STOCK EXCHANGE AND AMERICAN BUSINESS 491
extent, therefore, can a government stamp off fiat currency or
bonds—beyond this point lies only economic chaos, social dis-
ruption, and the disintegration of government.?
Many sincere citizens of this and other countries have al-
ways had and perhaps will always have the curious idea that in
these matters there is no limit to the powers of government,
and that by some magical process government officials can in-
definitely increase currency or issue any amount of its debt
obligations simply by printing them, without regard for such
dull and meaningless details as gold redemption, sinking fund
requirements, or debt service charges. The many extraor-
dinary economic diseases which arose after the war among
many European governments—diseases which were largely
due to this childlike faith in the unlimited power of govern-
ments to disregard the immutable principles both of economics
and of common sense—have provided a wealth of laboratory
material for scientific economists.
Marketing the Public Debt.—Tt is, of course, no detriment
for a nation to remain moderately in debt year after year—on
the contrary such a practice, if sanely limited, has certain salu-
tary results. It was not, however, until the late seventeenth
century that statesmen discovered this fact, and also the prac-
tical methods whereby this debt could be made interest-bear-
ing, split up into small amounts represented by government
bonds, and sold to individual investors. Since that time, how-
ever, this practice has been resorted to by practically all civilized
governments. As an inevitable result, organized security mar-
kets have sprung up all over the world where these evidences
of the government debt could be bought and sold, and thus
given the negotiability and reliable public quotation essential
to the best investments. The chief reason responsible for the
creation of almost every great stock exchange in the world, in
the first instance at least, was to assist the government in main-
taining its credit and the negotiability of its debt. In the case
"See Chapter I. p. 3
