CONTENTS / CHRONOLOGY (1), Docs. 1-51: Just World Campaign

[Thomas Jefferson on banks]

   David Brooks, e-mail dated October 16, 2008
   UNITED STATES – I believe that banking institutions are more dangerous to our liberties than standing armies.
   If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.
   The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.
   – Thomas Jefferson, 3rd president of US (1743 - 1826) in a Letter to the Secretary of the Treasury, Albert Gallatin in 1802.

[Chinese immigration, and wage forecast]

 
   The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., p 80, New York, Robert Schalkenbach Foundation; Speech made in San Francisco on February 4, 1890, occurrence recalled probably occurred around 1858.
   SAN FRANCISCO, U.S.A.: Part of speech made by Henry George in San Francisco on Feb 4, 1890:-
   "… One of the first times I recollect talking on such a subject was one day, when I was about eighteen, after I had come to this country, while sitting on the deck of a topsail schooner with a lot of miners on the way to the Frazer River.  We got talking about the Chinese, and I ventured to ask what harm they were doing here, if, as these miners said, they were only working the cheap diggings ?  'No harm now,' said an old miner, 'but wages will not always be as high as they are today in California.   As the country grows, as people come in, wages will go down, and some day or other white men will be glad to get those diggings that the Chinamen are now working.'  And I well remember how it impressed me, the idea that as the country grew in all that we are hoping that it might grow, the condition of those who had to work for their living must become, not better, but worse."

The Chinese on the Pacific Coast

 
   New York Tribune article by Henry George (as quoted in The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., pp 193-94, New York, Robert Schalkenbach Foundation); About 2007 on Internet on this webpage: www.henry george.org/ LIFEofHG/ LHG2/ lhg201.htm , Article published May 1, 1869
   "The population of our country has been drawn from many different sources; but hitherto, with but one exception, these accessions have been of the same race, and though widely differing in language, customs and national characteristics, have been capable of being welded into a homogeneous people.  The mongolians, who are now coming among us on the other side of the continent, differ from our race by as strongly marked characteristics as do the negroes, while they will not as readily fall into our ways as the negroes.  The difference between the two races in this respect is as the difference between an ignorant but docile child, and a grown man, sharp but narrow minded, opinionated and set in character.  The negro when brought to this country was a simple barbarian with nothing to unlearn; the Chinese have a civilisation and history of their own, a vanity which causes them to look down on all other races, habits of thought rendered permanent by being stamped upon countless generations.  From present appearances we shall have a permanent Chinese population; but a population whose individual components will be constantly changing, at least for a long time to come – a population born in China, reared in China, expecting to return to China, living while here in a little China of its own, and without the slightest attachment to the country – utter heathens, treacherous, sensual, cowardly and cruel.  They bring no women with them (and probably will not for a little while yet).  . . .
   "Their moral standard is as low as their standard of comfort, and though honest in the payment of debts to each other, lying, stealing and false swearing are with the Chinamen venial sins – if sins at all.  They practise all the unnamable vices of the East, and are as cruel as they are cowardly.  Infanticide is common among them; so is abduction and assassination.  Their bravos may be hired to take life for a sum proportionate to the risk, to be paid to their relatives in case of death.  In person the Chinese are generally apparently cleanly, but filthy in their habits.  Their quarters reek with noisesome odours, and are fit breeding-places for pestilence.  They have a great capacity for secret organisations, forming a State within a State, governed by their own laws; and there is little doubt that our courts are frequently used by them to punish their own countrymen, though more summary methods are oftentimes resorted to.  The administration of justice among them is attended with great difficulty.  No plan for making them tell the truth seems to be effective.  That of compelling them to behead a cock and burn yellow paper is generally resorted to in the courts.  . . .
   "The Chinese seem to be incapable of understanding our religion; but still less are they capable of understanding our political institutions.  To confer the franchise upon them would be to put the balance of power in the Pacific in the hands of a people who have no conception of the trust involved, and who would have no wish to use it rightly, if they had – would be to give so many additional votes to employers of Chinese, or put them up for sale by the Chinese head centres in San Francisco."

[Mill said Chinese immigration would reduce wages.]

