Lombard Street | Page 5

greater
than those of any other city--those of Great Britain many times greater
than those of any other country.
Of course the deposits of bankers are not a strictly accurate measure of
the resources of a Money Market. On the contrary, much more cash
exists out of banks in France and Germany, and in all non-banking
countries, than could be found in England or Scotland, where banking
is developed. But that cash is not, so to speak, 'money-market money:'
it is not attainable. Nothing but their immense misfortunes, nothing but
a vast loan in their own securities, could have extracted the hoards of
France from the custody of the French people. The offer of no other
securities would have tempted them, for they had confidence in no
other securities. For all other purposes the money hoarded was useless

and might as well not have been hoarded. But the English money is
'borrowable' money. Our people are bolder in dealing with their money
than any continental nation, and even if they were not bolder, the mere
fact that their money is deposited in a bank makes it far more
obtainable. A million in the hands of a single banker is a great power;
he can at once lend it where he will, and borrowers can come to him,
because they know or believe that he has it. But the same sum scattered
in tens and fifties through a whole nation is no power at all: no one
knows where to find it or whom to ask for it. Concentration of money
in banks, though not the sole cause, is the principal cause which has
made the Money Market of England so exceedingly rich, so much
beyond that of other countries.
The effect is seen constantly. We are asked to lend, and do lend, vast
sums, which it would be impossible to obtain elsewhere. It is
sometimes said that any foreign country can borrow in Lombard Street
at a price: some countries can borrow much cheaper than others; but all,
it is said, can have some money if they choose to pay enough for it.
Perhaps this is an exaggeration; but confined, as of course it was meant
to be, to civilised Governments, it is not much of an exaggeration.
There are very few civilised Governments that could not borrow
considerable sums of us if they choose, and most of them seem more
and more likely to choose. If any nation wants even to make a
railway--especially at all a poor nation--it is sure to come to this
country--to the country of banks--for the money. It is true that English
bankers are not themselves very great lenders to foreign states. But they
are great lenders to those who lend. They advance on foreign stocks, as
the phrase is, with 'a margin;' that is, they find eighty per cent of the
money, and the nominal lender finds the rest. And it is in this way that
vast works are achieved with English aid which but for that aid would
never have been planned.
In domestic enterprises it is the same. We have entirely lost the idea
that any undertaking likely to pay, and seen to be likely, can perish for
want of money; yet no idea was more familiar to our ancestors, or is
more common now in most countries. A citizen of London in Queen
Elizabeth's time could not have imagined our state of mind. He would
have thought that it was of no use inventing railways (if he could have
understood what a railway meant), for you would not have been able to

collect the capital with which to make them. At this moment, in
colonies and all rude countries, there is no large sum of transferable
money; there is no fund from which you can borrow, and out of which
you can make immense works. Taking the world as a whole--either
now or in the past--it is certain that in poor states there is no spare
money for new and great undertakings, and that in most rich states the
money is too scattered, and clings too close to the hands of the owners,
to be often obtainable in large quantities for new purposes. A place like
Lombard Street, where in all but the rarest times money can be always
obtained upon good security or upon decent prospects of probable gain,
is a luxury which no country has ever enjoyed with even comparable
equality before.
But though these occasional loans to new enterprises and foreign States
are the most conspicuous instances of the power of Lombard Street,
they are not by any means the most remarkable or the most important
use of that power. English trade is carried on upon borrowed capital to
an extent of which few foreigners have an idea, and