It was found by early workers in atmospheric electricity that, during conditions of steady rain, when the potential gradient at the ground was negative the potential gradient at the top of a high mast was occasionally positive. This indicated the presence of negative space charge in the layer between the two measurements. To farther investigate this effect simultaneous recordings were taken of the potential gradient and the precipitation current at the top and bottom of the mast, 21 metres high, situated in a field adjacent to Durham Observatory. Large differences in the values of the precipitation currents at the two levels were found. Due to the concentration of the lines of force on the earthed mast, and so on the upper shielded collector, laboratory experiments were carried out to investigate the charging effects caused when drops splash in a region of high potential gradient. It was found that the differences between the currents could be accounted for by the splashing of drops on the edges of the upper collector. As there is no obvious way of correcting for this effect it would appear that the shielded rain collector of the design used in the present work is unsuitable for measuring the precipitation current in regions of high potential gradient and even in other regions, the recorded currents must be considered with caution. Also drops were found to release negative charge to the air in regions of aero potential gradient. The actual reversal of sign of potential gradient between the top and bottom of the mast was only observed tor a number of very short periods, the longest being 4½ minutes, during low potential gradients. But on the majority of recordings the potential gradients did indicate the presence of excess of negative space charge in the layer below the top of the meat, although on occasions the space charge was positive. The space charge was of the same sign, and varied in the same sense, as the potential gradient recorded at the ground. Considering these points an attempt is made to explain the reversal effect in terms of layers of space charge between the cloud and the ground. The layer being due to the charge on the rain, the charge released when drops splash, and a separation or electrode effect due to the potential gradient of the cloud.