TRANSACTIONS OF SECTION F. 645 



The reserves of the banks of the country are already very large, and one 

 hesitates to suggest au addition to them. Yet if a special reserve is to be formed 

 the difficulty will have to be faced. 



It may assist us to form some idea as to what might be required if we remember 

 that the preparations made in other countries against such difficulties show what 

 they think necessary, and the position we hold renders it advisable that we should 

 take similar precautions. We are at present the clearing house of the world. 

 Can we expect to retain this position unless we make an effort to show that we 

 can without ditHculty, and without having to make any special effort, honour the 

 demands which at any time may be made on us ? 



3. The Gold Reserve. By D. Drummojjd-Fraser. 



England has at last realised the national importance of the strengthening of 

 her gold reserve. The whole thinking community has become alive to the vital 

 necessity of acquiring and maintaining an additional central stock of gold. 



The practical difficulty in solving the problem is: who is to bear the cost? 



E^iijlish Joint-Stock Banks. 



Why should the joint-stock banks bear the cost? Firstly, they increased 

 their balances at the Bank of England by over five millions in 1890, and these 

 balances form practically the entire banking reserve held at the Bank of England. 

 Secondly, they increased their holding of Bank of England notes. The effect of 

 these two has been the strengthening of the percentage of cash resources, together 

 with the reduction of the percentage of loan and discount to the deposit liabilities. 

 Does not this record justify the restoration of the right of issue to the joint-stock 

 banks of notes of U. and. upwards, plus the provision of a second central gold 

 reserve ? 



Bank of England. 



On the one hand the present system often leads to an accumulation of gold, 

 which induces a low Bank rate ; while on the other hand the Bank of England's 

 stock of gold is liable to be depleted, which causes higher rates. Sixty years ago 

 the money market was controlled by the Bank of England ; now it is controlled 

 by the joint-stock banks. A revision of the present arrangement between the 

 Bank of England and the Treasury is necessary so that the Government debt be 

 repaid in gold. This would also raise the question of an emergency issue over 

 and above the gold bullion on the German or even the Scotch elastic system. 



The Savings Banks. 



How is the Chancellor of the Exchequer going to make good the deficiency of 

 11,000,000^. (in consequence of the drop in Consols) which is requisite for the putting 

 in order of his balance-sheet ? 



The practical steps necessary for the strengthening of the gold reserve are : — 

 The Chancellor of the Exchequer should accumulate a gold reserve of 

 1,000,000/. per annum for ten years. The Bank of England should replace at the 

 expense of the Government 4,450,000/. securities by gold, and arrange to hold gold 

 in place of the Government debt. And an arrangement should be made with the 

 large joint-stock banks for the issue of 1/. notes, coupled with the provision of an 

 effective second central stock of gold. 



4. IndiiMrial Organisation in the Woollen and Worsted Industries of 

 Yorkshire. By Professor J. H. Clapham, M.A. 



Technical distinction between the woollen and worsted branches of the 

 industry. The chief economic distinctions are (1) the greater size of the normal 

 business concern in the TVQrsted branch, and (^-2) the uormtil subdivision of the 



