MIDLAND BANK DEPOSITS
It is Still too soon to get a complete picture of the bank's alance-sheets but it is already apparent that a marked feature of me position at the end of 1939 was a striking increase in (Continued on page 90) FINANCE AND INVESTMENT (Continued from page 89) liquidity. This is what one would expect at a time of un- certainty, but it is easy to detect the influence of the ex- pansion of credit which has accompanied the floating debt method of financing the war. Whereas in the 18 months preceding the outbreak of war the heavy outflow of foreign balances from London was reflected in a steady contraction of both deposits and bills, the war has reversed these trends; the contrast between the position at the end of 1938 and at December 31st, 1939, is correspondingly striking. So we find the Midland Bank showing a rise in deposits of £33,500,000 to £497,700,000, which brings them to the high point reached at the end of 1937. Advances are up by £11,400,000, but as investments are down by L4,400,000, the chief coun- terpart of the rise in deposits is in the liquid assets. Bills have risen by £17,500,000, and the cash ratio is slightly higher at ii.6 per cent.
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