Transcriber’s Note: Italic text is enclosed in _underscores_; boldface text is enclosed in ~tildes~. BY THE SAME AUTHOR INDIAN CURRENCY AND FINANCE. Pp. viii + 263. 1913. ~7s. 6d.~ net. THE ECONOMIC CONSEQUENCES OF THE PEACE. Pp. vii + 279. 1919. ~8s. 6d.~ net. A TREATISE ON PROBABILITY. Pp. xi + 466. 1921. ~18s.~ net. A REVISION OF THE TREATY. Pp. viii + 223. 1922. ~7s. 6d.~ net. A TRACT ON MONETARY REFORM [Illustration] MACMILLAN AND CO., LIMITED LONDON · BOMBAY · CALCUTTA · MADRAS MELBOURNE THE MACMILLAN COMPANY NEW YORK · BOSTON · CHICAGO DALLAS · SAN FRANCISCO THE MACMILLAN CO. OF CANADA, LTD. TORONTO A TRACT ON MONETARY REFORM BY JOHN MAYNARD KEYNES FELLOW OF KING’S COLLEGE, CAMBRIDGE MACMILLAN AND CO., LIMITED ST. MARTIN’S STREET, LONDON 1923 COPYRIGHT PRINTED IN GREAT BRITAIN PREFACE We leave Saving to the private investor, and we encourage him to place his savings mainly in titles to money. We leave the responsibility for setting Production in motion to the business man, who is mainly influenced by the profits which he expects to accrue to himself in terms of money. Those who are not in favour of drastic changes in the existing organisation of society believe that these arrangements, being in accord with human nature, have great advantages. But they cannot work properly if the money, which they assume as a stable measuring-rod, is undependable. Unemployment, the precarious life of the worker, the disappointment of expectation, the sudden loss of savings, the excessive windfalls to individuals, the speculator, the profiteer--all proceed, in large measure, from the instability of the standard of value. It is often supposed that the costs of production are threefold, corresponding to the rewards of labour, enterprise, and accumulation. But there is a fourth cost, namely risk; and the reward of risk-bearing is one of the heaviest, and perhaps the most avoidable, burden on production. This element of risk is greatly aggravated by the instability of the standard of value. Currency Reforms, which led to the adoption by this country and the world at large of sound monetary principles, would diminish the wastes of _Risk_, which consume at present too much of our estate.