THE RABBITS GO TO BRETTON WOODS
Denham, Sidney
The Rabbits Go To Bretton Woods By SIDNEY DENHAM THE Rabbits met in Council to decide what they should do about their money. For years they had used bits of paper' as money, but now one of the...
...They sought out the Fox, well known as a financial expert...
...When we want more money, we will simply bury more gold...
...The simplest way to get gold is from the store he has buried underground...
...That is what is called gold backing to a currency...
...MORAL: Gold is where you find it and money is what you make it...
...A Problem Arises This system worked for a very long time and all the animals said how nice it was to have money they could rely upon, instead of having to use bits of paper that were worth nothing because they were not backed by gold...
...Now I can issue more" money," and he gave them pieces of paper for the gold and put the gold back in the underground store...
...The next night the Rabbits stole some more gold and changed that with the Fox for paper, and so they went on until they had stolen all the original gold...
...That's fine," said the Fox...
...You are right," replied the Fox...
...The Fox says we must give him gold before he can give us money," he said...
...You must use gold, the only really valuable thing that never changes its value...
...All we have to do is to dig a tunnel to his store, take some of the gold and present it to him, when he will give us more money...
...They dug a tunnel to the gold store, took some of the gold and next morning went to the Fox with it...
...And there was no Inflation, because the money was backed by gold...
...For years they had used bits of paper' as money, but now one of the clever Rabbits had suggested that paper could not possibly be worth anything, and it seemed so obvious that he was right that they determined to take steps to prevent themselves being ruined...
...All might have continued happily forever if it had not happened that just when the animals, and especially the Rabbits, were having their biggest families, it became more and more difficult to find any gold...
...The Fox carefully buried the gold...
...The Fox explained it was absolutely impossible to issue any new money without gold, because this would be Going Off the Gold Standard, and no animal anywhere would have any faith in his money...
...Do you think I was made Governor of the Wild Thyme Bank for nothing ? I shall arrange that you need not carry the gold, but only pieces of paper with the amount of gold written on them...
...paper is worth nothing...
...So the Rabbits got poorer and poorer, because there were more and more of them to divide up the same amount of money...
...When the Rabbits had become so poor that they had not even enough to buy food, one of them had a very brilliant idea...
...Reprinted from the London Tribune...
...It was true that a great number of animals had to be employed digging gold so that it could be buried, but they all agreed that the stability which gold brought to their currency made this well worth while...
...With that handicap, you would catch us every time...
...As for the clever Rabbit who' thought of stealing the gold, he became a professor of political economy and was much respected by the Rabbits...
...This meant INFLATION, and although the Rabbits didn't quite understand what it meant, they knew from the way the Fox said it that it was something terrible, to be avoided at all costs, like traps and dogs...
...That's all right for the Kangaroo, who's got a pocket," objected the Hare, "but you can't expect'us to carry a pound of gold everywhere we go...
...I have thought of that," the Fox said, condescendingly...
...And there was still the same amount of gold in the store, so the Fox was happy...
...But the Fox, who reads his books, said his ideas were purely academic and wouldn't work in the hard world of fact...
...There was now twice as much paper money and quite enough for everyone to buy all he wanted, which made the Rabbits happy...
...A Moral For All It seemed so obvious that the Rabbits could not imagine why they had not thought of it before...
...The actual gold we will bury in some safe place...
...This seemed reasonable enough, so the animals collected up all their gold, weighed it, and then wrote out millions of pieces of paper, each labelled "1 ounce of pure gold," divided them up and used them for money...
...Whenever anyone wanted some more money they simply took some gold to the Wild Thyme Bank and the Fox wrote the amount on pieces of paper, which they used for money...
Vol. 8 • October 1944 • No. 40
