Monday, November 21, 2005

Fifth Lesson

Chicago Daily Tribune
March 25, 1876
pg. 4

In that wonderful picture of human life which Goethe has drawn from the legend of Faust, the poet has painted a financial episode in the second part of the tragedy, the particular features of which will be applicable for all time.

In the first act, Faust and his Satanic companion Mephistopheles, who is the inventor of paper money, appear at the Court of the German Emperor. The realm is in a ruinous condition, and the situation affords Mephistopheles an opportunity of securing power for Faust by the introduction of the financial system which is now so desperately urged by by Kelley and his rag-baby* followers.

The Court officials are gathered about the Emperor. The Chancellor complains of the decline of justice and the increase of plunderers; that lawlessness is upheld by law, and that "the man of good intent to flatterer and briber bendeth." The General-in-Chief complains of discords, mutinies and devastation of the realm. The Treasurer complains that the allies have not contributed their promised subsidies, and that "the strong box is void indeed." The Lord High Steward complains that he is always trying to be economical, but is ever greater in need, that the Court is short of wine, and that the Jews will have him "past all chances."

The Emperor, in despair, appeals to Mephistopheles, who shows that only money is lacking; that the earth is full of gold, and that as the earth is the Emperor's he has only to take hoe and spade and bring it to the light. The Emperor is disgusted with this proposition and demands that Mephistopheles shall procure him money.

Thereupon Mephistopheles, with his diablerie, sets upon foot a grotesque carnival masquerade, and after the mad revel is over, to the Emperor's astonishment, money is plenty. The Lord High Steward is safe from the Jews, and has blunted the usurers' claws. The General pays up his arrears. The Treasurer's box is running over. The Devil has created paper money, and the Treasurer thus informs the astonished Emperor how the transformation was effected:

Remember! Thou this note did undersign,
Last night, indeed. Thou stood as mighty Pan,
And thus the Chancellor's speech, before thee, ran:
"Grant to thyself the festival pleasure, then
The people's good - a few strokes of the pen!"
These did thou give; they were ere night retreated,
By skillful conjurers thousandfold repeated;
And, that a like advantage all might claim,
We stamped at once the series with they name.
Tens, thirties, fifties, hundreds are prepared,
Thou cans't not think how well the folk have fared.
Behold thy town, healf dead once and decaying,
How all alive, enjoying life, are straying!
Although thy name long since the world made glad,
Such currency as now it never had.

The Lord High Steward informs the Emperor that the currency was scattered everywhere; that the note was accepted for its worth in gold and silver; and that the people at once commenced feasting and reveling. Even the Devil himself grows merry over his new currency, it is so handy, and the Emperor orders everyone to do as he royally pleases. Even the Court Fool rejoices that he shall be a landed owner, and Mephistopheles sneeringly says to himself, "Who now ill doubt that this, one fool, has wit."

All goes swimmingly for a time, but at last comes the logical conclusion of the shinplaster madness. In the third act, Mephistopheles, upon the eve of battle between the rival Emperors, tells Faust:

...He did enjoy, even he!
Meanwhile the realm was torn by anarchy,
Where great and samll were warring with each other,
And brother drove and slaughtered brother.
Castle to castle, town 'gainst town arrayed,
The nobles and the guild of trade,
The Bishop, with his chapter and congregation -
All meeting eyes but looked retaliation.
In churches, death and murder; past the gates,
The merchants traveled under evil fates;
And all grew bolder, since no rule was drawn
For life, but self-defense! - So things went on.

The Devil having invented irredeemable paper money for the Emperor, and plunged him into all his troubles, takes pity upon him and rescues him. Mephistopheles' system is a fair exposition of the modern inflation business. The poet has painted a picture which has always been true in the past, which will always be true in the future, but the way of escape in the poetical creation is not available in real life.

If the people of the country avail themselves of the Devil's system of currency, the Devil himself will not get them out of the troubles that must flow from it.


*rag-baby - Mid-19th century term referring to the general type of money we use today, specifically the 'Federal Reserve Note'.

FIFTH LESSON: We've availed ourselves of the Devil's currency system since 1913.

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