Gold depreciation accentuates the injustice of the present economic system of production and distribution in many ways; it causes prices to rise much faster than wages and salaries. It causes high interest rates and low prices for bonds and securities with fixed incomes; it causes land values to rise abnormally fast and thus results in giving the landlords of the earth a larger share of the world's goods; it causes wealth to concentrate even more rapidly than it would otherwise do; it makes business a gamble and increases speculation; it causes the cost of operation of railroads and of other public service corporations to advance more rapidly than rates and fares. In these and in many other ways gold depreciation increases unearned and, therefore, decreases earned increments. It is a most powerful revolutionary force in commerce, politics and society, and operates to increase discontent and radicalism.
Knowing of the injustice of our present economic system and seeing how this injustice was accentuated by gold depreciation, which was expected to continue for many years, I, nine years ago, in Moody's Magazine, made some predictions, about all of which have since been substantiated by facts. One of these was that, because of increasing costs of operation, the situation of our railroads would become so desperate that public sentiment would permit rates to be advanced. Another prediction was that the evils of gold depreciation would so disturb industrial and political conditions that overturns, wars, etc., would result.
Never, perhaps, in any previous period of the world's history were so many important, and frequently revolutionary, changes under way as at the present time. In former periods, we have had religious, political, governmental, commercial, financial and industrial changes at different times. To-day, that is, during the present decade, we see most important, even if sometimes silent, changes under way in all directions.
The present European cataclysm can not but result in great changes, governmentally and politically, and probably also industrially. Repudiation of debts, both public and private, is not only a possibility but a probability. Many European countries and cities were, by experts, considered to be hopelessly in debt at the beginning of the war. The billions and scores of billions of additional debts will almost necessitate repudiation. There is, in my opinion, only one possible escape from wholesale repudiation of public debt, at least by the losing countries, and that is through the public appropriation of the unearned increment from land. But the taking of land value for public purposes will depreciate land values to almost nothing, and will necessitate the repudiation of the billions of dollars of private and mortgage indebtedness in continental Europe, under the heavy load of which the masses of peasant farmers are now but little better than feudal slaves.
I hope that the Rockefeller Foundation, in its search for the causes
