THE JOINT STOCK BANKS 275

oint Stock banks would be weakened, though he
oes not explain why, since they would obviously
old notes in place of their gold and so would be able
D meet their customers' demands, now that the
itter are accustomed to the use of notes for pocket
itoney. He points out that " the gold which was
eld by the Joint Stock banks before the war proved
lost useful. ... At the beginning of the war the
anks paid out gold, satisfied the demands of their
ustomers for small currency, and thus eased the
iuation until currency notes became available/'
Ee seems to have forgotten that the banks, or most
f them, refused to part with their gold, paid their
ustomers in Bank of England notes which, being
3r j£5 at the smallest, were of little use for pocket
icney, and so drove them to the Bank to get gold;
nd we had to have a prolonged bank holiday and
moratorium. Sir Edward is in favour of three
old reserves, one to be held by the Government,
ne by the clearing banks, and one by the Bank of
England. If there were differences between the three
ontrollers of the reserve at a time of crisis the
onsequence might be 'disastrous.

In view of the admiration expressed by Sir
Edward for the new American system which is so
learly based on central control it is rather illogical
hat he should be so strongly in favour of independence
n this side of the water. His opinion is that " the
>olicy of the Joint Stock banks ought to be to make
hemselves independent of the Bank of England by
laintaining large reserves in their vaults/' Inde-
^endence ancl individualism are a great source of