“Not necessary,” said Kokintz. “The wall is six feet thick. To withstand cannon balls. There are no cannon balls these days and one stone taken out does no damage to it at all.” “Look here,” said the Count. “There must be something of which you stand in immediate need and which we could order for you right away.”
Kokintz reflected solemnly.
“There is,” he said. “I would be very grateful for about ten bags of marbles ...”
Mountjoy, without waiting for the rest of the sentence, swept out of the study.
3
“MONEY,” said the Count of Mountjoy, “far from being the root of all evil, as the vulgar suppose, represents a tremendous and touching expression of national and international faith and completely refutes the arguments of those cynics who maintain that world peace and prosperity are impossible because man is by nature distrustful, hostile, and conniving.”
“We must abolish all taxes and leave the workingman with a full pay envelope for the first time in the history of this country,” said Mr. David Bentner, leader of the Labor party of Grand Fenwick and therefore of the party in political opposition to Mountjoy.
Mountjoy ignored him. At this critical meeting of the Privy Council of the Duchy he was not going to argue politics with the tenacious and short-sighted Bentner.
“It follows,” said Mountjoy, “that whoever destroys the value of money destroys the most precious possession of humanity—faith. He destroys the basis of all trade, the basis of all security, the basis of all government and the basis of all civilization.”
“A full pay envelope and an end to taxation to support the
wealthy,” said Bentner doggedly. “That’s my stand and I'm sticking to it.”
“The destruction of money, in short,” said Mountjoy, “means the destruction of faith. And the destruction of faith means an end to government and to civilization and the reemergence of barbarism.”
“The money belongs to the workingman,” said Bentner, not to be diverted by Mountjoy’s soaring phrases, “and it must be given to him direct by a remission of taxes and a bonus at Christmastime—I’d say a five-hundred-shilling bonus for every family in the Duchy. Election coming up in spring,” he added thoughtfully.
“Mr. Bentner,” said the Count of Mountjoy severely, “I’m going to ask you a question which I think will make clear to you truths which are hidden from you at the present time.” He took a slim gold wallet from the inside pocket of his morning coat and extracted from it a Grand Fenwick ten-shilling note.
“Now,” he said, holding out the note for Bentner and the other members of the Privy Council to see, “what is that?”
“Ten-shilling note,” said Bentner.
“Worth?” asked the Count.
“Ten shillings,” said Bentner.
“And why is it worth ten shillings?” asked Mountjoy.
“That’s easy. Printed right there on the face,” said Bentner.
“Excellent,” said Mountjoy. “Whatever is printed on the face of the note—that is the value of the note?”
“Right,” said Bentner.
“Who says?” asked Mountjoy.
“Government, of course,” said Bentner. “Her Grace”— bobbing his head in her direction—“they’re her notes. Leastways they’ve got her picture on them. She says they’re worth ten shillings or whatever is printed on the face of them and that’s good enough for me.”
“In short,” said Mountjoy, “you, all of you here and all in
Grand Fenwick, accept a piece of engraved paper as being worth ten shillings because you believe it is worth ten shillings. It is an act of faith on our part. Faith makes it worth ten shillings—faith alone.”
“Pays a farm laborer’s rent for one week and no more,” snapped Bentner dourly. “Milk’s ten pence a pint and going up too,” he added.
“Supposing,” said Mountjoy, “I were now to dump six million ten-shilling notes into the Duchy—divide them up among all the families in Grand Fenwick. That would give” —he scribbled for a while on a sheet of paper—“about six thousand ten-shilling notes to each head of a household in Grand Fenwick. Do you think then that a farm laborer would be able to rent a cottage for ten shillings a week?”
“Don’t see why not,” said Bentner, a little uncertain.
“You underestimate yourself,” said Mountjoy sarcastically. “I am sure you can appreciate that if ten-shilling notes have become as plentiful as pennies, no landlord will put a cottage to rent for a week for so miserable a sum as ten shillings. He will want twenty or thirty or forty shillings.”
“What’s wrong with that?” asked Bentner. “If everybody has lots of money, it won’t make any difference.”
“What happens to the wages of a man who is earning, say, forty shillings a week?” countered the Count.
“He’ll have to have more,” said Bentner. “And I and my party will see that he gets more,” he added aggressively.
“Ah,” said Mountjoy. “But suppose the value of what he produces to sell abroad—wine or wool—is less than the wages he is being paid to produce it—what then?”
Bentner opened his mouth a couple of times to reply and then lapsed into frustrated silence, conscious that the Count had once more encouraged him to run full tilt down a blind alley.
“The known saying should be amended to ‘The abuse of money is the root of all evil,’ ” said the Count of Mountjoy, addressing the Council at large. “And money is abused when it is made so common as to lose its value, or when its relation to production becomes so erratic that the public loses confidence in it, which is really the same thing. Faith is the essence of monetary value, and when faith is destroyed, economic anarchy is at hand.”
“Look here,” said Bentner, who had recovered from his setback. “Nobody is advocating taking six thousand i^n-shilling notes and giving them to the head of every household in the Duchy. All I’m asking is that taxes be abolished for a couple of years so that the workingman can have the full benefit of his labor in his pay envelope.”
