I have looked into the “Positive Money” school and from appearances they seem to believe that removing the money creation function from private institutions and placing it into the hands of Government is a desirable move.
Douglas, of course, warned that this would be disastrous. It is a key provision of the Communist Manifesto and was practiced by the National Socialists also, in both cases to enhance the power of the State, and would merely place the Money Power in an almost impregnable fortress from which it would be almost impossible to dislodge from its position of centralized control of policy. I note that Positive Money has no theory of natural cost or policy to reverse inflation of prices and seem to regard full-employment as a legitimate and desirable social policy. They do not appear to have a concept of Cultural Inheritance or of economic democracy rooted in consumer sovereignty. As such, I am inclined to regard their ideas as a distraction at best and a menace at worst. We discussed Positive Money at some length on our SC Google discussion Group some time ago. From a Social Credit perspective I do not think that they have anything of value to offer. They seem concerned with “price stability”, and economic stability and “equality” in the context of high “employment”—none of which are consonant with Social Credit policy.
Sincerely
Wally Klinck
Then SWISS NATIONAL BANK 3.0, Positive Money 3.0, Vollgeld 3.0, Monnaie pleine 3.0
Positive Money and the Chicago Plan
by Anthony Migchels on February 25, 2014
Positive Money is undoubtedly one of the leading monetary reform organizations in the world. Their analysis of our monetary problems and proposed solutions are basically the Chicago Plan. But the Chicago Plan does not address Usury.
Positive Money, headed by Ben Dyson, is based in the UK and is a spin off of theNew Economy Foundation. It’s a not-for-profit corporation and is financed by a number of social justice foundations and grassroots supporters. Total income last year was 135,000 pounds.
They have a powerful presence on the web. A well designed website, with an accessible narrative. They are very active on Facebook, where they have more than 20,000 likes, which is very substantial for monetary reform advocates. And this number grows quickly too, a testament to both their efforts and the growing general awareness of the issue.
Their communication is well thought out and professional. They break down the problem as they see it in concise videos and memes (pictures with a few sentences, which can easily be shared on Facebook). They churn out these memes regularly and they are continuously shared by many people who have an interest in monetary reform. By providing them they enable these people to promote the issue and this in turn gives Positive Money a strong voice in the debate.
Here’s a short video outlining their basic take:
They have a number of unofficial sister organizations abroad. For instance Sensible Money in Ireland and ‘Ons Geld’ (Our Money) in the Netherlands.
Recently they scored a nice success, when the British Green Party included Positive Money’s monetary agenda in their own program.
The Chicago Plan
Positive Money basically promotes the Chicago Plan.
In an effort to address the causes of the Great Depression, a first draft of this plan was circulated March 16th 1933 by a number of economists from Chicago University. It ultimately resulted in a paper called ‘a Program for Monetary Reform‘.
Irving Fisher was the most notable of these economists. At the time his plan, while appreciated by his colleagues, did not gain the attention it undoubtedly deserved, for the reason that his reputation had been severely damaged by his blindness to the bubble that preceded the depression. Only three days before Wall Street’s historic crash in October 1929, he predicted that stocks had reached ‘a permanently high plateau’.
It was an honest mistake, a lesson many continue to have to learn the hard way: he was heavily invested in stocks and really believed in the nonsensical stories that people make up during these, easy credit fueled, booms. He had been a wealthy man, but lost a very substantial part of his fortune in these weeks.
This blunder not only severely diminished his fortune, it was also a great bust for his reputation as a leading economist and it’s perhaps understandable that people at the time gave more credence to Keynes’ analysis of the situation. Keynes, after all, had already written ‘The Consequences of Mr. Churchill’ in 1925, after this Rothschild agent had reinstated the Gold Standard at their behest. Keynes predicted that this move would lead to a depression, undoubtedly one of the key reasons the Austrians always hated him so much.
However, Keynes claimed that depressions were caused by falling ‘aggregate demand’ in the economy (without pointing at the monetary reason: deflation) and suggested that the Government should compensate for this with anti-cyclical spending: borrowing money for investments for infrastructure and the like.
Fischer, perhaps exactly because he had learned the hard way, was much closer to the truth. He correctly stated that booms were caused by credit expansion and busts by deflationary debt deleveraging. What is more: he blamed the banks for this and squarely pointed at Fractional Reserve Banking.
His solution was to end Fractional Reserve Banking and force the banks to lend only what they had in deposits. Money creation should be left to the State, who should have the Central Bank print debt free money.
This then, is also what Positive Money prescribes as an antidote to our current problems.
The Goals of Monetary Reform
The New World Order is basically a group of banking families. They own the banking industry and through it the money supplies of the world. They use this control to suck up the wealth of the nations through Usury, which redistributes, ultimately everything, from the many to the very richest. Compound interest makes it unavoidable that these families owned the world within a few centuries after starting their lending operations.
Their second major tool is the manipulation of volume. Usury and racketeering cause money scarcity and associated permanently depressed economies, which has been the norm throughout the West for most of modern history. Alternating inflation and deflation causes the boom/bust cycle.
The third main issue is that the banks control who gets credit and who doesn’t. They finance those they own or want to own and starve the rest. There is zero democratic control of credit allocation, let alone a recognition of the fact that the credit they create through Fractional Reserve Banking is in fact our credit, to which we are naturally entitled.
The Chicago Plan was devised to solve problem number two: the manipulation of volume and the associated boom/bust cycle. Positive Money correctly states that money must be only printed in good times with low inflation. This is indeed a reasonable formulation of how volume should be managed.
Under the Chicago plan outright bankster racketeering aimed at creating deflation would be more difficult, although not entirely ruled out.
It would probably also to a large extent solve money scarcity. But not entirely, because money scarcity is implicit in a usurious environment. Interest plus debt will always be bigger than the principal.
While solving problem two, the Chicago plan does not even address point one or three. Banks would continue to rake in the interest and pay out to the rich (‘savers’) and the poor would be paying. They would continue to decide who gets credit and for what.
The Money Power and the Chicago Plan
There is little reason to doubt Fisher’s (let alone Positive Money’s) intentions. It fitted well with the thinking of these days.
But on the other hand, the Chicago Plan is not very threatening to the Money Power either.
It is more than noteworthy that we see the same thing with the Chicago Plan as what has become the fundamental conclusion of our discussion of NSDAP monetary policy after they came to power: Schacht solved the depression by providing the economy with some extra liquidity through his MEFO bills, but he vehemently opposed and managed to shut down Feder and the Strasser brothers and their anti-usury movement.
For the Money Power it’s a given that volume is under discussion. Their Austrianism is a typical example. It’s the redistribution through the monetary system that is the taboo.
Some highly amusing anecdotal evidence for this statement was recently provided by a friend, a notable monetary reformer from the Netherlands, who told me that at some convention he was invited by a well known Dutch economics professor to join the wholly innocuous ‘New Economy Transformers’, centered around ex-World Bank chief Herman Wijffels. The good professor had no qualms off handedly adding “but you will have to stop talking about the wealth transfer through the system all the time”.
Another issue is that leading Money Power outlets, including the Financial Times and the IMF, nowadays routinely positively discuss matters in a very similar vein to the Chicago Plan.
Is it worthwhile limiting oneself in the discussion to the boundaries of thought that the Money Power itself sets?
Full Reserve Banking
Until about six months ago, they didn’t mention the Usury issue at all. They reasoned (and basically still do) that Usury is too big an issue and getting it on the agenda, let alone rid of it, impossible.
But the growing momentum and ongoing feedback on their Facebook page made them change course and they produced a number of their typically high quality vids and memes exposing the hundreds of billions per year the British banks are raking in through Usury and the wealth transfer from the 90% to the 10% through this process and Usury in general.
But they frame it in such a way as not to disturb their proposed solution of Full Reserve Banking. They claim private money creation is the problem.
But ultimately it matters not who creates the money. What matters is what it costs and whether volume is stable. What matters is who gains by money creation.
We have already discussed Full Reserve Banking extensively in this article. Suffice it to say that the Money Power will quickly reestablish full control over any ‘debt free money’ and will continue to reign supreme through interest-slavery.
A 200k mortgage would still cost 300k in interest. The opulent would still rake in most of the money.
The conclusion is that the Money Power is comfortable with proposals that end the depression based on the correct analysis that they are caused by deflation. Sure, while implementing depression, they combat these plans, but they are no existential threat and in fact are used by them to solve depression when they have achieved the goals they were aiming for in creating them: they provide the necessary paradigms for the public to ‘understand’ what is going on.
But can we really avoid the Usury issue, considering the myriad profoundly dishonest and destructive implications? Its supreme importance to the Money Power?
The more so since such reasonable ways to do away with it are readily available?
Conclusion
Positive Money and the Chicago Plan are close to Public Banking and the Hamiltonians. And even more so to Zarlenga and the American Monetary Institute. Modern Monetary Theory also fits in this group.
The main difference between the Hamiltonians and the others is either private or public fractional reserve banking with interest vs. private full reserve banking.
Their common basic idea is that the problem is that control of money is private and that it should be nationalized. They either nationalize money creation or the banks (which automatically means the money too).
They all avoid the crucial Usury issue and enforce the State. They do not really accept the commoner’s fair share in it all. The fundamental need to end interest slavery.
But to the common man it matters little whether he is paying interest to the State or to private banks. Governments are not the commonwealth and history shows less is more.
So while Positive Money is doing a wonderful job getting monetary reform on the agenda, their proposals are simply not comprehensive and are co-optable for the Money Power.
Related:
The Goal of Monetary Reform
Forget about Full Reserve Banking
Full Reserve Banking RevisitedThe Difference between Debt-Free Money and Interest-Free Credit
Austrianism is Dying! Truthers Unite!More on Mutual CreditHitler’s Finances, Schacht in his Own Words
Challenging the Oligarchy
Paul Krugman
DECEMBER 17, 2015 ISSUE
Saving Capitalism: For the Many, Not the Few
by Robert B. Reich
Knopf, 279 pp., $26.95
Robert B. Reich; drawing by James FergusonBack in 1991, in what now seems like a far more innocent time, Robert Reich published an influential book titled The Work of Nations, which among other things helped land him a cabinet post in the Clinton administration. It was a good book for its time—but time has moved on. And the gap between that relatively sunny take and Reich’s latest, Saving Capitalism, is itself an indicator of the unpleasant ways America has changed.
The Work of Nations was in some ways a groundbreaking work, because it focused squarely on the issue of rising inequality—an issue some economists, myself included, were already taking seriously, but that was not yet central to political discourse. Reich’s book saw inequality largely as a technical problem, with a technocratic, win-win solution. That was then. These days, Reich offers a much darker vision, and what is in effect a call for class war—or if you like, for an uprising of workers against the quiet class war that America’s oligarchy has been waging for decades.
1.
To understand the difference between The Work of Nations and Saving Capitalism, you need to know about two things. One, which is familiar to most of us, is the increasingly ugly turn taken by American politics, which I’ll be discussing later. The other is more of an insider debate, but one with huge implications for policy and politics alike: the rise and fall of the theory of skill-biased technological change, which was once so widely accepted among economists that it was frequently referred to simply as SBTC.
The starting point for SBTC was the observation that, around 1980, wages of college graduates began rising much more rapidly than wages of Americans with only a high school degree or less. Why?
One possibility was the growth of international trade, with rising imports of labor-intensive manufactured goods from low-wage countries. Such imports could, in principle, cause not just rising inequality but an actual decline in the wages of less-educated workers; the standard theory of international trade that supports such a principle is actually a lot less benign in its implications than many noneconomists imagine. But the numbers didn’t seem to work. Around 1990, trade with developing countries was still too small to explain the big movements in relative wages of college and high school graduates that had already happened. Furthermore, trade should have produced a shift in employment toward more skill-intensive industries; it couldn’t explain what we actually saw, which was a rise in the level of skills within industries, extending across pretty much the entire economy.
Many economists therefore turned to a different explanation: it was all about technology, and in particular the information technology revolution. Modern technology, or so it was claimed, reduced the need for routine manual labor while increasing the demand for conceptual work. And while the average education level was rising, it wasn’t rising fast enough to keep up with this technological shift. Hence the rise of the earnings of the college-educated and the relative, and perhaps absolute, decline in earnings for those without the right skills.
This view was never grounded in direct evidence that technology was the driving force behind wage changes; the technology factor was only inferred from its assumed effects. But it was expressed in a number of technical papers brandishing equations and data, and was codified in particular in a widely cited 1992 paper by Lawrence F. Katz of Harvard and Kevin M. Murphy of the University of Chicago.1 Reich’s The Work of Nations was, in part, a popularization of SBTC, using vivid language to connect abstract economic formalism to commonplace observation. In Reich’s vision, technology was eliminating routine work, and even replacing some jobs that historically required face-to-face interaction. But it was opening new opportunities for “symbolic analysts”—people with the talent and, crucially, the training to work with ideas. Reich’s solution to growing inequality was to equip more people with that necessary training, both through an expansion of conventional education and through retraining later in life.
