Dearer and Dearer Money SIR.—Nicholas Davenport misrepresents 'the only argument
for dear money which otherwise sane people still advance.' The argument is that in times when the economy is at over-full stretch it is of crucial import- ance to induce individuals to save. How otherwise than fraudulently can the authorities induce people to save in a currency which is depreciating faster than the rate of interest less tax?
A State Unit Trust, which he (in your columns, incidentally) was the first person to advocate, is'part of the answer. But this is a medium for the indivi- dual's long-term savings. In addition, the authorities must be able to advocate a haven for the individual's other savings in which he does not actively lose money by saving rather than spending, i.e. one in which the rate of interest less tax is more than the :ate at which the currency is depreciating.
OLIVER STUTCHBURY
30 Cornhill. London, EC3
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