December 26, 2008
How to Understand International Finance (Robert Benchley, 1922)
Now there is a certain principle which has to be followed in all financial discussions involving sums over one hundred dollars. There is probably not more than one hundred dollars in actual cash in circulation today. That is, if you were to call in all the bills and silver and gold in the country at noon tomorrow and pile them up on the table, you would find that you had just about one hundred dollars, with perhaps several Canadian pennies and a few peppermint life-savers. All the rest of the money you hear about doesn’t exist. It is conversation-money.
When you hear of a transaction involving $50,000,000 it means that one firm wrote “50,000,000″ on a piece of paper and gave it to another firm, and the other firm took it home and said “Look, Momma, I got $50,000,000!” But when Momma asked for a dollar and a quarter out of it to pay the man who washed the windows, the answer probably was that the firm hadn’t got more than seventy cents in cash.
This is the principle of finance. So long as you can pronounce any number above a thousand, you have got that much money. You can’t work this scheme with the shoe-store man or the restaurant-owner, but it goes big on Wall St. or in international financial circles.
(From “How to Understand International Finance,” in Love Conquers All. Robert C. Benchley. Henry Holt. 1922.)
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2 Responses to “How to Understand International Finance (Robert Benchley, 1922)”
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Thank you, thank you, thank you.
I have to say, Sheila, this comes as something of a relief. I have been under the impression for years that I haven’t enough cash and now it would seem no-one has – because there isn’t any.