It was an attractive, optimistic vision; you can see why it received such a favorable reception. But while one still encounters people invoking skill-biased technological change as an explanation of rising inequality and lagging wages—it’s especially popular among moderate Republicans in denial about what’s happened to their party and among “third way” types lamenting the rise of Democratic populism—the truth is that SBTChas fared very badly over the past quarter-century, to the point where it no longer deserves to be taken seriously as an account of what ails us.
The story fell apart in stages.2 First, over the course of the 1990s the skill gap stopped growing at the bottom of the scale: real wages of workers near the middle stopped outpacing those near the bottom, and even began to fall a bit behind. Some economists responded by revising the theory, claiming that technology was hollowing out the middle rather than displacing the bottom. But this had the feel of an epicycle added to a troubled theory—and after about 2000 the real wages of college graduates stopped rising as well. Meanwhile, incomes at the very top—the one percent, and even more so a very tiny group within the one percent—continued to soar. And this divergence evidently had little to do with education, since hedge fund managers and high school teachers have similar levels of formal training.
Something else began happening after 2000: labor in general began losing ground relative to capital. After decades of stability, the share of national income going to employee compensation began dropping fairly fast. One could try to explain this, too, with technology—maybe robots were displacing all workers, not just the less educated. But this story ran into multiple problems. For one thing, if we were experiencing a robot-driven technological revolution, why did productivity growth seem to be slowing, not accelerating? For another, if it was getting easier to replace workers with machines, we should have seen a rise in business investment as corporations raced to take advantage of the new opportunities; we didn’t, and in fact corporations have increasingly been parking their profits in banks or using them to buy back stocks.
In short, a technological account of rising inequality is looking ever less plausible, and the notion that increasing workers’ skills can reverse the trend is looking less plausible still. But in that case, what is going on?
2.
Economists struggling to make sense of economic polarization are, increasingly, talking not about technology but about power. This may sound like straying off the reservation—aren’t economists supposed to focus only on the invisible hand of the market?—but there is actually a long tradition of economic concern about “market power,” aka the effect of monopoly. True, such concerns were deemphasized for several generations, but they’re making a comeback—and one way to read Robert Reich’s new book is in part as a popularization of the new view, just as The Work of Nations was in part a popularization of SBTC. There’s more to Reich’s thesis, as I’ll explain shortly. But let’s start with the material that economists will find easiest to agree with.
Market power has a precise definition: it’s what happens whenever individual economic actors are able to affect the prices they receive or pay, as opposed to facing prices determined anonymously by the invisible hand. Monopolists get to set the price of their product; monopsonists—sole purchasers in a market—get to set the price of things they buy. Oligopoly, where there are a few sellers, is more complicated than monopoly, but also involves substantial market power. And here’s the thing: it’s obvious to the naked eye that our economy consists much more of monopolies and oligopolists than it does of the atomistic, price-taking competitors economists often envision.
But how much does that matter? Milton Friedman, in a deeply influential 1953 essay, argued that monopoly mattered only to the extent that actual market behavior differed from the predictions of simple supply-and-demand analysis—and that in fact there was little evidence that monopoly had important effects.3 Friedman’s view largely prevailed within the economics profession, and de facto in the wider political discussion. While monopoly never vanished from the textbooks, and antitrust laws remained part of the policy arsenal, both have faded in influence since the 1950s.
It’s increasingly clear, however, that this was both an intellectual and a policy error. There’s growing evidence that market power does indeed have large implications for economic behavior—and that the failure to pursue antitrust regulation vigorously has been a major reason for the disturbing trends in the economy.
Reich illustrates the role of monopoly with well-chosen examples, starting with the case of broadband. As he notes, most Americans seeking Internet access are more or less at the mercy of their local cable company; the result is that broadband is both slower and far more expensive in the US than in other countries. Another striking example involves agriculture, usually considered the very model of a perfectly competitive sector. As he notes, a single company, Monsanto, now dominates much of the sector as the sole supplier of genetically modified soybeans and corn. A recent article in The American Prospect points out that other examples of such dominance are easy to find, ranging from sunglasses to syringes to cat food.4
There’s also statistical evidence for a rising role of monopoly power. Recent work by Jason Furman, chairman of the Council of Economic Advisers, and Peter Orszag, former head of the Office of Management and Budget, shows a rising number of firms earning “super-normal” returns—that is, they have persistently high profit rates that don’t seem to be diminished by competition.5
Other evidence points indirectly to a strong role of market power. At this point, for example, there is an extensive empirical literature on the effects of changes in the minimum wage. Conventional supply-and-demand analysis says that raising the minimum wage should reduce employment, but as Reich notes, we now have a number of what amount to controlled experiments, in which employment in counties whose states have hiked the minimum wage can be compared with employment in neighboring counties across the state line. And there is no hint in the data of the supposed negative employment effect.
Why not? One leading hypothesis is that firms employing low-wage workers—such as fast-food chains—have significant monopsony power in the labor market; that is, they are the principal purchasers of low-wage labor in a particular job market. And a monopsonist facing a price floor doesn’t necessarily buy less, just as a monopolist facing a price ceiling doesn’t necessarily sell less and may sell more.
Suppose that we hypothesize that rising market power, rather than the ineluctable logic of modern technology, is driving the rise in inequality. How does this help make sense of what we see?
Part of the answer is that it resolves some of the puzzles posed by other accounts. Notably, it explains why high profits aren’t spurring high investment. Consider those monopolies controlling local Internet service: their high profits don’t act as an incentive to invest in faster connections—on the contrary, they have less incentive to improve service than they would if they faced more competition and earned lower profits. Extend this logic to the economy as a whole, and the combination of a rising profit share and weak investment starts to make sense.
Furthermore, focusing on market power helps explain why the big turn toward income inequality seems to coincide with political shifts, in particular the sharp right turn in American politics. For the extent to which corporations are able to exercise market power is, in large part, determined by political decisions. And this ties the issue of market power to that of political power.
Jim Young/ReutersJeb Bush, Donald Trump, Ben Carson, and Ted Cruz at the Republican presidential debate in Milwaukee, November 2015
3.
Robert Reich has never shied away from big ambitions. The title of The Work of Nations deliberately alluded to Adam Smith; Reich clearly hoped that readers would see his work not simply as a useful guide but as a foundational text. Saving Capitalism is, if anything, even more ambitious despite its compact length. Reich attempts to cast his new discussion of inequality as a fundamental rethinking of market economics. He is not, he insists, calling for policies that will limit and soften the functioning of markets; rather, he says that the very definition of free markets is a political decision, and that we could run things very differently. “Government doesn’t ‘intrude’ on the ‘free market.’ It creates the market.”
To be honest, I have mixed feelings about this sales pitch. In some ways it seems to concede too much, accepting the orthodoxy that free markets are good even while calling for major changes in policy. And I also worry that the attempt to squeeze everything into a grand intellectual scheme may distract from the prosaic but important policy actions that Reich (and I) support.
Whatever one thinks of the packaging, however, Reich makes a very good case that widening inequality largely reflects political decisions that could have gone in very different directions. The rise in market power reflects a turn away from antitrust laws that looks less and less justified by outcomes, and in some cases the rise in market power is the result of the raw exercise of political clout to prevent policies that would limit monopolies—for example, the sustained and successful campaign to prevent public provision of Internet access.
Similarly, when we look at the extraordinary incomes accruing to a few people in the financial sector, we need to realize that there are real questions about whether those incomes are “earned.” As Reich argues, there’s good reason to believe that high profits at some financial firms largely reflect insider trading that we’ve made a political decision not to regulate effectively. And we also need to realize that the growth of finance reflected political decisions that deregulated banking and failed to regulate newer financial activities.
Meanwhile, forms of market power that benefit large numbers of workers as opposed to small numbers of plutocrats have declined, again thanks in large part to political decisions. We tend to think of the drastic decline in unions as an inevitable consequence of technological change and globalization, but one need look no further than Canada to see that this isn’t true. Once upon a time, around a third of workers in both the US and Canada were union members; today, US unionization is down to 11 percent, while it’s still 27 percent north of the border. The difference was politics: US policy turned hostile toward unions in the 1980s, while Canadian policy didn’t follow suit. And the decline in unions seems to have major impacts beyond the direct effect on members’ wages: researchers at the International Monetary Fund have found a close association between falling unionization and a rising share of income going to the top one percent, suggesting that a strong union movement helps limit the forces causing high concentration of income at the top.6
Following his schema, Reich argues that unions aren’t so much a source of market power as an example of “countervailing power” (a term he borrows from John Kenneth Galbraith) that limits the depredations of monopolists and others. If unions are not subject to restrictions, they may do so by collective bargaining not only for wages but for working conditions. In any case, the causes and consequences of union decline, like the causes and consequences of rising monopoly power, are a very good illustration of the role of politics in increasing inequality.
But why has politics gone in this direction? Like a number of other commentators, Reich argues that there’s a feedback loop between political and market power. Rising wealth at the top buys growing political influence, via campaign contributions, lobbying, and the rewards of the revolving door. Political influence in turn is used to rewrite the rules of the game—antitrust laws, deregulation, changes in contract law, union-busting—in a way that reinforces income concentration. The result is a sort of spiral, a vicious circle of oligarchy. That, Reich suggests, is the story of America over the past generation. And I’m afraid that he’s right. So what can turn it around?
4.
Anyone hoping for a reversal of the spiral of inequality has to answer two questions. First, what policies do you think would do the trick? Second, how would you get the political power to make those policies happen? I don’t think it’s unfair to Robert Reich to say that Saving Capitalism offers only a sketch of an answer to either question.
In his proposals for new policies, Reich calls for a sort of broad portfolio, or maybe a market basket, of changes aimed mainly at “predistribution”—changing the allocation of market income—rather than redistribution. (In Reich’s view, this is seen as altering the predistribution that takes place under current rules.) These changes would include fairly standard liberal ideas like raising the minimum wage, reversing the anti-union bias of labor law and its enforcement, and changing contract law to empower workers to take action against employers and debtors to assert their interests against creditors. Reich would also, in a less orthodox move, seek legislative and other changes that might move corporations back toward what they were a half-century ago: organizations that saw themselves as answering not just to stockholders but to a broader set of “stakeholders,” including workers and customers.
Would such measures be enough? Individually, none of them sounds up to the task. But the experience of the New Deal, which was remarkably successful at creating a middle-class nation—and for that matter the success of the de facto anti–New Deal that has prevailed since the 1970s at creating an oligarchy—suggest that there might be synergistic effects from a program containing all these elements. It’s certainly worth trying.
But how is this supposed to happen politically? Reich professes optimism, citing the growing tendency of politicians in both parties to adopt populist rhetoric. For example, Ted Cruz has criticized the “rich and powerful, those who walk the corridors of power.” But Reich concedes that “the sincerity behind these statements might be questioned.” Indeed. Cruz has proposed large tax cuts that would force large cuts in social spending—and those tax cuts would deliver around 60 percent of their gains to the top one percent of the income distribution. He is definitely not putting his money—or, rather, your money—where his mouth is.
Still, Reich argues that the insincerity doesn’t matter, because the very fact that people like Cruz feel the need to say such things indicates a sea change in public opinion. And this change in public opinion, he suggests, will eventually lead to the kind of political change that he, justifiably, seeks. We can only hope he’s right. In the meantime, Saving Capitalism is a very good guide to the state we’re in.
1
“Changes in Relative Wages, 1963–1987: Supply and Demand Factors,” The Quarterly Journal of Economics, Vol. 107, No. 1 (February 1992). ↩
2
A good overview of the decline of SBTC is Lawrence Mishel, Heidi Shierholz, and John Schmitt, “Don’t Blame the Robots: Assessing the Job Polarization Explanation of Growing Wage Inequality,” EPI–CEPR working paper, November 2013. ↩
3
“The Methodology of Positive Economics,” in Essays in Positive Economics (University of Chicago Press, 1953). ↩
4
David Dayen, “Bring Back Antitrust,” Fall 2015. ↩
5
Jason Furman and Peter Orszag, “A Firm-Level Perspective on the Role of Rents in the Rise of Inequality,” October 2015, available at www.whitehouse.gov. ↩
6
Florence Jaumotte and Carolina Osorio Buitron, “Union Power and Inequality,” www.voxeu.org, October 22, 2015. ↩
Ken (and Others),
The politicians are either culpable or ignorant, incompetent participants in attempting to run a country by redistributing what remains of the relatively shrinking national income as the Banking system through the mechanism of industrial cost-accountancy appropriates an ever larger portion of the communal real (physical) capital through prices, even as that same real capital grows rapidly due to advances in technology. One has the distinct impression that not only does the average citizen not have the foggiest notion of the nature of the process—and further that they don’t want to know. C. H. Douglas blew the gaff on this evil financial system nearly a century ago and a vast body of supportive documentation has amassed from that time to the present. Yet, when the evidence is presented to the majority of people it elicits little more than a blank stare. Is the general population just as utterly witless, indeed bovine, as the Financial Powers assume?
