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 point is that the objective of the authorities, pursued with such means as are at their command, should be the stability of prices."

I think it is probable that most of these considerations were not altogether overlooked by the Bank Court in old days under the goldstandard, when it was deciding whether it was necessary to move its official rate. Its object was to preserve its gold reserve with a view to the convertibility of its notes. By this method it maintained our prices roughly on a level with those in other countries and so secured stability both in prices and in rates of exchange. This is surely better than (possibly) stabilized prices, with unlimited fluctuations in exchange.

As to the means to be used to secure the contraction and expansion of credit needed to preserve stability, Mr. Keynes looks to joint control, exercised by the Treasury and the Bank of England. He says that the extent to which the Treasury draws money from the public to discharge floating debt depends on the rate of interest and the type of loan that it is prepared to offer; and that "the Bank of England is also, within sufficiently wide limits, mistress of the situation if she acts in conjunction with the Treasury. She can increase or decrease at will her investments and her gold by buying