Kitson: Money, Fraudulent Standard, Unemployment

Arthur Kitson

1860-1937

The Money Problem
London : Richards, 1903.

A Fraudulent Standard
an exposure of the fraudulent character of our monetary standard,
with suggestions for the establishment of an invariable unit of value.
London : P.S. King, 1917.

Unemployment
the cause and a remedy
London : C. Palmer, 1921.

Biglietto di stato a corso legale emesso dal Regno Unito

"Great Britain during the years 1915-16, discovered the true principles of State issue of paper money, and benefited unspeakably by it all through the Great War. But so little did she understand what she had done, that, after thirteen years of the practice of an automatic, self-regulating issue of full price state paper money, she surrendered the right once more to a Monopoly Bank in 1928. . . . From the moment of that discovery until 1928, England afforded an illustration of the true or ideal paper money and its principles, viz.: a State issued paper money and its principles, viz.: a State issued paper money of full face value, guaranteed by a full cover redemption fund composed of securities, issued automatically, retired automatically, self-regulating, never redundant, never deficient, neutral in its effect on prices, but rising equal to any strain upon it; guaranteed against debasement by the State which issues it, and incapable of debasement by the community which purchases and uses it. The Treasury note answered this definition in every point. . . . The control of the amount actually in circulation thus lay entirely in the hands of the community and was determined by the community's need for currency and its ability to pay for it. Neither the State nor the Bank of England had any control over the amount in circulation. . . . It increased in amount when required by the expansion of industry or of prices, and it decreased in among with their contraction. It bore all the strain of the war time by its automatic expansion, and then with the slump it automatically contracted. It was de facto inconvertible, and therefore had no relationship to any gold cover, and was not affected in any way by the fortunes of gold. . . . It was, therefore, not a source of inflation or deflation; its own movements, were the consequence and effect, not the cause, not the cause, of price movements . . ."

Here was a system for employing the National Credit for productive purposes which belonged to the public, and could be used by the Government without any costs for interest charges; and yet our Government allowed this safest and finest currency system the world has ever known to be deliberately destroyed for the benefit of the London Bankers, and to enable the private trading company -- the Bank of England -- to issue its own promissory notes without any obligation on the part of the bank to redeem them.

Not only did the Treasury note system function satisfactorily without gold backing or redemption promises, but these notes were far more stable than the American dollars with nearly one-half of the world's gold supplies behind them.

And if only our Governing officials had had the intelligence to employ a larger volume of these notes -- instead of making their National bond issues for money which did not exist, but which was created by the banks in the form of bank credits issued against the security of these bond, the War could have been financed -- except for goods purchased abroad -- without burdening the taxpayers with ruinous interest charges. Nor would there have been necessarily any greater inflation of prices under this plan than occurred under the bond issue scheme.

And whilst the Government is searching every pocket, endeavoring to find fresh sources of revenue, they have in front of them an almost inexhaustible mine, from which to obtain enough to meet the national requirements merely by issuing fresh purchasing power and thus reviving trade and industry, reducing unemployment, and allaying the present crisis. But the mere display of the bankers bogeyman -- inflation -- is quite sufficient to frighten our spineless leaders to refrain from adopting the one and only remedy for our present economic troubles.

Never was a people so readily deceived nor so easily subdued as the British public of the present period. All one has to do is raise the cry "INFLATION", and straightaway all classes turn aside from the only road leading to safety, plenty, peace and happiness. Fortunately for our trans-Atlantic neighbors, they have at last found a MAN as President who understands the bankers' game, and is not afraid of their shouts and threats. [Kitson of course is speaking of Franklin Roosevelt who had just taken office and called his famous "Bank Holiday" in which he confiscated the people's gold -- but as it turned out Roosevelt was only taking the little man's gold, the elites could still hold it outside the country, and the bank closings were only to shut down little competitors of the big banks. The Federal Reserve gained power under the New Deal, but the power was wielded by the banking interests led by Bernard Baruch and Percy Rockefeller. -- Dick Eastman]

There is but one remedy for the World Crisis, viz.: an increase of the money supplies -- not in the banks -- but in the pockets of the people, enabling them to buy more goods. The present problem is not one of production as it was a century ago. It is wholly one of consumption -- which depends upon an adequate supply and a proper distribution of money.

The post-war period, ushered in an entirely new era, unlike any former period in the world's history; a period in which man's inventive genius has placed within mankind's reach boundless wealth, sufficient for every inhabitant of this planet to enjoy life without encroaching upon the supplies needed by any of fellows; a period in which Nature's powers have been harnessed to machinery for furnishing all the necessaries and most of the so-called luxuries of life, thereby releasing man from the original curse. And yet amidst all this abundance, we are inundated with myriads of starving, ragged people all because our officials have not the intelligence to see that the old economic theories have become fallacies, the old monetary and banking systems unworkable, and that just as our productive methods to which we owe this Age of plenty have been revolutionized, so our entire economic system must be reorganized."