Up to January 1900 he undertook to sell telegraphic transfers at 1s. Let me first give a short account of the nature of the seasonal demand for money in India; and then discuss the salient respects in which her system of note issue differs from those of typical note–using countries.
F. But these are permanent not temporary additions. The amount of the sterling reserves is a measure of the ability of the authorities to withdraw rupees; and conversely, the volume of rupees which can be spared from the circulation (or from hoards) in bad times sets an upper limit to the extent to which they can be compelled to draw on their sterling reserves for the support of the currency. , in London 1½ in India 2½ │ │ (xii.
But an Indian writer, in a position to know the facts, could throw much useful light on a question where I must necessarily be content with somewhat doubtful conjecture. But there is still a considerable evil. _ those Banks, other than the three Presidency Banks, registered in India and having their head offices there. It would be much more in accordance with what we know of similar crises elsewhere to expect hoarding on a large scale, rather than a diminished demand for currency and an ability to export it. The other banks would be seen to be exempt from the cause which had destroyed it. But those who keep immense sums with a banker gain a convenience at the expense of a danger. ) = £m5½. But if it is a matter of shipping sovereigns _from England_ the variations in the cost of insurance and freight are relatively small.
And their natural tendency is to cause a general rise in price, and what is the same thing, a diffused diminution in the purchasing power of money. per oz. This is due to a deliberate change of policy, and to the use of the liquid part of the reserve for a new purpose. EXCHANGE BANKS ┌──────┬────────────────────┬────────────────────────–┐ │ │ Deposits in India. But if they miscalculate and mint more than they need, the new rupees must lie in the Government’s own chests until they are wanted, and the date at which they emerge into circulation it is beyond the power of the Government to determine. In short, a policy which led to a greater use of gold in India would tend, by increasing the demand for gold in the world’s markets, somewhat to lower the level of world prices as measured in gold; but it would not cause any alteration worth considering in the _relative_ rates of exchange of Indian and non–Indian commodities. F. Now that London is the clearing-house to foreign countries, London has a new liability to foreign countries. No one in the rural districts (as I know by experience) would ever believe a word against them, say what you might. They carry from home the idea and the habit of banking, and they take to it as soon as they can in their new world. They could not be expected themselves to discover such principles.