NOW the King's faith in his people was justified is fresh in every man's memory . Britain was driven off gold ; the patriotism, the courage and the discipline of the British people made that event an occasion of joy rather than of calamity . In the belief that they were helping their country the well-to-do imposed upon themselves new and crushing burdens of taxation ; the unemployed, on the very day on which the cuts in their meagre allowances became effective, voted for the men who had made these cuts . An astonished world was instructed that a nation's credit resides in the hearts of men and women, in their loyalty and devotion and sense of service .
But it would be an error, nevertheless, to suppose that these manifestations of the love which Englishmen bear to their King and country were not immediately turned to account by the International Money power . Englishmen had agreed to balance the national Budget because they believed that this action would uphold England's honour before the world . How many of them knew that the merit of a balanced Budget in the eyes of Money resides in the fact that it removes the necessity, which might otherwise arise, of raising the prices of goods ? If a nation refuses to be taxed further in order to balance its Budget, the process of balancing can only be carried out by creating more taxpayers that is to say, by increasing buying power and raising prices so that more people are enabled to earn profits .
The sole object of the Money power, to which crisis or no crisis it continued stubbornly to adhere, was to extract the gold lying hoarded in New York and Paris, and so restore the gold standard to full activity . That object, as has been seen, demanded the cessation of the flow of gold towards these centres . It demanded, therefore, the wiping out of Reparations and War Debts and the reduction of the American and French tariffs . America had to be persuaded of her splendid destiny as the Peacemaker of the World and the Friend of Humanity ; France had to be persuaded that the only way to security was by means of the forgiveness of debt and the reduction of armaments .
Now it is evident that the ideals of disarmament, of forgiveness of debt, and of brotherly love between peoples must make immediate appeal to men of sympathy and kindly feelings in every country in the world . That is being proved anew daily . How surprised, then, the good people who, up and down Europe, are pleading for reductions of debts and armaments, for equal status for Germany, for a strengthening of the power of the League of Nations and of the various peace pacts and agreements would be if they knew that they are acting exactly as the Money power desires that they should act, and are therefore probably the enemies rather than the friends of the causes which they advocate . For it is the will of the Money power to fasten again upon the world that system of ruinous competition for foreign markets which is the gold standard and which, as a true law of the jungle, is a chief cause of strife and battle between nations .
Not less surprised than these, probably, would be the members of the Conservative party if they understood that the policy of Protection and Empire Trade is, at the moment, serving well the ends of International Money . It has been stated again and again in these pages that a free British market is essential to the satisfactory functioning of the Money System, and this statement remains true as the Conservative party may one day discover . The point is that the Money System is not, at present, functioning satisfactorily because of the impossibility of getting the hoarded gold out of New York and Paris . It was pointed out above that, when the American and French Governments raised their tariff walls so high as to prevent debtors from paying in goods the interests on the loans made to them, these debtors made use of the open markets of England . They sold their goods in England for gold (thus increasing unemployment in this country) and sent the gold to New York and Paris . Seeing that the most immediate object of the Money power is to put a stop to this one-way traffic in gold, the closure of the British market is for the moment a step agreeable to its wishes . Further the tariff, by excluding imports, helps to redress the balance of trade and so to prevent an outflow of gold, which outflow would inevitably set in the directions of New York or Paris .
But the propagandists of the Money power never suffer it to be forgotten that their final object is not protection, but Free Trade with all the world . The British tariff and the Ottawa agreements, it is a safe guess, will, if the chief object of International Money namely, the redistribution of gold is effected, be made the objects of violent attack and bitter criticism by the Money power throughout the world . If London is to remain the financial centre of the world the London market must be free . The Conservative party, therefore, which, in its bewilderment, is allowing British agriculture to drift to hopeless ruin and is making of itself the mouthpiece of the campaign for lower wages and salaries, ought to seek speedy enlightenment . It may be true that a rise in the price of meat would inflict hardship on the wage-earners of the North of England, but so, certainly, and to a much greater extent, will the loss of wages occasioned by campaigns for economy . Economy campaigns, undertaken at a moment when the world is sinking under the weight of its unsold products, are apt to inflict injury on those who conduct them . Is the Conservative party sure that its unpopularity, when the time arrives to return to Free Trade, would be a matter of regret to the International Money power ? Conservatism is weak because it has too long turned its back on Toryism . Let it recall Disraeli's words : Toryism has its origins in great principles ; it sympathises with the lowly ; it looks up to the Most High . It is not dead but sleepeth .
