MONOMETALLISM
VERSUS BIMETALLISM.
A
Criticism of Henry Dunning Macleod's New Work on Bimetallism.
In
the interest of completeness, this essay which concludes Kitson's
great work, intellectually toys with concepts that very rarely see
the light of present conversation on matters concerning money and
monetary systems. We trust that something may be learned from its
inclusion here, which shall bring this series to a close on this
blog.
Under
the title of "Bimetallism," H. D. Macleod, the well-known
economist, has presented an epitome of the various arguments which
monometallists urge against bimetallism, and on this account, if on
no other, the work is interesting, since it sets forth in a brief
space the positions occupied by these two antagonistic monetary
schools. Mr. Macleod is a forceful, fervent writer, who is not afraid
to push an argument to its logical ultimatum, and, as a general rule,
he insists upon doing so, with results altogether surprising.
No
writer has done so much to expose the absurdities underlying orthodox
economy, and especially the present monetary systems, or to make of
the science a rediictio ad absurdum, as Mr. Macleod. It is
true that he is quite unconscious of his achievements in this line,
achievements which are the very opposite of his intentions. Like
Samson Agonistes, in slaying his enemies he has slain himself. I have
shown in the chapter on Wealth how,
by following the ability to exchange as the sole definition of wealth
to its logical conclusion, he is led to categorize rights-of-action,
debts, mortgages, personal qualities, etc., as wealth; the result of
which brings him to the absurd paradox that it is possible for a
nation to destroy wealth without being any the worse off, and to
create wealth by the mere fiat of law. To the two well-known factors
of production, labour and land, Mr. Macleod adds two more, viz., law
and ink. Because written documents are frequently used in exchange
as tokens or symbols of wealth, Mr. Macleod imagines them to be what
they represent. He mistakes the shadow of a thing for the thing
itself. He confounds shadow with substance, the ideal
with the material.
Most
people believe that their own labour does not represent wealth.
Perhaps they have been mis-educated to think otherwise. Likewise
they are seemingly unaware that their skill to do anything implies a
potential wealth. Most understand land to be wealth, especially
where it is used for activities that encompass more than mere
dwelling upon it. As we have consistently argued, true wealth is
anything capable of generating an income stream, a livelihood.
We distinguish this from mere “stuff” any of which may be
exchanged for something else in the market for “stuff” but may
not be actively marketed as product for sale. When a huge
mega-corporation competes against a town of mom and pops and drives
them out of business, they are destroying wealth, no matter how much
wealth they may be replacing it with. Most economic models never
consider impacts like this as destructive, nor do they reckon that
the perpetrators of this casual destruction of wealth bear the real
responsibility for this destruction. Were real law to be in force,
those ruined or dispossessed of their livelihoods by these so called
“progressive” or “structural advances” would have every right
to seek redress against them in the nearest court. Instead, the kind
of law most practised is against such people as being backward or
reactionary and in support of the bigs who have control of the
monetary system and game it to their liking, all the while pretending
that their concern is with the widest possible consensus of
consumers, the collectivist ideology which supposedly pits the group,
any large amorphous intangible group will do, against the individual,
especially one standing in the way of obvious “progress,” or
actually, the usurer's profit.
A
story is told by Proudhon of a French peasant, who, having confessed
that he had stolen his promissory note from the man who made him the
loan, was advised by his priest to return the money immediately if he
expected absolution. The man replied in astonishment, "No, that
would be unfair to me. I will give him another note.” It would
appear from this that Mr. Macleod is not the sole discoverer of the
"great juridical principle" that mere promises-to-pay are
wealth. (Mr. Henry George and his Single Tax friends fall into a
similar error regarding “land-values.” Land-values do not
constitute any part of the national wealth. Their destruction would
leave a nation none the poorer. The land would be none the less
fertile or more restricted in area than before. Land-values are
fictitious, but a tax is always collected in wealth, and wealth is
always produced by labour. So, in pursuing this ignis
fatuus, land-values, Single Taxers
must inevitably tax the very class whose cause they champion —
labour.)
We
have already seen, and we believe this to be Kitson's irrational
prejudice against land owners, that he would do anything to rid
mankind of the notion that land is worth anything. He also has the
usual irrational notions that if land were somehow to be
redistributed, that greater economy would result. We understand that
the many vagaries of history have resulted in the present land
ownership, but we cannot support or suggest any violent changes at
this point would result in anything better as the fairly recent
history of totalitarian regimes shows.
In
the contention between the advocates of gold and silver coinage,
science can take no part. Exactly! Recognizing,
as we must, the physical impossibility of any commodity functioning
as money, — so long as it has an independent commodity value and
existence, — ^gold and silver, neither separately nor collectively,
can furnish a scientific basis for any monetary system. We
totally agree and further we hope that it is understood that our
proposal to use them as a means of exchange between our money and
theirs does not in any way imply such. This I
have fully demonstrated in this work. It will, however, be
instructive to observe the hopeless difficulties into which the
advocates of metallic coinage inevitably fall.
"The
whole of this vast controversy," says Mr. Macleod in his
preface, "is reducible to a single, simple and definite issue.
Supposing that gold and silver are coined in unlimited quantities,
and a fixed legal ratio is enacted between
them, (i) Is it the fixed legal ratio enacted between the coins which
governs the relatlve value of the metals in bullion? (2) Or is it the
relative value of the metals in bullion which governs the relative
value of the coins ? (3) And if it be found impossible for any single
country to maintain
gold and silver coined in unlimited quantities in circulation
together, at a fixed legal ratio, is it possible for any number of
countries combined
to do so by an international agreement?"
"This,"
he says, "is the whole gist of the controversy, and all facts
and arguments adduced must be directed to establish one or other of
these points."
From
120 years ahead in the future, and after the Rothbards and others
have come and gone, is there any sense in addressing the lunacy of
these questions? Oh my, what blockheads!
These
very questions which Mr. Macleod propounds show at once the gross
absurdities involved, and utter ignorance displayed, in this
contention. The
absurdities can be made clearer by an analogy.
Supposing
a yard-stick made of silver and a foot measure of iron.
(1.)
Is it the fixed ratio of the foot to the yard which determines the
relative co-efficients of expansion of silver and iron?
(2.)
Or is it the relative co-efficients of expansion of the metals that
determine the ratio of a foot to a yard?
(3.)
And if it be found impossible for any single country to maintain the
exact ratio of one to three between a foot measure made of iron and a
silver yard-stick, under varying temperatures, is it possible for any
number of countries combined to do so by an international agreement?
"The
bimetallists," he adds, "maintain the first of these
propositions, the monometallists maintain the second. To the third
proposition the bimetallists reply in the affirmative; the
monometallists reply in the negative."
"Our
business," he adds, "is to investigate which of the parties
is right in their contention."
I
shall show that both parties are wrong, and are contending over a
question that neither of them fully understand. I shall also show
that as between
monometallism and bimetallism the latter system is unquestionably
fraught with less danger to the welfare of nations. No
human law can possibly govern the exchange relationship of
commodities. The natural law of
supply and demand alone governs value. They
cannot reasonably do so, whether that is considered monetized value
or real value. Laws can, however,
artificially alter values by limiting supply and demand. Thus gold
enjoys an artificial value which it could not do but for law. So that
whilst governments cannot fix values or absolutely control them, they
can materially affect them by affecting supply and demand.
And further, why should they be doing this, unless it is to favour
the interests of someone in a privileged position who may benefit
from the enforcement of said law?
The
"relative value” of the metals in bullion does undoubtedly
govern the "relative value " of the coins, but in the very
opposite manner to what Mr. Macleod supposes. The more valuable a
metal is in bullion, the less valuable it is for coinage. Why?