 
   John Stuart Mill, the English philosopher, writing from Avignon, France, in reply to Henry George's Tribune article "The Chinese on the Pacific Coast," (letter as quoted in The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., pp 198-200, New York, Robert Schalkenbach Foundation); letter dated October 23, 1869, published in Transcript on Saturday, November 20, 1869
   Avignon, France, Oct. 23, 1869.
   "DEAR SIR : The subject on which you have asked my opinion involves two of the most difficult and embarrassing questions of political morality – the extent and limits of the right of those who have first taken possession of the unoccupied portion of the earth's surface to exclude the remainder of mankind from inhabiting it, and the means which can be legitimately used by the more improved branches of the human species to protect themselves from being hurtfully encroached upon by those of a lower grade in civilisation.  The Chinese immigration into America raises both of these questions.  To furnish a general answer to either of them would be a most arduous undertaking.
   "Concerning the purely economic view of the subject, I entirely agree with you; and it could be hardly better stated and argued than it is in your article in the 'New York Tribune.'  That the Chinese immigration, if it attains great dimensions, must be economically injurious to the mass of the present population; that it must diminish their wages, and reduce them to a lower stage of physical comfort and well-being, I have no manner of doubt.  Nothing can be more fallacious than the attempts to make out that thus to lower wages is the way to raise them, or that there is any compensation, in an economical point of view, to those whose labour is displaced, or who are obliged to work for a greatly reduced remuneration.  On general principles this state of things, were it sure to continue, would justify the exclusion of the immigrants, on the ground that, with their habits in respect to population, only a temporary good is done to the Chinese people by admitting part of their surplus numbers, while a permanent harm is done to a more civilised and improved portion of mankind.
   "But there is much also to be said on the other side.  Is it justifiable to assume that the character and habits of the Chinese are insusceptible of improvement?  The institutions of the United States are the most potent means that have yet existed for spreading the most important elements of civilisation down to the poorest and most ignorant of the labouring masses.  If every Chinese child were compulsorily brought under your school system, or under a still more effective one if possible, and kept under it for a sufficient number of years, would not the Chinese population be in time raised to the level of the American?  I believe, indeed, that hitherto the number of Chinese born in America has not been very great ; but so long as this is the case – so long (that is) as the Chinese do not come in families and settle, but those who come are mostly men, and return to their native country, the evil can hardly reach so great a magnitude as to require that it should be put a stop to by force.
   "One kind of restrictive measure seems to me not only desirable, but absolutely called for ; the most stringent laws against introducing Chinese immigrants as coolies, i.e., under contract binding them to the service of particular persons.  All such obligations are a form of compulsory labour, that is, of slavery ; and though I know the legal invalidity of such contracts does not prevent them being made, I cannot but think that if pains were taken to make it known to the immigrants that such engagements are not legally binding, and especially if it were made a penal offence to enter into them, that mode at least of immigration would receive a considerable check ; and it does not seem probable that any mode, among so poor a population as the Chinese, can attain such dimensions as to compete very injuriously with American labour.  Short of that point, the opportunity given to numerous Chinese of becoming familiar with better and more civilised habits of life, is one of the best chances that can be opened up for the improvement of the Chinese in their own country, and one which it does not seem to me that it would be right to withhold from them.  I am, dear sir,
   "Yours very sincerely, J. S. MILL.
   "Henry George, Esq., San Francisco, Cal."

[Comment that Mill's letter supported restrictions, and tribute to him.]

 
   Henry George, editor of Transcript, replying to J.S.Mill's letter supporting restrictions on Chinese immigration (as reprinted in The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., pp 200-202, New York, Robert Schalkenbach Foundation); November 20, 1869 and afterwards.
   Commenting on this, the "Transcript" editorial said : "With all its qualifications, Mr. Mill's opinion entirely justifies the position of those who take ground in favour of restrictions upon the immigration of these people," for "Chinese labour has already begun to compete injuriously with white labour, and that it will soon be competing very injuriously, no one who has noticed how rapidly these people are entering and monopolising one branch of business after another, can have any doubt."  Moreover, nine-tenths of the Chinese immigrants are contract labourers and it would be useless to pass laws against such contracts ; while as for slavery, "Chinese women are sold and staked at the gambling table in San Francisco every day of the week." The editorial concluded with this tribute to the eminent English economist :    The "Transcript" editorial with the Mill letter made something like a sensation throughout California.  Some of the pro-Chinese papers republished both in garbled form, and in such form the letter may have got back to Mill.  […]
   Some of the pro-Chinese papers in California … took to abusing Henry George; one of them, the San Francisco "Bulletin," saying that Mill had been misled by George in the "New York Tribune" article, as that was "written from the exaggerated standpoint of a certain class of political alarmists …"

   REPORT OF THE JOINT SPECIAL COMMITTEE TO INVESTIGATE CHINESE IMMIGRATION, U.S.A., February 27, 1877; http://cprr. org/Museum/ Chinese_ Immigration. html . 

[Nominated by Anti-Coolies and independent groups.]

 
   The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., p 288, New York, Robert Schalkenbach Foundation; occurrences around August 20-26, 1877
   SAN FRANCISCO, U.S.A.: In his diary he noted on August 20, "Found I had been nominated for the State Senate at Charter Oak Hall," an independent political organisation.  Five days later the diary showed that he was "nominated last night by Anti-Coolies," a workingmen's anti-Chinese movement. … wrote declination to Anti-Coolies … wrote declination to Charter Oak …"

[Workmen denounce monopolies, Chinese immigration.]

