the “convulsions,” and those who will circumvent the Act by utilizing other forms of credit will escape them. The chief reason, then, why the Act has worked so well in England and so badly in India is due to the fact that, whereas English banks have succeeded in implanting the order or cheque system of using credit in place of the note system, Indian banks have unfortunately failed. That they should have failed was, however, inevitable. A cheque system presupposes a literate population, and a banking system which conducts its business in the vernacular of the people. Neither of these two conditions obtains in India. The population is mostly illiterate, and even were it otherwise it could not have availed itself of the cheque system, because Indian banks refuse to conduct their business in any other medium but English. Besides, the growth of the cheque system presupposes a widespread network of banks, a condition which is far from being fulfilled in India. In the absence of banking, a cheque is the worst instrument that could be handled. If not presented within a certain time a cheque may become stale and valueless, and is therefore [pg 65] inferior to a note as a store of wealth. In such circumstances as these it is no wonder that in India cheques did not come into being on a sufficiently large scale to amend the inelasticity of the notes. ¹²⁶ The Indian Paper Currency Act carried the principle of separation further than did the English Bank Charter Act. It not only prevented the Issue Department being conducted under the ægis of a Banking Department, but also disallowed the two being housed under the same roof. Such an ideal of separation was held out by Sir Charles Wood during the debate on the Bank Charter Act. Cf. _Hansard Parliamentary Debates_, Vol. LXXIV, p. 1363. Though he was then disappointed, he did not fail to realize his ideal when he became the Secretary of State for India. ¹²⁷ Cf. his Essay on the “Frequent Autumnal Pressure in the Money Market and the Action of the Bank of England,” _Investigations in Currency and Finance_ (ed. Foxwell), 1884, p. 179. Italics by Jevons. There is, however, an apparent misprint in the original, which at the close of the quotation reads “as they would have under a restricted system.” ¹²⁸ _Money and the Mechanism of Exchange_, Kegan Paul, London, 1890, p. 225.