Because it refuses to function as a coin. It
insists upon becoming bullion. Whether Kitson likes it or not,
he has just proved Gresham's law to be real: the “bad” money, the
cheaper something is as used for money, the more it will tend to
drive out of circulation the “good” money, the more expensive.
Now, I contend that the first requisite of a
good coin is that it shall properly discharge the functions of a
coin, and that is to facilitate exchange, to circulate, and to remain
in circulation. Agreed! A race-horse
is an admirable creature, but everybody will admit that it would be
worthless for street-car purposes. The common road-horse is
a much cheaper animal and an infinitely better horse for this work.
So it is throughout the entire industrial world; utility
determines value. But strangely
enough, monometallists cannot see that this law governs coins and
money, the same as all other things. "Money is as money does,"
says Francis
A. Walker, and history proves that, under free competition, dear
money (the more expensive), like all
commodities, must give place to the cheaper. This, Gresham perceived,
only he could not see that the cheaper was
the better money. We see here, quite plainly that Kitson
really does agree that Gresham's Law is a real one, despite Gresham's
prejudices, exactly as we see it; the cheaper substance money is made
of will drive out of circulation money made of more expensive
substances; paper will drive out of circulation any specie, period!
And swipe cards and bitcoin may be even cheaper, which doesn't mean
they are the best solution, only that they are cheap and by any
stretch of the imagination, easier to use, especially for long
distance transactions, than clunky chunks of metal. This is a real
law and no fake law made by any body of legislators is ever going to
change it.
No
material can be a useful substance out of which to coin money, that
is continually urging the coin to commit suicide. Gold is continually
causing coins to undergo dissolution by transforming themselves into
bullion. Now bullion is not money, it is not coin. The coin vanishes
the moment it becomes bullion. A metal that is good as bullion is not
necessarily good for coinage. Silver is far less liable to play the
truant and leave us in the lurch, than gold. It is not so disposed to
run abroad and create a stringency in the home market. "But"
exclaim the monometallists in alarm, "gold would be driven
out if silver were coined freely." Well, what of it? At the
present time, without any free silver measure, gold leaves the
country when the nation appears to be most in need of it, and it has
to be bribed and pampered and flattered in order to get it to return;
so that it seems inevitable that gold must travel. But suppose gold
disappears entirely from this country and silver takes its place?
What then? We should have a metal
that would not be liable to vanish, and one far more serviceable than
gold. "But" say the monometallists, "the country would
be flooded with silver, and all nations would pour it in upon us."
If you don't get all the foregoing, best reread it again until you
do. The point is that the discussion is hooked on the idea of money
being a commodity and then attempting to store some intrinsic value
into it in hopes of avoiding price inflation due to an excessive
expansion of this commodity so called money, whether it be of silver,
gold or anything else, even paper or just numbers in accounts on
computers. Again, what blockheads! The solution is to forever
destroy the concept of money as a commodity by adopting a fixed point
in time and a fixed transaction at that time as the basis for any and
all future units of money. Then it doesn't matter how much or how
little of this money is in circulation, nor are we tempted to think
in terms of commodity economics when considering the relative value
of a dozen eggs to an ounce of gold.
Let
us examine this assertion. We will acknowledge that under the free
coinage of silver gold would disappear. What would happen next?
Foreign merchants would hardly consent to ship silver here unless
they received something in exchange. In order to become loaded with
silver, we should, therefore, have to export an enormous quantity of
other goods, — which ought to please our friends the
protectionists, — and this would continue until it was no longer
profitable to import silver. Now, the immediate effect of a free
coinage law would be to increase the price of silver, and secondly to
decrease the price of gold, owing to the law of supply and demand.
The fewer
the nations demanding gold the less will be its purchasing power
(Because gold
nominally undergoes no change many suppose it remains invariable. Its
variations are, however, registered in all other commodities, and it
fluctuates enormously as I have shown in the chapter on Credit. These
fluctuations are largely due to the employment of credit).
Silver could not fall below its present price unless its production
was vastly increased.
All this is basic commodity economics, very well known and used to
this very day by speculators, who reap profits from changes in the
prices of various things and actively seek to create price changes in
order to make profits, as they profit whether prices are rising or
falling using various leveraging techniques unknown or unavailable to
most of us; devices known as options and derivatives. Attempting to
outlaw this activity has always proved futile because at this point
all said money is likewise nothing but another commodity. Until THAT
changes, there is no immunity from commodity speculation.
Another
effect would be to replace credits very largely with cash. In
Kitson's day, “cash” would have been silver or gold coins, not
the “notes” of some bank. Today “cash” is considered the
notes of a central bank or even as debit cards which offer no
anonymity in their transactions. Today fully
95% of business is done upon credit, and only 5% in cash. If
the commerce
of the United States was transacted upon a cash basis, it would
require more than all the silver coin in the world. Italics
appear in the original. By increasing the quantity of coin in
circulation, merchants would not require to ask for long time
payments, but would seek to gain the advantage of prompt cash
settlements; hence, business would be healthier and bankruptcies
fewer. Production would be cheapened and exchange enormously
facilitated.
We
have referred to this before in our paper on markets,
preferring a black market (no credit allowed) over all others. But
at that time, we didn't fully comprehend the concept of “split
barter.” We didn't fully understand that ALL completed
transactions are barter, whether money is used or not, and since
that is the case, ALL money (whatever it is made of) is evidence
of debt; evinces incomplete transactions. Our idea of
“settlement of a transaction” needs vast reorientation, as we
have been hoodwinked by our own invention; money. When we pay a bill
with money, what we are doing is arranging the terms of barter for
the person or organization that sent us the bill. Though the law
considers the transaction settled, it really isn't. They will take
the money we paid them and buy something they need, thereby
completing the transaction; settling it; it's still barter with money
functioning as intermediary. We are used to thinking that a
transaction is “settled” when we pay it, but settlement of that
transaction does not occur until the money we paid is in turn spent
for something that person or organization actually needs.
"But
what of those who have promised payments in gold?" The answer is
that they would have to purchase gold in the markets of the world as they
do today; and they would find this easier to do than now, since gold
would be cheaper, i. e. less silver would buy a given quantity of
gold than now.
A further result would be to put an end to this insanity of trying to
do the impossible, — of attempting to redeem one hundred millions
of credit with one million of gold, and thus giving the holders of
gold absolute power over the lives and fortunes of millions of men.
The power of gold — the most iniquitous, inexcusable, insatiable
privilege ever possessed by man, a privilege that exists solely
through the operation of human laws — will be completely broken in
the country that adopts free silver coinage. What he was
saying here by quick changes of commodities; dollars for gold, is
still the same. Bretton Woods was a secret assembly to create a
secret and special agreement as was Jekyll Island prior to the
foisting upon the American public and the world of the Federal
Reserve system. These were by no means meetings of people like you
and me to enact policies determined for the good of people like you
and me. Hence, as we continue to say, none of THEIR money is or ever
can be YOUR money. You only have temporary use of it and as long as
you do, you are THEIR slave. Understood?
"But
what would the dollar be worth?" "What would become of the
standard of value?" screams the monometallist. As to the worth
of the dollar, the same thing would happen with dollars as happens
with any other commodities. See, right here he's telling you
that all the money you know of is treated as a commodity. THAT's the
problem! Increased supply would cheapen them
and diminished supply enhance them. Free silver would unquestionably
cheapen dollars, — a consummation devoutly to be wished. We hail
bounteous harvests of wheat, of corn, of agricultural products with
delight, and devote one day every year for national thanksgiving. An
abundance of commodities, a plentiful supply of good things is what
we, as a nation, are eager to provide. Why, then, should we regard a
plentiful crop
of dollars with dismay? When wheat is plentiful it sells for half
the price it does when there is a scant crop. Wheat today sells for
one-fifth of what it did in 1S65; but no one has petitioned Congress
for the enactment of a law to restrict the growth of wheat.
