Until 1910 the absorption of sovereigns was not sufficient to restore them to a position of

This increasingly democratic structure of English commerce is very unpopular in many quarters, and its effects are no doubt exceedingly mixed. │ Deposits.

I have placed these proposals in the order of their probable efficacy to effect their purpose. There is a considerable ambition to fill the office. In a pompous advertisement it was announced that the directors of the Royal Academies Company had engaged the best masters in every branch of knowledge, and were about to issue twenty thousand tickets at twenty shillings each. The plans of the Government ought, therefore, to be laid accordingly.

The Central Banks of most European countries depend (in varying degrees) upon all three.

The land tax is collected, naturally, _after_ the harvest has been sold, not during it; and at the end of the calendar year the surplus balances are small. If the Government were free on such occasions to lend out some part of the rupees, against high–class security, at 5 or even 6 per cent, this would be profitable to the Government, and would prevent the discount rate from reaching a level which is caused, not by anxiety, but merely by the expense arising out of the distance between London and Calcutta. I feel little doubt that India ought to have a State Bank, associated in a greater or less degree with the Government. Sometimes they do this, but very often it is worth their while, for reasons to be explained in detail later on, to accept the tender of sovereigns in London.

For the gold could have been kept in England by selling bills at a rate more advantageous than the par of exchange by about this amount. These savings are first lodged in the local banks, are by them sent to London, and are deposited with London bankers, or with the bill brokers. In such countries a rise in the bank–rate cannot be relied on to produce the desired effect with due rapidity.

Indeed, I do not know that they ought to resist it.

We are now in a position to understand what the Secretary of State means when he says that he has sold bills to meet the needs of trade. There is in all ordinary joint stock companies a fixed executive specially skilled, and a somewhat varying council not specially skilled. I shall be concerned throughout this chapter with the general characteristics of currency systems, not with the details of their working. If the bank grows, and simultaneously the detail grows in proportion to the bank, a frightful confusion is near unless care be taken.

The holding of some part in actual gold in England was an innovation introduced in November 1912. His calculation explicitly excludes rupees in hoards, currency reserves, and Government balances; and is not, therefore, entirely comparable with the others. 10.

There is a reserve price (not published) below which he will not sell, but this reserve price is seldom operative. The Central Banks of most European countries depend (in varying degrees) upon all three. But this is not a perfect solution. ‘ As might be supposed, this rule was exceedingly unpopular with the brokers, and the greatest of them, Overend, Gurney and Co.

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