DOUGLAS CREDIT

Wanganui Chronicle, Volume 76, Issue 115, 18 May 1933, Page 5

DOUGLAS CREDIT

FROM WHENCE THE MONEY? LECTURE AT WANGANUI. A lecture was delivered by Mr. C. L. White, on Monday night, under the auspices of the Douglas Social Credit Movement. Mrs. J. Butcher presided, and introduced the speaker. Mr. White has a sound grasp of Major Douglas’ analysis and proposals, and his lecture was listened to with profound interest. The lecturer Laid: It has been suggested that before beginning my actual lecture, I should explain simply the meaning of social credit, and of why and how Douglas Economic Science uses that credit in the economic life of the people, because many may not yet have seized its inner meaning. Of course it is self-evident that the proposed change in the accountancy of production and distribution is for the sole purpose of improving the consumer end—otherwise it would be mere folly to make any change. The absolute need for this change is due to the dynamic fact that production has the dynamic science behind it, distribution is still fettered to the age of scarcity, instead of being in unity with the age of plenty. Therefore, the science of production demands that its mate, consumption, shall be raised to a status of science, too.

Because of scientific' production, producers are unable to sell, or exchange their products for the money they need for their continuity; since potential consumers arc without adequate money to buy them, wjiich hurts equally the producer as the consumer, for they arc economically one. Therefore, the problem is clearly monetary, and Douglas people call it the economic gap between production and consumption. Therefore, Douglas Economic Science provides the means whereby this gap may be completely filled to the satisfaction. of producers as well as consumers—of the whole nation. Those of us who arc realists know of the existence of 'that gap, because of the shortage of money to exchange for the goods and services of which we arc in need.

Those who like cross-word puzzles and theorems are provided with the A and B theorem to convince them of the existence of the gap. Personally, I am perfectly satisfied as to the existence of the gap, therefore, I do not require my satisfaction to be reinforced by a theorem, a theorem too, whose proof is beyond question. The A and B theorem is simple and explicit, notwithstanding that many“get excited and heated about it. It is this: The A represents, in an industry, all the money that industry distributes in wages, salaries, and dividends; whereas B represents the money paid to other organisations for material or services, this money being distributed as A in those organisations. Therefore, A cannot buy A and B, for lack of mohey; a fraction cannot buy the whole. And as in one industry, so in all: the total industries of a country do not circulate the necessary money to enable their products to be bought and consumed, thereby slowing down if not stopping consumption altogether, which causes insolvency. That is the gap—that is the deadlock, and that is the reason for the Douglas Economic Science. There is no other. Major Douglas discovered it—after personal examination of 90 industries, during the post-war inflation, and because of its camouflagement he had to prove its existence by the proof of a theorem, which we now know as A and B. Since then, most people have come to realise—at least subconsciously—the existence of the gap by the fact of the unpayable debts—which were one of the means of hiding it; another, insolvencies and liquidations; another, purchasehire and long-term credits—due obviuosly and indisputably to a money shortage. . The object of the extended means of payment was to provide more time in which to wangle from somewhere more money, which, wise people know, does not exist. Not only that, but things are made worse by reason of increased cost of extending time of payment. You cannot draw ten thousand gallons of water from a well that contains only 5000 gallons. You cannot make ten shilling buy 20 shillings’ worth of goods. Moreover, the gap is getting wider as science stimulates production, and this by deercasement of human labour—the labour of the working man—which means that less money is progressively being distributed to consumers, in the producing system. Yet without the money thereby saved or lost to science, how can the product be bought? And if not bought, how can production ebntinue? And if not continued, how can starvation of world be prevented? Or even worse—civil warfare and internecine destruction of mankind? These questions do not disturb Douglas people, since the Douglas scheme of things is able to provide all the money necessary to enable continuance of production and consumption in a way never visioned—even by fiction writers. Therefore, the trouble is a money trouble, and because the bhnks create and control our money, the trouble is of their creation. One is simply amazed at the banks’ way of functioning the people’s credit —the way of insolvency, instead of solvency; the way of continuity of replenishment of the people’s cruise of oil, without which finance is made difficult restrictive, or impossible. And this brings me to the subject of the lecture.—“ From Where will the Money Come?” Monetary Problem. We are in the toils, as some other civilisations before us were—of a monetary problem, whose immediate solution, as we have seen, is of paramount importance to the continuity of ours. If our civilisation is to continue, and every Douglas person is determined it shall, we must overthrow definitely and completely the monopoly of our credit and money, so that production and consumption may be adequately and scientifically financed at each end; producing and consuming, or distribution. Previous civilisations were predominantly national, rather than international, whereas ours is interwoven with internationalism. This difference has increased enormously the complexity of the monetary problem; and, besides, it has served to hide the truth that the people’s money is functioned in the interest of entrepreneurs, plutocrats, and of the manufacturers of bank currencies from the credit of the people. It has done even worse than that in preventing the people’s discovering earlier a serious defect in their money system, namely, that there never is sufficient money provided to buy their own products or those exchanged for them, or to pay for services rendered. Realise what that means. No re pub, lie, no people, no principality, or king-

