I say ‘indefinite powers,’ for i am not aware that any precise description has ever been

The Balkan War was at this time at an acute stage, but the European situation was only moderately anxious.

In truth, the Bank do not lend from the motives which should make a bank lend. . They were at first, of course, very small in comparison with what they are now. The only unused sum is the reserve in the Banking Department of the Bank of England: if, therefore, in a panic that Department itself attempt to sell stock, the failure would be ridiculous. │ 1911–12. Let us consider, first, the adequacy of the reserve of coined rupees. │ August. More cheques are drawn year by year; not only more absolutely, but more by each person, and more in proportion to his income. It may be said to correspond, therefore, to the London rate for some comparatively short period—say for fortnightly loans. 18. , resolved on a strange policy in the hope of abolishing it. If the panic destroyed those dealers it would grow by what it fed upon (as is its nature), and might probably destroy also the bankers, the holders of the reserve. Mr. This is, indeed, the most natural mode of forming a company in the minds of those to whom companies are new. But, secondly, assuming a sharp financial crisis to be accompanied by increased hoarding, it would plainly be better if it were a hoarding of rupees and notes rather than of gold. It has no sufficient responsibility. In normal years they cannot be relied on to prevail for more than about three months. 2. A good banker will have accumulated in ordinary times the reserve he is to make use of in extraordinary times. But for all general purposes, the rule may be taken as absolute. CHAPTER V. But the danger to the depositing banks is not the sole or the principal consequence of this mode of keeping the London reserve.

│ 2. But a private bank of the type usual in London has no such officer. ; paid up on each; which effectually checked the progress of such banks, for few new ones were established for many years, or till that act had been repealed. Some proprietor says that he does not see why so much money is kept idle, and hints that the dividend ought to be more. I append a chart giving the movements of the Rate of Discount at the Presidency Bank of Bengal since 1893.

Advocates of a gold currency, however, would not, I think, deny that it might involve the country in some extra expense. And in the second place, the Secretary of State’s method of selling exchange results in his dealing exclusively with the Exchange Banks and financial houses, and not directly with the trading public.

, invested in one way or another, leaving only 2,000,000 L.

Mr. An ‘alarm’ is an opinion that the money of certain persons will not pay their creditors when those creditors want to be paid. If this action stayed, as it well might, the run on the banks in India, and the difficulties of the Exchange Banks in raising temporary loans in London, the Government might with a very moderate loss of funds (the mere announcement that they were available being sufficient) find itself in a far more favourable position for dealing with the subsequent depression; whereas after a delay a similar announcement might eventually be forced upon them, and if the panic had then gained impetus, the £10,000,000 quickly lapt up.

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