ustry after war
is obvious, but what else are our banks for, if not to provide it?
They can only be set free to provide it on the scale required if, by
the necessary reduction of the floating debt, they are relieved of the
locking up of their funds in Government securities, which has been one
of the bad results of our bad war finance.

It goes without saying that the Committee does not recommend the
continuance in peace of the differential rates for home and foreign
money that were introduced as a war measure with a view to lowering
a rate at which the Government borrowed at home for war purposes. It
would evidently be too severe a strain on human nature to attempt to
work such a system, except in war-time, when the artificial conditions
by which the market was surrounded made it both feasible and desirable
to do so. With regard to the note issue, the Committee proposes a
return to the old system and a strictly drawn line for the amount of
the fiduciary note issue, the whole note issue (with the exception of
the few surviving private note issues) being put into the hands of the
Bank of England, all notes being payable in gold in London only
and being made legal tender throughout the United Kingdom. These
suggestions are subject to any special arrangements that may be made
with regard to Scotland and Ireland. An early resumption of the
circulation of gold for internal purposes is not contemplated. The
public has become used to paper money, which is in some ways more
convenient and cheaper; and the luxury of a gold circulation is one
that we can hardly afford at present. Gold will be kept by the Bank of
England in a central reserve, and all the other banks should, it is
suggested, transfer to it the whole of their present holdings of the
metal. In order to give the Bank of England a closer control of the
bullion market the Committee thinks it desirable that the export of
gold coin or bullion should, in future, be subject to the condition
that such coin or bullion had been obtained from the Bank for the
purpose. This measure would give the Bank of England a very close
control of the bullion market, so close that there is a danger that
if this control were too rigorously exercised, gold that now comes to
this country might be diverted, with a view to more advantageous sale,
to other centres. The amount of the fiduciary issue is a matter
that the Committee leaves open to be determined after experience of
post-war conditions