Before the war, if you got a Five Pound note saying “I promise to pay Five Pounds” the promise was kept and the five golden sovereigns were there for you whenever you went with your note to the bank and asked for them; but when the Government had these very heavy expenses to meet on account of the war, they first began making difficulties about paying when people brought their paper to the bank, and at last stopped paying altogether. At the same time, they did everything they could to get the gold out of private people’s hands and to make them use paper money instead. The consequence was that, people being so accustomed to think of a paper guarantee of the Government exactly as though it were real money, readily took to the new notes and used them as money, thinking of these wretched bits of paper exactly as though they were so many golden sovereigns. The Government could go on printing as many bits of paper as it liked, and they would still be used as though they were real money. So long as the amount of paper printed was not more than _would have been printed_ when the notes were redeemable, and when the currency was on a true “_Gold Basis_,” no harm was done; but of course it paid the Government to go on printing a great many more notes than that, because, when it could make money thus cheaply, it could pay for anything, however great the expense; but at the cost, of course, of debasing the currency more and more. This kind of money, forced upon people, pretending to be the same as real money but actually without a Gold Basis, is called _Fiat_[1] money, and that is the kind of money the whole world has to-day, except those countries which did not take part in the Great War, and the United States which did not ever give up its gold basis. Of the different European fighting countries, however, ours did best in this matter. We are still living on Fiat money, and we have much more of it than we ought to have. But the French have more in proportion, so that prices measured in _their_ money are now (1923) more than three times what they would be in gold. The Italians are worse off still. With them it is four times. With the Germans it is millions of times, and their currency has quite gone to pieces; a paper coin in Germany is worth (at the time I write, October, 1923) _ten million_ times less than the real metal coin which it is supposed to represent.