But later on they did, didn't they? To the
sixty-five million consumers America's
population was much lower in 1895, fifty
cent wheat is a boon, although to the million or so producers it is
disastrous. And as J. B. Say says, "The well-being of consumers
constitutes the well-being of society." But the truth is that
the depreciation of wheat is due to a restricted gold currency.
Nothing has happened in the production or actual demand for wheat to
cause this fall of prices to fifty cents. This is the result of the
increased value of money, due to the restriction and contraction
laws. Here we catch a glimpse of the true inwardness of the
opposition to a free silver coinage measure. It comes from the
usurers not the wealth producers; that is, from the bankers and
money-lenders, who tax away from society all the increased
productiveness that invention and labour create. And make no
mistake, ladies and gentlemen, these same people are right now at the
helm behind the scenes, and have been since at least 1815 (Congress
of Vienna). They dictate to captive governments around the world
what they may and may not do. Popular democracy and representative
governments are a mere sham; the curtain behind which they pull
strings and swing levers. Any government that does not go along with
their diktats is labelled a “rogue” state. They not so secretly
hate the common people upon whom they feed. They have and shall
strip the common people of everything and place upon the world a
tyranny and call anything that stands against them “terrorism”
which has its root meaning in “from the earth.” It's long past
time to wake up for these people have managed to gain control of
everything, including science, so called, so called education, etc.
They have foisted a false science called ecology on everyone,
insisting that unless you have a place within THEIR world, you are a
“useless eater” and should jolly well just go off somewhere and
die quietly. What links every last one of these people together is
their reliance upon usury and its evil cousin, commodity speculation.
An
increase in the supply of money, which free silver coinage would
necessarily cause, would make monopolization of the currency far more
difficult than at present. Prices could not be manipulated quite so
easily, nor would labour be so readily exploited. Yes, but
this was just a stop gap measure. The free silver movement didn't
solve anything because it never dealt with the fundamental issues;
money as just another commodity and usury.
Whilst
competition is continually cheapening production, whilst inventions
and discoveries are making labour more productive, all this surplus creation
of wealth -understood as mere “stuff” here- is taxed away by the
money monopolists, by means of their "standard commodity."
It is not the landlord class, as Henry George and his followers
falsely assume, that tax labour
most heavily; it is the money power. Kitson got that one
right 120 years ago. It is this power that
controls both labour and land, by controlling the land-holding
class, as is evidenced by the enormous quantity of land held under
mortgage and which is continually increasing. Nothing has
changed since then now has it? And
into the hands of the money power, the land must inevitably fall.
Italics in the original (It
is strange that land reformers are so absolutely blind to this fact.
One never hears of Money-Lords begging for land on which to employ
their wealth. But landlords are continually becoming indebted to the
money power for the use of money. In other words, land is far more
plentiful and more readily procurable than money. And today money is
made more essential to men than land.) This sounds more
sensible than his foregoing pronouncements concerning the private
ownership of land, which we consider an absolute and incontestable
human right and an absolute assertion of responsibility; a prime
requirement for a sound economy.
It
is somewhat amusing to see how eagerly the monometallists insist upon
regarding money as a commodity, on the one hand, and how, on the other
hand, they refuse to allow the natural law governing the production
of commodities to operate upon this particular one. If money is a
commodity, there is no earthly reason why money should not be exposed
to free competition, just as wheat, cotton and corn are. On
what grounds of either justice or expediency should the banker be
protected in his industry, more than the farmer and mechanic in
theirs? Emphasis ours! And
now observe: By prohibiting free competition in money, every industry
is compelled to pay an enormous tribute to the persons controlling
it, since it is by money that all commodities are compelled to gauge
themselves. Every man who engages in business must come under this
yoke which laws, restricting the production of money, have placed
upon the shoulders of industry. It is impossible to escape this form
of slavery, except by becoming a part of the money power. If
you can't lick them, seek to join them. That too has been a trend
over the last forty years or so. It will not work of course, because
their ship, their bandwagon, their bus, was only intended for a
chosen few, not the common people. Elitists tend to think of
themselves as preparing a kind of Noah's Ark for the next deluge, the
failure of their own system. Not just anyone can get aboard.
Every
man is compelled, under our present monetary system, either to bear
this yoke, or form apart of it himself. He is forced to become
oppressor or be oppressed. Quite so, and this has happened to
a greater or lesser extent, with those who tended to side with the
more “Liberal” or “progressive” side of the “built for
ready made consumption by the masses” political dichotomy; choose
either side, right or left, red or blue, as long as it is a part of
their prescribed dialectic and they have you where they want
you, you become another unwitting dupe, another useful idiot of their
schemes. But make no mistake, at base it is all about money; their
money, not yours, and that certainly includes bitcoin.
But
what of the standard of value? Let Mr. Macleod himself answer. In
Vol. I., page 184, of the "Theory of Credit," he says, "A
standard of value is impossible. That unfortunate confusion of ideas
between value being the quantity of another commodity which any
quantity will purchase, and the quantity of labour embodied, as it
were, in the commodity itself, which is chiefly due to Adam Smith and
David Ricardo, has not only led to that mischievous expression
"intrinsic value," the source of endless confusion in
economics, but also the search for something which very slight
reflection would have shown to be impossible in the very nature of
things, namely, an invariable standard of value." . . . On page
i86 he says: "But value is a ratio; and it is impossible in the
nature of things that a single quantity can measure a ratio."
On page 184 he also says, "Value is a mental affection;"
and on page 187, "Value then, like colour, sound and odour, only
exists in the human mind. There is neither colour nor sound nor odour
in external nature. They exist only in the human mind."
Taking
either of these different definitions of value, what sense is there
in the expression "standard of ratio," or "standard of
odour," or "standard affection of the mind?" Equally
meaningless is the expression, a "measure" or "standard
unit" of ratio! And yet after these definitions, Mr. Macleod
coolly informs us that money is a measure of value; (Theory of
Credit, Vol.
I., p. 186.) that a certain coin can be the standard unit of money,
and that this coin is gold. Hence gold is the standard unit or
measure of value!!
But a coin is a single quantity, and he has already proven that a
single quantity cannot measure a ratio (p. 186). How will he
reconcile these conflicting statements? To talk of "measuring"
a ratio is sheer nonsense. Ratios are expressed, not measured.
Further, as I have shown in the chapters on Value (included here) and
the Standard of Value
,
ratios can be expressed only by numbers. You cannot express them by
metals. Gold and silver, when placed side by side, give no expression
of ratio. It is not until an exchange occurs, a barter transaction,
and the metals are weighed and their weights expressed in numbers,
that a ratio can be thought of, let alone expressed. This
gives us the rationale for basing our proposed Value Unit on a simple
barter transaction between dollars and gold (and silver) on a
specific date. We decided on this rather than Riegel's original
plan, to use a specific dollar at the close of business in one year
and deriving the initial ratio; 1 dollar = 1 Valun, which would have
made us rely on the change in purchasing power of dollars only, a far
more difficult task to quantify precisely by the way, when we need at
this time a far more universal basis for exchange between their money
and ours. By adapting the precious metals to this use, we slay two
dragons at once.
If
one ounce of gold exchanges for twenty ounces of silver, the value is
not expressed in terms of the materials gold and silver, but in the
ratio of the numbers of ounces, 1 to 20. Gold
is not, never was, and never can be a measure of value.
Italics in the original.
It would be just as rational to say that gold was a standard of
equality or the unit of distance, as to call it the standard measure
or unit of value. Values are, as Macleod shows, ideal. It is
nonsense to set up a substance as a standard or measure of the
ideal!! Of course, since any ideal is frankly not even real.
