If the use of notes continues to increase, and if £40,000,000 is an adequate figure for the sterling Reserves, a considerable sum may soon be available in India from the funds of the Paper Currency Reserve. Every addition, moreover, to the Gold Standard Reserve reduces to some extent the need for holding large amounts of sterling in the Paper Currency Reserve. Great advantages may be obtained if the surplus funds in the Paper Currency Reserve be used, not as a permanent or quasi–permanent loan to Indian traders, but to provide _elasticity_ in the seasonal supply of currency and to make possible the increase in the stock of purchasing power in the form of money which is _temporarily_ required in the busy season, without having to raise it in London. _Permanent_ additions to the currency must be obtained in the future as they are at present. But _temporary_ additions, due to seasonal demand, ought to be provided by a suitable organisation of credit money in India herself. The advances from the Currency Reserve, therefore, must be made at a fairly high rate of interest and for periods not exceeding three months; and they should be so arranged that the Government would regain possession of its funds and the advances be reduced to nil in each slack season. Thus the Government would begin each busy season with their funds intact; and they would not lend until the success of the season was assured, and it was plain that the general position warranted it. The advances would be made in notes or rupees, according to the demand. These prosperity advances, therefore, are to be sharply distinguished from the adversity advances, discussed on pp. 160–163, which would be made in sterling drafts, and which would be governed by wholly different considerations. 36. There remains for discussion the question of the Government’s Cash Balances.[78] I will begin with the method of managing that part of them which is held in India. It will be useful to know in what way this method has grown up.[79]