282 REPORTS ON THE STATE OF SCIENCE, ETC. 
should not have had more weight with the Chancellor of the Exchequer and 
his advisers in August 1914 and during the earlier months of War. 
Mr. Hoare replies : ‘I don’t see that it matters theoretically, and therefore 
T should aim at the old parity.’ 
Sir J. C. Stamp replies: ‘Depends on foreign countries to some extent. 
On the whole, Yes.’ 
Question 9 (4).—/f the old parity, should an effort be made to restore it in 
the immediate future? If so, how? 
Professor Cannan replies: ‘Yes, by quietly reducing the Bradbury issue 
without making any great definite profession about it.’ 
Dr. Dalton says : ‘ If ‘‘ immediate future’ means ‘‘ within the next eighteen 
months, ‘‘ Yes.’’’ As to the method, he refers to his answer to question ‘13’ 
below. 
Mr. Ellinger fears that ‘ No heroic measures are possible to enable restora- 
tion in the immediate future. Exports should be increased to the uttermost. 
Economy of consumption should be practised in imported articles not forming 
the raw materials or semi-raw materials of our industries. Efforts should be 
made to draw gold from debtor countries, like Spain, who have an adverse 
exchange and a large accumulation of gold. At the present time Government 
securities in the hands of the public, in so far as they are used to obtam 
advances from banks, cause inflation of credit; the total amount of credit 
available should be measured by the total volume of commodities to be financed, 
and not by the total volume of commodities, plus a Government debt which 
represents no existing commodities. The gradual restoration of the credit 
position on these lines would lead to a reduction of the currency notes in 
circulation and to a more speedy restoration of the gold standard. The reduc- 
tion of the Government debt, particularly of floating debt, would have the same 
effect.’ 
Dr. Dalton comments : ‘ But the value of commodities varies with the amount 
of credit.’ 
Mr. Lavington comments: ‘I doubt if we should try to get gold from 
Spain. It is surely better that all surplus gold should go to the U.S.A., 
ultimately raising prices there and so helping to re-establish the U.K. on a 
gold standard. I do not think that there is any urgent need for more gold 
in this country. The urgent need, in my view, is for (1) increased production, 
(2) diminished consumption, and (3) diminished currency.’ (Dr. Dalton agrees.) 
Sir J. C. Stamp replies : ‘ Only very slowly.’ 
Mr. Shaw replies : ‘Make a Bradbury exchangeable for a sovereign at the 
Bank of England or the Mint.’ > 
QurEstion 10.—Would a Capital Levy or a Forced Loan offer any escape from 
the dangers of national insolvency? Or would private credit suffer more than 
public credit could hope to gain from any such method of reducing the War 
debt? 
This question is evidently controversial. Unfortunately, some heat has been 
imparted to the discussion by the discovery of large war profits and by the 
Board of Inland Revenue’s estimate of 4,000,000,0007. of ‘increased wealth’ 
in private hands owing to the War. Sir John Anderson informed the Select 
Committee that ‘the estimated aggregate increases of value appertaining to 
those individuals whose capital wealth had increased during the War, diminished 
by the fall in value of the capital of those whose capital wealth had decreased, 
amounted to about 4,000,000,000/.’ (Cmd. 594, p. 17). As we said in our Interim 
Report at Cardiff last year: ‘ This statement was taken to mean that the 
nation as a whole, or owners of property as a body. were actually better off 
as a result of the War. ‘The case for a levy on War wealth, like the case 
for the Excess Profits Duty, was based on the very natural sentiment that 
people ought not to ‘‘make money out of the War.’’ According to these 
Memoranda the Board of Inland Revenue had taken an estimate of the amount 
of wealth in private hands before the War, which came to 11,000,000.0007. and 
compared it with a similar estimate ‘‘as at June 30. 1919.’’ The second estimate 
showed a total of 15,000,000,000/., leaving 4,000,000,000/. apparently liable to 
® It is so now under the Currency Notes Act (IV. & V. Geo. V. ch. xiv.), 
But in’ practice the Bank’s officials show a reluctance to pay out sovereigns, 
gg as fue sovereigns can neither be exported nor melted down, the Act is 
A ea etter. 
