Activities 1931 1939 World Crises and Policies in Britain and America 2nd Ed. Edition Keynes Complete Edition
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Activities 1931 1939 World Crises and Policies in Britain
and America 2nd ed. Edition Keynes Digital Instant
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Author(s): Keynes, John Maynard
ISBN(s): 9781139524209, 1139524208
Edition: 2nd ed.
File Details: PDF, 28.87 MB
Year: 2012
Language: english
THE COLLECTED WRITINGS OF
John Maynard Keynes (1883—1946) was without doubt one of the most influ-
ential thinkers of the twentieth century. His work revolutionised the theory
and practice of modern economics. It has had a profound impact on the
way economics is taught and written, and on economic policy, around the
world. The Collected Writings ofJohn Maynard Keynes, published in full in
electronic and paperback format for the first time, makes available in thirty
volumes all of Keynes's published books and articles. This includes writings
from his time in the India Office and Treasury, correspondence in which he
developed his ideas in discussion with fellow economists and correspondence
relating to public affairs. Arguments about Keynes's work have continued
long beyond his lifetime, but his ideas remain central to any understanding of
modern economics, and a point of departure from which each new generation
of economists draws inspiration.
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JMK and J. C. Smuts, World Economic Conference, 1933
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THE COLLECTED WRITINGS OF
JOHN MAYNARD KEYNES
VOLUME XXI
A C T I V I T I E S 1931-1939
WORLD CRISES AND POLICIES IN
BRITAIN AND AMERICA
EDITED BY
DONALD MOGGRIDGE
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© The Royal Economic Society 1982, 2013
www.cambridge.org
Information on this title: www.cambridge.org/9781107650107
A catalogue record for this publication is available from the British Library
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CONTENTS
Acknowledgements 602
Index 603
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GENERAL INTRODUCTION
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GENERAL INTRODUCTION
himself had always taken a joy in fine printing, and the Society,
with the help of Messrs Macmillan as publishers and the
Cambridge University Press as printers, has been anxious to give
Keynes's writings a permanent form that is wholly worthy of
him.
The present edition will publish as much as is possible of his
work in the field of economics. It will not include any private
and personal correspondence or publish many letters in the
possession of his family. The edition is concerned, that is to say,
with Keynes as an economist.
Keynes's writings fall into five broad categories. First there
are the books which he wrote and published as books. Second
there are collections of articles and pamphlets which he himself
made during his lifetime (Essays in Persuasion and Essays in
Biography). Third, there is a very considerable volume of
published but uncollected writings—articles written for news-
papers, letters to newspapers, articles in journals that have not
been included in his two volumes of collections, and various
pamphlets. Fourth, there are a few hitherto unpublished writ-
ings. Fifth, there is correspondence with economists and those
concerned with economics or public affairs. It is the intention
of this series to publish almost completely the whole of the first
four categories listed above. The only exceptions are a few
syndicated articles where Keynes wrote almost the same material
for publication in different newspapers or in different countries,
with minor and unimportant variations. In these cases, this
series will publish one only of the variations, choosing the most
interesting.
The publication of Keynes's economic correspondence must
inevitably be selective. In the day of the typewriter and the filing
cabinet and particularly in the case of so active and busy a man,
to publish every scrap of paper that he may have dictated about
some unimportant or ephemeral matter is impossible. We are
aiming to collect and publish as much as possible, however, of
the correspondence in which Keynes developed his own ideas
viii
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GENERAL INTRODUCTION
in argument with his fellow economists, as well as the more
significant correspondence at times when Keynes was in the
middle of public affairs.
Apart from his published books, the main sources available
to those preparing this series have been two. First, Keynes in
his will made Richard Kahn his executor and responsible for
his economic papers. They have been placed in the Marshall
Library of the University of Cambridge and have been available
for this edition. Until 1914 Keynes did not have a secretary and
his earliest papers are in the main limited to drafts of important
letters that he made in his own handwriting and retained. At
that stage most of the correspondence that we possess is
represented by what he received rather than by what he wrote.
