It is interesting to reflect that India’s love of the precious metals, ruinous though it has been to her own economic development, has flourished in the past to the great advantage of Western nations. Every one knows Jevons’s description of India as the sink of the precious metals, always ready to absorb the redundant bullion of the West and to save Europe from the more violent disturbances to her price level. In very recent years, while the South African mines have been reaching the zenith of their production, she has been fulfilling to perfection her rôle of sink. Prices have been rising, as it is, much faster than is healthy and in a way very disadvantageous to such a creditor nation as Great Britain, to whom large sums fixed in terms of gold are annually due. It is reasonable to think that without the assistance of the Indian demand, they would have risen still faster. From its very short period point of view the City is sometimes cross when this Indian demand shows itself in an inconvenient week; but if we take a longer view the Indian demand is, at a time of plentiful gold supply like the present, a true friend to the City and an enemy of inflation. On the other hand, if a time comes when Indians learn to leave off their unfertile habits and to divert their hoards into the channels of productive industry and to the enrichment of their fields, they will have the money markets of the world at their mercy. A surfeit of gold can do at least as much damage as a shortage. During the past sixty years India is supposed to have absorbed, in addition to her previous accumulations, more than £300,000,000 of gold (apart from enormous quantities of silver). We may presume that, if India ceases to demand fresh gold and begins to disgorge some part of her huge stock, she will do so gradually. Yet if the change comes at a time of big new production, she may involve the world, nevertheless, in a very great inflation of gold prices. If, however, India is thus to turn the tables on the West, she must not delay too long. The time may not be far distant when Europe, having perfected her mechanism of exchange on the basis of a gold standard, will find it possible to regulate her standard of value on a more rational and stable basis. It is not likely that we shall leave permanently the most intimate adjustments of our economic organism at the mercy of a lucky prospector, a new chemical process, or a change of ideas in Asia. CHAPTER V COUNCIL BILLS AND REMITTANCE 1. Remittance by means of what are termed Council Bills is a feature peculiar to the Indian system, and is not, so far as I know, to be paralleled elsewhere. It arises partly from the historical circumstance that the Government of India is the successor of a trading company, partly from the necessity under which the Government lies of making very large annual remittances to England.