No. 239· 


CURRENCY, CREDIT 


AND THE 

UNEMPLOYMENT CRISIS. 


BY 
GILBERT SLATER, D.Sc. (Econ.) 


PuBLISHED AND SoLD BY 

THE FABIAN SOCIETY. 

PRICE TWOPENCE . 

LONDON: 

T H E F ABI!\N SociETY, I I, DARTMOUTH STRF.ET1 WESTMINSTER, 

S.W.I. PuBLISH ED DECEMBER, I932 
Telephone: VICTORIA I915. 


Currency, Credit, and the Unemployment 
Crisis. 


Unemployment in Great Britain was a serious problem even 
before the War. It was the subject of pecial enquiry, much 
discussion, and some legislation ; but it was a small matter in 
.comparison with post-War unemployment. 

Up to 1920 the statistics available are only those of trade 
unions making returns. Such returns are available for the years 
from 1881. They show percentages of unemployed fluctuat-
ing with the "trade cycle" between a maximum yearly average 
of 10.2 per cent. to a minimum of 2 per cent., the average for 
the twenty years 1894-1913 inclusive being 4.3. The membership 
of such trade unions was small compared with the total 
number of wage earners, but it was believed by the Labour 
Department of the Board of Trade that the proportion of 
unemployed in them coincided roughly with that among workers 
generally. 

In the seven years 1914 to 1920 of war and the brief postwar 
boom, the average percentage of unemployed so recorded 
-dropped to 1.6. 

The great extension of National Unemployed Insurance 
came into operation at the end of 1920. For the six years 1921-6 
the average percentage of unemployment in trade unions making 
returns was 12.0, and, for the same period, the average per-
centage of insured workpeople out of work was 12.3. The close 
correspondence between these figures indicates that the pre-warQfficial view of the representative character of the statistics 
recorded was correct. If so, we may estimate the average percentage 
unemployed of all wage earners in the pre-war period 
at about 5 per cent. For the ten years 1921-1930 it was 12.2 
per cent. 

In a word, before the war it was sufficiently alarming; in 
the decade following the war it more than doubled. But even 
this was only a prelude to worse things. For 1931 the per-
centage rose to 21.3, and the record for 1932 has proved even 
worse than 1931. 

The causes of unemployment are various, and they are beingdiscussed at great length by learned men. But it is the simplest 
and most obvious facts which are most important. 

(1) Under our laws, labour is dependent on the owners of 
property amd the organisers of business for employment. 
If, as some people say, labour were the only source of 
value. an unemployed man could use his labour power whenever 


4 

he chose to produce wealth. But actually he must have the 
material to work upon. Take the case of a skilled agriculturalworker-there is plenty of waste land which he would make 
productive if allowed to work on it, and vast areas of only 
half-cultivated land which could be made more productive, but 
before the unemployed man can turn a sod he must find the 
"owner" of the land, get his permission to work on it, bind 
himself to payment, and convince the owner that the rent will 
be forthcoming; and all that is impossible for an unemployed. 
man. And even if it were not, he would still have to borrow 
money to keep himself till he had produce to sell, and then he· 
would have to find a market to sell in. 

So the agricultural worker is dependent on the farmer for 
employment, and the farmer is dependent on the landlord for 
permission to use a bit of God's earth-or if you prefer the 
phrase, of Our Land-for power to give agricultural workers 
employment, and also on the banker who finances him, and Oil' 
the middleman who intercepts his produce on the way to the· 
market. All these have to be satisfied before the farmer can 
make any profit for himself, and unless he sees a prospect of 
making profits by the employment of labour, he does not employ 
labour. And the case is similar in any other industry. 

(2) The whole trewl of modern industry increases the 
dependence of labour on property owners. 
Machinery is continually being invented and improved to· 
"save labour," and all that machinery is in the control of property 
owners and not of the workers. When a machine is made 
to enable one man to do \\'hat two men did before, if it belonged 
to those two men, they might use it to shorten their hours of 
labour ; but it belongs to their employer, who may be an individual 
or a firm working under competitive conditions, or a 
monopolistic trust. If a competitive employer owns the labour 
saving machinery, he may probably use it to double his output,
and capture markets supplied by his competitors; and so he 
prospers until his competitors also use the same machinery. 
Then what happens depends on the market for the goods; if it 
can absorb the double quantity, well and good; employment 
within the industry is maintained, and the population is more 
amply supplied, and additional employment is given in transportand di tributive industries. But, more probably, the home market 
cannot absorb them, and manufacturers have to look for markets 
abroad. The Lancashire cotton indu~try of the nineteenth 
century is the most remarkable instance of this being done successfull;
c. In this country everybody knows that machinery in 
cotton manufacture vastly increased employment in Lancashire, 
but yery fc\\· reali e that it did this by throwing out of employ



