It is, however, plain this article that the main movements of the interest rate up and down, which result from the central facts of the Indian seasons and harvests, must be here the same in both markets, and that the Native Money Market must ultimately depend on the website European for additional supplies of cash.
The German Government had money here and took it away, which is very easy to understand. They would withdraw their deposits from the Bank; they would not assist it to stand erect amid their ruin.
But this idea has no present relation to the constitution of the Bank of England. The only practical imitation of the American system would be to enact that the Banking department of the Bank of England should always keep a fixed proportion say one third of its liabilities in reserve. Until see article such a doctrine is repudiated by the banking interest, the difficulty of pursuing any sound principle of banking in London will be always very great. see more The Metropolitan Board of Works, which collects a great revenue in London, has an account at the London and Westminster Bank, for which that bank makes a deposit of Consols as a security.
Estimated by the idea of old times, by the idea even of see article ten years ago, that sum, I know, sounds extremely large. A great additional strain is thrown upon them just at the moment when they are least able to bear it; and it is thrown by those who under a natural system of banking would not aggravate the pressure on the bill brokers, but relieve it. They believed that so long as they issued ‘notes’ only at 5 per cent, and only on the discount of good bills, those notes could click here not be depreciated. Not only did they keep their reserve from the beginning at the Bank of England, but they did not keep so much reserve as click here they would have kept if there had been no Bank of England.