The War and Our Financial Fabric

It has been said, and said truly, that the law can exercise much restraint upon the freedom of the individual. It is powerless, however, to restrain madness. Yet it is precisely by artificial methods that we would attempt to restrain madness, to keep individuals and nations in a state of sanity. This cannot be done. If the problem we are dealing with is psychological, we must find a psychological solution. We cannot cure a spiritual disease by a material remedy. If we can grasp the potency of fear growing into that species of madness called panic, we shall be able to grasp the tremendous task of allaying that fear during its earliest symptoms. We should also grasp the immensity of the task when we conceive how the healers of the disease would themselves be afflicted by the disease, and that their fears would confuse their minds and paralyse their actions.

Long before the greatest war in history broke out, we were assured by financial and economic prophets that when it did break out this country would be in the throes of the most serious panic it has ever known, and thousands of our business men would go down to ruin in it. These prophecies were based upon the inadequacy of our gold reserves, and upon the top-heaviness of our credit superstructure.