G.G. McGeer
The Conquest of Poverty
CHAPTER VI.
Lincoln’s Way Out
The Five-Point Plan
Lincoln fully appreciated that his national currency system would not and could not of itself create or maintain stable prosperity. He recognized, how ever, that the establishment of a national currency system was the first step in any scheme designed to stabilize progress and to rationalize prosperity. Experience since Lincoln’s time has taught us that in addition to the Mint there are at least four administrative institutions that must be set up before progress financed with national currency and public credit monetized in a national banking system can be maintained with any substantial degree of economic and social security. These institutions constitute the basis of the five-point plan that is essential to the reestablishment of normal prosperity. The fundamental institutions making up this five-point plan consist of :
(1) The Mint.
(2) A national banking system.
(3) An effective plan of scientific taxation.
(4) A department of economic regulation and control.
(5) A department of international trade and credit control.
Now let us summarize broadly the functions of these proposed governmental innovations commencing with the Mint.
(1) The Mint
The Mint should mint, print and issue all metal and paper currency.
(2) National Banking
The national banking system should be empowered—
(a) To manage the gold and silver reserves of the nation; to control the minting, printing and issuing of all currency, including metal coins, paper bills and bank credits which, when transferred by cheque, serve as a substitute for currency.
(b) To issue all the currency and credit requirements of the privately-owned and operated merchant or commercial banking system and to supervise and regulate the operation of all merchant and commercial banks.
(c) To regulate and control all long-term capital investment, including investments such as advances for farm and home investments; all long-term industrial investments and all investments required for the expansion and development of international trade.
(d) To regulate and control the nation’s international buying power and all international currency and credit transactions.
(e) To finance national, state, provincial and municipal government.
These proposals recognize that the creation and original issue of currency and credit as the spending Power of government, the regulation of circulation and the management of international exchange and credit are public functions that should be performed by departments of the national government. They also recognize that commercial or merchant banking essentially a private enterprise that should be carried on by individuals operating in a private capacity but under proper government regulation and control.
There is no need for the nationalization of the merchant or commercial banking system, nor should there be any attempt made to socialize private finance.
The national banking organization should act as the fiscal authority and financial adviser of the government and it should provide, free of cost, all the currency and credit required to finance all governmental enterprise. Where a nation maintains national, state and local governments, the national banking system must be organized with a system of sub-banks, a subbank being provided for each state to perform the duties and to offer the services to State and municipal government that the national bank proper performs and extends to the national government. In this way the national banking system can serve effectively the financial needs of national, state and municipal government.
The banking system must provide the deposit, credit and chequing facilities now offered to governments by private bankers. Banking facilities offered by the national banking system must be maintained in every centre of population sufficiently large to warrant a banking service, and where no banking service is warranted by the size of the community the Post Office should be empowered to supply the banking facilities necessary to make the banking service complete.
Like the Post Office, the national banking service should be in all places where banking facilities are required.
Properly administered, such a banking system would not in any way destroy the autonomy of states, provinces or any form of local government.
In addition to its power to create and issue the buying power medium of exchange, the national banking organization should have the power to restrain any undue desire of the representatives of the people to spend unwisely or unnecessarily. It should be responsible for the supervision and audit of all public expenditures and it should aid in the scientific regulation of the rate of expansion of capital investment.
Now I appreciate that this programme involves a very broad expansion of the existing banking system. The establishment, however, of the Reconstruction Finance Corporation, farm and home loan banks, industrial trade banks, foreign trade banks and innumerable types of investment banking institutions, justifies the conclusion that the banking system must be consolidated, and its powers widened, if the chaos arising from a loose and haphazard and unco-ordinated system where many banking and financial institutions try to work independently, of the government and each other, is to be avoided in the future.
The crying need of to-day is the establishment of a national banking system which will include in a consolidated and co-ordinated plan the innumerable institutions that are now ineffectively serving the monetary needs of the people.
