106 
MONEY 
were not very visible. The Bank, no doubt from 
intelligent anticipation, had on November 6 raised 
the bank rate 1 per cent. above the absurdly low 
rate of 5 per cent. which had been maintained by 
the help of the output of new currency since April, 
[gr7. But prices went on rising fast. As for the 
note issue, Christmas is the time of year at which 
people arrange to have most cash in their pockets : 
before Christmas it is drawn out of the banks in 
large quantities and they meet this drain by drawing 
from the Bank of England. When the season is over 
the public has spent the money, and the extra notes 
trickle back as they are paid in to the banks by 
shopkeepers, entertainers and others. The banks 
deposit them with the Bank of England, which at 
that time paid Currency Notes in to the Currency 
Note Account, so that there was always a great drop 
in the amount of Currency Notes outstanding in the 
course of January. But when the seasonal drop was 
over, the prospect of the limit stopping the general 
slope upwards which had been going on for five 
years began to exercise the influence which the pre- 
war impossibility of getting unlimited sovereigns 
without paying full value for them had always 
exercised. The banks, foreseeing tightness, became 
chary in making advances, and the Bank of England 
raised the Bank rate to 7 per cent. in April. The 
banks did not, as some alleged at the time, * restrict 
credit ’’ out of mere malice, nor from an unusual 
access of covetousness, nor out of a patriotic desire 
to end the rise of prices, but because they ‘“ hadn’t 
got the money,” and the reason why they had not 
got it, and did not expect to have it, was the adoption 
of the Cunliffe limit. 
Under this damping influence, the post-war boom, 
which was merely an extension and exaggeration of 
the war boom rather than an independent boom,