Such a period naturally excites the sanguine and the ardent; they fancy that the prosperity they

Once established, their activities are not limited. When it was founded, banks looked rather to the profit on their own capital, and to the gains of note issue than to the use of deposits.

23. 4d. The money therefore taken from the Bank of England could not be soon returned to the Bank; it would not come back on the evening of the day on which it was taken out, or for many days; it would be distributed through the length and breadth of the country, wherever there were bankers, wherever there was trade, wherever there were liabilities, wherever there was terror.

There have been few public pronouncements of policy on the part of Government, and the legislative changes have been inconsiderable. Till the available trade is found it lies idle, and can scarcely be lent at all; some of it is not lent. In 1906 Sir E. 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. 188) the sums lying idle in the Reserve Treasuries were unusually high. . If therefore such a saving period follows close upon an occasion when foreign credits have been diminished and foreign debts called in, the augmentation in the effective quantity of gold in the country is extremely great. If we manage our business well, we retain our friends; if we do not, we lose them. Nor did it cease in 1840. (_b_) Owners of Indian gold mines might conceivably find it worth their while to suspend the arrangements they have made in recent years with English refiners and might sell their gold (about £2,000,000 annually) to the Bombay Mint. Little effect is produced on the general trade of the country.

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