The other point is a trifle and reflects, perhaps, on a curiosity of our economic organism rather than on the India Office.
On this account, political Government–the oldest institution in the world–has been the hardest worked. The case of Overend, Gurney and Co. And in the same way, nothing but experience can tell us what amount of ‘reserve’ will create a diffused confidence; on such a subject there is no way of arriving at a just conclusion except by incessantly watching the public mind, and seeing at each juncture how it is affected.
, when the banks are requiring to remit to India, gold will flow. , and that the private deposits were only 17,127,000 L. Whenever, therefore, gold in India is available to the public throughout the year, the Government will lose during the summer months whatever amount the bullion dealers require.
They could not be expected themselves to discover such principles. People naturally choose for their banker the banker who has most present credit, and the one who has most money in hand is the one who possesses such credit. Since that time it has been established, under the influence of the same Government, in Mexico and Panama. 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. ; they now are more than 60,000,000 L.
The fact that a temporary increase in the media of exchange can only be obtained by bringing in funds from abroad partly explains the high rate of discount in India during the busy season. A uniform remedy for many diseases often ends by killing the patient. But the goodness of bank-notes depends on the solvency of the banker, and that solvency may be impaired if the invasion is not repelled or the revolution resisted. But how were those bills to be paid? Some one else must lend the money to pay them. There are famous dates in the history of Indian banking which should serve as a _memento mori_. But the modern practice introduces more complex considerations. At that particular day the Bank of England had only 11,297,000 L. ” The Secretary of State’s sole contribution to the discussion—no need to name him, it is the eternal Secretary of State speaking, not a transient individual—was as follows:— Any proposition for changes of a fundamental character, such as the establishment of a Central State Bank, or a return to the system of Government Treasuries, which may hereafter be taken into consideration, must be viewed in its general bearings, and not with special reference to the circumstances, of a particular Presidency, or of a particular crisis. And naturally the public mind was demoralised also. But only part of that prosperity has a solid reason. Three times since 1844 the Banking Department has received assistance, and would have failed without it.
‘ A Governorship of the Bank of England he would take almost without salary; perhaps he would even pay to get it: but a minor office of essential subordination would not attract him at all.