Our banks called in credits from abroad, but our debtors, with all the good will in the world, could not remit the funds. Not only did this place the discount and accepting houses in serious difficulties, but the banks were involved in these difficulties. The wealth, therefore, which in normal times the banks regard as next to their cash reserves in matter of quality, was practically of no avail. Bills of exchange became as frozen as Stock Exchange securities, and naturally enough the banks forthwith ceased to discount bills. And as the bill brokers depend on the banks, they could not discount. Moreover, it was useless at first to call in loans from the bill brokers, for they could not get the funds. So the deadlock was complete. What, then, was the most expedient thing for the Government to do in these unprecedented circumstances? Let things take their course? Let the problem solve itself? In that direction disaster lay. Even though the banks might stand up, the nation’s commercial and economic position could not stand up. Dire confusion would have resulted; ruin would have followed; there would have been unemployment on a vast scale; and the nation would have been in an infinitely weaker position than it was to face and conduct the war. The problem was solved by the moratorium; and the difficulties and complications arising out of the moratorium were subsequently removed by degrees by the other measures adopted. It was impossible for the highest human wisdom to grasp in its entirety and instantly the vast problem that had to be faced. No guidance was to be got from tradition or precedent. It was like sudden ruin overtaking an ordinary prosperous and comfortable household. The disaster not having been foreseen, and no provision having been made for it, the head of the household is in a state of bewilderment. He cannot at first see and think clearly. It is only by force of will and self-control that he finds a way to battle with his troubles and difficulties, and to minimize and overcome them. So with the Government of the national household. It had to exercise self-control, self-will, act boldly and act firmly, adopting what appeared the wisest course, not staying to ask what our forefathers did or would have done. The nation’s ancestors never had such trials and difficulties to face, such problems to settle. The only action the wisdom of which I have doubts, was the rapid advance in the Bank of England rate to 10 per cent. It is possible that this would have had graver consequences had the bulk of the public understood the meaning of it. To those who understood it looked like the symptoms of panic. Fortunately, the bulk of the public did not understand the significance of it. In its ignorance it regarded it as something wisely and inevitably done, a greater safeguard and, therefore, a measure designed to strengthen and not weaken its confidence in the banking and financial position.