Mr. The rate should be raised early in the panic, so that the fine may be paid early; that no one may borrow out of idle precaution without paying well for it; that the Banking reserve may be protected as far as possible. I think that the public would be quite satisfied if they obtained bank-notes. 3. And it is most desirable that it should be represented, for members of that firm can give if they choose confidential information of great value to the Bank. But, in fact, they are assisted by a permanent Under-Secretary, who manages all the routine business, who is the depository of the secrets of the office, who embodies its traditions, who is the hyphen between changing administrations. and IV. _ Cash Balances in London £1,850,000 ——————————– £1,850,000 ═══════════ _Sterling Securities_— In Currency Reserve £1,300,000 In Gold Standard Reserve 6,000,000 ——————————– £7,300,000 ═══════════ _Aggregate Sterling Resources_— Gold £2,000,000 Money at Short Notice 1,850,000 Securities 7,300,000 ——————————– £11,150,000 ═══════════ 9.
more than usual, it causes a proportionate increase of trade and increase of prices. The most common, and by far the most important, case where the depression in one trade causes depression in all others, is that of depressed agriculture.
On one vital point the Bank’s management has been excellent. Such accidental events are of the most various nature: a bad harvest, an apprehension of foreign invasion, the sudden failure of a great firm which everybody trusted, and many other similar events, have all caused a sudden demand for cash. But the legal position is so complicated and peculiar, that it will be worth while to state it quite precisely. It is probable, however, that it would be exceedingly difficult to start a new Exchange Bank at the present time, except under the aegis of some important financial house already established in a strong position in India. At present the possible fluctuation of exchange between what may fairly be termed the “gold points” on either side of 1s.
According to continental ideas, Messrs. It is now utilised for holding gold by means of which the Secretary of State can support exchange in times of depression and maintain at par the gold value of the rupee. Exchange Banks have such large deposits in India and so little cash there that they would probably require to import funds from London as fast as possible. £ million.
This question is further discussed in Chapters VI.
The Government, therefore, did what it could to make the notes useful and popular for purposes other than those of remittance; and it facilitated remittance so far as the proceeds of taxation, accumulating in its treasuries, permitted it to do this without expense.
_—(With the increase of gold) a corresponding decrease in the use of currency notes has been observed during 1911–12.