Many of them have information as to the present course of trade, and as to the

While, however, the note issue has managed to evolve an important function for itself, I think the time has come when the usefulness of the Currency Reserve may be much increased by a deliberate consideration of the place it might fill in the organism of the Indian Money Market. The danger may indeed be surmounted by the continual infusion of new and able partners. In such a country an immense credit rests on a small cash reserve, and an unexpected and large diminution of that reserve may easily break up and shatter very much, if not the whole, of that credit. In 1907–8 the adverse balance of indebtedness was largely due to a change in the trade balance;—on the one hand, goods ordered during the boom continued to pour into Bombay for some weeks after they had become unsaleable, thus continuing for a time a large supply of bills on India, while, on the other hand, the failure of the monsoon and consequent anticipations of a scanty harvest cut off a considerable part of the normal supply of trade bills on London.

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