Note 352 — Chapter VI
Reading edition
In the course of his speech on the Indian Paper Currency (Temporary Amendment) Bill, dated March 17, 1920, the Finance Minister observed: “… from a practical point of view, it is desirable to leave the gold-standard reserve until the paper-currency reserve has been re-transferred, in case … the Secretary of State finds it impossible to keep himself in funds by Councils for his heavy home liabilities. He will then be able to use the gold-standard reserve, and we can credit the gold-standard reserve out here. There is a third point, and I think a conclusive one. When you operate against the paper-currency reserve you have to operate within the paper-currency reserve; when you operate against the gold-standard reserve it disappears; it melts, and we are under no obligation to replace it; whereas we are under a statutory obligation to replace the paper-currency reserve.”—S.L.C.P., Vol. LVIII, p. 1416.