and the debauches and exactions of the peace, has been
the object of much comment, with the emphasis laid on the aspects rather
than on the essential characteristics of the breakdown.

One of the basic assumptions of the present economic order is that
promises to pay must be redeemed at par. Failing in this redemption, the
promisor is declared bankrupt, and beyond the pale of reputable business
society.

During the past eight years, most of the leading countries of Europe
have become bankrupt. Before the World War, the sixteen principal
belligerents had total debts of 28,660 millions of dollars, with a total
note circulation of 5,000 millions, making a total of promises to pay
amounting to something more than 33 billions of dollars. When the Treaty
of Paris was signed, these sixteen countries reported debts of 171,633
millions of dollars and paper money issues of 77,954 millions, making a
total of promises to pay about eight times the volume of 1913. Since the
signing of the Treaty, most of the European countries, belligerents and
neutrals alike, have continued to pile up obligations. According to the
estimates of O.P. Austin, of the National City Bank of New York, world
indebtedness was 43 billions of dollars in 1913, 205 billions in 1918
and 400 billions in 1921. ("Our Eleven Billions," R. Mountsier. Seltzer.
1922. p. 43.) A point has now been reached where the French, Russian,
Italian, German, Austrian and Hungarian debts are equal to at least half
of the total estimated national wealth. When it is remembered that most
of this wealth is in private hands, and heavily encumbered with private
mortgages; that the cities have issued enormous numbers of bonds against
the same wealth, and that even though the wealth were in public hands it
could not be liquidated for anything like its estimated value, it must
be apparent that the capitalist world--particularly that part lying in
Central Europe--has put itself into a position where its governments
cannot meet their promises to pay.

Nor is this the worst. The war experience taught European government
officials that it was possible to make money and pay debts with the aid
of printing presses. The rapid increase in prices, and the unwillingness
of the owning classes to pay for the war by means of a capital levy,
placed the governments in a position where the ordinary expenses, plus
the costs of the war, the interest on the war bonds, the costs of
reparations and other extrao