│1906. But the banking of great cities is little concerned with loans on landed property.
This discredit means, ‘an opinion that you have not got any money,’ and to dissipate that opinion, you must, if possible, show that you have money: you must employ it for the public benefit in order that the public may know that you have it.
If it were, the excess would be considerably greater than it actually appears above. In such great and close civil dangers a nation is always demoralised; everyone looks to himself, and everyone likes to possess himself of the precious metals. I conclude, therefore, that the advantage of such a policy would not be great, probably not great enough to outweigh the cost. If the gold replaced notes, the former would be diminished, and, if it replaced rupees, the latter.
If general distrust of banking was widely spread, and notes, gold, and rupees were being hoarded in the old–fashioned way on a large scale, the banks would not be able to put their hands on sufficient cash resources of any kind to enable them to pay for the Government’s drafts on a scale adequate to their necessities.