(to be levied, perhaps,
as an income tax on incomes over a certain minimum) they unwittingly
chose to pay more for their bread and butter. The seriousness of this
possible result lies in the definitely ascertained fact that salaries
and wages rise more slowly, and usually to a smaller extent, than the
prices of commodities.

Now, which of these speculative explanations is the true one does not
greatly matter to-day when all the consumers, rich and poor, are dead
and gone. What does concern us is that we should not misconstrue the
Guernsey example. We already use paper money in this country to a small
extent. We could certainly with economic advantage save a great part of
the cost (three or four millions sterling a year) that we now pay for
the luxury of having so many gold sovereigns wandering about in our
pockets. We may one day find the uncounted reserve of capital that in
our gold currency we already possess, virtually in common ownership,
come in very usefully on an emergency (which is, perhaps, what happened
at Guernsey). But we must beware of thinking that the issue of paper
money offers some magical way of getting things without having to use
capital, or we may find ourselves one day, to the unmeasured hardship of
the poor among us, stupidly burdening ourselves as consumers with higher
prices and increased cost of living all round.

There are, of course, other reasons in favour (_a_) of paper money being
issued by the Government, instead of this valuable and responsible
prerogative being abandoned to individual bankers or joint stock
companies, to the great financial loss of the community as a whole; and
(_b_) of the whole business of banking--which means the organising of
credit and the custody of savings--being conducted by the Government
itself, in order that the power which banking gives may be exercised
exclusively under public control, and for corporate instead of for
individual ends, and in order that the profit which banking yields may
accrue to the benefit of the community as a whole, instead of to
particular capitalists. But that is another story. The Guernsey
Government stopped short at the issue of paper money--which is not
banking--and even gave up this right at the bidding of private banking
companies.

SIDNEY WEBB.

41, Grosvenor Road, Westminster.
_December, 1910._

AN EXAMPLE OF COMMUNAL CURRENCY

INTRODUCTION

There are many persons who have heard from one source or a