 
   The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., p 290, New York, Robert Schalkenbach Foundation; occurrence in 1877
   SAN FRANCISCO, U.S.A.: In California the depression was deepened by a drought during the preceding winter months and by a heavy decline in the output of the silver mines on the Comstock Lode, which brought down all the stocks on the California exchanges and for the time stopped the speculation of the outside world through this market.  At this period when workmen all over the State were idle, the Central Pacific Railroad, controlling practically every mile of track in the State, proposed to reduce wages.  In San Francisco workmen held mass meetings, to denounce on the one side the great monopolies, and particularly the railroad, as oppressing the masses of labouring men; and on the other, Chinese immigration, as subjecting them to starvation competition.

  SCOTLAND and SCOTSMEN  

"There is no natural reason for poverty."    The Henry George Foundation Australia (then of 18 George Parade, Melbourne), P. J. Markham, editor, booklet dated December 1935, and see http://www. schalkenbach. org/library/ george.henry/ scotland &scotsmen.htm , An Address Delivered in the City Hall, Glasgow, Scotland, by Henry George, on February 18, 1884
   This is the second time I have had the privilege of standing in this hall.  I visited Scotland once before, but only Glasgow. I came in by night in a Pullman car, and I went back again by night in a Pullman car, and I saw nothing of the country.  The audience that I then addressed was an Irish audience – it was on St. Patrick’s night.  This audience is a general audience; I presume a Scottish audience. [p 5] […]
   … Low wages, want, vice, degradation – these are not the fruits of Christianity.  They come from the ignoring and denial of the vital principles of Christianity.  Let you people of Glasgow not merely erect church after church, you also subscribe money to send missionaries to the heathen.  I wish the heathen were a little richer, that they might subscribe money and send missionaries to such so-called Christian communities as this – to point to the luxury, the very ostentation of wealth, on the one hand, and to the bare-footed, ill-clad women on the other; to your men and women with bodies stunted and minds distorted; to your little children growing up in such conditions that only a miracle can keep them pure! [p 7] […]
   But take the bare facts.  Among what tribe of savages in the whole world, in anything like a time of peace, would such a thing as that be possible?  I have seen, I believe, the most unfortunate savages on the face of the earth – the Tierra del Fuegians, who are spoken of as “the very lowest of mankind”; the black-fellows of Australia; the Digger Indians of California.  I would rather take my chances, were I on the threshold of life tonight, among those people, than come into the world in this highly-civilised Christian community in the condition in which thousands are compelled to live. [p 8] […]
   … No one could be hurt by the resumption of the land as common property, save those who could well afford to have their incomes lessened.  The person of small means who had got a house and lot would be the direct gainer by the change which would exempt houses from taxation, and put it upon lots, while being an enormous gainer by the increase of wealth and the rise in wages.  Then the businessmen who are landowners would profit by the improvement and stimulation of the productive energies of society far more than they would lose as landlords.  The typical landlord is the man who goes to the Mediterranean in a yacht, and spends the money which he draws from the toil of the people here.  Or, like that Dublin man, known as ‘Cosey’ Murphy, who practically went to bed for seven years.  At the end of that time he woke to find himself twice as wealthy as when he went to bed.  ‘Cosey’ Murphy was, of’course, a landowner.  Without any effort on his part, the progress and activity of the community increased the value of the land he held, and that is how he grew wealthy while he slept.  Consider, the real thing that would be taken from the people who demand compensation is not land, but the power which the possession of land now gives them of levying tolls upon the labour of others.  What does the Duke of Sutherland want with his twelve hundred thousand acres; or the Duke of Westminster with his London estates?  No more than the Earl of Alrlie wants with the water that he sold.  They want to have the privilege of taking the wealth of the people who have produced it. [pp 30-31] […]
   … We who speak this language are on both sides of the Atlantic but one people becoming every day more one.  The agitation must go forward on both sides of the Atlantic – by action and reaction.  America must be affected through England and Scotland, and England and Scotland will be affected through America.  Whatever we do, we do for this whole, great imperial race – the race to whom the destiny of modern civilisation is entrusted. [p 32] […]

[Australian secret ballot advocated by Henry George.]

 
   The Life of Henry George, Book © 1900, 1960 edition, by Henry George, Jr., New York, Robert Schalkenbach Foundation; on Internet at: www.henry george.org/ LIFEofHG/ LHG3/ lhg311.htm , occurred in 1890
   SYDNEY (NSW), Australia: On the day of landing at Sydney, Mrs. George's native city, there was an official reception at the town hall by Mayor Sydney Burdekin, and a number of other city as well as colonial dignitaries, irrespective of political parties. Indeed, the Mayor himself was one of the largest land-owners of Sydney, so that his action bespoke a broad, generous mind. Mr. George had first to make a short speech from a carriage to a dense throng before the hall; and then when he entered and received the formal welcome of the Mayor, he made a long speech, of which this was a passage, as reported by the Sydney "Daily Telegraph":

[In 1892 came U.S. ban; right of exclusion defended]

