PAPER PRICES

QY

been increased, and eventually, when the continuous
depreciation became recognized, it became impossible
for the State to borrow at all. True that loans were
raised at first at lower rates of interest, but if the
depreciation was not to be permanent the lower
rate was counterbalanced by the larger amount which
had to be borrowed. True that to be pinched by
high prices rather than by small money incomes and
large taxes made the people rage in the first place
against the persons who were supposed to profit and
often did profit—most of them quite innocently—by
the rise of prices instead of against the Government,
but in the end the people came to the conclusion
that the Government was in league with the hated
*“ profiteers,” and political discontent began to boil,
and in some instances boiled over.
One advantage which was not foreseen or intended
was obtained. As the currency fell in value the real
burden of national debt contracted in that currency
diminished. The pre-war debt of the Austrian
government was reduced by the depreciation of the
krone caused by the War to one-fourteen thousandth
of its original gold value, and that of the German
government to the incredibly small fraction of one
billionth. In such cases bondholders are congratulated
 if they get a *“ compassionate allowancé *’ of 5 or
I0 p.c. Such a reduction of burden is a real advantage
 to the State in its corporate capacity, though
we may agree with Adam Smith that the advantage
is far more than counterbalanced by disadvantages
to the community. To cover up its own real insolvency
 the State involves millions of private persons
and institutions. Not only the State debts, but the
debts of local authorities, companies, and individuals,
are lightened to the debtors at the expense of their
creditors ; and not onl; cebts but all other obligations
 to pay fixed sums of money, such as the rents