It may be said that what the debtor loses the creditor gains
by this operation; but on examination this will be found true only to a
very limited extent. It is more generally true that all lose by it--the
creditor by losing more of his debts than he gains by the increased value
of those he collects; the debtor by either parting with more of his
property to pay his debts than he received in contracting them, or by
entirely breaking up his business, and thereby being thrown upon the
world in idleness.
The general distress thus created will, to be sure, be temporary,
because, whatever change may occur in the quantity of money in any
community, time will adjust the derangement produced; but while that
adjustment is progressing, all suffer more or less, and very many lose
everything that renders life desirable. Why, then, shall we suffer a
severe difficulty, even though it be but temporary, unless we receive
some equivalent for it?
What I have been saying as to the effect produced by a reduction of the
quantity of money relates to the whole country.
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