 
   The Life of Henry George, © 1900, 1960 edition, by Henry George, Jr., pp 201-203, New York, Robert Schalkenbach Foundation); reporting 1892, etc.
   The "Transcript" editorial with the Mill letter [November 20, 1869] made something like a sensation throughout California.  Some of the pro-Chinese papers republished both in garbled form, and in such form the letter may have got back to Mill. […]
   Some of the pro-Chinese papers in California … took to abusing Henry George; one of them, the San Francisco "Bulletin," saying that Mill had been misled by George in the "New York Tribune" article, as that was "written from the exaggerated standpoint of a certain class of political alarmists who either have not carefully studied the facts or who use the question as a good demagogue card to win ignorant votes."  But notwithstanding such utterances, George's "New York Tribune" article expressed a strong and strengthening sentiment that soon dominated State politics, inspired a long series of legislative acts, and eventuated in 1892, twenty-three years afterwards, in the passage by Congress of the Geary law, prohibiting "the coming of Chinese persons into the United States" and providing for deportation under certain conditions.
   To the end of his life Mr. George held to the views against free entrance of the Chinese set forth in his "Tribune" article in 1869.  They appear in many of his subsequent California speeches and writings, and in 1881 were set out fully in a signed article published in Lalor's "Cyclopedia of Political Science, Political Economy and of the Political History of the United States."
   And when in the fall of 1893, William Lloyd Garrison of Boston addressed a letter to James G. Maguire, who represented the Fourth California District in Congress, upbraiding the congressman with being false to his single tax principles of equal rights, in supporting and voting for an amendment extending the Geary Chinese Exclusion Act, Mr. George replied (New York November 30), a copy of the letter to Maguire having been sent to him by Garrison:    But while approving of Chinese exclusion "under present conditions," Henry George could conceive of a state of things under which such a policy would not be necessary.  In a lecture in San Francisco ¹ while writing "Progress and Poverty," he said :  "Ladies and gentlemen, it is not only more important to abolish land monopoly than to get rid of the Chinese ; but to abolish land monopoly will be to make short work of the Chinese question.  Clear out the land-grabber and the Chinaman must go.  Root the white race in the soil, and all the millions of Asia cannot dispossess it."
____________________
¹ "Why Work is Scarce, Wages Low, and Labour Restless," Metropolitan Temple, March 26, 1878.

THE DELUSION OF SUPER-PRODUCTION

   The English Review, by Major Clifford Hugh Douglas (of Britain), p 428, December 1918
   It is hardly necessary to draw attention to the insistence with which we are told that in order to pay for the war we must produce more manufactured goods than ever before–a powerful section of the Press would have the whole military, political, social and industrial policy of the Allied Governments directed to that purpose, […]
   … the world was over-manufacturing before the war … the immense development of advertising; … the cost of selling a sewing machine, amongst many other intances, was higher than the manufacturing cost; … a new model, not novel in any real essential, appeared from most of the motor-car works each year … the barter of trade gin … abroad … the struggle for markets; of which struggle war was the inevitable and final outcome. […]
   The factory cost–not the selling price–of any article under our present industrial and financial system is made up of three main divisions–direct labour cost, material cost and overhead charges …
   … intensified production means a progressively higher ratio of overhead charges to direct labour cost, and, apart from artificial reasons, this is simply an indication of the extent to which machinery replaces manual labour, as it should. […]
   … the book value of the world's production is continually growing more and more in excess of the capacity to absorb or liquidate it … with the result that a continuous rise in the cost of living absolutely must take place, apart and above that represented by currency inflation … leading along a path of cumulative fierce competition and harder toil … money … an increasing amount going to swell the mortgage held by the banker and the manufacturer on the effective effort of the world's population. […]
   … attack the second urgent necessity, the reduction of money in any form whatever to the status of an absolute medium of exchange. […]

