made (1) through the Bank, (2) at its published rate of discount, (3) in relief of temporary stringency.” Up to 1892, however, loans were made as before. From 1892 to 1899 loans were made very rarely. In 1899 the Secretary of State wrote to the authorities in India:—“I see no objection to your lending to the Presidency Banks, on the security of Government paper, at such rates of interest from time to time and for such periods as you think best. I am inclined to think that the rate should, as a rule, be not below the Bank rate.” Between 1899 and 1906 such loans were made on four or five occasions; but since 1906 there have been none. The balances left with the Banks without interest normally exceed, however, the prescribed minima.[80] The question of the proper employment of the Indian Cash Balances is, therefore, a very old one, and one in regard to which the Government have pursued no consistent policy. The effect of recent practice, however, has been on the whole to divert more funds than formerly from banking purposes. On the one hand the Government have been less willing to allow the Banks loans in addition to the normal balances kept with them, and on the other hand the general level of the cash balances has been getting higher. While the Government’s practice has become stricter, it is arguable, I think, that there is less need for it. Originally, we have seen, the Government banked with the Presidency Banks, and difficulties arose because, the Government’s deposits bearing a high proportion to the Bank’s total resources, it was not easy to release a large part of these deposits suddenly. This would no longer be the case to nearly the same extent, even if the Government were to place much larger sums with the Banks. In 1870[81] the public deposits at £3,600,000 fell not far short of the total private deposits and exceeded by 50 per cent the capital and reserve of the Banks; in 1880 they were £1,900,000, and were about one–third of the private deposits; in 1890 the figures were £2,400,000, equal to about a quarter of the private deposits; in 1900, £1,900,000, equal to less than a quarter; in 1912 the Government deposits at £2,500,000 were not much more than a tenth of the private deposits. Moreover, the capital and reserves of the Banks have doubled since 1870.