Government Securities 56,768,000
Other Securities 7,435,000
                       _________ 64,203,000

Other Securities                    92,278,000
___________
L226,264,000

Ratio of Gold to Notes =129.7 per cent.
" " Cash Balance to Liabilities = 33.5 "

It need not be said that these proposals have aroused the liveliest interest.  At the Bank Meetings held since then several chairmen have been asked by their shareholders to express their views on Sir Edward’s proposed revolution.  Sir Felix Schuster pronounced cautiously in favour of the revision of the Bank Act, and said that he had advocated it seventeen years ago.  Lord Inchcape, at the National Provincial Meeting, thought that the matter required careful consideration.  Most of us will agree with this view.  There is certainly much to be said for a reform of the Weekly Statement of the Bank of England, giving, it may be added, a good deal more detail than Sir Edward’s revised balance-sheet affords.  But concerning his proposal to reconstruct our system of note issue on a foreign model, there is certain to be much difference of opinion.  In the first place, owing to the development of our system of banking by deposit and cheque rather than by issue and circulation of notes, the note issue is not nearly so important a business in normal times in this country as it is in Germany and France.  Moreover, the check imposed upon our banking community by the need for an appeal to the Treasury before it can extend its note issue beyond a certain point often acts with, a salutary effect, and the view has even been expressed that if that check were taken away from our system it might be difficult, if not impossible, to maintain the gold standard which has been of such enormous value in building up the prestige of London as a financial centre.  I do not think there is much weight in this argument, since, under Sir Edward’s plan, the note issue could only be increased against discounts, and the Bank, by the charge that it made for discounts, would still be able to control the situation.  From the practical point of view of the present moment, a strong objection to the scheme is that it would open the door to fresh inflation by unrestricted credit-making just when the dangers of this process are beginning to dawn even on the minds of our rulers.

VII

THE COMPANIES ACTS

March, 1918

Another Government Committee—­The Fallacy of imitating Germany—­Prussianising British Commerce—­The Inquiry into the Companies Acts—­Will Labour Influence dominate the Report?—­Increased Production the Great Need—­Will it be met by tightening up the Companies Acts?—­The Dangers of too much Strictness—­Some Reforms necessary—­Publicity, Education, Higher Ideals the only Lasting Solution—­The Importance of Foreign Investments—­Industry cannot take all Risks and no Profits.