494
. c. ?OYAJEE
security on which loans can be made from
Currency Reserve. But the question will
Is the paper of Co-operative Societies commercial paper from the point of .?iew the Paper be asked-- as good as of security for such loans? We shall therefore institube a corn- parison between the security of paper and we shall find peculiar to et?ch. favor of commercial The first point paper is 'that value o! the ?ro kinds favorable characberistics to be urged in it is capable of being turned into cash in the ordinary marke?, while that is not possible at presen$ in the pro-notes of co-operative societies. In ever, this remedied defect of co-operative either by arrangements paper entered the case of time, how- might be into wii;h Presidency Banks under which they will undertake the duty of re-discounting agricultural paper or by the estab- lishment of a state co-operative apex bank. A second point in which commercial paper appears superior to co-operative paper is ?he shorter period of the former. Commercial paper is drawn for from three to six are drawn for furtl. her thoughlb usance does not go to the there are a few ?ousands months, while co-operative pro-notes from six' to twelve months. On however, this difference in root of the matter. If of bills in the port-folio of a bank or of a Govern- ment institution, a certain number of these bills and bout?kt on different date? must day by day. irrespective of the they are of bills bills drawn; and in this lies or paper as investments. are very often renewed on pro-notes liquidate period for the chief Further commercial which ar? themselves which merit maturity which is not the case with our pro-notes. This brings us to the special merits Of the paper of co-operative societies as securities. place, the Central Bank which lends on of In the first
e pro-notes
primary society is constantly controlling and
