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 stability of prices secured by the gold standard has been seen to be much better than the perfect instability produced by the printing-press in the hands of impecunious Governments. And the monetary system of England had in effect very cunningly weakened the restrictions of the Bank Charter Act by establishing, as part of the foundation of our credit system, the principle that a balance at the Bank of England can be ranked as cash with gold or gold certificates. Balances at the Bank of England could be, and were, expanded at moments of exceptional demand to any extent that the Bank of England thought prudent. When demands arose for expansion of credit, and the ordinary banks found that their proportion of cash to liabilities was becoming too low, all that they had to do was to call in part of their loans, which they habitually advanced to the London bill-brokers as their second line of reserve. The bill-brokers, in order to repay these loans, went to the Bank of England to borrow, and it lent them money with which they paid off their loans to the other banks. So the balances at the Bank of England of the other banks were increased, and the cash basis of our credit system expanded with extraordinary ease by a