IV
MONEY
FREEDOM
THE
CONSUMMATE ECONOMIC AND POLITICAL IDEAL,
ENCOMPASSING
ALL FREEDOMS
The
freedom thought in any language has always expressed the most common
ideal of man in all ages of his progress. Every page of history
records the fervor of peoples in their pursuit of freedom. Passionate
denunciations of tyranny, paeans of praise to the blessings of
freedom, and countless charters proclaiming it constitute the theme
song of civilization.
Next
in depth of meaning and universal consciousness is the word money.
Money, because it came into use only in the later history of man has
not so long a tradition, but is so profound that it is almost
synonymous with the word freedom. Certainly the joining of money and
freedom make a most comprehensive statement of human aspirations.
Money freedom encompasses all freedoms.
Freedom
is man's natural state; it cannot be conferred upon him. He Was born
in freedom. Then why has he been pursuing it from the beginning? It
is because he desires freedom plus prosperity and in the pursuit of
the latter he has compromised his freedom. Partly through his own
cupidity, and partly through the cunning of exploiters, the urge for
progress has ever carried him into entangling circumstances that
denied him both freedom and prosperity. Yet both must be attained to
enjoy either fully. Freedom to live and move without command of
wealth is an empty freedom. We must have the freedom of prosperity.
The
most difficult problem that man has encountered in his social
progress is how to make use of government without self-subjection. It
required centuries to explode the pretense of divine right to rule.
It took centuries to effect separation of church and state. It has
required additional centuries to promulgate the principle of
separation of money and state and, through it, to envisage money
freedom which is freedom's acme.
Governments
today are constituted by consent of the governed and in their
constitutions safeguards of freedom are incorporated against
governmental invasion of private rights. This aim of converting
government from ruler to servant has been constant. The most
masterful effort was made in the drafting of the Constitution of the
United States, where (under the Jeffersonian theme: "That
government is best that governs least") the most intelligent and
jealous endeavor was made to obviate the evils of centralized
authority and usurped powers. After the founders had made the draft
replete with "shall nots," the several states caused to be
written into the document, through the Bill of Rights, ten more
prohibitions against governmental invasions of private rights. But
the money power, the most insidious, the most pernicious one of all,
was not only unprohibited but was actually enthroned.
Throughout
the history of man's struggle to master government the process of
whittling down power showed steady gains; but, when money emerged, a
new factor entered. Ignorant of its nature, men thought its emission
and control should be a function of government. The projecting of the
money power, (by tradesmen with whom money originated) into the hands
of politicians and the accepting of that power by the latter, seems
to have been effected in complete ignorance (by both parties) of its
far reaching implications. We of the Valun school of thought now
realize from our study that the money power is a constitution of and
by itself and that its acquisition by government meant a second
constitution that tends progressively, as money becomes more
important in men's lives, to neutralize the political constitution,
no matter how jealously the latter was constructed. The letter of the
political constitution may be faithfully observed by government and
yet its purposes may be defeated by the money power of government
which is its second, its economic constitution. Hence the
contradiction and confusion in our political principles and
practices.
The
dream of democracy and the craftsmanship of constitution builders,
therefore, has been defeated. We see now the gradual subordination of
the political constitution to the economic constitution, with
increasing governmental powers and diminishing private powers. Yet
this has required no change in, nor disrespect for, the political
constitution. Nor does it imply a greater lust for power by
politicians. Strange though it may seem, it is and always has been, a
movement from the people, urging the government to exert a perversive
power. Even the politician is unconscious of what is the impelling
cause of the growth of government and the decline of private
enterprise. It is a world trend, but its most striking manifestation
is observable in the United States.
The
thirteen American colonies, when freed by the revolution, became
independent nations and, after the manner of old-world nations, each
set up its own money system. Later, when they federated in the thus
created government of the United States, it became the sole political
money power and thus was centralized at Washington the greatest
potential money-creating machine the world has ever seen. The power,
through money, to defeat democracy has always existed in the Federal
government (as in all modern governments) but it has been slow in
manifesting itself. Only in recent years have we come to appreciate
the force of it.
