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OUR MONEY TROUBLES.
The Cause and. the Cure.
By James D. Holden.
(Author of “The Disturbing lac
tor In Human Affairs,”)
No one in the face of recent events
can longer doubt the insufficiency of
our national currency system. All
recognize that it is defective, but all
do not perceive just why it is so,
nor what would constitute a true rem
edy. Indeed so uninformed on the
subject are men generally, including
most currency reformers, that the
baneful influence on our lives of a
defective currency system is but lit
tle understood.
After years of investigation of the
subject the writer presents for the
consideration of the inquiring reader
the following diagnosis of the situa
tion and offers a feasible remedy.
The purpose of the following argu
ment is to demonstrate that:
The money troubles of the individ
ual are really traceable to the fail
ure of society to provide itself with
a practical distributer of product!
This, as will appear from the fol
lowing reasoning, is the whole story
in a single sentence.
The Argument.
In our complex civilization the in
dispensable distributer of product is
Money. An insufficient money sup
ply necessarily results in imperfect
distribution. That which prevents
an equitable distribution of wealth
is A STATUTORY LAW—the silent
law which unduly restricts the vol
ume of full legal tender currency
(money) by confining it to the coin
age of the precious metals.
Why are our economic ills due to
the influence of this ancient Stat
ute 1
It is because the volume of money
resulting from the coinage of the pre
cious metals, and that issued upon
U. S. bond security, does not equal
society’s requirements. To eluci
date:
The dearth of money forces the use
of CREDIT as a means of distribu
tion. For the use of credit we
must pay INTEREST. The interest
we pay for the use of credit as a cir
culating medium absorbs (in the ag
gregate) THE SURPLUS EARN
INGS OF THE INDUSTRIOUS!
Thus we discover that, aside from
other causes, the ravages of Inter
est alone suffice to account for the
poverty of the many and the afflu
ence of the few.
Nor is this all. As the dearth of
money is the direct cause of Inter
est, so is it also the indirect cause of
Rent.
This is evident because of payment
of Interest, direct and indirect (all
consumers being daily interest-pay
ers) prevents the many from acquir
ing title to their homes and work
shops. Unable to own. them, they
must hire; hence the exaction of
Rent.
In Interest and Rent we have the
two factors that constitute the in
come of the NON-PRODUCER; the
two factors which enable the recip
ients to live without labor—to con
sume without producing. Eliminate
these two factors and the producer
will enjoy the fruit of his labor.
An insufficient money volume, there
fore, is the cause of poverty among
the industrious, and accounts for the
failure of the workers to own the
tools of production. Not only is it
responsible for the unjust division of
the present output, but so essential
a factor as money being inaccessi
ble so handicaps production as to pre
vent the advantageous employment
of Labor.
Thus this mute Statute, which con
fines the volume of full legal tender
to the coinage of the precious metals,
begets an abnormal social condition
—a condition wherein PLENTIFUL
LABOR SEEKS SCARCE MONEY.
This condition makes life to the many
an anxious battle for subsistence be
cause it is an anxious battle for an
insufficient issue of legalized curren
cy. Mature reflection will convince
the reader that when we shall pro
vide ourselves with a circulating me
dium equal to our REQUIREMENTS,
we will inaugurate a condition in
which MONEY WILL SEEK LA
BOR; thus instituting an industrial
era far preferable to that of any
known to man in any age of the
world.
Our economic ills being due to the
fact that legal tender paper is IN
ACCESSIBLE, and to no other cause,
obviously the remedy is to supply the
acknowledged deficit in our national
currency by providing the needed vol
ume of money.
Fortunately this is not a difficult
task.
What is Money 1 ? Money is mone
tized weallh. Nothing more. Our
present stock comes from monetizing
such wealth of the individual as the
law designates: (1) The coinage pro
cess for gold; (2) the certificate pro
cess for ether forms of wealth. By
tho policy of monetizing gold and sil
ver by the coinage process, and U. S.
bonds by the certificate process, we
provide but a mere fraction of the
currency REQUIRED.
Because of a common lack of fiscal
knowledge we are perpetuating a
financial policy which makes our in
dispensable circulating medium an
article of TRAFFIC; a policy which
makes this convenience inaccessible
to society to whom it is a NECES
SITY. Money is an article of traf
fic for the reason alone that there
are no legal provisions whereby it
may be called into existence by wealth
owners generally as it is by the own
ers of two forms of wealth, to wit,
owners of bullion and national bonds
—who alone enjoy this vital prerog
ative. Unable to obtain this essen
tial from Government, other proper
ty-owners are driven to the money
merchant, or banker, who exacts for
its use a form of tribute called “in
terest”; and in emergencies, like the
present, it is not obtainable at any
cost.
