Ill

THE RETURN TO GOLD

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delivery, but also for delivery three months for-ward. The difference, if any, between the cashand forward quotations might represent eithera discount or a premium of the latter on theformer, according as the bank desired moneyrates in London to stand below or above thosein New York . The existence of the forwardquotation of the Bank of England would afforda firm foundation for a free market in forwardexchange, and would facilitate the movement offunds between London and New York for shortperiods, in much the same way as before thewar, whilst at the same time keeping down to aminimum the actual movement of gold bullionbackwards and forwards.

The reader will observe that I retain for goldan important role in our system. As an ulti-mate safeguard and as a reserve for sudden re-quirements, no superior medium is yet available.But I urge that it is possible to get the benefit ofthe advantages of gold without irrevocably bind-ing our legal-tender money to follow blindly allthe vagaries of gold and future unforseeablefluctuations in its real purchasing power.