[To the Editor of the SPECTATOR.] Sin,—You ask for approval
of the policy for dealing with unemployment set forth in the Spectator and endorsed by Mr. McKenna. I do not. I believe inflation means ultimate ruin and that as there has been some inflation, the only course to pursue is to return to a sound currency by gradual and continuous deflation. I agree that unemployment is one of the most serious problems of the day, but I do not think that the cessation of deflation would cure it ; on the contrary, I think it would make it worse.
Your article suggests that cheap money would go to remedy unemployment and that the Government should borrow until employment is reduced to about 1 per cent. of the population. Borrowing does not make money cheap, it merely transfers it from the individual to the Government,' unless credits are created by. using the printing press. The. result of that is seen in Germany and Russia to-day. The same result oeCtured in France in the Revolution when the
Government created " assignatt." But has nqt money been cheap lately ? For some time past the Bank 'Rate was only three per cent. and now it is only 4 per cent. It surely cannot be contended that a Bank Rate of four per cent. stops trade.—
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