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 accustomed to weighing abstract problems in the perhaps rarefied atmosphere of an economist's armchair, this conclusion would naturally seem to be impregnable. Inflation and the increase of money by the printing press and the consequent rise in prices had produced chaos. Therefore the way to bring back order was to reverse the process and bring in deflation, the destruction of money by bonfire and a consequent fall in prices.

There were, it is true, some awkward details to be filled in before the scheme could become practical; for instance we had to be told how the Government was to be sure that it would not be obliged to issue new notes as fast as it burnt the old ones, because the consequent stringency in the Money Market was obliging holders of maturing Treasury Bills to insist on their being paid in legal tender. And those of us who had objected to inflation on the ground, among others, that it produced a disease, the cure of which might be as dangerous as its progress, might well ask our theoretical dictators to pause before applying logic too ruthlessly to real life.

The logic of the matter was very ably put by Professor Pigou of Cambridge, who in a letter to the Times printed in its issue of February 12, 1920, urged that the Bank Rate, which