Page:Indian Journal of Economics Volume 2.djvu/512

 494 . c. OYAJEE security on which loans can be made from Currency Reserve. But the question will Is the paper of Co-operative Societies commercial paper from the point of .iew the Paper be asked-- as good as of security for such loans? We shall therefore institube a corn- parison between the security of paper and we shall find peculiar to etch. favor of commercial The first point paper is 'that value o! the ro kinds favorable characberistics to be urged in it is capable of being turned into cash in the ordinary marke, while that is not possible at presen$ in the pro-notes of co-operative societies. In ever, this remedied defect of co-operative either by arrangements paper entered the case of time, how- might be into wii;h Presidency Banks under which they will undertake the duty of re-discounting agricultural paper or by the estab- lishment of a state co-operative apex bank. A second point in which commercial paper appears superior to co-operative paper is he shorter period of the former. Commercial paper is drawn for from three to six are drawn for furtl. her thoughlb usance does not go to the there are a few ousands months, while co-operative pro-notes from six' to twelve months. On however, this difference in root of the matter. If of bills in the port-folio of a bank or of a Govern- ment institution, a certain number of these bills and boutkt on different date must day by day. irrespective of the they are of bills bills drawn; and in this lies or paper as investments. are very often renewed on pro-notes liquidate period for the chief Further commercial which ar themselves which merit maturity which is not the case with our pro-notes. This brings us to the special merits Of the paper of co-operative societies as securities. place, the Central Bank which lends on of In the first e pro-notes primary society is constantly controlling and