Time Will Run Back

by Henry Hazlitt

  He was in bed, in a bare room flooded with sunshine. Standing at his side was a tall dark-haired girl, dressed in white, beautiful and smiling.

  She stroked his head. “You had us all so worried, Your Highness.”

  “Where am I?”

  “You mustn’t talk. You’re in the Peter Uldanov Hospital. You’ve been unconscious for nearly three days.”

  He started to say something, but she put her finger to his lips. “The air raid is all over. They did a lot of damage, but Secretary Adams says there was nothing fatal.... Yes, the Secretary is fine. The whole White House fell on you, chief, but Echo—I mean—Adams, was dug out without even a scratch. One of those freak things.... Secretary Adams is running the war. He says you’re not to worry about a thing.... The head doctor insists you’re not even to think about the war until he says you can.”

  “How long... will that be?” His voice sounded strange to him. It tore his throat apart to talk.

  She put her finger over his lips again. “You shouldn’t try to talk, chief. You’ll have to be a very good patient. Let us worry. All we want you to do is to relax, forget things, and get well.”

  She turned away from the bed. His eyes followed her graceful movements.

  “Now, we’ll try to get some nourishment into you. This is orange juice. Does that sound good?” All he could see distinctly was the front end of a bent glass tube that she deftly slid between his lips. His swallowing was painful, but the orange juice was wonderfully satisfying. “Now you’re to take a little sip of this.” It was some tasteless fluid. He fell asleep....

  When he awoke the nurse was bending over him. What a wonderful smile she had!

  “I dozed off for a few minutes....”

  She laughed. “You’ve been asleep for fifteen hours! That medicine I gave you did it. The night nurse has been here and gone. We’ll get some breakfast into you right away.” She slipped the glass tube in his mouth again. He liked the soft touch of her fingers against his lips.

  He glanced down at the bed. His whole body was in plaster casts—head, neck, back, legs. He was moved and turned by ropes and pulleys, like a marionette.

  “I look ridiculous.”

  “You look very nice.” She smiled. “And you shouldn’t talk for a while yet.... I’m your day nurse. You probably guessed that. My name is Edith Robinson—”

  “Edith?”

  “Yes... is there anything surprising...? “

  He finished his liquid breakfast and dozed off again....

  Everyone was in a conspiracy of silence. No one told him how the war was progressing. He was kept so continually doped with anesthetics and sleeping tablets that he couldn’t even keep track of his own pains. Every day the doctors, Edith Robinson and the other nurses told him he was doing fine. Every day Adams would call and tell him the war was going along fine and he was not to worry about a thing.

  “Nurse Robinson!”

  “Yes?”

  “Do you mind if I call you Edith?”

  “I should consider it an honor, chief.”

  “You know, I’m usually addressed as ‘Your Highness.’ “

  “I know.... I heard Echo—sorry, Secretary Adams—call you ‘chief,’ and it seemed much more friendly. I didn’t mean to be disrespectful. You know we’re very fond of you, chief.”

  “We?”

  “Yes. All of us in Freeworld.”

  “Oh.”

  He was silent for a while.

  “Did I hear you calling Secretary Adams ‘Echo’? “

  “I’m sorry, chief. That’s a nickname. A newspaper gave it to him. I guess it’s only recently....”

  “How did he ever get that?” “Well, it’s short for Secretary of Economics. And then... a lot of people think he just echoes your opinions and policies and that he’s just acting for you now. I don’t really think most people intend to be unfriendly when they use it. Secretary Adams doesn’t mind. He jokes about it... he’s a darling.”

  “Oh, he is?” He was surprised to hear a touch of resentment and jealousy in his own voice.

  Three months went by before the last cast was taken off. He found himself gradually walking again, though with crutches. He was told he could leave the hospital if he agreed to take at least another three months for convalescence.

  He consented to be taken back to his home in Bermuda, provided Nurse Robinson went with him. A doctor, two other nurses and three servants went along.