5 

ment millions of hand-loom weavers in India alone, and bydepriving scores of millions of peasant folk of the subsidiaryindustry of spinning, by means of which they had been accustomed 
to earn something during the long periods when, in a 
monsoon country, there is no work to be done in the fields. The 
world demand for cotton cloth is very elastic, but it cannot 
expand fast enough to keep pace with the increase of outputthat modern machinery enables the existing body of cotton 
operatives to produce. When we turn to a commodity like 
wheat, for which the demand is rather inelastic, the case is 
worse; we note that the recent rapid increase in the amount 
of machinery employed in the wheat belt of America has driven 
many thousands of agricultural workers to the American cities 
to compete for employment and swell the numbers "on the bread 
lines," besides creating distress in the peasant population of 
Europe, who are rapidly going bankrupt. 

Whereas competitive employers generally try to use labour 
saving machinery to increase output, a monopolist trust, when 
it gets hold of machines which enable one man to do the work 
of two, generally can make more profit by sacking half the 
workers, saving their wages, and keeping its output at the old 
level, so as to maintain the old price. And capitalist industry 
is passing steadily out of the competitive into the monopolistic 
stage. These then are the results of improvement of the technique 
of production on the position of the productive workers : 

(a) Less and less labour is required in order to satisfy the 
needs of the population; labour, as a factor of production, 
becomes relatively less important. 
(b) The redundant quantity of labour is unemployed unless 
some business man or company with the necessary command 
of capital, or some publi·c authority, employs it to meet some 
previously unsatisfied need or desire. 
(c) Action of this sort by public authorities is contrary to 
the principles of Capitalism, and to the interests of the governing 
class, at least as that class understands its interests, and 
it actively discourages such action. 
(d) Absorption of the redundant labour supply in capitalist 
industry takes place just to the extent to which employers believe 
they can make profits either by still further increasing the supply 
of "capital goods" (which is apt to make more labour again 
redundant), or by stimulating and satisfying some new want, 
fancy or craze on the part of people who can pay for its satisfaction. 
And so, people whose reasonable wants are already 
more than amply satisfied are being urged to spend more and 
buy more in order to revive trade and reduce unemployment. 
(e) Meanwhile the redundant workers, comp.eting for employment, 
drag down the wage level, or at least hmder its rise; 

6 

and this agam reduces the pmver of the wage earning class to 
pay for the satisfaction of either old or new wants. Those 
people who go short of what they need for decent living, are 
urged to accept still lower wages, in order in that way to revive 
trade and reduce unemployment. 

(3) Since the War, international competition has been 
enormously widened in scope, inC?·eased and intensified. 
In the nineteenth century Great Britain led the world movement 
for improving industrial technique, so that while industrialists, 
traders and financiers made fortunes and a great wealthyrentier class of recipients of unearned incomes was created, 
the numbers of wage earners employed also increased greatly, 
and their average standard of remuneration was improved. This 
prosperity was built up upon manufacture for export, supplemented 
by the earnings of British shipping, foreign investment, 
international banking and other financial business of the Cityof London. It went with a vast importation of foodstuffs and 
raw materials from overseas; and now, without those imports, 
we should starve. 

During the pre-war years of the twentieth century there 
was rapid progress in wealth production in the world as a whole. 
Other countries were improving their industrial technique faster 
than Britain, but since British supremacy in shipping vvas maintained, 
and foreign investments had been increased to some four 
thousand million pounds sterling, and London was still the 
financial centre of world commerce, this did not prevent a considerable 
increase in the national dividend. British exports had 
the advantage also of established business connections. 