[Shortage of Purchasing Power] – Economic Democracy

 
   Book Economic Democracy, 1920, by Clifford Hugh Douglas (of Britain); Melbourne, The Social Credit Press; Parts of Chapter 5, pp 57-59, 61-65, Australian edition 1933 (original publication 1920)
   GREAT BRITAIN:  LOOKED at from this standpoint it is fairly clear that the kernel of the problem is factory cost, since it is quite possible to conceive of a limited company in which the shares were all held by the employees, either equally or in varying proportions, according to their grade, and the selling costs were internal – that is to say, all advertising was done by the firm itself, and the cost of its salesmen, etc., was either negligible, or confined to their salaries.
   We should then have the complete profit-sharing enterprise in its ultimate aspect, and the argument against Capitalism in its usual form would not arise. Such an undertaking would, let us assume, make a complicated engineering product, requiring expensive plant and machinery, and would absorb considerable quantities of power and light, lubricants, etc., much of which would be wasted; and would inevitably produce a certain amount of scrap the value of which would be less than the material in the form in which it entered the works.
   The machinery would wear out, and would have to be replaced and maintained, and generally it is clear that for each unit of production there would be three main divisions of factory cost, the "staple" raw material, the wages and salaries, and a sum representing a proportion of the cost of upkeep on the whole of the plant, which might easily equal 200 per cent, of the wages and salaries.
   As the plant became more automatic by improvements in process, the ratio which these plant costs bore to the cost of labour and salaries would increase. The factory cost of the total production, therefore, would be the addition of these three items: staple material, labour and salaries, and plant cost, and with the addition of selling charges and profit, this would be the selling price.
   As a result of the operations of the undertaking, the wealth of the world would thus be apparently increased by the difference between the value of all the material entering the factory, and the total sum represented by the selling price of the product.
   But it is clear that the total amount distributed in wages, salaries and profit or dividends, would be less by a considerable sum (representing purchases on factory account) than the total selling price of the product, and if this is true in one factory it must be true in all. Consequently, the total amount of money liberated by manufacturing processes of this nature is clearly less than the total selling price of the product.
   This difference is due to the fact that while the final price to the consumer of any manufactured article is steadily growing with the time required for manufacture, during the same time the money distributed by the manufacturing process is being returned to the capitalist through purchases for immediate consumption. […]
   [p 61] But we know that the total increase in the personal cash accounts in the banks in normal times is under 3 per cent, of the wages, salaries and dividends distributed, consequently it is not to these accounts that we must look for effective demand. There are two sources remaining; loan-credit, that is to say, purchasing power created by the banks on principles which are directed solely to the production of a positive financial result; and foreign or export demand.
   Now loan-credit is never available to the consumer as such, because consumption as such has no commercial value. In consequence loan-credit has become the great stimulus either to manufacture or to any financial or commercial operation which will result in a profit, that is to say, an inflation of figures.
   [p 62] An additional factor also conies into play at this point. All large scale business is settled on a credit basis. In the case of commodities in general retail demand, the price tends to rise above the cost limit, because the sums distributed in advance of the completion of large works become effective in the retail market, while the large works, when completed, are paid for by an expansion of credit. This process involves a continuous inflation of currency, a rise in prices, and a consequent dilution in purchasing power.
   The reason that the decrease in the consumer's purchasing power has not been so great as would be suggested by these considerations is, of course, largely due to intrinsic cheapening of processes which would, if not defeated by this dilution of the consumer's purchasing power, have brought down prices faster than they have risen.
   There are thus two processes at work; an intrinsic cheapening of the product by better methods, and an artificial decrease [p 63] in purchasing power due to what is in effect the charging of the cost of all waste and inefficiency to the consumer. And it is clear that under this system the greater the volume of production the larger will be the absolute value of the waste which the consumer has to pay for, whether he will or no, because as the bank credits are created at the instance of the manufacturer, and repaid out of prices, each article produced dilutes, by the ratio of its book price to all the credits outstanding, the absolute purchasing power of the money held by any individual.
   These facts are quite unaffected by the perfectly sound argument that increased production means decreased cost per piece, since it is the total production price which has to be liquidated.
   Already there is not very much left of the argument for the innate desirability of unlimited, unspecified and intensified manufacturing under the existing economic system, but more trouble yet is ahead of it. While the ratio of plant charges to total wages and salaries cost is less than 1 : 1 over the whole range of commodities, a general rise in direct rates of pay may mean a rise (but not a proportionate rise) in the purchasing power of those who obtain their remuneration in this way.
   But when by the increased application of mechanical methods the average overhead charge passes the ratio of one to one (which it rapidly will, and should do on this basis of calculation) every general increase in rates of pay of "direct" labour may mean an actual decrease in real pay, because the consumer is only interested in ultimate products and overhead charges do not represent ultimate products in existence.
   The whole argument which represents a manufactured article as an access of wealth to the country and to everyone concerned, no matter what its description and utility, so long as by any method it can be sold and wages distributed in respect of it, will, therefore, be seen to be a dangerous fallacy based on an entirely wrong conception, which is epitomised in the use of the word [p 65] "production," and fostered by ignorance of financial processes.
   Manufacturing of any kind whatever, even agriculture in a limited sense, is the conversion of one thing into another, which process is only advantageous to the extent that it subserves a definite requirement of human evolution. In any case, it shares with all other conversions the characteristic of having only a fractional efficiency, and the waste of effort involved, although being continually reduced by improvements of method, still can only be paid for in one way, by effort on the part of somebody.
   If this effort is useful effort – "useful" in the sense that a definite, healthy and sane human requirement is served – the wealth and standard of living of the community may thereby be enhanced. If the effort is aimless or destructive, the money attached to it does not alter the result. […]

[Communal credit usurped by banks]

