By that act the currency manages itself; the entire working is automatic

Very much of it is repayable at demand, or at very short notice.

) = £m5. In almost all cases they would forbid it; all committees are cautious, and a committee of careful men of business, picked from a large city, will usually err on the side of caution if it err at all. The mercantile community will have been unusually fortunate if during the period of rising prices it has not made great mistakes. If the Bank were wound up, most of them would hardly in their income feel the difference. But I should be surprised if, even in the case of the Yokohama Specie Bank, it would amount to more than five to ten per cent; and in the case of some of them it must be much less than this. Our current political economy does not sufficiently take account of time as an element in trade operations; but as soon as the division of labour has once established itself in a community, two principles at once begin to be important, of which time is the very essence. But the Bank Act did nothing to hinder the use of cheques, and the very remarkable development of this medium of exchange during the next fifty years led in this country, without any important development in the use of notes or tokens, to a monetary organisation more perfectly adapted for the economy of gold than any which exists elsewhere.

But it does not act instantaneously; even the right rate, the ultimately attractive rate, requires an interval for its action, and before the money can come here. If, for example, the premium did not last more than three months, it would add to the profits of a temporary deposit of funds for that period as much as an addition of 3 per cent to the discount rate; or, to put it the other way round, there would need to be an additional profit of 3 per cent elsewhere if it were to be worth while to send funds abroad. Much of their business is very like that of any other Bank. The Duke was then on a mission at St. In either case there is a similar increase in the volume of currency in India not held by the Government.

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