THE
JOKER IN THE CONSTITUTION
Let
us examine the joker in our constitution out of which grew the
colossal evil from which we now suffer. It lies in Article 1, Sec. 8,
Par. 5, to wit: (The Congress shall have power) "to coin money,
regulate the value thereof and of foreign coins." Here the
ignorance of money by the founding fathers, which still abides, is
recorded. The very brevity of the provision shows that the drafters
had no comprehension of the subject they were dealing with. Literally
hundreds of thousands of words have been written by Congress into
monetary laws in an effort to discharge the obligation implied in the
quoted words and nothing but perversion has been accomplished. The
Constitution might as well have declared that Congress shall regulate
the course of the planets. We now know that money has no value and
that, therefore, the "regulation" of the value of money is
an absurdity. We know that money can be issued only by a buyer in the
act of purchase; and that the implied function of government issue of
money for the constituency is therefore also an absurdity.
While
the above quoted constitutional provision is literally meaningless,
the implications that have followed from it are the most important of
the entire Constitution. These eleven words involving the most
significant power in the entire document, constitute the germ of
error that can nullify all other provisions because they imply the
monopolizing by government of the money power - a power which should
and must remain with the people, and can be wholesomely exerted only
by the people. But the people, relying upon an abortive
constitutional provision, fail to exert their natural powers. From
this false start, we have come to the most unforseen consequences.
Under
the political money system there are but two sources of money. One is
issue by the government; (and its grantees) and the other is issue by
borrowers, through the banking system. The government issue springs
solely from government expenditures; since there is no other way it
can issue. This is the basic or legal tender money – and
constitutes the only actual dollars, either in currency form or in
promise to issue currency. Through the banks, those business men who
have bank credit, are permitted to issue promise-to-pay dollars. It
is important to recognize that there is only one source of primary or
legal tender money, namely the Federal government and only one source
of substitute money, namely, the borrowers from banks. Thus our money
supply is monopolized.
It
is important to remember that neither primary nor substitute money
can be issued except by the act of purchase. In other words, if the
government is to issue money it must buy something; there is no other
way that it can put money into circulation. Since modern society is
completely dependent upon money circulation, it is plain that we are
not freemen but subjects because we must beseech our government for
this life blood. But we are not subjects by government mandate; we
are subjects by dint of ignorance and inertia. Government does not
deny us the right to exert our natural power to issue money; we
ourselves thrust upon government the impossible function of vicarious
issue power.
Due
to the evolution that has taken place in the past 12 years, the
banking system is now impotent and the government is virtually our
only source of money. Now witness the anomaly of our position. For
the presidency we vote each four years; for the House and the Senate
we vote each two and six years, respectively. These are our
mandates. This, so far as the Federal government is concerned, we
call our political democracy. But we must vote dollars several times
each day for our economic needs. These dollar ballots are controlled
by the government.
OUR
DEMOCRATIC ILLUSION
We
have been pursuing the illusion that by voting political ballots
biennially and quadrenially, we controlled our affairs. While the
government must beg us each two years for our political ballot, we
beg the government every day for our economic ballot. Since we are
dependent upon our government for our daily dollar ballot, there
stands over our political democracy a monetary autocracy. Therefore,
we are not democratic governors; we are economic subjects. The most
scrupulous respect may be shown by the government for all the
prohibitions incorporated in our political constitution against
governmental invasion of our private rights, and yet we ourselves
gradually destroy the substance of these rights - leaving only empty
shells, clay idols.
The
process whereby parchment freedoms become sterile is quite simple. It
begins with the fact that we need a constant money supply to effect
our exchanges whereby we live. The supply is completely in the hands
of government. We beseech the government to issue it. The only way
the government can issue it is by spending. There are two spending
courses open to the government. It may spend for some non-productive
purpose, such as relief, pensions, subsidies, nonliquidating public
works, bureaucracy or war. Such expenditures create dollars with no
or very little marketable value back of them, and the result is
inflation or depreciated dollars. Such expenditures have dire
consequences. Government's alternative is to spend for income
producing projects. This puts government in business and private
enterprise out of business. This is communism. It is not necessary to
determine which is the greater evil, for, both lead to the
demoralization of both business and government. Yet who is to blame?
