But possibly it may be suggested that i ought to explain why the american system, or

The first crude attempt in recent times at establishing a standard of this type was made by Holland. │ £m. The truth is that the circumstances which originally favoured the establishment of private banks have now almost passed away.

He was afraid of certain joint stock banks which he saw rising around him; but the effect of his legislation was to give to these very banks, if not a monopoly, at any rate an exemption from new rivals. In what follows, therefore, I shall leave these five Banks out of account. The board of directors would almost certainly be demoralised by having to choose a sovereign, and there is no certainty, nor any great likelihood, indeed, that they would choose a good one. We know the laws of its changes peculiarly well: we can tell when its principal changes will happen with great accuracy; and we know that at such changes most of what is paid away by the Government is only paid to other depositors at the Bank, and that it will really stay at the Bank, though under another name. If the amount of dead capital so buried in the Treasury does not at any time much exceed the common average, the evil so caused is inconsiderable: it is only the loss of interest on a certain sum of money, which would not be much of a burden on the whole nation; the additional taxation it would cause would be inconsiderable. . I think it is possible to show that such a policy is likely on the whole to have an exactly opposite effect. In 1911, 43,305,722 British sovereigns were minted, or a good deal more than the whole gold coinage in that year of the rest of the world, viz. The peculiarity of the precious metals is that their value depends for unusually long periods on the quantity of them which is in the market. If a merchant have 50,000 L. It requires several ‘moves,’ as the phrase goes, several augmentations of the rate of discount by the Bank, before the really effectual rate is reached, and in the mean time bullion is ebbing away and the ‘reserve’ is diminishing.

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