Under a good system of banking, a great collapse, except from rebellion or invasion, would probably

1904. Scarcely any instance of great success in a railway can be mentioned in which the chairman has not been an active and judicious man of business, constantly attending to the affairs of the company. This seems to have worked satisfactorily up to 1874.

In their past relations with the Presidency Banks in the matter of temporary loans, the Government of India have sometimes seemed to attach more importance to preventing the Banks from making any profit out of the loans than to any other aspect of the transaction. It was the owner of many debts from England. For this purpose only a little money is wanted. The real introductory function which deposit banks at first perform is much more popular, and it is only when they can perform this more popular kind of business that deposit banking ever spreads quickly and extensively.

The holders of the cash reserve must be ready not only to keep it for their own liabilities, but to advance it most freely for the liabilities of others. ) have been as follows:—(1) The sovereign is legal tender in India at 15 rupees to £1; (2) the Government has bound itself by Notification to give rupees for sovereigns at this rate; (3) it is willing, as a rule, to give sovereigns for rupees at this rate, but is under no legal obligation to do so, and will not always exchange large quantities.

This value is remitted to England by selling for sterling in London bills which can be cashed in rupees in Calcutta.

On the other hand, as the Bank carries on itself a large discount business, as it considers that it is itself competent to lend on all kinds of bills, the bill-brokers are its most formidable rivals.

I shall return to this proposal again in Chapters VI. In fact, by the establishment of a par of exchange between the rupee and sterling; the severity of seasonal stringency has been greatly moderated. Thus at that date this reserve stood at about £19,750,000, allowing for depreciation. He runs the risk of loss and robbery just as if he were hoarding coin.

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