"Cum Grano Salis"
To the Béitor of the 'Nowru-Cuina Dany News'
Sin-—-With regard to "F. W. 6." and the Douglas System, the "famous" A and B Theorem is only true when banks are contracting credit. Since bank credit is a form of money and then being cancelled, the result deflationary and prices fall. The Douglas scheme (which is essentially inflationary) would then be correct tive, When on the other hand, bank credit is being expanded, the Douglas scheme would increase inflation and prices would rise disproportionately. [Soddy has shown recently that the "National Dividend" is quite small jand could only be issued once, not continually as Douglas claims.
'The bankers' statements should, however, be taken cum grano salis, Until their dividends are as low as those of the average industrialist or merchant they cannot claim to be philanthropists H.C.
Shanghai, Feb. 26.
Text read from the printed page and cleaned; old type leaves the occasional error.