Gold is our capital in a fundamental sense. If all the gold in the world were suddenly destroyed, banks would cease to exist. Whence, then, could we get the means of multiplying our capital? The productive machinery of the country would become inert. International trading would cease, because international exchange would cease. Bills of exchange would be as worthless as old newspapers, for they would be unnegotiable. We should have to get a substitute for gold. We try to attract gold to this country because it is gold that keeps the capital-multiplying machinery going, as oil keeps other machinery going. If we always had a sufficiency of it there would be no occasion for high Bank of England rates. If there be just a sufficiency and no more, then we cannot spare any for hoarding purposes. It would be wise of the nation to have at its command a potential supplementary supply, not of gold, but of legal tender, for legal tender can perform all the offices of gold as national currency. Gold is given its potency because it is made legal tender. It has no other vital potency. Therefore paper, or any other substance, can be given equal potency by law. Now, the necessity of having this supplementary supply has been tacitly acknowledged. The acknowledgment is implied in the provisions of the Bank Charter Act and the provision of legal tender notes based on debt and securities. This provision, as I have pointed out already, is arbitrary. It was fixed at a time when no man had the visionary power to foresee and forecast the great development of banking in this country and the vast development of its national and international trade. It was fixed at a time when the country was groping towards a greatly improved currency system, a system that has helped in an incalculable degree the growth and development of our commerce. But in the recent crisis it was not this potential supply that the nation actually tapped. Before it could be tapped it was necessary to suspend the Bank Charter Act. Instead of this happening, a new and unlooked-for supply was forthcoming in the shape of the Treasury notes. This issue of Treasury notes brought a new fiduciary currency into existence, and the issue was on all fours with a free Government loan--a loan, that is to say, on which no interest was paid. It provided not only currency for the country, but “silver war-bullets” for the Government. The issue performed all the essential services which the supplementary fund I advocate should and would perform. I am convinced that the alarm felt throughout the country in those first critical days was magnified. There was certainly some apprehension; but no good purpose would be served by magnifying it. It is indisputable, too, that even this moderate apprehension disappeared the moment it was known that a large amount of legal tender would be issued in the shape of £1 and 10_s._ Treasury notes.