And there is this excuse for the Bank. It had ‘Consols’ and other securities which it could offer for sale no doubt, and which, if sold, would augment its supply of bank notes–and the relation of such securities to real cash will be discussed presently; but of real cash, the Bank of England for this purpose–the banking bank–had then so much and no more. I am primarily concerned with the circulation of rupees; but the public circulation of notes has been added in the last column but one, as it is useful to know at the same time the _total_ public circulation of currency. │ │Chartered │ 9¼ │ 11½ │ 13¼ │ 12¼ │ 12½ │ 13¾ │ 15½ │ 16¼ │ 18 │ │National │ 6 │ 9 │ 9¾ │ 10¼ │ 10¼ │ 11¾ │ 12¾ │ 13 │ 14 │ │Mercantile │ 1½ │ 2¾ │ 3¾ │ 3½ │ 3½ │ 4½ │ 5¼ │ 5½ │ 5½ │ │Delhi and London│ 1¼ │ 1¼ │ 1¼ │ 1½ │ 1¼ │ 1¼ │ 1½ │ 1½ │ 1½ │ │Eastern │. 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.
Ultimately these plausible predictions may or may not be right, but as yet they have been quite wrong, not because England has rich people–there are wealthy people in all countries–but because she possesses an unequalled fund of floating money, which will help in a moment any merchant who sees a great prospect of new profit.
, year by year, from 1831 when the modern coinage first began. The reasons that may make him inclined to do this are, first, that to increase the proportion of his cash balances held in sterling puts him in a stronger position in a case of emergency; second, that selling Council Bills at a good price now will enable him to meet the Home Charges later on when he might not be able to sell his Bills at so good a price (in this case the transference of cash balances from India to London is only temporary); third, that it may put him in a stronger position for carrying out impending loan transactions at the most favourable moment; and fourth, that cash balances held in London can be made to earn a small rate of interest. But every banker knows that this is not the way to diminish discredit. His Lordship is not inclined to abandon the scheme at the stage which it has now reached. A very high pay of prestige is almost always very dangerous. A. , the model instance of all evil in business, is a most alarming example of this evil. It is certain that in all of these panics the Bank has made very large advances indeed. 5. . ) Current Accounts │ (xi. │ In India.
So long as the security of the Money Market is not entirely to be relied on, the Government of a country had much better leave it to itself and keep its own money. They are expected to be constantly present; to see all applicants for advances out of the ordinary routine; to carry on the almost continuous correspondence between the Bank and its largest customer–the Government; to bring all necessary matters before the board of directors or the Committee of Treasury, in a word, to do very much of what falls to the lot of the manager in most companies.