The big finance houses, who had “accepted” bills of exchange and rendered themselves liable to meet the payments for the things they represented, on the understanding that the means to pay them were to be promptly despatched, found that these means were not forthcoming; their own resources were far from sufficient to meet these payments.  Utter ruin stared them in the face.  At home also a run on the banks seemed probable, which would have meant ruin to large numbers of people.  In this grave crisis the State acted with commendable promptness.  The bank holiday was extended; State notes for 10s. and L1 were issued; a moratorium was declared, legalising the postponement of the due payment of debts, with certain exceptions; the Bank of England under a guarantee from the Government that the latter would meet the loss, began discounting, or buying for cash, approved bills of exchange accepted before war was declared, many of which are hardly likely to be met by the people liable for payment.  These steps were taken swiftly and boldly and allayed the panic.  But more was needed; such measures were not in themselves sufficient to put the machinery of foreign exchange into operation again and the suspension of this method of settling international indebtedness was having serious effects.  To carry on international trade, and to supply ourselves with the produce on which the very existence of the community depends, without the machinery, is a thousand times more difficult than to conduct our home trade by means of direct barter.  Without going into technical details, it may be said that the purchase of bills by the Bank of England, whilst relieving the last holder from loss, did not extinguish the liability of persons whose names had appeared on the bills as acceptors, endorsers and drawers.  This was true of traders and commercial people not only in this country but also in other parts of the world.  In the face of these liabilities, in most cases unexpected, it was hardly likely that they would increase their liabilities under new bills.  Consequently the remittances coming to London shrank to next to nothing.  As bills of exchange—­or their equivalent—­are the means by which both importers and exporters get paid for their goods, the difficulty of getting paid naturally began to have a serious effect on trade.  As the figures of foreign trade during August show, cargoes were being held up.  It was clear, therefore, that if this country were to continue to receive supplies of corn and meat, of cotton and wool, of hides and timber, something further must be done.  The question the Government had to decide was what steps could be taken to safeguard the food of the people, and to avoid a crushing volume of unemployment through the lack of the raw materials of industry.  The produce was there; what was needed was to start the flow of the particular kind of currency—­“credit money”—­which would expedite exchange.  The course taken by the State was to advance money