International Exchange
We have learned during the last few years that the mere control and regulation of gold as a basis of international exchange is not sufficient. Nations must set up and maintain the means of controlling the international movement of currency, credit and debt obligations. All nations have recognized this necessity to some degree. The perfection of the Department of International Banking so that all international money, currency, credit and debt transactions can be kept within reasonable bounds, is essential to the stabilization of progressive international trade and commerce. No nation can afford to permit its international buying power to be controlled by international credit dealers.
Commercial or Merchant Banking
The commercial or merchant banking system should be continued as a private enterprise. The currency and credit requirements of the commercial banks should be advanced by the national banking institution without cost to the commercial or merchant bankers. The benefit of this free issue of capital should in the main be passed on to the community at large, the commercial bankers being restricted to a legitimate profit for the services they render as clearing houses of currency and credit, and as investors of short term credits.
There is nothing new in this proposal that currency and credit be issued to the commercial banking system without cost. The commercial or merchant bankers enjoy to-day the privilege of printing paper currency and the greater privilege of creating a substitute for money by making loans of bank credit which exists merely in the form of statements of account in the banker’s books, but which the banker calls a deposit.
The credits so created, when transferred by cheque, serve as an effective substitute for money. The bankers, therefore, enjoy the power to create and issue an effective substitute for money. When all bank currency and credit is issued by the national banking system and, in turn, passed on to the commercial bankers, even though they secure it without cost as they do at present, the national banking system is placed in a position to prevent private bankers from disrupting the social system by an unwarranted inflation of private bank credit. Past experience proves such a precaution to be necessary.
Before the proposal to advance currency and credit to merchant banks free of cost is condemned, it should be recognized that many commercial bankers have not exercised their privilege of printing money and issuing bank credit to their own undue advantage. In the main, their profits have been reasonable and the benefit of their power to print money and to issue bank credit as a substitute for money has been passed on to the community at large. There should be no great difficulty in continuing this practice, for by limiting the profit of the commercial banking system to a reasonable return for services actually rendered, the interest of the community at large can be fully protected.
The commercial bankers should welcome this change. It will increase their total volume of business and place the business of the commercial or merchant banker upon a much surer foundation than it has ever been on before. In a word, the commercial banker will have the co-operation and assistance of the national banking system in stabilizing the going-concern activity of the social system on which the commercial banker depends at all times. He will be able to do legally and safely what he has been trying to do illegally and unsafely in the past. In a word, under this proposal the national bank creates and issues the medium of exchange, while the commercial banker provides the deposit, chequing. credit and investment facilities essential to the carrying on of commerce and industry as private enterprises. National banking power, therefore, does not conflict with merchant banking. They can and should work successfully together.
With such a banking system established, an inexhaustible supply of governmental spending power and consumers’ buying power could be maintained. Once this duty is undertaken, the banking system should not be charged with the entire responsibility of regulating circulation. That is so because when the banking system is called upon to finance both government and progress it will be compelled to create and issue more currency and credit than is required to maintain progress. Some effective means of withdrawing currency and credit from circulation must, therefore, be developed by the government to assist the banker in maintaining the continuity of the circulation of effective buying power. This can only be accomplished by the intelligent exercise of the government’s powers of taxation.
That brings us to the third institution in the plan.
(2) Scientific Taxation
Departments of national, state and municipal taxation must be developed and operated so they may co-operate with the banking system. Working together, these departments of taxation can assist the national banking system in balancing government budgets, in equalizing taxation and in maintaining the circulation of a stable medium of exchange. Undue accumulation of the medium of exchange in the possession of individuals or groups can be avoided. The tragedies and disasters of both inflation and deflation can be prevented.
It should not be overlooked that when government finances by exercising its power to issue currency and to monetize its own credit in a national banking system, the levy of taxes to meet the cost of governmental expense is unnecessary. The burdensome and confiscatory taxation which we are experiencing would be completely done away with. Taxation would only be needed to regulate the circulation of the medium of exchange. Unwarranted confiscation of property by taxation would be relegated to the dark ages of monetary despotism. In achieving these great reforms the taxation authorities would be confronted with two major problems, and they are :
(a) To prevent individuals, groups and corporations from accumulating and withholding from circulation an unrighteous amount of the medium of exchange.