That the International Money power wishes to see England return to the gold standard is, of course, absolutely certain . But this does not mean that there was much lamentation among financiers when the break with gold took place in September 1931 . The Money power certainly would, for the reasons already stated, have liked to avoid that break ; but it has wasted no time on idle regrets . Meanwhile English producers have received some small advantage . This is easily understood when it is recalled that, by simply allowing the pound to drop in terms of the dollar and the franc, the prices of English goods can be reduced in foreign markets without the necessity of effecting any diminution of buying power that is to say, of wages in England itself . The lower the prices of English goods fall in the world's markets, the more difficult does it become for French goods and American goods, to compete with them, because French and American producers, being still on gold, can reduce their prices only by making direct cuts in wages that is to say, by diminishing the buying power of their home markets, and this buying power is now too low to allow of costs being recovered in the home markets, Dumping consequently is, for the present, out of the question .
The Money power of the world, however, is using the opportunity afforded by the suspension of the gold standard in England not, as is popularly supposed, to try to raise the world prices of goods, but to drive prices down to still lower levels . The truth is that whereas producers look on the existing prices as ruinously low, the Money power looks on them as ruinously high .
For the Money power measures prices only in terms of gold . As there is very little free gold available now to the world, and as the world's buying power is still rigidly limited by this small quantity of gold, prices, according to the view of Money, ought to be considerably lower than they are and wages ought to be severely cut in order to enable prices to be reduced .
On this theory, as will be obvious, a total disappearance of free gold, which may possibly occur if America insists on being paid the uttermost farthing, should reduce both prices and wages to zero and bring human activity and human life to an end, no matter how large may be the productive power of men . In other words, food is not food unless and until there is gold to endow it with the quality of food . This is a mystical rather than an economic doctrine and suggests that the Powers of Darkness are more real than many people in these days are disposed to believe .
There are competent observers who believe that the long and fearful struggle for lower and still lower prices which is the economic expression of the struggle between Usury on the one side and the American industrialists and the French Nationalists on the other will be determined in the not very remote future in favour of Usury . In other words, the gold hoarded in New York and Paris will be invested once more at high rates throughout the world . This view is based on the facts already mentioned namely, that the English Budget has been balanced, and that, unlike France and America, England possesses a currency which is not at present tied to gold .
Both the American and French Budgets are hopelessly unbalanced . They can be balanced only by further drastic cuts in Government expenditure and by further heavy taxation or by raising the internal price-levels . Further cuts and further taxation are held to be impossible . Higher prices, it is contended, must therefore come in both countries .
But higher prices in the existing demoralization of the home markets of America and France mean failure to compete against England in the world's markets . (English producers, with a balanced Budget and a free currency, can reduce prices still farther if need be without reducing wages . ) England therefore, it is argued, will capture the export trade of the world and so draw to herself, in payment of her exports, much of the gold now lying hoarded in New York and Paris, though it may reasonably be objected that this is likely to prove a slow process in view of the American monopoly of cotton, Virginian tobacco, and (partially) petroleum, and that, in any case, America may return to the policy of dumping . There can be no doubt that all the elements in the economic situation which favour the International Money power have been made use of by that power with great skill and daring . But it would be a mistake to suppose that American industrialism and French Nationalism have not continued to offer a stout resistance .
