Chapter V Positive Suggestions for the Future Regulation of Money
A sound constructive scheme must provide—if it is to satisfy the arguments and the analysis of this book:
I. A method for regulating the supply of currency and credit with a view to maintaining, so far as possible, the stability of the internal price level; and
II. A method for regulating the supply of foreign exchange so as to avoid purely temporary fluctuations, caused by seasonal or other influences and not due to a lasting disturbance in the relation between the internal and the external price level.
I believe that in Great Britain the ideal system can be most nearly and most easily reached by an adaptation of the actual system which has grown up, half haphazard, since the war. After the general idea has been exhibited by an application in detail to the case of Great Britain, it will be sufficient to deal somewhat briefly with the modifications required in the case of other countries.