Ill

THE RETURN TO GOLD

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Treasury Bills. That is to say, the Bank wouldhave to abandon the attempt to bring about thefundamental adjustments by the methods ofeconomic pressure and the deliberate intensifica-tion of unemployment. Therefore, taken byitself, this policy might be open to the criticismthat it was staking too much on the expectationof higher prices in America .

To meet this, I suggest that Mr. Baldwinshould face the facts frankly and sincerely, incollaboration with the Trade Union leaders,on the following lines.

So long as members of the Cabinet continueto pretend that the present movement to reducewages has nothing to do with the value ofmoney, it is natural that the working classesshould take it as a concerted attack on realwages. If the Chancellor of the Exchequer isright in his view that his monetary policy hashad no more to do with the case than the GulfStream , then it follows that the present agita-tions to lower wages are simply a campaignagainst the standard of life of the workingclasses. It is only when the Government haveadmitted the truth of the diagnosis set forth inthese chapters that they are in a position toinvite the collaboration of the Trade Union leaders on fair and reasonable terms.

As soon as the Government admit that theproblem is primarily a monetary one, then theycan say to Labour: “This is not an attack onreal wages. We have raised the value of sterling10 per cent. This means that money wages