Surely not the government. The whole process was started by popular
clamor under the theory that the government owes every citizen a
living and the false notion that government can provide it through
its money power.
Is
not every public expenditure the result of pressure by some large or
small segment of the citizenry? And are not these pressure groups
impelled by the necessity of petitioning government since it is the
only source of the economy's life blood? How can we blame the
government for spending and on the other hand, how can we blame those
who invent schemes for spending, without which our economy would
stagnate? It is the false concept of political money power that
converts citizens into petitioners, and makes government a dispenser
of patronage instead of a public servant. This power of patronage
utterly destroys the democratic system of government - since the
people cannot be both petitioners and rulers. The product of
countless centuries of slow and laborious and bloody striving for the
subjecting of government to the citizen is being destroyed because we
have failed to master money and, by pursuing government for it, we
fashion our own subjection. If we do not master money, and exert our
money power, we will not only destroy democracy but we will destroy
government - since government cannot survive unless it has popular
support.
LOCAL
GOVERNMENT SUBJECTED
Observe
how the power of patronage is sapping the vitals of our multiple form
of government. The Federal government makes grants of money to the
states and the states in turn make grants to the cities and towns.
Thus subserviency is established and home rule destroyed. The
subdivisions of government designed to be independent within the
limitations established by the federal and state constitutions tend
to become satraps of a single government. On the theory that
governments have only the resources they can raise through taxes, it
may seem strange that the local and state governments do not go
direct to their citizens for funds. The explanation of this lies in a
secret of the money issuing power.
State
and local governments have only the power to create substitute
dollars through borrowing from banks. Besides this source of new
dollars, they can draw only on existing dollars of their citizens
through taxes or loans. When they borrow from banks they must promise
to return U. S. dollars, which they have no power to create and they
must approximately balance their budgets or the banks regard their
promises as hazardous and therefore they are limited. That is why all
the states and local governments combined have a total indebtedness
of less than 8% of that of the Federal Government and the states
alone, less than 2%.
The
Federal government needs not balance its budget and can borrow
endlessly, because, when it borrows, it promises only that of which
it has an endless supply - and thus banks making loans to the Federal
government take no risks, because all they promise their depositors
is the same thing that the Federal government promises them, namely
dollars of constantly diminishing purchasing power. Thus we see that
the Federal government, because it has the money issuing power, has
not the limitations of state and local governments; and can therefore
subsidize them and, through this power of subsidy, control them.
Freedom from the necessity of balancing the budget means freedom from
the necessity of collecting taxes from the citizens by the usual and
obvious and painful method. But the citizen does not thereby escape
taxes. He merely has them imposed upon him in a deceptive form
through inflation.
This
subtler form of taxation, which only the Federal government can
employ, permits the citizens to retain more dollars and even enjoy
the illusion of riches; but each dollar becomes weaker - with more
and more dollars required to pay the cost of daily living. It is
inflation taxation; and because of their ignorance of money, the
people are led to believe that the demanding by the merchant of extra
pennies with each purchase, is due to avarice on the part of private
enterprise. Thus the government escapes the resentment that would be
manifested if the budget were balanced and the cost of government
were paid in direct above-board taxes. By this easy method of
escaping public surveillance the government creates deferment of the
day of reckoning - but the reckoning must come with shock to both the
economy and the state.
This
does not imply that a political money system under a balanced budget
policy is or can be good. Some fiscal policies of a money issuing
government are less evil than others; but it is impossible for them
to be wholesome and beneficial to the economy and to the social
order, because, when the power to issue is monopolized, the failure
to issue is an evil, just as is the act of issuing. Both constitute
dictatorship over the economy. Either the people must have the money
issuing power or the democratic power is lost. No power can transcend
the political money power, once we accept its dominion, because money
is a license to buy and a license to buy is a license to live. We are
dependent upon money; and when any power outside ourselves controls
money we are dependent upon that power.