  The island was even lovelier than he had remembered it, and the sea more incredibly blue.

  His strength came back in little jumps. He found himself walking again, without crutches.

  Edith Robinson read to him in the long evenings. He began to taste for the first time some of the cultural fruits of his new system. As his reforms had brought a lessening of terrorism in the Western Hemisphere, a handful of old bourgeois books, saved by a few courageous ancestors and their descendants from the all-consuming bonfires, had emerged.

  What had been uncovered so far were the works of only three of the ancient bourgeois authors—a William Shakespeare, a Jane Austen, and a Miguel Cervantes. The books were of course all in dead languages, but scholars had patiently deciphered them, and they were now available in Marxanto—or rather in the resemanticized Marxanto that was gradually taking its place. Edith Robinson and Peter first went through the novels of Jane Austen and found them fountains of pure delight. To save the works of these authors, Peter reflected, though they carried no particular political message, men and women had risked torture and the lives of themselves and their children, on the bare possibility that these works might one day again be brought to light. Men could not have shown their courage, he felt, in a better cause.

  But sometimes, as she read to him, his mind would wander from the substance of what she read, and he would find himself listening to her voice itself, to its soft tone, or watching her graceful movements and her neat figure. He found himself making comparisons. This new Edith was so straightforward, so candid, so sure of herself. What he would have given to see that look of independence in the eyes of the shy, fearful Edith he had lost!

  And then he thought: It is not really the difference between two women I am seeing; it is the difference between two worlds!

  After ten weeks on the island, Peter was strong enough to sit down to his piano again. As he played Haydn, Mozart, Bach, Brahms, Schubert, Edith Robinson sat entranced.’ “It seems a pity, chief. A man with your gifts—a man who can play as beautifully as you—wasting his time in politics!”

  This peaceful life was almost enough to cause him to forget the war. But never quite. With each new surge of strength he felt also a new surge in his sense of responsibility. At the end of fourteen weeks he said to the doctor: “If you try to hold me here for more than another week, I will no longer follow your orders.”

  He cabled Adams that he would return the next week to take over.

  That evening, after she had finished reading to him, Edith said: “The doctor tells me you want to go back.” Her eyes were cast down. For the first time she was not looking straight at him or smiling.

  He placed one hand on her shoulder, raised her chin with the other, and looked into her eyes: “I want to tell you, Edith, how much your care has meant to me. You have been a wonderful nurse.... You know, you’d make some man a wonderful wife “

  Suddenly he knew that he was in love with her, and that the man he was thinking of was himself.

  Adams had conducted the purely military operations of the war with brilliance. Already the forces of Freeworld had regained a foothold in Ireland. They were widening it, and establishing and maintaining air bases. They had captured the initiative.

  But at home Peter found the economic situation chaotic, and a threat to further military progress. Prices of most things had nearly doubled. Other prices were at their old level, but in these cases the goods were scarce or unobtainable. Essential war production had actually been brought to a stop at some points because of unbalanced ou
tput or bottlenecks. As a whole, war production methods seemed inexcusably wasteful.

  Peter tried to find out the reasons for all this for himself, and then asked Adams for his own explanation.

  “Let’s begin with money,” said Peter. “Where are all the gold coins? They seem to have disappeared completely, and now I find only paper certificates ‘entitling’ the holder to a gold coin which he can’t in fact get.”

  “That came about by a series of steps,” Adams said. “I really think the present arrangement is a great improvement. First of all, it seemed to me unsafe in wartime to leave gold coins in the hands of the public.”

  “Why?”

  “Well, they might hoard them.”

  “Did they?”

  “No; but they might have started to at any time. Gold is a war resource, and all war resources should be in the hands of the government.”

  “Go on.”

