12. These are the chief relevant facts of law. Important considerations of policy do not lie so plainly on the surface. Since 1899 the circulation of notes has more than doubled, but the invested portion of the reserve has been increased by only 40 per cent. As the note issue has become more firmly established and more widely used, a growing and not a diminishing proportion of the reserves has been kept in liquid form. This is due to a deliberate change of policy, and to the use of the liquid part of the reserve for a new purpose. The bullion reserve is no longer held solely with the object of securing the ability to meet the obligation to cash notes in legal tender (rupees or gold) on demand. It is now utilised for holding gold by means of which the Secretary of State can support exchange in times of depression and maintain at par the gold value of the rupee. For the sake of this object the Government are content to forego the extra profit which might be gained by increasing the investments, and have steadily increased instead (as shown in the table on p. 49) the gold portion of the reserve. The Paper Currency Reserve is thus used to provide the gold which is the first line of defence of the currency system as a whole, and hence can hardly be distinguished from the resources of the Gold Standard Reserve proper. It is not profitable to discuss the reserve policy of the Paper Currency under existing conditions in isolation from the other reserves which the Government now hold. The whole problem of the reserves, regarded as a current practical question, is dealt with in Chapter VI. In this chapter I wish to look at the matter from a broad standpoint, with an eye to the proper policy in a future, possibly remote.