era

at

e ground for a true conception of the function of the arrency Note in the period of reconstruction which lies. front of us. The great desideratum of any currency

stem is not that it should conform to a creed but that should conform to industrial conditions, that it should e automatically expansible and contractible, and at all mes sufficient to carry the total strain of the nation's productive activity. This one desideratum the Currency fote possesses, whereas gold does not. For gold is not utomatically expansible and contractible; and a gold urrency is therefore not an elastic one. Why then nsist upon it that the Currency Note should be convertble into gold, and that, with a view thereto, the issue must be contracted? After only four years' experience of paper, nobody in England wants to go back to gold, nd nobody dreams of demanding convertibility into gold. The one important thing in currency matters is urrency habit. The habit grows of and from trust. And with us the habit is already formed. We trust the Currency Note as implicitly as we trust gold, not because It has the credit of the State behind it, nor because we know we can exchange it for gold, but because we know we can exchange it for goods, values and services. Nobody troubles his head about the convertibility of the note, or its security, or its redemption, or any other similar abstraction.

How, then, do we stand in the event of peace coming and in view of the needs of reconstruction which will then emerge? Put quite briefly, there will be a call from three sources on our powers of production, viz. rstly, from the increased peace revenue we shall have to raise; secondly, from the programme of reconstrucion, both of reconstructing at home and of rebuilding the ruins of Belgium, France, Serbia and Russia; and thirdly, from the decrease in the yield of our investments and earnings abroad arising from the sale of our dollar securities, from our loss of shipping, loss of landmortgage business in America, and most of all of course from our actual indebtedness to the United States.

With such calls upon us our production cannot possibly fall below our war-time productivity; indeed it may have to exceed it. As a consequence, the demand for currency will be at least as great as it has ever been

during the last four years of intensified effort. T fore the policy of the restriction and withdrawal or Currency Note, which the Currency and Exchange Sta mittee advocate, would be detrimental and dange In making such a proposal that Report conflicts 1 our highest national interest, simply in the supp interest of the banking world. We dare not follov recommendations of that Report, for it would financial suicide. By all possible means we must re command not merely of an adequate currency but of an elastic one. We already have in our hands, mechanism of such a currency. All that is neces in order to regularise the position and to keep with the public, is frankly to accept the principl inconvertibility, and to make proper provision for guarding the Currency Note Fund. I need hardly plain what the Currency Note Fund is. If we f 250 millions of Currency Notes, the State has ta 250 millions value from the public. That mone value is a trust fund and must be sacredly kept as s It must not be used as a Redemption Fund, for, if accept the principle of inconvertibility, we need Redemption Fund. Nor must it be used for pu finance, for expenditure or for borrowing. We r provide for all these other needs of the State each its own proper way, by taxation, or by State loan what not. The Treasury must not be allowed to bor the Currency Note Fund, nor must the politician allowed to touch it. It must be for ever kept invio from such depredations. The profits arising from employment of the fund should be applied solely to extinction of debt; and such profits would be enormo

The scheme which Mr Larkworthy has elaborateć the Memorandum and the speeches cited at the head this article makes provision for both these points. announces the principle of inconvertibility, emphas the inviolable trust nature of the fund, and then p ceeds to outline the superstructure which is capable being built on such a foundation. The completed syst would employ the Currency Note Fund, whether in 1 form of gold or securities or both, at the various change centres abroad, for the purpose of keeping an adequate supply of stable exchange; and, at a seco

remove, it would bring in an international pooling of capital. It is highly significant that, at the present gmoment, the United States are grafting on to their Federal Reserve Board System a Federal Reserve Foreign Bank System which will in effect do or tend to do that which Mr Larkworthy advocates in a more clear-cut, harmonious and systematic way. And it is a still more significant fact that, during the last two years, we ourselves have silently adopted the two most important features of Mr Larkworthy's proposed system. In the first place, we have issued paper money against the security not of gold but of credit. We have done this not merely at home with our Treasury Note, but in Egypt (where the note issue is now covered by securities simply), and, quite recently (Dec. 5), in Russia or rather at Archangel in the one-rouble note. In the second place, we have employed abroad a fund which has grown until it now exceeds our Currency Note issue. That fund has many functions, but the most vital one which it performs is that of steadying the exchanges not merely in New York but at other important centres of exchange. So that in essence both we and the United States are already working the system which Mr Larkworthy advocates. But we have not the courage to acknowledge it. Indeed, we are so afraid of what we have done that we are thinking of running away from it and pulling down our house upon our own heads. One can understand the average banker standing perplexed and doubtful before such a conception of new world finance. But one cannot understand how a Committee of Currency and Exchange experts should have completely shut their eyes to it, and should have contented themselves with a mere restatement of the old Bullion Report theory of international exchanges.

