paper, not with Cash. The Cash is always in the hands of those who extol the advantage of the Credit System. Who holds money holds power, and will hold it, until real barter or real money* comes in fashion again.
In 1919–1920, according to one of the best monetary authorities in the United States, the total shrinkage in values of the products of our fields, mines, factories, mills and forests represented a sum greater than the total gold supply of the world. It runs as high as the total amount of Liberty Bonds outstanding.
People say, “Well, the prices were too high.” Certainly they were too high, but who and what made them too high? It was the generosity with which money was supplied by the private Federal Reserve System. There was plenty of money. People say, “Well, the shrinkage is only in paper values; the real value of the product is still there.” Certainly, but when you live under a system in which “real” value and “money” value are so intimately intertwined that it affects your bread and butter, the tenure of your farm, and the steadiness of your job, it is pretty hard to separate the two. Moreover, when your prosperity was due to the readiness of a group of men to let out money, and your adversity is due to the unwillingness of the same group, and your own welfare and your country’s welfare is thus see-sawed up and down without any reference to natural law but solely upon determinations taken in committee rooms, you naturally inquire, “Who is doing this? Where is all the money gone? Who is holding it? Here is the wealth of the country; here is the need of the country; where is the money to transfer the wealth to the need? Every condition remains as it was, except money.”
We have a Federal Reserve System which still is benefiting by the assistance of its perfector and director, Paul M. Warburg. And what is the condition in the United States?