A more distinct view of abstract principle must be taken before we can fix on the

This is a confusing group, because a great number of small money–lending establishments are registered as Banks under the Indian Companies Act—in 1910–11 492 businesses were classified as Banks.

On September 1, 1907, they seem to have been, approximately, as follows:— _Gold_— Currency Reserve in India £4,100,000 Currency Reserve in London 6,200,000 ——————————– £10,300,000 ═══════════ _Money at Short Notice_— Gold Standard Reserve in London £50,000 Cash Balances in London 5,150,000 ——————————– £5,200,000 ═══════════ _Sterling Securities_— In Currency Reserve £1,300,000(a) In Gold Standard Reserve 14,100,000(a) ——————————– £15,400,000 ═══════════ _Aggregate Sterling Reserves_— Gold £10,300,000 Money at Short Notice 5,200,000 Securities 15,400,000 ——————————– £30,900,000 ═══════════ (a) Book value. Many of them have information as to the present course of trade, and as to the character and wealth of merchants, which is most valuable, or rather is all but invaluable, to the Bank. That, I have every hope, will come in time, but we cannot force it. In 1905 Sir E. For many years questions of the ‘currency,’ particularly questions as to the Act of 1844, engrossed the attention of all who were occupied with these subjects. │ Cash │ │ │ Banks. If the cash balances in London are not sufficient to stand the drain on them, gold at the Bank of England may be “un–earmarked” and placed to the Secretary of State’s current account, rupees in India being transferred at the same time from the Government balances to the silver portion of the Paper Currency Reserve—the reverse process from that which has been described already as the result of exceptionally large sales of Council Bills.

Many things which seem simple and which work well when firmly established, are very hard to establish among new people, and not very easy to explain to them. But probably up to 1830 in England, or thereabouts, the main profit of banks was derived from the circulation, and for many years after that the deposits were treated as very minor matters, and the whole of so-called banking discussion turned on questions of circulation. In the event of an internal financial crisis in India the Exchange Banks are probably depending on the anticipation that they will be able to remit funds from London by telegraphic transfer. These prosperity advances, therefore, are to be sharply distinguished from the adversity advances, discussed on pp. The danger may indeed be surmounted by the continual infusion of new and able partners.

The rich man wants the full rate of mercantile profit on the whole of the capital employed in his trade, but the poor man wants only the interest of money (perhaps not a third of the rate of profit) on very much of what he uses, and therefore an income will be an ample recompense to the poor man which would starve the rich man out of the trade.

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