HOLDEN’S FINANCIAL CATECHISM A Series of Questions and Answers Which Reveal to Receptive Minds the Cause and Cure for Poverty By James D. Holden Author of "The Disturbing Factor in Human Affairs" Q, Is it the duty of Congress to pro¬ vide the citizen with “money” on applica¬ tion, free from an interest charge? k. Yes, on his compliance with neces¬ sary regulations. Q. Why is this the duty of Congress? A. Because money (a commercial de¬ vice that governments alone can create) is a necessity to man in complex society. Being an indispensable adjunct of govern¬ ment, and a necessary tool of commerce, society must suffer and trade languish as long as rent can be exacted for its use. Q. How could Congress supply the sum required in the manner indicated? A. It could create it out of paper, or other suitable material. Q. How could Congress make absolute money out of paper? A. Precisely as it makes it out of metals. Q. By what process does Congress make legal money out of metals? -2 A. By investing the official symbol with arbitrary debt-paying power. Q. Is not commodity value an essen¬ tial thing in money? A, By no means! The par value of money is its legal value- a value depending upon the legal power imparted to it by sta¬ tutory law. Hence commodity value in the money symbol is superfluous value. Q. What is it that equalizes the ex¬ change value of coinshaving different com¬ modity values? A. The debt-paying power imparted to them by law. Q. Why does this equalize their ex¬ change value? A. Because it makes them worth a definite sum for an exceptional use. Q. For what exceptional use? A. For adjusting debts and taxes, for facilitating the exchange of property, and for conserving individual savings. Q. With what “necessary regulations” must the citizen comply to entitle him to money from the Government free from an interest charge? A. He must offer imperishable wealth for monetization by the certificate process. Q. Explain? A. Accurately and concisely defined, “money” is monetized wealth, in the form of legal tender specie, or a monetized representation of individual wealth, in the form of legal tender certificates. The precious metals are “monetized” by the coinage process, and also by the certificate process; and any imperishable wealth could be monetized by the certificate process, 3 - simply by investing the currency represent¬ ative of property with all the legal powers of specie. Investing wealth certificates with the full legal tender quality makes them absolute money, for the reason that debt-paying power is that which distin¬ guishes real money from credit currency. Q. What are the consequences of the prevailing impression, that absolute money cannot be made of paper alone? A. The consequences are disastrous beyond computation: hard times and pov¬ erty among the deserving being traceable to the blighting influence of this erroneous and ill-considered belief. Q. Explain? A. The common belief that commodity money alone is real money, begets a na¬ tional financial policy that restricts the vol¬ ume of legal money to the monetization of the precious metals. As the total amount of money thus created is less than one-fifth the sum required by the industrial world, the great bulk of exchanges is now effected with a private substitute for legal m.oney in the form of “bank credit,” or checking ac¬ counts,” furnished by “bankers,” and for which they exact a form of tribute called “interest.” Q. Why is interest paid for money on secured loans a form of “tribute?” A. Because representative money provided .by the government Is issued to the original recipients free from an interest charge, while its scarcity and inaccessibility to money users generally, creates a demand and enables bankers to exact interest for a credit substitute. - 4 - Q. Why does an interest-yielding ci-r- culation impoverish the many and enrich the few? A. Because every citizen is now a daily interest-payer; interest being an in¬ gredient in the price of every article that is bought and sold; and because the inter¬ est exactions each year actually exceed the value of the entire surplus product of all our industries combined. Q. What then is the immediate cause of the evils of which we complain? A. The inaccessibility oj money. Paper money! Q. What is the logical remedy? A. A volume of legalized currency equal to the needs of business, Q. What would be a scientific method of providing such a volume? A. The enactment by Congress of a law making imperishable wealth (instead of gold and silver alone) the nation’s mon¬ etary basis: granting to land owners, for example, the same right to have their values monetized by the certificate process (converted into currency) that is now en¬ joyed by owners of national bonds: extend¬ ing to owners of improved real estate, in town and country, the right to call new money into circulation for commercial uses at cost of issue; issuing representative mon¬ ey to each applicant to the amount of one- third (approximately) of the present mar¬ ket value of the realty offered for moneti¬ zation; and constituting its present official valuation for taxable purposes a perma¬ nent valuation of the same for currency purposes. - 5 - Q. Why is the immediate enactment of such a law the great desideratum? A. Because it will provide a mfficient volume of legal money, and make this indispensable instrument of commerce as accessible to the money user as it is now to the money lender. Q. What is the present money short¬ age as reported by the Comptroller of the Currency? A. It exceeds fourteen billion dollars; a shortage of about $140. per capita. WHY “LAND CURRENCY” WOULD INSURE GENERAL INDIVID- UAL PROSPERITY. Men are not economically wise who do not know that money troubles are unavoid¬ able under a money shortage, and that our currency deficit exceeds the enormous sum of 14 BILLION dollars! There is no escaping the conclusion that electors generally are ])oor and “in debt” for no other reason than that they have never posses.sed sufficient intelligence to provide themselves with a supply of pure paper money equal to the needs