The simplicity, the almost automatism, of currency and credit control under the gold standard has been highly praised. But at what cost to trade and industry did the system operate? The Bank rate might have to be raised when internal conditions required not restriction but expansion of credit—as for example last year. when the outflow of gold would have led to severe credit restriction at the very time when confidence was already shaken and enterprise languishing. Seen in retrospect, the pre-war automatism in monetary affairs meant doing nothing until an acute stage of financial weakness had been reached—a stage ut which drastic action was inevitable, however damaging its effects might be on industry and trade. But why should the British industrialist and trader pay more for credit, or find credit more dificult to obtain, because foreign capitalists choose to transfer their bank balances from London to New York?. Today human skill and judgment must take the place of automatism. Open market dealings by the Bank of England and the operations of the Exchange Equalization Account are the modern instruments of control and after several years' experience we can appreciate how well they have been used. Monetary management on this scale is a new system and therefore m some degree experimental, but we all recognize the readiness of the authorities to profit by experience and the adaptation of methods to changing needs.
Text read from the printed page and cleaned; old type leaves the occasional error.