m THE RETURN TO GOLD 193

into the other side of the balance, Deflation hasnothing.

2. The restoration of a currency to its -pre-wargold value enhances a country s financial prestigeand promotes future confidence.

Where a country can hope to restore its pre-war parity at an early date, this argument cannotbe neglected. This might be said of GreatBritain, Holland, Sweden, Switzerland , and(perhaps) Spain, but of no other European country. The argument cannot be extended tothose countries which, even if they could raisesomewhat the value of their legal-tender money,could not possibly restore it to its old value. Itis of the essence of the argument that the exactpre-war parity should be recovered. It wouldnot make much difference to the financialprestige of Italy whether she stabilised the liraat 100 to the f sterling or at 60; and it wouldbe much better for her prestige to stabilise itdefinitely at 100 than to let it fluctuate between60 and 100.

This argument is limited, therefore, to thosecountries the gold value of whose currencies iswithin (say) 5 or 10 per cent of their formervalue. Its force in these cases depends, I think,upon what answer we give to the problem dis-cussed below, namely, whether we intend to pinourselves in the future, as in the past, to an un-qualified gold standard. If we still prefer sucha standard to any available alternative, and iffuture “confidence” in our currency is to de-pend not on the stability of its purchasing power

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