For the gold could have been kept in england by selling bills at a rate more

Those in which the capital is used not to work the business but to guarantee the business. No one hears a syllable of objection.

And this is the reason why the Bank of England ought, I think, to deal most cautiously and delicately with their banking deposits. The common practice is to lend a certain portion of the market value of such securities, and if that value increases, the amount of the usual loan to be obtained on them increases too. It is sometimes said that any foreign country can borrow in Lombard Street at a price: some countries can borrow much cheaper than others; but all, it is said, can have some money if they choose to pay enough for it. Before that all Oriental trade went to ports in the South of Europe, and was thence diffused through Europe. This did not happen in former panics, because the case we are considering never arose. Yet see what it amounts to. . 17. Mr. │ Rate. Under any system of banking there will always group themselves about the main bank or banks (in which is kept the reserve) a crowd of smaller money dealers, who watch the minutae of bills, look into special securities which busy bankers have not time for, and so gain a livelihood. Up to 1898 the whole of the rest was held in silver coin in India. or 11,500,000 L. The main effect is to cause the reserve to be much smaller in proportion to the liabilities than it would otherwise be. In most banks there would be a wholesome dread restraining the desire of the shareholders to reduce the reserve; they would fear to impair the credit of the bank. .

‘On extraordinary occasions,’ says Ricardo, ‘a general panic may seize the country, when every one becomes desirous of possessing himself of the precious metals as the most convenient mode of realising or concealing his property, against such panic banks have no security _on any system_.

The Bank of England thus has the responsibility of taking care of it. The public have a right to know whether the Bank of England–the holders of our ultimate bank reserve–acknowledge this duty, and are ready to perform it. On one vital point the Bank’s management has been excellent. 2. But in the ensuing pages I mean to speak as little as I can of the Act of 1844; and when I do speak of it, I shall deal nearly exclusively with its experienced effects, and scarcely at all, if at all, with its refined basis. Act closing the Indian mints to the coinage of silver on private account. But in modern bill-broking the credit of the bill-broker is a vital element. The Government by granting it in response to popular appeal (though I doubt whether, in fact, there is any such appeal) would have a pleasant feeling of being democratic on an occasion when to yield involves no more evil than any other expenditure on a piece of fairly cheap ostentation.

76) were noteworthy as compared with those of former years by reason of their huge aggregate amount; but they were even more noteworthy if regard be had to the very high proportion of sovereigns.

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