The Sun.
London, England, 1861-03-23 00:00:00

THE PAPER CURRENCY.

The following is the Report of the Select Cora-
mittee on the Bill to Provide for a Government
Paper Currency in India :

To THE HON. TILE LEGISLATIVE COUNCIL OF

INDIA.

The Select Committee appointed to consider the Bills to
provide for a Government paper currency have the honour
to report that they have received a despitch from the Se
cretary of State for India, dated 26th March, 1860.
They have gone carefully through the bill, and have made
certain amendments therein, which are contained in the
copy of the bill annexed to this report. [From Secretary
to Government of Bombay, dated the 20th of August,
1860, and enclosures] .
In order to explain the nature and object of the more
important amendments it is necessary to refer briefly to the
circumstances which have occurred since the bill was read
a first time and printed.
It then embodied, in the form originally proposed by Mr.
Wilson, the scheme of that lamented statesman for the
establishment of a great and novel system of paper currency
throughout India.
The leading features of that scheme consisted in the issue
at various circles, into which India was to be divided, and
through the agency of an independent body of Commis-
sioners, of a paper circulation of notes, from sr. to 1,000 r.,
based on a reserve, partly of specie and partly of securities,
in a proportion which might fluctuate from time to time,
but was in no case to fall below that of one-third of specie
to two-thirds of securities.

This scheme, which was fully explained by Mr. Wilson
in a most able minute and speech, gave rise to many com-
ments, but his untimely death makes it impossible to know
how far he might have been disposed to modify it ; and
the bill was read a first and second time with a distinct un-
derstanding on the part of Members of the Legislative
Council that they were not to be considered as committed
to its detailed provisions. In the meantime a despatch was
received from the Secretary of State for India, objecting to
the principle on which the bill was founded, of issuing notes
against a fluctuating reserve of securities, and stating the
opinion of the Home Government, that the principle ought
to be the same as that adopted in England, of permitting
issues of paper only against actual coin or bullion, with the
exception of a certain limited amount, to be defined by law,
below which it might be reasonably supposed that the
paper circulation could never fall.

Your Committee concur with Sir Charles Wood in think
ing this principle safer and more applicable to the dream.
stances of India.

It is the principle, sanctioned by experience, and by a great
preponderance of authority in England, and it presents the
great advantage of securing a paper currency absolutely
identical, beyond a certain safe limit, with the metallic cur-
rency which it displaces, and free from those risks which
under the most able management, must attend an extensive
issue, by the Government, of promisiory notes, based on a
large proportion of securities, which, in times of difficulty,
might be almost inconvertible.
It is an advantage also that (under thisplan) the tempta-
tion will be diminished for the Government to force the
circulation of the notes further than the country is prepared
for them ; and that the necessity will be removed for
frequent interference of the State with the Money Market
by the purchase and sale of securities.
Your Committee have accordingly amended the Bill by
striking out the 10th and 11th sections, and introducing a
clause, declaring that all issues of notes shall be made
against actual coin or bullion, with the exception of an
amount, in no case to exceed four crores of rupees, which
may be issued against securities.
They have fixed on the sum of four crores as the
maximum limit, because this is very nearly the amount
which may be issued in excess of actual specie by the pre-
sent banks, under their existing charters.
The Banks of Bengal, Madras, and Bombay are autho •
rised to issue, in the aggregate, notes to the amount of five
croros of rupees, with a reserve of one-fourth of their total
liabilities in specie, to meet their notes and other demands ;
and your Committee have thought it right that the mercan-
tile community should have an assurance that the present
amount of authorised issue should not be curtailed, as
might practically be the case, if a lower limit than four
crores were adoptel.
Within this limit also we think that the Government
whose general credit and cash balances are, by the words
which we have introduced, made distinctly responsible as
well as the special reserve, may be safely trusted so to regu-
late their issues as not to endanger the payment of notes
for which purpose it will be esosntia that thoy should not at
first exercise the full power of issuing up to the four crores
against securities, but should proceed with great caution,
feeling their way gradually, and always maintaining an
ample reserve of specie. Beyond the limit of four crores no
issue whatever will be permitted, except against actual coin
or bullion in the vaults of the Mint or local treasuries, un-
less the Legislative Council should hereafter see fit, after
experience of the working of the law now proposed, and full
discussion and consideration, to pass a further law on the
subject.

