that they must cultivate a spirited and venturesome policy during the transition period from war to peace, now heard a good deal. This action of theirs really had a good deal to be said for it. Credit expansion created for the Government's use is, except as a purely temporary measure, bad and cowardly finance, because the Government is not engaged in production and so fresh money made for it cannot, from the nature of the borrower, lead to the making of fresh goods to restore the balance between goods and money, and so is certain to swindle all owners of the money already existing. But when credit made for Government is paid off and the banks' balance sheets are to that extent cleaned and lightened on both sides, it is not necessarily a bad thing for new credits to be given by the banks to private borrowers because there is a good chance that most of the new money will be used in enterprise and production, and this is especially so at a time of abounding trade prosperity when producers are making big profits. By this process deflation of credit is certainly defeated, but on the other hand trade is kept active and the fall in prices which was the object of the deflation is produced in a much more satisfactory manner by an increase in goods accompanied by no increase in money, since the
