All which is to my purpose is that our paper ‘legal tender,’ our bank notes, can

on a rupee is about ·6 per cent. The Government would be vehemently urged to save the situation by making sterling advances, not simply in exchange for notes or rupees, but on some other non–monetary security.

If the Exchange Banks are remitting funds back to London, this shows itself, therefore, in a poor demand for Council Bills; and conversely when they are remitting funds to India, there is a strong demand for Council Bills. No doubt in every one of these years the condition of the Bank, divided or undivided, was in a certain sense most sound; it could ultimately have paid all its creditors all it owed, and returned to its shareholders all their own capital.

Yet for the reasons already given it would not be worth while in existing circumstances for any one to borrow this sum and remit it to London, until such time as it may be again wanted in Calcutta;—it is better to let it lie idle and wait for busier times.

That bank lent this balance at its own discretion, to bill-brokers or others, and it formed a single item in the general funds of the London market.

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