The probable efflux of bullion from the Bank scarcely affects it at all; even the real efflux affects it but little; if the open market did not believe that the Bank rate would be altered in consequence of such effluxes the market rate would not rise.

If the Bank choose to let its bullion go unheeded, and is seen to be going so to choose, the value of money in Lombard Street will remain unaltered.

The more numerous the demands on the Bank for bullion, and the more variable their magnitude, the more dangerous is the rule that the Bank rate of discount should conform to the market rate.

In former quiet times the influence, or the partial influence, of that rule has often produced grave disasters.

In the present difficult times an adherence to it is a recipe for making a large number of panics.
A more distinct view of abstract principle must be taken before we can fix on the amount of the reserve which the Bank of England ought to keep.