REICHSBANK’S HOLDINGS OF FOREIGN BILLS AND CREDITS WITH FOREIGN CORRESPONDENTS ON LAST DAY OF EACH YEAR. ┌─────────────┬───────────────┬──────────────┬───────────────┐ │ 31st Dec. │ Bills. │ Credits. │ Total. │ ├─────────────┼───────────────┼──────────────┼───────────────┤ │ 1906 │ £3,209,000 │ £993,000 │ £4,202,000 │ │ 1907 │ 1,289,000 │ 503,000 │ 1,792,000 │ │ 1908 │ 6,457,000 │ 1,234,000 │ 7,691,000 │ │ 1909 │ 6,000,000 │ 3,369,000 │ 9,369,000 │ │ 1910 │ 8,114,000 │ 4,205,000 │ 12,309,000 │ │ 1911 │ 7,114,000 │ 1,439,000 │ 8,553,000 │ │ 1912 │ ... │ ... │ ... │ └─────────────┴───────────────┴──────────────┴───────────────┘ 7. If we pass from France, whose position as a creditor country is not altogether unlike Great Britain’s, and from Germany, which is at any rate able to do a good deal towards righting the balance of immediate indebtedness by the sale of securities having an international market, to other countries of less financial strength, we find the dependence of their Central Banks on holdings of foreign bills and on foreign credits, their willingness to permit a premium on gold, and the inadequacy of their bank rates taken by themselves, to be increasingly marked. I will first mention very briefly one or two salient facts, and will then consider their underlying meaning, always with an ultimate view to their bearing on the affairs of India. 8. 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. The Balkan War was at this time at an acute stage, but the European situation was only moderately anxious. Compared with the crisis at the end of 1907, the financial position was one of comparative calm. Yet in the course of that month there was a premium on gold of about ¾ per cent in France, Germany, Russia, Austria–Hungary,[9] and Belgium. So high a premium as this is as effective in retaining gold as a very considerable addition to the bank rate. 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.