Sect, ii ADJUSTMENT AND REVIVAL 73
out the fundamental cleavage between inflationary and deflationary
policies that divided the Conference and prevented it from adopting
any coherent plan of economic reform. The distinction was more
sharply drawn in the discussions that took place in the Monetary
Commission. Mr. Chamberlain initiated a general debate by moving
a resolution on the lines of his opening speech.1 The most cordial
support for a policy of raising prices by keeping money cheap came
from the British Dominions, and from other primary producing
countries. On the other hand, Trance and others claimed that, while
cheap money was essential, the main obstacle to a rise of prices was
the hoarding of capital, which only a restoration of confidence could
undo. Without stable currency, said Monsieur Bonnet, there could
be no lasting confidence. 'Who would be prepared to lend, with the
fear of being repaid in depreciated currency always before his eyes ?'
This division of opinion was repeated in the discussion on inter-
national indebtedness. Mr. Chamberlain denied that, pending a
general rise in world prices, there was any need for a permanent
reorganization of either short-term or long-term debts. He was
speaking to a Rumanian motion calling for governmental aid in
the establishment of creditors' organizations, which should con-
clude agreements with the debtors for a reduction of their debts,
'based on the capacity of payment and transfer of the debtor coun-
tries, and having due regard to the fall in prices of their principal
exports'. This approach to the problem found its most vigorous
opponent in Sir Henry Strakosch (India), who declared that if the
Conference called for a permanent reduction of debts it would be
exposing belief in its own failure. The way to lighten debts without
destroying credit was to raise prices. Eventually, a resolution on
indebtedness was passed, laying down no principles that had not
been generally acknowledged before,2 but recommending the forma-
tion of national creditors9 committees wherever they did not already
• exist.
Oddly, it was in the other Monetary Sub-Commission, wjaich dealt
with the working of the gold standard and the operations of central
banks, that there was outwardly the greatest measure of agreement
in the Conference. The sub-committee on permanent measures'
passed not only tHe Pittman resolutions on the restoration of exchange
stability,3 but also a resolution on the operation of the gold standard
admitting the undesirability of having gold coins or gold certificates
in circulation, and suggesting that 25 per cent, was a sufficient
1 See above, p. 50. 2 See the Survey for 1932, Part I, section (iii).
3 See above, p. 50.