“The corresponding figures on July 10, 1918, as nearly as they can be estimated, were:—­

“Fiduciary Issue of the Bank of England 18,450,000
Currency Notes not covered by gold 230,412,000
                                          ___________
“Total Fiduciary Issues [1] L248,862,000
Bank of England Notes issued against
   coin and bullion 65,368,000
Currency Notes covered by gold 28,500,000
Estimated amount of gold coin held
   by Banks (excluding gold coin held
   by Issue Department of Bank of
   England), say 40,000,000
                                          ___________
“Grand total L382,730,000

“[Footnote 1:  The notes issued by Scottish and Irish banks which have been made legal tender during the war have not been included in the foregoing figures.  Strictly the amount (about L5,000,000) by which these issues exceed the amount of gold and currency notes held by those banks should be added to the figures of the present fiduciary issues given above.]

“There is also a certain amount of gold coin still in the hands of the public which ought to be added to the last-mentioned figure, but the amount is unknown.”

It will be noted that the gold held by the banks (other than the Bank of England) and by the public has declined from L123 to L40 millions, according to the Committee’s estimate, while, on the other hand, the circulation of bank notes has risen by L27 millions and the issue of currency notes has taken place to the tune of L259 millions (at the date of the Report; it is now nearly L300 millions), making a net addition to legal tender currency of over L200 millions.  When we also remember that there has been a very heavy coinage of silver and copper, that the Bank of England’s deposits have risen by over L100 millions and the deposits of the other banks by nearly L700 millions, and all this at a time when most of the industrial activity of the country was going into the production of destructive weapons and the support of those who were using them, the behaviour of commodities of ordinary use in rising by nearly 100 per cent. seems to be an example of remarkable moderation.  With all this new buying power in the hands of the community there is little wonder that some people should think that we have enormously increased our wealth during this most destructive and costly war, and should then feel hurt and disappointed when they find that this new buying power is robbed of all its beauty by the fact that its efficiency as buying power is seriously diminished by its mere quantity.