( ~ Dhananjayarao Gadgil Library

\ I111m 1111111111111111111111111 ~IIII~ I GIPE-PUNE-009589 THE MONETARY PROBLEMS OF INDIA .. ~. MACMILLAN AND CO., LUUTID LONDON • BOMBAY • CALCtJTTA • UADLU UI!LBOVRNI . THE MACMILLAN .COMPANY NEW YORI: • BOSTON • CHICACO DALLAl· ATLANTA· .A. PUNCIICO THE MACMILLAN COMPANY OF CANADA, LIMITED TORONTO THE MONETARY PROBLEMS OF INDIA

BY L. C. JAIN M.A., LL.B. PH.D. ECON. (LoNDON) RBADBR IN .CONOMICS IN TMB UNIVBRSITY 0 .. TMB PUNJAB: SIlCRBTARY 01' THE UNITBD ,ROVINCBS BANKING INQUIRY COMMITTBB. 1929-30; LBCTURRR IN CURR.NCY AND BANKING AT THB UNIVERSITY OP ALLAHABAD; AUTHOR 011' II INDU.iBNOUS fI

MACMILLAN AND CO., LIMITED ST. MARTIN'S STREET, LONDON 1933 COPYRIGHT ,

..&NTIID I. GIIUI ••11" •• • TO

THE MEMORY OF MY MOTHER PREFACE THE aim of this book is to deal with the monetary problems of India as they have arisen in recent years, particularly during' 1926-32. While literature on the subject is in plenty, books on the recent phases of Indian currency and credit are not many. Happily, a mass of new material has been made available by the recent Banking Inquiry in every province in India. The very length of the material (20,000 pages in print), however, makes the task of its analysis rather difficult. Moreover, since the Banking Inquiry itself new changes-in fact, crises-have overtaken the money markets of the world, including India. Thus the subject of Indian monetary problems is today of unusual importance and difficulty. As in my work on Indigenous Banking in India, of the imperfections of my present venture I am fully sensible. My only justification for its presentation is that it is the first attempt to survey the monetary problems of the country in their recent phases made by one who has had unusual opportunities to study them from various angles during the last decade, and that it may form the basis of abler and more elaborate studies. For the opportunities to which I refer in the preceding paragraph I feel specially indebted to Sir Basil P. Blackett, Sir Purshotamdas Thakurdas, the Honourable Mr. E. A. H. Blunt and Mr. Manohar Lal. To Professor T. E. Gregory, Sir Bhupendra Nath Mitra, Dr. (Mrs.) 'Vera Anstey, Dr. Gilbert Slater, Mr. R. A. Gray and Mrs. A. Henderson I must express my great obligation for reading the whole or part of the manuscript and for many helpful suggestions. vii viii PREFACE My thanks are also due to the obliging Librarians of the Punjab University and Public Libraries, Lahore, the London School of Economics Library, the Library of the Office of the High Commissioner for India and of the British Museum Reading Room for the readiness with which they met all my demands, and to Messrs. Sumer Chand Jain and Shadi Lal Bhalla for their assistance in the construction of graphs.

L C.' JAIN.

t!NIVBRSITY 01' THB PI7NJ&B, LABORB, J.n"""" 1933· CONTENTS 'AGa PREFACE vii

CHAPTa. I. INTRODUCTORY I. The Constituents and Nature of the Indian Money Market I 2. The Currency System before 1916 2 3. The Currency System during 1916-25 10 4. Paper Currency. 1861-1925 16

J II. THE CURRENCY COMMISSION OF 1925-26 AND AFTER I. The Main Defects of the Currency System - 22 2. Recommendations: (A) A 24- (B) The Gold Bullion Standard 25 3. Attempts at Reform: (A) The Reserve Bank Bills. 1927 and 1928 - 30 (B) The CUrrency Act. 1927 - 33 4. The Currency Controversy of 1926-31 36 5. The Currency Crisis of 1931 39-

III. THE MONEY MARKET (A). 1929-32 I. Indigenous Bankers, • 5S 2. Loan Offices. Nidhis and Chit Funds 68 3, Co-operative Credit Societies 71 4. State Loans 85

IV. THE MONEY MARKET (B). 1926-32 I. Joint-stock Banks 88 2= Exchange Banks - 104- 3. The Imperial - IIO

V. THE MONEY MARKET (C). 1926-32 I. Post Offices 2. Government Loan Operations - 3. The Stock,Exchange ill: x CONTENTS

C~. .&0. ~ _VI. THE BANKING INQt1lRY, 1929-31 I. Origin, Constitution and Scope of the Inquiry - ISS 2. Nature of the Problems - 159 3. Suggested Solutions - 16'] 1VII. THE FUTURE OUTLOOK I. Monetary Reform • 187 2. Banking Reform - 191 3. International CcH>peration - 200

APPENDIX Ie THE CURRENCY Act OF I927 - - 203 APPENDIX II. THE GoLD AND STERLING SALES REGULA- TION ORDINANCE OF 1931 - 206

BIBLIOGRAPHY - - 209 INDEX - uS

DIAGRAMS

I. WEEKLY PRICE OF 100 DOLLARS IN RUPEES, SEP- TEMBER 1931 TO DECEMBER 1932 - 48

II. DEPOSITS OF THE JOINT-STOCK BANKS (1913-25) 93

III. DEPOSITS OF THE JOIIn'-STOCK BANKS (1926-30 ) 97

'IV. JOINT-STOCK BANKING IN GREAT BRITAIN Al'i'DIRELAND AND IN INDIA, 1929-30 - - I2S APPENDIX I

ACT NO. IV OF 1927 [PASSED BY THE INDiAN LEGISLATURE.] (Received the assent of the Governor General on the 26th March, 19270) An Act further to amend the Indian Coinage Act, 1906, and the Indian Paper Currency Act, 1923, for certain purposes, and to lay upon the Governor General in Council certain obligations in regard to the purchase of gold and the sale of gold or sterling. WHEREAS it is expedient further to amend the Indian Coinage Act, 1906, and the Indian Paper Currency Act, 1923, for certain purposes, and to lay upon the Governor-General in Council certain obligations in regard to the purchase of gold and the sale of gold or sterling; It is hereby enacted as follows:- 1. (I) This Act may be called the Currency Act, 1927. (2) It extends to the whole of British India, including British Baluchistan and the Sonthal Parganas. (3) It shall come into force on the 1st day of April, I~27. 2. In the Indian Coinage -,\ct, 1906.- (a) for section II the following section shall be substituted, namely:- • II. Gold coins. whether coined at His Majesty's Royal Mint or at any Mint established in pursuance of a proclamation of His Majesty as a branch of His Majesty's Royal Mint, shall not be legal tender in British India in payinent or on account, but such coins shall be received at any Government currency office and, at any time °after the 30th day of September, 1927, at any 203 204 THE MONETARY PROBLEMS OF INDIA - Government Treasury other than a Sub- Treasury, at the bullion value of IUch com. calculated at the rate of 8·47513 grainl .troy of fine gold per rupee '; and (6) the word 'and' at the end of clause (d) of sub-section (2) of section 21 and clause (e) of that lub-section &hall be omitted. .3. In the Indian Paper ~urrency Act, 1923 (a) to section 2 after the words' in thil behalf' the following shall be added, namely:- 'and " gold bullion .. includes gold coin '; (b) in clause (a) of section II, the words. 'or in gold coin which is legal tender under the Indian Coinage Act, 1906/ shall be omitted; (e) in section 13- (i) the words 'for gold coin which is not legal tender under the Indian Coinage Act, 1906, or ' shall be omitted; and (ii) for the· figures ' 11·30016' the figures '8·47512 ' shall be SUbstituted.; (d) in section 18- (i) in sub-section (4), the words 'sovereigns, haIf-sQvereigns • and the words ' coin and' shall be omitted; and ' (ii) in clause (a) of sub-section (8). for the figuCQ

