_To the Editor of the "Norta-Cuina Dainty News."
Sir,—Under the heading of Notes and Comments your valuable issue of the 71 you refer to your previous remarks made at about the time of the commencement of the General Election in Great Britain, that the fluctuations in sterling are the best possible indication of the trend of events; you also state that the New York—London cross rate is in favour of the latter market and may be taken as a strong indication of a Conservative victory according to thy opinion prevailing in well informed financial circles.
I venture to suggest that the proposal of Great Britain to evade her present difficulties by inflate ing sterling is the result of a care-folly thought out plan of an insidious character.
The assumption of an Economic Committee set up to examine this scheme is based primarily upon the restriction of credit as being the principal factor in the appealing unemployment epidemic at Home, and this Committee has strongly attempted to prove its findings by an erroneous examination of the Board of Trade's sta-fistical information relating to the rise and fall of trade during certain periods of time; and it has recommended, subject to the final approval of the Treasury, that the Government ought (A) Maintain domestic prices as indicated by the present index number of their present level in the Board of Trade returns, and not revert to the prewar basis.
That in order to accomplish this object, further deflation should be stopped and the work of the last six months reversed by an "increase. in legal tender.
(C) That steps be enforced to secure a.direct relation between the supply of credit and prices.
Taking the index of the Board of Trade as a basis, the Treasury should arrange with the Bank of England that the bank rate' be lowered a half per cent. for every fall of ten points in the cost' of living, and vice versa; the thieoretical idea being that this would create the necessary confidence to stabilize market prices.
Out of the increase of legal tender industrialists would,
Text read from the printed page and cleaned; old type leaves the occasional error.