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.