nd James wish to borrow it. John, by his honesty, his property,
and good reputation, offers security. He _inspires confidence_; he has
_credit_. James inspires little or no confidence. It naturally happens
that Peter lends his plough to John.

But now, according to the Socialist plan, the State interferes, and says
to Peter, "Lend your plough to James, I will be security for its
return, and this security will be better than that of John, for he has
no one to be responsible for him but himself; and I, although it is true
that I have nothing, dispose of the fortune of the tax-payers, and it is
with their money that, in case of need, I shall pay you the principal
and interest." Consequently, Peter lends his plough to James: _this is
what is seen_.

And the Socialists rub their hands, and say, "See how well our plan has
answered. Thanks to the intervention of the State, poor James has a
plough. He will no longer be obliged to dig the ground; he is on the
road to make a fortune. It is a good thing for him, and an advantage to
the nation as a whole."

Indeed, it is no such thing; it is no advantage to the nation, for there
is something behind _which is not seen_.

_It is not seen_, that the plough is in the hands of James, only because
it is not in those of John.

_It is not seen_, that if James farms instead of digging, John will be
reduced to the necessity of digging instead of farming.

That, consequently, what was considered an increase of loan, is nothing
but a displacement of loan. Besides, _it is not seen_ that this
displacement implies two acts of deep injustice.

It is an injustice to John, who, after having deserved and obtained
_credit_ by his honesty and activity, sees himself robbed of it.

It is an injustice to the tax-payers, who are made to pay a debt which
is no concern of theirs.

Will any one say, that Government offers the same facilities to John as
it does to James? But as there is only one plough to be had, two cannot
be lent. The argument always maintains that, thanks to the intervention
of the State, more will be borrowed than there are things to be lent;
for the plough represents here the bulk of available capitals.

It is true, I have reduced the operation to the most simple expression
of it, but if you submit the most complicated Government institutions of
credit to the same test, you will be convinced that they can have but
one result; viz., to displace credit, not to augment it. In one