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Free issue of MICHAEL

paper. By it you will bind your-

selves to pay both interest and

principal under penalty of confis-

cation of property by me. Oh! This

is a mere formality. Your property

is of no interest to me. I’m satis-

fied with money. And I feel sure

that I’ll get my money and that

you’ll keep your property.”

“That makes sense, Mr. Oliver.

We’re going to work harder than

ever in order to pay you back.”

“That’s the spirit. And any time

you have a problem, you come

and see me. Your banker is your

best friend. Now here’s two hun-

dred dollars for each one of you.”

And our five brave fellows

went away, their hands full of dol-

lar bills, their heads swimming

with the ecstasy of having money.

9. A problem in arithmetic

And so Oliver’s money went

into circulation on the island.

Trade, simplified by money, dou-

bled. Everybody was happy.

And the banker was always

greeted with unfailing respect

and gratitude.

But now, let’s see... Why

does Tom, the prospector, look

so grave as he sits busily figur-

ing with a pencil and paper ? It is

because Tom, like the others, has

signed an agreement to repay Oli-

ver, in one year’s time, the $200

plus $16 interest. But Tom has

only a few dollars in his pocket

and the date of payment is near.

For a long time he wrestled

with this problem from his own

personal point of view, without

success. Finally, he looked at it

from the angle of the little com-

munity as a whole.

“Taking into consideration

everyone on the island as a

whole,” he mused, “are we ca-

pable of meeting our obligations?

Oliver turned out a total of $1000.

He’s asking in return $1080. But

even if we bring him every dollar

bill on the island, we’ll still be $80

short. Nobody made the extra $80.

We turn out produce, not dollar

bills. So Oliver can take over the

entire island, since all the inhabit-

ants together can’t pay him back

the total amount of the capital and

the interest.

“Even if a few, without any

thought for the others, were able to

do so, those others would fail. And

the turn of the first person spared

would come eventually. The bank-

er will have everything. We’d bet-

ter hold a meeting right away and

decide what to do about it.”

Tom, with his figures in his

hand, had no difficulty in prov-

ing the situation. All agreed that

they had been duped by the kind-

ly banker. They decided upon a

meeting at Oliver’s.

10. The benevolent banker

Oliver guessed what was on

their minds but he put on his best

front. While he listened, the impe-

tuous Frank stated the case for

the group.

“How can we pay you $1080

when there is only $1000 on the

entire island? ”

“That’s the interest, my

friends. Has not your rate of pro-

duction increased? ”

“Sure, but the money hasn’t.

And it’s money you’re asking for,

not our products. You are the only

one who can make money. You’ve

made only $1000, and yet you ask

$1080. That’s an impossibility ! ”

“Now listen, fellows. Bankers,

for the greater good of the com-

munity, always adapt themselves

to the conditions of the times. I’m

going to require only the interest,

which is only $80. You will go on

holding the capital.”

“Bless you, Mr. Oliver ! Are

you going to cancel the $200 each

of us owes you? ”

“Oh no! I’m sorry but a bank-

er never cancels a debt. You still

owe me all the money you bor-

rowed. But you can pay me the

interest each year. If you meet the

interest payments faithfully each

year, I won’t push you for the cap-

ital. Maybe some won’t be able to

repay even the interest because

of the money changing hands

among you. Well, organize your-

selves like a nation. Set up a sys-

tem of money contributions, what

we call taxes. Those who have

more money will be taxed more;

the poor will pay less. See to it

that you bring me, in one lump

sum, the total of the amount of

interest and I’ll be satisfied. And

your little nation will thrive.”

So our boys left, somewhat

pacified but still dubious.

11. Oliver exults

Oliver is alone, deep in reflec-

tion. His thoughts go something

like this:

“Business is good. These

boys are good workers but stupid.

Their ignorance and naivety is my

strength. They ask for money and

I give them the chains of bond-

age. They give me flowers and I

pick their pockets.

“True enough, they could mu-

tiny and throw me into the sea.

But pshaw! I have their signa-