266 THE REGULATION OF THE CURRENCY

Sir Edward Holden, in one of those masterly
surveys of world finance with which he now instructs
the shareholders of the London Joint City and Mid-
land Bank, assembled at their annual meeting, gave
much of his attention to an attack on the report of
Lord Cunlifife's Committee on Currency. This was
only to be expected, since the Committee had made
recommendations on lines which were largely con-
servative and did not embody any of the reforms
or changes which had been previously advocated by-
Sir Edward. Being on this occasion chiefly critical,
he did not make very clear in his latest speech the
precise proposals that he favours. For them we
have to go back to his speech of a year ago, as re-
ported In the Economist of February 2, 1918,
p. 171, where he stated that " if the Bank (of
England) had been working on the same principles
as other national banks of issue, there would have-
been little ground for anxiety/' and that these
principles are :—

1. One bank of issue and not divided into
departments.

2. Notes are created and issued on the security
of bills of exchange and on the cash balance, so that
a relation is established between the notes issued
and the discounts.

3. The notes issued are controlled by a fixed ratio
of gold to notes or of the cash balance to notes.

4. This fixed ratio may be lowered by the pay- "
ment of a tax.

5. The notes should not exceed three times the
gold or the cash balance.