41. Some of the conclusions of this chapter may be summarised. All countries, since the practice has been generally adopted of employing a medium of exchange composed of some cheaper material than the standard of value, must keep a monetary reserve. Where there is a State bank, the bank is usually entrusted with this duty. Where the State regulates the currency and the note issue without the intervention of a bank, the State must itself undertake it. The proper magnitude of the reserve must depend upon the particular circumstances of each country. In India the reserve must be unusually large, first, because India is a great country specially liable to wide fluctuations in her prosperity and trade on account of climatic conditions the character of which cannot be easily foreseen; and second, because a large amount of foreign capital is employed, not only in permanent investment, but in temporary loans withdrawable at short notice, and because against these foreign liabilities India holds no appreciable amount of international Stock Exchange securities capable of easy realisation. I have argued that £40,000,000 may be, perhaps, at present a suitable amount to be held by Government in its sterling Reserves. These Reserves are most useful if they are held in London, where they must necessarily be wanted whenever there is need to make use of them. In deference to a public opinion which does not clearly understand the purpose of the Reserves or the limitations under which the Secretary of State must needs act in managing his sterling resources, it may be worth while to allay a groundless suspicion by the compromise of holding a fair proportion of the reserve of actual gold coin in India herself. When a Reserve of some such amount as the above has been firmly established, the diversion of further funds into any form of sterling or into the London Market should be deliberately avoided. Stability has been attained already, or is about to be. So, on the whole, has economy, though some current opinion in regard to the use of gold puts it in jeopardy. The system still wants elasticity. A machinery ought to be set up, therefore, by which further funds, accumulating in the hands of Government through the increased use of notes, may be used in India to afford the needed elasticity in the seasonal supply of currency.