“Mr. Bentner,” said Mountjoy, “far be it from me to counsel you on next year’s election since we are of opposite political persuasions. But if nobody in the Duchy is paying any taxes at election time next spring, how do you expect to interest the voters in your party’s program?”
Bentner relapsed into silence again.
Mountjoy addressed himself to Gloriana. “I had not wished to bring this problem before Your Grace’s Council without having a solution to propose,” he said. “I do not deem it the function of my office to produce problems without solving them. I regret that I have but a partial solution to put before you to the present problem of this unwarranted surfeit of money, though I have reviewed all the historic methods of dealing with unwanted money surpluses employed by other nations.”
“You mean we are not the first nation in history to have too much money dumped on us?” asked Gloriana.
“Not by any means, Your Grace,” said Mountjoy. “The problem has been common to the United States of America, for instance, since the end of the Second World War. It is a problem which democracies in particular have difficulty in solving, though the older monarchies were well able to cope with it. The extravagances of the court and the aristocracy in Tzarist Russia and Royalist France, for instance, could be relied upon to get rid of all the surplus money in the kingdom and much which was by no means surplus—without ruining the national fiscal system. Alas, with democracies the task is not so easy, for there is no select group into whose hands the surplus funds can be channeled without damage to the nation’s banking and trade.”
“What do the Americans do with their surplus money?” asked Gloriana, intrigued.
“First they collect it into the government coffers by taxation,” said Mountjoy. “They are the most adroit nation in the world in devising taxes. A nation which came into being in a rebellion against taxes has become the Machiavelli of the politics of taxation. The money, taken out of the hands of potent
ial spenders in the amount of billions of dollars a month, cannot then be spent by the government itself in the United States. That government is then at the point at which we ourselves now stand—confronted with a surplus of money and the problem of getting rid of it without returning it to the economy.
“Their situation, however, is less difficult than ours. A nation of such size and power and prestige in the world can give away large quantities of money in various foreign-aid programs which may improve matters abroad, may make others friendly toward the United States—though that result has not yet become manifest—but will certainly get rid of the greater part of the embarrassing money surplus without it getting back into the national economy.”
“Just a minute,” said Tully Bascomb. “If these gifts of money abroad are in dollar credits, then the dollars will surely eventually find their way back into the United States.” “True,” said Mountjoy. “But there is huge wastage in the process. And there is a very beneficent time lapse between the time when the money is sent abroad and the time it gets back. It comes back slowly, and during the interval various measures can be undertaken to improve the economic picture at home.”
“Meaning more taxes,” said Bentner.
“Usually meaning more taxes,” said Mountjoy.
“Couldn’t we have some kind of foreign-aid program?” asked Gloriana. “What about the Irish? Nobody’s done anything for them for centuries. WThy not just give them a million dollars with our very best wishes—at Christmas?” “Better not to meddle,” said Mountjoy. “Such a gift might hint at an alliance between the Republic of Ireland and the Duchy of Grand Fenwick which would seriously disturb the six counties of Northern Ireland which still remain loyal to William of Orange.”
“William of Orange?” cried Gloriana. “He’s been dead since the early eighteenth century.”
“Quite so,” said Mountjoy. ‘*But he still rules in British Ireland. No, it’s best not to think of a foreign-aid program. Whatever benefits might result would be offset by international entanglements which we, as a completely neutral nation, cannot afford.”
“What else do the Americans do?” asked Gloriana.
“They use the slow-down method,” said Mountjoy. “They collect, say, two hundred billion dollars in the tax year, spend a hundred billion abroad either on goodwill or warfare, and rely on there being quite a while before that money trickles back again into their own economy. Then they use government bonds with a fixed interest rate which cannot be cashed for a stated period—this mops up surplus currency. Also they undertake vast government projects at home. For instance, the United States has the biggest civil service known to man —more people at higher wages for perhaps less work than has ever before been achieved. This, though roundly cursed by the taxpayer, constitutes a tremendous protection for him for it represents a huge money-absorbing machine, which sucks up billions and allows them to drip back into the economy only slowly. Cries for economy in government are really pleas for a vast national disaster, though few realize this. Any American President or Congress who cut the budget in half would send the nation into an inflationary spiral from which it might never recover.
“The Americans have, moreover, one further weapon which is denied us and is the master tool of capitalism. And that is an increasing number of products. With more and more things to buy on the market every day, there are more and more outlets for the spending of money, and the relationship between dollars and produce is kept relatively stable, In our case, however, our national product is fixed in both variety and quantity. But our national revenue has soared as a result of these terrible earnings from chewing gum. Thus here in Grand Fenwick, if this money is allowed to get into the hands of our people, the price of everything will soar, which is another way of saying that the value of our pound will fall disastrously. In essence there must be a steady and fixed relationship between produce and money or money becomes of less and less use until trade has to be conducted by barter.”
“You mentioned that you have a partial solution/’ said Gloriana. “What is it?”
