+08 
MONEY 
Advances from Government Departments, and few 
persons suspected that the Currency Note Account 
was the largest holder of Treasury Bills and the largest 
Advancer among Government Departments. Ques- 
tions intended to bring out the facts were always 
smothered by Ministers in the House of Commons, 
and the uninstructed public imagined that the reduc- 
tion of the aggregate currency by some fifteen per 
cent. was due to the fall of prices, just as they had 
supposed that the increase of currency from 1915 to 
1919 was due to the rise of prices. This doubtless 
made it somewhat easier to carry out the policy, but 
it was unfortunate in that it prevented foreign coun- 
tries from understanding what was done, and thus 
deprived them of what ought to have been a useful 
example. 
By the end of the three years the work of restoring 
the pound to the old parity with gold was nearly 
done. In March, 1920, the paper pound was only 
worth about 70 per cent. of the gold contents of a 
sovereign : in March, 1923, it was worth over 96 per 
cent.—four months more at that rate of progress 
should have brought it to par. But as often happens 
in monetary history, the cup was allowed to slip from 
the lip. The policy of reducing the paper currency 
was abandoned in favour of keeping it stationary 
(except of course for the seasonal and other temporary 
variations). It is as yet unknown whether this was 
due to a change of personnel which had taken place 
at the Treasury, to ministerial fears of unpopularity, 
to timidity on the part of high financial authorities 
about the return to the gold standard, or to a belief 
that gold and the paper pound would now approxi- 
mate in value without any further reduction of the 
paper currency. Anyhow this belief turned out to be 
correct, though two more years were required for the 
process ; after a shocking 8 per cent. relapse in the