(b) To prevent the total volume of the medium of exchange in circulation from exceeding the needs of ordered progress.
The solution of these problems is now comparatively simple. That is so because while the bankers were perfecting the technique of substituting credits transferable by cheques based on accounting for money based on gold, the taxation authorities were compelled to perfect at the same time the technique of taxation. Taxing authorities during the years 1931 and 1932 were actually taking out of circulation more than the consumers’ buying power could stand. We are now fully aware that the burden of taxation has been one of the chief factors in reducing the circulation of the medium of exchange to substandard levels.
Knowing that we can take more out of circulation than consumers’ buying power can afford to lose, we should not hesitate to conclude that we can at all times withdraw from circulation any amount of the medium of exchange that threatens the social structure with the dangers of an excessive volume of currency or buying power credit in issue. Such a conclusion is elementary. The sound money theorists’ fears of inflation are therefore wholly groundless.
The taxes that would be employed are now well known—e.g., income and excess profit taxes, probate and succession duties, licence fees and excise fees—are ample to prevent the buying power medium of exchange settling in the credit or currency repositories of individuals or groups. The sales tax provides ample means for withdrawing from general circulation any amount that the demands of progress do not need.
With the power to create and issue money and the power to withdraw it from circulation by taxation, no nation able to establish government V should have any fear of a shortage of buying power, nor should it be troubled by the dangers of blind and uncontrolled inflation. The means of financing progress are therefore simple, reasonable and practical.
The banking and taxation authorities, however, cannot alone regulate the production, distribution and replacement of wealth. They can supply and regulate the circulation of the currency needs of the government and people. The regulation and control of the production, distribution and replacement of wealth must be undertaken by another branch of the government. This problem, or, to be more correct, the manifold problems that this proposition involves, are far from simple. The fact remains, however, that were the means of financing them available they would cease to be impossible as they are at the present.
Thus we come to the fourth institution that modern experiments in planned economy have established as essential to ordered advancement.
(4) Economic Regulation and Control
The experiences of Socialism in Russia, military nationalism in Japan and Germany, Fascism in Italy and co-operative regulation as between government and private enterprises in France, Great Britain and the United States have established that the regulation and control of the production, distribution and replacement of wealth are now inescapable duties of government.
Planned economy based upon laws, rules and practices is necessary for the same reason that traffic departments’ laws, rules and regulations must be maintained in modern metropolitan areas.
The National Industrial Recovery Act is not abnormal. It is the inevitable outgrowth which was bound to come from the Bankers’ Credit Corporation which, in turn, grew into the Reconstruction Finance Corporation and which quite naturally expanded into the National Industrial Recovery Act with its ever expanding ramifications. Such legislation will never be repealed no matter how often it may be changed or modified.
The technique of the N.R.A. administration will no doubt be expanded and perfected so that national, state and municipal authority can effectively co operate with commerce and industry, labour and capital, in maintaining effective distribution, and orderly marketing of goods and services required to serve advancing human needs.
Economic control and regulation are inevitable. Therefore there must be established—
National, state and municipal departments of economic control, empowered to co-operate in the regulation of prices, wages, working conditions, competition, production, distribution, and replacement of goods, capital investment, public works, social services and the more equitable division of wealth.
All these factors in the economic structure must be kept within the bounds of reason. The government must, on the advice of these departments, set up the rules and regulations that are essential and see to it that they are respected.
It, of course, would be absurd at this stage to undertake to define the specific duties and responsibilities of such organisms. We can only hope that time and experience will perfect the technique of their operations.
To what extent should such institutions go in fixing prices, in limiting production, in encouraging advancement? No one can set any specific or definite limits upon these activities. We must depend upon the reasonable application of common sense applied with intelligence to the needs as they arise from time to time. For example, there is nothing wrong with the price and profit system, so long as the profit seeker is compelled to submit to a proper respect for a decent standard of business morals and ethics. Unreasonable prices can be prevented and should be disallowed. In the main, however, fair and proper competition should be recognized as a safe and sound guide to price fixation.
