Nobody would understand it, or confide in it

But the moment the available trade is discovered–the moment that prices have risen–the demand for loanable capital becomes keen. Bellingham_, _India Office_.

That as goods are produced to be exchanged, it is good that they should be exchanged as quickly as possible.

In either case the result is the same. With the growth of the stability of banking, and especially with the growth of confidence in this stability amongst depositors, these occasions have become more and more infrequent, and many years have now passed since there has been any run of dangerous proportions on English banks. To illustrate how rare a thing in Europe a perfect and automatic gold standard is, let us take the most recent occasion of stringency—November 1912. His neighbours know him, and trust him because they know him. In a panic, as has been said, the bankers’ balances greatly augment. The many holders of the banking reserve would under the natural system of banking be obliged to advance out of that reserve to uphold bill-brokers and similar dealers. No advances indeed need be made by which the Bank will ultimately lose. This is the amount of their conceivable executive power, if the Government were to exercise it. ┌────────────────────────┬─────────────┬──────────┬──────────┬──────────┐ │ │ 1909–10. Speaking broadly, two things happened: during the war England was the best place of shelter for foreign money, and this made money more cheap here than it would otherwise have been; after the war England became the most convenient paying place, and the most convenient resting place for money, and this again has made money cheaper. Great advantages may be obtained if the surplus funds in the Paper Currency Reserve be used, not as a permanent or quasi–permanent loan to Indian traders, but to provide _elasticity_ in the seasonal supply of currency and to make possible the increase in the stock of purchasing power in the form of money which is _temporarily_ required in the busy season, without having to raise it in London.

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