For this sets, or suggests, a limit to the maximum amount which can possibly be spared

We have over again the situation which has long existed, to its detriment, in the United States. The notes went out, but they did not return. No English statesman would consent to be responsible for the choice of the Governor of the Bank of England.

And besides this defect of the present time, there are some chronic faults in the policy of the Bank of England, which arise, as will be presently explained, from grave defects in its form of government. The special features of the system, although, as we shall see later, these features are not in fact by any means peculiar to India, are: first, that the actual medium of exchange is a local currency distinct from the international currency; second, that the Government is more ready to redeem the local currency (rupees) in bills payable in international currency (gold) at a foreign centre (London) than to redeem it outright locally; and third, that the Government, having taken on itself the responsibility for providing local currency in exchange for international currency and for changing back local currency into international currency when required, must keep two kinds of reserves, one for each of these purposes.

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