[53] Thus a probable effect of exceptionally large sales of Council Bills is an earmarking of gold on Indian account at the Bank of England. The extent to which the Indian system can be misunderstood is well illustrated by the fact that in a money article recently published in an important newspaper in this country, an increased offering of bills by the India Council was given as a reason for expecting a _postponement_ of the need for earmarking gold at the Bank on Indian account. [54] On two occasions this practice has been suspended—in January 1900, when the price rose to 1s. 4⅜d., and in December 1906–March 1907, when it rose to 1s. 4–3/16d. The reason for the suspension in the second case was the operation of the rule by which the premium charged for telegraphic transfers over the rate for bills depends on the Indian bank rate (see p. 105). The statement made in answer to a question on this subject in the House of Commons (April 30, 1912) by the Parliamentary Under–Secretary was not quite correct. [55] Old–fashioned treatises on the foreign exchanges often leave the student with the impression that the gold import point is a known and stable thing given for good in books of reference. How far this is from the truth, the example of India well illustrates. [56] It is worth his while to do this, because the cost of sending gold from Australia to London in one transaction is less than the cost of sending it first from Australia to India and then from India to London in two separate transactions. [57] I make this assumption, which is not exactly accurate, for purposes of illustration only. [58] Or less, if paid at the time of shipment and in advance of the time of delivery. [59] See p. 37 (footnote). [60] The designation of the reserve was changed from “Gold Reserve” to “Gold Standard Reserve” in 1906, when it was decided to hold a part in silver; but the change of title has not really made the position much clearer. [61] At the end of March 1913, £1,620,000 in gold stood to the credit of the Gold Standard Reserve in London. [62] See also pp. 190, 191, below. [63] Reckoning uncoined silver at its coined value. [64] A further loan of £2,500,000 for “general purposes” was incurred in December 1908. [65] An unfunded debt of £6,000,000, which has been wiped off lately out of the proceeds of the opium windfall, was incurred by the issue of India Bills during this period. [66] For details of the method applied in these various investigations see Appendices to Reports of Head Commissioner of Paper Currency, 1894, 1895, 1896, 1897, and 1900. See also Mr. Harrison’s article on the “Rupee Census” in the _Economic Journal_ for 1891. [67] _Stat. Journ._ March 1897 and March 1903. [68] This represents a _per capita_ circulation of between Rs. 7 and Rs. 8.