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 banks, and expanding not only credit but the basis of credit. But these expansions were soon corrected as revenue came in and the newly made credit was soaked up by the sale of Treasury Bills, and the Bank of England and the Treasury evolved ingenious dodges for modifying their extent and effect. In fact, deflation may be said to have begun by the reduction of the Government's indebtedness to the Bank of England on temporary advances to zero, and by endeavours to keep it there as far as possible. Henceforward if inflation happened, it was not because of bad finance by the Government, but only because of demands for credit by industry and commerce, and other private borrowers.

So here we are at a turning point and may well stop to consider what was the right thing to do with our money in view of the way in which, during and after the war, its buying power had been lessened by the increase in its quantity. Ought it to have been brought back, if possible, to its pre-war value by being drastically and rapidly reduced, or ought it to have been "stabilized"—to use the new word that appeared about this time—or ought we to have joined the ranks of those who quite seriously argued that a depreciating currency is good for trade and makes everybody happy,