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ESSAYS IN PERSUASION

PART

pre-war conditions, not the first one. The only-prudent announcement on the subject would beto the effect that the embargo will not be re-moved until after sterling has been at parity forsome considerable time, and until all the funda-mental adjustments consequent upon this haveduly taken place. At the same time—if wewant to return to parity—steps should be takento achieve the fact by raising bank-rate andchecking foreign issues. I—without attachingany importance whatever to a return to parity—believe that there is much to be said for thesemeasures in the interests of the stabilisation ofour own situation. I do not believe that asomewhat higher bank-rate would do any harm,in view of the present tendencies of the pricelevel, to the volume of trade and employment,and that, in any case, the maintenance of ourown equilibrium will soon require the supportof a higher rate. Several of the bankers de-clared that they were in favour of removing theembargo, provided this did not involve a risk ofraising the bank-rate. Unless this was merelya polite way of saying that they were not infavour of removing the embargo, I do not followtheir analysis of the present situation.

It would be useless for me to attempt in thespace at my disposal to give the reasons forwishing to maintain permanently a ManagedCurrency. The most important of them flowfrom my belief that fluctuations of trade andemployment are at the same time the greatestand the most remediable of the economic