 
   Book Economic Democracy, 1920, by Clifford H. Douglas, Part of Chapter 9, pp 120-121, Australian edition 1933 (orig. 1920)
   GREAT BRITAIN:  … There is no doubt whatever that the first step towards dealing with the problem is the recognition of the fact that what is commonly called credit by the banker is administered by him primarily for the purpose of private profit, whereas it is most definitely communal property. In its essence it is the estimated value of the only real capital – it is the estimate of the potential capacity under a given set of conditions, including plant, etc., of a Society to do work. The banking system has been allowed to become the administrator of this credit and its financial derivative [p 121] with the result that the creative energy of mankind has been subjected to fetters which have no relation whatever to the real demands of existence, and the allocation of tasks has been placed in unsuitable hands.
   Now it cannot be too clearly emphasised that real credit is a measure of the reserve of energy belonging to a community and in consequence drafts on this reserve should be accounted for by a financial system which reflects that fact.
   If this be borne in mind, together with the conception of "Production" as a conversion, absorbing energy, it will be seen that the individual should receive something representing the diminution of the communal credit-capital in respect of each unit of converted material.

[Global Trade Competition Illusion]

 
   Book Economic Democracy, 1920, by Clifford H. Douglas, Part of Chapter 11, pp 144-47, Australian edition 1933 (orig. 1920)
   GREAT BRITAIN: [p 144] - We have already seen that a feature of the industrial economic organisation at present is the illusion of international competition, arising out of the failure of internal effective demand as an instrument by means of which production is distributed.
   This failure involves the necessity of an increasing export of manufactured goods to undeveloped countries, and this forced export, which is common to all highly developed capitalistic States, has to be paid for almost entirely by the raw material of further exports.
   Now, it is fairly clear that under a system of centralised control of finance such as that we are now considering, this forced competitive export becomes impossible; while at the same time the share of product consumed inside the League becomes increasingly dependent on a frenzied acceleration of the process.
   [p 145] The increasing use of mechanical appliances, with its capitalisation of overhead charges into prices, renders the distribution of purchasing power, through the medium of wages in particular, more and more ineffective; and as a result individual discontent becomes daily a more formidable menace to the system.
   It must be evident therefore that an economic system involving forced extrusion of product from the community producing, as an integral component of the machinery for the distribution of purchasing power, is entirely incompatible with any effective League of Nations, because the logical and inevitable end of economic competition is war.
   Conversely, an effective League of Free Peoples postulates the abolition of the competitive basis of society, and by the installation of the co-operative commonwealth in its place makes of war not only a crime, but a blunder.
   Under such a modification of world policy, inter-change of commodities would take place with immeasurably greater freedom than at present, but on principles [p 146] exactly opposite to those which now govern Trade. The manufacturing community now struggles for the privilege of converting raw material into manufactured goods for export to less developed countries. Non-competitive industry would largely leave the trading initiative to the supplier of raw material.
   Since any material received in payment of exported goods would find a distributed effective demand waiting for it, imports would tend to consist of a much larger proportion of ultimate products for immediate consumption than is now the case; thus forcing on the more primitive countries the necessity of exerting native initiative in the provision of distinctive production.
   Again, International legislation in regard to labour conditions under a competitive system must always fail at the point at which it ceases to be merely negative, because it has ultimately to consider employment as an agency of distribution, and rightly considered distribution should be a function of work accomplished, not of work in [p 147] progress, i.e., employment.
   As a consequence, this most important field of constructive effort resolves itself into a battleground of opposing interests, both of which are merely concerned with an effort to get something for nothing.
   The inevitable compromise can be in no sense a settlement of such questions, any more than the succession of strikes for higher pay and shorter hours, which are based on exactly the same conception, can possibly result in themselves in a stable industrial equilibrium.

[Freedom to Co-operate through Decentralisation]

 
   Book Economic Democracy, 1920, by Clifford H. Douglas, Part of Chapter 12, pp 152-54, Australian edition 1933 (orig. 1920)
   GREAT BRITAIN: The policy suggested in the foregoing pages is essentially and consciously aimed at pointing the way, in so far as it is possible at this time, to a society based on the unfettered freedom of the individual to co-operate in a state of affairs in which community of interest and individual interest are merely different aspects of the same thing. It is believed that the material basis of such a society involves the administration of credit by a decentralised local authority; the placing of the control of process entirely in the hands of the organised producer (and this in the broadest sense of the evolution of goods and services) and the fixing of prices on the broad principles of use value, by the community as a whole operating by the most flexible representation possible. […] Thus out of threatened chaos might the
Dawn break ; a Dawn which at the best
must show the ravages of storm,
but which holds clear for all
to see the promise of
a better Day.

[Government bank financed Australia during First World War]

   Sir Denison Miller, governor of the Commonwealth Bank of Australia, 1921
   When, during an interview in 1921, Sir Denison Miller was asked if he, through the Commonwealth Bank, had financed Australia during the war for $700 million, he replied: “Such was the case and I could have financed the country for a further like sum had the war continued.”  Again, asked if that amount was available for productive purposes in times of peace, he answered in the affirmative. (Australia’s Government Bank. p. 275, by L.C. Jauncey, Ph.D.)

