Even had the New York exchange turned against us, it would turn round again in due course, as it always has done and always will do so long as international commerce proceeds. By no jugglery can we, in the existing system, make cheap money dear, any more than we can make cheap apples dear. It can be done by cornering; but no cornering of money is possible. If banks cannot lend at 1 per cent., they certainly cannot lend at 2 per cent. Human nature must be re-created first. If men will not part with bills of discount at 1½ per cent., they will not part with them at 1¾ per cent., and there is no law, written or unwritten, that will compel them to do this. The law of supply and demand operates as irresistibly in this case as when we buy apples at an old lady’s stall. If there be great danger in a great abundance and cheapness of money, then there must be a great danger in an abundance of gold, which is the source of the cheap money. Logic teaches us this. Reduce the gold, hoard it or throw it in the ocean, then the supply of Lombard Street money will decrease and loanable rates will rise. CHAPTER XVIII CORRELATION It may now pertinently be asked: Is it possible to keep high gold reserves in the joint stock banks, taking them as a unit, and simultaneously a high reserve in the Bank of England? By high reserves I mean, of course, a high proportion, for this is what we all mean. What is the test of a high reserve? There is no other test than the ratio of the gold reserve to the liabilities. We cannot test it by a quantity of gold _per se_. We cannot say that a hypothetical quantity is sufficient and a hypothetical quantity insufficient. A reserve must be related to something. When we speak of gold reserves we speak correlatively. They are not something standing apart, in the air, as it were, an independent quantity.