Lombard Street: A Description of the Money MarketBagehot, Walter
History
Lombard Street: A Description of the Money Market
Bagehot, Walter
Banks and banking -- England -- London; Banks and banking -- Great Britain; Finance -- England -- London; Finance -- Great Britain
But it is important to observe, that the published accounts of the
Bank give no such information to the public as will enable them to
make their own calculations. The account of which we have been
speaking is the yearly account of the English Government--what we may
call the Budget account, that of revenue and expenditure. And the
laws of this are, as we have shown, already known. But under the
head 'Public Deposits' in the accounts of the Bank, are contained
also other accounts, and particularly that of the Secretary for
India in Council, the laws of which must be different and are quite
unknown. The Secretary for India is a large lender on its account.
If any one proposed to give such power to the Chancellor of the
Exchequer, there would be great fear and outcry. But so much depends
on habit and tradition, that the India Office on one side of Downing
Street can do without remark, and with universal assent, what it
would be thought 'unsound' and extravagant to propose that the other
side should do. The present India Office inherits this independence
from the old Board of the Company, which, being mercantile and
business-like, used to lend its own money on the Stock Exchange as
it pleased; the Council of India, its successor, retains the power.
Nothing can be better than that it should be allowed to do as it
likes; but the mixing up the account of a body which has such a
power, and which draws money from India, with that of the Home
government clearly prevents the general public from being able to
draw inferences as to the course of the combined account from its
knowledge of home finance only. The account of 'public deposits' in
the Bank return includes other accounts too, as the Savings' Bank
balance, the Chancery Funds account, and others; and in consequence,
till lately the public had but little knowledge of the real changes
of the account of our Government, properly so called. But Mr. Lowe
has lately given us a weekly account, and from this, and not from
the Bank account, we are able to form a judgment. This account and
the return of the Bank of England, it is true, unhappily appear on
different days; but except for that accident our knowledge would be
perfect; and as it is, for almost all purposes what we know is
reasonably sufficient. We can now calculate the course of the
Government account nearly as well as it is possible to calculate it.
Public-domain text, read in full here on John Shaqi.
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