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CURRENCY, CREDIT AND TRADE 79 
g or increasing the severity of its terms. It may 
iy gold or sell gold; it may buy securities or sell 
curities. Every transaction of this kind leads to a 
iriation in the amount of money in the country 
1d by this means exercises a powerful influence 
1 trade. 
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AEANING AND IMPORTANCE OF MONETARY POLICY 
We can appreciate now the meaning and import- 
ice of monetary policy. Money, except the 
1stomary minimum which we carry in our pockets, 
never left idle; it is always pressing for use. If 
iere is more of it, trade is stimulated ; if the amount 
reduced, trade is depressed. One man may tell 
DU to increase it indefinitely and keep trade boom- 
118. But if you do, prices will soar indefinitely. 
“ou will first suffer innumerable social evils, and 
nally the extreme depreciation of your currency 
ill gravely impair your power to trade. Someone 
ise may urge you to reduce the amount of money 
nd bring down prices to the pre-war level or to 
ach other arbitrary level as he happens to think 
1e right one. Yes, and trade will remain depressed 
nd the unemployed will be with you all the time. 
Toreover the burden of the National Debt with 
he higher value of money will become intolerable 
nd no Chancellor of the Exchequer will be able to 
alance his budget. Inflation and deflation, the 
‘hirlpool and the rocks, lie on either side of us, and 
' we are to avoid shipwreck the controllers of our 
10netary policy must steer a middle course. 
I should have hesitated to discuss a matter which 
es in the province of the Bank of England, were it 
ot that I share to the full the high respect and 
dmiration for that institution which are felt not 
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