The first edition of Keynes' important work on inter-war monetary policy, which attacked the gold standard as a 'barbaric relic' (p.172). Scarce in the original dustjacket.

A Tract on Monetary Reform was written during a period of general economic instability in Europe, with the Weimar Republic experiencing a prolonged bout of hyperinflation, and many countries muting a return to the gold standard. The work continues the discussion begun in the Economic Consequences of the Peace on the effect of changes in price levels on the distribution of wealth.

For most of his professional career, Keynes subscribed to the quantity theory of money — that is, that increases in the supply of cash leads to a proportionate rise in prices. The present work developed the case for a managed currency, arguing that the Bank of England had sufficient tools available to achieve stability in prices by adjusting its policies in regards to interest rates and its capacity to manage banking reserves.

'To return to the gold standard would mean giving priority to stability in the exchange rate and the external value of the currency over its internal value and forcing inflation or deflation on the economy if prices rose or fell in other countries. The report of the Cunliffe committee in 1918 in favour of an early return to gold at the pre-war parity, adopted as official policy, belonged to "an extinct and almost forgotten order of ideas" and spelt inevitable deflation and unemployment. Earlier Keynes had proposed pegging to gold at the current (devalued) rate and allowing the rate to appreciate if, as he expected, there was a gradual fall in the price of gold. The Bank of England, through its control over bank rate and the banking system, would seek to maintain price stability and fix buying and selling prices each week at the same time as it fixed bank rate. The exchange rate would then change at intervals, not float freely, as happened later' (ODNB).

First edition; 8vo (22.5 x 15 cm); 2pp publisher's ads to rear, slight offsetting and spotting to endpapers; publisher's blue cloth, spine lettered in gilt, minor wear, in the original buff-paper jacket, old bookseller's ticket to inner flap, extremities a little chipped and frayed, small dampstain to lower cover, very good; [2], viii, 209, [1], 2[ads]pp.

Moggridge A5.1