Sir Felix Schuster read an interesting paper on Wednesday evening
before the Institute of Bankers on " Our Gold Reserves." He defined "reserves" as meaning in this sense "such a reserve of gold as would ensure ability to meet without disturbance to our trade all demands that might suddenly arise for payment in gold of the obligations expressed in legal tender." The Bank Charter Act of 1844 was primarily, intended to ensure the convertibility of the Bank-note, at that time almost the sole instrument of credit, and it did not con- template the rise of joint-stock banking, and the creation of a new circulating medium. He advocated the extension of the Bank of England's gold reserve, the creation of a great central second reserve, to which all banks should contribute, and the monthly publication of the average figure of weekly accounts. A small permanent Committee should also be formed of representatives of the bankers to act with the Bank of England, and without this Committee's sanction the second reserve should never be used. Finally, he advocated allowing the Bank of England to increase its note issue, after the Bank-rate had reached a certain level, to an extent equivalent to a given proportion of the special reserve. This would ensure an elasticity now wanting in our system.
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