THE DEVELOPMENT OF CENTRAL BANK 
POLICY 
THE WORLD ON 4 DOLLAR STANDARD 
January 24, 1028 
A YEAR ago I ventured to suggest that there should 
be an inquiry into the working of our credit and 
currency system. The suggestion was not made 
In a critical or controversial spirit, but I thought it 
possible, as I still do, that an examination of the 
provisions of the Bank Act of 1844 would show 
that they are not well adapted to our actual re- 
quirements. It appears, however, that the Trea- 
sury see no sufficient reason for an inquiry, which 
they think might have unsettling effects in many 
directions. Although 1 cannot agree with this 
opinion I do not propose now to press the matter 
further. To-day I shall turn to another subject 
and ask you to consider the present position of 
gold as an international standard of value. 
Nearly three years have elapsed since the pound 
sterling was re-established on the gold basis, and 
most of the important currencies are now stabilised 
in relation to gold. This general reversion to gold 
gives the appearance of a return to pre-war condi- 
tions in matters of credit and currency, but if we 
look further into the question we shall find that 
there has been a remarkable change. The develop- 
ment of central bank policy in the United States 
has shown that, while gold may be retained as a 
medium for making international payments, it can 
be deprived of its function as the ultimate standard 
of value. How this came about, the stages through 
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