London, 22 April, 1949

My dear von Beckerath

I hope much that you have been able to find a new post. Financial worry is a sad deterrent to thinking on comparatively academic subjects.

(J.Z.: From 1947 onwards B. was already entitled to an old age pension, but until the currency reform that would have had very little purchasing power and even afterwards. I believe that his pension came only to about 130 - 150 DM a month, which would not have left him much after paying normal rent. Luckily, he lived in rooms of a house owned by friend and so, probably, got a very favourable deal from his landlady, probably a former sweetheart, with whom and her sister he remained on friendly terms to the end, except during his last days, when they deprived him of his revolver, he had kept for the day when pain would become unbearable for him, the handgun that came close to putting an end to Hitler. - Our world is still of a kind that does not offer men like him sufficient financial sponsorship to allow them to work full time, in healthy conditions, on their main and self-chosen task. He does not have masses of fans, like the pop heroes have, although he offers the whole of mankind so much more, objectively. He, too, needed an Ideas Archive and Talent Centre - still not existing today. - J.Z., 9.5.03.)

Thank you for your letters. I am much interested in your proposals for dealing with German inflation. I must have time to think them over.

Yes - Greene said a lot of good things; but I doubt if they had not been said before him. So far as I know Bishop Berkeley preceded him in 1710 when he asked in "The Querist" many fundamental monetary questions.

(I have not yet seen that text, either! - J.Z., 9.5.03.)

I will not enumerate his questions: you will find them quoted in "Free Banking" when you receive it.

John Gray, in his "Lectures on "The Nature and Use of Money" (Edinburgh, 1848), developed James Mill's principle that production is the cause of demand. Gray pointed out that the compulsion to use gold in exchange contradicted this principle, since it compelled demand (the possession of gold) to be the sole cause of production. Gray proposed a sort of mutual bank system in which a bank should issue to the producer money equal to the value of the goods he had produced. When the goods were sold, the money should be paid by the buyer to the bank, which should then issue a delivery note to the producer, authorising him to deliver the goods. Any goods remaining unsold after a certain period must be bought by the producer at his original price. I have mentioned Gray in "Free Banking" on p. 196 et seq.

In your letter of April 14 you argue that in times of crisis the public would use your notes to buy goods. It seems to me, however, that you overlook the necessity of the shops to replenish their stores from the wholesalers. The main reason for the breakdown of trust in a crisis is the fear of general bankruptcy. Consider the 1929 crisis in New York. The cause was an epidemic of speculation. The ordinary public had bought shares in every sort of industry, and had greatly inflated the price of those shares. Then suddenly they began to fear that prices had become too high, and they began to sell. Prices fell, and a panic ensued, in which everybody tried to sell. Many were unable to meet their obligations, and there was widespread bankruptcy. It seems to me, that at such times, lending will be diminished. Even sound buyers will hold back, in the hope that prices will fall still further. Hence although your notes would be used to buy the goods in the shops, few fresh notes would be issued until mutual trust were re-established.

(J.Z.: He describes this crisis as if it had not also and mainly been a means of payment crisis, one of monetary despotism, with its numerous false banking practices, with all too many bank accounts being frozen and unavailable for turn-over credits. Precisely shop foundation money would have been able to pay wages for unemployed to employ them again. And their spending in the shops would have led to orders for new goods, and these new goods required additional workers. All the stocks of ready for sale goods and services, or a large enough part of them, could have been turned into short term loans for wage payments [gradually, not all at once!] and thereby the sale of these goods and services would have been assured. The money shortage could have been very rapidly turned into a quite sufficient currency supply. Normal production and consumption could have gone on. That would have also restored the capital market. Only on the capital market some speculative investors would have suffered great losses, while others, still able to pay, would have gained enormous bargains. So what? That would merely mean that titles to capital assets would largely have changed hands. Whether a factory, a worker works in, is owned by company A or B is of little interest to him. His continued job is, and that he is paid for it in a useful enough means of exchange. When the ownership changes this has usually little effect on his life. But when neither company A nor company B know any longer how to continue to achieve orders and sales and to assure them, and to pay for all expenses, including profits, and thus keep the whole production machinery going, then the worker has good reasons to get worried - and to take up the study of the money question and of monetary and value standard alternatives. Like hell he will! Neither will the company directors. Both will rather scream for subsidies or handouts. It would not have meant that the businesses and factories and shops would have to close down because they could no longer sell enough. No business would have had to shut down, except those of e.g. some bad financial advisors and some bankers and brokers would no longer be trusted. On the contrary, the previous boom could have been extended into a still greater and permanent one, but unsound businesses and unsound business and banking practices would have been discontinued, as soon as possible, instead of being wrongfully supported with funds that should have been available for short-term turnover-credit [objectively they do not need any capital funds!] or that were wrongfully taken from taxpayers. The Central Banking system almost totally failed to supply sufficient and sound currency to keep normal production and sales going. It was itself all too much involved in flawed capital investments and speculations and based on the fallacies of "capital asset currency". The monetary freedom solution was not technically impossible. It was merely outlawed, also largely unknown and unappreciated. The vast majority of the monetary experiments, that did take place were very flawed. And the same flawed ideas on monetary matters still spook in most heads. Later, somewhere in "The Individualist", Meulen pointed out the existence of a list of about 150 different crisis theories, I believe in the "Zeitschrift fuer das gesamte Kreditwesen". I have never seen that list yet and it should be permanently published, together with all the pro and con of each of these theories, most of them ignoring most others, and with all the additional theories that have been advanced since then. The economists have not yet provided us with this service. They rather ride, each of them, or schools of them, their own crisis-theory hobby horse. No systematic scientific approach to the matter seems to exist, as far as I know. I do admit to very limited knowledge of economics! Only when this has been done, can one finally come to decide whether e.g., both of the above hinted at theories contains some truth and how much and to what extent they are still incomplete or flawed. - J.Z., 9.5.03.)

2.

In your letter of April 1 you recommend the greater use of options, or contract buying. This system is now extensively used among persons of credit, wholesalers and the larger shops. The ordinary wage-earner, however, has little credit, since he can provide little security that he will fulfil his contract to buy. I doubt if the system could be extended much among wage-earners.

(J.Z.: That's M.'s way of misunderstanding B.'s "order-system" for coming-up consumer requirements, to be paid for, at least by workers, usually in some form of currency or the other, when the time comes, not by credit. I have my own doubts on the system but would not call it an "options" system, rather a personal obligation or, as B. said, personal "commitment" system. Contracts are involved, as in every buying. But the decisive aspect here is the ordering in advance, of goods and services wanted in the future, in instalments, over a period, which would allow the providers to make sounder calculations on their possible and already contracted sales, instead of merely speculatively producing for the general market, without knowing whether and to what extent this market would actually buy the goods or services offered then. As I already hinted at, in notes to B.'s letters, a commitment to certain shops or shopping centres, to spend weekly or monthly a certain minimum amount there, could already be a pretty good substitute for an ordering system. Maybe employees would change their favourite and regular supplier, for a good fraction of their consumer spending, for the next 3 months to, say, even 3 years, occasionally or at every chance, changing over e.g., from Woolworths to Coles or vice versa. That would keep e.g. these stores even more on their toes. I suppose that several alternatives to this are possible. Use your own imagination. And insist upon full freedom of contract in this sphere, too. Naturally, as contractual favourite shopper, committed to a store or other supplier, you could negotiate e.g. a discount. - J.Z., 9.5.03.)

