PART III

THE RETURN TO GOLD

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Mr. Goodenough of Barclays Bank and Mr.McKenna of the Midland Bank , so far fromdeprecating discussion, join in it boldly.

Mr. Pease, as I have said, deprecates think-ing, or—as he prefers to call it—“the ex-penditure of mental agility.” He desires“straightly to face the facts instead of to finda clever way round them,” and holds that, inmatters arising out of the Quantity Theory ofMoney, as between brains and character, “cer-tainly the latter does not come second in orderof merit.” In short, the gold standard fallswithin the sphere of morals or of religion, wherefree-thought is out of place. He goes on to say:“As far as any ordinary joint-stock bank is con-cerned, I do not think it determines its policyconsciously on pure monetary grounds. Thatis to say, its chief concern is to meet the require-ments of trade as they arise, regardless of ad-hesion to any particular theory. Its actionsare not the cause of trade movements; theyfollow after and do not precede them.” Ithink that this, broadly speaking, is a correctaccount of the matter, and Mr. Pease’s emphasison it is the most valuable part of his speech.It is precisely this automatic element in the re-actions of the joint-stock banks which makes thepolicy of the Bank of England about the volumeof the banks’ balances and the rate of discountso all-important. In conclusion, Mr. Peasedoes not propose to take any particular stepsat present towards establishing any particularstandard. Nevertheless he is “hopeful that we