And so we must endure this endless insane and mindless debate about striving for balanced budgets or proceeding with unbalanced budgets. No one seems to understand that the price-system itself is unbalanced, i.e. financial costs and prices generated by production are always and increasingly outstripping available distributed consumer buying power required to liquidate these costs. We are given two essential choices: Borrow to “fill the gap” (probably most people don’t even understand that this is done through the creation of new money by banks, which they issue as debt owing to themselves)--or balance the budget to restrict production so that people cannot enjoy the full flow of goods emanating from the production line, let producers go bankrupt as the banks foreclose upon their assets and shut the whole system down. We might just as well all commit suicide—not because of any shortage of real resources but because of a shortage of “money” which in the modern world is just figures in an account—pure accountancy. In other words, apparently, consequent to a general lack of elementary intelligence, let us end Civilization because of an apparent inability to formulate a system of accountancy which properly reflects our rates of production and consumption. To allege a shortage of money is as senseless as to speak of a shortage of miles, kilometers, grams or pounds, etc.
So, obviously we would rather carry on with an interminable and sterile debate amongst ourselves over how a growing insufficiency of monetary incomes should be re-distributed—rather than using such God-given brains as we may possess to compensate for the universal insufficiency. Meanwhile we can just carry on letting the banking system continue to pseudo-compensate the deficiency by issuing new money as inflationary debt owing to themselves as a charge against the future—or, alternatively, reducing that credit issue as it serves their policy to foreclose on the assets of the nation. Any people who will stand blithely by and because of their apathy or stupidity approve of grand larceny probably deserve the consequences of such irresponsibility. Do not people realize that the Financial Powers are Revolutionary Agents--power- and wealth-centralizing institutions who use their power of depriving the people of the benefits of their real productivity so as to foment social strife and justify increasing restrictions upon their legitimate freedoms? And so we expend ourselves in fighting amongst ourselves over the few pathetic crumbs of financial income left as the bankers cancel this income prematurely through the price mechanism.
And so, the British author, Eric de Maré concludes his excellent book, “A Matter of Life or Debt” (Onalaska, WA: Humane World Community, U.S. ed., 1991):
“This monstrous confidence trick, this bogus numerology, this mad metaphysical rite of borrowing oneself out of debt, is still blindly accepted by political leaders of every persuasion all over the world. It is so destructive and so crazy that it may bring all life on this planet to a hideous end. Are we to vanish from this earth without even a whimper of protest against the cause of that possible tragedy? Nothing in the world will, or can, go right until we first get our money sums right.”
Oh, well—perhaps the Higher Powers of the Universe have programmed us genetically eventually to self-destruct so they do not risk getting bored (or disgusted beyond endurance) with the same old errant life-forms. If so, In consideration of the manner in which we behave, this is probably understandable.
Sincerely
Wally Klinck
P.S. Again, I provide a resource list. By all means, do not view or read, much less study, this material if you are averse to the effort required or disturbed by the possibility of exposure to ideas which may not conform with your comfort zone of orthodoxy.
W.
http://www.washingtonsblog.com/2015/07/economic-grace-of-social-credit-national-dividend-and-compensated-retail-prices-to-facilitate-consumer-goods-distribution-in-an-age-of-robotics.html
www.socred.org
https://www.youtube.com/watch?v=aUN_1mhXNLo
http://www.youtube.com/watch?v=7F6h1s42vWQhttps://www.youtube.com/watch?v=6DH_a6589ik
https://www.scribd.com/doc/243201839/Struggle-for-Money-by-H-M-Murray-final-Edit
www.socred.org Here you will find Dr. Heydorn’s recent 550-page book “SocialCredit Economics” which is available in various countries on the Web at Amazon.
Dr. Oliver Heydorn’s recent lectures in Australia
http://youtu.be/LJ_mEOq7Ujw
http://youtu.be/-ZLKmCbbx5k
http://youtu.be/I6qOILvMYYM
http://youtu.be/SrwOcVqu6ec
Here is Dr. Heydorn’s presentation in New Zealand (Aukland):
https://www.youtube.com/watch?v=BuVhZa5KaVI#t=22
http://social-credit.blogspot.ca
http://www.socialcredit.com.au
http://en.wikipedia.org/wiki/Social_credit
http://socialcredit.schooljotter2.com
http://www.ecn.net.au/~socred/
https://www.youtube.com/watch?v=aUN_1mhXNLo
https://www.youtube.com/watch?v=7F6h1s42vWQ
https://www.youtube.com/watch?v=gHBqma-79z4
Major C H Douglas on 'The Causes of War' PART 1 and the …
Major CH Douglas on "The Causes of War" - part 2 - YouTube
The appended is a narrative of the history of American Social Credit prior to WWII.
I don't know who the author is—I received it anonymously.
I don't vouch for it—it does contain errors.
It appears to be written by a non-economist who is a student of the poet Ezra Pound.
I will split it into two parts.
Soldiers in the "Brave Army of Heretics" Social Credit in America 1933-1943
Naturally history without monetary intelligence is mere twaddle." (Ezra Pound to T.S. Eliot, 1940)
"It was all done by conversation." (Ezra Pound, Canto XXXVIII)
Part I: C. H. Douglas and the theory of Social Credit
Towards the end of the first world war, in or about 1918, a very serious character came into the offices of the London weekly The New Age. A dry Scots engineer by the name of C.H. Douglas offered the editor of the magazine, Alfred R. Orage, an article he had written on a new economic theory called Social Credit. The New Age seemed to be the right address for such an article—it was a periodical that had dealt with a variety of cultural issues, had been involved in Guild Socialism and Fabianism, and had taken a critical attitude towards British politics and propaganda during the war. Orage, a consummate journalist and experienced editor found the newcomer's ideas very interesting; he took him in hand and taught him a thing or two about writing. The result of their collaboration was beneficial to both: Douglas was able to serialize his first articles in the New Age and later on to write and publish his first books, Credit Power and Democracy and Economic Democracy in 1920, whereas Orage became the first convert to the new theory of Social Credit and a major propagandist for the cause overseas. While the discussions with Orage were taking place, Major Douglas unexpectedly got another convert to deal with, a main contributor to the New Age, a brash, exasperating American poet by the name of Ezra Pound.
The starting point of Douglas's theory was an observation he had made while working for a factory of the Royal Air Force during the war: the purchasing power a factory distributed through wages, dividends, and profits was smaller than the price of the factory's product, since the latter also included other factors besides wages: costs of materials and tools, as well as overdraft expenses like scrapped material and junk, office supplies, interest for bank loans, rate of depreciation of machinery etc. In other words, the factory was producing prices faster than it emitted power to buy; in Douglas's vision the income of the consumer could never catch up with the price level in a given economy. Douglas called this observation the "A+B Theorem," where A were payments to individuals through wages, salaries and dividends and B the payments made to organizations (raw materials, office supplies, bank charges). Together they formed the price of the product. Obviously A was smaller than A+B and it was becoming smaller than even B. The theorem was in stark contradiction to the economic orthodoxy of the times, expressed in Say's Law, which maintained that in a given economy, aggregate demand would automatically be able to buy the aggregate production.1 Douglas started from the premise of his observation, and argued that the paradox of poverty among plenty was due to a shortfall in purchasing power, which was perpetuated in the economic system, since what money was distributed through incomes was much less than the costs generated in the process of production by waste and inefficiency compounded with profit and interest on credit. This gap between prices and wages was temporarily bridged over by more credit created and distributed by the banks for new production. Douglas maintained that this technique temporarily compensated for the gap between wages and prices, but mortgaged the industry to the banks.
The A+B theorem became the fundamental article of faith for the adepts of Social Credit and made its way into Pound's Cantos of the thirties: the way in which the poet chose to present it reflects his own difficulties in coming to grips with economic understanding in general and with his friend's theory in particular:
"A factory has also another aspect, which we call the financial aspect. It gives people the power to buy (wages, dividends which are power to buy) but it is also the cause of prices or values, financial, I mean financial values. It pays workers, and pays for material. What it pays in wages and dividends stays fluid, as power to buy, and this power is less, per forza, damn blast your intellex, is less, than the total payments made by the factory (as wages, dividends AND payments for raw material bank charges, etcetera) and all, that is the whole, that is the total of these is added into the total of prices caused by that factory, any damn factory and there is and must be therefore a clog and the power to purchase can never (under the present system) catch up with prices at large, and the light became so bright and so blindin' in this layer of paradise that the mind of man was bewildered." (XXXVIII 190)
Starting from his under consumptionist assumptions, Douglas maintained that in the past years no industrialized nation had been able to buy its own product through the wages and dividends made available to the consumers through employment. Due to the weakness of the home market, export had become the very condition for economic survival. The gap between supply and demand was due to the credit system in which both production and demand were embedded. The system demanded that the overhead expenses continually rise in proportion to wages and if the gap between prices and income was to be remedied, a source of assisting and supplementing purchasing power, which did not derive from bank credit, had to be found.
Douglas also observed that due to improved tools and processes a huge mass of goods could be produced with fewer and fewer workers and predicted that employment would in the future be much diminished. His opinion was that the volume of goods and services at the moment of writing could be achieved by 25% of the available labor working seven hours a day (Social Credit 18); this of course added to the problem of income. Not only that the purchasing power was on the decrease, because the wages were becoming an ever smaller part of the price; employment would also decrease, due to better machinery and improved production process—hence the inevitability of more leisure time and less money available for consumption. Douglas regarded the increase of leisure as the best thing that could happen for civilization, since human energies would be liberated from drudgery and become free for creativity and invention. On the other hand, there was a stringent need to bridge the gap between reduced income and higher prices. He proposed to do this by the two-pronged measures of the national dividend and the rebate. The former would increase income for every individual, the second would peg prices at production costs and prevent them from rising.
Douglas's solutions were not merely monetary but the expression of a new vision of money, of the nature of value, and the meaning of human life, a vision which was at odds with the opinions entrenched in the age of the gold standard. His theory was implicitly attacking such received wisdom and well-established definitions as: "money is a standard of value,""money is gold,""there is not enough money." For Douglas, not the tangible currency but the intangible credit was the real issue. The economy did not rely on the limited quantity of gold but on the volume of credit that was made available against gold. When credit was plentiful production was booming and the rate of employment rose. In the times that credit was scarce and prices were forced down, unemployment, bankruptcies, and misery were the result. During the times of the gold standard, the financial institutions were able to control the volume of credit by buying or selling the metal. Since the volume of credit was pegged to the quantity of gold, the banks could control the volume of the national supply of credit and hence the framework within which the economy was allowed to develop. The sources of credit were the national debt and the loans made possible by the rules of fractional banking.
