II

INFLATION AND DEFLATION

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in 1924 and double what it was in 1920; theYoung Plan would weigh on Germany muchmore heavily than the Dawes Plan , which itwas agreed she could not support; the in-debtedness to the United States of her associatesin the Great War would represent 40-50 percent more goods and services than at the datewhen the settlements were made; the obliga-tions of such debtor countries as those of SouthAmerica and Australia would become insup-portable without a reduction of their standardof life for the benefit of their creditors; agri-culturists and householders throughout theworld, who have borrowed on mortgage, wouldfind themselves the victims of their creditors.In such a situation it must be doubtful whetherthe necessary adjustments could be made intime to prevent a series of bankruptcies, de-faults, and repudiations which would shake thecapitalist order to its foundations. Here wouldbe a fertile soil for agitation, seditions, andrevolution. It is so already in many quartersof the world. Yet, all the time, the resourcesof Nature and men’s devices would be justas fertile and productive as they were. Themachine would merely have been jammed asthe result of a muddle. But because we havemagneto trouble, we need not assume that weshall soon be back in a rumbling waggon andthat motoring is over.