Such are the suggestions made by this distinguished body for the restoration of our currency.  Little has been said against them in the way of serious criticism, but their conservative tendency and the fact that they practically recommend a return to the status quo has caused some impatience among the financial Hotspurs who proposed to begin to build a new world by turning everything upside down.  In matters of finance this process is questionable, interesting as the result would undoubtedly be.  To get to work on tried lines and then, when once industry and finance have recovered their old activity, to amend the machine whenever it is creaking seems to be a more sensible plan than to delay our start until we have fashioned a new heaven and earth, and then very probably find that they do not work.  If the machine is to be set moving, it can only be done by close co-operation between the Bank of England and the other banks which have grown by amalgamation into institutions the size of which seem likely to make the task of central control more difficult than ever.  On this important point the Committee is curiously silent.  But it recommends the adoption of a suggestion made by a Committee of Bankers, who proposed that banks should in future be required “to publish a monthly statement showing the average of their weekly balance-sheets during the month.” (Will this requisition apply to the Bank of England?) This is a welcome suggestion as far as it goes, but unless something is done by co-operative action to make the Bank rate more automatic in its influence on the actions of the other banks, the difficulty of making it effective seems likely to be considerable.

Getting the currency right is a most important matter for the future of our financial position.  Another is the question of our debt to foreigners.  Most of this debt we owe to America, and we only owe it because we had to finance our Allies.  We surely ought to be able to arrange with America that anything that we have to do in giving our Allies time before asking for repayment they also should do for us—­within limits, say, up to thirty years.  In view of all that they have made and we have lost by this war waged for the cause of all mankind, this would seem to be reasonable concession on America’s part.

XVII

MEETING THE WAR BILL

January, 1919

The Total War Debt—­What are our Loans to the Allies worth?—­Other Uncertain Items—­The Prospects of making Germany pay—­The Right Way to regard the Debt—­Our Capital largely intact—­A Reform of the Income Tax—­The Debt to America—­The Levy on Capital and other Schemes—­The only Real Aids to Recovery.