ABSTRACT
Statement on the case for a “moratorium” for taxpayers in the over-defl ated countries We, the undersigned, consider: (i) That the fall in gold prices of commodities, securities and property has been too great in relation to existing undertakings of debtors to make gold payments. (ii) That the concentration of gold in the United States of America and in France has been largely due to the receipt by these countries in gold of too great a proportion of the payments due to them from abroad-and not enough in goods and services. (iii) That both the excessive fall in gold prices of commodities and securities, and the concentration of gold in the United States and in France, have been largely due to insuffi cient buying of goods and services by these countries from their producers at home and from their debtors abroad. (iv) That this defi ciency of buying of goods and services by these creditor countries (partly concealed for a time by loans to debtors)9 has been largely due to excessive withdrawals of money by taxation from their respective publics for the purpose of rapid reduction of national debts. In other words, excessive taxation has largely prevented taxpayers in these countries from buying enough goods and services from home producers and foreign debtors; whilst the drastic retirement of the obligations of their governments has, on the one hand, defl ated their money markets, and has, on the other hand, driven investors into unsound investments at home and abroad, into stock exchange speculation, and into the actual hoarding of money in the hearth or the virtual hoarding of money in the banks.10 (v) That in the present circumstances it is highly desirable that the debtor countries, the creditor countries that have suspended gold payments, and the creditor countries where there has been no defl ation in post-war years of the kind described above, should both balance their budgets and increase the money value of their exports in relation to the money value of their imports; and that this cannot be done unless the United States of America and France adopt refl ationary measures to increase the total amount of buying of goods and services by them and to raise the gold prices of commodities and securities. (vi) That a suspension of taxation for a suitable period, with corresponding budget defi cits, in the United States and in France is a refl ationary measure capable
of immediate application, which (a) would enable the people in these countries to absorb the goods and services made available for them by their producers at home and by their debtors abroad, (b) would raise the gold prices of commodities and securities as well as restore the values of unduly depreciated currencies on the foreign exchange market, and (c) would enable home and foreign debtors to make internal and international payments. (vii) That a “moratorium” to their own solvent taxpayers is better business for America and France than a moratorium to foreigners whose solvency at the present gold prices of commodities is questionable. Readers can assist us by letting us have their views on the preceding Statement. Communications sent in confi dence should be marked “CONFIDENTIAL.”
