Washington and the Riddle of Peace

by H. G. Wells

Far more serious, from the point of view of the future, than the destruction of either things or lives, are certain subtler destructions, because they strike at that toil, that courage and hope and confidence which are essential to any sort of recuperation.

And foremost is the fact of debt, everywhere, but particularly in the European countries. All the billions worth of material that was smashed up and blown to pieces on the front had to be bought from its owners and to secure it every belligerent Government had to incur debts. Lives cost little, but material much. The European combatants are overwhelmed with debts, every European worker and toiler, every European business man, is a debtor; every European enterprise goes on under a crushing burden of taxation because of these debts. An attempt has been made to shift this unendurable burden from the victors to the vanquished, but the vanquished already had as much as they could carry.

Now when first mankind began to experiment with money and credit the lot of the debtor was an intolerable one. He might become the slave of his creditor, he might be subjected to imprisonment and frightful punishments. But it was early discovered that it was not to the general advantage, it was not even to the advantage of the creditor, to drive the debtor to despair. Processes of bankruptcy were devised to clear him up, get what was possible from him and then release him to a fresh start and hope.

But we have not yet extended the same leniency to national bankruptcy because national insolvencies have been rare. And so we have whole nations in Europe so loaded with debts and punitive charges that every worker, every business man, will be under his share in this burden from the cradle to the grave. He will be a debt serf to the domestic or foreign creditor and all his enterprises will be weighed and discouraged by this obligation. Debt is one immense and universal discouragement now throughout all Europe.

But even that might not prevent the recovery of Europe. There is yet another and profounder evil in operation to prevent people “getting to work” to reconstruct their shattered economic life. That is the increasing failure of money to do its work. Europe cannot get to work, cannot get things going again, because over a large part of the world the medium of exchange has become untrustworthy and unusable. That is the immediate thing that is destroying civilization in the Old World.

We have to remember that our whole economic order is based on money. We do not know any way of working a big business, a manufactory, a large farm, a mine, except by money payments. Payment in kind, barter and the like are ancient and clumsy expedients; you cannot imagine a great city like New York getting along with its industrial and business life on any such clumsy basis. Every modern city, London, Paris, Berlin, is built on a money basis and will collapse into utter ruin, as Petersburg has already collapsed, if money fails. But over large and increasing areas of Europe money is now of such fluctuating value, its purchasing power is so uncertain, that men will neither work for it, nor attempt to save it, nor make any monetary bargains ahead.

Such a thing has never occurred to anything like the same extent in all history, and it is killing business enterprise altogether and throwing whole masses of working people out of employment.

Europe without trustworthy money is as paralyzed as a brain without wholesome blood. She cannot act, she cannot move. Employment becomes impossible and production dies away. The towns move steadily toward the starvation that has overtaken Petersburg and the peasants and cultivators cease to grow anything except to satisfy their own needs. To go to market with produce, except to barter, is a mockery. The schools are not working, the hospitals, the public services; the teachers and doctors and officials cannot live upon their pay, they starve or go away.

This state of affairs has been brought about by the reckless manufacture of paper money by nearly every European Government; we can measure their recklessness roughly by comparing their pre-war and post-war exchanges. It is only now that we are beginning to realize the enormity of the disaster which this demoralization of money is bringing upon the world.

We have weakened the link of cash payments, which has hitherto held civilization together, to the breaking point. As the link breaks, the machine stops. The modern city will become a formless mob of unemployed men and the countryside will become a wilderness of food-hoarding peasants—and since the urban masses will have no food and no means of commanding it, we may expect the most violent perturbations before they are persuaded to accept their fate in a philosophical spirit.