of commerce. Not only is it true that the industrial and professional classes are unable to dis¬ cern the source of their woes unaided, but 9 in 10, because of their ignorance of finance, are slow to recognize the primary cause when it is pointed out. Evidence to sustain the conclusion that men are rare who think correctly concern¬ ing the subject of money is found in the fact that while all agree that price is de- - 6 - termined by “supply and demand,” yet the belief is also well-nigh universal that it is determined by the “volume of money.” That poverty is the effect of a well- nigh universal ignorance of monetary science is shown by the fact that the men who could right existing wrongs by en¬ larging the money basis, i.e, by monetizing land values in addition to bullion and bond values, are themselves, as a rule, not ben¬ eficiaries but victims, of the financial sys¬ tem they unconsciously perpetuate. How is it possible for men generally to possess and own the money they need so long as the amount required to promote the general welfare is not in existence? It is impossible. A dearth of tangible money compels the many to borrow or else do ivithout this essential commercial device. To “borrow” money is to pay rent for that which, so long as it does not exist, cannot be generally owned. The following table compiled by the Librarian of Congress, illustrates the power of money to enrich the owner through interest accumulations: one dollar loaned for 100 years at compound interest at per annum would amount to $19.25 6^; . $:i40.()0 8% . $2,203.00 10 .■. $13,808.00 12% . $84,075 00 18% .$15,145,007 00 24% .$2,551,798,404 00 AN ADMONITION:- “There is a human trait that is a bar against all information, which is proof against all argument, and which cannot fail to keep a man in ever¬ lasting ignorance. It is contempt before investigation.” -7- . EXTRACTS FROM A SIGNIFICANT LETTER To the author of “The Disturbing Factor in Human Affairs.” “Your proposal to adjust the relations between Capital and Labor by the single act of “Monetizing land values by the certificate process,” is as unique in economics, and carries with it a perspective as start¬ ling to the financial world of our day as did the “thun¬ ders” of Martin Luther to the religious world of his time; and your contention that the “thrall of civiliza¬ tion” is INTEREST; and that interest for currency is “legalized tribute,” which can be abolished by “chang¬ ing the wording of a statute,” arrests the attention and tempts the mind to test the character of the arguments put forth to sustain your extraordinary claim. You marvel that intelligent human beings have for so long been content to pay for the use of a medium for exchanging the products of their labor a sum that (ibsorbs their mirjihis eanriitgs from year to year; and you make it clear to the attentive reader that society will avoid the impoverishing exactions of the usurer whenever it shall provide itself with a volume of legal money equal to its commercial requirements. “Whether as a nation we have reached that state of mental development, however, which will enable us to throw off our shackles, will be answered by the re¬ ception accorded your demonstration:— “1. That money in modern commerce is a symbolic repre¬ sentative of individual wealth invested by law with arbitrary debt-payinK power.” "2. That its value in exchange necessarily equals its worth as a debt-paying device, which is determined by statute—noU as is generally assumed, by the economic law of supply in demand. "3, That since gold and silver metals are simply forms of wealth, by law entitled to currency representation in the gen¬ eral circulation on application of the owner; and since United Jltates bonds are also granted such representation; common sense as well as common honesty demands that other equally suitable forms of wealth be given currency representation, to the end that the money supply may equal the needs of business! ‘‘I venture say that the logic of your thesis is irresistible; and that the practicability of your proposition, as a means of eliminating the charge for currency (while not affecting hire for trroperty) grows upon the mind of the reader, and upon his un¬ derstanding and his conscience, the more thoroughly he weighs the meaning of the terms you employ and perceives the true relation of money to and its importance in the development of our civilization. "That you have solved the great problem, by pointing out a perfectly logical and scientific remedy for poverty among the industrious, will be clear to students of the subject who are ready to accept truth for its own sake.” * - 8 - THE BOOK OF THE HOUR! “THE DISTURBING FACTOR IN HUMAN AFFAIRS ” A book every intelligent victim of present conditions should buy and study! Congress is powerless to better econ¬ omic conditions while ignorant of its teach¬ ings! It offers a sure cure for the financial distress that is so universal, and prescribes a remedy that is simple, practical and au¬ tomatic in its operation: a scientific substi¬ tute for the proposed “Aldrich” Currency Bill. After considering this unique argu¬ ment, John V. Farwell wrote: “If the author had the ear of all voters he cer¬ tainly would capture a majority for his plan.” J. D. Choate says: “I have read and re-read with increasing interest the monograph on ‘The Disturbing Factor in human Afftiirs,’ and do not hesitate to say that it is the most wonderful little book I ever read. “I am sure the author has found what others have been seeking these many centuries—that un¬ known quality about money that politicians prate of, and of which economists dream. The adoption of his views would make the word “anxiety” obsolete, abolish strikes and financial crisis, and put capital and labor on a fraternal basis not even dreamed of by the most rabid socialist writers and leaders.” In buying this book, reader, you con¬ tribute to a fund for propagating its timely truths. Mailed post-paid for 25c. 5 copies $1. Address James I). Holden, Secretary Land Currency League. Headquarters 214 Kittredge Bldg., Denver, Colo.