Ill

THE RETURN TO GOLD

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regaining last May. The results of unsoundinternational banking by the City are also, forthe time being, irreparable. The choice left tous was whether or not to adhere to the presentgold parity of the exchanges.

This was decided in the affirmative forreasons which I understand but with which I donot agree. The decision was taken in a spiritof hysteria and without a calm consideration ofthe alternative before us. Ministers have givenforecasts of what might have been expected ifwe had taken a different course which could notsurvive ten minutes’ rational discussion.

I believe that we shall come to regret thisdecision, just as we already regret most of thecritical decisions taken during the last ten yearsby the persons who form the present Cabinet.

But that is not the point at this moment.The decision to maintain the gold standard atall costs has been taken. The point is that theCabinet and the public seem to have no clearidea as to what has to be done to implement itsown decision, apart from the obvious necessityof raising a foreign loan for immediate require-ments ; which simply has the effect of replacingmoney which we had previously borrowed interms of sterling, by money borrowed in termsof francs and dollars. But they cannot supposethat we can depend permanently on foreignloans. The rest of the problem is primarilyconcerned with improving our current balanceof trade on income account. This is what theCabinet ought to be thinking about.