A German correspondent of mine, Dr. Fritz Winther, of Neckargemuend, sends me the enclosed cutting. In the penultimate paragraph you will notice that the writer says that lack of capital wherewith to set up in business is the main difficulty in setting up in business the refugees from the East. Does not this point to a need for long-date loans rather than for mere short accommodation?

(J.Z.: Possibly. But it does not have to be either - or. All credit spheres should be well supplied with their particular media, e.g., the short-term and turn-over credit sphere as well as the medium and long-term capital investment spheres. The mere that 4 or 5 of new business enterprises do go broke or that retailers have only an average life-span of 5 years, may also indicate that under present conditions they are unable to sell enough to stay in business, although they got the capital for their business enterprises and equipment etc. - If, under present sales conditions, even more enterprises got the capital for a start-up, this might merely lead to an even larger percentage of them would be going broke, because they cannot sell enough. This does not deny that something is also wrong with the supply of medium and long term capital but merely, that there is another and very important factor that is also involved. Under an insufficient currency supply or when only one and an unsound currency is supplied, then every employer and employee is more or less in trouble, almost independently of his capital situation. Then even vast firms, amply supplied with their own capital and with capital on credit, can easily go bankrupt - and the banking system ends up with billions in bad debts to be written off. - J.Z., 9.5.03

Of course Germany's difficulty today is an exaggerated form of the world shortage of wealth.

(J.Z.: There is no shortage of wealth in the form of ready for sale goods and services. Take a walk through any shopping centre and really look at the abundance ready for sale there - to those supplied with suitable exchange media - and then ponder the conversion of this ready wealth into exchange media, by the owners, for the own benefit and that of their customers, who would just have to offer their goods, labour and services in exchange, mostly indirectly! - Nor is there a shortage of production capacities. They could, almost everywhere, be greatly expanded, if only the additional goods and services could be easily sold. That is not possible under the monetary despotism of centralised note-issue. There lies to the major difficulty, as B. pointed out again and again - and usually quite in vain. - The "Euro" is the preparation or conditio sine qua non for the greatest European economic crisis ever! - J.Z., 9.5.03.)

But there seems little doubt that if the lending of existing wealth could be performed more cheaply, and more flexibly by better competition among banks, Germany would greatly benefit.

Duty The search for pleasure does not consist only in the preference for greater pleasures, but also in the choice of the lesser pain. A man in whom the gregarious sense is well developed may well judge death to be a smaller pain that the pain which life offers him in the circumstances before him.

Some men prefer a sudden death to a lingering illness. Surely the developed altruist may prefer death to causing pain to his fellow-men, or losing their respect. Please understand that I am Agnostic on the subject of hedonism. I cannot be certain why a man does any action; but just as I doubt if the Christian god exists, although I cannot deny his existence, so I suspect the hedonist view to be correct.

Your English is remarkably good. Just one small point. You often use "than" when you should use "then". "Then" is generally a translation of "dann"; but "than" is confined to comparative sentences, such as "better than", and is, I think, generally rendered by "als". Also you often use "any" when you should say "some". "Einige Maenner" is "some men"; but "any man" is "Irgend ein Mann".

I am glad that the warmer sun is coming to make your life a little more tolerable.

Sincerely yours - signed: Henry Meulen

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1^st May, 1949

My dear von Beckerath

Thank you for your letters. I am glad you received the books safely

I agree with your condemnation of index money. The main object of its promoters was, of course, the same as ours, namely to ensure that the supply of money be made equal to the demand. The chief point of difference between them and us is that they think the level of prices is the best test of the need for money. When prices fall, they will they will issue more money; when prices rise, they will issue less, or withdraw money by taxation. We think it is fatal to try to keep prices steady by these means. They assume that all fluctuations of prices have a monetary cause. This is certainly untrue. We think that the demand of credit-worthy borrowers, and the supply of capital, is the only true test of the need for money. And we reject the proposal to keep commodity prices steady. Prices should represent the relation of demand and supply.

My only difference with you on the subject of mutual banking is the question of which type of bank is the easiest to get started. We agree that the first thing to do is to convince people of the fundamental contention that the most important reform needed today is that the supply of money shall be adequate to the demand, and that they can get cheaper and safer loans under freedom than under restriction. Both you and I must eventually appeal to the man in the street, since he must accept and circulate our notes.

You will get the butcher, the baker and the tailor to organise a bank; and the willingness of the ordinary man to accept these notes will depend on his trust in these small shopkeepers.

I rather think, on the contrary, that he will have more trust in notes issued by the larger employers of labour. Shopkeepers will be more ready to accept these notes if they know that the issuer is ready to exchange them for either State notes, or notes issued by well-known banks. It is to the interest of the large employers to pay their wages and local purchases in their own notes. They need to form no organisation or arrangements with other employers or shop-keepers: all they need do is to issue the notes, relying on their reputation and willingness to redeem the notes. Later, some of these employers would give up their own business and become bankers.

(J.Z.: What will happen, to the notes of employers, when the local shopkeepers and their association say to themselves and to the public: Why should we accept the notes of the employers at all? Why should we trust them more than we trust ourselves as issuers? We will rather issue our own shop foundation notes and offer them to our suppliers, our employees and to wholesalers and factories that want to supply us. We are even ready to grant them short-term loans for wage payments, in our own means of payment. But, most of us, will simply refuse to accept notes of e.g. car dealers or farmers producing wheat for export, or of a local umbrella manufacturer, who supplies all of the country or local subcontracting firms, that produce some parts for other manufacturers, somewhere in the country or the world. We have only very limited use for their notes. But, almost all local people and almost all their employees could use our local currency very well and will find it locally much more acceptable than the notes of their employers, based mainly on trust, and not on ready-for-sale goods and services, that are in daily and local demand. Thus our notes do have the potential to become easily "current", i.e., a local currency, while most of their notes do not have this capacity, no matter how large their enterprise may be. They may be even firms that are known world-wide and trade world-wide. Thus they should issue, e.g., instead of trying to issue wage-payment means and local currency, international clearing certificates, based on the goods they supply world-wide, and sell them to importers, to pay imports with them, while the foreign exporters, receiving these clearing certificates, will directly or indirectly use them to pay for the exports of the firms that issued them. Their sphere of circulation for their kind of exchange media is quite different from ours. To each his own! - J.Z., 9.5.03.)

I agree with your opposition to the idea of low interest. The interest charged on loans should represent the state of demand and supply in loans. In this connection the old Scottish system of cash credits is interesting. The banker put an amount, say £1000, at the disposal of the borrower; but he charged interest only on that part of the loan which was actually being used by the borrower. This was an inducement to the borrower to repay as soon as possible.

