The British Government is at certain times a factor in the Money Market, that is, when on account of any extraordinary outlay, or when expenditure is temporarily exceeding revenue, it issues Treasury Bills and Exchequer Bills. If these bills are bought by the Money Market, it follows that the amount of money in the hands of the Market is, at least for the time, decreased by the amount of money paid for the bills (which goes into the Bank of England and helps to increase “Public Deposits”), and consequently the rates for money in the open market are inclined to rise or “harden.” When these bills are repaid the contrary effect is produced, market supplies are increased and rates are inclined to droop. Another factor which has to be taken into account in this matter is the India Government. The India Government has, from time to time, large funds lying here which are not required for immediate use, nor are they available to lend for long periods; these funds practically constitute a floating balance. Use is made of this money by lending it out to the market through a well-known house, much in the same manner that banks lend their floating balances. The money is usually lent in sums of not less than £50,000, for periods from a fortnight to a month; and it is generally stipulated that the securities deposited against the advances shall consist of either Consols, or Indian Securities of certain kinds, such as rupee paper and the guaranteed debentures of a few of the first-class Indian railways. The India Government generally manages to obtain a very fair return for the money so lent. The Stock Exchange is another element which requires consideration, although it is a rather one-sided element, inasmuch that it is nearly always a borrower. In busy times on the Stock Exchange enormous sums are borrowed from the banks for the purpose of speculation of one kind or another. Stocks are bought by various persons who have not the money to pay for them, in the anticipation that they will increase in value; and these persons arrange with their brokers to “take up” the stock for them—that is, that the brokers shall find the money to pay for these purchases—and this ultimately results in a banker advancing the money. During periods when the rates of interest are low also, large amounts of stock bearing a higher interest are then “taken up,” for the purpose of securing the difference in the amount of the interest paid for the loan and the interest received from the stock, and the money for these purchases is largely borrowed from banks. These Stock Exchange loans are made from “account to account”—that is, from one settling day on the Stock Exchange to the next—and as there are two settling days every month, the loans are nominally granted for about a fortnight each. The interest charged is fixed at the beginning of each account for that account, and varies according to the prevailing conditions at each renewal.