Chapter III
The Touchstone of War
Let us try to get in narrow compass a picture of what has been happening in our commonwealth during the last few years owing to such methods, or, more properly, to such lack of method, and of how disastrous to many has been our failure to make an attempt at measurement. In the first place we have jointly issued national obligations, to the amount of over 23 billion dollars, which we have promised to repay in gold. Of this vast sum we have collectively very little left. Part of it has been credited to the owners of the goods and services we needed, and debited to various nations, some of which cannot possibly repay us. While we shall only get back a small portion of this amount into our Treasury, and as a nation shall get back nothing of the large amount which was wasted owing to the necessity of haste, nevertheless we are pledged to pay back in gold every cent to those who lent us their credit with which to wage warfare. They did not lend us gold, for we know that there was not more than a fraction of that amount of gold in existence. We credited them with so-called value and rashly agreed to return gold instead. Putting this transaction in other terms, as stockholders in a financial institution we jointly endorsed and accepted as deposits the inflated credit instruments of individual stockholders, and our directors agreed to make good these optimistic acceptances in gold at a later date. Then, as stockholders, we voted to ratify and hold ourselves fully responsible for the acts of our directors, assuming full stockholders’ liability, as we quite properly should if we elect that kind of director, and take pride in such expansion of doubtful paper assets and definite bullion liabilities. Now a smaller Bank than the United States Treasury, doing business upon this basis, would be promptly closed up by a
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