2.

You quote your friend Dr. Unger as stating that he did not believe in trust as bank security. Well - if he had been so often deceived, he was justified in not trusting himself as a judge of character; but he was not justified in preventing other men from taking this risk. The early note-issuing banks did a good deal of this business. The main requirement is freedom for experiment. No rules can be laid down to decide when and how much one man may trust another.

(J.Z.: Can no man decide when and how much he can trust, e.g., any totalitarian system, compared with any democratic system or any quite free society? But he should have free choice of either - but only for himself! Are all note-issue banking system equally reliable and trustworthy or do they have different qualities and defects? Are there no flawed, absurd, wrongful and self-defeating rules or unnecessarily restrictive ones? No sound and rightful ones at all? No standard or model contracts to be offered? No clearly expressed options? No good business and management practices. No rules for issues and reflux? No rules for sound and unsound covers? All just trust and confidence? Hitler wanted that, too, of his followers and of his victims, in German and in the world. However good or bad the money and banking and credit or clearing system are, and their rules, even if they are altogether absent: freedom to experiment for all systems and their supporters, at their risk and expense! Panarchy in the monetary sphere as well. In this sphere, too, there will be no shortage of confidence tricksters. Death penalty for them, or life imprisonment? Why not rather take ordinary and common sense precautions? - J.Z., 9.5.03.)

Some of the old Scottish banks used the system of requiring two guarantors for a borrower without security. In other cases they were willing to dispense with guarantees. The matter should be one for arrangement between lender and borrower; and this is another argument against attempting to run a bank by a committee.

(J.Z.: There are some sound rules even for committee work and other work teams. If they are unknown or not practised, then all hell can and often will break loose. - J.Z., 9.5.03.)

Moratorium. On the whole I incline to the opinion that in the case of a national break-down of trust, such as

occurs at the outbreak of war, a moratorium is justified. Your shopkeepers might be unable to get their usual supplies. If they were given time, they might be able to get supplies elsewhere; but if they were made bankrupt when they were unable to take notes in exchange for goods, the whole organisation would break down.

(J.Z.: Hardly, if one of the rules for issues were: Only a fraction of the total ready for sale stock may at any time be issued in form of notes. Attempts to issue a higher percentage would, in normal times, lead to discounts and refusals. And in abnormal times the stores would have no reason to make large loans in their own notes, than they can immediately cover with their own goods and services. Again, M. did not check his premises sufficiently. He assumed that the shops would have issued notes for goods not yet supplied by their wholesalers. - J.Z. 9.5.03.)

Similarly, my banks would have in circulation a larger volume of their notes than their reserves of State or other notes. But many people would rush to convert these notes either into goods or State notes, and the action of quite a few people would destroy the whole organisation. I agree that the lesson would teach a good deal of currency theory; but we have stomachs that urgently need filling, and we cannot wait for the ideal system of banking.

(J.Z.: So, since we have to get somewhere, we try to drive there with flawed or no brakes or insufficient petrol and none obtainable on the way or with flat tyres? - J.Z., 9.5.03.)

I have thought over your proposals for meeting inflation. The need was too pressing for Germany to be able to wait until people had been convinced of the need for free banking. Your proposal therefore is reduced to that of exchanging existing currency for one of increased value, with the proviso (which is very important) that mortgages should be converted at prices equal to those on the date on which they were made. I suppose you would extend this privilege also to people who had put savings into banks, although this would involve a good deal of calculation. Also people who had bought securities might be similarly treated.

This would leave as victims only those people who had saved their money in stockings, and I see no way of avoiding injustice to them, and also to all people who bought fixed capital goods at high prices.

You do not say if you have been able to get another post. I am afraid this means that you have not yet succeeded. I earnestly hope I am wrong.

I will write to Sanyal.

Sincerely yours - signed: Henry Meulen

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London, 5^th May, 1949

My dear von Beckerath

Thank you for your letter of 25th April.

It is hard to discuss crises, since in the past they have sprung from such different causes. The 1929 USA crisis arose from over-speculation; but for us, and for Germany it came as a drain of gold and lack of buying by USA without over-speculation. All I wanted to point out was that a crisis involves a fear of bankruptcy, and this tends to make people prefer goods to money. Goods tend to rise in price (During a depression or deflation or credit restriction the fall! - J.Z.) and men tend to prefer barter. In a crisis the "mutual" shops will be rapidly sold out, and the wholesalers will be reluctant to sell their goods for money.

I do not think that the sole cause of the world shortage of wealth is the gold standard (distinguished from the gold basis). You must remember that we have destroyed a vast amount of wealth. (J.Z.: "We"? Neither M. nor B. nor I did!) We owe payment for this wealth, and we must produce more and consume less to repay it. Of course, however, I agree that we could repay quicker if free, banking on a gold basis were allowed. Since no country (not even USA) is today on a gold standard, the difficulty is not shortage of money, but rather, that the money is not lent to those who could use it productively. Even if the gold basis were allowed, agriculture would not be granted long-term credit freely so long as bank monopoly persists.

(J.Z.: One suspect statement after the other! - J.Z., 9.5.03.)

Duty. Your remarks are most interesting. Your wealth of classical examples remind we of Montaigne's style. A standard English dictionary, the "New English" (1932), defines duty as "That which is bound or ought to be paid, done or performed." Thus duty binds a man to do certain acts whether he thinks them desirable or not. This is the essence of slavery.

When Kant wants to describe acts which a man can do or not as he thinks fit, he should invent another word. But perhaps he means that a man should decide once and for all what acts he should do. I think this unwise. Acts should be decided according to circumstances. And what will decide his acts? Obviously his satisfaction. Towards the end of your letter you write that an egoist will always prefer his personal interest to social interests. I wonder why you think this. Surely thousands of men would prefer to institute a change which would bring happiness to society rather than buy themselves a new house. The first course will gratify their altruist sense, and earn the respect of their fellow men. I certainly agree that pleasures are not capable of analysis; but that should not prevent us from calling them pleasures.

As I see it, primitive matter exhibits the two qualities of attraction and repulsion. One may hazard (but not assert) the idea that the attraction is the pleasure of matter and repulsion pain. I think that from these two qualities all life and morals are developed, and I see no place for a feeling of duty, defined as not being a pleasure.

2.

I rather think that the fundamental point of difference between us is your reluctance to call certain altruist acts "pleasure". You write that pride is the basis of duty. But is not pride a pleasure? I am inclined to think that the

desire to be thought well of by a small or large group of people is a fundamental pleasure of nearly all men; and this is the oasis of pride - a pleasure in one's reputation. Robinson Crusoe may also be proud of himself in the absence of society; but he is a man, and gregarious, and I think his pride has a gregarious basis.

