Mr. McKenna, the new Chairman of the London Joint City
and Midland Bank, made an excellent speech on the causes of high prices at the general meeting on Thursday week. He de- monstrated that the root cause of high prices was Government borrowing from the banks, and especially from the Bank of England. The inflated currency was not the rain-storm itself, but the gauge which measured the rainfall, as every advance by the Bank was followed by a fresh issue of currency notes. " The only condition on which we shall be able to check the rise in prices is that our annual expenditure is brought within the compass of our revenue." Every house- holder has to do this or go bankrupt, and the State, whatever scatter-brained enthusiasts may think, is no more exempt from economic laws than the citizen. Mr. McKenna made it clear that he asked for economy in expenditure and not for heavier taxes. Our taxation, he said, was already higher than that of any other country, and was " dangerously near the point at which thrift, business enterprise, and needful capital development become seriously impaired."
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