  In Newtonian gravity it is a moot question whether energy should be localized
in the field or inside matter. An argument from relativity suggests a
compromise in which the contribution from the field in vacuum is positive
definite. We show that the same compromise is implied by Noether's theorem
applied to a variational principle for perfect fluids, if we assume Dirichlet
boundary conditions on the potential. We then analyse a thought experiment due
to Bondi and McCrea that gives a clean example of inductive energy transfer by
gravity. Some history of the problem is included