SELF-SUBJECTION
Nor
does this positive statement imply intended tyranny, for, we repeat,
government is forced to become a patron of the people by the people
themselves. It is helpless, because, due to a traditional error it has
undertaken a function that natural law precludes it from exercising
in the public interest. We beg ourselves into subjection and the
government into perversion. Yet we must beg because we need money and
ignorantly regard the government as our only source of supply. The
great delusion of the people is that communistic dictatorship can
come upon them only through conspiracy and use of military power and
that a revolution must occur. Evolutionary processes, subtle and
pernicious, operating through the government's money power, can bring
it upon us by our pleading for money – and even against the will of
the government itself.
There
is at this time before Congress a bill to subsidize the press through
government advertising. Did some one in the government propose this?
Oh no, it is a plea by a group of newspapers thirsting for funds from
the magical fountain. If this project is successful many newspapers
will spurn it at first but conditions will force it upon them. With
the press under pay of the government, can it be free? Yet no one can
say that the constitutional guarantee of freedom of press or speech
has been violated. The churches are in need of funds. If they fall
under government subsidies, as they must if the trend continues, will
we have separation of church and state? We have freedom of assembly,
yet it costs us money to assemble. Is not this money which we have to
receive by the grace of government equivalent to a license to
assemble and discuss? Is not our whole life based upon money license
- since we do not exert our natural power to create money but seek it
from our government? It matters not that we individually do not
beseech the government; the fact remains that those from whom we
receive it are the beneficiaries of special privilege and oblige us
to pursue them. Removed from contact with the fountain, though the
Constitution guarantees us the right of bargain, we have less
bargaining power than those who can take the bucket to the well.
Freedom
of press, freedom of religion, freedom of trade, etc., do not mean
that press, church and trade are to be free from control. It means
that their only control shall be by their private customers. Now, if
the government becomes their customer, they fall under the natural
customer control - which is not political but economic. If this
second government, the economic government, by reason of the peoples'
inability to buy, steps between them and the supplier, the suppliers'
customer consciousness will extend to the government, and not to the
people. The power of patronage cannot be suspended; it is natural.
To
satisfy the public clamor for price control, the government is
resorting to a back-door subsidy payment to producers, suppliers and
carriers - to compensate them for losses in observing price ceilings.
Thus the government becomes a customer of these industries; and is
not the customer always right? Do not most of the relief
beneficiaries decide that the incumbent administration is worthy of
support because through its influence they receive relief checks from
the government? Is not the farming industry influenced by what
benefits it receives directly from government? Are not most of our
industries now "customer conscious" toward the government?
Does the right of private property and free enterprise retain its
substance when one customer tends to dominate?
Is
not the postwar problem, that now excites so much concern, but a
problem of getting out from under the patronage of that overpowering
customer, the government? And are not private enterprisers torn
between the hope that they may again depend upon the private
consumers and the fear that they cannot function on that alone
without government patronage? Are we not approaching complete
demoralization in a complex of hopes and fears due to our dependence
upon government money power? Have we not become enervated addicts of
artificial stimulation?
What
we must learn from our experience thus far and what we face - is the
fact that no government, no matter how well intentioned, can create
money without evil consequences; because it can create money only by
spending - and that spending must be either non-productive, and hence
inflationary; or it must be productive, and thus be invasive of
private enterprise and productive of communism.
MONEY
ABOVE MAN'S LAWS
Money
is a law unto itself; political statutes cannot amend and no power
can transcend this law, which ordains that the issuer of money
commands the sphere of its influence. By giving the money power into
the hands of the government we gave it a second, an economic,
constitution that prevails by unseen and unsung processes over the
political constitution and may destroy the government itself. There
is nowhere a prohibition against our exercise of our natural power to
issue money; we merely fail to exert it - and, by our ignorance, we
thrust upon the government the impossible task of vicarious money
issuance. The government cannot issue money for us; it can issue it
only for itself; and we can get it only on the rebound. This is a law
of money that the government cannot alter. In its effort to deliver
money to us it can but create perversion and economic and political
maladies.