The national debt had been initiated in Britain in 1694 with the foundation of the Bank of England. At that time, William of Orange needed a loan to finance the Dutch Wars. The parliament had voted down his attempt to get this money through additional taxation. The king could get a loan with the help of a new banking institute that would award it on a smaller interest than the competition. The needed sum of £1,200,000 was raised by subscription, since the new bank had no capital and security. Moreover the king got the sum half in gold and half in the notes of the bank. The loan was put into circulation and functioned as money—the king had to pay 8% interest on it. The notes of the new Bank of England, which went up to the full sum of the loan and were created by a dash of the pen, were also circulating as money. Moreover, through its charter, the bank had the right to continue issuing notes which were competing with the king's notes on the market. During the following centuries, the bank maintained and extended its issue of credit and in 1833 its notes were made legal tender in England and Wales (Collins 23). Paper money was tangible credit, a mass of cheques, a conglomerate of loans against gold. The British national debt kept increasing, being pushed like a snowball from generation to generation. In a century it had risen to 274 million (John Adams, quoted by Pound LXVI, 381). In 1774 Britain was borrowing a sum equal to all her exports (XVIII 400). By 1830 the national debt had jumped to £900, 000, 000 (Thomas Hart Benton, 1833, quoted in LXXXVI 607). The bulk of the national debt could be regarded as an indicator of the increase of the money supply and consequently of England's economic development. The problem for Douglas was however, that this debt was made to a private, commercial, formally independent bank, owned by a group of shareholders, whose actions and cooperation with the government were not determined by the responsibility to the national interest, but by criteria of profit. Moreover, the interest on the national debt was a hidden, ever increasing tax, which the nation as a whole had to pay to the shareholders of the Bank of England. Or else, one can put it like Randolph of Roanoke, whom Pound quoted in Canto LXXXIX. Randolph was referring to the American situation, which was derived from the English one: "borrowing its own (the Nation's own) money". Said Randolph of Roanoke "And paying interest." 612)
In Douglas's view, the government and implicitly the taxpayer had to pay a national debt which cost the Bank of England nothing to create. The state could have furnished itself with this money by creating it itself, by the same method as the bank. It could have thus lifted from the population the burden of debt servicing and repayment. The national debt is just one possible way of increasing a nation's money supply. The other method is fractional banking, i.e., the practice of loaning approximately ten times (the rate differs from country to country and depends on historical period) the amount of reserves that the bank has at its disposal. Contrary to common perception, a loan received from a bank is only rarely already existing money transferred from deposits; it is rather new credit created by an inscription into an account especially created for the purpose. Such credit enters the market as interest bearing money, functions over a period of time, and is cancelled with the repayment of the loan. Again, fractional banking can be regarded as a procedure whereby the banks are legally entitled to earn interest by a dash of the pen. The method, invented in European banking at the end of the 17th century because of the scarcity of gold, survives intact into our time. Douglas's political protest was directed against these two issues and channels of credit. He maintained that through the instruments of the national debt and of fractional banking the financiers were monetizing for their own profit values that do not belong to them. The legal and moral right to create credit should belong to the community, as the sole creator of wealth. Moreover the vision of banks concerning what is good for them could clash with the vital interest of the nation. Writing at the end of the Great War, considering the huge loss of five million British lives in the trenches, Douglas argued that:
"For every shell made and afterwards fired and destroyed, for every aeroplane built and crashed, for all the stores lost, stolen or spoilt, the financier has an entry in his books which he calls wealth, and on which he proposes to draw interest at 5 per cent, whereas that entry represents loss not gain, debt not credit, to the community, and, consequently, is only realizable by regarding the interest of the financier as directly opposite to that of the community. Now it must be perfectly obvious to anyone who seriously considers the matter that the State should lend, not borrow, and that in this respect, as in others, the financier usurps the function of the State." (Economic Democracy 121.)
Douglas's conclusion was that the capitalist system under the rule of the gold standard, determined by price cutting, competition, and constant struggle for export markets, inevitably leads to war, since in wartime, production is meant to be destroyed, therefore there is no glut of the market. The national debt increases rapidly, unemployment is at its lowest, the volume of credit is severed from its gold backing and grows to meet the needs at the front. War is the very fulfillment of the system, the instance where capitalism is at its most efficient.2 Douglas set out to provide a vision of society in which competition would be replaced by willing cooperation, production would be pegged at the effective demand, and credit would be adjusted to the needs of the nation. Credit was intangible, a trust that a person, a firm or a community would continue producing saleable goods. But production did not start from nothing but was the inheritor of the achievements of countless men and women of the past whose creativity and inventions had brought civilization forward. Wealth was not only what a country could produce through labor at a given time, but also this foundation of previous invention which Douglas called "the cultural heritage." Every citizen had a birthright to this reservoir of wealth. This was not the bankers' credit but the community's own and could be monetized for the benefit of every citizen. The movement's name, Social Credit, means putting at the disposal of the population the financial equivalent of "its energy," i.e., of production plus national heritage, through the instruments of socialized credit and the national dividend. In this understanding, the community itself is to issue its own money— the supply would go as high as the estimate of goods and services it would be able to deliver. Private banks or governmental agencies would make this estimate and distribute the purchasing power to the amount needed. The dividend was not to be a fixed sum, but depend on the productive capacity of the community and fluctuate accordingly. Money would not be conceived as a commodity with intrinsic value (gold) but as a ticket enabling goods and services to circulate. It was obvious that the gold standard, with its inevitable restrictions on credit, had no place in Douglas's vision.2 For him, money was simply a slip of paper, issued against the credit of the nation by a decentralized credit authority. It would not be backed by gold but by the volume of goods and services that a community or nation was able to deliver. Moreover since money was not a loan, it would be interest free.
The ideas of the national dividend and of the state credit issued against the wealth of the community, were greeted by universal criticism. Everyone agreed that they would lead to inflation.3 Moreover, their implementation would need a huge bureaucracy employed in calculating the value of the cultural heritage and the distribution of the dividend. Corruption and abuse of the system would be inevitable. Douglas countered those criticisms through the idea of the rebate, the "Just Price." This was a retail discount that would peg selling prices to the cost of production, exclusive of financial costs. Like the dividend, it would fluctuate to achieve the balance between inflation and deflation. The prices would thus reflect production and the depreciation rate of the tools and processes within the cultural heritage. The price discount was subject to the same criticisms—it needed an army of accountants, it was subject to corruption, and it was inflationary. Douglasite measures had features similar to those of Socialism: productive capacity and credit would be controlled by the community and organized according to an assessment of needs and a program. Prices would be determined by the cost of production: competitiveness and price cutting would be abolished. Douglas paid attention to these similarities and maintained that he did not advocate nationalization, but rather what he called Great Britain Incorporated. Its citizens would be understood as the shareholders of a company. They would receive a national dividend simply as citizens. The production of consumables like food, clothing, and shelter would not demand from a person more than four hours of work a week. For the rest of the time the individual would have leisure to think for himself, be creative, and contribute to the cultural heritage. However, Douglas could not furnish an adequate distinction between nationalization and socialization of credit. Though he was militant for the rights of the individual and absolutely opposed to any kind of power centralization, whether political of financial, he did not specify clearly enough the concrete mechanisms in which credit control could be exercised by the community without nationalization (see also Pullen and Smith 230, 237).
For a poet like Pound who had never been employed, but who struggled for enough time to write relieved from economic anxiety, it seemed miraculous that an economist would make a place for makers and creative processes in his view of the ideal society. This was without precedent. He reviewed Douglas's Economic Democracy in the April 1920 number of The Little Review and took over his theory as his own project for the improvement of mankind. In his own economics treatise called ABC of Economics (1933), he stated and restated the necessity of reducing the working hours as an antidote to unemployment. Following Douglas, he pointed out that time is not money, but almost everything else: a man working five hours a day instead of eight, even if he earned less, would have more time at his disposal to feel free, go about his hobbies, have more potential for affection and creativity than he would otherwise have. Pound gave his own case as an example: he had spent his whole life among the unemployed—the artist was the perfect illustration of the fact that time and not money was the source of value and happiness.
Pound did not buy Douglas’s visionary community wholesale. In his ABC of Economics he conceded that the idea of the national dividend looked "goofy." But he did retain the primary importance of adequate distribution of purchasing power. Although more was produced than ever before, in "wealthy" nations like Great Britain or America starvation amid plenty was all too evident even to the uninstructed observer. Douglas had isolated the root of the evil—the malfunctioning of distribution was owing to the system of money and to the financial grip that the banks had on the industry and hence on the political life. As Douglas saw it and Pound was to maintain all his life, the interests of the banks and those of the industry were not the same. While banks are natural deflationists since by restricting the money supply they increase the value of their credits, the industry is straitjacketed by a deflationary policy and is interested in an economic environment in which the quantity of money is moderately increasing.
The great enemy of early Social Crediters was naturally the Bank of England, the very embodiment of the gold standard, the champion of tight money policy and credit scarcity. In 1925, as a consequence of the recommendations of the Cunliffe Committee, the Chancellor of the Exchequer, Sir Winston Churchill, could be persuaded that the best course for England's monetary policy is to remedy the inflation caused by the war, by returning the sterling to the prewar value of $4.86 (Collins 29). This measure, which meant a considerable shrinking of the volume of credit, proved disastrous to the British economy, which had considerably grown during the war: exports broke down, the industry contracted, unemployment reached 12.8% in the twenties and 16.5% in the thirties (Collins 28). Finally, England went off the gold standard in 1931. Chronic unemployment and perpetual crisis had led away from the confidence in efficient markets and laissez-faire economics.
Part II. The thirties, Social Credit, and the New Deal
The buoyant economic life of the twenties in America came to an abrupt end in the stock-market crash of October 1929. During the previous decade the consumption and investment boom had been financed on an expansion of credit. When the investment bubble at the Stock-exchange burst, the banks started calling in loans in order to protect themselves and pay their own debts. About eight billion dollars were taken out of circulation by foreclosing loans between 1929 and 1933 (Davis 185). The huge deflation diminished production and caused unemployment to rise. The army of the jobless, numbering four million in 1930 had risen to roughly 14,500,000 in three years (Horan 11). By August 1932 industrial production declined 51% from its 1929 base. National income dropped from 87.5 (1929) to 41.7 billion dollars (1933). There were 5,761 bank failures between 1929 and 1933 and as a consequence, approximately 9,000,000 savings accounts were wiped out. (Reinders 13, 18). Federal public relief before 1933 was inexistent. Alleviating the grinding poverty caused by the depression would be the main direction of the political effort.
Since no political force at the time had an unfailing solution that went to the root cause of the economic crisis, the beginnings of the new decade witnessed a welter of proposals for reform at all levels of the American society. These proposals were aimed at the creation and re-distribution of labor, as well as at increasing the volume of credit, as for example: the shortening of the working day (Senator Hugo Black of Alabama); the remonetization of silver (Senator Elmer Thomas of Oklahoma), stamp scrip (Senator Bankhead of Alabama); Dr. Townsend's pensions plan; various proposals to nationalize the Federal Reserve (Senator Bronson Cutting, Father Coughlin, Congressman Jerry Voorhis); Huey Long's Share Our Wealth program, Upton Sinclair's End Poverty in California (EPIC). Douglas's Social Credit became one of the voices in this chorus clamoring for reform in the spirit of greater social justice. Roosevelt's administration picked its way among the various proposals and adopted the solution of government paid work programs and welfare for the poor and the elderly. The overall political aim was to boost employment and increase general purchasing power so that consumers could continue to sustain production. Since the banking reforms of the New Deal, which joined these measures, made no significant change to the classical methods of increasing the volume of credit, the national debt rose to an unprecedented level. In the understanding of the Social Credit reformers, the state was getting indebted to individuals (operating the banking institutions) in order to create and redistribute wealth. In their view, this task should have been debt free.
In the 15 years which had elapsed since the discussions between Douglas, Orage, and Pound, Social Credit had become an international movement; from its British roots had sprouted ramifications in the USA, Canada, and New Zealand. Orage had done a good deal of proselytizing in the United States: he crossed the Atlantic and gave a series of lectures on Social Credit in New York in 1931. Through these lectures he converted a literary critic and journalist, Gorham Munson, who in his turn would play a key role in the American Social Credit movement. Additionally, Orage organized American funding for a new paper he intended to edit in London by the name of New English Weekly. For his part, Munson brought a significant contribution to the cause. As a leading member of the New Economics group in New York, he began publishing New Democracy, a Social Credit paper, and in his turn invited Pound to contribute. The new paper was to be a fortnightly and have the following structure:
"Page one: Notes of the fortnight (1800 words) by H.B. Brougham. Beginning of feature article on principles, policy or technique of Social Credit (2000-2500 words), said article in each issue to be good solid reading for students of financial economics. Page Two: Continuation of feature Social Credit article. Short literary feature, 1 column, 600 words. Page Three: News of the New Economics Groups in N.Y., San Francisco, Canada. News from England Correspondence Dept. Page Four: Literary causerie (1 column) by G. M. 600 words. Two columns of reviews 1200 words. Miscellany (1 column) of verse, aphorisms, etc. I would like to see in our number one brief manifesto to American writers or call to economic action or statement on literature and Social Credit by E.P. 600 words is the desired length. You are the most distinguished American man of letters sympathetic to Social Credit, and therefore the one to take the lead. If the invitation is appealing, won't you send me something, care of the organization on this letter-head." (New Economics Group, 425 Fourth Avenue, New York N.Y.) (G. Munson to E. Pound July 12, 1933)
The paper started publication on August 15, 1933, with Pound as one of the main contributors. Munson also enlisted the help of William Carlos Williams, who by that time had discovered Douglas (Weaver 103- 104). New Democracy developed as a "highbrow paper" to the disapproval of many Social Crediters, who would have liked a publication with more mass appeal.