When
this fallacy, this preposterous delusion is knocked on the head, we
may hope for a scientific monetary system, and an end to financial
and industrial fiascos and failures. It would take an end to
usury to accomplish that.
I
have given what I believe to be valid arguments in favour of the free
coinage of silver, as opposed to the gold monometallic system. Not
that I consider free silver a complete solution of the money
question. Far from it. It is a step, however, towards liberty,
towards sanity, towards national prosperity.
Underlined in the original. It wasn't, because usury was
and still remains the principle problem.
I
have said that laws cannot fix values, although they can and
do affect them. The fixing of values, as spoken of by bimetallists, I
understand to mean
the equalizing of the purchasing power of coins, so that gold and
silver dollars have exactly the same purchasing power. And this is,
of course,
true. Not only is this true, but paper, which is "intrinsically
valueless," — to use the common term — may also have the
same purchasing power, as is evidenced by our greenbacks. Macleod
also shows this by admitting credits as money. He says in his preface
to "Bimetallism": "It
appears by the last official accounts that with a reserve of gold
amounting to £4,866,511, the Scottish banks are able to support
£92,240,356 of banking credits. These ninety-two millions of banking
credits have exactly the same effects in all respects as an equal
quantity of gold."
Whatever
may be the legal ratio of coinage, or the denomination of the notes
issued, experience, in this country at least, shows that gold coins, silver
coins and greenbacks all have precisely the same purchasing power.
The value of the metals in bullion has nothing whatever to do with
the question.
All that this determines, is whether this or that or both metals will
remain in circulation. Exactly so.
The
author of "Bimetallism" has unwittingly furnished a
complete and unanswerable argument against the gold basis, and a
sufficient reason for abolishing
it, in the following sentence:
"To
use a homely illustration, the vast amount of credit, by means of
which all commerce and trade is now carried on, may be compared to a
schoolboy's humming top, which, however large it is, revolves on a
very minute axis. At the present day gold is nothing but the minute
axis upon which
the whole of the colossal system of credit revolves." (Page 123.
Bimetallism.)
This
is precisely the condition which I have described at length in thechapter on Credit.
As Mr. Macleod aptly shows (although he does not so explain it),
the gold currency basis is a gigantic
scheme of swindling, by which the leading bankers of the world
control all its wealth and industry.
Emphasis ours! This is precisely why we chose precious metals as
the basis for our exchange between our money and theirs. If we tried
to erect another monetary system without precious metals, the elites
through their willing accomplices, the “Austrians,” the
hoodwinked Libertarians, the “gold bugs” etc. would simply sway
public opinion their way and there could be no fundamental change!
There are out there those whose prejudice against precious metals
BLINDS them to this fundamental reality. Therefore consider what
Kitson says here from 120 years ago. It's still the same. This
gold axis — upon which colossal credits rest — revolves in their
hands. And upon these credits rests the commerce of the world. So, by
the simple device of controlling and monopolizing gold, the bankers
of Europe control the world. They have power to cause the top to
revolve and to cease revolving at will. These men, who spin not, make
the entire industrial world spin or cease spinning at their pleasure,
a fact that this country has experienced only too often. Mr. Macleod
holds this system up as a model of perfection. He maintains that gold
is not scarce since credits form a part of the currency. He either
ignorantly or intentionally overlooks, the fact, that as soon as the
supply of gold is "cornered" that "this colossal
system of credit" vanishes, and down falls the entire industrial
structure. (For instance, suppose in the case of the Scottish Banks
above cited, a clique should corner the £4 million of gold — as
happened in this country on Black Friday? What becomes of the £92
millions of credits?)
Free
silver coinage would at least displace some of this credit, and so
prevent the entire collapse of the structure when gold vanished. If a
Japanese juggler seriously proposed to suspend Mr. Macleod upon the
end of a rod resting upon his chin, and to carry him about wherever
he might desire to travel for the remainder of his days, such a
proposition would be not a whit less rational than the present scheme
of balancing the world's industries upon a minute axis of gold,
controlled by a gang of jugglers! We accept that it is, and
so are dollars, euros, yen, etc. What we require is a reliable means
of exchange between that universe and ours. There is no other
logical solution; it must be gold (and silver) at some point in time
close to their highest retail value in terms of dollars (and other
currencies).
From
the standpoint of the gold monopolist, such a scheme is
unquestionably perfection. No system emanating from the human brain
has ever succeeded in placing within the grasp of man such frightful
power, such absolute control over the destinies of mankind as the
gold standard! (The gold standard is a device of the bankers for
measuring everybody else's corn with their bushel. Thus all the
wealth of the world is measured entirely by its purchasers instead of
its producers — who have no say in the
matter.) That being so, why was Rothbard so keen on
re-establishing it? Who did he ultimately support? Who do the
Libertarians ultimately support? Who do the John and Jane Galts
ultimately support? Who owns the vast majority of the gold mines on
earth? Who monopolizes the gold? Getting the picture yet?
The
whole of this vast controversy is reducible to a single, simple and
definite issue: Do men, when exchanging goods for money, exchange
them in
order to obtain a certain amount of a particular metal, or merely for
a certain amount of general purchasing power? Is it the actual metal
men require in exchange^ or merely the power which will enable them
to acquire other commodities? If it is the metal they want, then the
contention in favour of a metallic currency must be accepted as
correct. But, as I have elsewhere shown, this is a barter system,
pure and simple. The exchange of one commodity for another is barter,
even though that one be gold. Money does not enter into such
transactions. If it is general purchasing power that men seek,
metallic currency is the greatest absurdity of modern times. Now
every authority, ancient and modern, who has ever written upon this
subject, distinctly states that coins are only taken for their
purchasing power, as a means to an end; and no one has stated this
more clearly than Mr. Macleod in his "Theory of Credit." He
quotes writer after writer to show that money is an "order,"
a "token," a "ticket" or "counter," and
that coins are merely orders on society, that they are not taken to
consume but to exchange, to pass along. Very well then, but
if ALL transactions are reducible to barter, and they are, then the
intermediary; money, can have any form imaginable and need not have
any “intrinsic value,” and in fact if it does, the commodity
represented participates in the exchange and complicates rather than
simplifies the terms of the transaction. Kitson said just now that
the use of gold (or silver) amounted to barter, but even the use of
any money is still splitting the terms of barter between buyer and
seller. No matter what, settling of exchange transactions involves
barter of one person's property for another's.
"Money,"
Macleod says, "is in reality nothing more than the right or
title to demand something to be paid or done," and so on.
(Theory of Credit, Vol I.,
p. 12) Money is the demand to settle a barter transaction.
Turning
to his last work on "Bimetallism/* on page 25, speaking of the
errors of Mr. Lowndes, Macleod says, "He totally failed to see
that when persons
exchange their goods for silver coin they do so to obtain a certain
amount of fine silver bullion, and that it is perfectly indifferent
to them what
number of pieces of money it is contained in."
The
bimetallists can wait until Mr. Macleod reconciles these
contradictory assertions before seriously considering his breathings
of slaughter. It is very amusing to read the following sentence from
one who is forced to admit that, but for human laws, gold would be
driven out of circulation, "Thus it was made manifest that human
laws, even though sanctioned with the direst penalties, were wholly
ineffectual to control the laws of nature." (P. 106.) If gold
be the natural standard of currency, as he and other writers assert,
why do they oppose any measure which allows silver to compete freely
with gold? Nature has given us a very simple rule by which to judge
of the fitness of things, the superiority of one thing over another;
and that rule is free and unrestricted competition which leads
inevitably to the survival of the fittest. The opposition of
monometallists to this competition is a confession of failure.