, 11.30016' the figures '"8.47513 ' .hall be I substituted; ee) in section 19-" (i) in sub-sectlon (3), the words' sovereigns. half­ sovereigns' shall be omitted. and, in the Ezplanatitm, after the word 'sub-section,' the following words and figures shall be in­ serted, namely:- 'gold bullion shall be reckoned at the rate of one rupee for 8.47512 grains troy of fine gold, and '; and APPENDIX I 20 5

(ii) in su~section (5), the words' coin or ' and the word' coin,' where it occurs for the second time, shall be omitted. 4. Any person who offers for sale to the Governor-General in Council at the office of the Master of the Mint, Bombay, or at any other place notified in this behalf by the Governor-General in Council in the Gazette of India, gold in the form of bars con­ taining not less than forty tolas of fine gold shall, subject to such conditions as the Governor-General in Council may, by notifica­ tion in the Gazette of India, prescribe, be entitled to receive payment for the same at the rate of twenty-one rupees, three annas and ten pies per tola of fine gold. 6. (I) The Governor-General in Council shall sell, to any person who makes a demand in that behalf at the office of the Controller of the Currency, Calcutta, or of the Deputy Con­ troller of the Currency, Bombay, and pays the purchase price in legal tender currency, gold for delivery at the Bombay Mint at the rate of twenty-one rupees, three annas and ten pies per tola of fine gold or, at the option of the Controller or the Deputy Controller, as the case may be, sterling for immediate delivery in London at an equivalent rate: Provided that no person shall be entitled to demand an amount of gold or sterling of less value than that of 1,065 tolas of fine gold. (2) For the purpose of determining the equivalent rate applic­ able to the sale of sterling under this' section, twenty-one rupees, three annas and ten pies shall be deemed to be equivalent to such sum in sterling as is required to purchase one tola of fine gold in London at the rate at which the Bank of England is bound by law to give sterling in exchange for gold, after deduction therefrom of an amount representing the normal cost per tola of transferring gold bullion in bulk from lJombay to London, including interest on its value during transit. (3) The Governor-General in Council shall, from time to time, determine the equivalent rate in accordance with the provisions of su~section (2), and shall notify the rate so determined in the GazeUe of India. APPENDIX II

ORDINANCE No. VII. OP 19JI.

lim following is the full text of the Ordinance to ~~&l the Currency Ordinance, 19JI, and to rqulate sale of cold ot Iterlinc under section 5 of the Currency Act, 1927:- . . Whereas it is expedient to ~peal the Currency Ordinance, 19JI, and to resume and rqulate sales of cold or stuUnc und~r section 5 of the Currency Act, 1927; It is bereby macted as follows:- , L Silorl TiIU. This Ordinance may be called the Gold and Sterling Sales R~gulation Ordinance, 19JI. L R~ oj QNi,..,," VI. oj 19JI. The CW1'enCy Ordinance, 19JI, is hereby ~pealed. I. RISIridiotts 011 s.us oj CoU tw St.""" (1) Notwithstand­ ing anything contained in section 5 of the Currency Act, 1917 (hereinafter referred to as 'the said IeCtion 1, sales of cold or sterling under the said section-

(.) Shall be complet~ only by the (hereinafter referred to as 'The Bank 1, at its Joc:a) head offices in Calcutta and Bombay; (6) Shall be made only to branches in Calcutta or Bombay of banks lor the time being recognised in this behalf by the Governor-General in CouDc:il; (e) Shall be made for 6nanc:ing- (i) DOI1D&l trade requirements. e.xcludinc any requirement fa1linc under cla.u.se (4); (ii) contracts completed before the lISt ~ptember, 19J1,aod (ill) reasonable personal or domestic purposes; and 206 APPENDIX II 207 (d) Shall not be made for- (i) financing imports of gold or silver coin or bullion, or (ii) liquidating the oversold exchange position of any bank in respect of any month subsequent to the month in which the demand for gold or sterling is made. (2) Where any demand is made under the said section to the Controller of the Currency at Calcutta or to the Deputy Con­ troller of the Currency at Bombay, it shall be forwarded forth­ with to the local head office of the Bank. 4. Power 10 make Rules regulating Sales. The Governor-General in Council may, by notification in the Gazette of India, make rules- (a) prescribing conditions as to the amounts of gold or sterling which may be sold to any recognised bank, and the procedure regulating the making of demands for gold or sterling; (b) prescribing the authorities which may determine if the conditions imposed upon sales by or under this Ordi­ nance have been satisfied; (c) authorising a Managing Governor of the Bank to suspend the recognition of any bank provisionally, for a period not exceeding seven days, and regulating the exercise of such authority; and (d) generally, to carry out the purposes of this Ordinance. 5. Bar of Jurisdiction. No suit or oTher proceeding shall lie in any Court in respect of anything done or in good faith intended to be done under this Ordinance or the rules made thereunder.

NOTIFICATION No. D. 6604-F. Simla, the 24th September, 1931. IN exercise of the powers conferred by section 4 of the Gold and Sterling Sales Regulation Ordinance, 1931 (Ord. VII. of 1931), the Governor-General in Council is pleased to make the following rules:- 208 THE MONETARY PROBLEMS OF INDIA L These Rules may be caned the Gold and Sterling Sales Regulation Rules, 1931. 2. An amount of gold or sterling of less value than [%5,000 shall not be sold to any recognised bank. 8. Demands for gold or sterling may be made at the Local Head Offices of the Bank in Calcutta and Bombay. 4. The secretary of the Local Board of the Bank at Calcutta or Bombay, as the case may be, shall be the authCj>rity to decide if any demand satisfies the conditions imposed by the Ordinance and those Rules; and his decision shall be final. 5. (I) A Managing Governor of the Bank may call upon any recognised bank to satisfy him- (a) that it has not been selling foreign exchange for any purpose other than those specified in clause (e) of subsection (I) of section 3 of the Ordinance, or for any purpose specified in clause (d) of that subsection, and (b) that it has been using aU its purchases of foreign exchange before making a de~d on the Bank for gold or sterling. (2) If such Managing Governor is not so satisfied, he may suspend the recognition of the bank for a period not exceeding seven days., • (3) A Managing Governor shall make a report immediately to the Governor-General in Council, of any action taken by him under this rule. BIBLIOGRAPHY

