Works by Hartley Withers
"Numerous instances of the Wisdom of Withers, culled from a ripe experience and put into literary shape by a trenchant, and occasionally caustic pen."—
Bankers and Credit
By
Hartley Withers
Author of "The Meaning of Money," "The Case for Capitalism," etc. etc.
London
Eveleigh Nash & Grayson
Limited
First Published in 1924
Printed in Great Britain by the Northumberland Press Limited
Waterloo House, Thornton Street, Newcastle-Upon-Tyne
What happened to our monetary system during and after the war, some of the things that a crowd of critics and reformers want to do to it now, and the reasons which seem to me to confirm the opinion of our leading bankers, that the first thing to do is to get back to the gold standard on the pre-war basis, are the subject of this book. It cannot claim to have covered all the suggestions of all the monetary reformers, who have been multiplied almost as fast as money by the efforts of our politicians. All that it can hope to do is to cull a few of the brightest flowers of the criticism that has bloomed so freely, and to put before the lay reader, in language that he can understand, some of the ambitions of those who believe that the economic Paradise is to be won by monetary manipulation. Dryden thought that "no Government has ever been, or ever can be, wherein timeservers and blockheads will not be uppermost." Without going all this way with him, we may safely contend that the financial achievements of our war Governments do not encourage us to increase official control of the Money Market.
August 26, 1923.
Contents
CHAPTER I
Bankers as Statesmen—Statesmen as Chaotic Bankers—Extent of Currency Debasement—Money, Market made an Instrument of War—Consequent Problems—Our Pre-war System—Based on Gold—Free Convertibility—Thus Money could only be Increased by Imports of Gold—the Importance of this Limitation—Proved by the Effect of its Removal during the War—The Gold Standard and Foreign Trade—All the Chief Countries used, in Effect, the same Money—Harmony in Price Levels—Stability in Rates of Exchange—The Elasticity of the Pre-war System—A Bank Balance Sheet—The Banks as Creators of Credit—The Bank of England's Return—Bank of England Creates Credit which is Regarded as Cash—The System's Working.
CHAPTER II
Five ways of Raising Money for War—Taxation—Loans Subscribed with saved Money—Loans Raised Abroad—Loans Borrowed from Banks—Notes Printed and Issued—The War-time Debasement—Was it Necessary?—What an Ideal Statesman might have done—France and Germany's Bad Example—The Spirit of the Country—The Tame and Fearful Capitalist—The Patriotic Manual Workers—The Opportunity, missed—War Borrowing made Unnecessarily Dear—Puffed out Banking Figures—The Increase in Currency—And in Cash at the Bank of England—Consequences of the Bulge—In Favour of Producers—And so, at First Sight, to the Community—As long as the Creditor is not Frightened out of Existence—The Wine, the Bottles and the Crowns.
CHAPTER III
The "Reformer's" Opportunity—Hopes of a New World—The Pre-war System Attacked—Sir Edward Holden's Eulogy of the Federal Reserve Scheme—His Proposal to Repeal the Bank Charter Act—His Alternative Scheme—Its Difficulties—The Cunliffe Committee—Its Report—Its Criticism of Sir Edward Holden—And of the German and American Systems—Its Proposals—A Return to the Bank Act, with Slight and Formal Modification—The Financial Facilities Report—Its Recommendations—The British Trade Corporation.
CHAPTER IV
Peace Optimism—General Election Promises—Vindictiveness Maintained—Its Causes—Making Germany Pay—Lack of Generosity to Allies—Bad Spirit at Home and Abroad—Bad Leadership—The Workers' Ambitions—And Natural Mistakes—Expenses of Readjustment—Monetary Effects of Public and Private Profligacy—The Gold Standard Abandoned—Was this Necessary?—Gold could not have gone Quickly—The Federal Reserve Board's Nerves—The Floating Debt—The Funding Loan Failure—Reaction Against Extravagance—Bank Rate Raised—A Treasury Minute.
CHAPTER V
The End of Borrowing—What had to be done with our Money?—Drastic Deflation?—Stabilization?—Or more Inflation?—Arguments for a Gradual Fall—Drastic Measures Taken—Professor Cannan's Bonfire—Professor Pigou's Bank Rate—Influence of Price of Money—Bankers and Credit—Collapse Began in China—Governor Strong's Evidence—High Rates did not Contract Credit—Mr. Hawtrey's Criticism.
CHAPTER VI
New and Old Currency Reformers—Mr. Kitson—His Various Solutions—Major Douglas—Interpreted by Mr. Kitson—Criticized by the Labour Party—Who want to Nationalize Banking—Mr. Webb's Bisection Proposal—Professor Soddy's Light on Economics—Mr. Lowenfeld's Way "Back to Prosperity"—Credit Restrictions and Bad Harvests.
CHAPTER VII
Continental Inflation—Mr. Kitson's Eulogy of Germany's—Dr. Rasin's Desire to Check it—The Benefits of Inflation—At Home—and Abroad—Doubts about its Effect—An Indemnity Debt as Stimulant—Our Fears of German Competition—How much Ground for Them?—Her Export Trade—Mr. Dane's Report—"Invisible Unemployment"—How We can use her Payments.
CHAPTER VIII
Stabilization's Champions—Some Difficulties Involved—The Soddy System—Dr. Snow on Index Numbers—Professor Irving Fisher's Varying Dollar—Dr. Cassel on a True Bank Policy—Mr. Hawtrey's Zeal—Mr. Keynes's Moderation—Mr. Snyder's Reinforcement—Would Stabilization Ensure Stability?—Mr. Lloyd on Stabilizing Certain Basic Articles—Sir Charles Addis on Devaluation—Falling Prices and Depression—Is the Connexion Inevitable?—Dr. Marshall and Mr. Layton's Doubt—Professor Lehfeldt on Falling Prices and Efficiency—His Suggestion for Regulating the Gold Output—Conclusion.
CHAPTER IX
The Barlow Inflation Scare—Mr. McKenna's Ambiguity—His Belfast Address—The Federation of British Industries' Version of Stabilization—Mr. Keynes on "Monetary Reform."
This work is in the public domain in the United States because it was published in 1924, before the cutoff of January 1, 1929.
The longest-living author of this work died in 1950, so this work is in the public domain in countries and areas where the copyright term is the author's life plus 73 years or less. This work may be in the public domain in countries and areas with longer native copyright terms that apply the rule of the shorter term to foreign works.
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