Moreover, the Gresham Law, as we
have seen, is an assertion of the fact that gold is less fit for
currency than silver. And they are both less fit than paper,
or swipe cards, or mere numbers on accounts in some computers.
In
reading the writings and speeches of monometallists, one fact stands
out most prominently, and that is they utterly lose sight of the
principal function of money. From a perusal of Mr. Macleod's work,
the conclusion one naturally arrives at is, that the whole end and
aim of government, of industry and of life itself, is to maintain "a
perfect system of coinage." He says the chief business of a
government is to establish such a system. Now I submit that a
"perfect" industrial system is far more valuable to a
nation than
any coinage system — industry being the sole creator of wealth. Mr.
Macleod inverts the natural order of things. He says that since the
coinage law of 1816, England has enjoyed the most perfect system of
coinage ever devised by the ingenuity of man, and has been entirely
free from all coinage troubles. From our distance, we can't
help but regard all of these ideas as hopeless, backward and
misguided. The chief purpose for any state is the protection of its
citizens in terms of their life, liberty and property. This must
apply to each individual citizen first and foremost. The rights of
any collective or group do NOT supersede those of the weakest
individual or the state is totalitarian; a despotic tyranny. Matters
applicable to due process matter to any people under any state;
control over the nature or disposition of money does not. It's like
suggesting that the state's responsibility extends to the
establishment of standards of measurement, such that (and this has
actually been enacted occasionally) a yard is the same as a metre.
They are close, but they are not the same thing and any “law”
saying that they are is an absurdity. It is likewise the case that
“laws” attempting on one hand to suggest that GMO corn is the
same as non-GMO corn and yet they are distinct when it is determined
that a farmer has GMO corn growing in his field regardless of how
that seed got there. Why are these said “laws” so devised? To
aid some people's interests over other people's, showing a distinct
disrespect for real law and a favouritism toward some as opposed to
others. Whenever any state does this, they become an anti-state, a
despotism, etc. Most people do not require a textbook to see these
things. When a state cannot do its job; to protect the rights of its
individual citizens to life, liberty and property, most who can vote
with their feet and depart for places which can.
An
African chief is said to have one of the most remarkable huts in
existence. It is composed entirely of human skulls!! If Mr. Macleod
will tell us what the coinage act has cost England's workers, how
many human souls it has damned to maintain it, we may better judge of
its perfection. Certain it is that monometallism has cost the
universe more blood, greater loss of wealth,
more suffering, than all the natural calamities that ever happened.
The attempt to reach this "perfect" standard cost the
United States the ruin of seventy thousand of her merchants in less
than ten years (1868-1878), and converted a million of workmen into
an army of tramps. It is quite possible to stamp out poverty and
discontent and establish universal peace, by exterminating the human
race. Order may be preserved by the same methods under which peace
finally reigned at Warsaw. The general opinion of humanity seems to
be, however, that "perfection" in coinage may be purchased
too dearly, and some day the world will wake up and learn with terror
and amazement what sacrifices she has made, and how much she has had
to pay in order that England might enjoy "a perfect system of
coinage." Should we seriously ask ourselves how much
certain people really understand who talk up a great storm about
precious metals as opposed to paper, created by GOVERNMENT fiat money
would solve things? Do they not understand the fundamental realities
behind the scenes? Don't they care? Perhaps they don't. Perhaps
they have accepted the present rationale for economics as a real
science which therefore assures them that being selfish and mean is
their right to enjoy their freedom, etc. We're here to tell them
that they are not only VERY SADLY MISTAKEN but unless they change
course, it could very well cost them their lives! You do not want to
be on the Titanic called Mystery Babylon which has no lifeboats for
any but the elites, when it finally sinks.
The
"great authorities," which Mr. Macleod cites at length in
support of his present position in favor of the gold standard, need
influence no one. Oresme was a bishop and a courtier, and his
writings upon money show him to have been incapable of perceiving its
true nature. He continually confounds the ideal with the material —
money with its commodity. The same may be said of Copernicus and the
other so-called "authorities." In fact, Mr. Macleod might
as well quote Thales as an authority on the science of electricity,
or Hero on the expansive force of steam, or Roger Bacon as an
authority on chemistry, as Oresme and the others upon monetary science.
One
question in connection with this discussion needs to be cleared up.
It is always taught in text books and writings bearing upon this
subject, that some staple commodity, such as gold, is essential in
order to preserve a record of debt, and that if a fluctuating
commodity be selected, an injustice is liable to be done to
creditors. It will be observed in all the writings of economists
upon this question, that the interests of creditors are
considered to the utter exclusion of those of debtors. They never
inquire whether this or that system may work injury to the debtor
class; so long
as creditors are amply protected they seem to think all is
satisfactorily settled. The basis of all modern systems,
which corrupts every state, are USURY and THE PROTECTION OF USERERS
and nobody else! Similarly, protectionists
have a single eye to the interests of manufacturers, and are blinded
to those of the much more important class, viz., consumers, and yet
the consumers outnumber manufacturers more than ten to one.
But behind most manufacturers stands the same people as above;
USERERS and their class. Since manufacturers are beholden to them,
they are the convenient shield behind which USERERS exert FORCE upon
states.
If
dollars are commodities, as metallists say they are, why should they
not fluctuate as well as other commodities? Why should the law step
in and by restricting their supply and forbidding competition prevent
their price from falling below a certain limit, whilst it places no
limit upon their advance? Why should the bankers' commodity be
protected beyond that of any other producer? It is said that if
dollars became cheap nobody would want them, and industry would
become paralysed. They might as well say that farmers would
stop raising wheat because the markets were over-stocked with
agricultural machinery! Money is the tool of commerce and becomes useless
only when it ceases to circulate, and that is why gold is the very
worst material for money purposes. There would be no danger of silver going
out of circulation, unless paper was placed in competition with it.
Its commodity price and the government stamp would always save it
from going
out of circulation.
Again,
why should a money creditor be protected against loss more than any
other kind of creditor; creditor of land, of houses, of machinery,
etc.? If I lend my house for a term of years, or my horse, or any
other commodity save gold alone, I am merely paid for its use, and
the same commodity is returned to me irrespective of the variation in
price that it may have undergone during the term of the loan. For
instance, my house may have fallen fifty per cent during the term of
its rental. The law does not protect me against such loss, nor can I
compel my tenant to pay me for this loss. So it is with all other
commodities, save the bankers'. Is there any valid reason,
dictated by justice or expediency, why the money creditor should
always be protected against loss more than any other man?
Or why money-debtors should have to make good these differences
in valuation more than any other kind of debtor? It is true that
nominally the money-debtor is only expected to return the same amount
of money plus the interest, and hence it is argued that the money
creditor is getting back only the amount of his loan with fair
interest. But whilst the money nominally
has undergone no change, in reality it has, by changing its
purchasing power, which is really registered in terms of other
commodities.
This
I have fully demonstrated in the chapter on Credit.
And these variations in the purchasing power of money which affect
prices so disastrously, causing enormous losses to debtors, is due to
the fact that whereas free and unlimited competition is allowed in
production of all other commodities, money remains free from
competition — its supply remains restricted irrespective of the
growing need and demand of commerce.
(Actually, it has since Kitson's day been the goal of all big
corporations to restrict competition (John D. Rockefeller said that
competition was a sin. Theirs is of an arrogance too awesome for
most people to ever even imagine.)
Take
an illustration: Suppose a man owed me 100 bushels of wheat a year
or two ago, which at that time was worth say ninety cents per bushel;
and supposing he gave me a due bill for that amount of wheat, and I
now desired its redemption. The price of wheat today is fifty cents;
what is the real amount of the debt? One hundred bushels of wheat,
or the price of 100 bushels of wheat? The price this year or
the price at the time the debt was incurred? If the debt was merely
100 bushels of wheat, the debt is, in strict justice, settled by the
return of the 100 bushels, irrespective of price. If, however, I was
shrewd enough to make the debt in terms of money, I have gained
eighty bushels by holding the note. I gave but 100, I get back 180.
