This paper is based on ideas originally developed in a paper in 1957 (J.S.S., 15, 1). In seeking to reintroduce and expand these principles at the present time the author has a variety of motives, some of which, it is hoped, will commend themselves to the Institute. Although attracting little attention at the time, and indeed essentially repudiated by the 1959 Radcliffe Report, the monetarist approach which it adopted has since become more respectable, so that (especially since one of its central contentions, as to the causes and likelihood of inflation, has been verified by subsequent events) it is hoped that there may now be a greater measure of general agreement with the principles put forward. Perhaps more important, the conduct of the United Kingdom's financial affairs is still, it may be judged, based on methods little changed from the time of Radcliffe, though an advance has recently been made in the administrative control of money supply.