Supposing the panic to grow, it will be demanded, and the reserve will be lessened accordingly

If any one proposed to give such power to the Chancellor of the Exchequer, there would be great fear and outcry. The principal items of the Home Charges are analysed below. In times of panic there is always a very heavy call, if not a run upon them; and in consequence of the essential nature of their business, they cannot constantly keep a large unemployed reserve of their own in actual cash, they are obliged to ask help of some one who possesses that cash. Great advantages may be obtained if the surplus funds in the Paper Currency Reserve be used, not as a permanent or quasi–permanent loan to Indian traders, but to provide _elasticity_ in the seasonal supply of currency and to make possible the increase in the stock of purchasing power in the form of money which is _temporarily_ required in the busy season, without having to raise it in London.

It is probably within the power of the Secretary of State, if he wishes, to regulate the flow of gold direct from London to Bombay by means of the sales of Council Bills.