Europe is willing to
mortgage its future to us on terms very advantageous to us; but when the
future comes, the purchasing power of money will probably be so much
lessened as to have absorbed all our advantage. Probably we shall lose
slightly on the whole. But it is not economically impossible that there
will be a net gain. In either case the net effect will, I believe, be
small.
Of more importance will be the various effects on various classes.
Certain people will be greatly benefited by the rise in food prices and
the fall in security prices. The farming classes will profit by the
former; the investing classes by the latter. Those who have the good
fortune to belong to both classes will grow rich. The farmer who is in a
position to save money will both make more money to save and be able to
invest it more advantageously after he has saved it. If he lends to his
neighbors he will find the market rate of interest high. Even if he buys
more land the purchase price will be restrained from the great rise we
might expect from the prosperity of farming by the fact that the "number
of years purchase," as the phrase is in England, will be small, or, in
other words, that the interest basis, which enters into every land
price, will be high.
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