Now if I had loaned for one year the price of the wheat, viz.,
$90.00, the law would have forbade me to exact more than six per
cent, viz., $5.40, I should then have received $95.40 in money; but
in wheat my gain is in this case ten and four-fifths bushels,
reckoned at fifty cents per bushel. But the eighty bushels
represents $40.00, or a gain of forty-four and one-third per cent
reckoned in money, or eighty per cent valued in wheat!!
Let
us examine this matter closely. Suppose we go back twenty-five or
thirty years and imagine the same loan, viz., $90.00, made at that
time with
wheat at $2,00 per bushel. The wheat value of $90.00 in 1864 was
forty-five bushels. At six per cent, I should have received in thirty
years in interest
alone $162.00 in gold; so that in this year of grace, 1894, the
principal and interest amounts to $252.00, or about 275 per cent of
the original
loan!! Extortionate as this may appear, it is a mere bagatelle
compared with the farmer's commodity. In 1894 $252.00 will purchase
504 bushels
of wheat. So that by lending the
equivalent of forty-five bushels of wheat thirty years ago, allowing
the interest to accumulate, and drawing both principal and interest
now, I get back the equivalent of 504 bushels of wheat. In other
words, I make more than 1,000 per cent profit!! Italics
in original. If I had loaned forty-five
bushels of wheat at six per cent interest, I should receive during
the thirty years in principal and interest 126 bushels; but by the
simple device of lending the price
of forty-five bushels, I receive in principal and interest during
exactly the same period 504 bushels!
Again,
let us take the main product of the South, viz., cotton. In 1864
cotton was worth $1.30, whilst today it is worth only about eight
cents per pound. Ninety dollars in 1864 was worth sixty-nine pounds
of cotton. The cotton value of $252.00 is the equivalent of 3,150
pounds of cotton in 1894, or a profit of nearly 5,000 per cent!! And
yet we have laws against usury!! These laws, to reiterate
the popular conception of usury as too much interest, restricted the
money lender's take to perhaps 5% or 6%.
Now
I have taken two extreme cases in order to show how insidiously and
yet how greedily this "perfect" gold standard eats up the
wealth of nations by juggling with prices. Usury's evil
cousin, commodity speculation. But what we
have seen happen in the case of these two commodities, happens to a
greater or less extent in all others. (See the chapter on Price,
where this system of swindling is fully exposed.) Let it be
understood that these profits and payments are not imaginary.
Every farmer who incurred a debt in 1864 and
is compelled to pay it this year, must pay back at least four times
the amount of his produce which his debt represented at the time it
was incurred, even though he pay no interest.
If he pay principal and interest all together, he must pay from ten
to fifty times more than the original debt valued in his own produce.
And now observe: The only means the farmer has of procuring dollars,
is by producing and exchanging whatever agricultural product he may
be cultivating, such as wheat, corn, cotton, etc. Similarly with all
other producers. Men do not
raise dollars, but commodities, the prices of which are determined by
the dollar monopolists, so that the more men cheapen production, the more
real wealth they produce, the heavier grow their debts.
Under the reign of this golden standard (that Rothbard, Rand,
the “Austrians,” various said Libertarians, etc. seek to return
us to), "the flowers of industry are woven
into none but funeral wreaths. The labourer digs his own grave."
Here is the explanation of that
paradox of wealth which we considered in the chapter on that subject
— that increased productiveness tends to poverty. Is it any wonder
that our producers look with alarm upon any tendency to
over-production, when the abundant creation of wealth means
destitution and beggary for them?
Underlined in the original.
Let not the reader suppose the illustrations here given far-fetched
or unreal. Every dollar which this nation borrowed during the war
-Lincoln's War; the Civil War here-, the
farmers, mechanics, merchants and wealth producers have had to pay,
and are now paying interest upon to the total amount of hundreds and
even thousands per cent, reckoned in their own products, viz.,
commodities. It is for this reason the government finds it necessary
to tax both production and consumption, to maintain tariffs and play
the highwayman at every shipping port upon its coasts. -so
what's the difference in said VAT's; “Value Added Taxes?” Right,
it's the same scam and not one thing has changed in these past 120
years, just more wars fought for the same reasons; to make bankers
rich and poor men die- And when we reflect
that not a single grain of this borrowed gold seized a ship, captured
a fortress, or fired a shot, that it per
se took no part in either feeding or
clothing men, nor assisted in any degree in stamping out rebellion,
we must see how, in incurring a gigantic gold debt, the authors of
these measures added insanity to crime. (Of course the reader will
see that I here refer to the metal gold, not its purchasing power.
But this purchasing power existed before the gold was borrowed. It
consisted of the nation's credit. Those who argue that the nation
could not have existed without this gold, forget that it was the
national credit that bought the gold. If the gold speculators find
this credit good enough for them, why was it not good enough for
every other merchant? The nation could have purchased all its
supplies during the war on credit -as in reality it did, since its
credit was all that it had to offer for gold- without the
interference of the interloper — gold. It would thus have avoided
the burden of a gradually increasing
debt— which gold always
becomes. Italics in the
original and emphasis ours: and you still want to believe the said
“Austrians?” The war debt is today from
twice to twelve times as great, measured in our most staple forms of
wealth — agricultural products — Note that to us,
agricultural products, except for the seed for next year's crop,
cannot be considered wealth and our distinction is quite important in
its implications notwithstanding that its money
value has been reduced nearly one-half. In 1865 the debt represented
about 1 billion bushels of wheat, or about1.7 billion pounds of
cotton. After paying back an equivalent of more than 3.5 billion
bushels in principal and interest, we still owe to-day the equivalent
of more than 2 billion bushels, or more than 12.5 billion pounds of
cotton. In other words, after having actually paid the debt in its
wheat value three times over, and its cotton value fifteen times
over, we still owe twice the amount of the original debt in wheat,
and twelve times its amount reckoned in cotton!! Is it any wonder the
gold manipulators
are in love with their standard? Is it any wonder our farmers remain
poor?)
It
is easy to see that this system of wholesale plunder and brigandage,
which the wealth-producers are subjected to, is due to a restricted
and monopolized currency. Every exchange in modern commercial affairs
is a conversion of special into general purchasing power. Money,
whether in the form of coin, notes or credits, represents general
purchasing power. Now,
every producer is engaged in the production of special purchasing
power, represented by commodities. The value of every man's product is
gauged by the amount of general purchasing power in active use in the
country. It matters not how eagerly one man may desire the products
of another, he cannot obtain them unless he possesses money. So that
men producing different kinds of wealth, the exchange of which would
result in the satisfaction of their wants, are prevented from doing
so simply from want of this tool of exchange, — money — which,
but for law, they would create themselves. Exactly so! Here
again, Kitson mirrors what Riegel was later to enunciate; the real
issue behind and beyond everything political is and has always been
the issuance of money; who gets this power or controls it has the
control over everything else. Therefore, we
witness starvation in the midst of wealth. Hence it is that the
farmers of the Dakotas burn their corn for fuel, whilst the coal
miners of Pennsylvania and
Virginia are starving for bread, and the railroad companies go into
bankruptcy through insufficient traffic. This is the natural result
of what Macleod
calls "England's perfect system of coinage.” Note that
either with or without a gold standard, control of the issuance of
money by the same people results in exactly the same results.
