Showing 72 results

179 City Road, E.C.1.—Keynes has agreed to speak at the next dinner (of the all-party group on India). Asks for suggestions as to who should be invited.

46 Gordon Square, Bloomsbury.—Suggests sources of information on the subject mentioned by Pethick-Lawrence (the provision of free services; see 2/230), and outlines the main argument against providing such services. The subject is unsuitable for the Economic Journal, and Pethick-Lawrence’s proposal is almost certainly unsound.

King’s College, Cambridge.—The contention in Abbati’s book (The Unclaimed Wealth; see 2/237) may have something behind it, but its exposition is muddled.

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King’s College, Cambridge
22nd January, 1926.

Dear Pethick Lawrence,

When I looked through Abbati’s book I had the impression that there was something behind the contention which he was trying to sustain. You will find something which I think is not entirely disconnected from Abbati’s point in a little book of D. H. Robertson’s, which will be published shortly. But, on the other hand, I felt that, as expounded by Abbati, it was all a fearful muddle—truth mingled with error—so that it was almost impossible to disentangle how far he was right and how far wrong.

Like so many recent writers on monetary theory, he is, I think, in a position of perceiving for a good reason that the orthodox theory won’t do, yet not clear enough in his head to criticise coherently, or to build up an alternative which will hold water.

Yours sincerely,
J M Keynes

F. W. Pethick Lawrence, Esq., M.P.,
11 Old Square,
Lincoln’s Inn,
W.C.2.

46 Gordon Square, Bloomsbury.—Thanks him for a copy of his article. He disagrees only with the suggestion that the institution of municipal banks would affect the amount of gold which it is rational to keep in the country.

Tilton, Firle, Sussex.—Will be delighted to look through his proofs (proofs of This Gold Crisis; see 2/245).

46 Gordon Square, Bloomsbury.—Declines to write a foreword to his book (This Gold Crisis).

Treasury Chambers.—Thanks him for his congratulations (on his peerage). Is back again at the Treasury, but attitudes are different from what they were in 1918.

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21. 6. 42
Treasury Chambers, Great George Street, S.W.1

My dear Pethick Lawrence,

Thank you for your very kind note of congratulation. Much appreciated—as was also your previous note to my wife. Here I am back again in the Treasury like a recurring decimal—but with one great difference. In 1918 most people’s only idea was to get back to pre-1914. No-one to-day feels like that about pre-1939. That will make an enormous difference when we get down to it.

Sincerely yours,
J M Keynes

Treasury Chambers.—The Commons debate (on monetary co-operation after the war) was characterised by isolationism and anti-Americanism, but he has no doubt that the House will eventually change its mind.

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Treasury Chambers, Great George Street, S.W.1
16th May, 1944.

My dear Pethick-Lawrence,

It was very comforting to get your letter. I spent seven hours in the cursed Gallery, lacerated in mind and body, and the only moment of satisfaction came when you rose to speak followed by the Chancellor. I thought both these contributions were first-class. For the rest, apart from another brave speech from Spearman, the whole thing was smeared by this unreasoning wave of isolationism and anti-Americanism which is for no {1} obscure reason passing over us just now. Somewhat superficial perhaps but nevertheless to be reckoned with.

However, I do not feel that any real harm was done. The thing will grind along. We shall produce a further version and when at a later date the House is eventually faced with the alternative of turning their back on all this sort of thing and begin to appreciate what that means, I have not the slightest doubt that they will change their minds.

Sincerely yours,
Keynes

The Rt. Hon. F. W. Pethick-Lawrence, M.P.
House of Commons.

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{1} ‘? an’ written above in pencil, probably by Pethick-Lawrence.

Treasury Chambers.—Sends cuttings showing Canada’s current attitude towards Britain. Denies having said that Britain had no intention of borrowing in Canada after the war.

Offers to write an article for the Economic Journal on the economics of war, a hitherto neglected subject.

Is writing a paper on the finances of Europe for the Royal Statistical Society. Asks who to contact for national budget figures. The Treaty of Versailles is gradually being recognised as a foolish thing.

Congratulates him on his forthcoming marriage. Commends his articles on the gold standard. Will raise a question on the subject in the Commons in connection with the Appropriation Bill. Asks why the price of bread has not fallen with the rate of exchange.

Has sent a letter to Henderson for publication (in The Nation; see 2/243), which is likely to provoke controversy. Asks Keynes to maintain his side of the argument in the paper, as he is going to India next week.

Outlines five points which should be borne in mind by supporters of free trade, and refers to the opposition he met when making these points before an audience of free traders recently.

