We also consider that, at the same time, the indian mints should be thrown open to

As in India their exchange policy was evolved gradually. e. A More Exact Account of the Mode in Which the Bank of England Has Discharged Its Duty of Retaining a Good Bank Reserve, and of Administering It Effectually. 18. They give interest for all the money deposited with them–an interest often nearly approaching the interest they can charge; as they can only keep a small reserve a panic tells on them more quickly than on anyone else.

Members asked one another what the Gold Standard Reserve might be, and, when writers in the Press told them, were duly horrified to learn that it contained no gold.

Germany led the way in 1871–73. A high average rate and a high maximum rate are likely to call for different explanations and, if a remedy is sought, for different kinds of remedies. What is almost a revolution in the policy of the Bank of England necessarily follows: no certain or fixed proportion of its liabilities can in the present times be laid down as that which the Bank ought to keep in reserve. They have never acknowledged the duty; some of them, as we have seen, deny the duty; still they have to a considerable extent begun to perform the duty.

They would not be more likely to suffer than other persons; the only difference would be that when they did suffer, having no adequate reserve of their own, they would be obliged to ask the aid of others. It was about the year 1688 that the word stockjobber was first heard in London. But the intention had never been repudiated, and in the Budget debate of 1910 Sir James Meston, then Financial Secretary to the Government, spoke as follows:— The broad lines of our action and our objects are clear and unmistakable, and there has been no great or fundamental sacrifice of consistency in progress towards our ideal. They keep an altogether different kind and quantity of reserve; but though the practice is mended the theory is not. Gladstone appeared not long since to say in Parliament that it ought to be so. In China, as is well known, currency reform has not yet been carried through. Accordingly London has become the sole great settling-house of exchange transactions in Europe, instead of being formerly one of two.

4d. But the English Government removed that necessity. At the foundation of the Bank of Bengal, the East India Company contributed one–fifth (the proportion became smaller subsequently) of the capital and appointed three of the directors. We found that the Bank had the power to lend money on deposit of goods. If, for example, the premium did not last more than three months, it would add to the profits of a temporary deposit of funds for that period as much as an addition of 3 per cent to the discount rate; or, to put it the other way round, there would need to be an additional profit of 3 per cent elsewhere if it were to be worth while to send funds abroad. If we ask how the Bank of England has discharged this great responsibility, we shall be struck by three things: first, as has been said before, the Bank has never by any corporate act or authorised utterance acknowledged the duty, and some of its directors deny it; second (what is even more remarkable), no resolution of Parliament, no report of any Committee of Parliament (as far as I know), no remembered speech of a responsible statesman, has assigned or enforced that duty on the Bank; third (what is more remarkable still), the distinct teaching of our highest authorities has often been that no public duty of any kind is imposed on the Banking Department of the Bank; that, for banking purposes, it is only a joint stock bank like any other bank; that its managers should look only to the interest of the proprietors and their dividend; that they are to manage as the London and Westminster Bank or the Union Bank manages.

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