CO129-446 - Others & Individuals - 1917 — Page 261

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of Government notes, If we gave a guarantee that this would eventually be done I do not see why the Bank could not consent to the 5 millions going to India at once. We should then send them, and you would eventually give us rupee securities equivalent to the number of rupees into which the silver was coined You will notice that the first 5 million dollars of our issue would be deposited with the Government as part of the Bank's security and would not be issued to the public. There would be no special reason to anticipate a shrinkage in the Bank's note issues until we issue our next 5 millions to the public. 1 think we must hold the whole of the silver received for the se next 5 millions to form a backing both for the notes issued to the public and for those issued to the Bank

of coin

though the 10 millions/still remaining in the ranks reserve deposited with the Goverment would provide a large margin for shrinkage.

Then our total issue passes 10 millions I think we could safely begin the half and half arrangement - 1.e. holding half and sending half to India, and our

experience

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