Mr. McKenna recommended that that policy of careful watchfulness in
order to prevent either deflation or inflation being carried too far should be adopted herd :=- " When unemployment is -greatly in excess of the normal we should abandon unhesitatingly the deflationary policy which is a cause of unemployment, But let me not be misunderstood. I do not say that a change in official policy would have the stone far- reaching effect in this country as in America. Neither do I say that we should pursue a4 policy of monetary inflation. With any improvement in trade undoubtedly more banking credit and' more currency will be required and must be provided, but this is not at monetary inflation."
in Mr. McKenna's opinion, though a full revival of ,healthy trade would necessarily take a long time, " a quite considerable revival " was possible in the near :future. For some three months there had been no act of deflation in Great Britain, and already the favourable effects could be observed. We may add here that on Wednesday Sir Arthur Balfour, President of the Associa- tion of British Chambers of Commerce, condemned inflation as being a disease as virulent as cancer. The mere suggestion of inflation here had caused a panic among our creditors abroad. He admitted, however, that deflation had perhaps been carried out too quickly. It is evident that there is a danger of misunderstanding through the failure to define terms strictly. Men who are almost in agreement are represented as being in violent conflict. * *
Previous page
