Furthermore, what made it additionally ill-advised on the part of the banks to hoard gold and pile up their reserves, was the subsequent proclamation by the Government to the effect that the Bank of England, on the authority of the Government, would advance the necessary funds to meet acceptances for which cover was not duly forthcoming from clients, until one year after the close of the war. This removed all necessity to hoard gold and to pile up reserves, and it justified the rebuke of the Chancellor of the Exchequer to those banks that refused necessary accommodation to legitimate business. It was also a rebuke to those critics who have seen no refuge for the country in the dark hour of trouble except in hoarding by the banks and parting by the public. That is to say, they counsel the public not to demand gold, and they counsel the banks to keep it. If, therefore, the public are not to demand gold, and if the banks are to accumulate it in their vaults, then it means that in a crisis we can do without gold, and that, after all, the credit which the banks are said to create will alone save us. They are told that if they will only go on creating this credit they will enable us to pass safely through the crisis. It comes to this, that the advice given places us in mental confusion. Actual experience, therefore, seems to be trustier than illogical advice. What has been the direct consequence of this discounting of pre-moratorium bills and this great inflow of gold, despite the issue of a War Loan to the prodigious amount of £350,000,000? In the words of the money article, day by day and week by week, money has been a glut on the market, and has been lent on nominal terms, while discount rates have also fallen to nominal quotations. In other words, the great joint stock banks, in spite of themselves, have seen their gold reserves rising to an unprecedented extent. Of what benefit to the country is this great mass of idle gold? It is unproductive. It serves no useful purpose if it cannot be employed. It is like the grain in the barns perishing because it cannot be consumed. Yet in spite of this state of things, due to the supply of liquid capital exceeding the output of wealth, there have been those who have lamented the fall in discount rates lest this should turn the exchanges against us, and gold should be taken to New York or elsewhere. Would it not be beneficial if some of the gold did go? If it went in payment of wealth received, the gold would then become productive. The right service of gold is to help to produce wealth, and if it does this it performs the services deputed to it by the community. When gold passes from one nation to another in exchange for wealth it never passes permanently. I might just as reasonably urge that when I pay gold to my tailor for my dress suit I part with the gold for ever. I should part with it only in the event of my immediate decease, or if I became a non-producer, or in other ways