If possible, that alarm is best met by enabling those persons to pay their creditors to

By the end of 1912 they had sunk again to a more normal level. 5. Our people are bolder in dealing with their money than any continental nation, and even if they were not bolder, the mere fact that their money is deposited in a bank makes it far more obtainable. The acute stringency in the international money markets, occasioned by the position in America, made it necessary for Exchange Banks and others to reduce below their normal level their short–period borrowings (direct or indirect) in London for use in India; and this stringency also caused the flow of new investment to India to fall short of its usual volume. Lindsay, Deputy–Secretary of the Bank of Bengal, who always maintained that “they _must_ adopt my scheme despite themselves. 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. They support their policy on the ground that it would do a great deal to ensure the stability of the currency system, and that it is worth while to incur some expense for this object. I do not feel in a position to say anything very decided as to the manner in which such loans could be best made. He proved, that in the years preceding both 1847 and 1857 there was a general rise of prices; and in the years succeeding these years, a great fall. They had some ten millions of other people’s money in their hands which no one thought of disturbing. Before the Act was broken– In 1847, the Banking Department was reduced to L 1,994,000 1857 L 1,462,000 1866 L 3,000,000 In fact, in none of those years could the Banking Department of the Bank of England have survived if the law had not been broken.

But we do not always manage it with discretion.

I have before explained in what manner the government of the Bank of England should, I consider, be strengthened, and that government so strengthened would, I believe, be altogether competent to a wise policy.

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