During the war years of 1914-18 and 1940-6 Keynes was
serving in the Treasury. With the opening in 1968 of the records
under the thirty-year rule, the papers that he wrote then and
between the wars have become available. From 1919 onwards,
throughout the rest of his life, Keynes had the help of a
secretary—for many years Mrs Stephens. Thus for the last
twenty-five years of his working life we have in most cases the
carbon copies of his own letters as well as the originals of the
letters that he received.
There were, of course, occasions during this period on which
Keynes wrote himself in his own handwriting. In some of these
cases, with the help of his correspondents, we have been able
to collect the whole of both sides of some important interchanges
and we have been anxious, in justice to both correspondents,
to see that both sides of the correspondence are published in
full.
The second main source of information has been a group of
scrapbooks kept over a very long period of years by Keynes's
mother, Florence Keynes, wife of Neville Keynes. From 1919
onwards these scrapbooks contain almost the whole of Maynard
Keynes's more ephemeral writing, his letters to newspapers and
a great deal of material which enables one to see not only what
IX
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GENERAL INTRODUCTION
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GENERAL INTRODUCTION
Donald Moggridge, and it has been their task to trace and
interpret Keynes's activities sufficiently to make the material
fully intelligible to a later generation. Elizabeth Johnson has
been responsible for vols. xv-xvm, covering Keynes's earlier
years and his activities down to the end of World War I
reparations and reconstruction. Donald Moggridge is respon-
sible for all the remaining volumes recording Keynes's other
activities from 1922 until his death in 1946.
The record of Keynes's activities during World War II is now
complete with the publication of volumes XXII-XXVII. It now
remains to fill the gap between 1922 and 1939 with three
volumes of which this is the third; to print certain of Keynes's
published articles and the correspondence relating to them
which have not appeared elsewhere in this edition, and to
publish a volume of his social, political and literary writings.
Those responsible for this edition have been: Lord Kahn,
both as Lord Keynes's executor and as a long and intimate friend
of Lord Keynes; able to help in the interpreting of much that
would be otherwise misunderstood; the late Sir Roy Harrod as
the author of his biography; Austin Robinson as Keynes's
co-editor on the Economic Journal and successor as Secretary of
the Royal Economic Society. Austin Robinson has acted
throughout as Managing Editor; Donald Moggridge is now
associated with him as Joint Managing Editor.
In the early stages of the work Elizabeth Johnson was assisted
by Jane Thistlethwaite, and by Mrs McDonald, who was
originally responsible for the systematic ordering of the files of
the Keynes papers. Judith Masterman for many years worked
with Mrs Johnson on the papers. More recently Susan Wilsher,
Margaret Butler and Leonora Woollam have continued the
secretarial work. Barbara Lowe has been responsible for the
indexing. Since 1977 Judith Allen has been responsible for much
of the day-to-day management of the edition, as well as seeing
the volumes through the press.
XI
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EDITORIAL NOTE
Xlll
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Chapter i
THE CURRENCY QUESTION
Once the flurry surrounding Britain's departure from the gold standard was
over, Keynes settled down to what for him was a very quiet autumn. Except
for spending the first half of October assembling Essays in Persuasion (JMK,
vol. ix) from his writings of the previous twelve years, Keynes remained aloof
from public controversy, publishing nothing of a popular sort in the last three
months of the year. However, this does not mean that he was completely
inactive or without influence.
As soon as Britain left gold, the authorities began to consider the
appropriate currency policy under the new circumstances. At one level, the
Prime Minister appointed an Advisory Committee on Financial Questions
consisting of R. H. Brand, Walter Layton, Lord Macmillan, Sir Josiah
Stamp and H. D. Henderson. Sir Arthur Salter joined the Committee at the
end of September. At another level, the Treasury began to consider
alternatives to the gold standard and an appropriate exchange rate for
sterling. Keynes soon became involved at both levels.