Thus because we monetize so small
a percentage of our stable wealth for
currency purposes, we (unwittingly)
WATSON’S WEEKLY JEFFERSONIAN.
create an enormous deficit in our mon
ey volume; and literally force our
selves to pay for the use of a mere
legislative device a sum each year
GREATER THAN THE ANNUAL
INCREASE IN NATIONAL
WEALTH!
it is an amazing truth —almost un
believable —that should we but ex
tend the provisions of currency law
so as to permit LAND OWNERS to
call new money into existence (as it
is now called into being by owners of
bullicn and government bonds) the
act would EMANCIPATE THE FOL
LOWERS OF USEFUL PURSUITS,
because it would destroy currency
monopoly—the parent of all monop
oly.
Query:
Why extend the currency provision
to land owners alone 6 /
Answer:
The underlying principle of the
measure proposed is the unrecognized
right of every citizen to have a cur
rency representative of his wealth in
the nation’s money volume; a right
the exercise of which is essential to
the equitable distribution of the
products cf labor—because barter is
impracticable, and currency a neces
sity. The proposal to monetize only
stable forms of wealth is one of prac
ticability. The volume of money need
not equal the volume of wealth. A
fiscal system that will provide an
ample circulating medium will confer
upon each member of society an indi
rect benefit equal to the direct favor
conferred upon the original recipients
—because it will insure a general dis
tribution of wealth by freeing society
from the direct and indirect exactions
of the usurer.
Query:
What is the visible deficit in our
national currency?
Answer:
It is a sum equal to the credit in
gredient in our present circulating
medium which consists of cash and
credit—about one part cash and five
parts credit, as shown by the Report
of the Comptroller of the Currency,
viz.:
Total bank “deposits,” Oct. 30,
1906 (cash and credits), $13,000,000,-
000; estimated amount of coin and
paper currency extant, $2,5u0,000,-
000; visible currency deficit, $10,500,-
000,000.
These figures show that we require
an additional currency issue of ten
and a half billions of dollars in which
to conserve the earnings of bank de
positors alone whose present savings
are conserved in nothing more tangi
ble than unsecured promises, in the
form of bank credit, the basis of
which—CONFIDENCE—may at any
time (as it periodically does) shrink
to nothing in a night.
Query:
How would an adequate volume of
money affect prices?
Answer:
Society has never known normal
prices because it has never had a
sufficient volume of money. When
the currency supply is unequal to
the commercial needs of a people, a
material increase in the supply causes
a temporary advance in prices, not
because of a cheapening of the money
unit but because the new currency
enables the recipients to gratify un
satisfied desires. The increased abil
ity to purchase creates a new de
mand for certain commodities which
advance in price when the supply,
does not equal the new demand. The
rise in prices from this cause, how
ever, will be temporary for the reason
that the currency issue 'which in
creases consumption sufficiently to
advance prices will also enable pro
duction to meet the new demand, so
that prices will readjust themselves
when the new demand is satisfied.
Were the volume of money equal
to the needs of commerce prices
would be determined by the two fac
tors, supply and demand; while with
an inadequate volume they are influ
enced by three factors, to wit, sup
ply, demand, and the tribute exacted
for the use of an exchange medium;
a tribute called “interest” which im
properly affects prices by increasing
the cost of production and distribu
tion to the consumer. Reflection will
convince the reader that prices would
not be disturbed by reason of the cur
rency issue proposed because the mea
sure would simply substitute one form
of circulating medium for another,
viz., cash for credit.
Conclusion.
It goes without saying that our
pressing troubles are Money troubles.
Beyond a doubt they are due to tho
influence on our fortunes of a fa
tuous fiscal policy—which keeps nino
of every ten men poor. We possess
the powei’ to free ourselves from the
legalized exactions of the non-pro
ducer. The question is—shall we ex
ercise it? Aware of the cause —shall
we apply the remedy? Are we equal
to the task?
Shall we make perfect our imper
fect currency system?
Shall we provide ourselves with a
volume of money equal to the require
ments of our commerce?
Shall we substitute cash for the
credit constituent of our circulating
medium?
Shall we monetize more of our
wealth for currency purposes?
Shall we instruct our lawmakers to
make legal tender paper as accessible
to owners cf stable wealth as it now
is to owners of government bonds?
Shall we advance a step and mon
etize land values for currency pur
poses by the certificate process?
“Money is a creation of law.”—-
Aristotle. “Money answereth all
things. ’ ’ —Bible.
In the light of these trutlis shall
we longer endure the blighting effect
upon our destiny of a man-made law
that makes this all potent symbol in
accessible to society which has power
to jreate it at will?
Let the reader who would better ex
isting conditions fancy for a moment
a state of affairs wherein society
would not be dependent upon the
usurer for the very life-blood of com
merce !
Let him imagine an industrial con
dition wherein the owner of stable
(Continued on Page Seven.)
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