Mr. Goschen on Tuesday explained his currency proposals to the
London Chamber of Commerce, and on Friday a letter appeared addressed by him to the Governor of the Bank of England, in which they are stated with great lacidity. The proposals are really two in number, and will not, we think, receive identical treatment in Parliament. The first is a plan to increase permanently the gold held in the Bank of Eng- land by 20 millions sterling, through the issue of 25,000,000 of one-pound notes. They will be secured to the extent of four-fifths in gold, which will, it is calculated, remain in the Bank, and one-fifth in "securities," that is, Consols. This scheme will, we believe, be accepted, and, as the notes will be popular, will succeed. The second plan is intended to dispense with the occasional necessity for suspending the Bank Act. The Bank itself, if it has £30,000,000 of gold in its vaults, may in times of emergency issue notes up to £50,000,000 on the credit of securities only, thus, in fact, suspending the Bank Act for itself. The cheek on such issue will be the payment to Government of a high rate of interest. This second pro- posal will be much discussed, and we state elsewhere one reason for doubting if it will be acceptable. It imposes on the Bank a responsibility which perhaps ought to belong to Government.
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