The Bank of England official minimum discount rate is fixed by the directors of the Bank of England at their meetings upon Thursday of each week, and their decision usually appears in the financial columns of our daily papers reading thus: "Bank of England minimum discount rate unchanged," or "the Bank of England increased (or reduced) its minimum discount rate to 3 per cent," etc.

The private discount rate is the rate at which private banks (meaning all those in Great Britain other than the Bank of England) will discount bills of exchange for account of the owners or last indorsers, and this discount is governed by the Bank of England discount rate, and also by the supply of bills in the market for discount, but, except under unusual conditions, the private discount rate will always be about 1/4 of 1 per cent. below the Bank of England official minimum discount rate.

What are known as "rebate rates" apply only to time commercial bills of exchange drawn on firms where documents are for payment; that is, where bill of lading is delivered only upon payment of the draft. This rebate is an allowance made to the payee or drawee from the face amount of the draft, if paid before maturity, or before due, and such rebate is 1 per cent. below the Bank of England official minimum discount rate.

Theoretically the Bank of England controls the discount market in London. This control is sought to be maintained through the official rate of discount at the bank, which is advanced when its stock of gold bullion is being largely drawn upon for export to the United States or European countries. If the conditions prevail to make it inadvisable to raise the bank rate, a higher price for gold will be charged; or if it finds difficulty in controlling the discount rate, it will create a demand for discounts by borrowing on its security, thereby increasing the demands for discounts.

Unlike the Bank of England, which undertakes to control the stock of gold by advancing the discount rates, the Bank of France protects its stock of gold by increasing the price of gold when withdrawal of a large amount is threatened. The official discount rate of the Bank of France, which controls the market rate, rarely changes except in case of financial or political crises.