Director of the Bank of England, in his Inaugural Address as President of the Institute of Bankers delivered in November 1921. He pointed out that if we accept the findings of the Cunliffe Committee that there are sound reasons for a return to the pre-war parity, then we must recognize that further deflation (using the word in the sense of a fall in prices) might be necessary, and he proceeded to put the case against deflation and in favour of devaluation as follows:—
"Why then, it may be asked, should we continue to wrestle with the burthen of deflation with all its attendant ills, when a way of escape presents itself, not by abandoning the gold standard, but by the simple expedient of altering it? Is there anything sacrosanct, it may be asked, in the ratio of 123 grains of gold or 4.86 American dollars to the pound? How could we be prejudiced if the pound were reduced to 92½ grains of gold and the American exchange to a new parity of 3.65 to the pound? It is true that gold would then command a premium of 33 per cent.; that is, it would be quoted at £5 3s. 8d. instead of £3 17s. 9d. per ounce in paper money, while the paper pound would be worth only 15s. in gold. What would that matter? It is worth a good deal less now. And as for the American
