Till 1857 there was an unusual calm in the money market, but in the autumn of

Its full force cannot be shown until we have discussed the question of the Secretary of State’s reserves as a whole, and have studied in detail the movements of the Indian bank rate.

In its essence, this anomaly is, I believe, an inevitable part of the system of banking which history has given us, and which we have only to make the best of, since we cannot alter it. Lord Farrer described it as “far too clever for the ordinary English mind with its ineradicable prejudice for an immediately tangible gold backing to all currencies. Whatever persons–one bank or many banks–in any country hold the banking reserve of that country, ought at the very beginning of an unfavourable foreign exchange at once to raise the rate of interest, so as to prevent their reserve from being diminished farther, and so as to replenish it by imports of bullion. I have tried to show that it is also closely related to the prevailing tendencies in Europe. If foreign bills of exchange are paid in this currency, the uncertain value of any sum, of what is in its own nature so uncertain, must render the exchange always very much against such a state, its currency being, in all foreign states, necessarily valued even below what it is worth. Great firms, with a reputation which they have received from the past, and which they wish to transmit to the future, cannot be guilty of small frauds. Harman, another Bank director, expressed his opinion in these terms: ‘I must very materially alter my opinions before I can suppose that the exchanges will be influenced by any modifications of our paper currency. ‘Now this is distinctly saying that the other banks of the country need not keep any such banking reserve–any such sum of actual cash–of real sovereigns and bank notes, as will help them through a sudden panic. Some Banks offer 6 per cent.

The _variable_ elements in India’s international balance–sheet are chiefly (i.

Rothschild are immense capitalists, having, doubtless, much borrowed money in their hands.

Deposit banking is a very difficult thing to begin, because people do not like to let their money out of their sight, especially do not like to let it out of sight without security–still more, cannot all at once agree on any single person to whom they are content to trust it unseen and unsecured.

) they may not lend for a longer period than six months[94]; (iv. A further amount might be held, as at present, permanently invested in Government of India securities. In Austria, for example, the hoarding was not so much of gold or silver as of notes. The bill-broker has, in one shape or other, to pay interest on every sixpence left with him, and that constant habit of giving interest has this grave consequence: the bill-broker cannot afford to keep much money unemployed. Huskisson expressed it, within twenty-four hours of a state of barter. But these figures are not relevant to our present purpose, and we must turn to the figures in the last column, giving the flow of sovereigns into the hands of the public.

Laisser un commentaire

Votre adresse e-mail ne sera pas publiée. Les champs obligatoires sont indiqués avec *