ABSTRACT
The fundamental reserves of the Central Banks consist of gold and silver, and of Foreign Exchange held as balances with the other Central Banks. A fixed fiduciary issue, intended to remain unchanged in the future, will, in the course of time, and as the reserves of the Bank increase, decrease if calculated as a percentage of these reserves. The maximum value of the Principal Liabilities appearing in the balance sheet at the end of the current week, should be equal to this last maximum value plus or minus the full amount of any increase or decrease respectively in the value of the Fundamental Reserves during the week. As the amount of sight liabilities forms the basis of non-cash payments, it may be taken for granted that the amount of the sight liabilities will never fall below a certain minimum.
