20. One minor indirect consequence of the existing system is worth reference. Gold flows into the Currency Reserve when this is a cheaper way of getting notes or rupees than by buying Council Bills or Transfers (see Chapter V.). It flows out of the Currency Reserve when sovereigns are wanted for circulation or for hoarding, or when this is the cheapest way in which bullion dealers can get gold. There is reason for thinking that a good deal flows out for the last reason, and it is the occasion of this outflow which I wish to examine in a little more detail. The Currency Department publishes figures which show the number of sovereigns withdrawn from the Treasuries each month. It appears from these that, while some are withdrawn in the winter months during the busy season, when the demand for currency and for hoarding (since it is then that the cultivators sell their crops and realise their savings in coin) is at its height, there is in the summer also, when it is most improbable that an extra supply is required for these purposes, a steady and, in the aggregate, a heavy drain. A brief arithmetical calculation provides what must, I think, be the explanation of this. Since the price of bullion in London is (normally) £3:17:9. per oz., while the price of sovereigns is £3:17:10½, the bullion import point of Indian exchange will be a little below the sovereign import point. Thus when exchange is fairly high, an Indian purchaser of gold finds it more profitable to buy drafts on London, purchase gold in the bullion market and ship it to India, than to purchase sovereigns from the Treasury at 1s. 4d.; but when exchange is low, the reverse is the case and it is cheaper to get as much gold as the Treasury will let you have at 1s. 4d. I do not know exactly where the dividing line comes;[50] but when telegraphic transfers are at 1s. 4⅛d. it is certainly more profitable to get gold bullion in London, and when they are at 1s. 4-1/32d. it may pay to get it in India.