cost the indebtedness of Europe to us just as we have to do with our ships?
In internal business we add nothing to our wealth by inflation. What is apparently gained is actually lost by subsequent deflation, as I have amply showed in these pages. We gain really only when we sell goods externally at inflated prices, buy nothing in exchange and accept promises to pay which become due after deflation has come about. In speculative transactions we might properly congratulate ourselves over such an outcome, but as the result of a joint defensive interest in a calamitous war, not so. The fact that the expenses of our associates were increased by our own dilatoriness, i.e., if we had gone earlier into the war it would have ended earlier, is also worthy of consideration.
We may come to the following conclusions respecting this debatable subject:
1. The writing down of the debt of 10 billion to five billion would be reasonable and fair.
2. The cancellation of the remaining five billion on the ground that we had made about that amount out of the necessities of Europe in 1915-1916 would be generous and chivalrous.
3. The total cancellation of the debt may be to our self-interest by bringing about an earlier economic readjustment.
4. A part of the debt we shall not be able to collect anyhow.
5. The part that we shall collect, if we insist upon it, will be slow in coming to us. There is no disposition to press for early payment, and certainly there should be no such pressure.