“I think we can reduce taxes from twelve to eight percent and make up the deficit out of these American funds. Then we can insist that Dr. Kokintz spend two hundred thousand dollars on equipment for himself whether he needs it or not. If we ordered very expensive scientific paraphernalia from America (it will serve them right to get their dollars sent back) and then have it sent here by common freighter and uninsured, there is a very good chance that it will be so hopelessly damaged by the time it arrives that Dr. Kokintz will not have to bother with it, since he doesn’t want it in the first place. We could also air-condition the whole castle. But I have to confess that after going into the whole problem as fully as I am able, I find we will still have about six hundred thousand dollars left over with no method in sight by which it may be got rid of.”
He paused and then continued gravely. “I have to warn Your Grace that this is only the beginning of future troubles which may, alas, destroy that complete independence and neutrality which we have fostered in this country for six hundred years. Our profits from the chewing gum were one million dollars this year. Next year they may be two millions. The year after five. And what are we to do in those circumstances I cannot envisage.”
“We will have to give that chewing-gum factory and all our rights in the manufacture of the chewing gum away,” said Tully. “That is obvious and we must start to work on that immediately.”
“We could just close it down, couldn’t we?” asked Gloriana. “Haven’t we the right to do that?”
Mountjoy shook his head. “We can neither give it away nor close it down for ten years,” he said. “Under the original agreement, to protect the investment of the American lessees, we gave them a guarantee that they would have the right to manufacture and sell the gum for twenty-five years, and our contract with them runs for that period.”
“What fathead cooked that one up?” asked Bentner, who very much disliked these lectures by Mountjoy.
“It was cooked up, as you put it, between the United States Secretary of State, Her Grace, Duchess Gloriana XII, and myself as her chief adviser,” said Mountjoy. “It was approved by the Senate of the United States and our own Council of Freemen.” He turned to Bentner and added smoothly, “Quite a number of fatheads, as you see, had a hand in the affair.” Bentner ignored that. “Do you mean to tell me that we are bound by international treaty to make and sell this gum in the United States?”
“That is so,” said Mountjoy. “The terms were incorporated in the Treaty of Peace between ourselves and the Americans. Such a provision is not so uncommon,” he said, turning to the Duchess. “The peace treaty for Austria at the close of World War Two deals with the staffing of the police department and the fire brigade in Trieste.”
“Maybe we are overlooking a very obvious solution,” said Tully. “Why not just leave the money in the United States in a bank or invested in bonds? Surely there’s nothing that demands that we bring it to Grand Fenwick and flood the country with it?”
“We can’t do that because we could never keep it secret,” said Mountjoy. “The funds would mount enormously for we can expect tremendous profits each year. The time would inevitably arrive when news of our dollar holdings would be made public and our people would come to realize that the government was the possessor of the wealth of Midas. The demand that the people themselves be allowed to share in that wealth either in whole or in a generous part would prove irresistible. And we would then be ruined.”
“Look here,” said Bentner, “I don’t agree with that. I say let us take this money and apply the whole of it to tax relief. Let us abolish income tax and every kind of tax in Grand Fenwick. Why not, if the money’s available? Why should people have to pay taxes?” He had been scribbling on a scratch pad on the table before him and he said, “With the money we have coming now we could abolish income tax in Grand Fenwick for three years. And with what comes in next year, we could abolish it for three years mor
e. In fact, we could probably abolish income tax in our country for all time. And that’s what I say should be done. Use the money for running the country and let the workingman have a full pay envelope for the first time in his life.”
“I’m inclined to agree with Mr. Bentner,” said Gloriana. “And I too,” said Tully. “Let’s use the money to abolish taxes.”
“This will be a grave mistake,” said Mountjoy. “I am firmly of the opinion that unless people make a money contribution to their government, they will lose interest in their government. They will not care how money is spent or how policies are followed since their own purses are not involved.” “Let us try it as a half-measure at present,” said Gloriana. “Let us announce to the people the receipt of this money. I think it wrong to withhold the information from them—and let us propose in the Council of Freemen when Mountjoy presents his new budget that all taxes be immediately reduced by fifty percent, with the prospect that they will be entirely eliminated in the future if the financial situation warrants.”
A vote was taken and proved to be three to one in favor of this solution.
4
THE Council of Freemen of Grand Fenwick was one of the most ancient parliamentary bodies in Europe. It readily predated the famed House of Keys on the Isle of Man and was modeled wisely on the British Parliament with its upper house composed of the Lords both Spiritual and Temporal, and the lower house, or Council of Freemen, the elected representatives of the voters. The upper house could veto laws but could not propose them, and its power of veto could be exercised only twice on any given piece of legislature. On such a law passing the Council of Freemen a third time, it had automatically to be passed by the House of Nobles and signed by the Duchess, who was a constitutional monarch with carefully limited powers.
News of the Duchy’s windfall of dollars had, following the meeting of the Privy Council, been allowed to get abroad, and the whole nation, in the midst of multiplying rumors, awaited the Count’s budget message, which would reveal what was to be done with this splendid bonus. The amount of the money was first underestimated, then correctly gauged, and then grossly overestimated until there were some who believed that they would be the masters of a fortune of ten thousand dollars apiece (the equivalent for most of ten years’ wages) as soon as Mountjoy brought forth his budget proposals.
The Mouse on Wall Street Page 3
