274. J. M. Keynes to Harrod , 30 December 1932 [a]

[Replies to a letter not found; follows on from 273 ]

as from 46, Gordon Square, Bloomsbury # [b]

30 December 1932

Dear Roy,

I think I took your point. But my difficulty is that the same argument would prove that if I save £1 this will diminish imports by £1 and (presumably) cause an inflow of £1 in gold. In my lingo the failure of Lancashire to sell cotton causes a diminution of foreign investment which means (as I now put it) a diminution of disbursement. But it is impossible to say, without many further data, what the ultimate effect of this will be on the foreign balance. In any case there is no reason to suppose that the reduction of imports will be equal to the diminution of disbursement.

I come back to London next week. Will you come to tea on Sat. Jan. 7 <at> 4.20 [1] to talk over this and Cole's letter?

Yours ever


I see that you do not want to keep Cole waiting. My inclination would be definitely to say Yes. Cole has two souls in quite separate compartments and I agree that this is the reasonable one. [2] Also people of the left must not be too suspicious of one another. [3]

One small point--I think you ought to stipulate for not less than 3 guineas a thousand, as a trade union rate. The figure proposed simply encourages Gollancz in his policy of sweated labour for authors and vast sums into the pockets of advertisers.

  1. 1. Keynes's diaries (in JMK PP/41) actually register this appointment, which indicates that Harrod accepted the invitation.

    2. Keynes had remarked on a previous occasion that "Socialism has two heads and two hearts which are always at war with one another": "The Dilemma of Modern Socialism", Political Quarterly III:2, April-June 1932, p. 155 (in Keynes, Collected Writings, vol. XXI, p. 33).

    3. G. D. H. Cole's letter was not found. However, Keynes's reference to Gollancz in the following paragraph suggests that Cole had invited Harrod to contribute to his What Everybody Wants to Know about Money (Harrod, "Currency and Central Banking", 1933:13 ). It should be noted that all nine contributors were members of the New Fabian Research Bureau (E. F. Durbin, New Jerusalems, 1985, p. 144), thus explaining Keynes's remark on the "people of the left".

    1. a. ALI, two pages on one leaf, in HP II-26. Reproduced by kind permission of the Provost and Scholars, King's College, Cambridge.

      b. "as from" was handwritten in front of the printed address.

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