The war interrupted those connections and gave the opportunity 
for others to be established; it compelled the development 
of competing industries in some countries and encouraged it in 
others; it inflamed nationalism and initiated policies of hightariffs, and prohibition or limitation of imports. As a particular 
example, we may take cotton manufacture, which is the greatestof our exporting· industries. In four countries, India, China, 
Japan and the cotton-growing states of America, power-drivenmachinery has increased enormously. There are now far more 
spindles in the cotton-spinning mills of the world than are needed 
to spin all the cotton which is grown, or to make yarn for all 
the cloth which the world-which is nov1· taking to artificial silk 
-will buy at remunerative prices. ln the Japanese mills girls 
work effi,..iently for long hours and for very low wages; during 
the war these mills were working double shifts, and they have 
to a considerable extent continued to do so since. If our spinnersand weavers would work Japanese hours for Japanese pay-
less than the "dole"-they might set some of the idle spindles 


7 


and looms of Lancashire going, and transfer some of the pressureof unemployment from England to Japan. On this principle 
the mine owners tried to increase employment in the coal mines 
by lengthening hours and reducing wages. It is playing a game 
of "beggar my neighbour" which can only tend to produce misery 
all round. 

Similar developments have taken place in other industries. 
As a result, although the population of Great Britain between 
1913 and 1931 inc-reased by three and a-half millions, and the 
amount paid for imports of food, drink and tobacco went up· 
from £295 millions to £417 millions, exports of British produce 

declined as follows:£ 
millions. 
1913 1931 
Coal 51 35 
Iron and Steel Manufactures... 55 30 
Machinery 
Cotton Manufactures ... 
34 
126 
33 
57 
Woollen Manufactures 36 25 
All Manufactures 414 291 

Wholesale prices (Board of Trade, general index) were 4 per 
cent. higher in 1931 than in 1913 so that what slight adjustmentis needed to allow for change of price level makes the decline 
of these exports measured in commodity values slightly larger than 
the decline in sterling values. The general paralysis from which 
British industry is suffering is further illustrated by such figures 
as these:_:__ 

Thousands of tons. 

1913 1931 
Coal output 287,400 220,000 
Pig iron 10,260 3,758 
Steel 7,664. 5,176 
Shipbuilding commenced ... 1,866 200 

Employment in agriculture and fishing, agricultural output and 
quantities of fish landed are also somewhat reduced. These 
extractive industries, with the exporting industries, are the basis 
on which all our other industries and means of living depend. 

The subsidiary props to our prosperity have also begun to fail 
us. Much financial business in the City on which great but risky 
profits were made, as, for example, borrowing money at low 
rates in France and lending it at high rates in Central Europe, 
has collapsed ; British income from foreign investments, according 
to Sir Robert Kindersley's provisional estimate, was less by 
£ 61 millions in 1931 than in 1929, and with low freightsand fares, which yet fail to attract passengers and cargoes,
earnings of British shipping have fallen to a very low level. 


8 


Since unemployment comes, not from lack of work which 
is worth doing, but from lack of wages offered for its doing, 
the effect upon employment of these declines in sources of income 
can be understood readily. 

(4) Productive industries are being crippled by increase of 
overhead charges. If a struggling farmer has his rent doubled, 
the odds are he goes bankrupt, or carries on only by the indulgence 
of his banker. What matters to him is not what his 
nominal rent is-that is, his rent reckoned in pounds sterling 
-but his real rent, which is what it is reckoned in the things 
he sells. If the prices they fetch are halved his real rent is 
doubled, though its nominal amount remains the same. Or if 
he has borrowed money to buy his farm-as hosts of farmers 
did after the war, at inflated prices-when the prices of farm 
produce were halved, the interest he has to pay is doubled. 
The same is true for any other producer.
Now the Board of Trade Index Number of wholesale prices 
for 1920 was 307, for 1931 it was 104. That means that on 
the average producers of goods in Britain were getting in 1931 
very little more than one-third as much money for a givenquantity of goods produced as they were getting in 1920. Out 
of the sums realised by the sale of the goods they produced, 
the price obtained for nearly three times as great a quantity of 
goods has to be set aside to meet a given annual charge. The 
burden of fixed charges 011 industry is trebled; the burden of 
many other charges greatly increased; rents, interest, rates, taxes, 
insurances, employer's contributions to national health and unemployment 
insurance, railway freights, even if somewhat reduced 
in nominal amounts, are, in real values, swollen enormously; 
and these are prior charges, which must be defrayed out of the 
product of industry, leaving only the remainder to be divided 
between wages and profits. Thus, in a great proportion of 
cases, profits are turned into losses, and employers see no chance 
of carrying on without heavy reductions of the wages they pay, 
either by cutting down rates of remuneration, or by getting the 
work done by fewer hands, or by both devices simultaneously. 

