MINUTES OF EVIDENCE 657
Therefore a change of ratio from that point of view was not desirable, as a lever for the adjustment of prices ?— Yes, it was not.
No country has done it unless you can show that it was particularly desirable in the case of India as an exception ?— But it has happened in all countries.
Which countries ?—All countries.
If I may make my question clearer ……….. ?—I do not think your question was put very clearly.
I sometimes do put my questions not very clearly, admit. Which countries which could attain to pre-war parity did voluntarily go past it in order to adjust their internal price levels ?— No, of course they did not do that.
Therefore where is the fallacy ?—Fallacy in this sense ; some people in doing this imagine they are going back to the old price level. That is a fallacy, because 1s. 4d. in 1914 is not the same as 1s. 4d. in 1925.
But I mean those who do not base the demand for
1s. 4d. on the question of prices at all, they would not be making that fallacy ?—No.
Then lower down you mention another point, I think. “If by restoring pre-wa r parity is meant the restoration of the pre-war level of prices, then the ratio instead of being lowered from 1s. 6d. inthe direcction of 1s. 4d. must be raised in the direction of 2s. gold.” Then you say “the restoration of pre-war parity even nominally would be unjust.” What have you in your mind by the words “even nominally” ?—Without looking to the price level.
I thought you yourself agreed.......?—Supposing now, in 1925,1s. 4d. is the ratio as compared to 1914, that would be only a nominal change because prices have certainly changed.
Where is the nominalness in regard to those who ask for 1s. 4d. as being the pre-war rate ?—You are asking for a definite change from 1s. 6d. to 1s. 4d. I take my starting point, as I have stated at the end of the statement from what we find actually there. I say, “In short, in matters of currency the real is the normal.” I therefore start from 1s. 6d. as the normal.