year and a half, before they dropped like a stone in the last three quarters of 1920.
In the Money Market, in the strict sense of the phrase, the outstanding event of the after-war period was the formal abandonment by England of the gold standard in March 1919 by the prohibition of gold exports except under licence. By this measure we went legally and definitely on to the paper currency basis, on which we had actually been standing, or rocking, all through the war. Convertibility of our legal tender currency into gold on demand was and is still the law of the land, but a very interesting example of the enormous power and prestige of the Bank of England is the ease with which on this point it ignores the law and goes scatheless. When a Home Secretary packs off some people to Ireland in the belief that he is acting legally and then finds that he is not, he is made to produce their persons and is put into a very uncomfortable position, from which he has to be rescued by a Bill of Indemnity. When people present a five pound note to the Bank and ask for gold which it is legally bound to pay, it reasons with them kindly and points out the error of their ways, and they go away with no gold in their pockets but a virtuous glow in their hearts, as if they had had their souls shampooed by a bishop.
