Arthur Kitson

To the Editor of the Times.

SIR,—In view of your comments on my reply to your City Editor and in justice to myself, I must again refer you and your readers to the origin of this discussion.  I was challenged to furnish a remedy for unemployment.  The Prime Minister and other members of the Government had stated that there was no remedy for this evil, and this was mentioned and endorsed at a meeting of several financiers at which I happened to be present.  With this assertion I disagreed, and said that there were several remedies, whereupon I was challenged to produce one.  The challenge was not that I should furnish an entirely novel and original remedy of my own conception, but any remedy.  Among several I selected one I considered the most feasible—namely, that prescribed by Major Douglas.  Having described this in my articles, your City Editor insinuated that I had failed to furnish any remedy and when I inquired why he had deliberately ignored the one I offered, you say in your comments, “ Our City Editor was not called upon to deal with Major Douglas’s book, but with Mr. Kitson’s remedy.”  But “ Mr. Kitson’s remedy ” is the one I selected, and is therefore the one that your City Editor, if he were able, should have dealt with.

Again, your citation of Russia’s experience with paper money has no more to do with my proposals than the act of drinking a glass of water has to do with committing suicide by drowning.  My proposal was that the Government should gradually convert the Treasury bills already issued into Treasury notes, for the purpose of increasing the supply of currency—which is at present a crying need throughout the country—and also to get rid of the interest charges which are now being paid on these bills.

My proposal is nothing more than converting one form of credit into another, and if the one form is unsafe, or as you seem to suggest, worthless, then the other is equally so.  As to the danger of “ inflation,” it does not follow that because a large amount of currency is paid out to the public that the whole of it, or even half of it, would be immediately offered for the purchase of goods, although this is the idea that you and your City Editor appear to convey.  Besides, since many of these bills are already used as security for bank credit issued, the change I propose would not necessarily raise prices to a very considerable extent.

The Russian paper money was issued, as Lenin admitted, for the purpose, not of assisting Russian trade, but of destroying it, and of getting rid of what they term the “ capitalistic financial system.”  It is one thing to issue currency for the purpose of assisting trade, it is quite another thing to issue currency for the purpose of destroying it.  To compare this system even with the German paper marks would not have been a fair comparison, although far less unfair than the comparison you have made.  But the beneficial results of Germany’s cheap monetary system on her trade and industries are well known, for it has enabled her to undersell not only our manufacturers in our own and neutral markets, but even the Americans, in spite of their high tariff protection.  The United States manufacturers have complained to their Government most bitterly because German goods are being imported in face of their high tariff wall and underselling their own products.  America is now learning a lesson that we ought to have learned long ago—namely, that dear, scarce money is destructive of industrial prosperity which tariffs are unable to remedy.

May I just add in conclusion the following extract from a letter written by one of those who was present at the meeting at which the challenge was issued, which I have been permitted to make use of :

“I have taken the trouble to inquire of the members who were present with you at the discussion on ‘ unemployment ’ last February, regarding their views on the articles you have written to The Times Trade Supplement.  You may remember that, including yourself, our party numbered eight persons in all.  Seven of them maintained that unemployment was irremediable, whilst you asserted that a solution of the problem was a simple one.  Four of the seven having read your articles think that you have fulfilled your promise, which was to furnish a rational solution, and until this solution is demonstrated to be fallacious, they think it should be regarded as a true remedy.  Of the remaining three, one is non-committal, and the other two are abroad, and I have been unable to secure their replies.”

Yours faithfully,

     Stamford, April 27.


P.S.—Since the above letter was written I have received word from all of the members acknowledging the fulfilment of my promise as stated in the Foreword of these articles.—A.K.