ABSTRACT

Peel's Bank Act, and the ideas on which it was based, still sets the standard by which credit policy is ultimately governed. The more the view regains ground that general business fluctuations are to be explained by reference to the credit policy of the banks, the more eagerly are ways sought for by which to eliminate the alteration of boom and depression in economic life. The most obscure and incorrect concepts are current concerning the nature of the discount policy of the central banks-of-issue. The purpose of the gold-premium policy was to postpone as long as ever possible the moment when the condition of the international money market would force the Bank to raise the discount rate in order to prevent an efflux of gold. The most important and most well-known of these is the gold-premium policy, as it was carried out by the Bank of France.