It is generally assumed in England that since September 1931 the French and American Governments have been following policies sharply opposed to each other. This is not necessary so . Neither the American nor the French Government doubts the supreme value of gold, but both these Governments have special claims resting upon them . The American Government, as has been said, is pledged to tariffs; the French Government to the Treaty of Versailles . And the Money power is implacably opposed to both tariffs and Treaty .
It would be surprising, in these circumstances, if bonds of sympathy did not somewhere exist between the American industrialists and the French Nationalists . After the visit of M. Laval, the French Prime Minister, to Washington, it was represented in England that America had been bullied into abandoning her support of Germany by threats of heavy withdrawals of French gold . There were heavy withdrawals of gold, but these continued after American interest in Germany seemed to have evaporated .
It seems more likely that the outbursts of anger against France, which occur from time to time in America, proceed from the owners of gold, and that the real key to American policy in 1931 is the attitude of the American industrialists towards the Hoover moratorium . The American industrialists before M. Laval's visit had persuaded themselves that the moratorium was a first step in the long journey towards reduction of the American tariff . They saw how welcome the moratorium had been to all their rivals throughout the world and argued, no doubt, that it boded them no good .
The American industrialists therefore criticized the moratorium so bitterly that President Hoover had no option but to refrain from further action in European affairs . M. Laval's visit approved this attitude, which was later imposed upon the President formally by Congress, just as, at an earlier date, non-intervention in European affairs had been imposed on President Wilson .
At the beginning of 1932, therefore, the Money power was as far as ever from its object . There seemed to be no prospect of getting the gold out of America or out of France . But as the year advanced new hope was awakened . Germany announced flatly that she would pay no more, and her attitude occasioned lively anxiety in Paris, where, as in America, the effects of the slump were beginning to exert their full and fatal influence . Both America and France showed signs of exhaustion ; fear was abroad in every city ; the atmosphere was becoming favourable for a deal .
In these circumstances the American Government displayed a new interest in European affairs and notably in the efforts of the League of Nations to cope with the Sino-Japanese quarrel, and the French Government adopted a milder tone . Optimistic people declared that if France and her former allies could be induced to forego Reparations, and if disarmament could be carried to a point at which President Hoover might claim it as a victory of the American spirit in world affairs, the American people would be won over to agreeing to a cancellation of War Debts .
Discussions began to this end in many European centres . It was suggested that the claims against Germany should be waived at a preliminary conference to be held contemporaneously with the Disarmament Conference at Geneva, and the hope was expressed that a gesture from America might indicate to the Disarmament Conference, during its sittings, the kind of agreement which would be most pleasing to the American people and their elected representatives . Every effort, meanwhile, which the wit of man could devise would be made to influence French opinion in favour of a more unbending attitude and American opinion in favour of freer trade .
The Ottawa Conference was not welcomed by International Money . Its dangerous character, on the contrary, was clearly recognized . It was likely to exasperate American opinion, and it might easily afford a platform to those Empire statesmen who wished to discuss the gold standard and its supersession by a managed sterling currency . Ottawa, in the view of Money, was a liability, but it was unavoidable .
For a time the hopes of a settlement achieved a large measure of fulfilment . In France the Nationalist Government of M. Laval fell and was replaced by the Liberal Government of M. Herriot . Germany moved to the right and presented the world, and especially France, with the prospect of a return to Prussianism a sufficiently terrifying spectacle . The force of the economic blizzard wrought upon both France and America so effectively as to induce a condition of mind described by one observer as chronic panic . At Ottawa, too, discussion of the financial question was left over to a World Economic Conference at which America was to be represented . It is worthy of note, however, that America made it clear that she would not, at this World Conference, discuss either War Debts or tariffs the subjects which the Money power was implacably determined that she should discuss .
