After these banks had been long established, they began to do what we call banking business;

By painful events and incessant discussions, men of business have now been trained to see that a large banking reserve is necessary, and to understand that, in the curious constitution of the English banking world, the Bank of England is the only body which could effectually keep it. The case is just the same if the banker wants to sell Consols, or to call in money lent on Consols. ‘ They would not much mind hurting his feelings, and if he resigned they would have themselves a valuable piece of patronage to confer on one of their own friends.

Generally speaking, however, if the purchaser can lend money out at no higher rate than 3 per cent in India, he will certainly prefer bills; but if he can lend at 7 per cent in India, it will be more profitable for him to buy transfers.

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. The objects to be attained are simple, but the methods of the Government are, largely for historical reasons, exceedingly complicated. ‘Before 1609 the great quantity of clipt and worn foreign coin, which the extensive trade of Amsterdam brought from all parts of Europe, reduced the value of its currency about 9 per cent below that of good money fresh from the mint. The same kind of thing occurred in Russia. A very good manager and very good board of directors can, without unreasonable difficulty, be provided for a bank at present in London. It causes the post to be desired by vain men, by lazy men, by men of rank; and when that post is one of real and technical business, and when, therefore, it requires much previous training, much continuous labour, and much patient and quick judgment, all such men are dangerous. In rural districts, and in former times, it was difficult for a man to ruin himself except at the place in which he lived; for the most part he spent his money there, and speculated there if he speculated at all.

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