A. BOOKS AND WORKS OF REFERENCE (GENERAL). ANSTEY (V.): The Economic Development of India. London, 1931. BASTER (A. S. J.): The Imperial Banks. London, 1929. BRIJ N ARA YAN: Indian Economic Life Past and Present. Lahore, 1929. BROWN (1. C.): India's Mineral Wealth 1" India of Today"). Bombay, 1923. CALVERT (H.): The Law and Principles of Co-operation. Calcutta, 1926. CANNAN (E.): Money. London, 1929. _ CANNAN (E.): Modern Cu"ency and the Regulation of its Value. London, 1931. DARLING (M. L.): The Punjab Peasant in Prosperity and Debt. London, 1932. Encyclopadia Britannica. 14th edition, 1929. GREGORY (T. E.): The Return to Gold. London, 1925. GREGORY (T. E.): The Gold Standard and its Future. London, 1932. HAWTREY (R. G.): Cu"ency and Credit. London, 1930. Indian Annual Register, 1923 and subsequent years. Edited by H. N. Mitra, Calcutta. Indian Finance Year Book. Calcutta, 1932. Indian Year Book, 192,5 and subsequent years. Bombay. JATHER (G. R) and BERI (S. G.): Indian Economics. 2 vols. Oxford University Press, 1931. KALE (V. G.): Indian Economics. Poona,I927. KEYNES (1. M.): A Treatise on Money. 2 vols. London, 1930. KISCH (SIR CECIL H.) and ELKIN (W. A.): Central Banks. London, 1932. KNOWLES (L. C. A.): The Economic Development of the British Empire. London, 1928. . PILLAI (P. P.): Economic Conditions in India. London, 1925. 209 210 THE MONETARY PROBLEMS OF INDIA

POWELL (E. T.): The Evoluticm oj 1M Money Mukel (1385-1915). London, 1916. Reports (and Memoranda) oj 1M Goltl Delegalicm oj 1M Fi""ftCiiJl Committee, League oj Nations. Geneva, 1932. SALTER (SIR ARTHUR): Recovery. London, 1932. SAPRE (B. G.): Essentials oj India1l Ec01lomics. 1927. SPALDING (W. F.): The Eastern E",hang' Cunency "nd Fi""",,. London, 1924. SPALDING (W. F.): London Money Markel. 1930. Stock Exchange Official Intelligence. 1932. WADIA (P. A.) and JOSHI (G. N.): The Wealth oj India. London, 1925. Worltl Ec01lomU: SU1'Vey, 1931-32. League of Nations, Geneva, 1932•

B. RECENT BOOKS ON THE INDIAN MONEY MARKET.' AMBEDKAR (B. R.): The Problem oj the Rupee. London, 1922. BHATNAGAR (E. G.): Currency and E",hange in India. Allaha­ bad,1924· CRABLANI {H. L.): Indian Currency "nd E"'hange in India. Madras, 1929. CRABUNI {H. L.): Studies in Indian Cunency "nd Exchange. London,1931. . . CLARKE (SIR G. R): The Post Office oj India. London, 1921. CoYAJEE (SIR J. C.): The Res,",e Bank oj India. Madras,I927. COYAJEE (SIR J. C.): The India1l Currency System (1835-1926). Madras, 1930. DADACHANJI (B. E.): A Resm. Bank Jor India "nd 1M Money Markel. Bombay, 1931. DADACHANJI (B. E.): History oj Indian Currency "nd E",hang', Bombay, 1931. DUBEY (D. L:): The Indian Public Debt. Bombay, 1930. GUPTA (B. B. D.): Paper Currency in India. Calcutta, 1927. HOUGH (E. M.): TM Co-operativ. Movemenl i1l India. London, 1932• Indian Currency and E"'hange (1914-1931). Published by the Federation of Indian Chambers of Commerce and Industry, 1931• JAIN (L. C.): Indigenous Banking in India. London, 1929. , With a few important exc:eptioD8 the boob included in the list are all those published within the last ten yean, 192z.-1932. BIBLIOGRAPHY 2U jEVONS (H. S.): The Future 01 Exchange and Indian Currency. London, 1922. jEVONS (H. S.): Money Banking and Exchange in India. Simla, 1922• KALE (V. G.): India's War Finance and Post-War Proble1ns. 1921. KEYNES (1. M.): Indian Currency and Finance. London, 1913. MADAN (B. F.): India's Exchange Problem. 2 vols. 1925. MAHINDRA (K. C.): Indian Currency and Exchange. 1922. RAu (B. R.): Present-Day Banking in India. Calcutta, 1930. RAy (SATISH CHANDRA): Agricultural Indebtedness and its Reme- dies. Calcutta University. RUSHFORTH (F. V.): Indian Exchange Proble1ns, 1920. Madras, 1928. SHIRRAS (G. F.): Indian Finance and Banking. London, 1920. SINHA (H.): Early European Banking in India. 1927. STRICKLAND (C. F.): Introduction to Co-operation in India (" India of Today"). Bombay, 1922. . THAKUR (B. T.): Organisation 01 Indian Banking. Calcutta, 1929. TURLE (H. B.): An Outline 01 Indian Currency. Calcutta, 1927. VAKD. (C. N.) and MURANJAN (S. K.): Currency and Prices in India. Bombay, 1927. WACHA (D. E.): Paper Currency in India. 1927. WADIA (P. A.) and JOSH I (G. N.): Money and the Money Market in India. London, 1926. WOLFF (H. W.): Co-operation in India. London, 1927.

C. OFFICIAL AND OTHER PuBLICATIONS. AU-India Income T4%, Report and Returns for the year 1930-31. Annual Report 01 the Indian Posts and Telegraphs Department for the year 1930-31. Annual Reporl 01 the Working 01 the Joint-Stock Companies, 1925-26. Annual Reporl on the Administration 01 the Indian Companies Act, 1913, etc., in Bengallor 19jO-31. Banking Needs 01 India. Pamphlet by Mohan La! Tannan. 1919. Budget (Annual) • • Census 01 India. 1921,1931. GazeUe 01 India, january 14,1931; September 21 and 24, 193I. 212 THE MONETARY PROBLEMS OF INDIA Govensme'" SectllilUs MII"IMIl, 1921 (with latest corTeCtions). INlu N"m1#s o/Irtdi/I" Prius. 1860-1930. llId.. itt 1925-2610 1930-31. (Annual.) ·11Id.. " YetII'-Book, 1931 and 193~. l"wsIqn' llId.. " Yetii' Book, 1931-32. LegislaIiv, .,tssmtbly DIIHJIes, llId.. (Official Report). Millis RejxJrl/or CIIlcuUII.1Id Bomhily. (Annual.) Morlll .1Id Mllhrilll Progreu o/IIIdUi, 1911-19u. Posl tllId TllegrtlPli G.. itU, 1932. Prices tllId Wages i" llIditl. (Annual.) Proceedings 0/ Fed611l SIrNcI.." Corra".iIUI. Indian Round Table Conference (Second Session), 1932 (Cmd. 3718). Reporl 0/ 1M C()JIJ,olJe, 0/ 1M CWf'IffCY. (Annual), 1920-21 to . 1931-32 . Reporl 0/ CorrafJIillu Ott llIdNSlry .1Id Fiu1I£'. London. 1931 (Cmd. 3897). Reporl 0/ 'M E%IenI4l CtlpiIIIl Corra".iIUI, 1925. RejxJrl o/IM llId.. " Clwml#s 0/ COffI1fUI'U, Ca1cutta, for 1930. Repori o/IM llId.. " ECOfIOfIIit; l"fNtry COrfIIftiUN, 1«}25. Reporl o/IM Roylll Corra".issiOJl OJI AgrictJlw, itt llIditl, 1<)28. Reporls IIIId EIIideJtu 0/ 1M (HencMll) COrfIIIIiItN OJI llId.. " CWf'eJICY, 1893; 1M (Fowler) Corra".iIUI OJIllId.. ,. CWf'IffCY, 18gS; 1M (C~ltIi") Royill CMJlrflissiOJI OJIllId.. ,. Fiu,," tllId CWf'eJICY, 1913 (Cmd. 7236 of 1914); til, BUiJlglofl S".iI/t CorrafJIiIUI Ott llId.. " Fiu,," .1Id CWf'IffCY. 1919 (Cmd. 527 of 1«}20); 1M (HilJofa YOIIJIg) Royill CMJIrfIissiOJI OJIlrtdi/I" C"""IffCY tllId Fiu,,", 1925-26-(Cmd. 2681 of 1926). Reports IIIId EWleJtU o/IM llId..,. C".111 BII1Iki"( COrfIIftiUN, 1931, and of the Banking Inquiry Committees m various Prov­ inces and Indian States, 1929-31. Reports o/IM A ",,1MIl COJI/tII'IJIU o/IM AU-Illd.. E"""",,ic A SI«'i4- lima, 1926 onwards. . Reports o/IM COJI/"ntea 0/ RegislTlIII'S 0/ Co-op.lllifll Soci#ha. Reports OJI 1M Working o/IM Co-op.lllifll SocieJia i,. 1M ~ ProviJIUS 0/11Id'" SItIIesfJItI,,', YetII'-Book: 1932. SWlisIiaal Abslrtld/or Brilisltllld.. , 1931-32. S~ SI4IertwJIIs rllMi", 10 Co-op"lIIiw Mweme'" itt I"tli•• (Annual.) S~ Tllbles rllMing 10 Bllw i,. lIIdUi. (Annual.) BIBLIOGRAPHY 213

