Page:The Economic Journal Volume 1.djvu/748

 726 THE ECONOMIC JOI.RN,aL Theehaw, received very large remittances of specie on Government account from Bengal, Bombay, and Madras. The principal inter-provincial movements of funds have now been enumerated. They are of course liable to fluctuation: during the Burmese war, trade was dull in Rangoon and Mandalay, whilst in 1888-89 the opium crop failed and money went out into Eastern Bengal, whi!st more was required in the north for the Sikldm Mission, and m the east and south-east for the expedition to punish the Lushai raid. In 1885-86 the bonus on the transfer of the Sind-Delhi Railway was paid into the Puniab. In 1886-87, the State of Gwalior made a loan of three and a half crores to Government, of which 31 lakhs were paid in our currency: of this, twenty lakhs were sent to the Punjab and seven to ._gra. In 1888-89, over forty lakhs of rupees entered the Punjab from the Pattiala and Kashmir States. With these and other rare excep- tions, remittances on Government account are made of mmixed coin, as it is easier to count large sums in new coin. The remarks made regarding these movements of public cash will not be generally intelligible without a brief explanation of the Government system of banking and paper issue. Until 1861, the Banks of Bengal, Iadras, and Bombay had the right to issue notes; which were receivable h payment of land-revenue to an extent of one-third of the demand: the circulation of this paper latterly averaged less than three crores and a half. By Act XIX. of 1861, Government took upon itself the sole privilege of issuing notes, the fiduciary limit being fixed at four crores. L:nder Act XV. of 1870, it was enlarged to five crores, by consent of the Secretary of State, then to six crores, and last year to seven crores. In 1890 the circulation was upwards of sixteen crores. There are at present eight issuing circles, which as a rule only cash their own notes, an exception being made in fayour of travellers, and also on those occasions when the encashment of foreign circle notes suits the interests of Government. It has always been considered impracticable to have one note change- able throughout the country. Notes of large denominations are commonly employed for remittance purposes, and the result of cashing them freely would be a constant shifting of Governmet funds at considerable expense in order to discharge them. For the same reason the notes of a circle are by law convertible only at the office of issue, and district treasuries are frequetly pro- hibited from giving coin in exchange. During the xqceroyalty of Lord Northbrook the system of keeping the public cash balances altered. To quote the language of last year's financial statement,