We know that the vast bulk of those engaged in commerce and industry are satisfied with fair prices and reasonable profits. The trouble comes from the few -who will not respect the right of others to live. These few in commerce and industry must be disciplined for the same reason that the few who abuse the privilege of using the streets in metropolitan areas must be disciplined and controlled for the benefit of the majority.
The opportunities for effective improvement by intelligent economic control are by no means confined to commerce and industry. The greatest opportunity that exists for effective results is to be found in the institutions of government.
Economic regulation and control should be able to eliminate the appalling unnecessary duplication of governmental service that now exists. Under the present system, the functions of government are maintained by three main political structures, viz.—
(a) National,
(b) State or provincial,
(c) Municipal or local governing authorities.
In these distinctly isolated realms of political activity, governmental institutions carry on not only independently of each other but often in a spirit of antagonistic conflict. The result is an unnecessary cost to the public for governmental services, but worse than that, the efficiency of the services offered is far below that which it should be.
President Roosevelt, in his book “Looking Forward”, says :
“The form of local, county and town governments, as we know it in most of our states, dates back to the Duke of York’s laws enacted about 1670.
“We may assume that at the time of their adoption they were suited for the conditions of the period which he describes as the horse and buggy age.”
Under the circumstances, President Roosevelt points out :
“As the machinery of local government exists to-day, we have, very probably, 500,000 units of government. They range from the Federal government down to the smallest school or special district.”
As a result of this situation, cost of government is up and efficiency of government is down. Recently William Anderson, Professor of Political Science in the University of Minnesota, has pointed out that there are, in the United States, 175,418 governmental bodies empowered to perform public service and to levy taxes. This number, according to this distinguished scholar, should be reduced to not more than 17,850.
The task of co-ordinating this loose and haphazard scattering of governmental authority is one of the important duties that the departments of economic control should undertake. Once we appreciate the appalling over-lapping of public service, we must recognize that here is an opportunity to reduce expense and to improve efficiency by applying effective methods of co-operation and co-ordination.
The complaint of the people that they are suffering from too much government and that the cost of government is too high cannot be disputed. Departments of economic control are necessary, therefore, to achieve the following objectives :
(a) The regulation of commerce and industry.
(b) The elimination of unnecessary governmental expense.
(c) The effective re-distribution as between national, state and local government of their duties, rights and responsibilities in the realms of public service, taxation and finance.
In this consolidation, the national government must assume the responsibility of maintaining the education, health and social well-being of the people and the law and order of the nation. Superannuation allowances, pensions and all social services should be recognized as national rather than local responsibilities. Education, health, social well-being, peace and security of the individual should be maintained upon a nationally standardized basis. No nation can survive, much less progress, where the standards of one section in these important elements of human relations are out of line with the standards maintained in others; that is clearly apparent now. Sectional prohibition, looseness in law administration and attempts at sectional social reform have placed that issue beyond question. Certainly, our present debt position proves that all non-money profit producing enterprises must be financed by the issue of currency and credit that comes without cost from the national banking system. The social obligation of government should not be burdens upon the taxpayer; they should be recognized and treated as opportunities to maintain the volume of purchasing power medium in circulation that is needed to sustain commerce and industry in a state of ordered progress.
When the government issues the spending power required to finance and maintain non-money producing social service and public enterprise, the buying power thus put into circulation provides, in turn, the buying power of consumers that will support commerce and industry in a prosperous and progressive state. National banking, taxation and planned economy are not all, however, that is needed to maintain a modern nation in prosperity.
International trade and commerce are now essential to every nation’s well being. The collapse of international trade during this depression has proven that international trade and commerce must be regulated and controlled. We thus come to the fifth institution.