(S) The great slump of prices has come, not through overproduction 
of goods, but through scarcity of mone:y. 
In order that this statement may not be misunderstood it 
is necessary to explain what is here meant by "scarcity of 
money." It can readily be understood that when money becomes 
more plentiful, or circulates more rapidly (and these two things 
generally happen together), production of goods remaining the 
same, prices go up; when there is less money, and it circulates 
less rapidly, prices go down. What then is money, and how is 
it there is scarcity? 


9 

Before the war and from 1925 to August 1931 British 
money (apart from small change) consisted of:


(a) Gold, in the form of bullion and specie (i.e., sovereigns.and half-sovereigns), and in the form of bullion only in the 
!925-31 period. 
(b) The Bank of England notes, which were paper promises 
to pay gold at the rate of the amount of gold in a sovereign for 
-each £1, which were legal tender. These were rather more 
before the war than the gold the Bank held to cash them ·with, 
.and much more since the war. These also are legal tender 
money. 
(c) Credit Money, i.e., cheques and other paper promises 
to pay legal tender money. The volume of these is, and has 
been, enormously greater than the amount of legal tender v\·hich 
they promise to pay.
Since August 1931 the Bank of England notes have ceased 
to be promises to pay gold at any particular rate, but theyremain legal tender money, and, for all practical purposes they 
are the only legal tender money, apart from small change. 

It is often said that the Banks make cr;edit money by granting 
customers loans and overdrafts. That is only true in the 
sense that the Banks are the means by which it is made. Credit 
money is really made jointly by the Banks, those of their 
customers who draw cheques on them, and those of their 
customers who accept the cheques instead of insisting on their 
legal right to demand legal tender money-i.e., gold or Bank of 
England notes. If people trust the Banks, and trust one another, 
the Banks can grant loans and overdrafts in much greater quantity 
than the legal tender they keep in their tills to cash cheques 
when they are presented; and, in those conditions the credit 
money circulates mostly by mere alterations of Banks' customers' 
balances in the Banks' ledgers, and money paid out in cash is 
quickly paid in again.

But when people cease to trust a Bank, all the credit money 
it was putting into circulation ceases to exist. And when a Bank 
is doubtful about its borrowing customers, it is reluctant to givethem credit money. And Banks have to keep a certain amount 
of ready cash to hand out to depositors who want their money. 

Hence we have these conclusions:


(a) By far the greater part of our money is credit money. 
(b) That credit money rests on a basis of legal tender 
money. 
(c) The greater, other things being equal, the amount of 
legal tender money, the greater the amount of credit moneythat can be based on it. But the amount that is put into circula

10 


tion may to a larger or less extent be less than the amount that 
can be put into circulation. 

(d) What we may call the height of the superstructure of 
credit money, built upon a given basis of legal tender money,
depends upon the degree of optimism or pessimism prevailing 
among financiers, traders, and other business men. 
Looking at current facts in the light of these principles, 
we note that in the last three years there has been an enormous 
reduction in the amount of credit money circulating all over the 
world. The decline in America is estimated at 10,000,000,000 
dollars ! Prices have not slumped because of over-productionof goods; since 1925 the volume of output in all capitalist 
countries is estimated to have been reduced by 20 per cent. This 
is probably an exaggeration, but the reduction must be great. 
They have slumped because the money has been reduced a greatdeal more than the goods.

Falling prices bringing falling profits-or turning profits into 
losses-and then also loss of confidence; loss of confidence 
choking the supply and use of credit; lack of credit further 
reducing prices-that is the vicious circle in which capitalistindustry is rotating, as ships were said to whirl downwards into 
the abyss of the Maelstrom. 

(6) Industry in Britain and elsewhere is staggering under a 
monstrous burden of debt. 
During the war Brita;.n and the belligerent countries of 
Europe "went off gold" and inflated their paper currencies; and 
inflation of credit followed. People borrowed more, and the 
Banks readily lent more, and the extra supply of legal tender 
currency gave them the extra till money they required to increase 
greatly the amount of credit money which they put into circulation. 
These conditions reacted on America and neutral countries 
which kept their money on a gold basis ; prices rose there also, 
gold depreciated in purchasing power, and credit was inflated. 
The volume of debts, both public and private, went leaping upwards; 
but as long as prices were rising and currencies depreciating, 
the real increase of debt was much less than the nominal 
increase. 

