I shall be at once asked–do you propose a revolution? do you propose to abandon the

Even supposing trade to have remained stationary, a greater capital would be required to carry it on after such a rise of prices as has been described than was necessary before that rise. But I need not say that the Bank directors have not their personal fortune at stake in the management of the Bank. The Suez Canal is a curious case of this. But to get a great number of persons to do exactly the same thing is always very difficult, and nothing but a very palpable necessity will make them on a sudden begin to do it. When reduced to abstract principle, the subject comes to this.

In 1866 we held only a much smaller sum of foreign money, but that smaller sum was demanded and we had to pay it at great cost and suffering, and it would be far worse if we had to pay the greater sums we now hold, without better resources than we had then. No figures are published of the proportion of their total business which these Banks transact in India. 4⅛d.

But the aggregate of deposits outside India is as nearly as possible useless.

These are the _data_.

The events of the last two or three years may have done very great harm in the direction of postponing the development of the use of notes in Northern India. This policy may not save the Bank; but if it do not, nothing will save it. The fixed manager ensures continuity and experience in the management, and a good board of directors ensures general wisdom. And they can bring to the court of directors an experience of banking itself, got outside the Bank of England, which none of the present directors possess, for they have learned all they know of banking at the Bank itself. 10 and Rs. Only our familiarity blinds us to the marvellous nature of the system. I should prefer, therefore, that the Indian Cash Balances should be held, so far as possible, in notes, thus increasing the capacity of the Currency Reserve, and that all advances should be made in form from the Currency Reserve. F. 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. I propose to take a middle course, nearer, however, to Mr. The governor of the Bank would be a high Parliamentary official, perhaps in the Cabinet, and would change as chance majorities and the strength of parties decide. Its practice may be compared with that of the branches of the Reichsbank. And though the Bank of England certainly do make great advances in time of panic, yet as they do not do so on any distinct principle, they naturally do it hesitatingly, reluctantly, and with misgiving. Of all institutions in the world the Bank of England is now probably the most remote from party politics and from ‘financing.

They form a a cabinet of mature, declining, and old men, just close to the executive; and for good or evil such a cabinet must have much power. The considerations which originally gave rise to them are no longer operative;—since the introduction of the Gold Standard, for example, dealing in foreign exchange has ceased to be a highly speculative business.

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