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single body of men; and a sufficient proportionof the supply has been able to find its way, with-out any flooding of the market, into the Arts orinto the hoards of Asia for its marginal value tobe governed by a steady psychological estima-tion of the metal in relation to other things.This is what is meant by saying that gold has“intrinsic value” and is free from the dangersof a “managed” currency. The independentvariety of the influences determining the valueof gold has been in itself a steadying influence.The arbitrary and variable character of the pro-portion of gold reserves to liabilities maintainedby many of the note-issuing banks of the world,so far from introducing an incalculable factor,was an element of stability. For when gold wasrelatively abundant and flowed towards them, itwas absorbed by their allowing their ratio of goldreserves to rise slightly; and when it was rela-tively scarce, the fact that they had no intentionof ever utilising their gold reserves for anypractical purpose permitted most of them toview with equanimity a moderate weakening oftheir proportion. A great part of the flowof South African gold between the end of theBoer War and 1914 was able to find its wayinto the central gold reserves of Europeanand other countries with the minimum effecton prices.

But the war has effected a great change.Gold itself has become a “managed” currency.The West, as well as the East, has learnt tohoard gold; but the motives of the United