If 3,000,000 L.
He is further asked: ‘Do you guarantee the bills you discount, and what is your charge per cent?–No, we do not guarantee them; our charge is one-eighth per cent brokerage upon the bill discounted, but we make no charge to the lender of the money. In this matter the experience of 1907–8, when the monetary position in India was easy throughout, may prove, I think, misleading. A busy season will soon come when the Government might lend some part of its reserves in India without endangering in the least the stability of its system and to the great advantage of Indian trade. That which happened so marvelously in the green tree may happen also in the dry. This would cause misfortune to the industries dependent on that one, and, as has been explained, all through society and back again. Until such a doctrine is repudiated by the banking interest, the difficulty of pursuing any sound principle of banking in London will be always very great. ‘ In a time of no alarm, or in any alarm affecting that particular banker only, he can rely on such reserve without misgiving.
Even now the Bank of France, which, I believe, by law ought to have a branch in each Department, has only branches in sixty out of eighty-six. One-third of the deposits in joint stock banks, not to speak of the private banks, would be 30,000,000 L. At every period of incipient panic the holders of it would perceive that it was of great importance to themselves to support these dependent dealers. Accordingly he asks the larger dealer for advances.
 5. 4d. 218, except that for “London” “outside India” would have to be substituted. There were a few joint stock companies, among which the East India Company held the foremost place; but the demand for the stock of such companies was far greater than the supply. He laid it down that a currency is in its most perfect state when it consists of a cheap material, but having an equal value with the gold it professes to represent; and he suggested that convertibility for the purposes of the foreign exchanges should be ensured by the tendering on demand of gold _bars_ (not coin) in exchange for notes,—so that gold might be available for purposes of export only, and would be prevented from entering into the internal circulation of the country. It would be specially unfortunate if a competitor to the paper currency were to be introduced, before the virtual abolition of the system of circles has had time to have its full effect in the direction of popularising the use of notes.
J. They now not only keep people’s money, but also collect their incomes for them. Next come such countries as Russia and Austria–Hungary—rich and powerful, with immense reserves of gold, but debtor nations, dependent in the short–loan market on their neighbours. The rules governing the Reserve were framed (see § 3) at a time which, to the modern student of currency, is almost prehistoric, under the influence of the Bank of England’s system of note issue and of the British Bank Act,—an Act which had the effect of destroying the importance of notes as a form of currency in England, and which it has been found impossible, in spite of some attempts, to imitate in the note–using countries of Europe.