17 NOVEMBER 1923, Page 10

[To the Editor of the SPECTATOR.] SIR,—Your correspondent, Mr. T.

B. Johnston, is blissfully unconscious that his illustration re the great discovery of gold and in respect to the inflation which naturally followed and the great growth of world trade answers itself. The inflation had a basis in the gold itself. Gold is not only a standard of value. It is also a commodity and an article of merchandise. A gigantic trade in articles of jewellery proves this fact alone. The inflation of currency with no gold backing, and no great growth of world or even home trade to be expected with nothing behind it, is about as wise an expedient as to attempt to stop the leaking of a ship by drilling more holes in her sides.—I am, Sir, &e.,

EDGAR II. S. BARNES-AUSTIN.