Meanwhile Americans manifested, in most gratifying fashion, the satisfaction they felt at the result of the Lausanne Conference a satisfaction which the whole world shared . Reparations were out of the way at last ; could War Debts continue to flourish ? The belief that even the hard heart of Congress must be touched was widely expressed and widely accepted . Men of goodwill everywhere opened a campaign for European disarmament, on the lines duly suggested by President Hoover to the Disarmament Conference .
Suddenly Germany became troublesome . It was obvious to Berlin that every hope of her former enemies was set upon Disarmament as a means of persuading America to cancel War Debts . Here was the opportunity to demand and obtain equality of status with France . The German representatives were instructed by their Government to withdraw from the Disarmament Conference .
So heavy a blow threw both Europe and America into a condition of lively anxiety. If the Disarmament Conference failed hopes of persuading Congress to wipe out the War Debt might be abandoned . These anxieties were not relieved by the failure of the Powers to induce Germany to come to a Conference in London or elsewhere . The Germans, when they saw the dismay occasioned by their demand for equal status, immediately put up their price . France reacted . America drew back once more from a Europe which, as her industrialists assured her, is a hotbed of war .
But hope revived once more when the French displayed a more accommodating spirit towards Germany . Interest in the Disarmament Conference, which had almost evaporated, was quickened . The result of the American Presidential Election came to give added comfort, seeing that the Democratic party in America is Liberal in sentiment and has never been very friendly to high tariffs .
In this atmosphere the Notes of the European Governments to Washington asking for a cancellation or postponement of War Debts were despatched . At the moment of writing (December 1932) the answer of America is before the world . A further large consignment of gold is gravitating towards the vaults in New York and the American parties are once more affirming their faith in tariffs on the one had and in gold on the other . The American industrialists are still in the saddle, and even though the horse is making heavy going they look like staying there . In the circumstances the World Economic Conference presents a less hopeful aspect .
But though nations are depressed, he is sanguine who believes that Money has wholly abandoned hope . Money never abandons hope . So long as Governments and peoples remain incapable of distinguishing between real wealth and gold, and so fear exceedingly loss of gold, new plans will be made and new expedients devised . And so perhaps we shall one day return to the Money System in its old ruthless form, to slumps and booms, to slums and Social Reform (with, however, a smaller dole ), to starvation and over-productionin short, to that inexorable economic law which, as is now being seen, is a law designed to sacrifice the whole universe in order to make the universe safe for Usury .
Even if such a return should take place it is unlikely to be wholly satisfactory to Money . For the smoke-screen of gold is less dense than formerly . What the Americans are doing in demanding payment of War Debts in gold corresponds exactly on a world scale to a run on an ordinary bank . It is being made clear even for the dullest to see that the Financial System of the world does not possess a gold backing for a tithe of its liabilities . The Financial System is therefore in the greatest danger, unless the American industrialists and French Nationalists can be converted in time, of having to close its doors and default .
This is the nightmare which is haunting the dreams of every international financier . Because the odds are that, after the last shipload of gold has crossed the Atlantic, Europe will rub along well enough on paper money . Will the illusion of gold then be shattered for ever ? One is reminded irresistibly of Rostand's hero, the barnyard cock which, every morning, amid profound silence, ascended a little hill and crowed . At the sound of the cock-crow the sun rose and all the other inhabitants of the farmyard believed that they saw a miracle . Where would they be if Chanticleer did not bestow on them the blessing of light ? But one morning Chanticleer slept in and the sun rose without awaiting his summons .
Why is nobody insisting today that British agriculture and British coal-mining are valuable quite apart from their powers of earning profits ? Or that a thriving agriculture would afford the best of all markets the home market for a thriving industry ? The only obstacle which stands in the way of such a development of the home and imperial market is the Money power and its gold standard . If British and Empire agriculture could buy the products of British and Empire industry so that producers could obtain their livelihood within the Empire, the whole fabric of Dutch finance would be destroyed, for it would no longer be possible to empty this country of money in favour of some foreign country and so to compel sellers to seek buyers in the ends of the earth . For the doctrine of cheapness we should then have the older and better doctrine of service . The Money power and its gold god would cease to exert the power of life and death over producers and, through them, over the whole people, and we should be spared the impending horror of a world bank .
