116 
MONEY 
by greater or less activity in coinage. The metal in 
the coins was always worth considerably less than their 
face value, so that there was never any danger of their 
being melted or exported for the sake of their metallic 
contents. No change has taken place in regard to this 
part of the currency except that the silver in the silver 
coins has been reduced from 92% per cent. to 50 per cent., 
and that the Treasury has given actual proof of its 
willingness to withdraw silver coin when necessary. 
Bank of England notes were printed promises by the 
Bank to pay sums of pounds on demand. Though legal 
tender for pounds when tendered by anyone else, they 
were not so when tendered by the Bank itself, so that 
holders of the notes could require the Bank to pay in 
gold coin (silver coin being legal tender only up to £2 
and bronze only to 1s). This obviously made itimpossible 
for the notes to be issued or to continue in circulation 
in larger total amount than was compatible with their 
maintaining a value equal to that of a sovereign for 
each pound expressed on their face, And the sovereigns, 
in turn, could not be issued and kept in circulation in 
larger aggregate amount than was compatible with their 
maintaining a value equal to that of 113 grains of fine 
gold, since, if they fell appreciably below that level of 
value, some of them would be melted or exported by 
holders who would see a profit in the transaction. A 
sovereign being worth less than 113 grains when passing 
as £1 would mean in the language of the bullion market 
that the price of gold was above £3 17s. 104d. standard 
and £4 4s. 113d. fine, so that full-weight sovereigns 
would sell for use in the arts or for export for more than 
a pound each. Thus the aggregate currency of bank- 
notes and sovereigns was always kept in check by the 
convertibility of bank-notes into sovereigns and the 
convertibility of sovereigns into free gold bullion. 
On the other hand the Bank of England notes could 
not be so deficient in total amount as to rise in value 
appreciably above the rate of 113 grains to the pound, 
because the Bank was bound by law to give notes in 
exchange for all gold bullion offered to it at £3 17s. 94. 
per ounce standard. Thus bank-notes were always