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Free issue of MICHAEL
www.michaeljournal.orgpaper. By it you will bind your-
selves to pay both interest and
principal under penalty of confis-
cation of property by me. Oh! This
is a mere formality. Your property
is of no interest to me. I’m satis-
fied with money. And I feel sure
that I’ll get my money and that
you’ll keep your property.”
“That makes sense, Mr. Oliver.
We’re going to work harder than
ever in order to pay you back.”
“That’s the spirit. And any time
you have a problem, you come
and see me. Your banker is your
best friend. Now here’s two hun-
dred dollars for each one of you.”
And our five brave fellows
went away, their hands full of dol-
lar bills, their heads swimming
with the ecstasy of having money.
9. A problem in arithmetic
And so Oliver’s money went
into circulation on the island.
Trade, simplified by money, dou-
bled. Everybody was happy.
And the banker was always
greeted with unfailing respect
and gratitude.
But now, let’s see... Why
does Tom, the prospector, look
so grave as he sits busily figur-
ing with a pencil and paper ? It is
because Tom, like the others, has
signed an agreement to repay Oli-
ver, in one year’s time, the $200
plus $16 interest. But Tom has
only a few dollars in his pocket
and the date of payment is near.
For a long time he wrestled
with this problem from his own
personal point of view, without
success. Finally, he looked at it
from the angle of the little com-
munity as a whole.
“Taking into consideration
everyone on the island as a
whole,” he mused, “are we ca-
pable of meeting our obligations?
Oliver turned out a total of $1000.
He’s asking in return $1080. But
even if we bring him every dollar
bill on the island, we’ll still be $80
short. Nobody made the extra $80.
We turn out produce, not dollar
bills. So Oliver can take over the
entire island, since all the inhabit-
ants together can’t pay him back
the total amount of the capital and
the interest.
“Even if a few, without any
thought for the others, were able to
do so, those others would fail. And
the turn of the first person spared
would come eventually. The bank-
er will have everything. We’d bet-
ter hold a meeting right away and
decide what to do about it.”
Tom, with his figures in his
hand, had no difficulty in prov-
ing the situation. All agreed that
they had been duped by the kind-
ly banker. They decided upon a
meeting at Oliver’s.
10. The benevolent banker
Oliver guessed what was on
their minds but he put on his best
front. While he listened, the impe-
tuous Frank stated the case for
the group.
“How can we pay you $1080
when there is only $1000 on the
entire island? ”
“That’s the interest, my
friends. Has not your rate of pro-
duction increased? ”
“Sure, but the money hasn’t.
And it’s money you’re asking for,
not our products. You are the only
one who can make money. You’ve
made only $1000, and yet you ask
$1080. That’s an impossibility ! ”
“Now listen, fellows. Bankers,
for the greater good of the com-
munity, always adapt themselves
to the conditions of the times. I’m
going to require only the interest,
which is only $80. You will go on
holding the capital.”
“Bless you, Mr. Oliver ! Are
you going to cancel the $200 each
of us owes you? ”
“Oh no! I’m sorry but a bank-
er never cancels a debt. You still
owe me all the money you bor-
rowed. But you can pay me the
interest each year. If you meet the
interest payments faithfully each
year, I won’t push you for the cap-
ital. Maybe some won’t be able to
repay even the interest because
of the money changing hands
among you. Well, organize your-
selves like a nation. Set up a sys-
tem of money contributions, what
we call taxes. Those who have
more money will be taxed more;
the poor will pay less. See to it
that you bring me, in one lump
sum, the total of the amount of
interest and I’ll be satisfied. And
your little nation will thrive.”
So our boys left, somewhat
pacified but still dubious.
11. Oliver exults
Oliver is alone, deep in reflec-
tion. His thoughts go something
like this:
“Business is good. These
boys are good workers but stupid.
Their ignorance and naivety is my
strength. They ask for money and
I give them the chains of bond-
age. They give me flowers and I
pick their pockets.
“True enough, they could mu-
tiny and throw me into the sea.
But pshaw! I have their signa-
u