You write that "Selbstzufriedenheit" (self-satisfaction - J.Z.) is different from pleasure, and you instance the drinker of spirits. This is, of course, a common experience. I think the reason is that we so soon forget a desire when it is satisfied, and we think only of our present desires. The spirit drinker forgets his strong desire to drink after he has drunk, and he thinks only of the bad head he now has. He now thinks that the bad head outweighs the pleasure of drinking. He did not think so before he drank, although he may have been quite sure that he would get a bad head. I think that Selbstzufriedenheit is the gregarious pleasure in one's reputation. Of course it differs from the pleasure of drinking; but it is none the less a pleasure. You dislike using the same term for both. I think the classification a scientific advance. Wheat and oats are different; but it is useful in economics to call them both grain. 7 apples + 5 apples are certainly 12 apples to the arithmetician, although the fruiterer who sells the 7 apples at 1d. each, and the 5 at 1 1/2 d. each, may object if he is asked to sell the 12 for 1s.

You quote Darwin on acts of altruism done without reflection. But when one has long found pleasure in certain acts, one tends to do them without reflection.

Arithmetic is certainly derived from experience. We teach the operation of addition to children by showing them the result of adding two balls to two balls. Only when they have the difference between two and four balls firmly in their minds can they grasp that 2+ 2 = 4.

Time and space are, I think, simply the conditions under which we perceive successive or simultaneous phenomena. There is nothing metaphysical about them.

Your experience over the purchase of the Darwin book is interesting. You will find many cases of prevision detailed in Camille Flammarion's book on the subject. Prevision does not "annihilate" time; it demonstrates foretelling, and its cause is still obscure.

I rejoice that the Berlin blockade is to be lifted. This will certainly make life easier for you. The result is a triumph for the Allied policy of restraint. A hot-headed government might so easily have started a war with Russia.

What is the meaning of "Konjunktur"?

Sincerely yours - signed: Henry Meulen

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London, 30 May, 1949

Dear von Beckerath,

Thank you for your letters, the last dated May 16.

I should have replied sooner; but, alas, for the last week I have has a sharp recurrence of stomach trouble with another ulcer, and have not had energy to think. I am now better (without hospital treatment), the proof whereof is that I am writing you.

Thank you for the trouble you have gone to in defining "Konjunktur". The meaning seems vague; but I think I understand.

I tick the letters in the Economist to the writers of which I send copies of "The Individualist" and the pamphlet "Free Banking" - not because I agree with the views.

Many many years ago I bought in Parts six volumes of Montaigne in the original French. I am sending them to you. Medieval French is not hard to read. I already have both the Cotton and Florio English translations of Montaigne, which accounts for the fact that the edition which I send you is largely uncut.

You will notice from "Instead of a book" that Tucker thought highly of Bilgram's writings on money although Bilgram opposed free banking. I am adding a small copy of one of Bilgram's books which I hope will interest you.

Banking. During the XIXth century economists here ascribed every financial crisis to overproduction. In "Free Banking" I went to some trouble to analyse the different crises, and to point out that the economists had generally overlooked the effect of the Gold Standard and the 1844 Act in causing these crises. The trouble was that under the Gold Standard, as soon as a production revival caused prices to rise, foreigners sent in cheaper goods in exchange, not for goods, but for the legally-cheapened gold, which caused acute shortage here in the means of payment. But under Free Banking men would still be subject to occasional "herd-waves" of optimism. Some would over-produce, and prices would rise. The 1929 New York Stock Exchange boom is a good example of this herd optimism. It was a crisis of lack of confidence in commodity values, not of money shortage. At a certain point doubt seizes a few people that values have risen too high. You must have noticed sheep who all run together in one direction; when suddenly one sheep starts off in a different direction, and all the rest follow. The effect of this doubt among buyers is to stop the rise of prices. The others begin to think that a fall is imminent, and they postpone buying. If this movement proceeds, a crisis will arise which, it seems to me no free system can prevent, since freedom implies liberty to make mistakes. Your mutual shops would suffer with all other shops. But I think that under freedom such crises would be few.

(J.Z.: I rather hold, that there is no end to rationalisations, myths, imaginations, excuses, pretences and hypothesis constructions on events that people noticed, think to be important enough for their attention, but do not sufficiently comprehend. They feel the urge to try to explain them. Then they construct their more or less plausible hypotheses and, from them on, tend to adhere to them almost with fanaticism, ignoring other hypotheses, theories and contrary facts, just like a mother loves her child without reservations and tends to ignore most of its flaws. - J.Z., 10.5.03.)

In crises caused by monetary shortage, whilst I admit that the obligation of mutual shops to redeem their notes at par would support retail sale, the manufacturer needs raw material, he would not ordinarily be able to use mutual notes for this.

(J.Z.: Indeed, for trade in these another kind of "shop foundation money" is to be issued - by the providers of raw materials, namely, international clearing certificates, that are redeemed in the raw materials which they are ready and willing to supply to the world. Among international traders these will be as useful as are local shop currencies among local consumers, retailers and producers (for wage payments). B. never asserted that notes of e.g. local bakers, greengrocers, butchers and barbers and their combined issuing centres, are to be used as means of payment in international trade. Either M. never read B.'s books or he had forgotten all too much about them. For each sphere its optimal means of payment, competitively issued - and also discountable and refusable. The same for capital values and their certificates: shares, bonds, mortgage letters etc. - J.Z., 10.5.03.)

2.

You remark that since it is unlikely that people should be found in Germany to start private issue banks, mutual banks are the only alternative. I do not know why you think modern Germany so different from the England before 1844. I imagine that mutual trust is more highly organised in Germany today (or will be as soon as she has a settled government) (says an individualist anarchist! - J.Z.) than in England then. In England before 1844 new banks were constantly being started by business men of reputation beginning to issue their own notes in wages to their employees and in local purchases. It was to their interest to do this; and they did do it until they were stopped by law. This interest persists in Germany today.

