oh. 21 INTERNATIONAL DISEQUILIBRIUM 355

Turning to the practical considerations of themoment, one finds also certain other obstacles in theway of Gold-Exchange Management working out inan entirely satisfactory way. In the first place, thereis not always accurate and up-to-date knowledge ofthe amount of liquid resources which one BankingSystem is holding as a reserve within the territory ofanother Banking System. Consequently changes inthese amounts are not as overt and palpable as aremovements of actual gold. Indeed, this greatersecrecy, which allows a Central Bank ’s reserves tofluctuate in amount without this being generallyknown, is sometimes a recommendation in the eyesof the Bank in favour of its holding foreign liquidresources rather than gold in its own vaults.

In so far as the vagueness of our knowledge aboutthe movements of foreign balances is due to the loveof secrecy, Central Banks have only themselves toblame. But it may also be due to a certain vaguenessas to what ought to be reckoned for the present pur-pose as a foreign banking reserve. One kind of assetshades off into another—from Central Bank Balancesto Member Bank Balances, to Bank Bills, to TreasuryBills, to other Short-dated Securities, to Securitiesgenerally having a free international market. Nor isit clear that we should concentrate our attention solelyon Central Bank assets in those cases where MemberBanks also are accustomed to hold foreign liquid re-sources on an important scale. For the real distinc-tion is between those resources which are held abroadfor the purpose of affording reserves against con-tingencies to a country’s banking system as a whole,and those resources which are held abroad because ofthe attraction which they offer as investments. Thesolution to this difficulty can only be found in CentralBanks having in their possession the greatest possibleamount of information under all the above headings,and then applying their practical judgment to the