New-York tribune., 1919-03-31

Blu sin SIS g:

policy. Perhaps also it was the sole
plan consistent with currency inha-
tion Of maintaining the traditional
world reliance on the stability of the
English pound and of sterling cx-
change. There were no great and
direct fiscal losses in it, The bills that
out of borrowed funds the government
bought in New York at artificially sup
ported rates it collected in London at
the same rates. 1t is true that the
London prices were inflated and that
therefore t. the purchasing power, in
England of the proceeds of the bills
purchased by the government in New
York was less than the purchasing
power in New York of the funds pro-
vided there for the buying of the bills.
so far, then, there was fiscal loss; but
so far the English consumer had more
for his work or his money.
But, in any case, these borrowings in
New York, when rendered over into
exchange collectible in London for
government account, were so far a
fiscal resource in London for the use
of the government, despite the fact
that under the prevailing level of Eng
lish prices the buying power was low
appreciably lower than the buying
power in New York of the funds which
the government provided for buying
the bills and for which it went into
debt. But in simplest terms that was
was not that England sold its exports
too cheaply in America or paid too
dearly for it's American purchases, but
that England bought too many goods.
1t is true also that the inflated prices
both in England and America at which
the English government has done its
buying have enormously increased the
total issue of war bonds-true again,
in turn, that the deflation must now
increase the burden of each unit of
these issues; but it is not true that
the pegging policy has appreciably CON
tributed to make prices higher or has
appreciably increased the fiscal bur
dens of England in view of the amount
of it's own products that England has
consumed and has supplemented by
balances of purchases abroad. Pegging
has meant merely that England has
bought goods more generously and con-
sumed them more improvidently The
unpeggng programme will mean that
for the future England will sell more
ard buy less good abroad, and will
therefore come so much the nearer to
living within its means.
Concurrently also the reversal Of
the English policy of retarded exports
and stimulated imports will mean for
us smaller sales in England and larger
purchases by us in England, and, so
far the return by us to England of
the gold that, unwisely for itself as
for US, England earlier sent us. The
process should end in the reestablish
ment of the gold standard in England
and France.
The choice now lies between this and
the definite accomplishment of the gold
standard, with the exchanges allowed
to in either case seek their own un-
supported level.
If Englan and France or either of
them should turn to the policy of
dehation, the same policy will be- i'm
posed upon nsa most unfavorable
prospect for us in its immediate bust
ness aspects as we'll as in its long
time bearing on the significance of all
public debts. Meanwhile England's
business problems and frictions will
be of the same nature as ours--falling
prices, narrowing business margins,
unemployment, wage controversies,
shrinking security wines, and in ad-
dition, for England, widespread pro-
test against the cessation Of the de-
lusivc prosperity that consists in the
improvidcnt incurring of obligations
abroad. But, like other folks, England
cannot have il all ways.