(It did not! The ideas and practices of monetary freedom were largely forgotten and, if raised, not only M.'s but numerous other prejudices were raised against them, so that such ideas were generally not taken serious and thus not practised or proposed for practical experiments. There were only B. and Rittershausen advocating monetary freedom and R.'s freedom of expression was in this respect curbed through his academic positions. R. could freely write and publish on central banking and other banking legally permitted and insert some criticism and other ideas there, but he could not get anything published explicitly favouring free banking. His last chance for this passed when the 1948 currency reform came, just before he had got his manuscript into print, which was a revised version of his "Das andere System", of the thirties. I microfiched that manuscript many years later and I cannot remember even a single order for it from Germany or anywhere else! Apart from these two most important monetary freedom advocates in post-war Germany, I found only one monetary freedom article in Germany in the years after WW II, written 1949 and published in a German economics journal, overlooked by most later writers on monetary freedom. It was written by a friend of R., I forgot his name, but I reproduced his text and listed it in my still incomplete bibliography on free banking. Some other writers, e.g. Gerding, arose only after Klein and Hayek had written on the subject in 1974-1976. By the way, once the free banking bibliography is complete, then it would be interesting, at least for the history of ideas, if all these titles were also ordered by year of appearance and by countries and languages. If this were done, and this list published, then I could, in this case, rapidly point out this other German author, of which I presently remember only the year of the relevant article. Also, the paucity of published literature of this kind in post-war Germany, would be made quite obvious. In this respect B. and R., were, in Germany, also for most of the rest of the world, for a long time, rather voices in the wilderness. Even today there may be no others who have as much explored the details and techniques of monetary freedom as these two did. Professor E. Milhaud, of Switzerland, had at least developed the theory of international clearing certificates in a special book, which I microfiched. Zander had left Germany in time to survive - but he seems to have left most of his monetary freedom interests behind as well and was more concerned with the other following catastrophic events in the world - and did not sufficiently trace them back, any longer, to monetary despotism. Likewise, for most other Jews the wrongs and catastrophes of pogroms, and mass extermination camps and the re-establishment of a territorial Jewish State, have driven out of their mind the memory of and awareness of the significance of the extent and frequency as well as duration of exterritorial autonomy of some Jewish communities in some countries in the past and of the potential of such communities for the future, not only for Jews, if only they are no longer outlawed. Like even Meulen, the "free" banking advocate, came largely to think of free banking in terms of a forced and exclusive legal tender paper money and of a legislated "gold standard" and its impositions - with Meulen's variations, so Jewish people and all other religious, ethnic, ideological, reformist and revolutionary groups, have largely come to think only in terms of the wrongful and imposed territorial institutions and practices, rather than of the rightful and voluntaristic alternatives to them. The employer-employee relationship, so common today, has also induced all too many people to think only in terms of class warfare and labour legislation and jurisdiction, rather than in terms of the numerous self-management options. However, a revival of such ideas has taken place in recent decades - but, as in the monetary, panarchistic and peace research sphere, militia, self-defence, liberation-technology and revolution sphere, as well as that of human rights declarations, all the alternatives proposed and all the experiences with alternatives in the past and present, are not yet scientifically and systematically compiled, compared and published.

We haven't even bothered to compile and publish as yet a comprehensive libertarian encyclopaedia, bibliography, abstracts and review compilation or a single comprehensive libertarian library, which could be so easy and cheaply done on CD-ROMs, if many of the readers, writers, editors and publishers of these texts collaborated in using this medium. Furthermore, an international Ideas and Talent Archive for Libertarians has still not been set up. Thus most of the most important ideas, facts, opinions, experiments and talents in this sphere remain still widely unknown, even to those who would be most interested in them. And thus people like M. came to wrong conclusions like the above. - But then: Who knows, how many unpublished manuscripts on such important topics do still exist somewhere, often after their writers have long died, in the possession of heirs, who do not care about them? - J.Z., 10.5.03.)

Duty. I think Badcock's description of duty as slavery is to some extent justified by the fact that slavery implies that a man must do certain actions whether or not he wants to do them, or thinks them desirable. A duty cannot be brought before the court of reason. Duty leads to the performance of countless absurd actions. The really useful altruist actions would survive the abolition of the idea of duty, because they are based on the gregarious pleasure. Two old sayings come to mind: "The harm done by the good in the world has far outweighed that done by the evil." And: "None so cruel as he that is cruel on principle." The "good" act out of duty - the evil out of hedonism.

The fact that habits are continued unreflectingly does not prove that they were not started for good pleasure-seeking-seeking reasons (remember always that in the search for pleasure is to be included the avoidance of pain). All day long in imagination we see ourselves in certain circumstances, and we decide what we would do. If our character is settled enough, it is not surprising that when occasion arises we act almost automatically. And a very large part of our imaginings on such situations consists of "What would so-and-so say if he or she knew I had done this?" The desire for the good opinion of smaller or larger groups of people is, I think, much more widespread than the "Will to power" which has been so much talked up.

Agnosticism. If Schopenhauer thinks, he can absolutely prove a negative, I will cheerfully leave it to him; but I will have to be short of reading before I will read him. Karl Pearson demonstrated beautifully that nothing can be proved absolutely: our senses are fallible, and our knowledge limited. He points out that science is content with a high degree of probability. When A is followed by B in a sufficient number of cases and conditions, science says that A in the cause of B; although the capable scientist realises that there may be an unobserved X between A and B which is a more proximate cause of B. The probability that the addition of H2 to O causes water is high; but the probability the back of the moon is made of cheese - that is the only difference between the scientific value of the two contentions.

Your cases of the immorality of God will be countered by the Christian with a list of his blessings, and by the injunction that we cannot fathom the purposes of God. I am content to say that we cannot affirm that the universe is benevolently ruled until we can compare it with an unruled universe, which, since the word universe comprises the totality of things, is impossible.

Therefore, I am agnostic. But it seems to me that there is so little evidence that the universe has any regard for man's welfare that I think, although I cannot prove it, that the Christian assertion is nonsense.

Yet - it is nicely German, although quite inconsistent for me, to conclude by saying

"Gruess Gott"! - signed: Henry Meulen

(J.Z.: "Ja, wenn ich ihn sehe!" - Yes, if I see him! - is one of the standard atheist replies to such a greeting. - J.Z., 10.5.03.)

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Arithmetic. I rather think that this also is subject to the Pearson objection to absolute truth. That 2 apples added to 2 apples make 4 apples in subject to the fallibility of our senses. A drunk or hypnotised man seen two apples where the ordinary man sees one. When we withdraw the concrete illustration and say that 2 + 2 = 4, we can prove it to the doubter only by reintroducing concrete objects, which again involves sense fallibility.

It is convenient to eliminate the concrete illustration, just an it is convenient to go further and represent numbers by algebraic symbols; but the fundamental proof rests always on concrete objects.

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London, 9 June, 1949

My dear von Beckerath,

Thank you for your letters of 17 May and 2 June.

Your letters are a great pleasure to me. I count myself lucky to have found a man who is so keenly interested in both currency and philosophy - my two darling subjects - the combination in a man with so lucid a mind was almost too much to be hoped for.

I am glad to report that on Tuesday last my stomach made a dramatic recovery, and for two days I have been without pain. But please do not tempt me to talk of my illness. One's complaints are not a fit subject for civilised conversation.

You will remember the old joke: "He is the sort of man who, when you ask him how he is, tells you."

It was amusing to me to find in hospital, where fully half the men in my ward (a general - not a specialised ward) suffered from duodenal trouble, the first sympathetic audience I have ever found on duodenal trouble!

By the way, is it not interesting that for every woman duodenal case there are 20 or 30 men?

Your letter of 17 May is mostly concerned with Malthusianism. But you do not answer the point I raised in the note on population in the April "Individualist", in which I gave the output per worker in various countries. You write that neither Malthus nor Darwin give examples of people suffering from food shortage on account of population. I am sending you a copy of the December 1945 "Individualist" in which a table is given.

I freely admit that the danger of war is the one argument for a large population which has weight.

