Note 88 — Chapter VII

By 1862 such issues were of negligible account, but in earlier times they had been important. “Probably the first banking institution in India, on European lines, was the Bank of Hindustan, which was established in Calcutta about 1770 by a private trading firm. The notes of this Bank, though not recognised by the Government, obtained a local circulation which occasionally reached forty or fifty lakhs and generally averaged about half that amount.” It is said that they were “received for many years at all the public offices in Calcutta scarcely excepting the Treasury itself.” On two occasions, once in 1819 and again in 1829, the occurrence of a panic led to the presentation for payment of about twenty lakhs’ worth of the notes, and the demand was promptly met. (Brunyate, loc. cit. p. 55.) This Bank and others disappeared in the commercial disasters of 1829–1832. “Out of their ruin rose the Union Bank, a Joint Stock Bank created by co–operation among all the leading Calcutta houses.” (Brunyate, loc. cit. p. 59.) In 1834 the Bank of Bengal refused to accept the notes of its formidable rival, and in 1848 the Union Bank disappeared.