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ESSAYS IN PERSUASION

PART

be he who turns his assets into cash, withdrawsfrom the risks and the exertions of activity, andawaits in country retirement the steady apprecia-tion promised him in the value of his cash. Aprobable expectation of Deflation is bad enough;a certain expectation is disastrous. For themechanism of the modern business world iseven less adapted to fluctuations in the valueof money upwards than it is to fluctuationsdownwards.

In the second place, in many countries, De-flation, even were it desirable, is not -possible ;that is to say, Deflation in sufficient degree to re-store the currency to its pre-war parity. For theburden which it would throw on the taxpayerwould be insupportable. This practical impossi-bility might have rendered the policy innocu-ous, if it were not that, by standing in the wayof the alternative policy, it prolongs the periodof uncertainty and severe seasonal fluctuation,and even, in some cases, can be carried intoeffect sufficiently to cause much interferencewith business. The fact, that the restoration oftheir currencies to the pre-war parity is still thedeclared official policy of the French and ItalianGovernments, is preventing, in those countries,any rational discussion of currency reform. Allthose—and in the financial world they are many—who have reasons for wishing to appear“correct,” are compelled to talk foolishly. InItaly , where sound economic views have muchinfluence and which may be nearly ripe for cur-rency reform, Signor Mussolini has threatened