ertibility into gold as is now held by the note. On this
point Sir Edward's answer is telling: "In reply to this statement, I
say that the depositors at the present time can always get gold by
drawing out notes from the reserve and taking gold from the Issue
Department. There seems to be little difference between the depositors
attacking gold direct and attacking the gold through the notes in the
reserve. If the Bank cannot pay the notes when demanded the whole
machinery stops." Quite so. The notion that the holder of a Bank of
England note has now a stronger hold over the Bank's gold than the
depositor seems to be baseless. He can exercise his hold more quickly
perhaps, though even this is doubtful. Since banknotes are not
legal tender at the Bank of England, it is not quite clear that the
depositor would even have to take the trouble to go first to the
Banking Department for notes and then to the Issue Department for
gold. He might be able to insist on gold in immediate payment of his
deposit. Still less convincing is the Committee's argument that "the
amalgamation of the two departments would inevitably lead in the end
to State control of the creation of banking credit generally." Their
report might have explained why this should be so, for to the ordinary
mind the chain of consequence is not apparent. On the whole it is hard
to see much good or harm to be achieved by changing the form of the
Bank return. It might make the Bank's position look stronger, but it
could not make it really stronger. Nor would it really impair the
strength of the note-holder's position as against the depositor,
because even now there is no essential difference. It would substitute
a more businesslike and simple statement for a form of accounts which
is cumbrous and stupid and Early Victorian--a relic of an age which
produced the crinoline, the Crystal Palace and the Albert Memorial. On
the other hand, to alter a statistical record merely for the sake of
simplicity and symmetry is questionable. Unless we are getting more
and truer information, it is a pity to make comparisons between one
year and another difficult by changing the form in which figures are
given.

A more essential difference between the two policies lies in Sir
Edward's advocacy of a ratio--three to one--between notes and gold,
and the Committee's support of the old fixed line system. By the
latter, if gold comes in, notes to the same extent can be created,
and if gold goes