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 congratu- 
lated if they get a *“ compassionate allowancé *’ of 5 or 
I0 p.c. Such a reduction of burden is a real advan- 
tage 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 insol- 
vency 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 obliga- 
tions to pay fixed sums of money, such as the rents