The route by which he became involved started with a letter from Sir
Frederick Leith-Ross of the Treasury.
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ACTIVITIES I 9 3 I - I 9 3 9
consider that France and America and other countries should take, and have
not taken, to operate the gold standard fairly. Do you think that you could
do something on this? -. . ,
Yours sincerely,
F. W. LEITH-ROSS
My dear Leith-Ross,
I should be delighted a little later on to let you have my ideas,
both in writing and by word of mouth. There are a good many
possible alternative schemes and I am not at the moment very
clear in my own mind which I prefer. Also there are two rather
separate problems:—
1. The question as to what general plan we ought to be working
up towards;
2. The right order of procedure, and what point is best tackled
first.
I am turning over both problems in my mind and I am at your
service as soon as I feel ready to express myself.
Yours sincerely,
[copy not initialled or signed]
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THE CURRENCY QUESTION
we will now be brought to see the errors of our ways. They are somewhat
apprehensive as to the effects of our abandonment of the gold standard on
other currencies and central banks, but they are convinced that the brunt
of the difficulties will fall on us. They are exceedingly surprised that we accept
the present position of sterling with such a light heart, and they appear to
be genuinely afraid that if we are not careful, sterling may become a
speculative counter, and in that case they believe that its depreciation might
be very rapid and become unmanageable. The net effect is that there is a
general readiness to help us to hold sterling and to get back to the gold
standard as soon as possible, but this attitude may easily be modified if it
appears that we are not doing our best to restabilise and in that case there
might easily be a new flight from sterling.
I do not mean that the central banks would sell sterling if they can help
it. But the fall in the gold value of sterling has, of course, entailed heavy
losses to all the central banks which kept sterling balances and they are very
sore about it. This experience may have serious effects in so far as it discredits
the gold exchange standard and induces a general stampede from foreign
divisen into gold. There is no doubt that this is one of the elements in the
present wholesale export of gold from America, though during the past
fortnight the movement has been reinforced by fear as to the position of the
dollar if a policy of credit expansion is to be embarked upon. The Americans
are now busily engaged in denying that any such policy is in contemplation.
Thus conditions at present do not seem to me very favourable to the
initiation of any conversations for better international co-operation on the
gold standard, and I fear that the French influence will be used as far as
possible also to persuade the Americans to unite themselves with French
policy rather than with the sort of policy that we have been advocating. It
is, therefore, desirable that we should get our programme prepared, so that
we can put it forward if and when a suitable opportunity occurs.
Yours sincerely,
F. W. LEITH-ROSS
My dear Leith-Ross,
I am interested to hear what you say about the French
attitude. I am not at all disposed to differ from what I take to
be your attitude of some scepticism as to the utility of an
international currency conference at the present stage. To
3
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ACTIVITIES 1931-1939
some extent I think the demand for a conference is an overrun
from the state of affairs which existed just before we went off
gold. Today the situation is quite a new one, and, as I said before,
I find it difficult to make up my mind just what to do. But I
agree that it is very probable that matters are not yet ripe for
an international conference and that little could result from such
a gathering.
But have you considered the possibilities of an Empire
conference? I am rather inclined to think that that might be
the first step to take. All except Canada and South Africa have
followed sterling; which gives them an interest if not a right in
considering the future of sterling. Canada is half off, and one
wonders how long South Africa will last. There might be great
advantages in trying to concert, in the first instance, [a] common
empire policy, and to establish a reputable sterling system for
the Empire, before proceeding further afield.
I hope to get my ideas into writing sooner or later and will
then send them on to you. ,. . .
Yours sincerely,
[copy initialled] J.M.K.
Before Keynes put pen to paper for Leith-Ross, he did try his ideas out
elsewhere. The first occasion was in a long letter to Walter Case setting out
the general situation as he saw it.
My dear Case,
I think the point has now come when it might be useful that
I should give you a general report on the situation as I see it.
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