“Up to threequarters, you say?” Parkes was shaken by the revelation.
“That does sound excessive. Damned excessive, if you ask me. But how will doing something about this raise money for the Government?”
“The key to the power of the money-lenders is that they have a grip on the seed for the next year’s crop and can charge what they will for it. In a nutshell, they lend money and then take it straight back as payment for the seed. Now, few of those money-lenders pay the proper tax on their incomes. If we inspect their declared earnings, we will find that they only allow for interest rates of perhaps ten percent instead of several hundred.
“So, before the next planting, we audit those money-lenders and confiscate their supplies of seed in lieu of payment on back-taxes owed. We distribute that seed, free of charges, to the farmers explaining to them that this is a once-only compensation for prior over-payment. Come the harvest season, the share of the crop that would once have been taken by the money-lenders is now theirs. Some, they will store as seed for the next harvest. The rest they will sell and turn into money. Ahh, my friends, but what will they do with that money? They will wish to save it, but where?”
“A bank, of course.” To Parkes, that was an obvious answer, but it was one that again showed he understood little of the living conditions of the Indian country dwellers.
“There are no banks outside the big cities.” Nehru astonished himself by how patient he could be. “But there is one thing that is in every village. A post office. I propose we set up a system of post office savings accounts. They will be suited to the small investor and will pay a small but reliable rate of interest. After all, the money-lenders are, I am ashamed to say, Indians. But, when an Indian wishes to make a solemn oath, he will say ‘I give you the word of an Englishman.’ A savings account backed by the word of the English will be considered as safe as gold. The farmers will save their money in the post offices, where it will earn interest. While it is there, we can use it for our own purposes, paying off any withdrawals with monies deposited by others.”
“That’s called a Ponzi scheme. I rather think it is illegal.” Sir Eric Haohoa was impressed by the idea. The money coming into those post office accounts would not be any great sum individually, but there would be millions of such accounts and cumulatively they would provide a healthy income.
“In the final analysis, is not every government a Ponzi scheme?” Nehru looked around the cabinet room with a broad smile on his face.”
“Yes, but it’s not considered good form to say so too loudly.” Lord Linlithgow sounded amused. “This scheme does sound as if it would solve some of our problems. I move that the Treasury and Post Office form a joint committee to adopt and enact Pandit’s suggestion. Any objections?
“Very well. So moved.”
“The smoked trout please, followed by the breast of pigeon.” Sir Edward Bridges put down the menu and looked over at his host. Reading the elaborate menu had been a formality for him; the trout and pigeon were his established favorites here.
Sir Desmond Glasebrooke was hard put to make his decision. Eventually, he ordered the potted shrimps and applewood smoked venison. The wine waiter had brought the first of their bottles and poured for them. Then, they were discretely left on their own.
“Edward, old chap, how are things going in Downing Street?” Sir Desmond gave a strong impression of a walrus that had just learned of the death of a much-loved relative.
Bridges shook his head sadly. “Very difficult, I fear, Desmond. The truth is, I don’t think that the Prime Minister quite understands how everything fits together. He really isn’t one of us, you know.”
Glasebrooke shook his head sadly. “Between us, Edward, the chaps in the City aren’t terribly happy with the current course of events. I might even go as far to say the chaps are perturbed.”
Bridges put down his fork. “As bad as that? They’re not concerned, are they?”
Seconds ticked by while Glasebrooke thought very carefully before answering. “No, not concerned. Not yet. If things don’t settle down soon, though, they might reach that point. A major row like this within the Commonwealth, well, it makes the chaps unhappy. Some of them are beginning to think that the current administration may well be just a little bit unsound.”
“My word.” Bridges was shocked. “I had no idea things had reached that point. The dispute with the Dom/Col isn’t that serious. It’s more a matter of insensitivity at this end and trampled toes on theirs.”
“I’m sorry, Edward, but I really must beg permission to differ on that point. This whole affair might have started that way, but it has gone beyond that point. The situation with Dom/Col is getting serious. Are you aware that they are beginning to move their financial reserves out of London? And that the Australian Division that was heading for Britain has been diverted to the Middle East?”
“That is serious.” Bridges hesitated himself, concealing the uncertainty about what he could say by carefully anointing a piece of smoked trout with roasted lemon jelly. “We knew about the South African Division going to Kenya, of course. That was no great worry; the IGS might have diverted them there anyway. The Italians have advanced at least fifty miles into Kenya and the presence of the South Africans there will stabilize that situation. The P.M. is more worried about the Canadian Division. Technically, they are still at war with Germany and he thinks they could bring down the armistice. He is considering ordering them home. And that would be another breach with the Commonwealth. One that would be much harder for all the parties involved to accept. But, if Dom/Col are moving their funds out of the City, it would be very serious.”
“What is happening with the armies really doesn’t worry the chaps too much.” Glasebrooke waved his fork around dismissively. “The financial thing is perturbing them much more. Ever since the turn of the century, the hard core of Britain’s wealth has been in global finance and investment. We own, or have serious interests in, sewers, water, electrical, telegraph, telephone, rail, shipping, warehousing, banks and retail companies all across the world. The chaps really don’t think that is too much affected by where a division goes or what happens to a squadron of flying boats. The split in the Commonwealth is quite different; quite different. If this goes on, the Prime Minister will be handing all our investments abroad to our competition on a plate.”
There was a long pause while the waiters cleared the first set of plates away and brought the next course, along with the appropriate wine. Glasebrooke waited until they had withdrawn before continuing. “Take Malaya. Because the Japanese will. Does the Prime Minister really want to hand over all that rubber and palm oil to the Japanese? The economic loss to the chaps in the City would be stupendous and it won’t stop there. I don’t want to sound excitable, Edward, but the chaps really do think this is vital.”
Bridges sighed. “I understand all this, Desmond; I really do. You’re preaching to the choir. I think most of the Civil Service knows that. The problem is that HE doesn’t see it that way. To him, the Commonwealth is a bunch of unruly children who need to be sent to bed without any supper. No matter what anybody says, he won’t change his mind on that.”