But in April 1920 deflation of the currency and of credit 
began in Britain; the volume of treasury notes was reduced, the 
Bank of England discount rate was raised (for the two years 
1920 and 1921 it averaged over 6 per cent.), other banks squeezed 
their borrowing customers, wholesale prices collapsed.¥-Sooner 

¥-The cost of living did not fall in the same proportion.
The Index (B.O.T.) of wholesale prices for 1920 was 307, for 
1921. 197. The cost of living Index was 252 for 1920, 220 for 
1921. For 1931 the former Index was 104, the latter 147. 


11 

or later other countries ceased to inflate and began deflation; 
and as they did so, as they made money scarce and increased 
its purchasing power, debt burdens were increased. 

The effects of inflation and deflation on debts will be more 
clearly seen by the single example of our own National Debt. 
In sterling the gross liabilities of the State were :


£ 
31st March, 1914 706,154,110 
1920 7,875,641,961 

" 

1931 7,582,899,661

" 

showing an eleven-fold increase in the war and inflation period, 
and a 5 per cent. decrease (attained with difficulty by heavy 
taxation) during the deflation period. 

When these figures are translated into real (commodity)
value, they tell a very different story. The real amounts, stated 
in terms of the purchasing power of sterling in 1914 were:


Increase. 
£ £ 
31st March, 1914 706,154,110 
1920 2,565,355,688 1,859,201,578

" 

1931 7,291 ,248,135 4,725,892,447 

" " 

So it is also with all other sterling debts public or private.
Where the nominal amount is the same, the real burden has 
been trebled. In many ca:ses the nominal amount also has 
increased. So many duties requiring capital expenditure have 
been laid upon local authorities that their sterling debt has more 
than doubled since 1920, and its real burden increased more than 
six-fold; and many private businesses have only kept going by 
mortgaging their assets more and more heavily, while the banks 
complain of "frozen credits," which means that they dare not 
call in their loans-if they did the debtors would go bankrupt,
-and they keep on sending good money after bad. 

In all nations outside the U.S.S.R. there has been since 
the war first a period of inflation, longer or shorter, moderate 
or fantastically extreme, then a period of deflation. Creditor 
countries took the lead in deflating; debtor countries later 
deflated to keep their currencies in some sort of stable ratio to the 
currencies of the creditor countries in which they have to 
pay the charges on their external debts; but they have not 
thereby been enabled to meet those charges any more easily;
the deflation only increased the burden of their internal debts; 
since their ability to pay interest on sterling or dollar debts 
depends on the sterling or dollar prices of the commodities 
they export. 


12 


As gold, sterling and dollar prices fell, debtor countries had 
to make more and more frantic efforts to export, and had to 
cut prices in order to sell abroad. That provoked increases of 
tariffs, and other hindrances to international trade. As long as 
neditor countries would go on lending the wherewithal to payinterest on previous debt, the debtors could carry on; when 
they refused, the collapse came. The well-meant Hoover moratorium 
was futile, both because it came too late and because 
it concerned public debts only. It in fact precipitated the crisis, 
because it called attention to the bankrupt state of Central 
Europe, and set private creditors agog to extract what they 
-could while there was something to be got. Deflation and fallingprices anyway were making impossible the process of "puttingcountries on their feet" by "giving them credits." Austria, for 
example, was supposed in 1923 to be set on its feet by a loan 
of £14,000,000 gold at 6 per cent. That £14 million gold loan 
now (November, 1932) represents a commodity value equal to 
£28 millions in 1923. 

(7) The system of control of national currencies and 
national credit by private profit-seeking institutions is at the root 
of the trouble. 
The control of the currency is one of the most ancient 
functions of the State; and the King's head on our coins is a 
reminder of the fact. In our country, the Bank of England,
seizing ever each opportunity offered by the financial difficulties 
of the State to extort sume new privilege, gradually usurpedthat function, till, in 1925, the function of the State was limited 
to issuing small change from the mint. The Issue Departmentof the Bank of England is nominally under governmental regulation, 
but the Governor of the Bank advises the Government what 
those regulations shall be. As is usually the case with other 
capitalist trusts controlled by governments, "the controlled 
controls the controller." Inflation of currencies by various 
governments during the Great War, and in the chaotic period 
after the Armistice, provoked an effective demand by bankers 
and financial experts that currency control should be taken out 
{)f the hands of the public authorities and entrusted to the 
managers of Central Reserve Banks, responsible to their depositors 
and shareholders, that is to the rentier class to which 
inflatation brings loss, and deflation apparent-though u,uallydelusive-gain. This was a leap out of the frying-pan into the 
fire. 

