EFFECTS OF INFLATION.
cannot help thinking, however, that another motive may have prompted the President's action. On the face of it for a country to go off gold with a holding of very little short of £900,000,000 is to court the charge of wilful default. Inas. Much, however, as Congress and possibly the Administration at Washington also had come to a definite decision in favour of a ;policy of inflation, President Roosevelt had to consider the possible.effact of that policy upon the American exchange, Those who were antagonistic to it and were apprehensive of the effect of inflation might easily have begun trans ferring the resources to other countries by purchases of foreign currencies. This in its turn would have led to gold movement, and while, as I have said, the store of the metal was ample tc meet all possible demands, it is probable that President Roosevelt calculated that the sight of gold withdrawals in the present psychology of the American people might easily bring about a fresh run on the banks and precipitate a second banking crisis. For unquestionably the situation in the United States is a thoroughly unsatisfactory one.
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