Mr. Cole admits that on the _least_ strain, or dislocation of the machinery of the market, recourse has to be made to what is then the only available source of supply, the central institution, where it is simply a question of the rate of interest whether the money is forthcoming. After admitting, then, that the machinery can break down and that then there can be but one source of supply, that supply can only be obtained at a higher price. If it is to be obtained at a higher price, then it is to be obtained at the general expense of the community. If capitalists will not pay that higher price, then this is tantamount to a lessened supply of money. As the Bank of England, too, will not lend on the same class of wealth that the other banks will lend on, a vast mass of wealth is excluded. Therefore a vast mass of wealth cannot be transformed into liquid capital. If no one will liquefy this wealth, then the production of liquid capital must be limited, and that capital must remain in its fixed form till the other banks restart their transforming machinery. If this be so, then the supply even from the Bank of England is not, as Mr. Cole would have us believe, unrestricted and illimitable. It is, after all, a restricted supply, regardless of the entire claims or needs of the community, for narrower discrimination is practised. The Bank of England may always be willing to discount or lend upon good bills. But there are other bills of a lower grade than this class of bill, and there is a vast quantity of wealth that is rejected by the Bank. If the lending is limited to good bills, and if the quantity of good bills is limited, then the supply of money from the Bank must be limited. To say that the supply is inexhaustible is, therefore, misleading. We know, too, from experience that when the Bank has been lending for a time on good bills it has had at times to check these loans. And in order to check them it has raised the Bank rate. Why has it raised the rate? To replenish the supply that is said to be inexhaustible. Mr. Cole says it could get that supply from abroad, and therefore the fund would be replenished inexhaustibly. If, however, the supply from abroad were checked, as we can imagine it could be, would the fund be inexhaustible then? It would be interesting to know if, should the Bank Act be suspended in certain circumstances, this would fall in with Mr. Cole’s idea, or conception, of inexhaustibility. Also if the creation of the Treasury notes falls in with that idea.