3 OCTOBER 1931, Page 9

" The Government and the Bank of England clung to

their illusions. They hoped that by not increasing the volume of notes the currency would have a slight and gradual deprecia- tion, namely, a little oxygen for British industry, and the effect of a brake on foreign holders of sterling who might have been tempted to withdraw their balances In London, and an encouragement to debtors to pay their debts, taking advantage of the exceptional circumstances.