Money,
to be sound and wholesome to the economy and to the government, must
be issued only by private buyers under the safeguard of competitive
bargaining for private profit. The people must control the money
power; and, through it, control their economic and political affairs.
Only through the exercise of our natural money power, which is our
actual sovereignty, can we gain freedom, sound government and
prosperity. This is money freedom. It means tranquility within the
state and peace without. It means equality of opportunity. It means
freedom from want; freedom from fear. It means life, liberty and
happiness realized. It is the substance of all freedoms, without
which the statutes ordaining them are but empty shells.
How
can the individual possibly be assured of life, liberty and the free
pursuit of happiness when the very means thereof is controlled
outside himself and he is too ignorant to assert his inherent powers?
How can we proclaim the dignity and supremacy of the individual and
the subordination of the state when the mace of his power is not even
within his consciousness? What is life without the power to enrich it
and fashion it to private taste in the fullness of one's own purpose
to produce and enjoy? What is citizenship without sovereignty? What
matters a constitution full of prohibitions against invasion of
private rights when we do not recognize our most precious right - and
by this failure sap the substance of all other rights leaving only
the fetishes?
AMERICA'S
OPPORTUNITY
America
gave to the world the greatest political document ever conceived by
man. America now has the opportunity and the challenge to give to
mankind - through a universal, non-political money system - the
greatest of all charters of freedom. That charter will liberate
society's vast wealth producing forces, unify the peoples of the
world on the economic plane, preserve and effectuate democracy –
and banish war and poverty from the earth. Such a charter can be
written only in terms of money freedom.
All
the issues of the great war in which the nations are now engaged, all
the problems of postwar planning, all the hopes of humanity for a
better world, resolve themselves into but one question: can man in
this crisis master money? Our whole thinking on this subject must be
revised. The obvious lack of a science of money, after centuries of
experience with it, should suggest to everyone that there is involved
in past thinking and practice, a basic error. One may go to the
parliaments, to the academies, to the counting houses, to the market
places, in search of an understanding of money and it cannot be
found. Instead of mastery, we find mystery.
No
one need feel any inferiority in confessing lack of comprehension of
this subject, for ignorance is universal except among those who dare
to challenge the orthodox concepts. There is not lack of sufficient
intelligence to master the problem; it requires only the courage to
break with the old concepts and open the mind to new. If we have not
this courage in this grave crisis, we are lost. If we cling to old
ideas while men are sacrificing their lives, the dead shall have died
in vain. The blood of the dead cannot requite the brains of the
living.
Money
freedom is a new cause in human progress. It has as yet no clarion.
Ours is but a thin small voice in a world clanging with steel. But
all the greater is our responsibility. We are custodians of an idea -
and ideas are more powerful, more enduring than steel. The
inscrutable wisdom that inspires men to undertake new causes, often,
and in fact usually, commits to humble and obscure persons the task,
the honor and the privilege to nurture the struggling cause, and, by
so doing, not only serve humanity but become lifted out of their
obscurity.
Let
each of us assume leadership in the circle of our contacts no matter
how limited, with the devout purpose of bringing to our fellows a new
gage of freedom, a new inspiration and a new hope of a better day.
And this day and every day can be bettered by devoting the mind to a
constructive cause, rather than leaving it prey to the depressing
thoughts of war and destruction.
Let
us not ask despairingly, "what is this world coming to?"
Rather, let us assert confidently, "this is what the world is
coming to and I am part of the great constructive power that moves
it." If we here and now resolve to grasp the opportunity that
fate has brought to us, we shall have recollections of this day that
will pay dividends of satisfaction and pride as long as memory lasts.
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