Unfortunately we do not know how prices behaved to the Guernsey housekeeper between 1815 and 1837. Perhaps another student will look this up. What is interesting to us in this argument is the fact that, _if prices generally did rise_, in consequence of the issue of the paper money, even by only one half-penny in the shilling--if eggs, for instance, sold twenty-four for a shilling, instead of twenty-five--this represented a burden laid on the Guernsey people as consumers, exactly analogous to a tax (say an octroi duty) of four per cent. on all their purchases. On this hypothesis, which I carefully abstain from presenting as anything but hypothetical, because we are unable to verify it by comparison with the facts, the economist would say that this burden or tax was what they imposed on themselves, and notably upon the poor, by increasing the currency, instead of borrowing the capital from elsewhere. Instead of paying interest on a loan (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.