[To the Editor of the SPECTATOR.] SIR,—I would personally agree
with your statement, " Deflation Means Unemployment," if you would accept the corollary " and inflation means more unemployment in the future." That is, the aim should be stability, which can be attained so far as we know only by a gold standard or a " managed " currency. Many hesitate to trust currency to the " management" of politicians who lack even discretion, the more so because it is doubtful in practice whether inflation can be carried out in England now in such a way as to secure such advantages as it possesses in theory. Deflation does not seem to be in progress now, for bank deposits and currency- note circulation have been stationary for six months. There is good reason tt• believe that our domestic consumption of goods is 100 per cent. of pre-War volume, and that the 11 millions unemplo ed correspond to the loss of foreign trade plus the natural increase of that portion of the people which is of employable age. Thus, the best sphere for Government activity may lie in improving political rather than tampering with monetary conditions.—I am, Sir, &e.,
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