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 had experienced in maintaining its control of the market; and having touched on the changes which have affected the gold standard during the war, laying stress on the great increase in the volume of bank deposits and of legal tender currency; and pointing out that these issues could not be avoided, "given the necessity for the creation of bank credits in favour of the Government, for the purpose of financing war expenditure;" it then proceeded to discuss the measures for the restoration of conditions necessary to the maintenance of the gold standard.

"It will be clear," says the report, "that the conditions necessary to the maintenance of an effective gold standard in this country no longer exist, and it is imperative that they should be restored without delay. After the war our gold holdings will no longer be affected by the submarine danger, and it will not be possible indefinitely to continue to support the exchanges with foreign countries by borrowing abroad. Unless the machinery which long experience has shown to be the only effective remedy for an adverse balance of trade and an undue growth of credit is once more brought into play, there will be a very grave danger of a credit expansion in this country, and a foreign drain of gold, which might jeopardize the converti-