because the drawer had a claim on England through a trade transaction.
He was able to sell it to the South American bank only because the bank
knew that many other people in Argentina would have to make payments to
England and would come to it and ask it for drafts on London, which, by
remitting this bill to be sold in London, it would be able to supply.
International finance is so often regarded as a machinery by which paper
wealth is manufactured out of nothing, that it is very important to
remember that all this paper wealth only acquires value by being
ultimately based on something that is grown or made and wanted to keep
people alive or comfortable, or at least happy in the belief that they
have got something that they thought they wanted, or which habit or
convention obliged them to possess.

FOOTNOTES:

[Footnote 2: All this imaginary picture is of events before the war. At
present Dr. Pillman, being a patriotic citizen, is saving much faster
than before, and putting every pound that he can save into the hands of
the British Government by subscribing to War Loans and buying Exchequer
bonds. He is too old to go and do medical work at the front, so he does
the next best thing by cutting down his expenses and finding money for
the war.]




CHAPTER III


INVESTMENTS AND SECURITIES