Has returned from India. Encloses a letter summarising his views of the situation in that country (see 6/135), and two others describing the Indian National Congress (wanting) and his meeting with Gandhi, Tagore, and Bose (see 6/133). His wife is recovering from the illness she suffered on board ship. Refers to adverse reactions to his recent pronouncements on the subject of free trade.

The proofs of Pethick-Lawrence’s book (This Gold Crisis) must be returned to the publisher (Gollancz) by Monday.

Queries certain points in Keynes’s article for The Times (see 2/214–15).

Is sorry that he has not yet been able to arrange Keynes’s visit to the House of Commons (to discuss compulsory saving). Will try to do it in the New Year.

Is pleased that he has adopted many of his suggestions (about the White Paper Cmd. 6438; see 2/221), and looks forward to this year’s White Paper.

46 Gordon Square, Bloomsbury.—Is unable to come to he House of Commons (see 2/262), as she and her husband are going to Berlin. Is amused by his reference to the Hammersmith ballet (the ballet by Ashley Dukes in the revue Riverside Nights?) as a ‘parody’.

17A St Edmund’s Passage, Cambridge.—Thanks him for his letter of sympathy on the death of Lord Keynes (see 6/164). She feels utterly alone without him.

1 Eaton Square, [London].—Explains why he considers the amount of international monetary reserves inadequate, and suggests remedies.

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1 Eaton Square.
March 20, 1961.

Dear Pethick,

Thank you for your letter.

I am sorry my debate {1} had to be postponed until March 28, but the Government rightly wanted it taken as a separate subject.

My point is that the amount of international monetary reserves are inadequate to support the ever-growing volume of production and trade in the free world; with the result that the two great international currencies, the dollar and sterling, are under alternate but continuous pressure.

After the war it was assumed—by all except Keynes—that we could rely upon increased gold production and continued growth in holdings of dollars and pounds sterling. This has proved a false assumption. The total amount of funds capable of international movement is now very large indeed, compared to our reserves and IMF drawing rights. And it is this vulnerability that has caused us to adopt what has been described as the “Stop-and-go” policy of recent years, with disastrous effects upon our own economic growth and productivity.

The truth is that the price paid at Bretton Woods for fixed exchanges was supposed to be adequate international monetary reserves; and, owing to the rejection of Keynes’s scheme for the creation of international money in the form of “Bancor”, the necessary reserves were not in fact provided. The monetary system of the free world is therefore obsolete.

Various remedies have been propounded, and I shall touch on some of them.

A rise in the price of gold (now pegged at a wholly artificial level) is obviously one. But it would not be permanent; and I think that at present it is politically impossible.

It is, however, not insuperably difficult to devise means of creating more international liquidity and of converting present holdings of national reserve currencies—sterling and dollars—into holdings of reserves with international backing.

The culmination of a radical revision of the international monetary system should, in my view, be the transformation of the International Monetary Fund into an international central bank, the deposits of which would be an international currency on the lines of Keynes’s “Bancor”. This could be achieved in successive stages; but would ultimately require a revision of the Bretton Woods Charter. The main objective is a reorganisation of the international financial system designed to facilitate economic growth, and to remove the constant threat to balances of payment caused by the movement of “hot” money.

I therefore intend to ask for an international economic conference to consider the whole problem. And I am encouraged by the fact that the Radcliffe Committee saw “great merit in the proposal for a transformation of the I.M.F. into an international central bank”; and that President Kennedy said in his Inaugural Address, “We must now, in co-operation with other lending countries, begin to consider ways in which the international monetary institutions—especially the International Monetary Fund—can be strengthened and more effectively utilised, both in furnishing needed increases in reserves, and in providing the flexibility required to support a healthy and growing world economy”.

I do not know how many speakers there will be. But Derick Amory, Robbins and Bob Brand are certainties. Walter Monckton will be there. And I am hoping to persuade Cyril Radcliffe to do his duty!
It should be an interesting debate on a topic which, in my belief, is of major importance—perhaps the most important of all.

Yours ever,
Bob B.

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Letter-head of the House of Lords. At the head have been written ‘File.’ and ‘620’.

{1} A debate on ‘International Liquidity in the Free World’. See Parliamentary Debates (Hansard): House of Lords, vol. ccxxx, pp. 51–107.

107 Albert Bridge Road, S.W.11.—Is in favour of stabilising the price level and therefore does not believe the Treasury Minute should be abrogated at present (see 1/192), as it is a defence against inflation.

(Printed letter-head of the London School of Economics, which Dalton has enclosed in square brackets.)

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107 Albert Bridge Road, S.W.11.
5/3/24.

