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them fed and armed-that man is going to do more for this country than any ten thousand chaps in khaki who account for ten times as many Germans. In the first place, of course, we were faced with the problem of how to raise and train our armies. We solved that pretty well. Our next task was to raise money. We've done better than we expected. There's been an encouraging response. The future looks bright enough in that respect. But what people don't understand yet is that furnishing the government with money-even twenty billions of dollars-is only half, if it's even that, of what we've got to do."

"I don't fully understand," I interrupted. "If the government is given the money to spend, why can't it go out and buy what it wants and hire what men it needs?"

"Because," answered Morris, "the mere fact that we turned over to the government five billion dollars in the last Liberty Loan won't help us at all unless the government, in its turn, can exchange the money for the things we want-food, uniforms, guns, labor. The success of the loan merely means that five billion dollars will be credited to the government, and that the bank balances of the bond buyers will be debited by a similar amount. Raising money, by itself, won't raise a single potato more than we had before.

"Of course it's an elementary proposition, but people don't seem to get it through their heads. They think in terms of money when they ought to think in 251

terms of goods and labor. The American public has an idea that you can solve any problem by passing legislation and appropriating money. We vote a billion dollars for aeroplanes and destroyers, and then sit back comfortably with the idea that they're already bombing Berlin and sinking submarines. It's a delusion of grandeur. Congress can vote money until it's black in the face and yet accomplish nothing, unless the people supply what's really needed-the materials and the men.

"Now, where are they coming from? Remember that our mills and our mines are producing no more than heretofore and that two million men out of our thirteen million workers have been drafted. Let us assume that we, as a nation, have been obliged to produce for our efficient support a quantity of essentials we shall call x. Well, the government comes along and appropriates twenty billion dollars-practically all of which is to be spent in this country-to carry on the war. If, after it is raised, all the money is to be used for the purposes for which it was voted, we shall have to produce this year not only the quantity x, which we absolutely needed before, but also twenty billion more in goods and labor. Where is it coming from?"

"Preposterous!" I exclaimed. The proposition was simplicity itself, but it seemed utterly impossible of accomplishment. "It can't be done!"

"I don't know whether it can or not," replied Morris. "There are so many unknown factors in

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volved. There is the factor of accumulated surplus wealth-the factor of yearly saving in the past-for, of course, as a people we have always saved a proportion of what we have produced, only it isn't in a form that can help us much-houses, railroads, and so on. There is the great unknown factor of how far our ten million physically able women can and will take the place of men and how far the men who have hitherto been regarded as too old can be made useful.

"There is going to be a tremendous rejuvenation of the middle-aged. The age limit on railroads, for instance, will probably be pushed up five years. Old and decrepit men will be utilized for the ornamental sinecures, such as doorkeeping.

"Then there is the practically unknown factor of how much x really is and how much of our total annual production has been for non-essentials. It may be much larger than we think. And, finally, there is the unknown factor of how much we, as a people, can save over and above what we've saved before.

"Well, to make a long story short, it's a tremendous, staggering question; and the more people I talk to about it and the more I study it the less I am able to come to any conclusion as to what the task confronting us actually amounts to in billions. Congress has appropriated twenty billions of dollars for war purposes. Of this about five billion will go for soldiers' pay and similar objects, not requiring any production to meet them; but the balance of fifteen billion is to

be spent in the purchase and manufacture of war materials and in other ways requiring labor and production. Now, assume that the annual pre-war production of the United States was twenty-five billion, this will mean an added production of fifteen billion, or a total of forty billion, as against our previous twenty-five. How are we going to supply the materials and labor to meet this new and unprecedented demand? Well, first by extending and speeding up producing. We ought to be able to increase our annual production of goods and labor from twenty-five to thirty billion. That is only an increase of twenty per cent. But that leaves a deficit of ten billion! Where is it coming from? The only answer is that it must be saved! We must save forty per cent of the amount of our annual pre-war production of twentyfive billion-that is, we must deny ourselves and release to the government goods and labor amounting to about ten billions of dollars! Yet it is a sum larger than the human mind can comprehend.'

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"That is the basis of Mr. Vanderlip's thrift campaign and his saving certificates, isn't it?" asked Lord. "The theory is that if we lend the money to the government we shall have just so much less left to spend on ourselves, and so will have to go without. As you say, the banking transaction doesn't affect the economic situation. There isn't any more flour or labor now than there was before the Liberty Loan was floated. The important thing is going without the flour and labor-more important even than lending to the government the money we save by going without."

"That's it, exactly!" declared Morris. "It isn't the money that the government needs so much as the things-things and the labor to make 'em; and we can get those things and that labor by inducing idlers to work, accelerating or increasing production, or by saving. Now when all is said and done, practically the only way to enable the government to get the goods and the labor it needs is by going without them ourselves. As Blackett says: 'Every cent of private expenditure that is not really necessary for health and efficiency involves a diminution of the goods and services available for winning the war. Extravagance and waste are treason.'

"One thing is certain. The government may have all the money in the world at its disposal, but unless those who control the goods and labor will release them to the government, our boys over in France will

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