dom, or empire, is able to buy its own products. And what is true of a single community is true of all—the world cannot buy its own production, notwithstanding that people are in dire need of them, and this because money, the means of exchange, has been commercialised in the interests of the few, in that it has been kept in a position to cause either deflation or inflation, as the policy of central banks demanded; and in consequence of the policy of deflation, according to existing economics, international trading was sabotaged. Therefore, every effort possible, both by banks and Governments, is being made to restart international trading. Professor Gustav Cassel worked out his scheme to secure that end, since when much water and debris have passed under the international bridge. For instance, England (a) went, on, in 1925, to the gold bullion multiple exchange standard. (Not on the gold standard), (b) Went off the gold bullion standard, (c) Established sterling, to which is linked most currenThus England went further away from the gold dollar, (4.86) not nearer to it, as suggested by Cassel, but nearer to other currencies. These changes, togethed with all international attempts to remedy faults, have left the problem of re-starting international trading exactly where it was, or rather, the position has grown worse, as peoples, suddenly and without warning, are being compelled to live within their own economic spheres of production and consumption, causing thereby enormous accentuation of distress and unrest everywhere. Money and Finance. I consider it a privilege, a joy to tell you from whence the money will come —and this means money as the equivalent of finance. Uncivilised man, socalled, when he made things for himself or the tribe needed no exchange medium, money, since everything belonged to the tribal community. But when tribal life broke its bond of insularity by tribes living together as one people under one head, money became an important factor in the new lifecivilised life. Within the community money was a system of awards, convertible awards, for work done or services performed. This man in his more primitive communal state had his egoism altruised; whereas when he rose to a higher life it was necessary to egoise his altruism by a system of money awards. Money is a community award of purchasing power,* really an order on the products or services of.the community. While one can make a wheelbarrow worth 40s one cannot make 40 shillings worth of money, which latter is merely the lubricant of exchange between the maker ' of the wheelbarrow and the possessor of 40s. in money, who needs and buys the wheelbarrow. To quote Douglas, “Money is not made by industry. Neither is it made by agriculture, or by any manufacturing process. The farmer who grows a ton of potatoes does not grow the money whereby the ton of potatoes may be bought; and if he is fortunate enough to sell them, he merely gets money which someone else had previously. Purchasing power is not, as might be gathered from the current discussions on the subject, an emanation from the production of real commodities or services—much like the scent from a rose, but, on the contrary, is produced by an entirely distinct process, that is to say, the banking system.” But what is meant by what is called “costless” money? We know what usury money—interest-earning money —has done for the world. It has pauperised peoples because of an uneconomic taxation load, and 1 don’t suppose it has earned one per cent, interest, because of its uneconomic capital load. Obviously no amount of this sort of money can rehabilitate trade. Yet most of the costly money to the world was costless to the banks—that is why they stand huge losses in interest; besides, the assets arc their. “Bankers, Not Economists. Why did the banks, out of costless money, create inflationary capital loads on industry and states, and then destroy their creations by deflation? Professor Cassel affirms it “was done ignorantly; the bankers didn’t know what they were doing,” so intent were they upon their own affairs. Also the Governor of the Bank of England, as well as his brother of Montreal,, have publicly stated that they are bankers, not economists. It is because bankers are bankers not economists, that the Douglas proposals coniine to banking, bankers, who are to be relieved of the control of the people’s money—a job they confessedly do not understand, any more than they understand the running of a factory, farm, or business, Huw did central banks wangle thi.. costless money with their coffers? By licence from the people, through their executive the Government, to use their (the people’s) credit and function their money. What is the procedure? Cassel affirms, as do others, that banks create bank currencies, from which are financed governments, public bodies and what not, who pay interest and provide sinking funds. This is said to be good business —this making of millions of money from nothing—the digging deeply and freely into the nation s mine of credit, social credit, whose replenishment is by the continuity of wealth created by the industry and sagacity of the people. Therefore, if the people themselves, not haphazardly like the banks, but scientifically, use their owr. social credit in the creation of wealth, which would be as costless to .them as to banks, surely that would be the acme of business perfection. Someone says that that is ••Nationalisation” of finance. A 'liousand times no! For that connotes a government using its own printing press, producing money, not as a scientific means of exchange, but as a commodity, thereby causing a rapid and fearful inflation, with consequent depreciation of the monetary unit, ultimately requiring a car-load to buy a shilling’s worth of goodsl Douglasism is not out to make bad worse, but better, now since the people own their own credit, all that is necessary is to cancel the existing license or charter, and themselves function it by and through a qualified control board, who would keep the money transubstantiated from that credit, in constant equation with consumable goods by the operation of the equation discount of the Just Price Ratio and the National Dividend, working harmoniously with the law of supply and demand. The Government of the day would have no more control over such a board than it now has over the Supreme Court Bench, Harbour Boards, Councils, Power Boards etc., or over persons, such as the .sneaker, the Public Trustee, the Auditor-General, etc. To say otherwise is to say what is untrue, and those whe say so, do so cither from ignorance, or for the purpose of duping people, and unfortunately are to be found in