Nevertheless, Kitson is on a roll- Observe,
now, the manner in which the gold standard cuts both ways. By
restricting general purchasing power, consumption is restricted,
making fewer purchasers. Competition is therefore confined to
producers. This tends to make the competition of production keener,
fiercer and more cruel than where competition exists among both
buyers and sellers. And this destructive competition eventually
leads to combines, trusts and organizations to restrict production,
in order to raise prices. -as indeed must be the end result
since USURY is the universal wolf at everyone's door that must be
paid. This is the true cause of that modern movement known as the
era of trusts, a movement dictated by the laws of self-protection to
producers. And this restricted production causes idleness, and turns
working men into beggars, tramps and thieves. The contraction of the United
States currency which has occurred during the war -as if that was not
one of its intended purposes-, has produced an
army of two million tramps.
-while today we may have ten times that number. The
general prosperity of a country is dependent upon the creation of a
large fund of general
wealth, consisting of all desirable commodities; and the larger this
fund, the happier and more prosperous must that community possessing it
become, under proper conditions. Note our difference; if
wealth is ONLY that capable of providing a living, an income, then
mere “desirable stuff” isn't the objective, but rather a large
fund of general wealth, consisting of desirable means to earn a
living. Our distinction is important!
Hence,
by restricting the issuance of money, by clinging to this gold
standard, we are restricting the production of wealth immeasurably,
impoverishing ourselves, and making it more and more impossible to pay
our debts. Understood? The “gold bugs” have NO solution.
Theirs has been tried and has FAILED every time it was used. Anyone
still advocating it is an idiot! We'll do better restricting the use
of gold (and silver) to vehicles for exchanging their money for ours,
not the other way around either, until their money becomes worthless,
as it inevitably will. What then of these “precious” metals?
They will be reduced in value to the stones under our feet!
The
natural operation of this gold standard is bad enough; but when we
remember that the natural limitation
to the supply of gold is still further limited by those who control
it, who cause it to appear and disappear at will,
how inconceivably injurious this "gold axis" is to our
welfare, all must admit. What, then, are we to understand from those
who insist upon the necessity for a “standard of values” as a
question of honesty between debtor and creditor — a standard which,
as we have seen, in thirty years has had the power of taxing away our
most staple form of wealth, viz., wheat, at the rate of 1,000 per
cent of the original loan?! (I have shown in the chapter on Money how
an invariable ideal unit of purchasing power can be obtained — by
divorcing money from the material — by abolishing the so-called
standard of value. Silver will of course fluctuate, and cause money
to fluctuate, as gold does, and therefore cannot form an invariable
unit. All we can do is to use it as a makeshift, as a stepping-stone
to the ideal. So long as people insist upon regarding money as a
comnodity, they must allow competition free play in this as in all
others. The variations in prices which I have illustrated are due to
two causes, viz., cheapened production and contraction of the money
supply. It is this contraction which is the cause of all industrial
depression, that free silver will partially remedy. Silver dollars
will go up and down as all other commodities do; but they will not
drop out of sight on the one hand, because the supply can never
exceed the demand when cash replaces credit (as it will do to a large
extent), and its supply will prevent future panics caused by its
disappearance in the other direction, through monopoly. Gold varies
also continually, but its supply being always scarce, its general
tendency is ever upward. Silver would always remain in sight, varying
between the two limits of vision. Gold disappears — but always in
one direction — and that when commerce is moat in need of it. Hence
those constant disturbances in business under which the world groans
! ) As we have witnessed over the intervening 120 years,
silver is at least 20 times more plentiful than gold and less easy to
monopolize, yet it is still a commodity and behaves just as gold
does; a silver standard is no better than a gold standard and we
propose to use silver as an exchange vehicle exactly as we propose
for gold.
To
further elucidate this subject, let me point out one feature that the
advocates of a standard entirely overlook. Money represents at any
given time
certain quantities of wealth. Read mere
“stuff” here. When
a man borrows gold, he borrows in reality whatever comtnodities he
happens to purchase with it. He does
not hoard it or make of it a work of art; he exchanges it. And when
he needs it again, in order to discharge the debt, he must go through
the reverse operation and exchange his products for gold. Pay
attention, because this is exactly the system Murray Rothbard and the
“Austrians” want us to return to. Now
supposing, between the time of his borrowing and discharging the
debt, gold has appreciated. The commodities that he bought, and which
were virtually what he borrowed, may not purchase one-tenth part of
the gold. What must he do? He must procure the gold even at the
sacrifice of his home and his life's savings. And if we trace the
operation still further, and suppose that with the sacrifice of the
man's home he discharges the debt in gold, and thus sustains his
reputation for honesty; in the hands of the loaner, what becomes of
the gold? He, like the borrower, does
not want the gold itself;
he merely wants its purchasing power. So that this "honest
standard," which, so far as the material itself is concerned,
undergoes no change,
has caused the ruin of the borrower, and grown from a comparatively
trifling burden to one of enormous magnitude. This cloud which is at
first no bigger than a man's hand, finally covers the heavens and
ends in a deluge of bankruptcy.
The
fact is, that gold currency is built upon the most gigantic system of
usury ever conceived. So gigantic, so appalling is it, that its
advocates dare
not have it exposed; and hence they are compelled to set up this
fiction of a "standard of value" and an "honest"
currency, as a matter of self-preservation
to avoid discovery! For it is morally certain that if the truth
were generally known, the gold standard would be swept out of
existence, and its authors and advocates consigned to eternal
execration. Whether this system was a creation of the human mind for
accomplishing what it has done and is still doing, or whether it is
an accidental product of civilization, the fact remains that the
system necessitates eternal indebtedness. (Monometallists tell us we
must not trifle with the gold standard, or else it will cause a loss
of confidence and we shall not be able to borrow any more gold! Thus
every attempt to escape from the necessity of borrowing they strive
to check. They make borrowing and indebtedness virtues,
instead of showing what they really are — national curses.) It
makes redemption impossible. Maybe some of the people who
attended the secret meetings at Jeckyl Island, Georgia prior to the
FORCING through of the Federal Reserve Act, knew this. From then on,
the gold standard was buried even though it continued until 1971.
But it had been superseded by Bretton Woods and other international
bankers' agreements by then anyway. What all idealist adherents to
the euphemistic “gold standard” claim they want is an end to
price inflation. But that didn't happen even while we were on a
“gold standard” so who is kidding who? Meanwhile, behind the
scenes are the bankers and financiers, who as a class prefer that
nobody recognizes them, for they know that were more to know, their
situation might be a good deal more precarious. So many outright
lies have been deliberately concocted to steer some elements of a
gullible public one way, whilst another element is steered in an
opposite direction, creating the dialectic they can use to manipulate
public opinion to suit themselves. It's been going on now for quite
a long time and shall continue to do so as long as the game goes on
and the music continues. Our position is “come out of her, my
people, lest you be implicated in her crimes.” It's time to start
something else in parallel with their system; monetary lifeboats for
a time when their system goes down and they plead with the world, or
more likely threaten FORCE, for just more of the same.
Dante's
inscription may well be written over this gold system, “All hope
abandon ye who enter here."
One
fact should be borne in mind by every reader of Mr. Macleod's book.
Whenever he speaks of national or universal bankruptcy, which he
predicts free silver coinage would result in, he speaks merely for
the money brokers and speculators, whose wealth is the result of
controlling the standard.
That goes for ALL academic economists including the said
“Austrians.” A recent suicide was heard to exclaim, "I am
about to blot out the universe," so the bankruptcy of these gold
speculators seems to them universal. It is said by economists that
the gold standard has existed in all ages, and that the general
opinion of mankind favours its adoption, and should,
therefore, be accepted. My answer is that every
nation has had this standard forced upon it by legislators acting in
the interests of the moneyed class.
