BALANCE OF PAYMENTS SIR,—The excellent series of articles by Nicholas
Davenport has brought out what I think is incon- testable, that you cannot run the British economy as a free-for-all subject only to monetary controls of a general nature. The Government is relying far too much on the Bank rate. We obviously need some form of control over the larger building projects and some general supervision of the movement of capital outward as well as inward.
As to the world's balance of payments problems, I do not think they will be solved by makeshifts like writing up the price of gold or devaluing the dollar or the pound. The IMF has enough credits to help both the US and British Treasuries over a difficult period. But it is urgently necessary that it be enlarged to become a real Central Bank to the Cen- tral Bankers along the lines originally proposed by Keynes. Until this is done neither the US nor Britain dare take the measures required for internal pros- perity and expansion because of the pressures which would result upon their reserves.—Yours faithfully,
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