Page:Bankers and Credit (1924).pdf/272

 defect can be cured, the maladjustment can be corrected." So our lack of foreign customers and our failure to get peace, and the action of France on the Ruhr which so many have held responsible for our continued depression, have had nothing to do with our unemployment; and a new Gengis Khan might sweep over the whole of Europe and Asia with fire and sword from Pekin to the Bay of Biscay, and might then proceed to inflict the same inconvenience on North and South America, Africa and Australasia, but as long as the Governor of the Bank of England moves his official rate according to Mr. Hawtrey's directions, employment will go on steadily in England!

Well, one can only hope that Mr. Hawtrey is right, but the admissions which he himself makes seem to show that his theory is not quite as impregnable as his confidence. For he observes on page 120 that "a deflation so intense as to reduce prices of commodities by nearly 50 per cent. and to throw 2,000,000 people out of employment has been accompanied by no visible fall in bank deposits. And it is even argued that there has been no deflation at all, as if the quantity of purchasing power were the sole test of the state of credit. The kind of deflation that is practically