(J.Z.: With a fully libertarian defence and liberation, revolution and military insurrection program, even a small libertarian society would not have to be afraid of a large and populous country, governed by a tyrant or dictator but could and would make that regime afraid of it and rightly so. Its mere example already, sufficiently publicised, could already lead to the overthrow of that regime and to the liberation of its subject. One should cease to think in terms of territorial statism and consistently explore the alternatives to it. - J.Z., 10.5.03.)

Banking. Do you not think that there are many firms in Germany who would issue their own notes in payment of wages and local purchases if they were allowed? It is to their interest. It is in this direction that I look for the establishment of fresh banks, rather than to individual clever men.

(J.Z.: How many people are there, who always and consistently pursue their most rational and rightful interests in any sphere of the social sciences and their practice? At least as thought-experiments or games? They rather hang on, tenaciously, just like M. did, to flawed ideas, myths, practices, customs, laws, judicial opinions and traditions, regardless of the high prices they have to pay for upholding them. Innovation is all too much monopolised by territorial governments and the result is no better than is to be expected from them. - However, if there were, finally, full experimental freedom introduced, for all who are, for instance, somewhat or much in advance for their countrymen, while, at the same time, those who are with their views even behind the level of the majority of their countrymen were free to harm and wrong themselves within their own voluntary communities, and others remain free to adhere to their beloved status quo, then and only then could we expect to advance fast and almost everywhere, through the successful experiments that are, at first, only undertaken by a few, the pioneers, innovators and successful reformers and revolutionaries, practising their one-man-revolutions and reforms by joining or establishing corresponding volunteer communities or experiments, or practices of minority autonomy, that are, exterritorially, quite autonomous and have personal constitutions, laws and jurisdictions for them. The masses would not rush into monetary freedom but a few would and outsiders and even the mass media would observe their efforts with at least some interest, and be it only with the curiosity of tourists or people who like a good laugh when they see something they did not expect to see. - Consider my growing encyclopaedia "On Panarchy", which attempts to promote a complete alternative to current politics, economics and social sphere systems, practices, beliefs and institutions. May the old kind of politics and its "scientific" literature become discarded as quite outdated and based on wrongful premises and conclusions, as soon as possible. Likewise, that of monetary despotism, the employer-employee relationship, that on defence, on war and peace, on jurisdiction, that on governmental bills of "rights" and one the "protection" of genuine human rights by territorial governments or their UN. - And how many governmental librarians and all too limited libraries and how much "library science" will we still need - once sufficient readers become aware that they, too, could become, quite extensively, publishers, editors, writers, commentators and contributors to numerous encyclopaedias, catalogues, surveys, bibliographies, abstracts and indexes, once they come to use the powerful, cheap, lasting and affordable media in their particular strengths? - The mass media and the Internet and its websites and e-mail are far from being our only and our most promising options. With all the alternative media, in their strengths, and all other rightful options, including suitable alternative institutions, especially exterritorial ones, we could rapidly advance towards liberty, rather than vainly relying on too few conventional or widely accepted ones, which have already failed us for all too long. - Can you list genuine successes for territorial States, or many of them? I am not sorry but glad that I cannot find them, for I am not willing to pay their prices. Can you even list genuine and large-scale advances of enlightenment that can only be ascribed to the Internet? It, too, has still its technical limits, and those in the ways in which it is presently being used - or abused. - J.Z., 10.5.03.)

I note your remark that the Bali fishermen will sell his shark leather for Manchester notes which are accepted in 1000 shops in Manchester. This would already be quite a big mutual bank. Yet these notes would certainly be at a discount in Bali compared with notes convertible into gold. And at what price would a manufacturer in Solingen take mutual notes accepted only by minority of shops in Freiburg-Breisgau? You will of course reply (how like is all discussion to the pleasant anticipation and thrust of a game of chess!) that in times of crisis Solingen must choose between the mutual notes and no purchasers at all. Agreed. But a system designed to stand the stress of crisis may not be the best for peace times, just as the institutions of military society

do not promote trade and prosperity as effectively as those of an industrial society.

( J.Z.: "Military society"? A contradiction in terms, unless one means, hereby, an ideal militia force, as I have described it in my first peace book. - In peace and during large and long wars - if there are still any under full freedom, which I deny - in boom times and during crises - the latter most likely disappearing entirely, for local exchanges and for international ones, for capital exchanges and for consumer goods exchanges, quite different means of exchange and, possibly, also value standards, are likely to be developed and used and prove themselves in practice. The small examples here chosen by B. should not be assumed to be the only possibilities for a genuinely free economy, but rather simple examples which, once understood, can then be sufficiently extended and multiplied. Naturally, all of them would have to prove themselves in world-wide and local free competition. And none of them will be generally suitable for more than their natural niche. For all rare exchange media and the ones which do go astray, we will have exchange offices, like in tourist centres, a money market and clearing centres, which will lead them back to their issuers. No one has to fully comprehend the automatic workings of a truly free market in order for this market to work pretty well, in spite of a few scoundrels being also active in it. Even international trade was, when somewhat free, largely carried out not by rare metal transfers but by clearing arrangements. But it was and is disturbed by creditors having the right to be paid in certain exclusive currencies. - J.Z., 101.5.03.)

Banking is a fine development of mutual trust. If that trust is lacking, we will turn to more primitive methods of exchange; but those

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methods are not to be recommended for a community wherein mutual trust is more developed.

(J.Z.: Rather, the "trust theory" prevented the development of banking to its full potential! In the absence of that "trust", we will proceed to more advanced methods of free banking! - J.Z., 9.5.03.)

Duty. What a. remarkable story of the 300 Japanese who committed suicide! It seems incredible. Do you think Paul Morand a trustworthy writer? I think that one important ethical principle emerges from the rejection of the notion of absolute certainty, namely, an increase of toleration. I recall to you the famous words of Cromwell to his opponents in the House of Commons:

"I implore you, gentlemen, by the bowels of Christ, to believe in the possibility that you may be mistaken."

(J.Z.: Where are or were the bowels of Christ? Did this God or Son of God need any? The man, who, supposedly, could create thousands of loaves of bread out of thin air? However, as a call for tolerance Cromwell's expression was very timely but not sufficient. Nor did he himself practise tolerance widely enough or was he even aware of its full possibilities. If he had been, his civil and international wars would have ended very soon, to the satisfaction of all the different parties and movements. - J.Z., 10.5.03.)

Since you are so interested in philosophy, I send you a copy of a letter that I sent recently to our chief Rationalist journal "The Literary Guide". Also another on a similar subject to the "Freethought News".

I agree with you that the Allies should take a stronger line with regard to Russia. I do not think that Russia would risk war at present; and there is every hope that if the Western Powers can set up a really effective organisation to provide a permanent international force to prevent war, it will deter Russia from risking war in the future.

You must use a stronger envelope when you enclose so much. Your two last letters arrived burst at the side.

Sincerely yours - signed: Henry Meulen

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4 June 1949

The Editor of

"The Literary Guide".

