chapter  III
12 Pages

Return to Pre-War Parity

THE deflationary monetary policy adopted by the British authorities after the war on the recommendations of the Cunliffe Report has been subject to a great deal of criticism, especially since the suspension of the gold standard. It is now generally recognized that it was a mistake to restore the pound to its pre-war parity. It is more than probable that, had those responsible for this policy possessed superhuman faculties of vision, they would never have embarked upon a deflationary campaign, and the pre-war parity of sterling would never have been restored. The question is whether, at the time when the return to pre-war parity was decided upon and carried out, it was reasonable to assume that sterling could be maintained at its old parity without unduly heavy sacrifices.