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’ W - 53.—.....eTi..,** - n an y l» 1 Ifr » Q 1 Q ti C| J O»C SOJIE PAGES TEO Pl PIT SCT(AP HOOK W- - -***• - - —n . _ 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.) PAGE THREE