THE CUNLIFFE RECOMMENDATIONS 267

As will be remembered, the Cunliffe Committee
recommended that the division of the Bank of
England Into an Issue Department and a Banking
Department, should be retained; that the old
principle by which above a certain fixed limit all
notes should be backed by gold, should also be
retained, but that if at any time a breach of this
rule should be found necessary it should be possible,
with the consent of the Treasury, and that Bank
rate " should be raised to a rate sufficiently high to
secure the earliest possible retirement of the excess
issue." Since it was formerly only possible to
exceed the limit on the fiduciary issue by a breach
of the law, under the Chancellor of the Exchequer's
promise to get an indemnity for it from Parliament,
and since Treasury tradition insisted on a 10 per
cent. Bank rate whenever such a breach was per-
mitted or contemplated, it will be seen that the
Cunliffe Committee proposed some considerable
modifications in our system and hardly justified
Sir Edward's assertion that it " proposed that the
Bank should continue to work under the Act of 1844
as heretofore/'

At first sight there seems to be a good deal of
difference between Sir Edward's ideal and Lord
Cunliffe's, but is not the difference to a great extent
superficial ? Whether the Bank be divided into
two departments, each presenting a separate account,
or its whole business be regarded as one and stated
in one account, seems to be rather a trifling question.
And the arguments put forward for their several
views by the two champions are not strikingly