Only under one or other of two conditions could loans from the cash balances be important:

│1909. According to the saying, you ‘can sell Consols on a Sunday.

But in a panic they come to London and want this money. ‘The rise has also been aided by the revival of credit. Some such committees are vaguely known to exist in most, if not all, our large joint stock banks. If at any time the floating money in the hands of Government were exceptionally large, he might require augmented security to be lodged, and he might obtain an interest. . Individuals were not permitted, therefore, to take out more than £10,000 at a time; and in this manner the gold dribbled slowly away over a period of a few months. He can pay away his own ‘promises’ in loans, in wages, or in payment of debts. No country of great hereditary trade, no European country at least, was ever so little ‘sleepy,’ to use the only fit word, as England; no other was ever so prompt at once to seize new advantages. The Duke was then on a mission at St. The total amount of 70 lakhs is then allotted to the highest bidders, the allotment at the minimum rate accepted being proportionate to the amount applied for at that rate. A few weeks later the bills reach England, are duly accepted, and are capable of being rediscounted if the Bank needs additional free funds to buy more Council Bills and turn its money over again in another transaction of the same kind. But the critics referred to in § 35 are following a false track when they argue that much offence lies in the present use of the Cash Balances, and that the main remedy for the seasonal stringency of the Indian Money Market is to be found in lending out these balances in India during the busy season. If, on the other hand, the India Council had refused to sell bills freely, gold would have been exported to India, taken to the Paper Currency Department, and exchanged for rupees in notes or silver.

The criticisms which have had most popular vogue have been mainly directed against the absolute amount of the Gold Standard Reserve, against the investment of a large part of this reserve in securities, and against the maintenance in London of some part of the gold in the Currency Reserve.

Richardson, the principal ‘bill-broker’ of the time, as the term was then understood, thus described his business to the ‘Bullion Committee:’ ‘What is the nature of the agency for country banks?–It is twofold: in the first place to procure money for country bankers on bills when they have occasion to borrow on discount, which is not often the case; and in the next place, to lend the money for the country bankers on bills on discount. And these principles taken together amount to saying that, by the doctrine of the directors, the Bank of England ought, as far as they can, to manage a panic with the Act of 1844, pretty much as they would manage one without it–in the early stage of the panic because then they are not fettered, and in the latter because then the fetter has been removed. Any sudden increase in the bankers’ balances would be a probable indication of new foreign money, but new foreign money might come in without causing an increase, since some other and contemporaneous cause might effect a counteracting decrease.

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