D. MISCELLANEOUS. Bankers' Magan,", September 1926: • Indian Currency and Finance: by Sir Stanley Read; also issues from 1926 to 1932. Capil4l. 1931 and 1932. Commerce. 1931 and 1932. Despalch of the Gooernment of India on Constitutional RefONM. 1930 . Economica. 'October 192I: • The Indian Currency Report: by A. R. Bums. Exbad from the P,oceedings of the Punjab Gooernment (Ministry of Agriculture). No. 322-D. dated the 29th January. 1932. Gooernment Order No. 374. Government of Madras. dated 12th March. 1932. P41'liamentary Papers. 148 of 1864. T1t6 Calcutta Stock E%Change Association. LId.: Reports and Accounts for the year ended 30th September. 1931. 1932. Tlu Times. London. 1932. }u,t Publi,hed I A Unique Work! ANCIENT KARNATAKA • ': VOL. I HISTORY OF TULUVA • BY Dr B A. S\LETORE, M.A., ph.D. (Lond,), D.phil. (Giessen) Profenor of History. Sir Parnhurambhau College. Poona. Price Rao 7-8-0 Pp. x + 659 with 5 Plates + after April 1937 Rs. 10. map. Crown, Cloth bound. What wu till now reckoned as a lost province is now recovered to the country and the world of scholars in this work in which Dr. Saletore arrays a mass of facts concerning one of the most ancient dynasties of Southern India. Tuluva. now known by the name of South Kanan. was an integral part of the Karnataka: and to ita shores had come the Greeks in the 2nd century A.D. when a Tuluva king got.. himsel£ entangled in a love-story which brought the foreigners to one of the harbours of the province. Dr Saletore delineates the part played by the king of Tuluva is well as by· the Greeks: and gives us a connected account of the Alupas, who were one of the longest reigning families of India. Here we have a full description of the village organization, customs. manners, and religion of a province, which produced the celebrated Vai'Qava teacher Anandatirtha Madhvacarya. whose detailed history is given along with a complete account, of other religious teachers. Jaina, Saiva, and· Bhagavata Sampradaya, hitherto unknown to students of Indian history. This standard work is the only one of its kind dealing with that province i and no account of the history of Southern and Western India can be said to be complete without it. Apply to- ORIENT AL BOOK AGENCY, 15 Shukrawar, Poona 2. SELECT OPINIONS

.. It is a pleasure to see how carefully you stud, III available sources and put the whole mlterial before UI, '9 that we can alwaYI lee how you arrive at your reaultL Such treatises, dealing with definite partl of India, Ind bringing together the information contained in 111 Ivailable recordl, are enctly what is needed; Ind to European Icholara, who are not al a rule in a position to consult those numerous Indian publications where informltion Cln be gathered, they .re extremely welcome, provided that they are prepared with methodical criticism. Such is, 10 far II I cln lee, eminently the case with your boo", and I can onll congratu­ late you and us." CDr. St,n KonolD. 0.10. NorlDa,). "You have dealt with your complex lubject in ~ interesting manl!!'r, and it il specially latiefactory to have _10 full a discussion of the administration, of village orglnisa­ tion, of religion, and of life in generaL I note your very careful discussion of the legenda centring ill Bhiitila Pio4YI. Your views seem very convincing, and ahould leave little room for dispute. I am glad allo to aee the new evidence adduced in favour of a date for Madhva rather later than that adopted by Sir R. G. Bhandarkar. There ia much to be Isaid for the later date. I have read with intereat your view of the Kanna4a laaguage in the Greek fragment. I confe.a I still feel very dubious aa to the posaibility of the preae"I' .tion of intelligible Kanarese in luch In authority. It ia very difficult to see what value it would have for apeelltora fA the play. It is dear that your work ia being carried on ill • scientific spirit, .nd that when completed it will be .n indie­ pensable authority on the history of Karnatak.... CDr. A.8. K,ith, EJinbargh).

II It is • very valuable and painstaking work, which throws much light on a rather neglected corner fA hiatory." (Dr. L. D. Barndt, Lon Jon). INDEX

