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ESSAYS IN PERSUASION

PART

loss of export trade and a corresponding re-duction of foreign investment and in divertingthe labour previously employed in the formerand the savings previously absorbed in thelatter to the task of improving the efficiency ofproduction and the standard of life at home. Ifthe return to gold has the effect in the end ofbringing about this result, it may have been ablessing in disguise. For this course has mani-fold advantages which I must not stop to enumer-ate at the end of a long article. I believe that afurther improvement in the standard of life ofthe masses is dependent on our taking it.

This brings us back to Mr. McKenna. Iassume that his object in advocating an expan-sion of credit is to absorb the unemployed ina general crescendo of home industry and in-directly to help a little the export industries alsoby the economies of full-scale production. Inshort, he favours the third course. For he canhardly hope to lower the sheltered price levelor to effect an adequate economy in manufactur-ing costs by expanding credit. As on someprevious occasions, Mr. McKenna has done lessthan justice to his own ideas by pretending togreater confidence in the effects of the return togold than he really has.

Now, within the limitations of the goldstandard, this is a very difficult policy, and—inview of the £100,000,000 which we may stillowe on account of the Coal Strike—possibly adangerous one. If Mr. McKenna were Gover-nor of the Bank of England with a free hand, I