omplete freedom, as far as it was consistent with the best
interests of the country, was most of all desirable.

How far, we have next to ask, is it necessary for the best interests
of the country to restrict the freedom of capital issues? If we look
back at the terms of reference under which the reconstituted Committee
is to work, we see that the officially expressed objects are (1)
preserving capital for essential undertakings in the United Kingdom,
and (2) preventing any avoidable drain upon Foreign Exchanges by the
export of capital. There is certainly much to be said for both these
objects. When we lend money to foreigners we give them the right to
draw on us now in return for their promises to pay some day; in other
words, we make an invisible import of foreign securities, and in the
present state of our trade balance all imports, whether visible or
invisible, need careful watching. It is also very evident that at a
time when capital is scarce there is much to be said for keeping it
for essential industries, especially those which produce necessaries
and goods for export, and not allowing it to be swept up by borrowers
who are going to devote it to making expensive fripperies on which big
profits are probable.

There remains a very big other side to both these questions. All over
the world there is a demand for goods which have not been produced,
or only in greatly reduced quantities, during the war. This demand is
only effective in so far as willing buyers can pay; some of them have
the needful cash in hand or waiting in London or elsewhere to be drawn
on, but a great number of would-be buyers want to be financed, and
will have to be financed by somebody if the needs that they feel are
to be translated into actual purchases. In other words, in order that
the wheels of industry are to be set turning as fast as they might, if
they had a full chance, somebody has to lend freely. Now, it is surely
most of all important in the national interest that those wheels
should begin spinning as fast as possible, and the question is whether
we are more likely to serve that interest best by keeping a meticulous
eye on the course of exchange and buttoning up our pockets to foreign
borrowers or by leaving capital free to seek its market, knowing that
every time we give the foreigner the right to draw on us we stimulate
our export trade, because his drawing must finally mean a demand on us
for something--goods, securities or gold