But the natural system–that which would have sprung up if government had let banking alone–is that

But, apart from private profits, the important point is the extent to which Indian trade is financed by the purchase of Council Bills in London with borrowed money, whether this money is supplied by the depositors in Exchange Banks or by those who rediscount the bills. (iii. After exchange touched par in 1898, we see from the above table that gold began to flow in. If 3,000,000 L. The Bank of England lends to middlemen who, by holding bills or otherwise, lend abroad. New wants are mostly supplied by adaptation, not by creation or foundation. It is not very improbable, however, that in the future there might be a general crisis of the third kind—a heavy adverse balance against India, and an internal banking crisis at the same time.

If the issue (of one–pound notes) took place, and were taken up, we should have £20,000,000 more _central_ gold—an immeasurably stronger reserve than 30,000,000 sovereigns on which we could not place our hands. per rupee, it can never be worth while for the banks to buy Council Bills at a price which exceeds 1s.

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