AGHA moneylenders, 58 Bankers' Magazine. 37 n. Agriculture: lOme of its needs, 159: Banking. see Imperial Bank of India: rural credit, 1.59: rural indebted­ Indigenous bankers; Joint-Stock ness, 160, 167: Royal Commission banks on (1928). 81 n., 156. 159, 161. 168. Ban"'ng Committe. Repon, See 174 under ]ndian Banking Committee Agricultural LoansAct (1884). 85. 86 Repon Agricultural Tribunal of Investip Banking education. u4, 186. ~8 tion.I.59 Banking inquiry (1929-31). 155-86. Agriculturists' Loans Act. 178 196 Ahmadabad. 12Z Banking reform. 191-200: suggested Ajmer-Marwara. 57. 74. .19. 103. legislation, 179. 198; statistics. 199 n,l 186, 199 Akalkote. 1.57 n.­ Baroda. 103. 157 fI,· Akyab. 179 n, Baroda. Bank of. 98. 193 All-India Bankers' Association, 185 Bassein. 179 n, All-India Co-operative College. 186 Easter. A, S. J,. 108 fI,I . 98. 102.193 Bearer Bonds. 134. 135 Allahabad University. 124 Behar and Orissa. 58 n,'. 60 It,I. 74. American Express Company. 105 79. 81. 83. 86. 87. 101. 103. 118. Amritsar, 108 157 It,. 161. 163 n,. 183. 199 It,I Anstey. Dr, (Mrs.) Vera. vii Bmami loans. 162 Assam. 57. 58 n,'. 74. 79. 81. 85-7. Bengal. 57.58 It,'. 62.67.68. 6g It,I. 103. 118. 1.57 n,. 161. 199 n,l 74. 79. 80 fI,. 81. 85. 86. 101. 103. Atith moneylenders. 58 118. 157 fI,. 163 It,. 199 fI,l AtIay Committee. 144 Bengal. Bank of. 16 It,. 110. I II Aundh. 157 n,- Berar. 101. 199 fI,l Better Living Society. 75 Babington Smith Committee. u. 13. Bhalla. Shadi Lal. viii 23 Bhopal. 157 fI,· Bagla. Lala Ramesbwar Prasad. 38 Bijapur. 178 BaJaikhala (account book). 61 Bikaner. 157 It,' Baluchistan. 101. 103.203 Bill market. 108. 185. 197 Bangalore.IOI Bills: Council. 9. 16: Reverse . 98. 193 Council. 9. 10 It,. 14. 15: Supply. Bank of Bengal. 16 n,. 110, III 114: Treasury. 39, 40• 135-7; . 16 n,. 88. 110. II I stamp duties on bills. 185 Bank of Chettinad. 61 Bills of exchange, se. Hyndi. Bank of India. 89. ga. 99. 148, 193 Bimetallic standard, 4 It., 188 . 16 n,. 110. III Blackett. Sir Basil, vii, 26. 32, 32 fI" Bank of Mysore, 89, 98 157 .. Bank of Upper India, 90 Blunt, Han, E, A, H" Vll Bank rate, 36, 37 Bombay. 17, 109, III. 122. 127, 196 Bankers'bank,117. 120 Bombay. Bank of, 16 It,. 88, 110. III Bankers' Evidence Act, 65,171 Bombay loans, 143 Bankers, Indian Institute of. u5. Bombay Merchants' Bank,89- 186 Bombay Mint, 34, 205 215 2I6 THE MONETARY PROBLEMS OF INDIA Bombay Presidency. 56 •.'. 57.58. Cleo"'" (pawnbrokers or IOld- 61. 63. 7.-6. 80. 81. 8 •• 86. 100. amith·).58 101.103. 118.127.1.5.157 •.• 161. Clarke.SirGeoftrey R .• u7 •.• uS •• 163 •• 172 •.• Il~9 •.• 199 •.1 Clearing hOllH8. III Bombay SAroff" .adon. 58. 59 Cochin State. 103 . 1.3-51. Coinage Acta (1835). 3-5; (1906). 166 0 20 2 Bombay University. 12. Colombo.3 • 3. 112°. British competitors. 195 Companies Act. 1913 (Iadian). 103. Budget position (1931-32). 39 : 123. 12. Bundelkhand Land Alienation Act. I Cook. Thomaa. and Sons (banken). 65 i 105 Burma. 17. 57-9. 61-3. 65. 66 •.• 72. Co-operative credit eocleties. 65. 7•• 78• 79 •.• 81. 83. 86. 100. 101. 71-85; c:o-operative machinery. 103. II8. 157 •.• 199 •. 1 72; Central Bank'l2; Provincial Bumett-Hurst. Professor. 200 Bank. 73; ratel ° interest. 73; general progre.. (1926-32). 74; Calc\ltta. 17. 62 •.• 109. III. 122. progrua made in the Provinces. 127. 135. 179 •.• 196 74; the Paaja~. 75; Bot;nbaY.76 ; Calcutta Banking Corporation. 105 Madraa. 76; VDlted ProVinces. 77; Calcutta loans. 1.3 Central Provinces. 78; Burma. 78; . 143. 151- . North-West Frontier Province. 153.166 79; Behar and Ori_. 79; elleet Calvert. H"12 •. 1.78 of th' recent depre..ioa. 80; Cannan. Pro . E .• 8. 8 •.• 29 •.- inadequacy of the movement. 80; Capital. 17 fI.-. 162 fl.- cau_ of llow progresa. S2; land Cash Certificates. 130. 135. 137. 166. mortgage bankl•. 82-5. 163. 168. 183 17.-7; defecta of c:o-operatioa. Cassel. Prof. Gustav. 189. 190 •. 162; luggested remedies, 171-•• Cassels. G. C .• 157 fl.' 192 Cawnpore. 17. 122 Co-operative educational inltitatel. Central Areas. 60 fI.-. 65 fl.'. 103. 186 . 157 •.'. 163 fl. Co-operative HinduataD Bank. 89 Central Bank. 2 fl .• 2 •• 31, 32, 116. Co-operative Societi.. Act (19U). 117, 196. 197 172.173. 181 . 89. 98. 193 Coorg. 79. 81, 199 • .1 Cefllral BII"Ai"g IfllJwi", C_ffliUu Council Billa. 9,16 Reporl (1931). 56 fl.'. 105 fl •• 129 ••' Col( and Com~Y (bankers). 107 157 •.1, 158. 160. 166 •.• 167 •.• Coyajee. Sir J. C .• 5 •.' 18. fl. Credit Bank of lDdia. 90 Central Provinces. 57. 58 •.-. 67 •.-. Credit control. '3-5.197 7., 78• 81. 85. 100. 101. 103. 118. Cridit Lyonnala. 19. 157 •.• 161. 199 ".I CanlliIe Committee. 12 CeyIOll. 118. 122 Currency Act (1927). 33-6. 203. ao6 Chablani. H. L .• II fI.I. 18 ••1 CvwMUY MUI PrUu •• l~. 5 •.' Chamberlain. Neville•• 7 •.'. 190 Crwreruy C_iIIu R.,m (1919). Chambers of Commerce. 59. 156. 158 19·· Chartered Bank of India. Australia Currency Ordinance (1931). .1. and China. 105. 107 206-8 Cheques (of indigenous bankers), Cwreruy. Reporl 0/ COfIIroUer 0/. 60. 61; beazer. 179 18 •.'. 20 •.• 21 •.• 38 •.• 39 •.• Clu#ws (bankers). 57. 59.61.63.65 .0 •.• 5° ••• 111 ••'.113 •.•• 118 •.• Chettinad. Bauk of. 67 119 •• ,121 ••• 131 •.• 136 •.• 137 ... Chetty.R.K.Shanmukham•• 6 140 •.• 1.1 •• Chinese moneylenders and pawn- Currency. Royal Commileioo OIl brokers. 65. 66 IndiaD (1926). IS. 16 ••• 20 •.• Chit Funds. 68-70 22-33•• S ••1, 119 •.• 120 ••• 156. CAitItGs (pass-books). 60 •• 183. 200 INDEX 217

