A corresponding cost would fall on the government, for mintage in the first instance and sometimes

Hankey’s is the last explanation we have had of the policy of the Bank. ; but when exchange is low, the reverse is the case and it is cheaper to get as much gold as the Treasury will let you have at 1s. The Metropolitan Board of Works, which collects a great revenue in London, has an account at the London and Westminster Bank, for which that bank makes a deposit of Consols as a security. The same might be shown of the years before and after 1866, _mutatis mutandis_. In the first place the gold imports for 1911–12 fall short of, and those for 1912–13 do not much exceed, those for 1910–11 if we exclude the additions to the Paper Currency Reserve. , England is in matters of currency the worst possible model for India; for in no country are the conditions so wholly different. A really able and active-minded Governor, being required to sit all day in the bank, in fact does, and can hardly help doing, its principal business.

The fourth of these provisions is the vital one for supporting the sterling value of the rupee; and, although the Government have given no binding undertaking to maintain it, a failure to do so might fairly be held to involve an utter breakdown of their system. Before leaving this topic I wish to emphasise, in close connexion with it, a special reason why it is so important to develop the use of notes in India at the present time. Only a translated text by a professional is relevant

It takes two or three years to produce this full calamity, and the recovery from it takes two or three years also. Tumbling day by day, it reached on November 25 the rate of ⅓–11/16. ‘ In a natural system, he would borrow of any one out of many competing banks, selecting the one that would lend cheapest; but under our present artificial system, he is confined to a single bank, which can fix its own charge. In Bombay and the Punjab, particularly in the latter, their use is, however, much more important. 1900. In order to give themselves breathing space, and to allow time for the silver recently bought in London to reach India and be coined, the Government had to raise the price of telegraphic transfers to what was then the unusually high figure of ¼–5/32. But few are now found who dispute on broad general grounds the wisdom of the change from a silver to a gold standard. My own nerves were educated to smaller figures, because I was trained in times when the demands on us were less, when neither was so much reserve wanted nor did the public expect so much. The old idea, as I have explained, was that the London bankers were the competitors of the Bank of England, and would hurt it if they could. But now that London is enormous and that no one can watch anyone, such a trade would be disastrous; at present, it would hardly be safe in a country town.

It might even be necessary for him to remit gold backwards and forwards himself, thus bearing the whole expense of which the Exchange Banks were being relieved. He removed the preservative apprehension which is the best security of all Banks. 4-1/32d.

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