§ Mr. WISEasked the Under-Secretary of State for India why no use is being made of the Paper Currency Act of 1920 under which notes might be issued up to a limit of 5 crores of rupees against good 1817W commercial bills of exchange; and will he consider whether this would prevent the necessity of the purchase of gold by India and assist the trade, and that if notes were issued against hundis the financing of the harvest might be assisted?
§ Earl WINTERTON:Under the procedure laid down the initiative in the matter of the issue of the additional currency to which my hon. Friend refers rests with the Imperial Bank of India, and, so far as I am aware, no application has been made by the bank this year. If it had been thought. expedient, in view of the prevailing conditions, to bring the powers referred to into operation, the effect would have been to increase (subject to a maximum increase of 5 crores) the bank's cash resources available for the discounting of bills and trade purposes. It may be noted that the Government of India, reviewing the money market position in India at the end of January, stated that they saw nothing to call for their active intervention. The question of the imports of gold by India is affected by other than purely monetary considerations.