There are two fundamental objections to the present sy tern. 

In the first place Directors and Managers of banks are appointed

and paid to serve their bank shareholders, and not the industry

Qf the country. Complaint is being made of the Big Five, that 

while they pay only 1 per cent. on deposits they refuse to lend 


lS 


on overdraft to producers, even on unimpeachable security, at 
less than 5 per cent., and that thus they retard industrial recovery. 
The complaint is just, but futile. It may seem hard to farmers 
and manufacturers that they should have to pay ten times as 
much to the banks for the use of capital as the banks pay to 
the depositors who supply that capital, but as, in the absence 
of competition, bank directors can charge a gross profit of 450 
per cent. on that portion of their turnover, and as they think 
that policy will bring in maximum dividends, they are faithful 
stewards of their employers when they exact such terms. 

Secondly, even when the men who control Central Banks. 
feel that it is their duty to put public interests first, they tend 
to confuse the general interest with the interest of that rentier 
class of which the banking community is the agent. By ancient 
tradition they are worshippers of "sound money" and of the Gold 
Standard; the cult of the Sacred Metal is, for the generalityof them, the essence of their religion, their altars those wonderful 
underground vaults and cellars in which Gold is safeguardedwi'th a perfection of apparatus beyond the wildest dreams of 
Rhampsinitos. On the whole, during the pre-war period, the 
gold standard worked at least as well as any other would have 
which was then practicable. Since 1914 the rapid fluctuations 
in the purchasing power of gold have made it an impossiblestandard of value on which to regulate the settlement of longperiod accounts and interest on long period debts, with anyapproach to justice between creditor and debtor. 

From this analysis of the situation certain conclusions 
follow : 

(1) The nation must control its own currency. Parliament 
must dictate the general currency policy, and entrust the issue 
of legal tender to a public department so constituted as to aim 
at equal fustice to creditors and debto?'S. 
But what should that policy be? Because the drift into 
world oankruptcy was started by currency deflation, it does not 
follow that it will necessarily be arrested by re-flation. In the 
existing nervous condition in the financial world, increase of 
currency might be accompanied by a further contraction . of 
credit, and still deeper industrial depression; on the other hand 
it might provoke anticipations of rapid advance in prices, excessive 
speculation, a brief boom, follovved by another collapse.

It must therefore be made known to all the world that the 

instructions to the currency department are to bring back sterling 

to a specified level of purchasing power, and henceforward to 

stabilise it as completely as possible at that level. What that 

level should be. whether that of 1929 as some propose, or that 

of 1924 which seems preferable, or that of some other year, is 



14 

a detail of some importance; also the question would have to 
be decided whether the stability aimed at should be stability 
of purchasing power in the wholesale markets, national or 
international, or in the cost of living. Any of these sorts of 
stability would be a great improvement on the calamitous 
-instability of the gold standard. 

(2) Credit also must be brought more under public control. 
The Bank of England ought never to have been granted 
its peculiar privileges; the Big Five ought never to have been 
allowed to carry out the amalgamations which made them so 
big, without being required to admit government representatives 
to their respective Board of Directors. That error should be 
corrected immediately. The monopoly of banking by private 
profiteering enterprise should also end. All the greater local 
authorities should be allowed and encouraged to follow the 
example of the City of Birmingham and create their own banks 
All impediments to the expansion of the services rendered by 
the post office and Trustee savings banks should be removed. The 
most appropriate State institutions suggested by the experience of 
other countries for guiding the flow of investment into the 
channels of the greatest public advantage should be adopted. 

(3) National action should accompany or precede international 
conferences. 
When governments mean business, as the present "National 
Government" does in the matter of tariffs, they act first, and 
confer with other governments later. When they don't mean 
business, but only want to conciliate public opinion, they organise 
an International Conference, talk eloquently, gorge the newspapers 
with copy, and nothing is done. When Britain declares 
for a stable currency, and sets to work to achieve it, other 
countries will speedily follow such a lead. 