John Curtin, Leader of the Australian Labor Party, speaks on national defence, employment and banking policy during the 1937 Federal Election campaign

   John Curtin Prime Ministerial Library, Curtin University (Perth, Western Australia), http://john.curtin.edu.au/ audio/ 00128_1_1. html , 1937
   Records of Helen Ralston. John Curtin, 1937 Federal Election speech on national defence, employment & banking policy. JCPML00128/1/1. (duration 12 minutes).  NOTE: You'll need Quicktime 6 to listen to this audio file.
   AUSTRALIA – START OF AUDIO CLIP:
   [This is] Mr John Curtin, the leader of the Australian Labor Party, talking to you in connection with the election on October 23rd.
   Let me say a word about defence. All governments, in all countries, and whatever their policy or label, profess to favour international peace. All claim to be non-aggressive; all claim to be armed purely for defensive purposes. Not one admits the desire for war, but all are ready for participation in war. The Australian Labor Party exists primarily for the social uplift of the great mass of the people. It is, however, confronted with the universal fact of preparedness for war. It cannot ignore it; it does not and it has never attempted to ignore it.
   From its very inception the Labor Movement has stood for national defence. It supplied the first Australian government that transformed words into tanks; it gave Australia a navy; a well trained army; a national small arms factory; a national woollen mills; a national clothing factory; national munition works; and behind them all, it provided the national note issue and the Commonwealth Bank.
   On the ground that those who are wounded in the struggle for existence are entitled to national support, Labor created invalid pensions. On the ground that no man was entitled to first choice of benefits gained by other men's efforts, it gave preference to unionists. Because land monopoly was an evil it placed a commutative tax, not on the processes of production, but on the accumulation of land by a few. In that way it started the way to closer settlement.
   Those reforms in banking, in currency, in land and in industry, all part of a progressive policy, were interrupted by the world war. That war produced increased mechanisation in industry and new methods for the destruction of life. It was followed by giant strides in aviation, new international alignments, the looming futility of the League of Nations, and the decline of western power in the east. This all meant a new external environment for Australia and to the Australian Labor Party it has meant that the future no longer involve[s] the shipment of armies to European battle fields, but preparedness for the defence of Australia's own soil. Therefore in the election policy speech of two campaigns ago, the Labor Party declared that there could be no effective defence, no advancing social benefits, no uplift in the conditions of wage earners without prior expansion of the ramifications, functions and power of the Commonwealth Bank. It declared the banking reform and the use of the national credit with a ground work for economic expansion without increasing interest burdens.
   Of all the schemes for national defence that put forward by the Labor Party was the first to regard aerial fleets as Australia's first line of security against defence. As a counter to Labor's policy, the then Bruce-Page Government promised motherhood endowment, widows, orphans and unemployed insurance and protection against sickness. It won the elections right enough but it scraped [? scrapped] the promises. What it did do was to place the nation's bank under the control of a board of private directors. It continued in office for years and went out with Australia in a bog of financial and industrial disaster. The responsibility of meeting the crisis was handed to the Labor Government of 1929-31. That government, as you will recall, was hamstrung by a hostile Senate and a dictatorial Commonwealth Bank Board. Between them they held the fort for vested interests. In 1931 the Lyons Government was returned to reap the benefit of the arduous years of the Labor Government's work.
   Now, as a result of the expenditure by a war-fearful world of hundreds of millions of pounds, a new stimulus has been given to industry and to employment. Needless to say the Lyons-Page Government claims credit for this so-called recovery. But it does nothing to safeguard Australia against the slump which is inevitable when rearmament reaches saturation point. Instead it hides its ineptitude behind the last retreat of those who have no programme, namely vague generalisations.
   Labor's defence policy is humane because Labor has most to lose in time of war. It stands to lose the lives of its own people, which are more valuable than those of the so-called patriots who would sacrifice them on foreign battle fields. Labor's planned policy is not a mushroom growth based on re-armament, it will allow the nation's strength and prosperity to grow continuously with ever-increasing velocity.
   We approached the unemployment problem from the national economic standpoint and our policy, with the nation's credit as backing, will not only remove this ugly blot on Australia's economic life but will so advance the nation that it will contribute substantially to the nation's defence programme. Wealth production is limited by manpower. The non-employment of manpower means the reduction of the power to produce wealth. Doles and starvation rates of relief pay sap the moral and mental fibre of those who are forced by circumstances to accept them. Industrial armies engaged in the construction of homes, roads, schools and other permanent works are sustained, just as our military armies, by production and transport armies in the rear. They are fed with the energies of field workers; they are clothed, shod and equipped with the energies of workers in factories.
   No hocus pocus about banking and currency systems can alter these fundamental facts. The Labor Party therefore is determined that no group of private bankers, no coterie of vested interests and certainly no instrumentality set up originally by the people for the people shall stand in the way of bringing industrial emancipation to Australia's unemployed army.
   If we have a look around what do we see? In Japan industry works to a set plan, and banks function as working parts of the national purpose. Japan has expanded by the applied industrial energies of her people and not by means of foreign loans. Whether the future of Russia will be as good as her friends predict or as bad as her enemies prophesy, it is unquestionably true that Russia has never before in her history has her internal economic power highly developed. Russians have dammed rivers; developed heat, light and power; created hundreds of new industries; developed and duplicated railways; multiplied schools, college and health centres; but her every unit and her revenues are not in bondage to foreign bond holders. In Italy since 1922 the banks function to serve the policies of the government. Previously, the banks dictated government policy. The great industries are still privately owned but they work for ends designed by the government and the limit of their dividends is at the will of the government. As a result of this harnessed financial system swamps have been drained, land reclaimed, food production increased and in a territory which is only one third the size of New South Wales, wheat production exceeds Australia's record harvest. Slums have been blasted away, new residential cities located on new areas and production has been intensified. Incidentally, Italian workers enjoy a 40 hour week.
   Disregarding the political colour of the Russian and Italian and Japanese governments, it is shown that these root out slums, build new cities and pursue health and physical fitness. These governments control banking and currency and make them the servant and not the master of industry. The governments think, talk and act in terms, not of paper money, but of human and mechanical energy and productive power.
   Instead of advancing, however, in Australia, all around we see malnutrition and a great deal of idleness. It cannot be disputed that the government can, that is if it so desires, absorb manpower in a campaign of national construction works. Government's use manpower in war to destroy assets, the Labor Party declares that its government will use manpower to create assets. It is said that public works should not be constructed unless they are reproductive, that means the maintenance of a service must be levied on the actual users of that service. Adopting that principle rigidly and applying it, society could not exist. It would mean that outback people could not be given a railway, a post office or a school, because the people served by those utilities would be too few to maintain them. On the principle of maintenance payments by actual users, there would be no hospitals for the sick, asylums for the insane or prisons for the wrong doers. On the same principle there could not be an art gallery, a museum, a public library, a park, a botanic garden or a national highway without tollgates. Every public utility in service for the convenience, instruction, pleasure or protection of the community has to be maintained by the community according to the ability of each person to pay. The wealth of a country does not consist merely in an increase of livestock or of bank credits, but in everything that beautifies life and lifts mankind to a higher level.
   The non-productive argument used in opposition to public works is a revival of the tollgate on public roads. Under the present system of trading bank interest charges, it is not the men who are engaged in public works who collect the interest; it is not the men who supplied the food, clothing and shelter to those workers who collect it; its collection by a private group of bankers does not end when the work on a particular project ceases. It goes on to be a burden on the labour of unborn generations.
   Yet the Commonwealth Bank as originally constituted [by] the late Sir Dennison Miller … if bank expenses … public works and were placed as an integral part for the betterment of the conditions of its people for … to vote Labor for the House … who also solidly vote… END OF AUDIO CLIP #

