The Bank of England must keep a reserve of 'legal tender' to be used for foreign payments if itself fit, and to be used in obtaining bullion if itself unfit.

And foreign payments are sometimes very large, and often very sudden.

The 'cotton drain,' as it is called--the drain to the East to pay for Indian cotton during the American Civil War took many millions from this country for a series of years.

A bad harvest must take millions in a single year.

In order to find such great sums, the Bank of England requires the steady use of an effectual instrument.
That instrument is the elevation of the rate of interest.