Evening star. [volume] (Washington, D.C.) 1854-1972, 1906-12-20
BRITAIN NEEDS GOLD.
$165, 600, 900 BULLION IN BANK OF
ENGLAND NOT ENOUGH.
Sir Felix Schuster Proposes Plan Of
Increase to Bankers Institute
Notes to Reduce Bank Rate.

LONDON. December 2o-sir Felix schus-
ter, the well known fnancier read an i'm
portant paper before the Bankers Ins;i-
tute dealing with the British gold reserve,
the need of increasing which is. in his opin-
Ion, clearly proved. In addition to the i'm
portance attaching to the opinion OF such
an authority as Sir Felix, his proposals are
especially Interesting owing to the reported
intention of Mr.. Asquith, chancellor of the
exchequer, and the government to adopt
his recommendations
Sir Felix said that the existing system
was amply sufficient for the purposes of in
ternal trade, but 1t seemed imperative to
strengthen the gold reserve in case of a
sudden external drain. One of his most in
terestlng suggestions was that a census be
taken OF the Bank of Englands notes and
the sold held by all the banks OF the coun-
Try on given day, the object being to dis
cover the proportion of Bank of England
notes held by the public and the banks.
Gold Circulation.
There Is at present absolutely no means
or knowing the number of bank notes held
oy the public. Estimates place the gold cir
cuiatinS In the country at eighty million
pounds sterling (si0O 100000. Sir Felix
estimated that the liabilities on current de-
post accounts in the banks of the united
klngdom exceeded eight hundred million
pounds, 4,00O,Oo0,000, against which the
total stock of bullion in the Bank of Eng
land is only G33, 263, 600
Among other things Sir Felix proposed
that the banks publish monthly the aver
age of three weekly accounts that the
Bank of England publish a periodical re-
turn showing bankers balances. that a spe-
cial reserve be formed to which each bank
should contribute gradually a sum equlva-
lent to per cent of its deposits repayable
on demand, which would amount to about
S4oG0,OCO, and that the government also
contribute the equivalent of per cent of
the deposits in the savings banks, or about
$40. 900.
organized without whose consent this spe-
cfal reserve could never be used. Consent
would only be given in exceptional emer-
gencies. The Bank of England should be
empowered after the bank rate had reached
high level to increase it's note issue by a
given proportion of the special gold re-
serve subject to paying the government
duty the notes. which would only be-
used for internal purposes.
The institute will discuss the proposals in
the middle of January.
English Gold Mine.
The Daily Mail referring to the story OF
the discovery of a gold reef In England.
obtain options over all the land where the
reef lies. Until this is done. the location
of the reef will not be revealed.
The Mail publishes an interview with the
chairman of the syndicate. whom 1t de-
scrlbes as a man of good standing In the
city He said that only five persons know
the whereabouts of the reef, which is thirty
one miles long. He added that when IL
was worked England would rank high
among the worlds gold producers and that
the problem of the unemployed and the
question of gold reserve be settled.