After all that has preceded we may at last find a plausible reason for the existence of and the general belief in gold reserves. Neither the defenders of the faith in gold and the gold standard, nor the scorners of this faith, are agreed among themselves in their interpretation of gold reserves. Professor Fisher and Mr. Keynes hold views which are widely different, nor does Professor Soddy, though he is as unacademic and as radical as Silvio Gesell, take up the same attitude as the German reformer. The commonest opinion is, or used to be, that the gold reserve is necessary as a backing for the notes issued. Notes, it was maintained, must be convertible or redeemable, without which security they would not circulate. This notion has been thoroughly exploded by recent practical experiments, which have proved that notes circulate the more readily the less they are weighed down by gold. Another idea has in consequence of the disruption of the old theory found fairly general acceptance: that a gold reserve is needed as a security against untoward emergencies. I have discussed this conception in my criticism of Mr. Keynes's " war-chest " plan. In normal times the reserve is not needed, while in an emergency gold is the last thing that a government will part with. So this explanation is not likely to go a long way.