PEESIDENTIAL ADDRESS SECTION F. HI 



a standard of value. Further, money is merely an instrument, and 

 its amount, less or more, at a given moment is a matter of complete 

 indifference, but tha£ it should not change rapidly, or even per- 

 ceptibly, in value proves to be one of the main interests of civilised 

 society. It is because they seem to me relevant to this important 

 question that I offer short studies or observations upon the economic 

 disturbances caused by the late war. I shall call the subjects re- 

 spectively: I. National bankruptcy; II. Economic disconf ormity ; 

 and III. Economic dependance. 



I. National Bankruptcy. 



In a recent book, "The Salvaging of Civilisation," H. G. Weils 

 amplifies an idea suggested to him by his visit to Russia, namely, 

 that European civilisation is suffering from a disease which might 

 easily prove fatal and of which Bolshevism on the one side and 

 militarism on the other are outstanding symptoms. As more or 

 less relevant to the same idea, I beg to offer a few remarks upon 

 aspects of the present world troubles which are new to economics. 

 National bankruptcy must now be accepted as an economic fact; 

 previously it was only a speculation. What is then this conception 

 of national bankruptcy 1 In one view a nation identified with 

 territorial limits is possessed of the hardest and most indestructible 

 of assets and has always the reproductive powers of nature to fall 

 back upon. Yet we shall see that there is a very real sense in 

 which a nation can become bankrupt and practically lose the control 

 for all purposes of credit and exchange of those same indestructible 

 assets. 



II. Economic Disconformity. 



Secondly, the conception of an international standard of value 

 and medium of exchange has recently become not only a thinkable 

 but a necessary idea. The international exchanges which have 

 hitherto served as bridges for commerce between different currency 

 spheres have become to-day yawning gulfs which commerce shrinks 

 from and finds itself unable to pass. Various schemes of a remedial 

 nature have been brought forward such as a return to international 

 barter and credits, international currency, and an international 

 reserve superbanking system. It is impossible to understand, dis- 

 cuss, or form reasonable opinions upon any of these proposals with- 

 out returning to first principles and trying to bring out the basal 

 elements of these questions. 



III. Economic Dependence. 



Thirdly, the conception of economic independence, and its 

 shadow economic dependence, from being largely of a speculative 

 nature, has to us in South Africa become so far real and concrete 

 as to have become the basis of a most important, and at first sight 

 anomalous, decision in our national finance. The recent con- 

 troversy with regard to the embargo on gold and the decision of 

 the Government after full consideration to maintain the embargo 

 has led Professor Edwin Cannon in the "Economist" to twit this 

 country with having achieved an inconceivable paradox— the 



