more work. If 3,000,000 L. of coin be deposited in a bank, and it
need only keep 1,000,000 L. as a reserve, that sets 2,000,000 L.
free, and is for the time equivalent to an increase of so much coin.
As a principle it may be laid down that all new unemployed savings
require _either an increased stock of the precious metals, or an
increase in the efficiency of the banking expedients by which these
metals are economised_. In other words, in a saving and uninvesting
period of the national industry, we accumulate gold, and augment the
efficiency of our gold. If therefore such a saving period follows
close upon an occasion when foreign credits have been diminished and
foreign debts called in, the augmentation in the effective quantity
of gold in the country is extremely great. The old money called in
from abroad and the new money representing the new saving co-operate
with one another. And their natural tendency is to cause a general
rise in price, and what is the same thing, a diffused diminution in
the purchasing power of money.

'Up to this point there is nothing special in the recent history of
the money market. Similar events happened both after the panic of
1847, and after that of 1857. But there is another cause of the same
kind, and acting in the same direction, which is peculiar to the
present time; this cause is the amount of the foreign money, and
especially of the money of foreign Governments, now in London. No
Government probably ever had nearly as much at its command as the
German Government now has. Speaking broadly, two things happened:
during the war England was the best place of shelter for foreign
money, and this made money more cheap here than it would otherwise
have been; after the war England became the most convenient paying
place, and the most convenient resting place for money, and this
again has made money cheaper. The commercial causes, for which there