﻿THE FUTURE

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paper money only to the extent and for the duration
of its extraordinary requirements and thereafter ex-
ercise the same economy in expenditure that it would
have practiced under a system of taxation or fund-
ing, the expedient would be ideal in its simplicity and
economy. If the amount so issued even though for
legitimate purpose were so large as to cause infla-
tion and high prices there would result social in-
justice, and this consideration in itself might be
enough to disqualify the whole procedure. But in
so far as the Treasury is concerned — until such
time as the public expenditure had felt the full effect
of inflated prices — fiat money would be an ideally
easy and painless mode of supplying the exchequer.

As a matter of fact, however, demand notes if not
utterly discredited, at least rest under the gravest
doubt as a fiscal expedient by reason of the great
likelihood, attested by the experience of state after
state that has lapsed into their use, that once resort
has been had thereto all the old canons of economy
and prudence are gradually weakened and the Treas-
ury drifts insensibly into a course of unchecked and
wasteful expenditure. Issue succeeds issue; there
develops unwillingness to resort to taxation or fund-
ing and the descent to inflation and depreciation be-
comes swift and easy.	~

Theoretically, however, there need be no such
lapse. A state might issue demand notes within
strictly defined and inviolably maintained limits,
might exercise the most rigid economy in the dis-
bursement of the funds so provided, and might
within a reasonable season liquidate such issues from
out the proceeds of loans or taxes. The historic