O0-OPERATIVE PROGRESS 49? which is permanently invested, the whole is kept in gold and silver. This is in immitation of the rule governing the Bank of England's note issue ". He argues in favor of lending out a portion of the reserve on bills of exchange and other approved seourity. His proposal is that loans from the Paper Currency Reserve should be given out to help Indian traders and generally so as to reduce the fluctuations of the Indian discount rate. But, it might be added, that there is no reason why the whole benefit of. loans from the Paper Currency Reserve should go to the commercial classes. at least an equal claim loans and his need is even The Indian. agriculturist has to the benefits from these greater. we The importance of the resource for loans to which have referred system, above can hardly be exaggerated. extension of public confidence in any the of the 'fiduciary With the rapid country's note reserve behind it is bound to develop. portion is no better the growth illustration of this than of securities in our Paper years, when the increased Reserve in the last four of securities to the total reserve has 18 per cen? to nearly 62 per cent. Perhaps there
- s afforded by
Currency percentage from We see from this that with a world war going on-and with our Paper Currency figures reaching new records year by year, the Fiduciary Reserve has been more than tripled. It was a signal proof of the triumph of state credit, as most of the new securities added consisted of Treasury Bills or of securities created ad hoc. It is also very encouraging for credit of the paper of co- operative societies as long as they are supervised and their policy is guided by state officials. The merits of our proposal depend upon the value of the pro-notes of our societies as securities. It is generally admitted that commercial paper is excellent
