For every transfer from the sterling branch of any of the reserves must be balanced by

│ Number of Depositors. You may raise your rate of interest to 6 per cent or 8 per cent, but the bulk of the people will not carry less gold in their pockets than they did before, and I doubt whether, from other quarters, you would be able to get much addition to your central store. for a fortnight at 5 per cent per annum. From 1903 up to 1910 little was heard of proposals for an active encouragement of the circulation of gold. The Bank cannot stay still and wait till its bills are paid, and so fill its coffers, for unless it discounts equivalent bills, the bills which it has already discounted will not be paid. By irresistible tradition the English Government was obliged to deposit its money in the money market and to deposit with this particular Bank. The main effect is to cause the reserve to be much smaller in proportion to the liabilities than it would otherwise be.

would reduce his reserve to 100,000 L. Till a saving is invested or employed it exists only in the form of money: a farmer who has sold his wheat and has 100 L. FORBES, Chief Cashier. There has never been a suspicion that it was ‘worked’ for the benefit of any one man, or any combination of men.

‘ After a day or two of this treatment, the entire panic subsided, and the ‘City’ was quite calm. In that way the Bank knew easily what to do and the public knew easily what to foresee. Such years alter altogether an important part of the mercantile world: the final question of bill-brokers, ‘which bills will be paid and which will not? which bills are second-rate and which first-rate?’ would be answered very differently at the beginning of the year and at the end. It may fairly be said, therefore, that in the ten years the Gold–Exchange Standard has become the prevailing monetary system of Asia. A. I thought it would frighten people.

‘Do you advert to these two circumstances with a view to regulate the general amount of your advances?–I do not advert to it with a view to our general advances, conceiving it not to bear upon the question. First.

In the first group there are six Banks—the Delhi and London Bank (1844), the Chartered Bank of India, Australia, and China (1853), the National Bank of India (1863), the Hong Kong and Shanghai Banking Corporation (1864), the Mercantile Bank of India (1893[97]), and the Eastern Bank (1910).

And he would have a peculiar power of guidance at such moments from the nature of the men with whom he has most to deal. e.

The dealings between the Egyptian and the Indian banks must thus present very delicate problems of arbitrage.

The vital points to them is to employ it at some rate. These great Banks have not had to keep so large a reserve against their liabilities as it was natural that they should, being of first-rate magnitude, keep. It is the high maximum rate almost invariably reached which calls for enquiry.

31.

‘I consider it to be the undoubted duty of the Bank of England to hold its banking deposits (reserving generally about one-third in cash) in the most available securities; and in the event of a sudden pressure in the money market, by whatever circumstance it may be caused, to bear its full share of a drain on its resources.

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