n out in the morning which were
still in their tills at the close of the day, and that hence the legal
limit was never exceeded. But it was not till the 6th of August that the
rate was reduced to 8%.

The effect of the crisis of October 1890 was far less severe. This was due
to the judgment and skill displayed by the governor (Mr Lidderdale) and the
directors of the bank, who imported L3,000,000 in gold from Paris. The
reserve in that year never dropped below L10,000,000, and before the end of
November the anxiety had greatly passed away. "Caution prevailed, but not
panic, and the distinction is a very clear one." (See arts. on "Crises,"
_Dictionary of Political Economy_, vol. i.)

The most important requirement of banking in the United Kingdom is still
the establishment of an efficient specie reserve. The reserve in the
banking department of the Bank of England averaged:--

L8,500,000 in 1845. L11,600,000 in 1875.
8,400,000 in 1855. 15,100,000 in 1885.
8,000,000 in 1865. 29,900,000 in 1895.
L23,500,000 in 1906.

[Sidenote: The "Reserve" question.]

This provides but a narrow basis for the whole business requirements of the
country. Though much larger than in several previous years, it cannot be
regarded as adequate. The figures fluctuate more severely than these
decennial averages show, and the progress has not been one of uniform
increase. Thus the L15,100,000 in 1885 was followed by L12,700,000 in 1888.
The L29,900,000 of 1895 was followed by L34,600,000 in 1896 and L21,200,000
in 1899.

Beyond, or side by side with, the reserve of the Bank of England there are
the reserves held by the other banks. Part of these are held in the form of
balances at the Bank of England, part in specie and bank notes in their own
tills. The latter, hence, are not unlikely to be estimated twice over. The
published figures on this point are meagre.

The expectations expressed by Sir Robert Peel in his speech [v.03 p.0342]
on the bank charter and the currency of the 6th of May 1844 have not yet
been fulfilled. "I rejoice," he said, "on public grounds, in the hope that
the wisdom of parliament will at length devise measures which shall inspire
just confidence in the medium of exchange, shall put a check on improvident
speculations, and shall ensure the just reward of industry and the
legitimate profit of commercial enterprise conducted with integrity and
controlled by provident calculation."

Th