Perth Amboy evening news., 1923-11-19
HASKIN'S
LETTER
EURoPE'S WEALTH CHANGES
BY Frederic j. Haskin

wealth tnrUuBnJuL all Eur 0pe. az
cording to obser ;ahons OF special
agents of the government who re-
Gently have returned from surveys
of conditions abroad.
This redistribution has been ac--
complished by the depreciation OF
Various types of REFORM
ers have for many years argued IN
favor of a leveling of wealth. Many
of them have contended that this
should be brought about by a d.
rect action, violent, Il necessary,
which would wrest great fortunes
from those who hold them and place
them in the hands of the working
people. Most OF them probably did
not hope to see such a leveling ac-
in their generation. Gers
tainly, none of them over expected
to see the result SO nca-ly accom-
pIlshed as it has been and no one
dreamed of the means by which the
miracle has been achieved.
That the thing has been achieved
in large measure, however, IS the
gist OF the reports brought back
from Europe after summer of in
vestigation there. To be sure many
great fortunes still exist, some In the
hands of those who were rich pc
fore the war and some in the hands
of war profiteerk, but these are ex-
ceptions to the general rule. Re-
the situation from a broad
economic standpoint the wealth has
been redistributed and leveled to an
degree.
The process has worked in an al
most mysterious manner and IN a
manner wholly unforeseen. Betore
the war many farms In Europe PROB
ably most farms, were encumbereo
by MORTGAGES representing money
which the farmers had borrowed IN
times of crop failure or low rilces'
Workers in industrial cities owed
debts of various sorts, the furniture
of MANY a small householder being
under a chattel mortgage to some
rich money lender. Bills were owed
to grocers, butchers, bakers, CANDLE
stick makers and all other sorts OF
tradesmen and hundreds OF thou
sands of poor people were stagger-
ing under a burden of debt Whlch
at times seemed intolerable. 1t was
this situation which encouraged the
radicals to talk about direct action
and the overthrow of established IN
stitutions in order to get rid OF in
iebtedness.
The landlords, the employers. the
rich people generally, were living
off the interest on the borrowed
money or were drawing dividends
from Industrial concerns, public util-
ties, and other users of accumulated
wealth.
Then came the war, followed by
he period of economic turbulence
In which the currencies deprecated
10 such extreme degrees. Every
one knows how the Russian ruble,
the German and Polish marks, and
the Austrian crown became bywords.
The French and Italian currencies,
and even for a while the stable old
English pound sterling, became
worth substantially less than par.
Here is where the leveling, the
redistribution of wealth occurred.
Suppose a German farmer borrowed
/ 900 marks on his farm. This was
a heavy mortgage for him to pear
and he had to work hard to pay the
interest, often with little hope OF
ever being able to repay th' prln-
cipal and get out of debt. Then
the mark began to go down in value.
At the same time the price Of 1000
the farmers chief product, began
to rise. 1t was not long before the
mark was worth but one-tenth OF
what it formerly had been. The
descent in values continued and,
simultaneously, the price OF farm
products went up.
1t was inevitable that the farmer
should seize this opportunity to pay
off his mortgage. He did so. lie
discovered that he could get enough
marks for a load of potatoes to lift
his whole burden of debt. On the
other hand, the capitalist, the man
who had been living off the mere In
terest on the mortgage. discovered
that he had to take all the marks
which the farmer repaid in order TO
purchase enough food for week.
The depreciation continued. Finally,
it reached such fantastic proportions
that the price of a single egg would
pay a heavy mortgage.
To be sure some of the capital
lists had made provision when they
lent their money that 1t must be r.
paid in gold but this was the ex-
ception because no one in the pre-
war days ever dreamed that the
mark would depreciate. Marks were
lent and marks had to be taken in
payment, unless there had been some
prearrangement for t. payment or
gold. Where such arrangements
had been made, the farmer was
little better off, save for the fact
that he was getting much higher
prices, even on a gold basis, for his
crops.
Scarcely anyone in lending money
stipulafes that it must repaid in
gold. A lender merely advances dol
lars because he has a firm conVlc-
ton that dollars will be just as good
fifty years hence as they are today.
The same idea was in the minds OF
zshe Germans who lent marks be-
fore the war.
therefore, wealth was leveled. The
thing of value was the farm land'
NOT the marks. The rich lender got
back his marks but found himself
moor because the marks would BUY
little or nothing. The poor farmer
still had his farm and had freed 1t
OF debt. Had not the farmer been
able to pay the mortgage before the
war. the lender could have taken
the farm away from him, but there
was no danger of that after the marx
became cheap. The real wealth,
therefore, passed from the hands OF
the rich capitalist to the farmer.
The same phenomenon took place
with all classes of poor people. Those
who worked with their hands on
farn, and in factory commanded real
wealth. Those who had been living
on The interest from money they had
LENT or invested found that when