This defect is enhanced, because, as has so often been said, there is now no adequate

Of the ultimate solvency of the Bank of England, or of the eventual safety of its vast capital, even at the worst periods of its history, there has not been the least doubt. 19. on the Bank of France; and even after that aid the directors permitted their bullion, which was still the currency reserve as well as the banking reserve, to be reduced to 2,404,000 L. would be all which the Bank of England could pay to the depositing banks, and consequently all, besides the small cash in the till, which those banks could on a sudden pay to the persons who have deposited with them. The danger may indeed be surmounted by the continual infusion of new and able partners. It may be lessened; the bill-brokers may, and should, discourage as much as they can the deposit of money with them on demand, and encourage the deposit of it at distant fixed dates or long notice. It should be free to lend it out on suitable security, either in India or London, for periods not exceeding three months.

Gold reserves, therefore, in Great Britain are no longer held primarily with a view to emergencies of this kind. They must be prepared to supply rupees in payment for Council Bills or in exchange for sovereigns. These prosperity advances, therefore, are to be sharply distinguished from the adversity advances, discussed on pp.

But till they began, the Bank of England had among companies not only the exclusive privilege of note issue, but that of deposit banking too. You might as well attempt to guide the affairs of the nation by means of a cabinet similarly changing. │ Total. They are treated as unfunded debt and used for capital expenditure. The silver market is a very narrow one and can only be dealt in through the agency of one or other of a very small number of brokers. But if the ‘securities’ really secure him in a time of difficulty, he will not like to give them up, and take a bit of paper–a mere cheque, which may be paid or not paid. ‘ Accordingly Mr. The proper solution for each country must be governed by the nature of its position in the international money market and of its relations to the chief financial centres, and by those national customs in matters of currency which it may be unwise to disturb. And in a time of panic it might be asked for. But it is hardly relevant to the question of the Government’s _sterling_ resources; and, unless the Government Savings Banks were to be in trouble at the same time, it is not likely that there would be any difficulty in helping the bankers, if it were thought right to do so. These consequences, whether desirable or not, have very little to do with currency questions. To lend in London would be technically convenient (for the reasons given on p. The maintenance of the Indian system depends on their ability to fulfil this double obligation to whatever extent may be required of them. The Bank of England had the privilege of being the sole joint stock company permitted to issue bank notes in England. Karachi ” Sind. But if there are sovereigns on their way from Australia and ready to be diverted to India, or if there are surplus sovereigns available for export at Alexandria, it may be a good deal cheaper to buy these sovereign than to get gold bars from London.

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