THE ATTACK ON THE BANKS
[To the Editor of THE SPECTATOR.] Sm,—May I be allowed space to observe that the Marquess of Tavistock in his letter in your last issue appears to have dropped the attack on the banks of the country as a whole and now directs it against the policy pursued by the Central Bank, i.e., the Bank of England, which is supported by Parliament ?
Next I gather from his letter that he is of opinion that the Bank should increase its issue of notes to an amount which would enable the consumption of the community to keep pace in purchasing power with the goods and services it (the community) can provide.
Is this to be done by a larger dole and liberal increases in salaries and wages all round ? In those circumstances, provided the prices of goods and services remained as before, consumption would no doubt soon equal supply and unem- ployment be lessened, but I can't see how goods and services could continue at the old figures if employers had to pay higher wages and salaries. And if prices had to be increased to the equivalent of extra costs, should we not rapidly get back to the old position with the added difficulty of finding our export trade handicapped by the extra cost of our goods Sterling too would shrink in value compared with foreign currencies and bring about higher prices for imported food and raw materials. And remembering what has happened in other countries where the printing press has been used to create money, unemployment would rapidly increase.— [This correspondence is now closed. ED. The Spectator.]
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