xii 
PREFACE 
RY 
title which was intended to help, and I think did help 
a little, to make people think of the pound of 1914-25 
as a paper pound. But a more powerful engine was 
set to work about the same time. In October I had 
grumbled to a member of the Cunliffe Committee about 
its inaction, and he admitted that it had * been in a 
trance for a long time,” but said it was just going to 
meet again. It did so, and soon produced the Report 
recommending what became known as “the Cunliffe 
limit ” on the issue of Currency Notes, and this was 
adopted by the Government in the Treasury Minute of 
December 15. 
The battle, however, scarcely appeared to be won. 
If the limit held, the currency could not be increased 
unless its old par with gold was first restored, but there 
was nothing to show that the existing currency would 
be reduced in amount so as to bring that restoration 
about in the early future. Moreover there was no 
security that the Treasury Minute, made by one Chan- 
cellor of the Exchequer, might not be varied by another 
Minute, made by the same or a subsequent Chancellor. 
The idea that the limit would hold was openly derided 
by many of the foremost experts, and their contempt 
for it seemed to be justified by the fact that during the 
months from March to July the fiduciary issue of Cur- 
rency Notes rose faster and to higher level than it had 
done in the corresponding months of 1919, terrifying 
the Treasury into the very pusillanimous action of 
practically enlarging the limit by declaring a few millions 
of notes forming the earliest issue to be “ called in but 
not yet cancelled,” and therefore not to be reckoned 
as part of the total outstanding. In the same period 
there was also a considerable increase in the Bank of 
England notes outstanding. 
But appearances were deceptive. The increase of 
Bank of England notes was more than accounted for 
by the fact that some were being locked away against 
Currency Notes, which only meant that the public were 
exchanging £5 notes for £1 notes, and others were being 
taken by the banks in exchange for gold coin surrendered