every community. One hopes ultim- 1 ately they will be weeded out of the s human family. No Confiscation. i Let us begin this year a new era in , man’s painful travail to a higher know- , ledge and appreciation of his inherit- . ance of the wisdom and free blood from his ancestors. Do not let the legion, or any such grandiose thing, united to plutocracy, divide the ranks of the people at such a time as this! (Applause). Th c people, without money, are about to begin a great fight—we hope a bloodless one, which can be handsomely and cleanly won if they stand shoulder to shoulder, and this without robbing any man or thing of what he or it owns. Douglasism stands for neither confiscation nor nationalisation. It stands for the development of the individual to the utmost, so that the collection of the best of a nation may, by its dynamic power lift the whole j nation on to a higher platform of humanity. It stands for King and country, because it stands for thc | people. It stands for right, not might. I It stands for the protection of th e old ! from fear of the future. It stands for the saving of our young people from the sabotage of those who would utterly destroy the opening buds of girlhood or youthhood with the acid produced from inefficiency and greed! (Applause). More or less money in a Douglas state, is to secure equilibrium between money and goods, that is, a true and fair purchasing power operating in the interests of the producer as well as the consumer, for they are one (Applause). Money Control Board. All this being so, a credit and Money Control Board should be immediately established, thereby cancelling the right of banks to lend money other than their own money, or money placed in their hands for investment. This would rob the banks of nothing they own, either by right or purchase; a privilege only is withdrawn, because the people cannot afford its continuance. (Applause). Take the case of “Wanganui Ltd.” Its credit is real credit, inasmuch as it is capable of efficiently providing the wants of a population twice the size, and without the increasement of its capital load. Here we have an economic real credit, socially created, which we can and should transubstantiate in financial credit, materialising therefrom a joyous city, healthful and beautiful. Instead of that we have sold our birthright to the banking system for a mess of pottage, and in consequence, rightly, are guarded by the chains of debt. The banks have our credit and charge us for it. What has been said of “ Wanganui Ltd.” can be said increasingly of “N.Z. Ltd.” whose real credit possesses the ability to finance a population of twice the existing number without any increment of the capital debt of the whole community., Such an increase would make solvent the worth while part of the producing system of the community, and would prove to the

world tho fertility and reliability of social credit when wisely and properly used. The banks supposedly create bank currency out of nothing—whereas it is produced from social credit, and when a government issues Treasury notes, these are equally a product of social credit. Yet the Government actually exchanges these notes of the people for bank currency, whose origin, as we have seen, is the same. Since the true source of money is real credit, the credit of the community, social credit, the whence of finance, and the foundation stone of (Douglas Economics, let us be done with this playacting, and assume mastership of our

own financial home. (Applause). Let us take this thing with both hands, determinedly, and transubstantiate our own credit into the money requisite of economic capacity consumption, thereby enabling us to live properly and humanly the life of self-respect, of banishment of fear, of nurture of the young, of industry, and of service to others—a worth while life for you, for me, for all of us. (Applause).