Chapter XIV
Congress Must Regulate The Value Of Money

Now that we have dealt with Congress' responsibility of "coining money," we must now take up that more difficult task of "regulating" the value of money.

1. After Congress got full report from the Treasury, giving total deposits to the credit of the people (and the Government), and after getting from other agencies of the Government information which would lead them to a knowledge of the total business transacted in the United States in current year, the Congress would then "regulate the value of a dollar" in terms of the work it had to do.  No other factors would enter; for the sole purpose and duty of money is to serve as a medium of exchange between buyer and seller, and to serve as a measure of the surplus products the people produce in anyone year.

Of course that would divide our deposits into two categories:  (a) demand deposits used in buying and selling goods and/or services, and (b) time deposits, or deposits to be loaned.  However, the total would be treated as a whole, because the making of loans would keep the time deposits active, not in the names of the owners of these deposits, but in the accounts of the borrowers of money.

Suppose that the Congress found that, after all monetary deposit credits of the people had been totalled, there would be on deposit to the credit of the people $700 billion, but it required only $350 billion to meet the demands of business annually.  Then Congress would order the Treasurer to instruct the Depositories throughout the Nation to rewrite all deposit balances, giving each depositor credit for just half of his former balance.  For example, should you have $300 to your credit on the books of the Depository, the bookkeeper would strike out the $300, and write $150.  This would not cost you one penny because it would be like swapping 300 half dollars for 150 dollars.  Your new $150 deposits would buy just as much in the markets of the Nation as your $300 did before the adjustment.  Price tags would be rewritten at half the former figures.

This would give us a sound, stable dollar.  It would continue to buy the same amount of any commodity every day.  If it bought four pounds of coffee in 1957, it would buy four pounds of coffee in 1997.  This would be accomplished by the Congress keeping the total deposits equal to the total cost of carrying on business as the years passed.  They would do this by adding deposits as often as the total demands of business was greater than total deposits.  They would add these deposits, by having the Treasurer give the Government deposits in the amount of the extra deposits needed.  This would be the only creative act of Congress.  When it gave the Government deposit credit for, say $10 billion, that would increase the total deposits $10 billion which would have been a creative act, for no goods, chattels, or wealth would have been involved; but when the Government chequed the $10; billion out to pay for services and goods, the $10 billion would be added to the people's deposits, becoming a part of the permanent volume of deposits, money.

As production and business increased, the Congress would in this way keep pace with deposit credits.  That is a true valuing of the dollar, and gives us the soundest, most fluid dollar the world will have ever seen.  Fluctuating prices would disappear; there would be no feverish writing and rewriting price tags.  There would be no furniture dealer writing a price tag for $249 and hanging it on a suite of furniture; then drawing a red line in the same act through the $249, and writing "our sales price" at $129.

All commodities that did not readjust to the new dollar value, would be placed under a ceiling by Congress.  There would not be allowed any speculators in the commodity markets of the world, buying up commodities, then refusing to let the people have them except through a dole which would keep the prices high.

2. There are other monetary values which are never listed among deposits, transferable by cheque.  These are investment obligations, simple notes, vendors lien notes, first mortgage notes, deeds of trusts, corporation stocks, etc.  These do influence the money market, and the value of a dollar just as much as too much money.  Not by creating new deposits as now; but through the watering of their values; as when a company sells $100 million more shares than it needs to finance its business.  Or when contractors price a house that actually cost $5,000, at $10,000, or may be $15,000.  Those notes are watered, just as corporations water stock.  Land values that jumped from $10,000 a lot, to $100,000, are watered just as much as the corporation watered its stock.

When the re-adjustment day, the "judgment day" rolls around, and the Congress "squeezes the water" out of all investment obligations; this will bring the price of them down in "parity" with the sound dollar that must pay the note, the mortgage off.  The gathering in of investment obligations during their pumping money into the stream, then siphoning it out, making it impossible for the mortgagors to pay, has long been a prime activity of banks.  Foreclosures followed, because the note maker could not pay, and more property was transferred from the people's ownership to the banker's wealth.

As with the people's deposit balances, the Congress would have all investment obligations altered (by law) writing the principal figures at half their original volume.

Your lot that you say is worth $100,000 now, would be re-valued at $50,000; and so on down the line . . . prices in most cases would voluntarily drop, but in those instances where they would not, Congress would set a ceiling price over them.

