BANK RATES

Marlborough Express, Volume XLII, Issue 5, 7 January 1908, Page 2

BANK RATES

The increase in the Bank rate to 7 per. cent, has created a marked impression throughout the country, for it is necessary to go back some thirtyfour years to find a precedent. In October, 1873, it was 7 per cent., and at the close of the first week in November reached 9 per cent. It remained at that figure for over a fortnight, but by the end of the year the rate had fallen again to 4£ per cent. That the Bank of England has been justified in raising its rate to 7 per cent, in order to protect its gold reserve from depletion seems generally admitted, for that reserve, - -owing to the intensity of the American demand, has dropped t>v £6,500,000 during the past fortnight. Though a very high Bank rate—and it is quite possible that in 7 per cent, we nave not reached the highest point—is a great cause of inconvenience in the city, and ncessarily exerts a m■strictive effect on trade, there is not the slightest reason for any alarm as -to the general commercial and financial condition of the country. Not only is our banking system a sound one, but there is every evidence that the *rade development which has marked the last, three years is perfectly legitimate, and in no way due to over-

speculation or any other unwholesome causes.