Category: Book Quotes of the Day

One of the consequences of settling with the debtor countries on the capacity of each on to pay, not on the written contract, was that in negotiating their agreements they made of course in every case a statement of poverty. It would be only human. They were trading.

On that basis of calculation you could say that Great Britain settled for eighty cents on the dollar, France for fifty cents and Italy for twenty-six cents.

The settlements were criticized, by some on the ground that they were too lenient, by others on the ground that they were too hard, and by others on the ground that they were unequal. The cancellationists were most vocal, saying the settlements were too hard.

When we began to send man power into allied countries–no, we did not charge for that. We were charged for it.

We were charged for moving American soldiers across the sea in British ships; we bought pounds sterling with dollars and paid cash for that British service. We were charged port dues for landing ships in French harbors–ships bearing our own munitions and supplies; we bought French francs with dollars and paid cash for the right to enter.

“In no circumstances,” said Lord Balfour, “do we propose to ask more from our debtors than is necessary to pay our creditors, and while we do not ask for more, all will admit that we can hardly be content with less, for it should not be forgotten, though it sometimes is, that our liabilities were incurred for others, not for ourselves.”

This is as the news appeared in the New York Times on the morning of October 20: “The Bank of France, which has about $600,000,000 of short-term balances in this market, yesterday notified New York banks that the 1 1/2 per cent. rate of interest now being paid on foreign bank deposits by local institutions was unsatisfactory. The French bank of issue indicated that unless a higher rate was provided it would seek other employment for its huge dollar balances.”

Since the Dawes Plan took effect–since 1924, that is to say–Germany’s net payments on account of reparations, according to her own figures, have amounted to $2,350,000,000.

In the same time, still according to her own statistics, she has borrowed from other countries the incredible sum $3,750,000,000.

To any suggestion that the government shall set its printing presses free and flood the country with fiat money, all our economic intelligence reacts with no. Only those will say yes who are mentally or politically unsound. And if a government is obliged by vote of the unsound to do it, then everybody, including the unsound, will begin to hoard gold because gold is the one kind of money no government can make or dilute.

The problem is that so much credit, that is to say labor, is trapped, frozen, locked up in the world’s industrial machine, that people cannot afford to buy the whole of its product at prices which will enable industry to pay interest on its debt. This is perhaps the most involved from of pyramid that human ingenuity has yet devised.

It is believed that on Cheops alone 100,000 men were employed for twenty years. And when it was finished all that Egypt had to show for 600,000,000 days of human labor was a frozen asset.

Before the Committee on Finance of the United States Senate, the head of the second largest national bank in Wall Street, who represented also the most aggressive bond-selling organization in the world, appeared and said: “We are merchants. With respect to bonds generally, we are merchants.”