As regards bank reserves, I think we can do in the future what we have done in the past--trust them to keep a fair average proportion. As things are, we must not expect the system to work with perfect elasticity. This cannot be done with inelastic gold as a basis. We cannot have an absolutely safe mathematical ratio. Whatever the ratio be, it alone will not ensure us against disaster. Only the Government--that is, the nation--can ensure us against disaster. It is the duty of the nation to do this, and it is also a prudent course to take. We had an exemplification of this in the recent crisis. Experience is a safer guide than theory. But the Government, in its turn, has the right and the duty to insist upon sound banking. It should allow no institutions to spring up calling themselves banks which cannot be conducted soundly. This is not safeguarding the community. Such institutions should be differentiated, and should have their proper designations. I think the fewer the banks the better, therefore I favour amalgamations. This is because I think they could be brought under more complete control and could be more soundly and safely administrated. In fact, I would go to the logical extreme and make them branches of a State Bank and not independent entities. It is because they and the Bank of England are independent entities that we cannot simultaneously have high reserves in the joint stock banks and high reserves in the Bank of England unless both stop lending simultaneously. A joint stock bank singly can keep a high proportion because it can make all its branches conform to the common policy. But as the banks are not branches of the Bank of England there can be no common policy. This has its grave disadvantages at times. We may evolve in time to closer union, to a more consistent and uniform system. This certainly lies in the path of social evolution. As to where the reserves should be kept, I do not think, as the system is at present, that this is a question of vital importance. The reserves appear to me to be safer in the Bank of England, because thereby they place greater obligations upon that Bank, and this comes nearer to our notions of unity. Behind the Bank of England is the Government, and behind the Government is the State. One thing is certain. Wherever the reserves be, they will not suffice of themselves to save the banks in a state of ungovernable panic without the help of the Government. And all the banks must stand or fall together. And if they stand or fall together their reserves must be pooled in some fashion and somewhere. The Government can save them in these grave, but, happily, remote circumstances, by setting the machinery at work to produce legal tender currency. The wisdom and efficacy of this have recently been strikingly demonstrated.