The main problem that the American Social Crediters in America had to face was taking an influence on the political process. The special situation of the Great Depression, as well as Roosevelt's New Deal measures were a favorable context in which a program proposing such radical monetary reforms like the change of the nature of money and the distribution of a national dividend could find a chance to be discussed and implemented. But the exact nature of the political course to be taken was the element of discord that split the American Social Credit movement into a number of small groups trying to influence the political process on their own. Munson soon found himself on shifting sands. The few rich people who had agreed to finance the New Economics group wanted more control within the movement in order to support their own views on the right policy. The first split occurred between New Democracy and the New Economics group financed by Alan Brown. Brown managed to oust Munson from the group and limit his activities to the paper in May 1935. At that time, New Democracy was the only organ of the movement and the official and public reference point of the groups on the East coast. Brown's idea about political activity was that the New Economics group should concentrate on local projects, to be financed on a one at a time basis. The group decided to finance another paper called Money, which should have the mass circulation it had missed. On the other hand, the few rich people who financed the New York group were not willing to invest too much and establishing two competing periodicals did not contribute to the spread of the movement, since resources were divided rather than pooled together. Munson, on the other hand, was in touch with the California groups, wanted to increase the circulation of his paper and influence political circles in Roosevelt's entourage. But this did not seem enough to other factions. The Californians, grouped around their own paper, Controversy, also wanted to play a leading role in the movement. Their opinion was that leadership and guidance should originate in the West and spread to the East. Competition and not co-operation was determining the direction of the political effort.4
Pound was in contact with all these factions, urging them to coordinate their activities and find bridges of agreement. He also urged temporary alliances and mergers with other reform movements like those of the Gesellites, Townsend's clubs, or Huey Long's Share Our Wealth adepts. Though severely criticizing the others' ideas, he was prepared to support them part of the way towards implementing Social Credit measures. He was also in favor of temporarily dropping the strict allegiance to Douglasite theory, in order to flow into a larger movement for reform. Pound's idea was that reformers should not use the founder's books as a sort of "koran" and demand a strict interpretation sticking to the letter. The lack of flexibility and the unwillingness of Social Crediters to discuss proposals coming from other camps in order to improve their own theory made him lose interest in the movement after the American presidential elections in 1936.
Though he was living in Italy, Pound tried to influence the American political process on his own, by two sets of measures, which were reflected in his correspondence: one method was to exercise influence on Roosevelt himself through his friend William E. Woodward, the author of Washington, the Image and the Man and Meet General Grant. Woodward was a member of the Industrial Advisory Board working under the aegis of the New Deal, had extensive knowledge of alternative economics, and knew a great number of politicians and businessmen personally. The historian had economic opinions of his own and agreed with the main Douglasite dogma that the Depression was not due to overproduction but to insufficient purchasing power. He remarked that slave work was successful only in agrarian societies, but in industrialized nations the wage earner was supposed to buy the national product, hence a system had to be devised in which he had enough economic power to do so; in America, the wages were higher than in other parts of the world, but not high enough. In Woodward's view, the roots of the crisis lay in interest (the population was deeply in debt in order to buy at least a part of the national output); unregulated production (capital investment into goods already overflowing the market); inefficient methods of farming; and finally absolute control of money by banks. In Woodward's opinion, American banking was not a business, but a racket; financiers were not simply content to give the necessary credits to industry, but felt impelled to acquire controlling stakes in it. The historian maintained that after the wildcat juggling of shares at the Stock Exchange, it was high time for the state to step in and regulate industry, money, and labor in the interest of the nation as a whole (W.E. Woodward to E. Pound January 25, 1934).
Given Woodward's critical opinions of American liberalism and his proximity to the president, Pound attempted converting him to Social Credit and through him also Roosevelt. He therefore wrote to the historian on October 8, 1933:
"If you see him [Roosevelt] I wish you cd/ get it into his head or out of his face / that problem is simple arithmetic/ ratio between the WHOLE purchasing power of community and whole mass of goods NEEDED (or wanted % He admits that when HALF the pubk/ can buy what the other HALF produces, it is damn unpleasant. The god damn trouble is that the WHOLE of the pubk/ hasn't the printed paper to shift the NECESSARY mass of goods from factory to consumer, i.e., buy what the whole of the pub/ produces. LET ALONE what it cd/ produce with no effort to speak off/ All nationalization of production is clumsy: bolchevik etc. the nationalization of community controll of MONEY (credit issue etc.) is THE road." Since Pound did not get an immediate response to his demand, he asked Woodward a month later (November 3) whether Douglasite ideas like the national heritage, or the deficiency of purchasing power were received officially or unofficially. Woodward finally replied on November 16: "I don't know whether the President approves of C. H. Douglas or not. It is very difficult to give any information to the President; he does all the talking. You don't tell him; he tells you."5
Apart from converting Woodward, Pound tried to take influence on the American political process by corresponding with senators and congressmen whom he considered open for ideas of reform. One such politician was Bronson Cutting, Republican Senator of New Mexico, who had made a name for himself in artistic circles, since between 1929 and 1932 he had campaigned against the censorship laws that banned E. M. Remarque's All Quiet on the Western Front, D.H. Lawrence's Lady Chatterley's Lover, and J. Joyce's Ulysses from circulation in America. Pound's correspondence with Cutting, which had been started on the customs censorship issue, took an economic turn in 1934. On March 4, Roosevelt had delivered a speech on the radio in which he had admitted the insufficiency of purchasing power—Pound had increased hopes that once the root of evil is located, the most reasonable solution would also be found. He wrote to Cutting four days after the speech:
"After Roosevelt's speech on March' 4th, the issue is clear, and one wd. think, unavoidable: Why shouldn't the increase of purchasing power which he demands and which [he] admits to be necessary; namely why shouldn't the nation's credit be distributed per capita to the citizens instead of being 'allocated' by special favour either to banks or to groups of 'employers'? The enormous source of this (the government's) credit lies in the nation's real profits, namely the surplus of the country's production over what it consumes. This is the meaning of 'Economic Democracy.'" (Cutting 113)6
Pound was advocating the national dividend to the senator, arguing that the source of the nation's credit lies in the overall productive capacity of the country and should not be issued by banks under the form of bonds, i.e. state indebtedness; credit should be issued by the government and distributed to every citizen. Pound was not preaching in the desert, but counted on the senator's political record and future reform plans. Cutting had been an early advocate of federally funded programs of civil works. In his opinion, the prime necessity was a massive employment campaign that would give the poor the immediate means of buying the necessities of life. Soon, by the beginning of 1934, Cutting's interest began to move from the immediate measures to relieve unemployment to the method of funding these necessary projects. He observed that in order to create work, the state had to increase the money supply in order to pay for it, hence to emit bonds and get indebted to banks. Indirectly, the civil works programs initiated by the New Deal (through the Public Works Administration and The Civilian Conservation Corps) were a boon to financial institutions and implicitly a tax on the earning population.7 Cutting had begun reading Social Credit literature, he was in contact with Orage, and contributed money both to New English Weekly and to New Democracy. He thought about the necessity of transferring control of banking from the invisible minds operating the Federal Reserve to the state. In January 1934 Cutting was publicly advocating the creation of a national bank with a state monopoly on the issue of credit.
Cutting's agenda could only partially be considered Douglasite since the senator did not advocate a national dividend or a price rebate. Additionally Douglas had been against nationalization of credit, since this process would have concentrated power in a state monopoly and hence would have been restricting the liberty of the individual, which to Douglas was the supreme value. However, since Douglas had not clearly specified the concrete mechanism of the decentralized credit authority he believed in, his supporters took the state control of credit to be the only method through which the wealth of the nation could be computed and the dividend adjusted to production and services. In June 1934, Cutting, together with the Congressman Wright Patman of Texas, pushed a bill through Congress which advocated the creation of a national bank to absorb and replace the existing Federal Reserve and monopolize the credit system of the country. Its aims were "to regulate the value of money in pursuance of article 1, section 8, paragraph 5 of the Constitution of the US; to create a Federal Monetary Authority; to provide an adequate and stable monetary system; to prevent bank failures; to prevent uncontrolled inflation; to prevent depressions; to provide a system to control the price of commodities and the purchasing power of money; to restore normal prosperity and assure its continuance" (Cutting 101). The article 1 section 8 paragraph 5 of the Constitution, which Cutting was referring to, gave Congress the right and privilege to issue money and control its value. It was a provision of creating state money, which would have made the government independent from private banking. The bill provided for the nationalization of the 6500 member institutions of the twelve Federal Reserve Banks through the purchase of the stocks. In time, the 10,000 non Fed banks would be brought into the system as well. Cutting's goal was "to put the Government in control of the banking business of the US" (Cutting 101). Though the bill was not strictly Douglasite, in the sense that it did not go all the way towards implementing the national dividend or the subvention of prices, Pound supported it in what he conceived to be a step in the right direction.
Since Social Credit was being discussed internationally, not only in the United States, but also in Canada, the year 1934 was highly propitious for Douglas to cross the Atlantic and spread his ideas by means of a conference tour. Additionally, he could use his contacts to gain new converts to his ideas. Douglas's visit in America in spring 1934 could become the highlight of the year for the movement. Unfortunately, the high hopes were rather disappointed. After having conferred with Father Coughlin on April 22, Douglas attended a reception in his honor hosted by Cutting, where he could meet several senators and congressmen to be won over by his ideas.8 Douglas, however, did not dazzle. Cutting reported dryly to Pound a month later "I am afraid there were few conversions [ ... ]. As an expositor the Major is a little less aggressive than is customary in this partibus infidelium" (Cutting 128).
Goldsborough, Lewis, Kvale, Patman, and Steagall; Administration officials Chapman, Collier, Peek, and Hopkins, and publicists Gardner Jackson and Farmer Murphy. On the following day Major Douglas was back in New York to broadcast over station WJZ and NBC network." (Note in the NEW 31 May 1934. Heymann 322)—
Cutting's dry remarks on Douglas's lack of social ability must have been a feather compared to Woodward's letter of 25 May 1934, which discussed an important part of Douglas's tour, namely his lectures in New York. Woodward's criticism deserves extensive quotation—as a disinterested observer, he struck a great blow to Pound's hopes concerning the success Social Credit may have in America:
"I heard Major Douglas speak when he was here in New York. The effect was quite disappointing—not only to me, but to almost everyone in the audience. We went to get some information about Social Credit, but he didn't give us anything at all. His talk was on the subject of the evolution of finance. He told how money came about, and that it had no value in itself, etc. That is all right in its way, but I should say that nine-tenths of the audience had learned everything he said at least twenty years ago. It was utterly old stuff and bored most of the people; yet we remained—hoping he would explain about Social Credit. He did not explain, nor does his book Social Credit tell anything about it. I have just read his book again, and 204 pages out of 212 are devoted to sophomoric essays on the money system, production and consumption, etc.
"Now, I’ll tell you frankly that with all the interest I have in the new idea, I have been unable to learn how Major Douglas expects to work out his plan. In his book, just as in his lecture, he stops before he tells how the thing will work and the result. I notice that the same thing is done in that little four-page leaflet called "The Social Credit Proposal"; you sent me half a dozen copies of it. On the second page of the leaflet there is a sort of balance sheet called "Real Credit Budget," and then it goes on to say that national dividends will be issued and that money required to finance the discount will be issued.
"Now, the question is: What after that? In the United States there are about sixty million adults. Suppose you paid a national dividend to each of them of $10 a month; that would mean $ 600,000,000 the first month, and so on, and so on. By the end of the year you would have prices sky high because of inflation. I know that Douglas says prices would not rise, as they would be controlled, but you can just bet one hundred to one that they would rise. With that universal and unrestrained inflation the dollar would not be worth ten cents at the end of two years. It would be simply a confederate dollar.
*(This I am answering. Error but ought to be answered & MORE clearly by Doug & NEW yet again)*
"Douglas does not meet this issue at all. He evidently has no plan for getting rid of all the paper money which he intends to put out. At the end of his talk he said he would answer questions if sent up in writing. A number of questions were sent up. I sent up one in which I asked, 'Could Major Douglas give any concrete idea of how his Social Credit plan might be put into actual working?' He evaded that question; I thought he would. He said, 'That is your job. I am only telling you the lines on which it can be done. What I have been describing to you are general principles. There is no such thing as one plan that is exactly right and suitable to all conditions and all states of industrial progress.' Then he started to talk about steam engines, and reminded me very much of Howard Scott, who will begin to talk about Technocracy and wind up with reducing diets.
"Now, I am genuinely interested, and I wonder if you can tell me what will be done with the outflow of money which will accumulate in the flood after the plan gets into operation. Consider also the discount arrangement. I can see fifteen ways in which it can be abused and used improperly. I venture to say that if you ever put it into operation in this country you would have in three months the damnedest mess conceivable.
