studied in order to obtain a proper insight into the working of our system: but it must be remembered that during the period under review such crises as we have had have been purely internal ones, and the question of large exports of gold did not arise. It is commonly supposed that on the three occasions when the Bank Charter Act was suspended and the Bank authorised to increase its issue beyond the bullion limit, that authorisation alone was sufficient to stop the crisis, but this is not the case; in 1857 the crisis did not come to an end until £2,000,000 of notes had been so issued. Were a crisis to arise owing to an external drain, the consequences might be of the most serious nature. In the event of war with a great Continental nation, this would at the very commencement be one of our most vulnerable points. The danger is not an imaginary one, considering the vastness of our international obligations, all payable in gold, and the suddenness with which such obligations might at a time of disturbance be enforced. I prefer not to dwell on the consequences that might arise. It cannot be a matter of surprise, then, that during the last few years the question of the necessity of increasing our gold reserves has been frequently discussed and can never be left out of sight.
"When under the existing system," says Lord Goschen, "a suspension of the Bank Charter Act takes place, it authorises a simple issue of notes unsupported by gold: a course which may add to the dangers of the situation by increasing paper money at a time when gold is leaving the country. It seems to me that it would be infinitely better to have command over a reserve of gold, a separate stock of gold."
His memorable speech made at Leeds after the Baring crisis has fortunately just been republished[1] and I may refrain from quoting it at length, and can only refer you to the speech itself, as the utterance of the one Chancellor of the Exchequer who had the closest knowledge of, and most intimate acquaintance with, the City: but I call your special attention to the paragraph admitting the change that had taken place in the position of the Bank of England. "It has still the duty," he says, "of en-