Now THAT'S the truth! Anyone claiming otherwise is either an
intentional liar, or some stooge clown who parrots the smart sounding
remarks of other clowns and idiots. Got that? Believe me, I know.
I used to do it myself! It didn't mater one whit whether the money
tokens were made of gold, brass or paper just as long as THEY
controlled them. That also was FORCED on all nations. It
has not been adopted in any nation by the popular vote, nor as a
rational system, from choice. It has been established either by the
force of the governing class, as in Great Britain, or by trickery and
fraud, as in the United States; and with the repeal of those laws the
standard would die a natural death. So far as England is concerned,
getting other nations to adopt her system has resulted in draining
their treasures into her lap, and has won her far more extensive
conquests than all the achievements of her armies and navies
combined. The gold standard achieves for England more than a
successful war could do, without its dangers and expense. One
could have asked the average Englishman of those times whether
knowing this made him feel even the tiniest amount better about
himself or his lot in life. Surely the same could be asked of the
average Englishman of today as nothing much has changed in 120 years.
Today,
every nation but China (China is now offered a gold loan as the price
she must pay to stop the present war with Japan. Just as soon as she
becomes enslaved to the money-power, the Christian nations of the
world will insist upon a cessation of bloodshed — but not until
then.) is sending a stream
of wealth to the shores of England, as interest upon borrowed gold.
England's sway is far more despotic, absolute and extensive, under
this gold standard, than was the power of ancient Rome with her
armies. Those who imagine the prevalent use of gold a satisfactory
argument in favour of its continued existence, should reflect that at
the time slavery was under discussion, forty years ago, the same
argument was far more applicable to that institution than to gold at
this time. Every argument founded upon historical precedent favoured
slavery's continuance. No system had been so universally practised in
all ages of the world, as slavery. The ancient civilizations of
Egypt, of Greece and Rome were built upon it. It was the very
foundation of their social structure. It was proven to be
permissible, if not commanded by divine authority, as taught by Moses
and the Prophets. It was practised by the most enlightened and most
advanced nations of the earth, right up to the present time.
Philosophers and statesmen of the inductive school, who looked with
contempt upon a priori
reasoning, predicted that the world could not exist without this
ancient institution. Justice, however, finally triumphed, and the
result was that in solving the ethical problem, nations discovered
they had solved an economic question with it. The gain to morality
was found to be an economic advancement. Yes, it was adduced
by certain observant men among the moneyed class that it was just as
easy to cause people to become willing slaves through perpetual
indebtedness as it was to make of them actual slaves, and cheaper too
in that debt slaves are no one's direct responsibility.
I
have now, I think, shown the errors and misconceptions of both
monometallists and bimetallists, the unscientific nature of both
systems, and the impossibility of solving this question, save by
destroying the commodity-value of money, and thus reducing money to
its proper sphere, its natural function, as a medium of exchange. But
as between these two schools there cannot be a moment's hesitation in
deciding which is the better system, which will tend more to national
wealth and prosperity, and stop this continued borrowing of gold and
the creation of irredeemable obligations, which denudes us of all our
surplus wealth. Free silver coinage
will enable this nation to again achieve national independence, which
a body of men, either ignorantly or treacherously, sacrificed to the
gold power during, and shortly after, the war. That's
Lincoln's War – the Civil War. Then, when that standard had run
its course, they embarked upon the credit standard with the Federal
Reserve note and started another war -the First World War- to profit
from their new system. It will increase
the volume of money and enable debtors to honestly meet their
obligations. Gold, as I have shown, creates debts, and then prevents
men from
settling them. It places mankind in perpetual bondage. It is a prison
gate that only opens inward. Its victims are permitted to enter, but never
to escape. -like the Hotel California.
Not
only are the factors of well-being and of progress rendered impotent
by the gold standard, but the factors of evil minister to its
exploiters. Wars, State extravagance and political corruption all
serve to build up this pyramid of irredeemable debts which almost
every nation is now adding to, and
upon which the gold octopus feeds. Is there ANY difference
whether it's gold, silver or paper? No, NONE! The real villains are
USURY and COMMODITY SPECULATION, not the basis or intrinsic value of
the money. One can be stopped by simply abandoning it, and letting
it fall. The other can probably at best be sidelined until
governments adamantly do what all worthy states must do; protect the
lives, liberties and properties of their citizens by making all such
racketeering criminal and prosecuting those who engage in it. Will
any such thing happen tomorrow? I wouldn't hold your breath.
In
vain men toil, in vain they produce, so long as this tape-worm of
society exists. All our surplus wealth which should go to form a
national store, all our surplus creations we must sacrifice as a
peace offering to this insatiable cormorant. In vain science
prosecutes her voyage of discovery, and
art labours to convert the discordant and hostile elements of nature
into a system of usefulness and harmony. In vain temples of learning
are reared and libraries founded. All these institutions, all these
achievements that have for their object the advancement of learning
and the raising of labour to a higher state of efficiency, serve but
to strengthen and nourish this octopus, and give it a firmer grasp
and a stronger hold on society. It is beyond interesting that
Kitson should have chosen the octopus to describe this perpetual
conspiracy. It is a symbol used from his time right up to the
present to describe the oligarchic elite and its minions. In
vain ministers preach the gospel of peace and righteousness. In vain
peace societies are established. The gold standard means inevitable
war. So does ANY standard these same people put forth. It is
USURY that is crucial, not of what money is composed, as long as they
control it. Nations cannot possibly exist long
under it. They don't really care about national communities
either. In fact they'd prefer a great mish-mash of peoples and
cultures to any coherent national identity that can challenge them.
“The
children born of it are fire and sword,
Red
ruin and the breaking up of laws."
Quote
form Idylls of the King by Alfred Lord Tennyson
Repudiation
is inevitable. Let us clearly see this. It is not a threat. It is an
inevitable result. It cannot be avoided. Nations must strangle this
monster or it will strangle them. The gold debts of the world can
never be redeemed. Freedom, therefore, can only be secured by
repudiation. We agree with this and the process is already
beginning. Although gold does not enter in the
slightest degree into those things that sustain life, or into the
maintenance of life itself, by building industry upon this fickle
basis our civilization is in danger of being swept away. This
question, this money question, is the supreme problem of the hour.
It always was and it continues to be right up to the present moment.
It is not a mere abstract question of
economics. It does not merely concern statesmen and students of
finance. It is the greatest moral, the greatest social question which
mankind has ever had to consider. It concerns the lives, fortunes and
happiness of every human being in society, and of generations yet
unborn. All other questions sink into insignificance compared to this
one. We quite agree. It is the fin
di secle (close of the 19th century) problem,
and our answer to it will determine the character of the drama we
shall shortly have to witness, and upon which the curtain of the
twentieth century is about to rise.
We
have just been through the most turbulent century in human history
where all the warfare casualties were easily attributable to failure
to address this problem seriously. We still haven't done so and the
forces that caused by calculation or deliberate intentions, cost the
lives of hundreds of millions of human beings, lies fairly well
exposed to candid view. We doubt whether ANY real progress was made
since Kitson's time. Certainly technology has advanced in the
direction of allowing us to kill more people far more quickly and
even to make life on this planet unsustainable, all without having to
deal with some extraterrestrial threat such as an incoming asteroid
or comet. Our political leadership is frankly moribund. Those who
really control the levers of power are those who control the issuance
of money. We can't even contemplate taking this power away from them
without inciting more senseless violence. The only conceivable
solution involves starting something new in parallel with the
existing system as a lifeboat system for not if but when their system
fails. Since it has in the past, it will in the future. Governments
around the world cannot run unimaginably huge debts to central
bankers forever. Sooner or later their thing shall crash. What
then? Will billions of people starve or die due to lack of money?
That's absurd! We had better figure out what OUR money will be and
RIGHT NOW!
