Ill
THE RETURN TO GOLD
237
none of them except Mr. McKenna—and onone point of detail Mr. Goodenough—had any-thing to say about the future of monetary policy.So leaving Sir Harry Goschen to chirrup in thebushes, let us join Mr. McKenna in an attemptto dig a few inches below the surface of the soil.
Mr. McKenna reminded us of the overwhelm-ing prosperity of the United States as againstour own depression during the past five years.He declared that in the “wide divergence be-tween English and American monetary policy,we have at least a partial explanation of thephenomenon.” He found the measure of thisdivergence of policy in the expansion and con-traction respectively of the bank deposits in thetwo countries, namely, as follows:—
(Volume of Deposits in 1922United States .
= too)
1922 .
100
100
r 9 2 3 •
107
94
1924 .
”5
94
T 9 2 5 •
127
93
1926 .
131
93
He explained in some detail what is funda-mental, yet too little understood, that the volumeof bank deposits in Great Britain does not de-pend, except within narrow limits, on the de-positors or on the Big Five, but on the policy ofthe Bank of England. And he concluded thatwe can scarcely expect a materially increasedscale of production and employment in thiscountry until the Bank ofpolicy.
England revises its