Thus it is not easy to find a remedy for high Bank Rate by any method of diminishing the maximum range of fluctuation in exchange. Indeed so long as the currency arrangements are at all like those now in force, this maximum range may fairly be said to be determined by forces outside Government control, namely, by the forces governing the cost of remittance of gold. Though the burden of this cost may be shifted, it cannot be easily avoided altogether. 8. We must fall back, therefore, on the second alternative, the discovery of a new source for the seasonal supply of funds in India herself. A proposal, having this object in view, has already been put forward in more than one passage in the preceding pages. I believe that, in future, the Government of India may have in the busy season a considerable stock of rupee funds available in the Paper Currency Reserve and, occasionally, a surplus stock in the Indian Cash Balances. If a proper machinery is set up for lending these out in India, I anticipate some appreciable relief to the Bank Rate at the season of greatest stringency. Assuming that such a policy is practicable on other grounds, let us try to compare its precise effect as compared with the existing state of affairs. 9. Broadly speaking, surplus Government funds in India can at present be released only by the sale of Council Bills in London. When these bills are sold at a fairly high rate, the Government gain the premium over and above 1s. 4d. and are in a position to put out at interest funds in London. If the funds in India, instead of being released through the encashment of Council Bills, are lent out there direct, the interest obtained in India takes the place of the two sources of gain distinguished above. In the first case money is first borrowed from the London Money Market (by the Exchange Banks or otherwise) for the purchase of Council Bills, and is then lent back again to that Market by the Secretary of State. In the second case, instead of a double transaction in London there is a single transaction in India. It might be argued that the two methods come in the end to much the same thing; that there can be no relief to the Money Market unless the Government of India accept a lower rate of interest for sums lent out in India than is the equivalent of what they would make if they were to sell Council Bills at a premium and lend out the funds in England; and that the second method involves no net addition to the resources available in India. For the following reasons, however, I do not think that this way of looking at the matter would be correct.