American Ball Bearings for Soviet Missiles

   From the book National Suicide; Military aid to the Soviet Union, by Antony C. Sutton, parts of pp 91-100, © 1973
   Ball bearings are an integral part of many weapons systems; there is no substitute.  The entire ball bearing production capability of the Soviet Union is of Western origin–utilizing equipment from the United States, Sweden, Germany, and Italy. … All Soviet tanks … missiles and related systems including guidance system have bearings manufactured on Western equipment or Soviet duplicates …
   … the Bryant Chucking Grinder Company of Springfield, Vermont … 1931 Bryant shipped 32.2 percent of its output to the USSR. … 1934 … 55.3 percent… 1938 one-quarter … shipments were also made under Lend-Lease …
   Soviet dependence on the West for ball bearings technology peaked after … 1959-61, when the Soviets required a capability for mass production … of miniature precision ball bearings for weapons systems.
   The only company in the world that could supply the required machine for a key operation in processing the races for precision bearings (the Centalign-B) was the Bryant Chucking Grinder Company. …
   In 1960 the USSR entered an order with Bryant … for forty-five … machines. …
   In 1961 a Senate subcommittee … report stated: … the decision to grant the licence was a grave error. ⁷ […]
   In 1972 … Bryant … announced a contract with the Soviets for 164 grinding machines. …
   … the Soviets have five times more missiles than they did twelve years ago.
___________________
⁷ U.S. Senate, Proposed Export of Ball-Bearing Machines to U.S.S.R. (Washington, 1961)

[Tax low-elasticity items, such as unimproved land]

   "A great economy is one which includes everyone," leaflet, Prosper Australia (Victoria), 1st floor, 27 Hardware Lane, Melbourne, issued about 2007-08.  (File as 1981 until the date of Mr Tobin's statement is determined) 1981
   "I think in principle it's a good idea to tax unimproved land, and particularly capital gains (windfalls) on it.  Theory says we should try to tax items with zero or low elasticity, and those include sites." – James Tobin, Winner, Nobel Prize in Economics, 1981