Page:Stabilizing the dollar, Fisher, 1920.djvu/116

62 Besides negotiable or circulating securities there are many private debts which never circulate. There are savings-bank deposits and deposits in ordinary banks, running up into scores of billions and held by over a score of million of depositors. There are scores of billions of dollars in insurance contracts of various kinds, many of them running for long terms, such as the span of human lives. The widow whose husband twenty years ago insured his life for her benefit gets to-day only a little over one third of the purchasing power contemplated in the policy.

Between the fall of 1915 and the armistice the dollar suffered a loss of purchasing power of about 25% per annum. Consequently bondholders not only lost all of their interest (of, say, 5%) but 20% per annum of their principal besides! The stockholders, in the same period, have had enormous earnings. Professor Friday has shown that the dividends of corporations in the United States in 1915-1917 were eleven billions as against seven and a half billions in 1911-1913. This increase of itself would scarcely keep pace with the rising prices and increase in number of corporations. But there is to be added the fact that the corporate reinvestment in "surplus" account was thirteen billions in 1915-1917 as against four billions in 1911–1913!

Now, at the end of the war, millions of people in the United States own Liberty Bonds; millions hold war savings certificates; millions are financially interested in the soldiers' insurance, which totals about forty billion dollars. And all these are in addition to the