As everyone knows, that panic began quite suddenly, on the fall of ‘overends

After the panic of 1866, especially after the suspension of Peel’s Act (which many foreigners confound with a suspension of cash payments), a large amount of foreign money was withdrawn from London. in May 1866, rose to 19,413,000 L.

Some of those deposits too are of a peculiar and very distinct nature. In § 6 I have stated the practical effect of these successive measures. I believe, indeed, that such was not the original intention of the founders. 7. A may be able and willing to produce what B wants, but he may not be able to find B–he may not know of his existence.

The German Government has lately taken large sums in bullion from this country, in part from the Bank of England, and in part not, according as it chose. The evolution of the Indian currency system since 1899 has been rapid, though silent. It may indeed be said that the money thus taken from the Banking Department of the Bank of England would return there immediately; that the public who borrowed it would not know where else to deposit it; that it would be taken out in the morning, and put back in the evening. And this new unemployed saving means additional money. The privileged opportunity of which we spoke is singularly conspicuous in such figures; it enables banks to pay much, which without it would not have paid much. They are only able to keep those deposits at the Bank by the aid of the Clearing-house system, and if a panic were to pass a certain height, that system, which rests on confidence, would be destroyed by terror. The _variable_ elements in India’s international balance–sheet are chiefly (i.

The peculiar essence of our banking system is an unprecedented trust between man and man: and when that trust is much weakened by hidden causes, a small accident may greatly hurt it, and a great accident for a moment may almost destroy it. A good deal of opinion has been expressed in India lately in favour of loans being made there from the Government’s Cash Balances. But it would be useless to lower the Bank Rate; for the additional funds were probably not loanable in India for the month of July at any rate at all.

But in fact the particular interest of single directors is not to be regarded; almost all directors who bring special information labour under a suspicion of interest; they can only have acquired that information in present business, and such business may very possibly be affected for good or evil by the policy of the Bank. The easiest mode of explaining anything is, usually, to exemplify it by a single actual case. And there is no such palpable necessity in banking. Nor can I propose that we should adopt the simple and straightforward expedient by which the French have extricated themselves from the same difficulty. As some recompense for these restrictions, the Presidency Banks have been allowed to hold a portion of the Government balances without payment of interest. (2) The sovereign is unlimited legal tender at £1 to 15 rupees, and is convertible at this rate, so long as a Notification issued in 1893 is not withdrawn, _i.

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