(5) International Trade and Commerce
The success of every nation demands the establishment of a national department of foreign relations empowered to control, regulate and promote foreign trade and commerce. In this age of rapid transportation and communication, individuals and corporations are no longer able to operate internationally without the assistance and co-operation of governmental authority. Individuals are wholly unable to collect and co-ordinate the information now necessary to successful international commercial operations.
The development of export and import trade is therefore a national and not wholly a private enterprise. The stabilization of progressive international trade can only be accomplished when a government establishes an effective authority under which all international transactions can be regulated and controlled.
Influenced by a unique combination of laissez faire, the international gold standard, depreciated currencies, bonuses, tariffs, dump duties, trade embargoes, competition and jealousy between nations, international trade has been carried on as a form of war. All nations were seeking to sell more than they were buying. Some succeeded and some failed, but all suffered from the universal collapse of international trading activities which came in 1932. In the debacle that followed all nations sought to establish national economic self-sufficiency.
The visionary may say that national economic independence cannot last. There is no reasonable ground, however, for any such conclusion. Everything indicates that national economic independence will become more and more intensified with time. Each nation, therefore, must set up the best machinery it can devise within its own borders to maintain in international relations the greatest possible measure of economic security for itself.
The government of each nation must place itself in a position to prevent its people from buying more abroad than they sell abroad. In addition to that, the government must set up the machinery under which nations can exchange goods and services of the one for the goods and services of the other.
In addition to regulating and assisting in the expansion of international trade development, the Department of International Trade must co-operate with the Department of International Banking in the regulation of international exchange and credit. The Department of International Trade and Commerce, while enjoying the power to trade as nation with nation and to control and regulate all international transactions, should not improperly interfere with the international activities of private individuals engaged in foreign trade. The Department should encourage and extend assistance to all such private enterprises and should recognize the international trader as an important and necessary factor in the nation’s progress.
In the hope that the reader might be assisted in visualizing the scheme of circulation which the five, point plan here outlined contemplates, I have attempted to picture the plan in operation for a country like Canada. In Chart V, I show the National Mint, the National Bank, the Department of Taxation, Economic Control authority and the clearing house for international trade and exchange operating in co-ordinated service. In Canada there is a national government, nine provincial governments, and in each province there are local governmental authorities such as cities, municipalities, counties and many other local governing bodies. The plan pictures a monetary system serving all forms of government.
Such a plan can be applied to a country like the United States whose government consists of the Federal, State and local governing authorities. The Mint is the national repository of all bullion. It supplies the National Bank with all metal and paper currency. The National Bank, in turn, provides the national government and the merchant banking system with all its credit and currency needs. The National Bank also maintains a sub-bank in each province and provides it with all the currency requirements which are in turn furnished to the provincial and local governments to meet their needs. Government in all its activities is thus financed by the direct issue of national currency and credit. No borrowing at interest is necessary.
The currency and credit thus paid out for materials and services rendered circulate in the social system. There is no change in the technique of financing government involved as far as the use of currency and credit is concerned. There is a difference, however, in the way the currency and credit are put. into circulation. Instead of the government issuing bonds which are converted into currency and credit-spending power by the private banking system, the national banking system issues the currency and credit needs of the government direct, eliminating the interest and other profits which the private money system now exacts from the taxpayer for providing public finance. This system takes private profit out of public finance.
Obviously under this system, if no steps were taken to regulate circulation the social system would soon become flooded with the money and credit so created and issued. The acceptance of deposits by the National Bank takes care of a part of that problem and the Department of Taxation operated by local, provincial and national government authorities withdraw from circulation all amounts that would endanger the economic security of the social system. Circulation can thus be maintained as a balanced and continuous operation.
The merchant banking system operates under the control of the national banking system, using its own capital and such deposits as may be placed with it for private investment. The issue of national currency and credit augments the circulation of private finance and provides the extra capital needed to finance profit and progress.
The Department of Economic Control functions in close co-operation with the banking and taxation systems and assists in the regulation of the rate of progress. The Department of International Trade and Commerce and Exchange serves to keep the inter national activities of the nation in line with its domestic progress and assists in balancing international commerce.