  “Well, first of all it struck me as illogical, chief, to have gold coins stamped as to their weight and fineness merely by a private goldsmith. That didn’t seem to me to give enough assurance to those who were offered the coins. The reputation of the stamper might be merely local, or not warranted; and the receiver might be compelled to make his own assay—”

  “But, in fact,” broke in Peter, “wasn’t the business of stamping gold coins being done more and more by just a few well-known firms, like Lloyd’s and Morgan’s? And wasn’t that precisely because these firms did have a Freeworldwide reputation for care and integrity, and because their coins therefore had a wider and quicker acceptability?”

  “I just don’t feel,” said Adams, “that the stamping of money can be left to private hands. The maintenance of a sound and uniform currency seems to me obviously a governmental function—”

  “Go on.”

  “So I called in all the coins to be re-assayed, reweighed, melted down and re-stamped with the government’s own stamp. This made a completely uniform—and incidentally, I think, a much handsomer currency. I hired first-rate artists—”

  “Go on.”

  “Well, after I had got the new coins all stamped, it seemed to me ridiculous to turn them all back to their owners, who might only hoard them instead of putting them to use. Gold is a weapon of war, and ought to be enlisted for the duration.”

  “Go on.”

  “So it occurred to me that all I really had to do was to let the people who had turned in their gold coins keep the receipts for them! The receipts represented the pledged word of the government itself. There’s nothing better than that, of course; so all I had to do was to make the receipts transferable—”

  “Go on.”

  “I wish you wouldn’t keep interrupting me just to tell me to go on!” “Go on.” “So what I did was to let the receipt holders turn in their receipts for a freely transferable receipt, payable not to a specific person but to ‘bearer.’ And I must say, I think I made these receipts very durable and good-looking. They were on an expensive paper, skillfully and beautifully engraved, so that they could not be easily counterfeited—”

  “And they promised to pay the actual gold on demand?”

  “Precisely! They were just like a warehouse receipt! Only of course I issued an order, chief, that no one could get the actual gold until after the war was over.”

  “I see. No one was entitled to get his own property back until you said so.”

  “I am actually protecting that property, chief, better than the owners could themselves. I am having enormous underground vaults built in the middle of the continent, near Winnipeg, which will be guarded by troops day and night.”

  “In other words, you are putting all your eggs in one basket. So that Bolshekov’s paratroopers would only have to go to one place with the assurance of getting all our gold instead of having to extract it from each of 200,000,000 persons, each with his own hiding place.”

  “I can’t accept that argument. I—”

  “Go on.”

  “Well, it didn’t take me many weeks to learn that a shooting war is a very expensive business, chief. I needed money and needed it quick; so I hit upon a marvelous way of solving the problem!”

  “Yes?”

  “I simply issued more of the engraved warehouse receipts for gold!”

  “Against what?”

  “Against nothing. What did it matter? People couldn’t get the gold anyway! And the new warehouse receipts circulated as money just as freely as the old, and at parity with them.” “Particularly as you made their acceptance at that rate compulsory.”

  “Of course.”

  “What would happen, Adams, if at the end of the war every holder of this paper money were to turn it in for gold?”

  “I don’t think he will. Why should he? The paper circulates just as well as gold, and is just as acceptable. And it’s lighter and handier to carry. We don’t need a 100 per cent gold backing, because there will never be a 100 per cent turn in.”

  “No doubt if there were 100 per cent gold backing,” said Peter, “and everybody knew it, you would be right in saying that there would never be a 100 per cent turn in. People wouldn’t bother to ask for gold as long as they knew they were certain to get it.”

  “Precisely!” exclaimed Adams. “Don’t you see what a wonderful economy I’ve achieved? I’ve hit upon a wonderful new monetary technique, comparable, if I may presume to say so, to your own discovery of the free enterprise system!”

