ABSTRACT

The relations between the inflation of currency and the inflation of credit have been the subject of a great deal of technical discussion by specialists. The inflation of credit is increased in the volume of credit, i.e. purchasing power, in existence without a corresponding increase in the volume of commodities on which the credit is based. There are three ways, and three ways only, in which a war can be financed: taxation, borrowing, and inflation. The whole of this question of inflation of credit and inflation of currency can best be studied in detail in two documents. The first is the Cunliffe Committee Report issued in 1919, and obtainable at H. M. Stationery Office, and the second is the report of Mr. McKenna's speech at the annual meeting of the London Joint City and Midland Bank in 1920.