The outline which the chart offers of the institutions needed to correlate the power of government to create and issue the medium of exchange, to regulate circulation and to keep the rate of progress within the bounds of reason in domestic and international trade indicates the steps which must be taken if capitalism is to be maintained as an institution effectively serving constitutional Democracy. It is based upon the assumption that the medium of exchange can be made to serve as the economic life-stream of the social system.
The plan, by creating the methods of control and regulation necessary, aims to maintain and support the value of wealth by offering the means of maintaining going-concern activities in all phases of the economic and social structure. It recognizes that the circulation of the medium of exchange is no less essential to the continuance of a healthy social system than is the circulation of blood essential to the maintenance of the health of the individual.
A careful study of the relation of the different departments mentioned, as they are pictured in Chart V, will, I think, help the reader to appreciate that the continuity of the circulation of an effective medium of exchange in the social system should form the first fundamental step in any scheme of planned economy. Once the means of financing progress is established, all other administrative functions should become reasonably possible. Certainly’ if planned economy is not provided properly with finance, success cannot be expected.
Lincoln’s Plan in Operation
In outlining the foregoing plan set out in this Chapter and depicted in Chart V, I fully appreciate that there are innumerable features and elements involved in maintaining balanced government under a scheme of planned economy that I have not referred to. I have, however, clearly indicated the fundamental pillars necessary to put a system of planned economy financed with national currency and credit into action. It is, of course, more complete than anything Lincoln had in mind, but had Lincoln been privileged to carry out his proposals for national currency as a means of financing national government, the plan I have outlined would have been the inevitable result of the development that would have followed.
The plan submitted involves no innovation of theory in the creation and use of token currency and credit. It merely adopts the technique which the private money system has now perfected and puts that technique to work in the service of the people. It involves no change in the technique of consummating monetary transactions. It offers no extension in the duty and responsibility of government that was not contemplated by Lincoln in his interpretation of the constitution of the United States nor of his understanding of the growing responsibilities of government, which he correctly anticipated three score and ten years ago. It is, in my opinion, nothing more than the plan of government that would now be in operation if the ideas of Lincoln on monetary policy had been accepted and established as the basis of Democratic government during his second presidential term.
In developing his national currency policy, Lincoln did not rely upon the casual or haphazard acceptance of loose ideas. The formation of his policy came slowly and step by step, and was based upon inspired wisdom assisted by knowledge gained [n actual experience.
Lincoln thoroughly understood the ancient truths. He appreciated that, in addition to the protection they afforded humanity against all evil, they specifically provided for the protection of mankind against the evil designs of the lovers of money. He fully recognized that the law “Thou shalt not lend on usury” was no less important than the law “Thou shalt not steal”.
In the establishment of his monetary programme, he sought to make government the instrument of service that would free humanity from the scourge of usury and the tragedy of war. When Lincoln entered the White House he did not hesitate to organize government on a war basis for the purpose of putting down one of the most sweeping and dangerous rebellions that any nation has ever had to face. The appalling cost did not deter him because he knew he could use the nation’s power to issue money to finance the expense of the Civil war, no matter what it might be.
The success he achieved in using national currency to save his nation from secession convinced him that the government could create and issue all the finance necessary to maintain progress. In the economic structure which he conceived to be necessary to maintain in prosperity a nation of 250,000,000 souls, he made his national currency system “the head of the corner”. He proposed to use national currency as the means of financing an age of plenty, freedom and ordered progress.
Some day statesmen and economists will recognize that the government’s power to create and issue national currency and credit free from interest charges “is the stone that the builders of our civilization have rejected” and that it is the keystone of the economic arch which must be maintained to carry the bridge which will permit an ever-increasing supply to meet and satisfy an ever-increasing demand.
By carefully studying Lincoln’s letters, speeches and messages to Congress, we find that they disclose that Lincoln was the most profound and advanced economic thinker of his time and the most advanced political economist of the 19th century.
