The way in which this has arisen is easily explained

Since the Indian system has been perfected and its provisions generally known, it has been widely imitated both in Asia and elsewhere. The invested portion may not exceed a stated maximum, of which a part only may be held in sterling securities and the rest must be placed in rupee securities. Accordingly, in every panic these sums are sure to be called in from the bill-brokers; they were wanted to be used by their owners in time of panic, and in time of panic they ask for them. the rupee. A very good manager and very good board of directors can, without unreasonable difficulty, be provided for a bank at present in London.

Two hosts of eager disputants on this subject ask of every new writer the one question–Are you with us or against us? and they care for little else. But it would be extravagant to maintain a reserve adequate for all conceivable emergencies, since there is a further resort of which use might fairly be made without great reluctance.

If the season had turned out poorly, it is clear that the Secretary of State must have had recourse to borrowing on a fairly heavy scale.

Until now, or until lately, this difficulty has not been fully felt. ); and the demand for Council Bills was on a large scale. But the possessor of money has rarely been willing to pay anything; he has usually and rightly believed that the borrower would discover him soon. But Mr. But very few persons are aware how much greater the ready balance–the floating loan-fund which can be lent to anyone or for any purpose–is in England than it is anywhere else in the world. Up to 1844 London private bankers might have issued notes if they pleased, but almost a hundred years ago they were forced out of the field. Nor is it necessary to accumulate reserves in advance for every eventuality.

While, therefore, it is to a certain extent within the power of Government (though not at present according to their usual practice) to urge a certain number of rupees into circulation _more rapidly_ than is necessary, they cannot _permanently_ increase the circulation without depreciating its gold value, that is, they cannot permanently increase the circulation beyond what it would otherwise be and at the same time maintain the rupee at 1s. 24. │ Reserve, │ Public │ Private │ Cash. Great authorities have been unwilling to admit it. ). But the English money is ‘borrowable’ money. [109] More than half of the deposits of the Banks as a whole are probably held on current account or at short notice. In regard to the amount of the Gold Standard Reserve, Lord Curzon, in 1904, was inclined to think that £10,000,000 would be a proper figure. , the Bank must begin to take precautions when the reserve is between 14,000,000 L. And as these specially qualified dealers can for the most part lend much more than their own capital, they will always be ready to borrow largely from bankers and others, and to deposit the securities which they know to be good as a pledge for the loan. , and are, therefore, available to the public two or three years after the period to which they refer.

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