We learned one lesson by that panic; at least, the big financial men learned it, and had Congress pass what is called the "Federal Reserve Act," a provision whereby in time of need the government issues practically unlimited credit to banks. This, of course, is fine for the banks; it puts the credit of everybody else behind them, and all they have to do is to stop lending money--except to the big insiders--and sit back and wait, while the little men go to the wall, and the mass of us live on our savings or starve. We saw this happen in the year 1920, and for the first time we had "hard times" without having a financial panic. But instead we see prices staying high--because the banks have issued so much paper money and bank credits. CHAPTER LX CAPITALIST WAR (Shows how the competition for foreign markets leads nations automatically into war.) In a discussion of the world's economic situation, published in 1906, the writer portrayed the ruling class of Germany as sitting in front of a thermometer, watching the mercury rising, and knowing that when it reached the top, the thermometer would break. This thermometer was the German class system of government, and the mercury was the Socialist vote. In 1870 the vote was 30,000, in 1884 it was 549,000, in 1893 it was 1,876,000, in 1903 it was 3,008,000, in 1907 it was 3,250,000, in 1911 it was 4,250,000. Writing between 1906 and 1913, I again and again pointed out that this increase was the symptom of social discontent in Germany, caused by the overproduction of invested capital throughout the world, and the intensification of the competition for world markets. I pointed out that a slight increase in the vote would be sufficient to transfer to the working class of Germany the political power of the German state; and I said that the ruling class of Germany would never permit that to happen--when it was ready to happen Germany would go to war, to seize the trade privileges of some other nation. There was a time when wars were caused by national and racial hatreds. There are still enough of these venerable prejudices left in the world, but no student of the subject would deny that the main source of modern wars is commercial rivalry. In 1917 we sent Eugene V. Debs to prison for declaring that the late world war was a war of capitalist greed. But two years later President Wilson, who had waged the war, declared in a public speech that everybody knew it had been a war of commercial rivalries.