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