A purely internal crisis of the first kind might require assistance from the resources of Government, but would involve no claims on their sterling resources specifically, as distinguished from their rupee resources. The trouble would probably begin with a boom of the usual type, heavy commitments on the part of the banks, large importations of foreign goods, and (in the future) a good deal of internal company promoting. If, early in the autumn, a serious failure of the monsoon became apparent, a widespread suspension on the part of the numerous bubble banks, which have been springing up lately all over India,[70] would be a probable consequence. Indian depositors generally might take alarm and hoard money in their own houses on a large scale. Exchange Banks have such large deposits in India and so little cash there[71] that they would probably require to import funds from London as fast as possible. The Indian Joint Stock Banks, however, are now so important that the part played by the Exchange Banks might not be adequate to save the situation. The Government would then be called on to make advances to the Presidency Banks. This has happened from time to time in the past, the last occasion being in April 1898, when the Bank of Bombay, whose bank rate was then at 13 per cent, asked the Government for an advance of 25 lakhs.[72] This raises the first question of policy—whether the Government should help the bankers’ reserves on an occasion of internal crisis by making rupee advances to them. But it is hardly relevant to the question of the Government’s _sterling_ resources; and, unless the Government Savings Banks were to be in trouble at the same time, it is not likely that there would be any difficulty in helping the bankers, if it were thought right to do so. A crisis of the second kind, due to general depression or bad harvests, in which India has to meet a heavy adverse balance in London, provided that, as in 1907, it is not accompanied by internal banking difficulties of the kind just described, causes, it is true, a drain on the Government’s sterling resources through the necessity of providing remittance on London, but only in proportion to the volume of notes and rupees which are brought to the Government for encashment or in payment of sterling drafts. At first, therefore, in such a case, there is no question of the Government’s using its reserves otherwise than as currency reserves; and the banks will have plenty of notes and rupees with which to buy the Government’s sterling drafts. Only if the depression is very prolonged, and one bad harvest follows another, is the need likely to arise for sterling advances from Government, otherwise than against a corresponding face value of notes and rupees.