I am jealous of the fair name of Reason. Permit me therefore to remark that Mr. Marlow makes some doubtful points in his attack on reason in the course of his controversy with Professor Heath in the June Literary Guide. (*) He defines a metaphysical theory as one incapable of being proved by experience, and asserts that the inductive principle is such a theory. Now Hume demonstrated beautifully that our ideas of cause and effect spring from habit. If we have long noticed that A is followed by B, we eventually come to expect B when A appears. This expectation is certainly based on experience, and should hardly be called metaphysical. But now comes Bertrand Russell, and declares that induction is metaphysical in the above-mentioned sense because experience affords no proof that A will always be followed by B, or that we have examined all possible cases.

I think Bertrand Russell sometimes raises unnecessary difficulties; and this is one. There is no doubt that science today would accept the principle laid down by Karl Pearson in "The Grammar of Science" that the search for absolute proof is vain. Science is content with a high degree of probability. If A has been observed to follow B

in a sufficient number of cases, and in sufficiently varying conditions, science then declares, not that A is an absolute cause of B, but that it is highly probable that B always follows A, and a scientific "law" is erected. In other words, science limits its assertion to the range of its experience, and no metaphysical assumption is made.

Henry Meulen

(*) (J.Z.: Only the unreasonable would attack reason! And even that he could not do without some reasoning, however flawed. Perhaps only the most unreasonable takes such arguments serious. - J.Z., 10.5.03.)

____________________________________________________________________________________________

The Editor of "Freethought News" (B. noted on it: June 1949?)

Sir,

I also hope that Mr. Throup'ss theory of the genesis of thought will be adequately discussed. Mr. Throup traces thought to the development of the sense of awareness in simple forms of living things. I would take the process further back and connect it with the qualities of attraction and repulsion exhibited by primitive

matter. These qualities most probably represent awareness in some form. It is usual to call such reactions in "non-living" matter automatic. I submit that we have no grounds for such a distinction. We have no direct evidence of thought in any other beings beyond ourselves: we infer thought in others because of the similarity between their actions and our own. But mere dissimilarity of action is no proof of absence of thought.

To trace thought back in this way to the qualities of attraction and repulsion in primitive matter, settles the long-discussed problem of the origin of life. If the theory is true, there remains no such thing as "dead" matter, and life becomes a universal quality. What we call the development of thought becomes simply the development of means of providing satisfaction for attraction, and of defence against, or avoidance of, repulsion.

Henry Meulen

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Dear von Beckerath London, 25 June, 1949

Thank you for your letters of the 11^th and 12^th June. I hope you have received the Montaigne by now. I have received all the letters you mention: the post seems quite good. I note that "American Section" is to be added to your address. I can't think how I got the idea that you were in the British Section.

Malthusianism. Your criticism is good. I have sent your table to the editor of the "New Generation", and will let you know his reply.

I think the expression "real income" means the goods that the income will buy before deduction of taxes etc. But there seems considerable difference in the estimates of different statisticians. In the Aug. 1948 issue

of the "Individualist" I quoted Lewis Ord's figures. They are different in some respects, and he does not give his sources.

Colin Clarke is a statistician of considerable reputation here.

Your argument that the producer may receive very little after the payment of taxes etc. is a good criticism of the "New Generation's" statement that the Australians eat more than 200 lbs. of meat yearly, while the Japanese eat only 2 lbs. When I write to Kerr again, I will put your point to him. But of course it does not affect his argument from comparative real income if this excludes taxes. Furthermore your argument that scientific methods and

land and banking reform could increase the food output, omits to notice that hitherto most scientific improvement has consisted in labour-saving methods. I believe the Chinese farmer still gets bigger crops per acre by hand labour than does the Westerner.

It is possible that improved methods may be invented; but meanwhile it seems important to point out that population is at present increasing faster than food production. I am inclined to doubt if 6/7 ths of the fertile ground in China is not cultivated. China has so large a population and the poverty of farmers there is so great.

Banking. It may be that the notes of individual firms will not circulate unless there is a supervisory committee; only freedom for experiment can decide this point. But I would urge that

(1) Control by committees always slows down experiment and variation;

(2) the history of banking in England and Scotland shows that individual firms were able to circulate notes redeemable in gold on demand without such supervision.

The notes rarely fell to a discount locally in Scotland. They occasionally depreciated in relation to gold; but that was when England set up a sudden demand for gold.

On the question of the acceptability of Freiburg notes in Solingen, I cannot think that notes acceptable only in the Freiburg shop Mueller, or even in several Freiburg shops, will be accented by a Solingen bank at only a 3 % discount. Here in Wimbledon there are, for instance, many grocers. Yet, for various

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reasons, we buy at one particular grocer. We would not like to take notes that compelled us to change our grocer. Hence people will find it hard to pass on such notes and I should think there will be unwillingness on the part of wholesalers to accept such notes in payment for their sales to the shop, unless they themselves deal with the shop - which is unlikely.

You will reply that the wholesaler can take the notes to a bank. But since the bank can find only a few people who will accept the notes, such notes will lack liquidity, and the bank will accept them only at a discount, which discount would discourage the wholesaler from accepting more of the notes.

It seems to me that you exaggerate the importance of the Rueckstrom (reflux - J.Z.) principle. Scotland got an adequate Rueckstrom of its notes without any regulations on the subject.

Convertibility into gold. It is not necessary for a country to have gold coins for the banker to be able to promise convertibility into gold. All that is necessary is that there should be a free market price for gold. People who want to convert their notes will then receive the gold value of their notes in whatever paper money and coin they are willing to accept. They will probably demand either State notes, or the notes of some well-known bank.

Letter to "Freethought News". You write that it is possible to consider the fundamental forces of matter as derived from "the vital forces of the universe". But whereas there is evidence of the forces of attraction and repulsion in matter, I have seen no plausible evidence of the existence of vital forces in the universe apart from matter. Whether the sum of events in the world is a revolving one or not does not seem to me to affect the argument that thought is developed from the forces of attraction and repulsion. This argument concerns the cause of the development - not its direction.

Enclosed is an amusing cutting from "Truth" on the subject of modern painting. Sir Alfred Munnings is the President of the Royal Academy, and at this year's Academy banquet he made a slashing attack on modernist painters.

My stomach is still improving.

Sincerely yours - signed: Henry Meulen

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London 25 June, 1949

My dear von Beckerath,

I find that I omitted to thank you for your interesting criticism of the last "Individualist". I have extracted some of your notes for the next issue.

I have had correspondence with Kenneth de Courcy. He seems impervious to banking argument.

I have no belief in a tax-payers' strike as long as there is freedom of writing and speaking. The government has too strong a weapon in the confiscation of the strikers' property.

If Germany pays so much for the book education of her children, she is crazy. But then I have always felt that Germany locked on book education as other nations look on religion.

Kitson paid the market price for men with diplomas in languages. The remedy is not that he should pay more than the market price, but that men should not enter a profession where there is so much competition. They should have learnt engineering rather than languages.

Unless the State is foolish enough to insist on the fact of artificial insemination being inserted on the birth certificate, nobody need ever know how a child was conceived. The prejudice against "illegitimate" children is fast disappearing.

