Times without number the public have been alarmed mainly because they saw that the Banking reserve was already low, and that it was daily getting lower. M. For I have excluded the Public Deposits (amounting in 1910 to £2,820,000), and have included the whole of the cash balances (at the branches as well as the head offices) held by the Presidency Banks against them. ‘ Again, a most important function of early banks is one which the present banks retain, though it is subsidiary to their main use; viz. But we have no concern now with these differences of detail. In any case the reason why the Indian and London Bank Rates can differ from one another for short periods by large amounts is adequately explained. The kind of difference it makes is comparable to the difference which would be made if it lay within the discretion of a government to charge or not, as it saw fit, a small _brassage_ not much greater than the cost of coining. And as the amount of absolute necessaries which a people consumes cannot be much diminished, the additional amount which has to be spent on them is so much subtracted from what used to be spent on other things. If he wants to replenish his reserve, he may ask for it, suppose, just when the alarm is beginning.
From its very short period point of view the City is sometimes cross when this Indian demand shows itself in an inconvenient week; but if we take a longer view the Indian demand is, at a time of plentiful gold supply like the present, a true friend to the City and an enemy of inflation. But a private bank of the type usual in London has no such officer. But few have, we think, considered one most remarkable feature of the present time, or have sufficiently examined its consequences. Between September 1907 and September 1908 railway loans to the aggregate amount of about £12,500,000 and a loan of £2,000,000 for “general purposes” were raised in sterling.
There is in all ordinary joint stock companies a fixed executive specially skilled, and a somewhat varying council not specially skilled. If, on the other hand, it is intended to act as a banking reserve and to ensure India’s ability to meet her international obligations at all times, then its upper limit is set by the probable maximum amount of the adverse balance which could arise against India for immediate payment.
When, therefore, we are considering to what extent the Government could lend at the height of the busy season, we must chiefly pay attention to the sums in the _Reserve_ Treasuries on January 1.
 Further attempts to force gold into circulation were, therefore, abandoned, and a large part of the gold which had accumulated in the currency reserve in India was, a little later on, shipped to England in order to be held “ear–marked” at the Bank of England. And it is as the Bankers’ Bank that the Bank of England has to pay it, for it is by being so that it becomes the keeper of the final cash reserve.  Before the Fowler Committee of 1898, there was some desultory discussion of proposals for a Central Bank of India, which were supported by a few of the witnesses; but, apart from Mr.