THE ATTACK ON THE BANKS [To the Editor of THE
SPECTATOR.] S111,—In reply to Mr. Brand, without going into unnecessary detail or repeating what on various occasions 'I have already written in letters to The Spectator, the new money which I propose should be issued would be created in the same way that new money is created nowadays, namely, by the use of the pen in the case of credit or " cheque money," by the use of the paper money-making machine in the case of paper money. Its purchasing power is maintained by keeping the total supply of money in the country in working relation to the total output of desired goods and, as far as their money value can be estimated, of services. The percentage of the total of money issued in paper form would depend, much as it 'does at present, on the needs of the country for tangible as opposed to intangible money, and as the output of real wealth in goods and services is not unlimited during any given period, the issue of money also would not be unlimited. It is curious how people with Mr. Brand's mentality seem incapable of distinguishing between an increased issue of money and an unlimited issue of money : between inflation, which is an increased issue of money in excess of a backing of real wealth, and enlightened finance, which is an increased issue of money accompanied by an increased backing of real wealth.-L- Yoursetruly, ' 70 St. James' Cowl, S.W.1. TAVISTOCIE.
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