"As for the national dividend, it would lead at once to a wage reduction unless the trade unions managed to prevent it. For instance, the elevator boys in this house get $75 a month. Suppose they received a national dividend of $10 apiece. I haven't the least doubt that the owners of this house would reduce their wages to $65 a month and would tell them that the Government is paying the other ten. It seems to me that Major Douglas's Social Credit plan could be carried out only in connection with the national ownership of land, buildings, factories, farms, stores, and so on. Then it would be easy enough to work it—also easy enough to keep down inflation, because when paper money would be issued under those conditions it would be spent with some Government concern and would be called into the Treasury and destroyed. *(Balls)*[ ... ] I notice that on page 29 of Social Credit he goes out of his way to attack the Jews. What he says on that page would be sufficient to kill his Social Credit scheme in the United States. What have the Jews got to do with it? Everybody of intelligence in this country is bored to death by the argument that the Jews have a mysterious control over money and finance. We know better; we know they haven't. Besides, in a serious economic work questions of race or religion are a little extraneous. *(1 think this is sound. There is also the gd. Orient ct)* [ ... ] I read New Democracy every issue, and I must say that publication makes me rather sad. It is intended as propaganda, and it misses everything that might convince anybody. It is full of dull essays dealing with generalities, and it always has about two pages of fluttery little items that remind me of the stuff one reads on a society page. I have read every issue for the last three months, and I am yet to see an article to tell me what Social Credit is—except in vague philosophic terms. If I were running that paper I would have standing, and printing in every issue, a definite, clear statement of what Social Credit is, and I would have calculations showing what would happen if the scheme were adopted. *(This is just damn good sense)*
"1 will make a prediction, although I am not in the business of prophesying because a prophet is very often shown to be a damned fool; but I will risk it in this case, for I am confident that I am dealing with a certainty. My prediction is that within two years Major Douglas's Social credit will be as dead as a door-nail so far as the United States is concerned. It will follow the course of Technocracy, which was going big a year and a half ago. Now it is dead, and laid away in the cemetery of lost ideas and the robins are singing over its grave. Social Credit will be laid beside it."
Pound was severely hit by Woodward's objections. He added his own marginalia and forwarded the letter to Douglas and Orage, inviting them to reply to its criticisms.9 Further he sent two long letters to Woodward as a response, in June 1934. Finally he commented on the historian's views in his own letters to Senators Cutting and Borah. But it was undeniable that Woodward had put his finger on the major ills of Social Credit: the danger of inflation, the difficulty of putting the theory into practice, the weak propagandistic appeal, and finally the insinuating presence of Anti-Semitism, already visible in Douglas's addressing the issues. Moreover, the historian gave the movement two years—he was proven right by the events.
In his response to Woodward, Pound tried to explain the Douglasite view on the increase of the money supply, as well as his own ideas in this matter. The poet's opinion was that the national dividend, as well as public works, ought to be paid for in stamp scrip and not in bonds, or by merely printing money. Stamp scrip was a kind of currency that had been invented by a German businessman by the name of Silvio Gesell. The name he gave to his invention was "Schwundgeld," meaning "self-depreciating money." At regular intervals, the possessor of scrip had to affix a stamp on it, in order to preserve its original value. In other words, Schwundgeld was a kind of money that bore a tax on it. The purpose of the procedure was to insure that the money was not hoarded but kept into circulation. The possessor of such scrip would feel bound to spend it quickly, knowing that it would depreciate. The money had the additional advantage that it was consuming itself: after a period of time, there would not have been enough space left on a note to stick any more stamps and it could be thrown away. Paying for the national dividend, for the dole, or for public works in scrip, as Pound advocated, would have been a way to distribute sorely needed purchasing power, without the state getting into debt and without inflation. Pound argued to Woodward that in the case of scrip, the tax falls on the money itself and therefore on persons who possess it and not on those "wot aint got muffink." The money, furthermore, had been tried in Worgl (Austria) and worked. The scheme, however, was not Douglasite and the Social Crediters rejected it.
After he had brought a Gesellite argument, Pound also gave a Douglasite one to Woodward's objection that the national dividend would be inflationary. The quantity of new money was to be governed by the national real profits, it was to increase at the same rate with the production of goods and services. The state had constitutional warrant to create money and had done so during the American Revolution and the Civil War. It could create credit by the very same procedures that the banks used, namely by the printing press. There was no need for it to borrow the means of circulation from banks in order to make possible the creation of wealth. Additionally, the prices had to be controlled. Here Pound made his first slip towards Fascism since in his response letter to Woodward, he assimilated Douglas's concept of the rebate to the Fascist control of prices. For Douglas, the just price was based on what the product cost to the nation. Since producers were going to receive free credits, their prices would have to go down, since they would not include interest to be paid to banks—the profit on turnover was to be kept (Social Credit 208-209); in the Fascist economy on the other hand, the price was fixed by decree and lowered arbitrarily, without regard to the welfare of producers. In his campaign for Fascist Italy, Pound chose to disregard the difference:
“… the Prices of FOOD in Rapallo are determined by the Podesta consultin with the facts etc. and pasted up on a wall, and anybody who is damn fool enough to pay more, is a damn fool and out of order/ and the shops that get caught trying it are liable to [be] punished or closed. This is new and the Podesta reckoned it wd. take a few swats of fines to start 'er. Take the Boss' horse sense in the last RENT reduction. all rents reduced 12% and in the words of the decree "timorous locataires who are afraid to insist on the reduction are also liable to be proceded against". "gets over the tenant being too perlite to tell his owner he don't want to pay. what he did last year) "As I have had MY rent reduced several times, I believe things of this sort are NOT beyond human comprehension.
"Doug proposes to put out more money and leave prices AS IS. Muss gets similar result by ordering prices LOWERED which differs from bank deflation. "The effect on ME (E.P. Rapallo ad/ 1934 month of June,) is that of getting a DIVIDEND. (E. Pound to W.E. Woodward June 5, 1934) "
Under the fresh impression of his exchange with Woodward, Pound wrote a letter to the Senators Cutting and Borah urging them to accept the idea of controlled or fixed price. The letter shows that Pound was well aware of the difference between the Douglasite and Fascist notions of fixed price. In this he acted like a propagandist for Mussolini, arguing that America had to learn from the Fascist measures. (E. Pound to Sen. W. Borah June 7, 1934. Borah 25-26).
Around this time, Social Credit got support from unexpected and controversial quarters, namely from Father Coughlin. Coughlin was a Catholic priest, who had been preaching on social justice on the radio since 1926. By 1934 he had become a political force to be reckoned with: he had acquired a following of about 10 million persons, who were regularly listening to him and sending him letters of support. During this time Coughlin had advocated several schemes for monetary reform, and criticized the New Deal measures, the NRA, and increasingly Roosevelt himself. In November 1934 he founded his informal National Union for Social Justice, which was largely a mailing list but which could exert considerable pressure on Washington. By the end of the year, Coughlin was preaching ideas inspired from Social Credit, placing them in a curious context. In his radio talk for Sunday, December 2, 1934, for instance, he told his listeners that "mass production machinery is constantly displacing labor" (Lectures 47) and maintained that the task should be "to distribute the profits which have been piled up through the use of mechanical devices" (Lectures 51). These faintly Douglasite ideas, reminding one of the progressively decreasing employment and the necessity of distributing the benefits derived from the cultural heritage, were combined in the same lecture with principles of the National Union, which were obviously similar to Fascist corporatism: limitation of profits derived from industry, government supervision on the harmonization of the interests of employers and workers, production tailored for the national welfare, abolition of competition, and most of all, the re-establishment of vocational groups, professional associations that would compensate for the weak participation in trade-unions in America. At the same time Coughlin urged his listeners not to use strikes as weapons in their struggle for higher wages (Lectures 52- 54).
The import of Social Credit ideas into Father Coughlin's lectures of 1934 and 1935 was not accidental. The priest was reading the New English Weekly and met Douglas personally during his American tour. At the beginning of 1935 the radio priest drafted a program for the nationalization of the Federal Reserve, which bore striking resemblance to the Cutting bill, presented to Congress a few months before. In his lecture of 26 February, Coughlin read to his listeners a detailed program, whose aim was to "destroy want in the midst of plenty" and "provide for the orderly distribution of the abundance with which a beneficent creator has blessed us" (Lectures 166). The aim was the same as Cutting's and had the same basis: the creation of a central bank, which would be an agent of the Government and would have a constitutional right to issue debt free money and control its value. The new bank (called Bank of the USA) would have to purchase the stock of the Fed and turn it into a branch under its supervision. Moreover, it would in time control every private bank in the country. Particularly Section 13 of the bill was interesting from a Social Credit perspective:
"Sec. 13. [ ... ] The duties of said Bureau [Bureau of United States Statistics, supervised by the Bank of the U.S.A.] in addition to all those now prescribed by law, shall be to collect, assemble and analyze authentic data, for the purpose of determining the true and correct relation of the total amount of money in actual circulation, including both currency and credit money commonly called demand deposits, to prices, wages, industry and commerce, the standard of living, employment and unemployment, to the end that the board of Directors or the Bank of the U.S.A. and the Executive Board thereof may scientifically and accurately determine the rate at which progressive additions to the stock of circulating money, both currency and credit, must be made to maintain an even and stable purchasing power and to promote a constantly rising standard of living for the people of this nation. [ ... ] It will tell us definitely how many bushels of wheat are grown, how many acres of land under cultivation, how many men employed, how many pairs of shoes manufactured, how much money in circulation—a million and more facts from which it will not be difficult to ascertain how many dollars of currency should be in circulation as well as how much credit should be issued." (Lectures 172-173)
The fact that Coughlin was devising a concrete office for computing the wealth of the nation in order to establish the volume of credit sounded encouraging to the Social Crediters who could not easily find an answer to the pressing question formulated by Woodward, namely how is the Douglasite theory going to look like in practice?
Meanwhile the movement was splitting and the diverse factions were trying to take political influence on their own. The New Economics group separated from Munson's New Democracy in May 1935. James Crate Larkin, a business man from Buffalo affiliated to the New Economics group, as well as his friend Nyland, who had been a manager to New Democracy also split from the main line. The reason was too little national political action. Munson and his circle wanted to go to lectures and "hold hands in a corner"; they refrained from concrete, decisive measures of implementing the theory. Larkin felt that it was time for the movement to turn national and propagandize in simple terms in order to bring pressure on Washington for a "National Social Credit Act" (J.C. Larkin to Pound February 18, 1935). He founded his own organization, which he called National Social Credit Association, and started acting on his own. Larkin was a great admirer of Father Coughlin and lost no time in trying to get in touch with him. By 23 April 1935 he was reporting to Pound: about Father Coughlin. "I am a little discouraged. I have written him and wired him and sent him money, but his answers are always ambiguous. I have considered going to see him sometime, but when he brawls with that Baruch-owned rat Johnson, I wonder if the time would be wasted."10 In the meantime Larkin was busy issuing a Social Credit Constitution that could act as a founding document of the National and he sent it to Pound for comments. In his characteristic language, the poet had two important ideas about it: the first concerned the desirability of full employment. As a champion of dividends, leisure time, and freedom for the individual, Douglas did not believe that employment would cure the need for purchasing power, but rather aggravate the already existing situation in which wages were the only source of income. Pound fully subscribed to the idea that not employment, but adequate distribution of purchasing power should be the aim of political action. He responded to Larkin on April 8, 1935:
"FIRST IMPRESSIONS.
"Bill compares favourably to most legislative LANGUAGE, in that in section TWO, several terms are DEFINED. Section 1. contains a BLOT. 'to reduce and relieve unemployment'. "You can NOT CURE unemployment, I know you may quibble about the words reduce and relieve, but they are obscurantist. [ ... ]
"The bill shd/ state its AIM to be
"'TO ENABLE THE WHOLE PEOPLE TO BUY WHAT THE whole people produces; to distribute the purchasing power of the nation so that both social and economic justice shd/ be attainable in degree not heretofore known; to give ever human being in the U.S. his share in the inheritance of humanity.' yrs. E.P.
"PRIVATE
"or for a few people at yr/ discretion. [ ... ] Nat Divs paid in s/s/ serious Treasury consideration of the ratio between fixed and labile money. NO taxes/ all govt. expenses to be pd/ in S/S/ the rate to be adjustable acc/ needs of the year or settled at time of issue. Never more than 1 % monthly.
"Polite expressions re/ retail discount etc/ if you like. BUT I dont see them as FEASABLE NOW in legislation. Better think of this now, than later.
"The 'relief of unemployment' is just frivolous TOSH. And anyone who uses it is no better than any other demagogue. The idea has NO place in age of plenty propaganda."
If Pound's criticism of employment are fully in the spirit of Douglas, the idea of paying the national dividend in stamp scrip was new and only his own. He had written to Woodward about the same ideas in a letter six months earlier. Stamp scrip could be used as an auxiliary currency in an established ratio to the dollar. Pound reckoned that the tax on scrip would be enough to cover the expenses of its issue and add to government revenues. The rate of devaluation could not exceed 1 % monthly.11 Larkin however, could not be won over for stamp scrip. He responded that Social Credit simply does not need the measure, that it solves the problem of purchasing power and velocity of circulation on its own.