Currency .yltem ~ before 1916. a-Io; i zz; gold bullion .tandard scheme. silver standard a-7; token cur­ 25-30, 187; aterling exchange rency. 8; the two - currency standard. 3... 35. ,,1-8 • .5 .. ; weak­ system-the .ilver rupee and the neae 01 exchange (1937-311.36-8; lold pound. 9; currency ayatem , IUlIatialactory exchange position (1916-a.5). I~ZI; main defects of (1931). 40; alternative standards the currency ay.tem. ZZ-4; two- i to gold. 188-91 token c:urrency ayatem. zz; paper Exchange banks. 10"-9. 165. 181. c:urrency reserve and lold alan­ 193 dard reserve. a3. 30; inelastic Exchange Banks' Associations. 109 c:urrency. a.. ; emergency cur­ Exchange Brokers' Associations. rency. a.. ; a Central Bank to 10<) control credit. a.. ; the gold Exports (1916-19). II •. ; (1929-32). bullion .tandard acheme. a.5-30. ,,9.5a-.. 187; propoeed c:urrency and bank­ External Capital Committee. ISS ing legislation (1927). 30; Re­ External debt. 136 aerv. Bank Bills 11937 and 1928). 3~a; the sterling exchange alan­ Famine Commission (1901). 178 dard. 3.5 ...1-8; c:urrency con­ Famine Insurance and Reliel Fund~. troversy (1926-31). 36-9; cur­ 137 III. rency crisis (1931). 39-,,1; mone­ FedMal SlrvelMre COtII".i"" Pro- tary reform. 187-91; alternative "64illll (1932) • .. a II ....3 II. standards to gold. 188; proposed Fiduciary issue. 16. 18. 19. a9. 30 currency board. 190;' s.. also Fifteen-rupee gold piece... Paper c:urrency Finance and Currency. Royal Com­ Currency Transfers. II" mission on Indian (191,,), ISS Currie. B .• 1.51 II.· FillA"" Gild IUMSI",. Report of COtII".itUeOli (1931). a5 11,1. a911." DadAII (credit by word of mouth). 63 Five-rupee gold piece... Dalhouaie (Lord), 5 Four-anna nickel piece; 8 •. Debt. Internal and External. 136 Fowler Committee. 8 Delhi. 57. 59. 7.. , 79. 81. 101. 103. Friederich. Dr. A .• 158 II. na.I99 I1 .1 Deposit-bankin,. 60. 61 GoutU o/b.diA. 33 11,1 ... I II •• .. a •.'. Desai. B. J., 144 57·· . 194 Goa. 103 Dhar. 1.57 •.' Gold: coins deprived 01 legal tender. Dholpur. 1.57 •.' 3 .... 3... 203; and Gresham's law. Double pice. 4 .. ; demonetised. 5; the movement lor gold currency. 5. 6; gold East India Company. 3 prices (185a-93), 6; gold standard East India Cotton Association of with gold currency, 8; use 01 the Bombay..... gold pound. 9; the rupee linked Eastern Bank, 10~. 107 to gold (1930). 13; gold standard Economic depreSSlon. 39. aOI reserve. a, 3. 30.53; gold bullion Economic InquUy Committee. aoo standard scheme. a5-30. 187; Education. banking. 12", 186. 198 sale and purchase 01 gold (19a7), Eight-anna nickel piece. 8 II. 3 ... a0 3-8 ; gold exports (193 1-3a). Elkin. Miss W. A .• 31 11.1, 32 .-. "9-5"; gold standard ceases to Exchange: evolution of the ex- lunction. 187; essential precedents change standard (181)8-1916), B- to a restoration 01 the gold stan­ 10; the sterling exchange stan­ dard.189 dard (1898-1916), 10; the silver Gold and Silver ~ge Act (1835). exchange standard replaces ster­ 3-5 ling (1916). II; the rupee linked Gold and Sterling Sales Regulation to gold (19ao), la; management ~ce(1931) ... a.51.5... a06-8 01 exchange (19a0-25). 15; main Gold Delegation of the League 01 defects 01 the exchange system, Nations, 189, 19o •., 200. aOI II. :218 THE MONETARY PROBLEMS OF INDIA

