Persons who buy to sell again soon are often liable for amounts altogether much greater than

In common opinion there is always great uncertainty as to the conduct of the Bank: the Bank has never laid down any clear and sound policy on the subject. Except in 1913,[82] the resources of the Reserve Treasuries on January 1 have been in recent years between £1,000,000 and £2,000,000. is all which is really held in actual cash as against the liabilities of the depositing banks. The status which is given by it, both to the individual who fills it and to the firm of merchants to which he belongs, is considerable. ‘And they are not discounted in London?–No. The other four are primarily Indian. The principal mode in which money is raised by traders is by ‘bills of exchange;’ the estimated certainty of their paying those bills on the day they fall due is the measure of their credit; and those who estimate that liability best, the only persons indeed who can estimate it exceedingly well, are the bill-brokers. The effect of this cheapness is great in every department of industry. │ Adie, │ Adie, │ Atkinson. It will be sufficient to say that it tends to hamper the brokers, who act as middlemen between the British short–loan fund and the foreign demand for accommodation (chiefly materialised in the offer of bills for discount), and to cause them to enter into a less volume of new business than that of the short loans formerly contracted and now falling due, thus bringing to bear the necessary counterbalancing claims against foreign countries. But when towards the end of their busy season the Egyptian banks find themselves with more gold than they need, Council Bills must be sold at a relatively low rate if the flow of this gold to India is to be prevented.

But in the end common sense conquers. or 11,500,000 L. 2 will not give them up till he gets his money, No. The same peculiarity has shown itself over and over again during periods of financial pressure; and even at the present moment (November 1898), while money is not by any means tight, there exists a difference of about 2 per cent between the bazaar and the Presidency Bank rates. But it will ordinarily be very great. In considering the difference between two European Bank Rates as the cause of a transfer of funds between the two centres, the cost of remittance, as measured by the difference between the telegraphic rate of exchange outwards at the beginning of the transaction and the telegraphic rate of exchange back at the end of it, is not, of course, to be neglected. Banking is a very peculiar business, and it depends so much upon credit that the least blast of suspicion is sufficient to sweep away, as it were, the harvest of a whole year. For more than a century after its creation (notwithstanding occasional errors) the Bank of England, in the main, acted with judgment and with caution. But when their stocks are falling low and there are apparently signs of demand in the _immediate_ future, how long can coinage be delayed safely? To answer this we need to know the maximum rate of output of the Mints, and the maximum rate of absorption of new currency so far experienced.

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