In applying Lincoln’s monetary policy to the needs of to-day we should, of course, remember that Lincoln lived in an age ,of scarcity. Unemployment in Lincoln’s time was largely taken care of by opening up new land areas for settlement. Our problem is somewhat different. We have not only to put the unemployed in the cities and industrial centres to work at wages so they can buy the abundance which the existing farmers are able to produce, but we are called upon to finance men and women in leisure.
We must change unemployment created by the release of men, women and children from bread and butter activities into cultural leisure. In other words, we must finance the buying power of individuals who can find no employment in the commerce and industry of our day which, due to technological advancement, is now able to carry on with an ever-decreasing supply of human energy.
The need for Lincoln’s monetary programme is therefore infinitely greater now than it was three-quarters of a century ago. Lincoln may have been a poetical, dreaming humanist, but he was more than that; he was a great, practical statesman. He was a political economist able to think out and design a currency system that we must accept if we are to survive.
Non-Monetary Factors
In recognizing and fulfilling the need for a sound administration of national currency and public credit that will, under all circumstances, finance government and consumers’ buying power, we must not make the mistake of the past by accepting the false conclusions that a monetary system can be developed which will automatically adjust inflation and deflation; create and regulate properly the rate of investment of capital, regulate commercial and social progress by preventing the depression of glut or artificial shortage. These and many other social and economic problems, like law and order, education and social service, the advancement of social justice, working conditions and wages, the balancing of budgets, the stabilization of government, the regulation of international exchange, the balancing of progressive international commerce, the more equitable distribution of income, are administrative responsibilities that are distinctly separate and quite apart from the administration of the monetary system. The regulation of circulation, wages, working conditions, prices. competition, production, distribution, the rate of progress of the standard of living, and other kindred problems too numerous to mention are, like the prevention of crime, functions of government that must be performed by the government through agencies especially organized and equipped to do the work in hand.
The monetary management should have no more to do with problems which are outside the realm of currency and credit, issue and circulation, than the department of agriculture has to do with the administration of currency and credit. Of course, the monetary management must work in co-operation with all departments of the government, but it cannot and should not be expected, without adequate co-operation from other departments of the government, to do more than supply the volume of governmental spending power and quantity of consumers’ buying power required to maintain effective government and the normal progress of domestic and international trade.
The critic of this plan may say that I have attributed conclusions to Lincoln that he never specifically defined. That is quite true, but I am satisfied that had Lincoln proceeded with his national currency system he would have met and solved the problems that are now confusing Roosevelt. Starting from a proper basis, viz. the national currency system, Lincoln anticipated the proper foundation of a sound scheme of planned economy that would sustain not 130,000,000 but 250,000,000 Americans in prosperity and peace.
In Lincoln’s day there were two courses for the government of the United States to follow, and they were—Lincoln’s national currency policy, under which the government assumed the responsibility and maintained as a monopoly the right of issuing the currency and credit needs of government and people, and under which the government recognized the management and regulation of circulation as a duty of government.
As opposed to this policy of Lincoln there was the policy of the international bankers which vested in the banker the right to control and manage the nation’s currency and credit as the stock-in-trade of a private profit seeking monopoly.
Upon Lincoln’s assassination his national currency system was buried with his mortal remains. The bankers took control, and seventy years after Lincoln’s death their foolish and selfish actions are forcing the government to resort to Lincoln’s programme. But Money Power still rules, although its days are now numbered. But there is still much to do to overthrow that power.
I am aware that conventions and traditions revered by time are not overthrown easily. I know that there are many questions, foolish and otherwise, to be answered. In the hope of elucidating Lincoln’s programme in an interesting way, I have taken the privilege of using the President of the United States as the questioner and the spirit of Lincoln as the one to answer the questions that are currently popular.
In this imaginary discussion between the two great humanists which the American political system has produced, I have tried to meet not so much the technical objections that are raised to national control of currency and credit but to meet in a plain and simple way the demand of the public for information on the innumerable problems that our present political and social system is called upon to solve.