FOREIGN BALANCES.
One further point with which Mr. Tennant dealt I can only mention in closing. • It sometimes happens that interest rates here are temporarily raised to retain foreign balances, or, _perhaps, to attract them on particular occasions. The point made by Mr. Tennant in this connexion was that but for London being a great monetary centre, these balances—beyond what - is called a mere working balance—would not be kept here, and the net result would be that while there might be fewer fluctua- tions in interest rates on loans, the absence of such balances would mean that the average rates of interest would be much higher than they are to-day. There can, I think, be little doubt that Mr. Tennant made out a good case for London's position as an international centre being not only indispensable to the country's international balance-sheet, but to the advantage of overseas trade and to home industry.
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