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 by the addition of a highly important ingredient. "At the moment," the report continued, "we are at the depth of an extremely serious depression of trade. Past experience shows that in such conditions a certain upward movement in prices is an invariable and inevitable accompaniment of the process of recovery. The object of a policy of price stabilization, therefore, should not be to stabilize prices at the abnormally low level shown by the index numbers at the bottom of a severe depression, but at such an increase on this level as normal trade activity would entail."

"But?" inquired the Economist, in commenting on this report, "are prices abnormally low, and, if so, on what standard?" What the Federation seemed to mean was a rise in prices brought about by monetary manipulation. But is not this something very like the inflation which according to its President had "never entered its head"? And who is to decide how much rise in prices normal trade activity would entail? And if the rise were brought about and cheered people up, would not there be an overwhelming clamour in favour of its continuance by the same method?

And now comes Mr. J. M. Keynes, clad in the shining armour of his outstanding ability and fame, and tells us in his Tract on Monetary