38 
MONEY 
high commission for printing and maintaining such 
an issue, which is the proper description of what is 
done by the bank. 
That the issue of inconvertible paper was a broken 
reed for governments to lean on was not then nor 
for a long time so well recognized as it is now. It 
was a quick way of getting power to spend—much 
quicker than taxes and quicker than loans. By 
pouring out money at the central market for loans, 
commonly called the Money-market, it kept the rate 
of interest down, and so appeared to enable the 
government to borrow on better terms. By raising 
prices all round it increased the amount of *“ money ” 
saved by the people and therefore available to be 
borrowed by the government, and also increased the 
money yielded by income-taxes and ad valorem 
commodity taxes. Lastly, but not least important, 
it was supposed that if money incomesincreased, the 
people would be less discontented with a diminished 
amount of material well-being, which seemed to them 
to come from high prices, than they would be with 
that diminished amount of material well-being if it 
seemed to come from diminution of spendable money 
income. 
With the exception of the first, all these apparent 
advantages turned out delusive. True that some of 
the taxes and other revenues brought in more money, 
but they rose less rapidly than the expenses of admin- 
istration and of working state institutions like the 
Post Office and railways: the countries in which 
the growth of currency went farthest eventually 
found that revenue was meeting but a miserably 
small percentage of their expenses. True that more 
money could be borrowed at first, but the larger 
amount only bought as much of the commodities 
and services required by the State as the smaller 
amount would have done if the currency had not