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 arrangements were based, a Committee had already been appointed under the Chairmanship of Lord Cunliffe, who was Governor of the Bank of England during the early period of the war, to consider "the various problems which will arise in connexion with currency and the foreign exchanges during the period of reconstruction, and to report upon the steps required to bring about the restoration of normal conditions in due course," and the following words were subsequently added to the terms of reference:— "and to consider the working of the Bank Act of 1844 and the constitution and functions of the Bank of England with a view to recommending any alterations which may appear to them to be necessary or desirable."

This Committee signed on August 18, 1918, its first interim report which was, in fact, the most important document that it produced. It practically recommended that the Bank Act of 1844 should be restored to full working order, with very slight modifications to meet the altered conditions. It did not admit any need whatever for altering the principles on which the Bank Act had been based.

After giving an interesting survey of the currency system before the war, in which it rather ignored the difficulty which, since the introduction of the Act, the Bank of England