By their increasing progress they effectually prevent the foundation of any new private bank.
On this occasion, and, as far as I know, on this occasion alone, the Bank of England made an excellent alteration of their policy, which was not exacted by contemporary opinion, and which was in advance of it. A certain number of directors attending daily by rotation is, it should be said, no substitute for a permanent committee. But all of them could be brought about more cheaply without the establishment of a Bombay Mint. A crisis of the second kind, due to general depression or bad harvests, in which India has to meet a heavy adverse balance in London, provided that, as in 1907, it is not accompanied by internal banking difficulties of the kind just described, causes, it is true, a drain on the Government’s sterling resources through the necessity of providing remittance on London, but only in proportion to the volume of notes and rupees which are brought to the Government for encashment or in payment of sterling drafts. Plainly these ventures are not to be taken too seriously. As these do not vary much from year to year it has been thought sufficient to give the figures of one recent year, namely, 1911–12. Samuel Montagu) as medicine. Those which have undertaken a business both large and simple–employing more money than most individuals or private firms have at command, and yet such that, in Adam Smith’s words, the operations are capable of being reduced to a routine or such an uniformity of method as admits of no variation.
Very much of it is repayable at demand, or at very short notice. The difficulty of propagating a good management by inheritance for generations is greatest in private banks and discount firms because of their essential secrecy. Imports of gold for this purpose are, for reasons to be explained in Chapter V.
The recent spell of rising prices in India has shown clearly in how many ways a depreciating currency damages large sections of the community, although it may temporarily benefit other sections.  Further attempts to force gold into circulation were, therefore, abandoned, and a large part of the gold which had accumulated in the currency reserve in India was, a little later on, shipped to England in order to be held “ear–marked” at the Bank of England. The first relations with the State were more like those of a finance company than of a bank, as we now think of banking. A monarchy in any trade is a sign of some anomalous advantage, and of some intervention from without. The German Government is only a conspicuous example of a foreign power which happens lately to have had an unusual command of good securities, and an unusually continuous wish to use them in England. a year; and if, like the old trader, he make 5,000 L. Mr. Under a more natural system, no part of the banking reserve would ever be lodged at the brokers. Not only merchants but all persons under pecuniary liabilities–present or imminent–feel this wish to ‘strengthen themselves,’ and in proportion to those liabilities.