Ill

THE RETURN TO GOLD

2 59

a view to forcing wage reductions is alreadypartly in force, and the tragedy of our situationlies in the fact that, from the misguided stand-point which has been officially adopted, thiscourse is theoretically justifiable. No sectionof labour will readily accept lower wages merelyin response to sentimental speeches, howevergenuine, by Mr. Baldwin. We are dependingfor the reduction of wages on the pressure ofunemployment and of strikes and lock-outs;and in order to make sure of this result we aredeliberately intensifying the unemployment.

The Bank of England is compelled to curtailcredit by all the rules of the gold standard game.It is acting conscientiously and “soundly” indoing so. But this does not alter the fact thatto keep a tight hold on credit—and no one willdeny that the Bank is doing that—necessarilyinvolves intensifying unemployment in the pres-ent circumstances of this country. What weneed to restore prosperity to-day is an easycredit policy. We want to encourage businessmen to enter on new enterprises, not, as we aredoing, to discourage them. Deflation does notreduce wages “automatically.” It reduces themby causing unemployment. The proper objectof dear money is to check an incipient boom.Woe to those whose faith leads them to use itto aggravate a depression!

I should pick out coal as being above allothers a victim of our monetary policy. On theother hand, it is certainly true that the reason