There should be only two dealers between the manufacturers or producers of goods: (a) the wholesaler, who would buy the goods, and store them in great storehouses for distribution to the retailers, for resale; (b) the retailers who would buy them only for resale.  There would be no stock markets, stock exchanges, wheat pits, cotton markets, where men and women with phoney money would gamble on the guess whether the price went up or down.  A few men in Chicago New York, New Orleans and a few other cities, could not then manipulate the markets exactly as the dealer manipulates the roulette wheel.

As a boy on my father's East Texas farm, we planted cotton with the cotton market at 10¢ or 12¢ a pound.  When we harvested the crop in the fall, and sold it, we got as low as 4¢ a pound for strict middling cotton, picked by hand, as free of trash as careful picking could keep it.

Many of us can remember the Krugers, Lawsons, Hills, Goulds, of the yesteryear, and the Youngs of today, who manipulated the stock markets "making" millions in the steal.

With the sound dollar that the Congress can give us, and having cut out all phoney money, reducing money lenders to the lending of existing deposits, the Congress will not have to outlaw these gambling devices; for that is what they are, just as much as all of the gaming devices "legalized" at Las Vegas.  They could never have been established, without the phoney dollar; and with the death of the phoney dollars, the bankers' pen and ink dollars, there will be laid by the phoney dollar's corpse, the corpses of the "stock market," the wheat and cotton pits and casinos.

he land speculator will go along with his buddies.  Boom and busts will pass into limbo of unneeded and forgotten things.

Then truly, in the words of Sir Josiah Stamp, this, will be "a happier and a better world to live in."

Fixing the value of the dollar will effect every transaction between man and man; and the strong will not be able to tread down the weak — the big club of the Nation will be there to strike him down if he tries it.

I can sense your saying "Oh, no; you couldn't trust Congressmen.  They wouldn't know anything about banking, as you have shown, and bankers would use them as they use them now. . . and besides all politicians are crooked."  And let me reply: "There are a hundred crooked business men behind every crooked politician" and then add, "What could the crooked business man get out of Congress if it could not buy investment obligations, indulge in stockmarket gambling, neither buy nor sell merchandise?  Corporation stock?  What special privilege could Congress grant corporations who were engaged only in the manufacturing of goods for the people?  If Congress could not lend money, what would Congress have that the business man would want other than police protection along with all other enterprises, and the people?  Too there would be no bankers.  Only deposit lenders.

Too had you rather trust 19 men over whom you have no control appointed for 14 years; tools of private corporations who are interested in only one thing, profits for their private corporations (including the banks); who will not hesitate to take even the shirt off your back, and you have no recourse; who sit tri-weekly in Washington (not as a government agency, but as private banking corporation officials to pump more money into your pockets or siphon it out, just as their whims drive them, than trust 531 Congressmen — 96 Senators, and 435 Members of the House — whom you elect (all Congressmen every two years., and a third of the Senators every two years, giving you a chance to clean out the old and return all new Congressmen, which would give us 467 Congressmen, say in 1960, fresh from the people?)  They would obey the people's wishes IF the people would stand behind them and demand that they do so as the corporations now stand behind the Congressmen and compel them to do their bidding.  Take crooked businessmen from behind Congressmen and they will not be crooked Congressmen.

If Congress vote against the people's welfare, if they are crooked, it is because corporations stand closer to Congressmen than the people do.

Why the upsurge of Congress in the 30s for the people rather than for the corporations, in the main, it seemed?  Because the hungry people and impoverished small business men, became angry and shouted such a manifesto (Roosevelt was chosen repeatedly by the hungry and the impoverished) that all sorts of laws were ground through Congress, for the benefit of the masses.

The halycion days for the masses were here, but while the people rejoiced in their saviour (Roosevelt, and a Congress who took his suggestions almost to the letter), the corporations were busy in the back ground tightening up their controls of the Nation's money and credit.  And now we are in the beginning of another holocaust of dollars, all lost by the people to the bankers' private profits.

The fact that the Constitution couches in the same paragraph with the coining of money, the "fix the standard of weights and measures," proves conclusively that they had in mind that the value of money should be measured by commodities; therefore, when Congress establishes the right ratio between money and goods, business turnover, then it shall have "regulated the value thereof."