But if positions on economic theory were more or less settled, it was high time for Social Credit activists to break into national politics. The New York group had not been idle: Munson and his circle had drafted a bill which the Democratic Congressman Alan Goldsborough put into Congress in August 1935. The bill, which was demanding a monthly national dividend of $12.50, got extensive hearings until 1937, before it died in the Banking Committee. Pound thought that the bill was too complicated and too technically phrased for the congressmen to understand and put no hopes in it. Additionally it provided for a dividend only to the citizens living on the territory of the U.S., which all but excluded him from the benefits. Not Goldsborough, but Cutting should be the "plumed knight" of Social Credit. Pound's hopes about the presence of Social Credit in the Senate came to nothing when in May 1935, Cutting died in a plane crash. After this who else was there who could put up a resistance to Roosevelt and be a man for reform? Reviewing the political spectrum, there were few choices available: William Borah, Senator from Idaho, Huey Long, Senator from Louisiana, and Father Coughlin. Though Pound declared to Larkin that he would have gladly seen Coughlin president, this was technically not possible for a Catholic priest. This left only Borah and Long as feasible candidates for Social Credit. Particularly Long had made a good impression on Pound—the poet had read the senator's speeches in the Congressional Directory and had gathered firsthand opinions on him from his correspondents.12 As he argued in an article, ("American Notes." New English Weekly 12 Sept 1935. P&P VI: 312), Huey could be won over to the idea of the dividend, since his own Share Our Wealth program was distributist in nature.13 Pound wrote to Long, offering his services as a future Secretary of the Treasury. Needless to say, there was no response. Long had not adopted any specific monetary solutions, nor had he gone into any details about how he planned to put his own Share Our Wealth program into practice. It cannot now be speculated whether he would have been a dangerous competitor to Roosevelt in the presidential elections—Long was murdered in September 1935.
Pound had to revise his political hopes yet again. He wrote to Larkin after the event that after Long's death, Father Coughlin should gather Huey's adepts under the banner of Social Credit, unite with the groups in California, and aim for two posts in the Cabinet. Such political calculation was not so absurd as it might now seem. The major event of summer 1935 had been a Social Credit victory in Canada –in the province of Alberta, a Social Credit party led by a radio priest, William Aberhart, won a landslide victory in the elections. It was not exaggerated for Pound to think that Father Coughlin, with his following of 10 million listeners, would prove a similarly powerful political force if not in person, then by proxy.
By mid 1935 both Larkin and Pound had managed to contact the radio priest, seeing in him not only a supremely eloquent man, a champion of social justice, and an important political agent, but a fellow traveler. On July 31, Larkin reported to Pound:
"Here is some news. Nyland and I flew out to Detroit for a very satisfactory visit with Coughlin. I trust him. He is okay and a real person. Says this coming year will be the hardest of his career; that we mustn't expect to get anywhere in '36 but that we will be there in '40. Beginning this fall he is going to start preaching Social Credit in simplest possible terms. For example, telling his audience 'The bankers say there is only $30 billion total credit available but the wealth of the country is worth $200 billion which can be monetized to finance consumption. In other words there is $170 billion worth of idle credit belonging to the American people which they don't use because the bankers have flim-flammed.'
"Coughlin is very different from what you would expect—not at all priestly. Smokes cigarettes and says damn! Told us we would never make Social Credit a mass movement because it was too complicated. [ ... ] But here is the point—he reads your American notes in the New English Weekly and showed us something you had written there. It opens up a possibility for you to write to him, for him, and about him." Pound was of course very flattered that Coughlin was reading him14 and told Larkin, who had come to know the radio priest personally, to urge the priest to support Aberhart in Alberta. But by the end of October the situation in the Canadian province had become a great disappointment to Social Crediters: Aberhart had been unable to implement the necessary measures. Though he had promised a national dividend ($25 to every man and woman, $5 to $20 to children) he intended to finance this by traditional measures, i.e. by bonds. The debt would have had to be paid through a sales tax. Aberhart began his time in office by saying that there was not enough money to finance the dividend,15 which to reformers was sheer apostasy. In their view, there could be no question of funding a dividend out of debt. The government had to take over the control on money and issue debt free credit. Preserving the banking system as was, went counter to everything the reformers stood for. In Munson's view, Douglas's unwillingness to go to Alberta and advise Aberhart had left the terrain free for J. Magor, a conservative banker who took the advisory role and assured the premier that the distribution of the dividend was impossible. According to Larkin, Aberhart, though well-intentioned, had no business experience and could easily be misled by the political and banking establishment. Father Coughlin took his information on Alberta from Larkin and on his advice stayed out of the fray.
At the beginning of 1936, Father Coughlin's activities in the Social Credit line became more intense. He hired Gertrude Coogan, a Social Credit economist and the author of Money Creators, to write for him.16 He started publishing his lectures of 1934 and 1935 and further, a newspaper, Social Justice. Finally, he turned his loose organization, The National Union for Social Justice, into a party, The National Union. His break from Roosevelt had become complete and the priest was preparing for elections. He faced two main problems: increase his electoral base and find a candidate for his party. The fact that Coughlin openly accused Roosevelt of communism, socialism, or fascism, as the occasion arose, was damaging his own reputation. In the open competition for popularity Coughlin's listeners were deserting him. It seemed to the radio priest necessary to ally himself with other forces for reform, much as Pound had recommended: Huey Long's Share Our Wealth following was in disarray, but Coughlin hoped to win them over by cooperating with Gerald L.K. Smith, Long's friend and supporter. The radio priest then struck another alliance with Dr. Townsend and his clubs. Finally, Coughlin nominated William Lemke, a Congressman from North Dakota, to be presidential candidate of the Union Party.
The American presidential elections proved disastrous for the Social Crediters. Cutting and Huey Long were dead. The Republican party did not nominate Senator Borah, but Alfred Landon as presidential candidate. In spite of his loyalties for the Republican party, even Pound commented that Landon should not win the elections and that in spite of all shortcomings, Roosevelt was the better president. Coughlin's candidate, William Lemke, got a negligible number of votes. Roosevelt had the whole nation behind him and won the elections by a landslide. By the end of the year, Pound wrote resignedly to Munson: "Till 1940 we are INSIDE the nude eel// must go with it. any opposition is sheer waste of nrg//" (December 2, 1936).
Coughlin had tied his personal fate with that of Lemke and his winning the elections. He had promised that if Lemke does not get nine million votes, he would withdraw from public affairs. After Roosevelt's victory, Coughlin disbanded the National Union and took to the air for what he declared to be the last time: "I hereby withdraw from all radio activity in the best interests of the people ... You are all friends tonight" (Brinkley 261).
In New York, Munson was resigned to see the foundering of Social Credit. By spring 1936, he had made a desperate attempt to preserve and expand New Democracy by trying to sell shares. He also announced that the paper was going to become a monthly. Pound had not liked Munson's periodical, he agreed with Woodward and Larkin that it was pale, uninteresting, and ineffectual as propaganda. However, it was one of the few American papers which published him regularly and for that he was grateful. He sent Munson suggestions for improving it along three main lines: 1. a broader philosophical treatment of economics; 2. the correlation and discussion of Gesell, Douglas, and the corporate state; 3. expansion of the literary segment, "to INCLUDE repeated discussion of WHY any writer worth more than a horse turd OUGHT to emerge from ECONOMIC ILLITERACY" (E. Pound to G. Munson June 13, 1936). The suggestions were gratefully acknowledged, but it was too late. In August Munson was forced to give up and the New Democracy ceased publication.
The New York group led by Alan Brown was still meeting, but the participation to lectures and "local projects" was dwindling. The movement, which in 1934 and 1935 was spending $20,000 per year, was now spending no more than four thousand. Munson summed it up to Pound on December 6, 1936: "Our Social Credit 'Sunday School' still holds sessions but with diminishing attendance. The sooner these people go over to Mack or Irving Fisher or some other 10% reformer, the better. My final editorial had a very good effect. It crystallized a real nucleus of the uncompromisers, the chaps who will keep at the job in bad weather and won't lick the boots of the occasional rich person who wanders into Social Credit. I am hopeful about 1937."
Epilogue
In the years that followed, Social Crediters fought their fights on their own, in ways which in large part were not foreseeable in 1934 and 1935. The network of correspondence that Pound had kept up since 1933 had broken. The only Social Credit combatant that continued struggling along the same lines after the elections of 1936 was Munson. After a brief interlude with the agrarians (Allen Tate and John Crowe Ransom), Munson finally broke with the Sunday School led by Alan Brown and founded the American Social Credit Movement in 1938. In the manifesto, Munson responded to two problems that had slowly transformed the movement along the years: the first was related to the questions whether Social Credit was a movement of the Right. It was not to be denied that it had been rejected by Socialists and embraced by people connected to Fascism, like Pound, Mosley, or Father Coughlin. On the other hand, there was nothing in the Douglasite theory to justify a rapprochement to Fascism. Douglas had actively stood against the centralization of power, and supported the right of the individual not to be coerced or exploited by institutions, be they banking or governmental ones. The supreme value for Douglas had been the freedom of the individual to be creative, the belief that the abundance of the world which individuals created, either alone or in association, was to be distributed fairly, with as little mediation as possible. Munson therefore took the point of view of Hargrave, the leader of the Social Credit party in England: Social Credit is the Third Resolvent Factor, the alternative to the Left-Right dilemma.
There was however a second problem with Social Credit that Munson could not settle so easily, the question of anti-Semitism. In his manifesto, Munson declared: "American Social Credit stands for the liberty and equality of opportunity of the individual, irrespective of race, creed, or color. We abominate anti-Semitism. The Money question and the so-called Jewish Question have NOTHING to do with each other and we will let no one confuse this fact." (Weaver 105). The "fact" remained however: Douglas was openly anti-Semitic, at least since 1933, as Woodward had remarked. Pound, who from 1934 had been more or less reticent in his correspondence, as well as in his journalism and poetry, finally broke into print in 1938 with statements like: "If a man is going to be anti-Semite, let him be objectively anti-Semite. Let him gather as many facts as he can and not blink them." ("The Revolution Betrayed." British Union Quarterly January-March, 1938. P&P VII: 279-288). By 1939 Pound was openly and aggressively Fascist and sent Munson letters full of anti-Semitic drivel. Father Coughlin had returned to the radio and was openly propagandizing for Hitler and Mussolini and railing against Jews. All three men, moreover, had fallen prey to a belief in conspiracy theory. They were convinced that "international bankers" of Jewish origin had conspired to lead governments into war in order to increase the profits of their own houses. Moreover, they believed that Roosevelt was preparing America for involvement in the European war on the advice of Jewish bankers like Morgenthau or Baruch. Finally, on the strength of the vicious Protocols of the Elders of Zion, all three had become convinced that Jews and Freemasons had conspired to rule the world.
Munson tried to steer clear of all these elements that tainted Social Credit and forcefully stressed the allegiance of the movement to democratic values:
"We stand for democracy, that form of society in which government and communal organization exist for the benefit of the individuals composing the community. We are unalterably opposed to totalitarianism and collectivism, social systems in which the individual exists only for the group. No Fascism, no Communism. We stand for the Bill of Rights and will resist all attempts to infringe upon any section of the Bill of Rights". (Weaver 105)
At the same time, Munson continued the fight for the socialization of credit. In 1939, together with Congressman Jerry Voorhis, he wrote a bill for the nationalization of the Federal Reserve. The bill was co-sponsored by Wright Patman, the same congressman from Texas who had worked with Cutting at a similar proposal in 1934. Voorhis argued that the government should issue its own money by Congressional direction; credit should go to all business and all people equally; the national debt should be gradually liquidated by replacing it with government money; inflation should be controlled by national regulation of the volume of credit made available to banks; and the government should either own or control its own banking system. The Voorhis-Patman Bill proposed that the government should purchase the stock of the 12 Federal Reserve banks; a new Federal Reserve Board be appointed, directly responsible to Congress; the government should issue debt-free money and the supply in circulation would be kept at the level of 1926; banks should be required to keep dollar for dollar reserves behind demand deposits (Cutting 195).
Munson sent Pound both the ASCM manifesto and the Voorhis-Patman bill for comment. The response, coming in March 1940, was not very encouraging. The manifesto did not contain definitions of terms and did not make sufficient distinction between money and credit. And the Voorhis bill was unclear: "Is it preventive of war or intended for publicity, as a stunt?" (E. Pound to G. Munson March 20, 1940). Pound's position was unchanged: Social Credit had to be supplemented by stamp scrip, because it needed less bureaucracy, was simpler, and easier to understand and accept; moreover, it was non-inflationary. Munson was not disposed to see any changes to Douglasite theory and pointed out (correctly) that Gesellism in America was just a tiny movement of German emigres and Nazi sympathizers. Almost single-handedly Munson ran a weekly sheet, Men First, struggling against proto-Fascists and anti-Semites. In 1943 the ASCM finally collapsed and Munson settled down to write his book on Social Credit, Aladdin's Lamp. His campaigning was over.
