GIPE-PUNE-OIIOI2 - DSpace@GIPE

AND THE BANQUE DE FRANCE 49
Down to 1853, 25 p.c. of the bullion might be kept
in silver. But since then silver has been discontinued.
And the bullion consists exclusively of gold.
In 1889 the amount of securities that could be held
as pledge against note-circulation was raised from £ 14
millions to £ t 6,450,000.
In 1914 the Currency and Bank Notes Act authorized
the note-bank to issue bank-notes in excess of any
limit fixed by law. This was a temporary measure. In
1919 a maximum limit was imposed. And it was
decided that the actual maximum "fiduciary" (i.e., uncovered
by gold) circulation of currency notes in any year
should be the fixed maximum for the following year. For
t 920 this maximum was £320,600,000.
In July 1928 the "fiduciary note-issue" was fixed
at a permanent maximum of £260,000,000. The position
may be indicated as follows :-
I. Fiduciary Note-issue
t • Government securities J
2. other securities
3. silver coins worth
£5,500,000.
£260,000,000
II. Covered by gold ~'
1. coins
2. bullion
The whole of the remaining
note-issue.
·The principle has remaided the same as in t 844.
In other words, with the exception of the maximum
.against which securities can be held the entire cir~ulation
.is to be covered by gold. In the British system, then, we