This discussion will have served to make clear a distinction highly important to the problem of

in dealing with the Secretary of State’s Reserves. They provide for the executive first and above all things. If we examine the manner in which the Bank of England has fulfilled these duties, we shall find, as we found before, that the true principle has never been grasped; that the policy has been inconsistent; that, though the policy has much improved, there still remain important particulars in which it might be better than it is. It is true that, if a different practice were adopted (a practice which was adopted in part in 1907), and if the profits on the coinage of rupees, instead of being credited to the Gold Standard Reserve, were turned into rupees and spent by the Government in India on goods and services (whether for capital or any other purpose), more rupees would be in circulation for the time being than would have been the case otherwise. Thus the second provision prevents the sterling value of the rupee from rising above 1s.

_, excluding rupees in the Currency Reserve and Government Balances) of 120 crores of rupees.

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