WM. A. SHAW.

Art.

7.-EASTERN

REUNION.*

CHRISTIANITY : REFORM

Some Links in the Chain of Russian Church History. W. H. Frere, Priest of the Community of the Resur tion. London: Faith Press, 1918.

THE Holy Orthodox Eastern Church-to give it its title-may perhaps have some considerable part to p in the political developments of the more immedi future. Always a subject of interest to the ecclesiasti historian and to the Anglican theologian, it is likely compel the careful attention of the statesman. For is the religion of peoples whose destiny is involved no slight degree in this great world-conflict. From Murman coast and Archangel on the north to Jerusal and Alexandria and Athens on the south, it is dominant, often the exclusive, form of Christianity. numbers some 130 million adherents; it is the religion Russia, of the majority of the Southern Slavs, and of Greek people wherever dispersed. It thus forms a ze stretching from north to south, to the east of t Teutonic races. It is on the adherents of this Chur that the full force of the present conflict has burst; a it is their desire for freedom, for autonomy, for nation union and self-expression, their resentment at Turk oppression and Teutonic domination that are among t strongest forces that have been at work.

Let us enumerate more particularly the chief peop that belong to this Church. They fall into two divisio the northern which contains the Great Russians, te Little Russians or Ruthenians and other peoples broug under their influence; and the southern, the mark characteristic of which is that all the peoples that co pose it either have been at some time in the past, or st are, subject to the rule of the Turk. They are t Rumanians or Vlachs, a people of Romance langua

*This article is largely based on information supplied by the Rev. C. Kallinikos, Priest in charge of the Greek Church at Manchester, and co versations with the Archbishop of Athens, with the Archimandri Chrysostomos Papadopoulos, Professor of Divinity in the University Athens, and with Dr Alivasatos, Professor of Canon Law and Director Religious Education at Athens,

but of Eastern affinities; the Bulgarians, a mixed race of Mongol extraction but Slavonic speech; a portion of what is now called the Jugo-Slav race; the Greeks both in their homeland and the many cities of the Levant, where they form so large a part of the population; some Albanian tribes, Arab-speaking Christians in Syria and Palestine called Melketes, and the Georgians of the Caucasus, belonging to an old national Church which was destroyed by Russian autocracy but may revive again.

All these peoples in different degrees still exhibit the evil results of Turkish rule. Some have been emancipated for a longer, some for a shorter period; some have continued, down to the present day, to suffer terribly under this oppression-it is only recently that we read of a great massacre of Greeks at Trebizond. But, even in the most advanced, the national life, the intellectual culture, and the sense of religious freedom, have only partially revived; and the sufferings of the present war have fallen on all with devastating fury. Conspicuous among them are the Serbs, a race hitherto divided both politically and in religion. As their home was on the confines of the Eastern and the Western Church, the eastern portion of the race received its Christianity from Constantinople, while the western portion, consisting of the Croats, the Slovenes, the Dalmatians, and some of the inhabitants of Bosnia, came ander Latin and Venetian influence. On Serbia and Monenegro the full fury of war has fallen continuously. Although the northern province has been free for nearly 100 years, the Serbians of Macedonia were subject to the urk until the Balkan War. Although Montenegro has ever been completely and finally conquered by the urks, its historic characteristics have depended on the act that for centuries its hardy and brave mountaineers arried on an endless guerilla warfare against the ational enemy. In judging the Eastern Church, parcularly in judging those branches of it which are still have been until quite recently subject to the rule of he Turk, the effect of this subjection upon their developjent must never be forgotten. For centuries the only ossibility, almost the only duty which might seem eumbent upon these martyrs to Christianity was to reserve their Faith. That they have done so, under

Vol. 231.-No. 458.

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