268 THE REGULATION OF THE CURRENCY

convincing. Sir Edward wants only one account,
because he thinks the consequence would be a stronger
reserve and fewer changes in bank rate. But a
mere change of book-keeping such as the amalgama-
tion of the two accounts would not make a half-
pennyworth of difference to the extent of the Bank's
responsibilities and its ability to meet them, and it
is on variations in these factors that movements in
bank rate are in most cases decided. On the other
hand, Lord Cunliffe and his colleagues argue that
the main effect of putting the two departments into
one would be to place deposits with the Bank of
England in the same position as regards converti-
bility 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 differ-
ence 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.