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[[underline]] April 1865 [[underline]]

blessing.

Now suppose that the inflation of currency just described was caused by the issue or descent of paper money upon the Island instead of Gold, each paper dollar passing in the Island for a gold dollar.  The effect would be exactly as [[strikethrough]] with [[strikethrough]] before described.  people would all be rich and cease to labor, the other Islands would send in their manufactures as before but there would be this difference.  To the Islander the paper dollar would be just as good as the gold one as long as he traded with his fellow countrymen, but the foreign traders could make use only of the gold as the paper dollar would not be recognized in their own country and so the gold would be drained off leaving the worthless paper.  But the Island being apparently rich the [[trading?]] Ilands would trust until some some sudden demand or panic [would reveal to the astonished [[end page]]

[[start page]]  [[underline]] April 1865 [[underline]]
people that their riches [[was?]] but paper their prosperity a dream.

^[[x]] Suppose now a third case and that is our own This paper money is made a legal tender and the gold becomes a commodity.  As before the country will seems very proserprous and the people rich as long as they trade among themselves but when foreign goods are required the trader finds that the money to purchase them must itself be bought and the expense is so great that trade is checked.  The gold is therefore retained in the country or at least does not go out as rapidly as in the preceeding case, but how great are the evils of the inflation Prices must grow higher and higher as the depreciation of the paper money increases. Creditors are paid in a  
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^[[x]] Such was the great crash of 18[[blank space]] which took place just as Father arrived in Europe and turned his attention to the philosophy of Finance and political economy.