And there is this excuse for the Bank. 38. But this is most unlikely to be the case.
It has been necessary in the immediate past to use the Paper Currency Reserve as a part of the general reserves held for ensuring the absolute stability of the rupee. A great private bank might easily become very rotten by a change from discretion to foolishness in those who conduct it.
George, at Genoa, and other banks founded in imitation of it, were at first only companies to make loans to, and float loans for, the Governments of the cities in which they were formed.
Thus the authorities are free, if they like, to hold the whole of the Currency Reserve in rupee–tokens, and this reserve has become, therefore (as we shall see below), an important part of the mechanism by which the supply of silver rupees to the currency is duly regulated. To a certain extent they must anticipate probable demands on the output of the Mint. The main variable element in the reserves of the Presidency Banks is the notes, and these are duly allowed for in the above table. In 1900 the Government issued a circular asking for opinions on certain proposals, including one for “universalising” the notes or making them legal tender in all circles. They prefer to keep it so, and it would not answer a banker’s purpose to make expensive arrangements for keeping it otherwise. What was the effect on the Government Balances in India? The ordinary method, by which the rupees accumulating in the Reserve Treasuries from the proceeds of taxation are quickly released and given back to the Money Market, the encashment, namely, of large volumes of Council Bills, had failed. The Presidency Bank of Bengal was opened in 1806 and received its charter of incorporation from the East India Company in 1809.  Gold is an international, but not a local currency. Any sudden event which creates a great demand for actual cash may cause, and will tend to cause, a panic in a country where cash is much economised, and where debts payable on demand are large. ; thus a refusal to sell bills would mean an eventual loss of nearly ¼d. The first is to permit a small variation in the ratio of exchange between the local currency and gold, amounting perhaps to an occasional premium of ¾ per cent on the latter; this may help to tide over a stringency which is seasonal or of short duration without raising to a dangerous level the rate of discount on purely local transactions. Harrison and Mr. The effect of this on the volume of remittance would be very great. The worst people will come to him and ask for loans. The Fowler Committee, then appointed, recommended a gold currency as the ultimate objective. Few men in India would be found equal to the task. 4d. The working classes, having cheaper food, need to spend so much less on that food, and have more to spend on other things. . But beyond withdrawing from the market he took no further steps for the support of exchange. The really best man would probably not be so rich as the majority of the directors, nor of so much standing, and not unnaturally they would much dislike to elevate to the headship of the City, one who was much less in the estimation of the City than themselves.