Dear Pethick Lawrence,

I should like a talk with you sometime before the next Finance Committee meeting. I regret to find that I shall again have to leave early, as I have an engagement at 6.30 on that day to dine with Charles Latham and the London Accountants.

Shortly, my view is the following.

I am in favour of stabilising the price level now & in the near future, though, looking further ahead, I hesitate to commit myself to a definite policy. Many factors seem to me to complicate the distant view.

I am more afraid of inflation in the near future than, I think, you are. I want stabilisation as a defence against the F.B.I., no less than against the old-fashioned deflationist authorities, who are, I think, the weaker of the two possible disturbers of the price level.

I don’t, therefore, feel happy about abrogating the Treasury Minute at this stage. It is our only real defence against inflation at present.

Nor am I so certain as, I think, you are that the Minute will operate to check a healthy, as distinct from a hectic & inflationist, trade revival in the near future.

Keynes said a few months ago at a Committee, of which I am a member, that he thought there was a good deal of margin in the situation, even with the Treasury Minute unchanged. In addition to the margin in the Currency Note Issue, he attached importance to the prospect, with reviving trade, of a more rapid circulation of bank deposits. I would add another factor, pointing in the same direction, namely the prospect of an increase in trade credits (between business men,—I don’t mean bank credits), as confidence grows.

Further, our situation may be eased by a rise in American prices, sufficient to restore the pre-war parity of exchange & lead to British imports of American gold. This has been long in coming, but it may come quickly, if the Federal Reserve Board’s stabilising policy gives way before the strong forces opposed to it.

My present feeling, therefore, is to pronounce in favour of a stable price level as our immediate objective, without committing ourselves to anything very general in the way of economic principles, & not to mention explicitly the Treasury Minute. Nor would I say that a future rise in bank rate is undesirable. If prices continue to rise as they have been doing lately, it may be desirable to raise bank rate in order to secure stability. My belief, (in opposition to that of others, I hear) is that you can stabilise any level of price you choose, & that there is no causal relation between the level chosen & the volume of unemployment.

If, for the time being, we could get the Govt to agree to stabilisation of the price level as a principle, and, implicitly, to whatever measures may be required to secure it, I should feel satisfied.

But I wouldn’t meet trouble half way, or give any encouragement to profiteers, by proclaiming in advance that more money shall be printed than the Treasury Minute allows.

Yours sincerely
Hugh Dalton.

King’s College, Cambridge.—Will send him twenty reprints of his article in the forthcoming number of the Economic Journal (see 2/226).

Charleston, Firle, Sussex.—The American economists and financiers most likely to be interested in a capital levy are Seligman, Taussig, and Norman Davis.

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Charleston, | Firle | Sussex
18. 9. 19

Dear Lawrence,

I am really rather at a loss as to how to answer your letter about Americans interested in a Capital Levy;—the project is so remote from their ideas and their necessities. Amongst economists there is Seligman of Columbia and also old Taussig. Amongst financiers I hardly know whom to mention,—perhaps Norman Davis, whom you may find in Washington, is the best. With any of these, if you meet them, and with any others who know me, certainly make use of my name to any advantage you are able. I presume you will be seeing the New Republic crowd in any case.

Yours sincerely,
J M Keynes

King’s College, Cambridge.—Has written to Snowden proposing an amendment (to the Gold Standard Bill) repealing Section IV of the Bank Act, 1844. He overlooked the importance of this point in his article in this week's Nation.

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King’s College, Cambridge
3 May 1925

Dear Pethick-Lawrence,

In my article in this week’s Nation, which you may have seen, I made a bad mistake and gave the Treasury more credit than they deserve. I forgot Section IV of the Bank Act, 1844, which they are not proposing to repeal. This Section obliges the Bank of England to buy gold bullion in unlimited amounts at £3-17-9.

Thus all the dangers, which in my article I thought they were avoiding, they are in fact inviting.

If an amendment could be carried on Monday, repealing Section IV of the Bank Act 1844, it would be an enormous improvement.

I have written a letter to Snowden on the same lines as the above. If you agree with me, I wish you would go round to see him on Monday morning.

Yours sincerely,
J M Keynes

46 Gordon Square, Bloomsbury.—Thanks him for a copy of Hansard. Churchill seems to be having doubts (about the reform of the House of Lords?). Is not sorry an inquiry was refused, as it would have been premature.

Tilton, Firle, Sussex.—‘I am very glad you have left the Government and sympathise entirely with your circular letter.’

King’s College, Cambridge.—Commends Pethick-Lawrence’s contribution to a debate in the Commons. Is disappointed by Arthur Greenwood’s response in the Daily Express to his own articles in The Times on compulsory saving.