Supplement I - An abstract from the pamphlet ‘The Money Market and Paper Currency of British India' (1884) by N.P. van den Berg

Summary

It is beyond question that the paper currency established by the British Indian legislator fully answers the purpose, so far as business requires an easier means of exchange than gold or silver coins; but no connection whatever exists between the issue of the fiduciary currency and the wants of the public to have their bills and other commodities converted into a current medium of exchange. The bullion stored in the vaults of the Currency-Department is a sufficient guarantee for the public at large, that the notes in their hands can at any time be convertible into hard cash; but it docs not add in the least to the operating power of the Banks, which only can come to the rescue of trade in times of pressure, and this is the sole cause of the unexpected convulsions and sudden transitions in the money market, so utterly detrimental to business, to which British Indian trade is constantly exposed: - impediments which, as a rule, arc unknown in Netherlands India, owing to the manner in which currency and banking have been regulated here.

Not at once however did Netherlands India get the benefit of the banking system which at the present moment is working so remarkably well. Ever since the year 1828, when the Java Bank was first established, it has held the exclusive privilege of the issue of banknotes for all the possessions of the Dutch in the Eastern Archipelago; but the rules to be observed with regard to the note issue have been subject to various alterations, and it was only in 1875, after an existence of nearly fifty years, that the Java Bank was empowered to regulate its operations according to the same principles on which the Netherlands Bank in Amsterdam is working, and which for many years have proved highly beneficial to all the interests concerned.