PAYING AMERICA IN KIND
[To the Editor of THE SPECTATOR.] SIR,—But for the midnight darkness which surrounds the whole subject of money on its theoretical side, the British Treasury could perfectly easily put its own interpretation on President Roosevelt's recent offer, and pay America in kind the full sum for which we are being asked.
It would only require three steps, all of them easy to take : (a) a special issue of treasury notes to the amount of £17,000,000, and (if this were not thought a superfluous formality) their actual transport to America ; (b) the printing of a date on these pounds, say five years • or ten years ahead, after which they would be repudiated by the issuing authority in this country ; and (c) a strict regulation that these Dace were not to be ranked, by our own banking system, as cash for purposes of issuing loans at any time within the entire term of their existence.
If the British banks would at the same moment embark on a policy of gradually withdrawing loans (or, of abstaining from issue of new loans which would otherwise have been issued) up to the amount in question, the Treasury issue would have no inflationary effect on this country's currency. As the notes came in for cancellation the stream of loans could automatically flow on.
If the same policy were repeated on every occasion when our interest fell due, we should be paying in kind continuously, and we would lay the ghost of default in the eyes of the world for all time coming.—I am, Sir, &c.,
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