Page:Stabilizing the dollar, Fisher, 1920.djvu/115

. 8] The bondholder is in the same plight. Perhaps nominally he has been "living on his interest"; but meanwhile the purchasing power of his principal has been decreasing, so that really, although without knowing it, he has been living on his capital. For, to keep the value of his capital unimpaired, he would have had to reinvest all his interest and more! Meanwhile the stockholder has made what the bondholder has been losing.

Dr. J. Pease Norton, referring to the first part of this period, has said: "The investor in bonds by saving all his interest payments and reinvesting would have been able to maintain his principal in purchasing power, but had he done this he would have had no income. Measured in purchasing power, the investment in stocks shows 6% per annum better than the investment in bonds."

8. The Extent of Social Injustice

The total financial interests thus affected by changes in the price level are colossal. Shortly before the war, Alfred Neymarck estimated the total securities then circulating in the world at 175 to 200 billions of dollars.

And to-day the volume of securities is greater, and the war-bonds have increased the total by probably more than 50%.