_Gold_— Gold Standard Reserve in London £7,500,000 Gold Standard Reserve in India 2,500,000 Currency Reserve in India 15,000,000 ——————————– £25,000,000 ═══════════ _Money at Short Notice_— Currency Reserve in London £1,000,000 Cash Balances in London 7,500,000 —————————— £8,500,000 ═══════════ _Sterling Securities_— Currency Reserve £7,500,000 Gold Standard Reserve 11,000,000 ——————————– £18,500,000 ═══════════ _Rupees_— Currency Reserve £13,750,000 ═══════════ 33. Some changes of substance might be added to these changes in book–keeping and are naturally suggested by them. There is, first, the question whether the gold portion of the reserves ought to be held in India or in London. Readers of Chapter IV. will know that there are, in my opinion, no advantages in keeping gold in India, and that such a policy involves a direct money loss through the cost of originally carrying the gold to India and the cost of bringing it back again to London when, at a later date, it is required to support exchange. But Indian opinion views with suspicion the holding in London of the greater part of India’s gold reserve, and this opinion, though ill–founded, is likely to persist for some time to come. The amount of expense involved in keeping gold in the Indian reserves is, in relation to the issues involved, not great; and it might be well worth while to incur it in order to avoid the currency system’s falling under a suspicion, however ill–founded. It might be a satisfactory compromise, therefore, if, as a normal practice (but not as a legal requirement), the gold in the Gold Standard Reserve were held “ear–marked” at the Bank of England, but the gold in the Currency Reserve retained in India. It may be added that the authorities seem, in fact, to be moving somewhat in this direction; for it is understood to be their intention to accumulate £5,000,000 in gold “earmarked” for the Gold Standard Reserve. If, however, a large part of the gold be held in India, it is of the utmost importance, in the event of a crisis, that the gold should be shipped by the Government to London and sterling drafts on London sold against it, or, if it were released in India, that the banks only should be allowed to get it, and on an undertaking to export it. Otherwise, if it were made freely available in India, a part might be lost and wasted (so far as the support of exchange is concerned) in hoards.