In writing his own contribution to the theory and history of Social Credit at the beginning of the forties, Munson was a few years behind Pound. In 1937 the poet had published the Fifth Decad of Cantos XLII-LI, which can be considered the most detailed transfusion of economic thought into poetry. Not the discursive procedures of argument or propaganda were here employed, but concrete example and instantiation through collage was the manner of presentation. The cycle begins with the Monte dei Paschi Cantos, which describe a bank working for the benefit of the community of Siena: the capital of the Monte was based on revenues from pastures, on the ever renewable wealth of nature; it awarded cheap credits for investment, without class discrimination, and reinvested the profits in civil works for the city. The contrast to the Monte was the usurious Bank of England, an institution founded in order to finance a war with money created out of nothing. The one made abundance possible—the other thrived on scarcity. We find the indictment of usury in the Cantos XLV and LI; we also find the counterpoint to it, the peaceful, agrarian life outside the turmoil and injustice of the money system, where the eternal rhythms of the seasons, and not the ticking of the clock, food, not money determine work. Thus in Canto XLIX:
"State by creating riches should get into debt? This is infamy; this is Geryon This canal goes still to TenShi though the old king built it for pleasure ... Sun up; work sundown; to rest dig well and drink of the water dig field; eat of the grain Imperial power is? and to us what is it?"
And if "this tale teaches .../ a lesson" it is that the fate of Social Credit, as a political and economic movement was decided not in the legislative buildings or in the garrets of the revolutionaries, but between the covers of a poetry book. Two economists of the nineties (Pullen and Smith 1997) could maintain that Social Credit is discussed today only because Keynes had mentioned Douglas as a private (not Major) in his "brave army of heretics." But then, economists may study his theory as a curiosity and publish an essay in a decade. Social Credit lives on because literary men like Pound, Williams, Orage, or Munson got involved with it. As Pound used to say, "poetry is news that STAYS news."
Notes:
1 Douglas's theorem was much criticized by the economists of the time, who objected that it did not take the time factor into account. Douglas therefore reformulated it in his book Social Credit (1933), dropping the A+B name. This is his new formulation: "the collective prices of the goods available for sale at any moment in a given community, if they have been produced by ordinary commercial methods, cannot be met by the money available through the channels of wages, salaries, and dividends, at one and the same moment. They can be exported in return for purchasing power, or they can be destroyed, or they can be bought by purchasing power which is created and distributed in respect of a separate cycle of production" (94).
2 Starting with the thirties the gold standard was gradually abandoned. In 1931 in England and in 1933 in the USA, paper money became legal tender (i.e. the only medium valid for all debts) and unredeemable in gold. In international transactions the gold standard survived until the collapse of the Bretton Woods agreement in 1971.
3 [Douglas] "did not seem to appreciate that the payment of a rebate would reduce (or even eliminate entirely) any incentive on the part of producers to hold costs down or take cost-cutting initiatives. It would be virtually impossible for the public officials charged with administering the rebate to determine whether or not the costs being incurred by every firm and for every product were justified. If any increased costs are covered by the rebate, firms would have no reason to resist claims for higher wages or higher charges for other inputs. Thus, contrary to Douglas's belief [ ... J the rebate scheme would almost certainly be inflationary." (Pullen and Smith, 223)
4 In a letter from March 1, 1937, Munson described to Pound the outcome of this strategy: "The Money rag has tried diffuse propaganda with results that were foretold. It asked the movement, which had failed to support even one publication, to support two. It initiated competition for revenue from the same people, which is unpleasant for all concerned. It needed $25,000 to make a serious bid for mass-circulation. And it has wound up in parish-house size with a parish-size circulation. Moreover, its editors have been controlled from the start by the whims of two or three rich people (Mack, Mrs. Welch, Mrs. Grant, Allan Brown) so that the course has been extremely wobbly."
5 Woodward's remark made its way into Pound's Cantos: "'On these occasions/ HE / talks.' end quote, Woodward '36." (LXXXVI 588) Since he was writing the Canto at the beginning of the fifties at St. Elisabeths hospital and was far from his own files at home Pound got the year wrong—the letter from Woodward was from 1933, not 1936.
6 The above passage is also contained in a letter Pound sent to Woodward on the same day. (March 8, 1934)
7 "What does the government do [ ... ] when it goes to the rescue of its needy and starving citizens? It floats loans through the banks. It pays interest to private organizations for the use of its own credit. The thing becomes still more preposterous when we realize that an enormous proportion of the relief expended by the government has gone to the aid of great banking institutions. So that actually the government is getting itself into debt to the banks for the privilege of helping them to regain their stranglehold on the economic life of the country." (Cutting 99-100)
8 "On April 22 Major Douglas and Father Coughlin, whose personal following exceeds that of any Hollywood queen, and whose weekly broadcasts are now based upon Social Credit, conferred together in Washington for several hours. Next day Douglas returned to New York by air to deliver his lecture in the New School for Social Research, after which he again went to Washington. On Wednesday he was the guest at a luncheon at the Brookings [sic] Institute, and in the evening he was guest of honour at a supper given by Senator Cutting. A list of the forty-four people present would furnish a striking testimony to the upward spread of interest in Social Credit in the United States: they included Senators Black, Bone, Borah, Clark, Frazier, George, La Follette, Norris, Nye, Shipstead, Thomas, Wagner, and Wheeler; Representatives Speaker Rainey, Busby, Dies, Goldsborough, Lewis, Kvale, Patman, and Steagall; Administration officials Chapman, Collier, Peek, and Hopkins, and publicists Gardner Jackson and Farmer Murphy. On the following day Major Douglas was back in New York to broadcast over station WJZ and NBC network." (Note in the NEW 31 May 1934. Heymann 322)
9 If Pound had hoped to incite a transatlantic discussion between Douglas and Woodward, his hopes were disappointed. Douglas responded petulantly to Woodward's criticism, refusing to give the least attention to the objections. He wrote to Pound: "Your Mr. Woodward has two advantages over me, firstly that he has heard of me and I have not heard of him, and secondly that though he apparently thinks very poorly of my intelligence, I think even less of his. [ ... ] When people like Mr. Woodward really want to do something effective and are in a position to do it, I will provide them with a Plan of their own. I think it is most improbable that they will understand it, but if they put it into operation it would work. I am much too busy to waste my time on them otherwise" (C.H. Douglas to E. Pound June 13, 1934).
10 Larkin probably referred to Father Coughlin's lecture of March 11, 1935, in which he replied to Hugh Johnson's accusations against him (Lectures 219- 231).
11 Stamp scrip had been discussed in Congress through Senator Bankhead's initiative in February 20, 1933. The bill proposed the issue of a billion dollars in scrip with a rate of devaluation of 2% weekly. Pound commented that the amount had been too great and the tax too high. This in his eyes was the reason for the failure of the bill.
12 Woodward had written that Long "has a splendid education—bulbait mind—quick thinker—with the manners and speech of a ward politician or a street corner orator. His policy is to throw the enemy completely on the defensive, to attack continuously and pay no attention to attacks made on him. So he's got them on the defensive: They're busy explaining that he's wrong, and he often is, but he pays no attention. Huey Long and Father Coughlin! What a combination!" (March 7, 1935). Larkin said that Long was "smooth and clever, capitalizing on discontent and refusing to divulge what he proposes to do about it, one of the greatest orators that ever appeared on the political scene" (May 16, 1935).
13 The Share Our Wealth was a plan for the government to confiscate all income above one million and all inheritances over 5 million dollars and distribute to the poor. Every family would receive a homestead allowance of about $5,000, free of debt, and an annual income of $2,000. Pound derided the idea, calling it a plan to cut up the cow to increase milk production. After Cutting's death, however, Long was the only politician with a distributist plan, and Pound hoped he could be educated and brought over to Social Credit. Long died a few days after Pound wrote the article.
14 He mentioned it to Munson, who alarmed, advised him not to get involved with Coughlin (March 16, 1936).
15 A Canadian Gesellite, E.S.Woodward, who knew Aberhart personally, wrote to him to suggest the implementation of stamp scrip for the distribution of the dividend. It would have been a temporary expedient until the monetary problems ensuing out of the transformation of the banking system would have been solved. The scrip could be issued by the Treasury against the credit of the nation, was cheap to produce, easy to distribute and would have brought in revenue to the government. (YCAL 43, Box 16, Folder 701). To this idea there was no response.
16 In a letter to Father Coughlin (undated, probably December 1935), Pound urged him to adopt a new method in his propaganda:
"TELL the nine million to ASK QUESTIONS, give'em two or three questions a week and have'em ASK EVERYONE." As Coughlin had heeded Pound's advice before, this might be the reason why the first book ghost-written by Coogan (Money!) has a question and answer format.
Sources:
Unprinted:
Ezra Pound Papers. Yale Collection of American Literature, Beinecke Rare Book and Manuscript Library. (YCAL 43 Series I)
W.E. Woodward Papers, New York Public Library:
The Ezra Pound-W.E. Woodward Correspondence (YCAL Box 55 Folders 2557-2567)
The Ezra Pound-James Crate Larkin Correspondence (Box 28 Folders 1191- 1193)
The Ezra Pound-Father Coughlin Correspondence (Box 10 Folder 459) The Ezra Pound-Gorham Munson Correspondence (Box 36 Folders 1507- 1512)
The Ezra Pound-Charles [sic, Clifford] Hugh Douglas Correspondence (Box 13 Folders 607-610)
The Ezra Pound-Hugo Fack Correspondence (Box 16 Folders 701-705)
Printed:
Brinkley, Alan. Voices of Protest: Huey Long, Father Coughlin and the Great Depression. New York: Knopf, 1982.
Collins, Michael and Mae Baker. Bank of England Autonomy: A Retrospective. Holtfrerich, Reis, and Toniolo 13-33.
Coughlin, Charles E. A Series of Lectures on Social Justice. 1934. New York: Da Capo Press, 1971.
—. Money! Questions and Answers. Royal Oak: National Union For Social Justice, 1936.
Davis, Earle. Vision Fugitive. Ezra Pound and Economics. Lawrence and London:
University Press of Kansas, 1968.
Douglas, C. H. Economic Democracy. 1920. Epsom: Bloomfield Publishers, 1974.
—. Social Credit. 1924. London: Eyre and Spottiswoode, 1933.
Heyman, D.C. Ezra Pound. The Last Rower. 1976. New York: Citadel Press, 1992.
Holtfrerich, Carl-L. and Jaime Reis. "Introduction." The Emergence of Modern Central Banking from 1918 to the Present. Eds. Carl. L. Holtfrerich, Jaime Reis, and Gianni Toniolo. Aldershot: Ashgate, 1999.
Horan, James. The Desperate Years. New York: Crown Publishers, Inc., 1962.
Ickstadt, H., Bob Kroes, and Brian Lee, eds. The Thirties. Politics and Culture in a Time of Broken Dreams. Amsterdam: Free University Press, 1987.
Marsh, Alec. Money and Modernity: Pound, Williams, and the Spirit of Jejferson. Tuscaloosa and London: The University of Alabama Press, 1998.
Munson, Gorham. Aladdin's Lamp. The Wealth of the American People. New York: Creative Age Press, 1945.
Pullen, J.M. and G.O. Smith. "Major Douglas and Social Credit: A Reappraisal. " History of Political Economy 292 (1997): 219-273.
Reinders, Robert. "The New Deal: Relief, Recovery, and Reform. " Ickstadt, Kroes, and Lee 11-34.
Surette, Leon. Pound in Purgatory: From Radical Economics into Fascism and Antisemitism. Urbana: University of Illinois Press, 1999.
Voorhis, H. J. "The Mysteries of the Federal Reserve System." Paideuma 11 3 (1982): 488-502.
Weaver, Mike. William Carlos Williams. The American Background. Cambridge: Cambridge University Press, 1971.
Ezra Pound
—. Ezra Pound and Senator Bronson Cutting. A Political Correspondence, 1930- 1935. Eds. E. P. Walkiewicz and Hugh Witemeyer. Albuquerque: University of New Mexico Press, 1995.
—. "Ezra Pound. Selected Prose. Ed. William Cookson. New York: New Directions, 1973.
—. "Ezra Pound's Poetry and Prose. Contributions to Periodicals. Eds. Lea Baechler, Walton Litz, and James Longenbach. 11 vols. New York: Garland Publishers, 1991.(P&P)
—. Jefferson and/or Mussolini. L'idea statale. Fascism as I Have Seen It. London: Stanley Nott, 1935.
—. Social Credit: An Impact. 1935. London: Peter Russell, 1951.
—. The Cantos. New York: New Directions, 1998.
—. The Correspondence of Ezra Pound and Senator William Borah. Ed. Sarah C. Holmes. Urbana and Chicago: University of Illinois Press, 2001.
The references to The Cantos are made in Roman numerals followed by page number.
End
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