Summary: defense to meet emergencies, and it was essential to maintain a proper balance between the London reserves and the Paper Currency Reserve in India. The elasticity of the currency system was introduced by Acts such as Act VI of 1918 and Act II of 1919, which raised the maximum investment limit from 14 crore rupees to 100 crore rupees, allowing for the issuance of currency notes against Treasury bills. However, the character and location of the securities in the Reserve underwent significant changes in the early 1920s due to the sale of sterling securities by the Secretary of State. The percentage of securities in the Reserve to the total circulation of notes increased over the years, reflecting the need to maintain a strong and flexible currency system to meet the evolving financial needs of the country.