This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1920 edition. Excerpt: ...cash that it keeps in normal times. At the end of the year it allows it, as has been shown, to run down rapidly, knowing that the demand on it at that period is short lived and is chiefly on account of borrowers who will leave the sums borrowed to their credit in its books; but at other times its cash ...
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This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1920 edition. Excerpt: ...cash that it keeps in normal times. At the end of the year it allows it, as has been shown, to run down rapidly, knowing that the demand on it at that period is short lived and is chiefly on account of borrowers who will leave the sums borrowed to their credit in its books; but at other times its cash proportion is carefully controlled by movements in its official rate and the measures described above. "The problem of providing emergency credit and currency capable of easy expansion and rapid contraction is thus solved by means of this convention, backed by the use of the check currency which cancels itself day by day, each check existing only for the purpose of the transaction which it completes. "At the same time the Bank of England is obliged by the pressure of external conditions frequently to regulate the price of money in London. This necessity for regulation is a fact which is only dimly grasped by the London money market as a whole, which frequently resents the operations of the Bank of England and contends that the price of money ought to be left to the natural laws of supply and demand. The position of the London money market, however, as the only one in which gold can at all times be obtained, to any extent and without question, clearly makes some regulation of the rates at which it is prepared to work inevitable. None of the various items which compose the market can be expected to conduct their business with a view to the necessities of the market as a whole. If a banker wants to increase his holding of bills, he naturally does so at the market rate, without considering whether his doing so is likely to turn the foreign exchanges against London and so cause a demand on London for gold. Consequently the exigencies of their...
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