This fundamental change in the principle of the issue of
notes makes several changes necessary in the machinery of
the Bill.

When the function of Commissioners is reduced to the
simple one of giving notes for specie or specie for notes, it
is obviously unnecessary to provide for an expensive staff,
or to make them independent of the Government.
The Masters of the Mint may probably be the commis •
sioners at the Presidency towns, and the ordinary collectors
may act as deputy commissioners at other places.
In certain cases it may be advantageous to use the agency
of banks, especially at the Presidency towns, or at large
places of commerce, where branches may be established.
Such an agency would in no respect alter the character
of the issue, -which would remain that of the Government,
who would retain the exclusive possession of the reserves
against which the notes were issued, but the banks would
simply act as agents for the purpose of greater economy and
convenience, in paying or issuing Government notes to the
general public.
Accordingly, instead of the section obliging the Gover-
nor-General in Council, by a certain day, to divide all India
into circles, and to appoint Deputy Commissioners in each,
we have substituted sections giving a discretionary power,
except as regards the Presidency towns, which are to be the
centres of separate circles, of appointing, from time to time,
such circles as may be found expedient, and of making such
arrangements with Government offices, banks, or other
persons, as way be necessary to facilitate the issue and pay.,i

meat of notes. As regards the circles, we are disposed to
leave much discretion to the Government in exercising the
power of creating them, as experience only can show to
what extent it may be necessary to resort to it.
It is clearly impossible to make notes issued at one place
payable everywhere, as this would entail the necessity of
keeping a reserve adequate for the whole circulation at
each point, and it is difficult to enact that notes shall be a
I legal tender at an extreme distance from any place where
cash can be legally demanded for them.

Hence has arisen the necessity for circles ; but it cannot
be denied that the division of India into separate circles
would be in many respects an evil, and that it would be very
desirable that a uniform circulation should be established
over as wide an area as possible.

We are not without hopes that under the arrangements
contemplated this may be, to a considerable extent, at-
tained ; and that, as confidence is extended, Presidency
Notes, if received at the Government Treasuries, may, with
the aid possibly of an auxiliary gold currency, become
practically such a general medium of exchange throughout
India as to supersede in a great measure the necesaity for
local notes.

With reference to the question of gold, we have intro-
duced an important amendment.
Without attempting to discuss the questions which have
been raised respecting a double standard, or to depart in
any respect from the principle of a sole silver standard, we
have thought that it would be a considerable advantage to
provide for the possible application in India, of the prin-
ciple as regards gold as is applied in England in regard to
silver.

In England, where gold is the sole standard, the Bank of
England are authorised to issue not exceeding one-fourth
of their gold coin and bullion against silver.
We have given a power of issuing up to one-fourth part
of that portion of the circulation of India which is repre-
sented by actual coin or bullion, against gold coin or bullion,
at a rate to be fixed by the Government from time to time,
and not altered without six months' notice.

With ordinary prudence the Government cannot lose by
taking a limited amount of gold at a price to be fixed by
itself, while it may be a great convenience to commerce in
many cases to know that gold can be made available as
money at a certain fixed rate.
Nor is it impossible that, if a certain fixed minimum value
be thus given to gold, and it can be freely taken at the Go-
vernment treasuries at this rate, the superior convenience
of gold and its adaptation to native wants may give it a
higher value, and thus, in course of time, a considerable
auxiliary gold currency may be, introduced. Should these
expectations net be realized, no harm will have been done,
and the clause will simply remain a dead letter, showing
that, with a sound paper circulation superadded to silver,
nothing more is wanted.
Your Committee have anxiously considered another
point, namely, what should be the lowest denomination of
notes which should be issued as a legal tender ?
The disadvantage of issuing two sorts of notes, one which
should be a legal tender, and the other not, seemed to be
such that it was desirable to make all the notes uniform in
this respect.