  “Just a moment,” continued Peter. “It is true that people wouldn’t ask for gold as long as they knew they were certain to get it. But they would start asking the moment they felt there was any doubt about their getting it. You yourself know this. Otherwise you wouldn’t have forbidden people to ask for their gold, or refused to pay it out. Now the minute you issue, say, 200 claims to goldgrams against only 100 actual goldgrams, and the people know that this is the situation, then every holder will know that only the first hundred claims can be honored; so everyone will rush to be among that first hundred, and your marvelous new technique will collapse.”

  Adams was silent for a few minutes. “I simply had to raise money,” he said at last.

  “Don’t you think it was dishonest to issue claims for gold against nonexistent gold?” persisted Peter. “If a private individual did that, you would throw him in jail as a cheat and a swindler!”

  Adams looked deeply hurt. “I don’t think the two cases are comparable. The government has the taxing power and can use it to get whatever resources it needs to meet its obligations after the war. We have to win this war, and get money in the quickest way we can. And besides, maybe we could turn this whole gold thing into a sort of fiction. What good is gold, anyway? You can’t eat it. Why should people want it instead of paper, which circulates as money just as well?”

  “On that argument, you can deprive the people of anything on the ground that they are irrational in wanting it.”

  “But isn’t the desire for gold merely a silly superstition—?”

  “I’m not going to waste time arguing the alleged irrationality of other people’s wants,” cut in Peter sharply. “I’m simply going to point out to you the practical effects of what you have actually done. Prices of goods have nearly doubled—”

  “Because of the scarcities of goods brought about by the war,” said Adams.

  “That’s what I thought you would say,” Peter answered. “But that’s only true of a few specific commodities. It’s only a very small part of the general explanation. People can’t offer more money for all goods unless they have more money to offer. Let’s get back to what I assumed we had both learned several years ago. What is a ‘price’? It is a relationship between the value of a commodity and the value of the monetary unit. If the monetary unit is a gram of gold, then the so-called ‘price’ of an article is the relationship between the value of that article and the value of a gram of gold. If, other things equal, an article gets scarcer, its price will go up. But if the article gets no scarcer at all, but the supply of
monetary units increases, then the price of the article will also go up—because the value of the monetary unit, in which the price is expressed, has gone down!”

  “You mean,” said Adams, “that every price really reflects two things—not only the value of the particular commodity priced, but the value of the monetary unit in which it is priced?”

  “Exactly,” said Peter. “Every price is a ratio between two values.”

  “That’s a rather ingenious way of looking at it!”

  “It’s not ingenious at all,” said Peter, spurning the compliment. “It applies to all measurement. When I say that the length of a yard is three feet I am merely talking about a ratio between a foot and a yard, and that ratio won’t remain unless both lengths remain what they are. Let’s say this office is twenty feet wide, and next week you issue an order saying that hereafter the foot is only six inches long. Then the office becomes forty feet wide, though it hasn’t grown a bit.”

  “That’s not a bad idea,” said Adams, grinning. “It would be a way of making all rooms seem larger.”

  “And in the same way, cheapening the value of the monetary unit, Adams, is a way of making everybody’s income seem larger. And fools are fooled by it. Now look what you’ve really done. You’ve about doubled the quantity of money outstanding. And therefore you’ve about doubled the prices of goods, because the value of the monetary unit is not much better than half its previous level. If you increase the supply of wheat, you lower the value of each individual bushel of wheat. Now there is another way of doing the same thing. You can sell ‘short’ in the speculative markets wheat that you haven’t got to deliver, and therefore you can temporarily increase the apparent supply of wheat on the market and temporarily depress its price. Or you can issue certificates and call them the equivalent of a bushel of wheat, and force everybody to take them as such.”

  “But I’ve raised money for the government; I’ve raised money to conduct the war!” protested Adams.

  “And you did it in such a way,” said Peter, “as to kick around economic relationships, to cheat people dependent on fixed monetary incomes, and to reward and penalize people without relationship to their real productive contribution or lack of it. And so you’ve helped to throw discredit on the profit-and-loss system that we made possible at the risk of our lives....”