Gold Standard Act (192S). 27. 29 financ:ing of foreign trade. 1 Sa ; Gold SlGtldM4.tId its FIIl_•• U II.' recommendatiooa of the Banm, Gold Standard and Reserve Bank Committee,lh . of India Bill (1937'. 30 Imperial Bank of India Loan. IlS Goldsmiths. SS Ifllfurlal B."I... 108 "" • Gossain moneylenders. SS Importa (191~19). II ft.; (1929-l2). Government deposits, 1 17 49.52"4 Government securities. '" Loans India. Bank of, 89. gII,990 148• 193 Gou_mml Secuf'ilul M .,.11111. 13S II. . S9· . Gray. R. A .• vii IndiaD Bank, Ltd. (Madras). 98 Gregory. Prof. T. E .• vii. 2 II.', U II.', Itldi.II B."lti.., C_fIIiUu R~fJorl 26,.. . (1931), 72 •.•• 7l •.• 8l .... 8S ••• Gresham's law, S S6 ft., 87 •.• 10l •.• 107 .... log •.• Grindlay and Company (bankers), 112 •.• 122 •.• 12) •.• 124 •.• lOS 160 •.'. 161 •. , 162 .... 16S •.• Cluj,..,is (bankers), 61 166 •.• 167 •.•• 170 •.• 174.11$ II •• Gupta, Dr. B. B. Du, S ,..,. 17 II.' IgII ft. Gurwala. Lala Shrikrishna, 59 I tldiall C II,.,.."'Y .tId E.dta..". Gwalior. 103, 157 ,..' II "".99 II.' • Itldiall CII,.,.IfU1 Sy.IIfII, S'II.' Hailey College of Commerce. 1Z4 1ff4_ Fi_ Y..,. BooII. 4a •.• Haji. N. S .• IS6 SI ••• S2 ft. ' Half-pice. 4 IndiaD Specie Bank, 90 Half-rupee (silver). 3, 34; (nickel). S lff4iall Y'M BooII. 10 II., II II,. II II,'. Hapur. 6S. 97 ft• Haque. S. A .• 14S II. Indigenou. banken and moaey­ Haria moneylenders. SS lenden: the distinction ~ Hathras. 65 bankers and moneylenders. ss; H.,"-wllsM (credit by word of their numbers. geographical di.. mouth). 62 tribution. and c:luai1ication. S~; Henderson. Mrs. A., vii inten:onnexion betweeD bankers Herschell Commission (IS93). 7 and moneylenders. S8; modern HII,.4is or trade bills. 24. SS. 60.179. auociations. 59: fuactions of ISS moneylenders and tndi,eDOUl Huson. Tod and Co .• IS4 bankers. 59: method.. 6cM; Hyderabad. 103. IS7 ,..- w.tinA:tioD between bankers and moneylenden and modem banb. Imperial Bank of India. 2 ft •• 19, 63; their relations with the joint­ 23-5, 31. 36. 37. 43. 61. 64, 6S, .tack bankl. 6l; decline of in­ 73. 10Z. 13S. IS6. 193. zoo; first digenous banking (193~l2). 64; banking amalgamation. 110; difficulty iD regard to loan re­ capital and reserve. 110; consti­ payment.. 64; competition of tution and tnanagement. III ; other credit agenciee. 6S; re­ kind of business. liZ; London lationship between bankers and branch. 113; obligations and moneylenden and be,uoNen. 66; privileges. 113: resources. 114; changing methods. 67; control balance sheets, liS: its consti­ aDd reform of moneylenden' tution, position and functions. 116. activities. 168-70: the money­ 117; Government deposits. 117; lender's grip over the caltivator. branches. liS. 119; inland re­ 161; reorganiaing the bankers. mittances. Jl9: its relations with 161. 170. 193 the joint-stock banks. IZO; dear­ Iff4if- B_It;"I'II 1ff4U..3 .... ing house business. IZZ: Imperial 24 II,'. 55 11.1. 6z 11.'.63 II.'. 87 II.'. Bank of India Amendment Bill lOS .... 193 ••1 (1937). uz; and credit and over­ Industrial CommiasioD (1918), I" draft facilities to c:o-operative Institate of Bankers. US. 186 societies. 173: improvements Insurance facilities 01lerecl by the needed. 166. 167. 195; aDd the Post Office. 133 INDEX 219 Interest rates: charged by pawn­ Lahore, 17. 108, 12121 brokers, 621; loan Officel, 68, 69; Lal, Manohar, vii Nidhu, 70; co-operative credit Land Alienation Acts, 176. 177 societies, 73, 1721; agricultural Land Improvement Loans Act loans, 86; Post· Office Savings (1883).85.86 Bank, U9; Post Office Cash Land mortgage banks. 821-5. 163. Certificates, 130; Government J68. 174-7 loanl, 131, 141 Lausanne agreement. 2101 Intermediates, 16 Law and Principles 0/ Co-operalioK. Internal debt, 136 721 n.' International monetary system, Legislal;ve Assembly Debales. 30 n.I, zoo 33 n.I , 38 K.6. 46 n.I , 47 n.', International Settlements, Board JS6 n. of the Bank for, 189 Uoyds Bank, J07, J08 Investment trusts, 196 Loans-by indigenous bankers and Investors, 55 moneylenders, 6J, 64. 67; by Inv'5101", Indian Y,ar BoolI, 139 n .• pawnbrokers. 621; loan offices. 140 n. Nidhis, and Chit Funds. 68-70; co-operative credit societies, 7J. Jain, Sumer Chand, viii 171, 1721; land mortgage banks. Jain bankers. 59 821-5. J63. 168, 175; state loans Jeidels, Dr. 0., 158 n. to agriculturists. 85; takav; loans, Jodhpur, 157 n.8 87. 177; Government loan opera­ Joint-stock banks, 88-u6; capital tions, 134-421; fall in the prices of and reserve, 88; bank failures, securities, 140; prices of Govern­ 90, 94, 99-1021; capital reserve, ment securities ~n recent years. deposits and cash balances, 91-7; ISO. JSz; loan operations of 8ummary of balance sheets, 97; public bodies. 1421; B,nami loans, dividends, 98; proportion of cash 1621 to liabilities, 99; geographical Lucknow University, JZ4 distribution of banks. 1021 ; banking legislation, 103; resources com­ McDougall, A. P., 158 n. pared with those of banks of the Maclagan Committee (J9JS), 71 United Kingdom, u6; some Macmillan Committee, 215, 30 •• defects, 164; Banking Committee Maconochie, James, a: Co., J54 recommendations, 178; suggested McWatters, Arthur, J97 reforms, 193 Madras, 17, 1217, 196 Madras, Bank of, 16 n., JlO, JlI Kabuli moneylenders, 58 Madras loans, J43 Kachcha moneylenders, 58 , 57, 59 n., 6J. Kallidaikllrichi Brahmans (bank- 621. 67, 69, 70, 721, 74-7, 81, 84, ers), 61 86, 87, JOJ, J03, 109, JlJ. Jl8, Kamrup,85 12121, JZ7, J57 n.-, J6J, J99 n.' Kandllioans, 621 . J43, 153 Karachi, 17. 109. uz, 179 n. Mansfield Commission (J866), S Karachi loans, 143 Marwari Association, 59 Kashmir, 103 Marwari Chamber of Commerce, S9 Kathiawar, 103 Marwaris (bankers), 59, 61 Keynes, J. M., 89 n., 99 n.-, 18g, Igg Mehkar,8s Kharegat, Mr., 821 Mercantile Bank of India, 105. J07 Khurja,65 M"ltods and Macltinery o/InvlSl- King, Henry 5., a: Company _Is in India, 148 •. (bankers), 108 Military moneylenders, S8 Kisch, Sir Cecil H., 31 n.1, 321 n .• Mitra, Sir Bhupendra Nath, vii, Kolhapur, 157 n.8 IS8 KommandilglS,'lscitaft all/ .Uli,", Mod_ CII","CY a.d Regulation 0/ 16g n.- its Vallll, 8 n .• Kllri,s (Chit Funds), 70 Moghul moneylenders, 58 220 THE MONETARY PROBLEMS OF INDIA Mohur (gold coin). 4 notes (192-S). 10; contnction Money. s •• CUrTency sylltem of note currency (1926-,1). ]8 MOftey. 8 11.1. 29 II.' Paper Currency Acts (1861). 16: Moneylenden. sell Indigenoul bank­ (1923). 19. ]0. 30]. 104: (19\5) •• en and moneylenden 20 Money market. its meaning. I; its PepwC_,;lIlruli.:S 11.'.17.'& constituents. I; its nature. 2; Paper .tandard based on prica in­ its deficiency. 167; highly dis­ dex numben. 188. 189 organised and illodeveloped. 187; Pass-books (of indigenous banken) • . international co-operation. 200-2; 60.61 lIell .Iso CUrTency system PathaD moneylenden. S8. 170 Moral 110114 M tllerial Prop.', ;11 Patiala, 157 II.' 1114ia. 17 II.' Pawubroken. 058. 61 Moni.85 People'. Bank. 90 Moulmein. 17911. People'. Bank of Northern India. Multani Bankers' Association. 59 126 MulltJllu (bankers). 61. 63 Petit. Sir Din.haw. IU MUII;"'II (agents). 58. 59 II. Phaltln. 1057 II.' Murajan. S. K .• 5 II. Pice. 4 Mysore. 101. 103 Pie. 4 Mysore. Bank of. 89. 98 Porbandar. 157 11.1 Poll Offiu oJlrulia .rul ii,S.,. Naga moneylenders. 58 127 II. National Bank of India. 105. 107 PoIt Offi~gin aDd develop­ National Provincial Bank. 107 ment. 117: savings banks. 127-]0. National Savings Associations. 183 137. 183; &I banken and .tock­ Native Share and Stock ,lkokers' broken. 128; Cuh Certificates. Association. 143. 144 1]0. 1305. 137. 166. 183; pun:hue N.uukoUai CIseU'. (banken). 59 II •• and we of Government MCaritiel. 61.63 131. 183: iDlUr&DCe facilitiel aad Negotiable Instruments Act. 179 fund. 133; improvements ueeded. New Delhi. 108 166. 183 Nickel coins. 8 II. Powell. Elli. T .• 194 II. Nidhu. 68. 69 Presidency BanD. 16 II.'. 110. I u. North-West Frontier Province. 57. 113. 127 74. 79. 81. 101. 103. 118. 199 11.& Price_. index number of ~ in Notes. lIell Paper cUrTency Calcutt. and Bombay (1928-32). 48.49 Oakden Co-operative Committee'. Promilaory note•• 134. I" report. 77. 78 II. Provident fund. 137. 138 One-eighth rupee. 3 Provincial balance•• 136. 137 Orcha. 157 II.' Provincial banD. 171• 173 Provincial Board of Economic P. &: O. Banking Corporation. lOS, 1n9uiry. 167 107 Provincial Co-operative Bank. 176 Palik. moneylenders. 58 Provincial Land Mortgage Corpora­ P.II'"Y'" (Association). 59. 66. 172 tion. 176 Paper currency: Government as- Pudukottah. 1057 II.' sumes 80le right of issuing (1861). Punjab, 63 II.'. 66. 72. 74. 705. 76 •.• 4. 16; universal notes. 6. 17; 80. 81. 82 •.• 83. 86. 87. 100-3. fiduciary issue. 16. 18. 19. 29. 30; 118.1057 •.•• 161. 192. 199 •. ' cin:les of issue, 17; lack of elas­ Punjab and Sind Bank. 8g ticity. 17; paper currency during . ga. 193 the War.18;cin:uIation (1913-20). Punjab Regulation of Accoants Act 18; (1920-25). 20; paper currency (1930). 168. 169 reserve. 18. 19. 20. 23. 136; emer­ Punjab University. 124 gencypapercurrency. 19; decline in encashment of foreign cin:le QislbMtdi 1oau. 62 INDEX 221 QillitU (moneylenders), ,58 Shroffs ('o"o/s), ,58, ,59 Quarter-rupee, 3 Silver prices (1916-20). 6, 11-14 Silver standard 2-5, 188; silver ~Iway., 137, 138 slump (1872-92), 6; departure Rajputana~ 103 from silver (1893), 7; reintro­ Rangoon, 17, .59, 109, 122, 179 n. duced (1916), I I Rangoon loans, 143 Simla, 122 Ratlam, 1.57 n.- Sindh, 63, 103 Reddi, T. N. Ramakrishna, 19,5 Slater, Dr. Gilbert. vii Reed. Sir Stanley, 13 II. Sonthal Parganas, 203 Remittances, inland, 119, I2I Sovereign, 22 Reserve (gold standard), 23,30, ,53; Spalding. W. F., 194 (paper currency), 18-20, 23, 30, Standard Bank of Bombay, 90 136 Slolislical Tables Relaling 10 BanAs Reserve Bank, 24, 28, 30-2, .52, 122, ill Indio, 88 II., 89 II., 90 11.1,91 n., 124, 1,56, 170, 171, 173, 178, 179, 94 II., 95 II., 99 n., 105 n., II4 n. 181, 182, 184-6,19,5-8 Stephen and Co., 154 Reserve Funds, 137 Sterling exchange standard, 10, II, Reserve Treasuries, 119 34, 35, 41 -8, 54, 188 ReI"", 1o Gold, 2 11.8, 26 II. Stock-brokers, Post Office as, 128 Reverse Council Bills, 9. 10 II., 14, Stock certificates, 134, 135 1.5 510&11 Excllang, Official /nlelligence, Rohilla moneylenders, .58 142 II. Round Table Conference (1931), Stock Exchanges: Bombay Stock 197 Exchange, 143; Inquiry Com­ ROla; (day to day loans), ,58 mittee (1923), 144; membership Rupee: a silver coin of unlimited and members' conduct, 145; de­ legal tender, 3, 29, 34; under the faulters, 146; kinds of members, silver standard, 3; fall in its value 147; methods of business, 147; (1872-92), 6; departs from the kinds of clients, 148; clearing silver standard (1893), 7 j rated at house, 148; holidays, 148; oper­ IS. 4d .. 7, 8; becomes loll"", 8; ations (1927-32), 149; business its stabilisation (1898), 9; silver suspended (1930), 149; Govern­ standard replaces the sterling ment securities market, ISO; standard (1916), II; a 2S. rupee Calcutta Stock Exchange, 151-3; linked to gold (1920), 12-14; Madras Stock Exchange, 153; rated at 2S. sterling (1920), IS; Stock Exchange improvements restored to 18. 4d. sterling (1923), needed, 166, 184, 187, 196 IS; at IS. 6d. sterling (1924-25), Strickland, C. F., 79 16; basis of its stability, 22, 23; Subedar, Manu, 159 its parity under the gold bullion Supply bills, II4 standard (1925), 27; parity of Swadeshi movement, 88, 102 exchange (1927), 34; linking the Sydenbam College of Commerce, 124 rupee to IS. 6d. sterling, 36- Sylhat, .as 48 Rural Insolvency Act, 168 I TGllorn loans, 87, 177 ' Telegraphic Transfers, 16 Sarma, Sir B. N., ISS Tenancy Acts, 176 Sarro/s, see Slirol/s Ten-rupee gold piece, 4 Savanur, 1.57 11.8 Thakurdas, Sir Purshotamdas, vii, Savings banks, Government, 10, 24 11.8,158,159 127; district, 127; Post Office, TlIGlldalloans, 62 127-30, 137. 183 Tharakkar moneylenders, 58 Savings certificates. 29, 183 Thirty-rupee gold piece, .. Schuster, Sir George, 38, 47 11. 1, Thomas, Dr. P. J., 154 II. 141, 1.57 , Token' cnrrency, 4, 7, 8, 22 Securities, Government, see Loans Townsend Committee, 77, 84 Shirras. G. F., 89 II•• 90 II. Trade statistics (1929-32), 49, 52 222 THE MONETARY PROBLEMS OF INDIA Transfer of Property Act, 179 Upper India, Bank of, 90 Travancore, 70, 101, 103, 157 II.a UsuriOUI Loan, Ad, 168 Treasury balances, 119 Treasury bills, 39, 40, 135-7 V"is"".. (bankers), 59 • TreAlise 011 Mtmey (Keynes) 199., Vakil, C. N.,.5 11.1. 6 •.• .. Trip, Dr. L. J, A., 158 II. Two-anDa piece, 8 ., War of 1914-18, ita effect on the monetary lituaUon, 10 , 98 Ways and Means Advancel. 137 United Provinces, 57, 58, 61 11,1, World EconoInic Conference. 1«10, 67, 71, 72, 74, 77, 78 II" 81-3, 191, 201 100-3, 118, 130 II., 157 11,1, 161, 163, 171 II" 19911.1 Young, Hilton, ComInissioD, IS7. Universal notes, 6, 17 196, 197

