23 JULY 1932, Page 19

How CONFIDENCE IS WON.

With a full knowledge of that fact, those responsible for conducting the banks' affairs have to act in such a manner that this faith shall never be shaken for a moment. That can only be done, however, by insuring that there shall_ always only sufficient liquid resources to Meet any sudden large demands which may be made upon them, and a moment's thought will show that this can only be accom- plished by a Sacrifice of earning power. The loans and overdrafts to which these " attacks " refer arc usually concerned with advances made for a fairly prolonged period to traders and private individuals, and if it can be imagined that all the bankers' funds were employed in, such directions, the profits, indeed, might be very fine, but where would be the liquid funds to meet the Constant demands of depositors for immediate payment ?