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Supposing
The supposing game is, usually, a poor miserable makeshift as the suppositions almost always fail to become facts. The economics situation confronting Canada and the present time lends itself to the game however.
During the war Europe took from this continent surplus goods valued somewhere about $17,000,000,000 which have not been paid as yet. The net result has been a dislocation of the financial and economic limbs of the economic body. To set these limbs again so that free movement can take place, appears to be the job of the financial sharps, banking magnates and economies of every ilk. The microbe, so far, has been isolated, so that these doctors are at a loss what cure to try.
The USA during 1919, exported another $4,000,000,000 of dollars without payment. Now, suppose that Europe gathered up all her gold and shipped it to the USA to pay her debts as far as the gold would go. What would be the position? The boss of the Federal Reserve Banks, in making his report last month, said that the USA had about $3,350,000,000 of the total world’s gold which he places at six billion dollars. Europe would then have all her money on a paper basis that is it would all be inflated money. Then the USA would have no use for this gold for modern commerce, since the yellow metal is now only used for selling trade, national balances.
Now, let us again suppose that the bankers and the statesman and diplomats should get together in a peace conference and wanted to set capitalism on its feet once more. They could, being in this case (putatively) sensible me, do one of two obvious things, the simplest of which would be to divide up the gold among the different trading nations on a per capita basis, repudiate all debts, public and private, and having thus purged their economic systems of the inflation, set to work to produce goods for exchange for profit. The large scale industries owned by the big capitalists would then come into their own again.
But national ambition and emulation would soon bring up antagonisms among the great powers, that is to say that, those powers strong enough to break the peace. A League of Nations would then be a necessity. There should also be a uniform coinage, uniform weights and measures, and the sheriff’s writ should run in any country under the sun to collect the new debts under uniform laws and procedure. An international police force recruited from among the delinquents of the leisure class would never shrink from maintaining law and order.
Again, supposing that the rules of the game, as they at present exist, are religiously followed out, that the shrewd business men who are captains of industry, give credit only where a good balance of asserts can be shown over liabilities and in other cases distribute the assets and write off the losses in their ledges. Where then will the world’s trade stand? The answer is that it would stand just where it stands now.
The debts are so enormous that there is not a country in Europe that can pay for its interest at home and abroad, pay for the excess of imports over exports which must last at least until these countries reach the full tide of production and pay the exchange rate which always goes with an adverse balance of trade. The game is so loaded against Europe that there is much better chances of China, Japan, South America and Africa succeeding in trade and commerce than of Europe being able to come back.
Then, supposing that this takes so long a time, that the United States and Canada are compelled to suffer an enormous decrease in the production of the farms the mines, the mills and the factories, what is going to happen? Can we decrease production so that home consumption equals production without asking the Bolsheviks in to help us to set up a new plan of house keeping?
Page revised: 3 August 2013
