This would lessen to a certain extent the probable range of fluctuation in exchange and might, therefore, diminish the risk of loss involved in remitting to India when exchange is high; but the Secretary of State’s withdrawal from the market would not necessarily prevent exchange from falling below 1s.
The earlier Banks, coming under this description, were usually under European management. Least of all could they bear it at the beginning of a panic, when everybody wants more money than usual.
In an article contributed to the _Contemporary Review_ of 1887, Dr. Estimated by the idea of old times, by the idea even of ten years ago, that sum, I know, sounds extremely large.
Whether it were done through the Presidency Banks only, or whether an approved list of borrowers of Government funds were to be drawn up for India as is already the case for London, the effect on the Indian Money Market would be much the same.
The same peculiarity has shown itself over and over again during periods of financial pressure; and even at the present moment (November 1898), while money is not by any means tight, there exists a difference of about 2 per cent between the bazaar and the Presidency Bank rates. │1909. The figures are, therefore, hardly relevant to questions peculiarly Indian; and I will content myself with quoting, from the table given in the official statistics, the total deposits of Exchange Banks made _in India_, and the cash balances held _in India_ against them. Not possessing the accumulated credit of years, it would have to wind up before it attained that credit. ” Financiers of this type will not admit the feasibility of anything until it has been demonstrated to them by practical experience. If the use for the additional currency is only temporary, the cost of transport or remittance is great enough to make it not worth their while to get this addition until the Indian rate of discount has been forced up to a high level. Suitable security for this purpose would be Government of India securities (which would have indirectly the effect of increasing the market for Rupee Paper) and Bills of Exchange of the highest class. I do not think that this is the most useful point of view from which to approach the question, or that the proper magnitude of the Gold Standard Reserve can be discussed without reference to the magnitude of the other reserves. _ on remittance) is to be recouped in three months (_i. The Committee of 1898 explicitly declared themselves to be in favour of the eventual establishment of a gold currency. ) + (xii. , amount to £19,000,000 or £20,000,000 annually. This is quite apart from the question whether they are more _likely_ to get into trouble than formerly. , five millions–there would be a great danger that the whole mass of Exchequer Bills would be at a discount, and would be paid into the revenue. The regent in Law’s time had given a monopoly of note issue to a bad bank, and had paid off the debts of the nation in worthless paper.