“Ask away, my little fellow,” said his uncle, kindly, “and I will attempt to explain any difficulty you have in simple terms suited to your age.”
“Well, uncle,” said the fifth nephew, humbly, “I cannot in the first place see how the 300,000 pieces of which you speak, and which as you say were represented by notes alone, constituted any real wealth.”
“My dear little chap,” answered his uncle, leaning forward to pat him upon the head, “you will have the intelligence to perceive that wherever such a note existed people thought of it as ten golden pieces, did they not?”
“Y‑es‑s,” answered his nephew, feeling that he was getting cornered.
“Very well,” continued the old man, merrily, “this attitude of mind being common to the whole community, and all having come to regard these pieces of paper as so much money, I had but to receive them in payment of my debts and then to buy with them into the gold of others. Thus all the gold entered my possession. Eh? On my departure the outstanding notes were presented to the firm, I hear, and there was then no gold to meet them with. A sad state of affairs! Many clamoured and all sorts of trouble arose. But by that time I was far away.”
The little chap still looked puzzled. “But, uncle,” he said, “when the people presented the notes after you had gone, they may have thought they had wealth, but they hadn’t any, had they?”
“I don’t know,” said the old man, after a pause. “It is a most difficult point in the discussion of currency. … I, at any rate, had been bold in the story I told, and got hold of their gold.”
“But the wealth wasn’t there, uncle,” persisted the little boy. “It wasn’t there at all!”
The merchant with a benign air replied: “The science of political economy is abstruse enough for the most aged and experienced, and it will be impossible for me to explain to you at length so intricate a point. Let it suffice for you that so far as I was concerned the wealth was there, it was there in fifty large leather bags. … You had, I think,” he added in a severer tone, “a second question to propound?”
“Yes,” said his nephew with a slight sigh, “dear uncle, it was this: Why under such favorable circumstances did you think it necessary to leave so early, seeing that your new trade was going so well?”
“That,” said old Mahmoud in a tone of relief, “is much more easy to answer. My leg was healed. The resources of Skandir were limited. Signs were apparent that the worthy populace, though unable to unravel the precise nature of their entanglement, were already very seriously hampered by my operations. Though I was able to prove by statistics that prosperity had increased by leaps and bounds, and though the chief, who was now my partner, kindly printed pamphlets at the public expense to prove the same, numbers who had formerly been well fed were now reduced to a few handfuls of raw grain, the jails were crammed, much of the land was going out of cultivation, and what between the ignorant passions which such periods of transition arouse in the vulgar, and the inability to get more water out of a sponge when you have already squeezed it thoroughly dry, I am sure that I was right in the determination I then took to retire from this field of operations.
“Before leaving I offered my business for sale to the public in general. The shares, I am glad to say, were eagerly taken up. And as I gave a preference in allotment (another technical term) to those who paid in my own notes, I recovered all of these save an insignificant fraction, and was able to negotiate them again for gold in public exchange before my departure.
“Meanwhile the unscrupulous anxiety of the chaotic multitude to share in so prosperous a commercial undertaking as mine had been, permitted me to ask for my business more than four (but less than five) times the sum which I would myself have been content to pay for it.
“I loaded 300 more camels with valuables of various sorts, including nearly all the precious metals discoverable in the state; I purchased a whole army of new slaves for the conduct of the caravan (paying for them in new notes issued upon the new company), and amid the plaudits and benedictions of a vast multitude, many of whom (I regret to say) were now in the last stages of destitution, I regretfully took my way through the gorge and bade farewell to the simple people of lovely and lonely Skandir to whom I owed so much.”
“I proceeded from the people of the valley whom I had introduced to banking, and went out through the gorge into the rising prairies beyond the mountains. For at least four days’ march beyond the valley my name was a household word to the villages through which I passed; not only was I able to pay for all goods by a further issue of notes, but I would even reward any special considerations shown me by selling to the grateful inhabitants for cash such shares in my old firm remaining at Skandir as I had retained to amuse me in my travel; and these, I am happy to say, went rapidly to a premium. These shares passed at gradually lessening prices from hand to hand, and I subsequently learnt that in a few months they had become unsaleable. Those who suffered in the last purchases had only themselves to blame, and indeed did not think of blaming any other, while the first to sell at a high price still hold my name in reverent remembrance.
“When I had proceeded a few days further upon my travels I found that the enlightenment and civilization to which I had led the