(4) It need hardly be added that no currency reform can 
avail unless debtor countries and industries generally are relieved 
of the burdens of their debts sufficiently to enable them to set 
to work again under normal conditions; and it is equally obvious 
that the world will drift into something far worse than banl;cruptcy 
if its rulers refuse to disarm. 
Loss of ability on the part of British exporting industries 
to compete effectively in foreign markets has been cited as the 
other cause of the increase of unemployment since the war. 
It is obvious ( 1) that this power could be recovered if those 
industries were re-organised on rational lines; (2) that they will 
not, perhaps cannot, reorganise effectively without State compulsion 
and aid; (3) that if reorganised on a capitalistic basis 


15 

and on the capitalistic principle of maximum wage saving their 
reorganisation will be no benefit to the people; ( 4) that the only 
good reason for desiring to export is to obtain desirable imports ; 
of which food is the most important; (5) that under the existing 
system of land ownership and tenure arrangements, by tariffs 
or other measures, to make home production of food more ample;md profitable will chiefly enrich the parasitic class of landowners. 


With regard to unemployment generally, it has been said 
with truth that the root of the trouble is that people want too 
much. The gospel of Self Help teaches them to get all they 
can, regardless of the limits of their real needs and of the 
unsatisfied needs of others. Those who can get too much, in 
consequence others get too little. The richer a man is, the more 
easily he can add to his income; the poorer he is, the more 
easily he loses the little he has. Poverty and unemployment 
are normal features in the life of an acquisitive Society. Postwar 
unemployment exceeds pre-war unemployment because the 
course of events has increased the pressure of the rentier class, 
the tlass that gets too much, upon producers, the class that getstoo little. Currency reform will ease that pressure, and enable 
the capitalist system to stagger along a little longer. But it is 
only a palliative, calculated to relieve some of the distressing 
symptoms of a deep-seated disease. The Society which creates 
a parasitic class of property owners at one end of the scale, 
and a disinherited proletariate at the other, and which orders 
its economic life on the principle of competitive greed, cannot 
be healthy. The disease has indeed become a mortal one. The 
triumphs of invention offer civilisation the choice-it must be 
horn again of a nobler spirit, the spirit of justice and mutual 
service, and live a nobler life, or perish. 

SOME BOOKS SUGGESTED. 

The Intelligent Man's Guide through World Chaos. By G. D. H. CoLE. 


Recovery. By SIR A. SALTER. 
The World Economic Crisis. P. EM ZIG. 
Unemployment. By SIR W. H. BEVERIDGE. 
The Post-war Unemployment Problem, By H. CLAY. 
Unemployment Problems in 1931. THE li'TERN ATIONAL LABOUR OFFICE. 
The Intelligent Woman's Guide to Socialism and Capitalism.


By G. BERNARD SHAW. 

The Decay of Capitalist Civilisation. By SIDNEY and BEATRICE WEBB, 
Final Report of the Royal Commission on Unemployment Insurance, 1932. 7/6. 
Fabian Society Tracts and Publications. 

Any of the above may be ordered through the Fabian Society, 
11, Dartmouth St., Westminster, London, S.W, 1. 


SELEOTION OF FABIAN PUBLIOA TIONS. 

rCompleu li&t sent on application.) 

THE CRISIS AND THE CONSTITUTION: I9JI AND AFTER. ByHABOLD J. LASKI. Paper 1/6 ; Cloth 2/6. Postage 2d. 

THE COMMONSENSE OF MUNICIPAL TRADING. By BEBNARD 
SHAW. I/6 net; postage 2d. 

MIND YOUR OWN BUSINESS. By R. B. SUTHEBS. I/6 net, postage 2d. 

THE DECAY OF CAPITALIST CIVILISATION. By !iiDNEY and 
BEATRICE WEBB. Cloth, 4{6; paper, 2/6 ; postage 4d. 
HISTORY OF THE FABIAN SOCIETY. By EDWARD R. PEASE. New 
edition. 1925. 6{-, postage 5d. 

FABIAN ESSAYS. (1931 Edition). 2t6; postage, 4d. 

KARL MARX. By HAROLD J . LABKI. I/·; post free, I/I . 

TOWARDS SOCIAL DEMOCRACY? By SIDNEY WEBB. IS. n., post.ld 

FABIAN TRACTS and LEAFLETS. 
'l'rac'•· each 16 to 614 pp., price Jet., or 9d. pe,. dot., unleuotlaerwiu ltated. 
Lealteu, 4 pp. eacla. price ld . fo" three comet, 2!. per 100, or 20/-per 1001;. 
The Set, 10,'-; post free 10'9· Bound in buckram, IS/-; post free 1519. 

