3. CENTRAL BANKS. (Sir Cecil Kisch & W.A. Elkin.)

​“If a Central Bank is to be in a position to control credit, it must have an unchallengeable voice in deciding the volume of credit to be available from time to time. If the banking reserves of the country are in the hands of a Central Bank, it is able to regulate the credit position on its appreciation of the situation as a whole and in the light of changing developments. If, on the other hand, reserve balances representing potential credit are held by the commercial banks themselves, it would be easy for them to pursue a credit policy independent of that of the Central Bank, and possible conflicting with it. The very idea of a Central Bank presupposes that the commercial banks will deposit their cash resources, other than till money, with it, and that a system will be established under which the commercial banks will not counter the credit policy of the Central Bank by any action on their part.”