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 or selling the one or the other. In the case of advances and of bills, whilst their volume is not so immediately or directly controllable, here also adequate control can be obtained by varying the price charged, that is to say the bank rate." The Bank's buying and selling prices for gold would be announced every Thursday morning at the same time as its discount rate; and gold would be retained as a reserve against emergencies and "as a means of rapidly correcting the influence of a temporarily adverse balance of payments." How it would do so, if America and other countries also adopted Mr. Keynes's policy, is not clear. For they might put down their buying prices to a prohibitive level or refuse to buy gold altogether. One does not see why they should take it at all; for Mr. Keynes proposes that the gold reserve should be separated entirely from the note issue, the volume of which would depend on "the state of trade and employment, bank rate policy and Treasury bill policy." If everybody worked on these lines who but dentists and goldsmiths would want gold?

It is a most interesting and ingenious scheme, but I venture to think that it does not answer two objections, put forward in my previous chapters, to proposals to regulate prices by means of credit and currency management.