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 August Mr. Chamberlain made a speech in the House of Commons in which he called emphatic attention to the unsatisfactory state of the Government finances and went so far as to include the phrase "national bankruptcy" in his sketch of what was going to happen if extravagance in expenditure was allowed to proceed at a pace so much faster than the inflow of revenue. The country was startled and alarmed by the statement, and some of us wondered why, if these things were so, the Chancellor of the Exchequer did not either cut down expenditure or raise fresh revenue. But Parliament adjourned with nothing done, and in November there came a rise in Bank Rate and a Treasury Minute. Bank Rate had stood at 5 per cent. ever since the Armistice and was put up to 6 per cent. in November 1919 with a consequent advance in the rate at which Treasury Bills were sold.

The Money Market was bewildered and puzzled by this movement. There would have been no mystery about nt if the Government had found any difficulty in selling Treasury Bills at the current rate and so had thought it necessary to offer a higher rate on them; or if large demands for credit had been made on the Bank of England; but in the previous two weeks the securities in the Bank return had