This being so, your Committee have thought that, on
the whole, it would be more prudent not to authorize at
present a lower denomination of notes than for 20 rupees.
With a circulation of 5 and 10 rupees notes, it appeared
to several members of your Committee that there would be
considerable risk of exciting suspicion and discontent
among the mass of the community, who might be com-
pelled to take payments, in an unaccustomed medium, for
which they could not readily obtain change without loss.
If, under the proposed provisions as to gold, that metal
should come into general circulation, the use of small notes
would be, in a great measure, superseded by a medium
which, from its intrinsic value and power of uniform circu-
lation, must be admitted to possess some important advan-
tages over any form of small note currency.
If, on the other hand, those apprehensions should be
groundless, and after a short time, when the public are
familiarised with the larger notes, a spontaneous demand
should arise for notes of a smaller denomination, it will be
easy to introduce a bill, extending the limit below 20 rupees.
The other amendments are merely matters of detail which
will be seen by reference to the bill.
Your Committee have been unanimous in adopting the
amendments now submitted to the Legislative Council, and
they trust the bill, as it now stands, will be found to embody
a safe and practical scheme for extending to India the bene-
fits of a circulating medium better adapted for her wants
and for the rapid expansion of her trade and industry, than
that which she at present possesses, of a purely metallic

silver currency.
The last two sections of the bill have been omitted, be-
cause the Penal Code seems to contain similar enactments,
S. LAING.
H. B. E. FRERE.
H. B. HARINGTON.
H. FORBES.
A. SCONCE.
C. J. ERSKINE.
The 16th February, 1861.

(From the Calcutta Englishman, of 18th Feb.)

In commercial matters there is as yet nothing to
report. Imports, exports, and produce market are
alike stagnant. Government securities and money
have been hanging on hand.
In military matters we have nothing to notice,
except that a plan is being mooted for the erection
of an Outram Institute at Meerut, on the same
principle as that at Dum Dum. The Commander-
in-Chief is still inspecting and reviewing. The sth
Fusiliers are rapidly preparing for home, and the
75th are ordered to relieve them.

SPURTING 111, TELLIGENCE.

CHELTENHAM RACES.-FRIDAY.

The Grand National Hunt Steeplechase of 10 sovs each,
h ft, 12st each ; gentlemen riders ; over four miles of fair

hunting country. 14 subs.
Mr. Symond's The Freshman. .. (Mr. Edwards) 1
Viscount Talon's Laudanum (Owner) 2
Mr. Edward Vaughan's Ebony
The following also ran :—Waverley, Ralph, Chatterbox,
Horror, Volunteer, and Willoughby.
Betting—Even on The Freshman, 5 to 1 agst Ebony, 6
to 1 apt Horror, 7 to 1 agst Chatterbox.
The Military Welter Steeplechase of 10 sovs each, h ft,
with 100 added; certain penalties and allowances ; ridden
by officers of the army, navy, or militia; three miles.

9 subs.
Captain Boyce's Smoke, 13st 71b . . (Owner) 1
Colonel Baker's The Dodger, 13st 71b (Blundell) 2
Lieut. Riley's Med ora, 14st 71b (Capt. Barclay) 3

The Warrior and Greatnorth also ran.

Betting-7 to 4 agst Medora, 3to 1 aget The Dodger, 4
to 1 each agst Smoke and Warrior. Won by a length, two
lengths between the second and third ; a bad fourth.

The Southam Plato of 5 sovs each, 2 ft to the fund, with
30 added; winners extra; the winner to pay 5 soya

towards expenses ; two miles and a half. 9 subs.
Mr. Rowland's Brunette (Ownel

Mr. Stevens's Piff Paff (G. Stevens) 2
Mr. Williams's Sunbeam

Betting-6 to 4 agst Sunbeam, 2to 1 each agstßrunette
and Piff Paff. Won by a length and a half.

