[103] There is of course much business of a semi–banking character transacted by financial and mercantile houses, some of them of the first magnitude, with establishments both in India and London. But they are private firms and publish no information about their business of which it is possible to take account.
[104] Another method occasionally worth while employing is the purchase of Government Rupee Paper in London and its sale in India.
[105] The volume of bills, drawn in India on London and outstanding, is not, of course, a correct measure of the extent to which India is being financed abroad. A bill may be used to finance the foreign purchaser just as much as the Indian seller. For example, a dealer in cotton in India might be paid by a 3 m/s Bank credit supplied by the buyer, a Continental spinner; this spinner might get the cotton within a fortnight of the acceptance of the bill, which would, therefore, be really financing his cotton factory.
[106] The figures for 1910, for example, are in the issue which was obtainable in England early in 1913.
[107] On the one hand, these balances are even weaker than they look, because they include the Exchange Banks’ balances at the Presidency Banks. On the other hand, the Exchange Banks often have sovereigns or Council Bills in transit which they may fairly consider, perhaps, as equivalent to cash.
[108] A certain proportion of their bills, no doubt, are drawn on the London branches of Banks with a foreign domicile. These bills are not always so readily discountable as London acceptances, the Bank of England taking them unwillingly and charging ¼ per cent extra discount. But for the present purpose they can, I think, be regarded none the less as liquid London assets.
[109] I believe that the Eastern Bank offers rather better terms than the other Banks for fixed deposits.
[110] The confusing point here is this: that (ix.) is the amount advanced to Indian merchants, and (x.) the amount advanced to English merchants; yet (ix.) must be reckoned an English asset and (x.) an Indian asset. For (ix.) when it falls due is paid in England, although, of course, the Bank has advanced money, through the purchase of it, in India.
[111] It would be most useful to have a triple classification—India, London, and elsewhere. But I do not see how the Indian authorities could reasonably enforce this.
[112] The great majority (363) of these small money–lending establishments were registered in Madras. Most of them are mutual societies, and it would not be difficult to exclude them from the official statistics.