“In a word, my dear nephews, when my operations were concluded I found myself in possession of 200,000 pieces of gold, while my notes, which were everywhere received throughout the State, stood for 300,000 more. A simple calculation,” said the worthy old man, smiling, “will show you that my total new fortune was now no less than half a million pieces, when signs of economic exhaustion in the public and the complete healing of my leg reluctantly decided me that the time had come to seek fresh fields of effort and other undeveloped lands.”
As the merchant now puffed at his pipe in silence the fifth nephew begged leave to ask him two questions which had perplexed his youthful mind.
“Ask away, my little fellow,” said his uncle, kindly, “and I will attempt to explain any difficulty you have in simple terms suited to your age.”
“Well, uncle,” said the fifth nephew, humbly, “I cannot in the first place see how the 300,000 pieces of which you speak, and which as you say were represented by notes alone, constituted any real wealth.”
“My dear little chap,” answered his uncle, leaning forward to pat him upon the head, “you will have the intelligence to perceive that wherever such a note existed people thought of it as ten golden pieces, did they not?”
“Ye-s-s,” answered his nephew, feeling that he was getting cornered.
“Very well,” continued the old man, merrily, “this attitude of mind being common to the whole community, and all having come to regard these pieces of paper as so much money, I had but to receive them in payment of my debts and then to buy with them into the gold of others. Thus all the gold entered my possession. Eh? On my departure the outstanding notes were presented to the firm, I hear, and there was then no gold to meet them with. A sad state of affairs! Many clamoured and all sorts of trouble arose. But by that time I was far away.”
The little chap still looked puzzled. “But, uncle” he said, “when the people presented the notes after you had gone, they may have thought they had wealth, but they hadn’t any, had they?”
“I don’t know,” said the old man, after a pause. “It is a most difficult point in the discussion of currency.... I, at any rate, had been bold in the story I told, and got hold of their gold.”
“But the wealth wasn’t there, uncle,” persisted the little boy. “It wasn’t there at all!”