It is not very improbable, however, that in the future there might be a general crisis of the third kind—a heavy adverse balance against India, and an internal banking crisis at the same time. It is in these circumstances that the most difficult question of policy arises. The Indian Money Market would need to remit funds to London, but, on account of the internal banking crisis and an outbreak of hoarding amongst depositors, would not have even rupee resources with which to do it. Consequently the Government’s offer to sell sterling drafts in Calcutta, or to release gold from the Currency Reserve would not meet the case. If general distrust of banking was widely spread, and notes, gold, and rupees were being hoarded in the old–fashioned way on a large scale, the banks would not be able to put their hands on sufficient cash resources of any kind to enable them to pay for the Government’s drafts on a scale adequate to their necessities. The position would be that the Indian Money Market was on the verge of general insolvency with the Presidency Bank Rates at (say) 12 per cent, and that the Indian Government had (say) £40,000,000 sterling resources in hand with demands on only a modest scale for the encashment of notes and rupees. The Government would be vehemently urged to save the situation by making sterling advances, not simply in exchange for notes or rupees, but on some other non–monetary security. 24. We now have the possibilities before us. If in any of these sets of circumstances the Government were faced with demands for advances either in rupees or sterling, what line would it be proper to take?