against the deadly fire of machine-guns, in close-packed lines. But if drill were brought up to date on the lines of open order and the group, it is probable that moments and even hours of priceless value would be saved, during the approach at any rate. But even during the actual attack, there might well be occasions when an ingrained method of control could be used to quicken the manoeuvre of deployed units and direct them to take advan- tage of local situations. Voice control would be out of the ques- tion, but if signals were few and simple, visual control might be used, particularly if a clearer means of signalling than the hand were devised. Let anyone with experience of war ask himself if there were not moments in his recollection when he might, had his men been drilled in such a system, have saved precious minutes, an opportunity which never returned, by the use of a signal instead of the slow method of sending a message by runner. The old close order was under control, but modern fire made it impossible. With extended order the battle degenerated into the chaotic movements of an uncontrolled mob. An ingrained system of battle drill, in which intervals and distances were purposely exaggerated, would enable sub-units to be manoeu- vred, to be opened or closed in " concertina " fashion according to the ground and local circumstances. Such a system might go far to combine the flexibility of the old with the invulnerability of the modern formation.
In defence the probable development of the new power of manoeuvre would seem to indicate that in future the infantry will be so disposed as to encourage the attacking enemy to pene- trate into channels in which he can be raked by flanking fire. The posts would be sited to support each other by raking fire, rather than to fire direct to a flank. They might even be echeloned backwards along the natural avenues of approach to form gradu- ally contracting funnels raked by fire, with preconcerted signals to bring down a hail of artillery projectiles at the best moment.
It seems improbable that in the future we shall see the exten- sive and elaborate field fortifications of 1914-8. The new mo- bility brought in by the tank, the caterpillar tractor, the aero- plane, would appear to prevent the possibility of the long-drawn stagnation which produced the labyrinthine entrenchments in the World War. The infantryman will be trained for future war to dig temporary cover, not mausoleums of mud.
(Acknowledgment for help in the preparation of this article is due to Capt. J. Evetts, D.S.O., and to Capt. B. H. Liddell Hart.)
(F. I. M.)
INFLATION. As with most economic terms in popular use, analysis shows that " inflation " has different meanings with varying contexts. It is sometimes used as equivalent to a general rise in prices, but a general rise in prices may be due to causes primarily associated with commodities, e.g. scarcity. Even if the term is confined to money (metallic and representative) it is possible that a general rise of prices may take place which although due to monetary causes cannot properly be described as due to inflation. In former times a frequent cause of a rise in prices was the debasement of metallic money. Debasement does not of necessity mean depreciation, and the depreciation need not be in exact proportion to the debasement. Much of the reasoning of Thorold Rogers, in his great work on the History of Agriculture and Prices, on the debasement of the English currency by Henry VIII. was vitiated by the failure to recognize that debasement of money in general only acts on prices in so far as the debasement leads to an increase in quantity. Such an increase in the quantity of money consequent on debase- ment is not usually called inflation, though clearly analogous.
A general rise in prices may also take place through an increase in the metal or metals available for money although there is no debasement of the coinage. The rise in prices in the i6th cen- tury so far as due to the new silver, and in the igth century the rise due to the new gold in two periods, can hardly be described as caused by inflation. The gold standard implies that values are measured in terms of a certain weight of gold of a certain fineness in any country in which the gold standard is effectively maintained. In different countries values on the gold standard are compared by the amount of fine gold in the standard coins.
Very great discoveries of gold, or even the artificial production of gold, would not of necessity mean any departure from the maintenance of the gold standard. Prices might rise indefinitely and the value of gold relatively to things in general fall indefi- nitely, but it would seem a misuse of language to speak of the " in- flation " of gold. Such an increase of gold may and probably will cause an increase in prices, but in neither case is the increase of gold properly called inflation.
In the interpretation of popular terms there is, of course, no decisive test, as the usage varies; but by the application of the historical method the origins of the different meanings may be traced, and the search for the meanings will, as Sidgwick showed, throw light on the corresponding facts.
Before the World War the term " inflation " was in general applied to paper money. The paper money was thought to be inflated when the amount was greater than if the paper were strictly convertible or definitely related to the metallic standard. From this point of view inflation would now mean an abandon- ment of the gold standard, together with a consequential in- crease in the quantity of the currency in which prices are expressed. This is the interpretation given to inflation by Francis A. Walker. " A permanent excess of the circulating money of a country over that country's distributive share of the money of the commercial world, is called inflation " (Pol- itical Economy, 1887). His subsequent treatment shows that Walker had in view an excess of paper money consequent on partial or complete inconvertibility.
In theory it is possible to control an inconvertible paper cur- rency in such a way that there should be neither specific nor general depreciation as compared with gold. But experience shows that, in general, when notes have been made inconvertible they have been subjected to over-issue, with consequent depre- ciation, specific or general, or both. Over-issue in this sense is another name for inflation.
It seems best, however, to distinguish between the fact of over-issue and the consequent depreciation. Over-issue might take place with inconvertibility, but the depreciation, whether specific or general, might be delayed. The annulment of the restraints imposed by the gold standard allows inflation to take place, but the degree of the depreciation (if any) depends on the quantity of the new paper money (with the credit based on it) and the demand for it.
In the natural course of the progress of a nation, with the increase of population and trade, a greater amount of money is required for cash transactions. With the gold standard in effective working order the additional money required might be obtained by the expansion of convertible notes and of the various forms of bankers' credit, without any departure from the effectiveness of the gold standard. Such was the case in the United Kingdom from the definite establishment of the gold standard with the resumption of cash payments (1821) to the outbreak of the World War in 1914. There was also, it is true, an increase in the amount of gold in circulation and held in reserve, but only sufficient to secure the absolute convertibility of the notes and other forms of credit.
In the same way in periods of speculation and of trade activity there is, no doubt, an abnormal demand for currency and credit, and both are extended until the limitations imposed by the gold standard are reached. If these limits are overstepped there is a monetary crisis. We speak of cycles of expansion and of depression of trade (in the widest sense), but it is only when the expansion of the " money " used exceeds certain limits that it can be properly called inflation. There may be a legitimate expansion to meet the legitimate expansion of trade.
We are well advised under modern conditions to confine the term "inflation" to such abnormal increases of currency and credit as transcend the limits imposed by the gold standard. Over long periods there may be a normal increase of money and of money-substitutes, and there may also be normal increases from time to time for short periods according to the activity of trade or exchange in the widest sense. Such increases of currency and of credit would not properly be called inflation.
