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 possibility would be very much more disturbing to the business community.

Sir Edward's further suggestion that the proportion of gold to notes might be lowered by the payment of a tax takes away regulation altogether, except the regulation implied by expense, which at times of exuberant gaiety or desperate need is a negligible consideration; this system allows the community to insist on the creation of legal tender currency to any extent that it is prepared to pay for.

On the whole it seems that the arguments used by the Committee in favour of the absolute limit have a balance in their favour, especially when we remember that by the altogether uncontrolled right of the Bank of England to create credit in its books for any borrowers to whom it chooses to lend, and the convention which allows the other banks to regard a credit at the Bank of England as "cash," the apparently hard and fast restrictions of the Bank Charter Act have been made much less tyrannical in their working than they might appear to be on paper to those who do not understand the true inwardness of the British monetary system.

Having thus decided in favour of the maintenance of the principle of the Act of 1844, the Committee proceeded to recommend that the