D4 
MONEY 
analogous circumstances. There is, too, no mystery 
about the method by which the government can get 
possession of most of the gold in the country. With 
the proceeds of taxes and loans it can buy up all 
that is not current coin, and the current coin can be 
extracted from the pockets and tills of the people by 
printing a convenient paper legal-tender substitute 
and making all payments in it, while retaining all 
coin received. The coin which is in the cellars of 
banks can be commandeered, and the new paper 
given in exchange for it without causing any financial 
crisis or disturbance. 
This can be done without issuing more of the new 
currency than there existed of the old, and conse- 
quently the change from a gold to a paper unit of 
account—say from a gold pound or sovereign to a 
paper pound or Bradbury—need not involve any 
depreciation against either gold or commodities and 
services in general. But the European belligerents 
in the late War, without a single exception, issued or 
allowed and encouraged their banks to issue a great 
deal more paper legal-tender than this. It is well 
to understand exactly how and why this came about. 
Sometimes when peace is profound and currencies 
are perfectly healthy, something starts a general 
wave of optimism which makes large numbers of 
people buy and promise to buy more goods and 
services than usual under the impression that ““ busi- 
ness is likely to be good ”’; in other words, that they 
will be able to sell more without reduction and perhaps 
with an increase of price. There is a “ boom,” and 
the ““ producers ” (it would be more accurate to say 
the community thinking of itself as a seller) feel very 
prosperous. Soon, however, it is recognized that 
selling much at “good *’ prices is accompanied by 
having to buy at prices which are only “good ” to 
the seller but are “shocking ” to the buyer, while