these valuable assets
in hand; but against them we have to allow, which the Chancellor
altogether omitted to do, for the big arrears of expenditure and the
huge cost of demobilisation, which is at least likely to absorb the
whole of them. On the whole, therefore, although we can claim that
our war finance is very much better than that of our enemies, it is
difficult to avoid the conclusion that it might have been very
much better than it is, and that it is not nearly as good as it is
represented to be by the optimistic fancy of the Chancellor of the
Exchequer.

X

INTERNATIONAL CURRENCY

_June_, 1918

An Inopportune Proposal--What is Currency?--The Primitive System of
Barter--The Advantages possessed by the Precious Metals--Gold as
a Standard of Value--Its Failure to remain Constant--Currency and
Prices--The Complication of other Instruments of Credit--No Substitute
for Gold in Sight--Its Acceptability not shaken by the War--A
Fluctuating Standard not wholly Disadvantageous--An International
Currency fatal to the Task of Reconstruction--Stability and Certainty
the Great Needs.

As if mankind had not enough on its hands at the present moment, a
number of well-meaning people seem to think that this is an opportune
time for raising obscure questions of currency, and trying to make
the public take an interest in schemes for bettering man's lot by
improving the arrangements under which international payments are
carried out. Nobody can deny that some improvement is possible in
this respect, but it may very well be doubted whether, at the present
moment, when very serious problems of rebuilding have inevitably to be
faced and solved, it is advisable to complicate them by introducing
this difficult question which, whenever it is raised, will require the
most careful and earnest consideration.

Since, however, the question is in the air, it may be as well to
consider what is wrong with our present methods, and what sort of
improvements are suggested by the reformers. At present, as every one
knows, international payments are in normal times ultimately settled
by shipments from one country to another of gold. Gold has achieved
this position for reasons which have been described in all the
currency text-books. Mankind proceeded from a state of barter to a
condition in which one particular commodity was used as the chief
means of payment simply because this process was found to be much
more convenient. Under a s