The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-12-20
BRITAIN NEEDS GOLD RESERVE.
sf65 900 900 BULLION IN BANK
OF ENGLAND NOT ENOUGH.
Sir Felix schuster Proposes plan OF Increase
10 Bankers nstitute -GOyernment
Said to Think OF Adopting N-Notc
Issues to Reduce the Bank Rate.
Special Gable Despatch to TIE SUN.

hobuVs W Wv NuO b@"A NsNOs
Special Gable Despatch to TIE SUN.
LONDON, Dec. i9.-Sir Felix Schuster, the
well known ~Rnancier. read an important
paper before the Bankers Institute dealing
with the British gold reserve. the need Of
inc raasing which is, in his opinion, clearly
proved. In addition TO the inn ortance at
taching 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 recon-
mendation.
Sir Felix said that the existing system
was amply sufficient for the purposes OF
internal trade, but it seemed imperative to
strengthen the gold reserve in case OF a sud
den external drain. One OF his most in
teresting suggestions was that a census
be taken Of the Bank OF England's notes
and the gold held by all the banks Of the
country on a given day, the object being
to discover the proportion OF Bank OF Eng
land notes held by the public and the banks
There is at present absolutely no means OF
knowing the number OF bank notes held by
the public. Estimates place the gold cir
culating in the country a eighty million
pounds sterling (S4OO. 900 ,OOO). Sir Felix
estimated that the liabili ties on current de-
post accounts in the banks OF the United
kingdom exceeded eight hundred million
pounds "a 600, 600, OOO), against which the
total stock OF bullion in the Bank Of Eng
land il only fS3, 263, 900.
Among other things Sir Felix proposed
that the banks publish monthly the average
of three weekly accounts, that the Bank OF
England publish a periodical return show
ing bankers balances, that a special reserve
be formed to which each ban should con-
tribute gradually a SUN equivalent to ? per
cent. OF its deposits repayable on demand.
which would o to about $40 900 900.
and that the Government also contribute
the equivalent Of 2 per cent. OF the deposits
in the savings banks, or about $50 900 900.
A small committee Of bankers should be
organized without whose consent this
special reserve could never be used. Con-
sent would only be given in exceptional
emergencies. The Bank Of England should
be empowered after the bank rate had
reached q high level to increase its note
issde by a given proportion Of the special
gold reserve, subject to paying the Govern
ment a duty on the notes, which would
only be used for internal purposes.
The institute will discuss the proposals
In the middle OF January.
The Daily Mail. referring to the story
recently oabled to The Son of the dis
covery OF a gold reef in England, says that a
syndicate has been formed to obtain options
over all the and 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 IL
describes 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 Inc the
question OF gold reserve be settled.