But this form of the opinion, though more reasonable and moderate, is not, therefore, more true

It will lie idle in the banks, as we have often seen it. On the present occasion 45,000,000 L. ‘ Credit means that a certain confidence is given, and a certain trust reposed. There are three kinds of crises by which the Indian Money Market might be assailed—a purely internal crisis, in which the banks have difficulty in meeting a run on them by their Indian depositors; a purely external crisis, in which India owes, and is called on to pay, large sums in the London Market, but is free from serious banking trouble at home; and a general crisis, in which the features of an internal and an external crisis are combined. Ordinarily, however, there is no account of which the course can be so easily predicted; and therefore no account which needs in ordinary times so little reserve.

Germany led the way in 1871–73.

In a great panic, Consols cannot be sold unless the Bank of England will advance to the buyer, and no buyer can obtain advances on Consols at such a time unless the Bank of England will lend to him. But in the case of convertible notes there is a third effect, which works in the same direction, and works more quickly.

It would be absurd to have large reserves in hand, and not to use them to avert a general calamity. But the house of Rothschild is represented on the Bank direction. Free payment in gold is sometimes, in effect, partially suspended,[8] though covertly and with shame. ” His first proposals were made in 1876 and 1878. would be all which the Bank of England could pay to the depositing banks, and consequently all, besides the small cash in the till, which those banks could on a sudden pay to the persons who have deposited with them. And such a constant difference indicates, I conceive, that the two are not managed on the same principle. Indeed so long as the currency arrangements are at all like those now in force, this maximum range may fairly be said to be determined by forces outside Government control, namely, by the forces governing the cost of remittance of gold. Brunyate’s _Account_. Perhaps we may fairly sum this evidence up by saying that it goes to show the existence in India at the present time of an enormous demand for gold bullion, a very considerable demand for sovereigns for purposes of hoarding, and a relatively smaller demand for them, chiefly confined to the United Provinces, the Punjab, Madras, and Bombay, for purposes of currency. Because the Bank Rate is at 7 per cent, it does not follow, therefore, that money can be used, or obtained, at this rate for two or three months. The Government would be vehemently urged to save the situation by making sterling advances, not simply in exchange for notes or rupees, but on some other non–monetary security. │ £m. The way was led in 1904 by the foundation of the Bank of Burma.

Lord Crewe looks forward (see his speech in the House of Lords, November 14, 1912) “with some confidence to the increased use of gold currency in India among the people, although it may be a long and indefinite time before it becomes the habitual and favourite coin in the country at large.

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