It need hardly be said that the doctrine preached by the Cunliffe Committee and the Financial Facilities Report was not put into practice as soon as the war was ended. This could not have been expected, even if war's strained excitement had not been followed by an outburst of peace hysteria that was perhaps still more virulent. If we had all been sane and sober as judges, it would have taken some time to adjust our financial system to the circumstances involved by the rearrangement of industry on a peace basis. As it was there was an amazing outburst of political and economic optimism, followed by violent reaction; and these changes of sentiment were accompanied by monetary measures the effects of which are of special interest for the light that they throw on a monetary theory which has since become fashionable.
For this reason it is necessary to remind our-