Doubtless if the financial system breaks it will be patched up again . But will the Money power really succeed ? Against it, today, stands the spirit of service which, in 1931, rescued the terrified lords of Mammon from the ruin they had compassed . If it is England's calamity that she has been chosen as the citadel of Money, it is her glory that her people retain, more perhaps than any other people, the ideals of Christian Feudalism . There is no sacrifice which Englishmen are not ready to make for England . If the Money power is really to triumph, therefore, it must convince this people and must keep them convinced that its patriotism is not inferior to their patriotism and that, in serving its ends, they will be serving the ends of their country . All the engines of a vast publicity belong to Money ; but it is doubtful, nevertheless, if the propaganda which succeeded so well in the Nineteenth Century will be equally effective in the Twentieth .
One reason for this is the power which man has acquired over the forces of Nature . Until this moment buying power, as has been seen, has invariably been distributed to the people in the form of salaries, wages, dividends, and profits ; but man power is being displaced by machine power so quickly that even now since machines do not earn wages enough buying power to enable the output of production to be consumed is not being issued . It is certain that, under the Money System, this state of affairs will be greatly intensified . Even at the height of the American boom there were 2,000,000 unemployed persons in the United States who had been thrown out of work because machines were doing that work . A recent calculation suggests that at least a quarter of the 12,000,000 persons now unemployed in America can never again be employed under the present system perhaps under any conceivable system .
How then, as salaries and wages disappear, is buying power to be distributed ? Here is a new battle-field for Money which will resist to the utmost the idea that, as human labour becomes more productive, larger quantities of money will be needed to exchange the products of that labour . The question, Are men to be given money for nothing ? is bound to be asked by those whose office it is and has always been to give money, invented by themselves out of nothing, in exchange for the largest possible quantities of goods and services .
It is no part of the writer's intention to enter into the question of the distribution of buying power in a world in which the power to produce is being increased almost from hour to hour . (The reader is referred to the illuminating works of Major Douglas .) But it may be pointed out that enlarged opportunities of rest and recreation were not, under the God System, looked upon as an evil . It depends on what you believe to be the object of man's life . If that object is work, as Money understands the word, then every human invention, including the spade, is an evil, since it reduces the amount of work . If, on the contrary, the object the service and enjoyment of God and of one's fellows, then there is no evil .
Men have, until now, enjoyed few opportunities of that kind of spiritual development which is associated with the contemplative life .
The conditions of social and economic life, the Pope stated in his recent Encyclical, are such that vast multitudes of men can only with great difficulty pay attention to that one thing necessary namely, their eternal salvation .
It was the belief of the architects of the God System that the Christian revelation of God is of so infinite a richness that its wealth will not fully have been explored at the world's end . These architects would not certainly have regarded as an evil discoveries which, when the power of Money has been broken, will release men and women throughout the world and so enable more men and more women to achieve a deeper enjoyment of God and therefore a nobler service of their fellows .
It may be argued that prosperity and leisure constitute great temptations . But it is well attested by experience that poverty and misery are the fruitful mothers of vice . Every man today sees before his eyes a world overflowing with goods, but crowded with paupers . So far all the eloquence of Finance has not sufficed to explain away that strange and grim spectacle . On the contrary, such incidents as the advice of the Federal Farm Board to the growers of cotton to plough up every third row remain engraved on the public memory . The Money power must reckon now with the fact that it has shocked the conscience of humanity . Knowledge is coming to the commonpeople; it was by the support of the common people, as has been shown, that, under God, Kingship originally was made effective and the nation established . Englishmen owe it to Queen Victoria and her descendants that the ideals of duty and service have not been suffered to fade in a world in which greed of gain achieved an almost universal sanction .