The Military Veteran's Steeple Chase of 10 soya each, h ft,
with 50 added ; 12st 71b each ; winners extra ; gentle-
men riders ; Military Steeplechase Course ; three miles ;
16 subs, 7 of whom pay 5 sovs each.
Mr. 11. Handley's The Martyr, l3st 71b (Capt. Blundell) 1
Mr. Formby's Birdcatcher c, 12st 71b (Hon. J. F. Ellis) 2
Mr. E. R. King's King Edward, 13st (Capt. Towneley) 0
Betting-6 to 4 on the Martyr, 5 to 2 agst King Edward.
Won by six lengths ; King Edward did not pass the post.

OXFORD AND CAMBRIDGE
BOAT RACE---THIS DAY.

This great aquatic tournament, which invariably
creates immense interest, came off to-day at a much
earlier hour than usual. For many years the .
gallant struggle between the two Universities for
the highly-prized honour has been looked upon as
the inauguration of the London rowing season, and,
as a natural consequence, thousands of persons make
business subservient to pleasure and betake them-
selves to Putney, in order to be present on an occa-
sion to them so specially interesting.
Honour, not the love of lucre, is the guiding star
of those who form University crews, to maintain
the dignity of the cloth ; the race is for nothing
but honour ; and all the trials and all the troubles,
all the self-denial, all the exertions, are amply com-
pensated for, not only by victory, but by a well
rowed race. The former, of course, is the crowning
effort, but a crew, collectively, is looked upon little
less if it did its work well, although it become
defeated. It is only such mishaps as the 1859
swamping that really mortify a crew, or mortify both;
for, in the first case, there is necessarily a feeling
that all their labour has been thrown away—and
in the second, the winner plucks inglorious laurels,
which some ill-natured persons hint would never
have been possessed at all but for the mischance of
the opposite party, and so neither are satisfied ;
and the public, inoculated by the disease, are dis-
satisfied also, the whole sapiently arriving at the
conclusion that they might as well not have rowed
at all, as nobody can tell really which was the
better crew. The same rule applies to a foul, or
any other casualty which may prevent the contend-
ing parties rowing a clear rightaway wager.
What a joyous thing a University race is—what
a gratifying exhibition to all who behold it when
untrammelled by any of the casualties to which we
have alluded. How it stirs men up to emulate, if
possible, the gallant example set them ; how bane
ficial it is directly and indirectly to every man
connected with the water; how it sets the circulat-
ing medium at work; how it gladdens the hearts
of the good people at Putney ; how it enlivens at
an early and dull period of the season the shores
there, may be judged by those who have paid a
visit to the place during the past week. The
Putney folks would like a University race every
week, and if formally moved and seconded we verily
believe the public would carry it unanimously. We
have said nothing about steamboat companies, but
it is they who reap the greatest harvest—and that
too without any care or anxiety—the fleet attend-
ing this and every race of late years being so large
as to thin the ordinary passage boats most
materially.

Since the first contest, which took place at
Henley in the year 1829, seventeen matches have
been rowed. The first match was won by Oxford.
The second occurred in 1836, and was won by

Cambridge; the third in 1839, and won by Cam-
_ _ .

bridge ; the fourth, 1840, won by Cambridge ; fifth,
1841, Cambridge ; sixth, 1812, Oxford ; seventh,
1845, Cambridge ; eighth, 1846, Cambridge .;
ninth, March 1849, Cambridge ; tenth, (in conse-
quence of a foul), in December, 1849, Oxford ;
eleventh, 1852, Oxford ; twelfth, 1854, Oxford ;
thirteenth, 1856, Cambridge; fourteenth, 1857,
Oxford ; fifteenth, 1858, Cambridge ; sixteenth,
1859, Oxford; and seventeenth, 1860, Cambridge.
Thus it will be seen that of the seventeen matches
Cambridge won ten and Oxford seven.
The competitors to-day, in the eighteenth con-
test, were—