THE BANK RATE.
[To the Editor of the SPECTATOR.] Sra,—With regard to the interesting letters which have appeared in the Spectator, there are many others who would like to know what are the limits which the Government has set itself to the issue of Treasury Notes. Has any limit been set by Act of Parliament That alone would be acceptable, since any amount fixed for the time being by Order in Council
could presumably be altered by the same process. , Another question which has been touched upon is the gold reserve. I may seem very ignorant, but what is the real necessity for a gold reserve When we had gold in circula- tion did we look upon it as anything but a means of exchange ?
Of course, a golden sovereign represented in metal its purchasing power in goods. But after all, it was only a token, and why not have paper-tokens ? - In the last two decades of the last century an enormous quantity of -very much worn gold and silver was in circulation, and some of the golden half-sovereigns could not have had more than half the original quantity of gold in them. But they bought just as much goods as if they were not worn. They were merely tokens. So now our Treasury Notes are but very convenient tokens. I may be wrong, but it seems to me that provided a limit is fixed, based on the purchasing power of the population, it matters little what is the gold reserve, or if there is any gold reserve
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