The custom and convenience of the people justify this, so far as concerns payment in small

│Treasuries. If this is the case in European countries, there cannot be much doubt as to what would happen in India.

Notwithstanding other changes, the distribution of the customers of the bill-brokers in different parts of the country still remains much as Mr. In fact, some recent complaints against the existing currency policy have been occasioned by the tendency of prices to rise; whereas it is plain that the great change of 1893 must have tended to make them fall, and that rupee prices would, in all probability, be higher than they now are, if the change had not been effected. 8.

How much of this could possibly be spared from circulation at a time of crisis? In 1908 the rupee circulation fell (at its lowest point) by somewhat less than 30 crores, or less than 20 per cent of the estimated rupee circulation at that time. Mr. In consequence all our credit system depends on the Bank of England for its security. The figures of the preceding paragraphs, in their cumulative effect, suggest the following reflection. . Each industry when prosperous buys and consumes the produce probably of most (certainly of very many) other industries, and if industry A fail and is in difficulty, industries B, and C, and D, which used to sell to it, will not be able to sell that which they had produced in reliance on A’s demand, and in future they will stand idle till industry A recovers, because in default of A there will be no one to buy the commodities which they create. Many persons live entirely on the income of shares, or debentures, or foreign bonds, which is paid in coupons, and these are handed in for the bank to collect. On various occasions, most influential persons, both in the government of the Bank and out of it, have said that such was their opinion. I thought it would frighten people. Hankey) advocate an erroneous policy. Three times ‘Peel’s Act’ has been suspended because the Banking Department was empty. This is due to the fact that the Government Treasuries, the Presidency Banks, and possibly other banks and large merchants, use the notes as a convenient method of avoiding the custody of large quantities of silver during the slack season when rupees are not wanted.

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