I. General Soctalism in its various aspects.
TRAOTB.-234· Social Philosophy for Fabians. By RoBERT FRABER. 2·d. 
233. Sociali~m and Fabianism. By BERNARD SHAW. 3d. 229. NationaL 
Finance. By F . W. PETHICK-LAWRENCE, M.P. 2d. 216. Soc1ahsm and 
Freedom. By H. J . LASKI. 2d. 200. The State in the New Social Order. 
By HAROLD J. LASKI. 2d. I8o. The Philosophy of Socialism. By A. 
GLUTTON BROCK. 159. The Necessary Basis of Society. By 8IDNEY 
WEBB. 146. Socialism and Superior Brains. By BERNABD 8HAW. 2d. 
I42. Rent and Value. 107. Socialism for Millionaires. By BEBNABD 
BuAw. 2d. I33· Socialism and Christianity. By Rev. PEBCY DEABMEB. 2d. 
72. The Moral Aspects of Socialosm. By SIDNEY BALL. 51. Soc alism: 
True and False. By S. WEBB. 2d. 45· The lmpossibilities of Anarchism. 
By G. B SHAW. 2d. 5· Facts for Socialists. Thirteenth Edition,. 
1926. 6d. 41. The Fabian Society : ltsEarly HIStory, By BEBNABD 
8HAW . 2d. 
11 -Applications of Socialism to Particular Problems. 
TRACTB.-237· What Happened in 1931 : A Record. By SroNEY WI!:EB. 2d. 

236. A New Reform Bill. By MRs. SIDNEY WEBB. '.!d. 235. The 
Limitations of the Expert. By H. J. LASKI. 2d. 23I. The Local Government 
Act, 1929: How to Make the Best of It. By SIDNEY WEBB. 2d. 
230. Imperial Trusteeship. By The Ht. Hon. LoRD OLIVIER, K.C., M. G. 2d. 
228. Agriculture and the Labour Party. By G. T. GARRATT. 2d. 227. 
Labour's Foreign Policy. By Mrs. H. M. Swanwick. 2d. 226. The-
League of Nations. By BERNARD SHAW. 2d. 223. The British Cabinet : 
A Study of its Personnel, 19or-1924. By HABOLD J . LASKI. 3d. 220. 
Seditious Offences. By E . J. C. NEEP. 3d. 196 The Root of Labour 
Unrest. By BIDNEY WEBB. 2d. 194. Taxes, Rates and Local Income 
Tax. By RoBERT JONEB, D.Sc. 2d. 187. The Teacher in Politics. BySIDNEY WEBB. 2d. 183. The Reform of the House of Lords. By 
SIDNEY WEBB. 2d. 

111.-Local Government Powers : How to use them. 

TBACTB.-225. Education Committees : Their Powers and Duties. By H. 
flAM UELS. 3d. 218. The County Council: What it Is and What it Does. 
By H. SAMUELB. 2d. 190. Metropolitan Borough Councils. By C. R. ATTLIIIE, 

M.A. 2d. 191. Borough Councils. By C. R. ATTLl'lE, M.A. 2d. 189. Urban 
Distnct Councils. By C. M. LLOYD, M.A. 2d. 62. Parish & District 
Councils. 2d. 
IV. -Biographical Series. In portrait covers, 3d. 
221. Jeremy Bentham. By VICTOR COHEN. 217. Thomas Paine. ByKINGSLEY MARTIN. 215. William Cobbett. ByG.D.H.CoLE. 199. William 
Lovett. ISoo-1877. By BARBARA HAMMOND. Robert Owen, Idealist. By
C. E. :M. JoAo. 179. John Ruskin and Social Ethics. By Prof. EorTB 
MoRLEY. 165. Francis Place. By ST. JoHN G. EBVINE. 166. Robert 
Owen, Social Reforrr.e1. By Miss Rutchings. 167. William Morris and 
the Communist Ideal. By Mrs. TowNSHEND. 168 JohnStuart Mill. 'ByJuLIUB WEST 174. Charles Kingsley and Christian Socialism. By C. 
E. VuLLIAMY. 
Prineed by G. Standring, 17 & 19 Finsbnry St., London, E.C. and published by the Fabian 
Society, 11 Dartrnoutb St.. We>tminster London. S.W. 1.