PlUIIftD .. 0 ....., aurAl. 1ft an.LIlIO .AND so•• LTD .. OUlLlWOllD dD ...... ~y THE SAME AUTHOR

8vo. l5s. net. I ~ Indtgenous In India

PifoPESSOR J. M. KEYNES.-" I have read it with much interest; it fills a distinct gap in monetary literature." MR. M. 1\1 S. GUBBAY (Ex-Controller of the Currency for India). -" It is a valuable addition to the literature on Banking in India, and has a special significance in view of the Central Banking System contemplated for India. It throws light on the practical difficulties attendant on the question of bringing the indigenous bankers within the sphere of influence of a Central Bank." Th, Scotsman.-" Mr. Jain's volume contains a vast amount of information regarding the history and development of banking in India." Th, Banke,s' Magazin,.-u An excellent impression is given of the functions of the indigenous banker, the part he plays in the life of the country generally, his relation to the joint-stock banks, and the faults of his methods and their economic results." Th, Economica.-II Mr. Jain has succeeded in removing to a con­ siderable extent the veil that-as he says-has long obscured the working of indigenous banking in India. . •. He has not only utilised the available printed matter, but has collected fresh material by means of a questionnaire and personal enquiries, and thus succeeded in making a very use­ ful contribution to the subject." Th, Financial N,ws.-" Hitherto there has been DO book in English dealing with the ancient and widespread practices of native banking in India, but this gap has now been filled.- .. associated by descent with the banking caste of the jamas, he (the author) writes from inside knowledge of his subject. It adds to clearness as well as to interest that in illustrating the intermediate position which Indian nati~e banking ~olds between casual money-lending on the one sld~, and ~rdlnary trading in merchandise on the other, and its hnks with both, the author has adopted the historical method." 1 h, Economist.-u This book, which is the fruit of careful research, fills a serious gap in the economic literature of India." LONDON: MACMILLAN AND CO., LTD.