It will be asked, what more can be required? i reply, a great deal

In wild periods of alarm, one failure makes many, and the best way to prevent the derivative failures is to arrest the primary failure which causes them.

My purpose is, first, to show that the British system is peculiar and is not suited to other conditions; second, that the conventional idea of “sound” currency is chiefly derived from certain superficial aspects of the British system; third, that a somewhat different type of system has been developed in most other countries; and fourth, that in essentials the system which has been evolved in India conforms to this foreign type. _, the Government can be required to give 15 rupees in exchange for £1. Thus, as in the United States, the Government maintains an independent Treasury system.

According to the present practice the process in these circumstances also is, therefore, automatic, and the amount of new rupees put into circulation does not depend on the arbitrary action of the Secretary of State in selling or withholding Council Bills. That, I have every hope, will come in time, but we cannot force it.

31. Huskisson expressed it, within twenty-four hours of a state of barter. Act declaring the British sovereign legal tender at 1s. In 1832, Lord Overstone observed: I think that joint stock banks are deficient in everything requisite for the conduct of the banking business except extended responsibility; the banking business requires peculiarly persons attentive to all its details, constantly, daily, and hourly watchful of every transaction, much more than mercantile or trading business.

If the national money can safely be deposited in banks in any way, this is the way to make it safe. │ Total. There was also a small increase of rupees in that part of the Indian Cash Balances which is held in rupees and not in currency notes. It shows that the notes supply an increasingly important proportion of the seasonal demand for additional currency.

Very often they have incurred obligations which must be met; and if that is so the rate of interest which they pay is comparatively indifferent.

And this rise of prices has three consequences. Such deposits are, in fact, a portion of the reserve of these bankers; they make an essential part of the sums which they have provided and laid by against a panic. If, on the other hand, the India Council had refused to sell bills freely, gold would have been exported to India, taken to the Paper Currency Department, and exchanged for rupees in notes or silver. And they would be canvassed in every way and on every side to appoint a man of mercantile dignity or mercantile influence. The Balkan War was at this time at an acute stage, but the European situation was only moderately anxious. │ │circulation. From 1860 to 1876 the possibility of the Bank of Bengal’s developing into a “Bank of India” was constantly in the air, successive financial Members of Council being not unfriendly to the idea. Mr.

Up to 1862 the Banks had the right of note issue; but this right was so hedged about by a restriction of the total liabilities payable on demand to a certain multiple (at first three times, later four times) of the cash reserve, and of the total liabilities of all kinds to the amount of the Bank’s capital (up to 1839), or of the total note issue to a fixed amount (from 1839 to 1862), that the note issue of the Presidency Banks never became important.

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