In 1913 people thought (see Bloch and Angell) that there would never be another major war. Hence international commercial trust was great, and the pound sterling was generally accepted. It is the disturbed political state of the modern world which causes men to insist on payment in their own currencies.

I do not believe that Chinese children learn to write Chinese as quickly as Europeans learn to write their languages. I suspect that few Chinese can write at all.

After spelling reform people will know that the sound of the word, not its spelling, gives the clue to its meaning, and most people will be able to dispense with a dictionary. The really useful old books will be republished in modern dress, just as France publishes Montaigne in modern French. Those who are interested in less useful books (or less popular books) - a small minority - can study the older language. They should not compel others to share their curiosity.

The real urge. I should say that the "displeasure produced by inactivity" is quite a modern disease. There is no sign of it in primitive people. Where the urge to activity is strong, they do something. Otherwise they just sit - and are happy.

I had some correspondence with our Post Office over sending newspapers to Berlin. They now tell me that newspapers are allowed to be sent only to the British Sector of Berlin.

This is amusing, since for a long time I sent you papers without specifying the section, and you received them. Then I started addressing them wrongly to the British Section, and you received them. I think I had better omit the name of the section. I am sending you the "Economist" by this post.

Tell me if you receive it (Issue of June 16).

Sincerely yours - signed: Henry Meulen

____________________________________________________________________________________________

July 12, 1949

My dear von Beckerath

Thank you for your letter of the 29th June, enclosing letters of the 25., 27. and 26th. In the case of most of my correspondents I generally regret that I am not talking to them instead of writing - it would save a lot of time. In your case I am glad to be writing. I am a slow thinker, and although I have done a lot of lecturing and answering questions on banking, I am glad to be able to give myself time to consider your very fundamental criticisms.

I am glad you received the Montaigne safely. It would have been a real misfortune if the volumes had been pulped by the Russians to produce extra copies of Pravda.

I agree with you on the subject of interest. It has often been urged against me that even if Free Banking did result in lower interest rates, this would hardly produce the beneficial effects on industry for which I hope. I have always replied that a much more serious defect of the present system is that lack of competition between banks excludes all but the most valuable security from the benefits of cheap long-date loans; and that this exclusion hits precisely those smaller producers to whom we must look to increase and cheapen production. Nearly all our long-date loan business for small industry is forced by the law into the hands of money-lenders, where the rate may be anything between 20 and 40 %. And I suppose you would agree that this rate is a strong deterrent to industry. For short-term loans, or long-date loans on valuable security, our banks are more generous.

As I have often remarked in the Individualist, our banks' nervousness in regard to long-date loans was justified so long as we were on the gold standard, and were exposed to unforeseen drains of gold to foreign countries. Since 1931, however, it is mainly lack of competition which enables banks to continue to avoid the extra risk involved in long-date loans.

Ruecktrom. Yes - yes - I agree that a fundamental of sound banking is the due repayment of loans. But surely a bank can remain in business only so long as this Rueckstrom proceeds steadily, and it is to the banker's interest to see to this.

But I think that the business of different banks varies so much that it is unwise for either the State or local communities to lay down fixed rules. (*) If the banker finds it advantageous, he will be ready to publish details of his business. If some people are so nervous of banks that they want rules and more details, let them deal only with banks that provide these conditions; but they should not compel uniformity in all banks. You write that the public

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trusts in committees today, and therefore such committees should be encouraged. But my point is that committees are clumsy, and tend to prevent experiment. The same is true of State industry: people today tend to trust to State control and planning of industry. You do not therefore recommend nationalisation.

(*) (J.Z.: Far from it: He merely recommended abiding by sound economic rules for the issue and reflux of currencies, applied by private and competing bodies and publishing their sound practices sufficiently. - J.Z., 10.5.03.)

You write that the Solingen banks will find a way of sending Freiburg notes back to Freiburg, and will therefore accept Freiburg notes at par or at a very small discount.

But my point was that since the Freiburg notes may be acceptable only to the small minority of people in Freiburg who deal at the shops at which the notes are accepted, few Freiburg banks would be ready to take any large quantity of these notes. Hence Solingen banks would be unlikely to accept the notes at only a small

discount. Bills of exchange are different. A bill is issued on the personal guarantee of the industrialist, and is accepted by a banker only if he approves the reputation of the depositor. Such a bill, issued in Freiburg, would generally be accepted in Solingen only if it were guaranteed either by a Solingen industrialist or by a Freiburg bank.

I have not recommended the use of gold coins because it is vexatious to business to have to use a token which is subject to almost daily fluctuations in value (from changes in the world bullion market). If notes are used, their value will change only with changes in local trust in the issuer, which changes will, one hopes, be relatively far fewer than changes in the market value of gold.

Malthus. I have not yet had a reply from Kerr (editor of the New Generation). Perhaps he will deal with your criticism in the next issue of his journal. As you remark, your figures of total area compared with arable area do not show what proportion of the total area is cultivable. You write that you know from the reports of travellers in China that the amount of land cultivated could be considerably increased. The reports I have seen are different. Both in China and Japan every square yard of cultivable land is said to be worked to the utmost advantage.

I agree with you that the extreme poverty of the farmer in both countries is largely due to bad government, and also to land monopoly and money scarcity. Yet I think it remains true that with agricultural science at its present stage, the population is increasing faster than the possibility of food supply. The burning of coffee and wheat which you mention occurred before the war, in the days when glut was always with us. Since the war there has been no serious glut of any food.

I can only honourably cry "Touché" at your keen thrust in quoting p. 342 of "Free Banking" at me. Yet - I must be allowed to say in my defence that the paragraph in question was not intended to deal with the question of over-population, but only with cheap labour. Cheap labour does not result only from

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over-population. (J.Z.: My scanner read this as "over-copulation". Even it can crack a joke!)

In Germany, for instance, before 1870 the whole population lived at a lower standard than the English, due mainly to our rapid progress in industrialisation during the 19^th century.

(J.Z.: Also due to relatively free trade in England, while in Germany protectionism prevailed, until 1966 even between dozens of German small States. - J.Z., 10.5.03.)

Between 1860 and 1890 there were frequent complaints here that Germans came here and were willing to work for much lower wages than the Englishman. Germany was certainly not over-populated then: it was simply that England was a richer country. I think that this was also the main cause of Japanese emigration to Western America at the same period. By 1900 Germany's progress in industry had been so great that emigration from Germany had practically stopped, and immigration from Poland increased greatly. I rather think that today the need for food is so great that countries like Argentina, South Africa. Australia and Canada will find it advantageous to concentrate on farming rather than on manufacturing industry.

Education. You will remember that I conceded that it was useful for a child to learn the three R's (reading, writing and 'rithmetic). With a knowledge of these any child can, in these days of abundant libraries, teach itself if it wants to. I can honestly say that all the really useful things that I know today I taught myself.

Spelling reform. Agreed that age impairs memory. But if the spelling approximated more closely to the sound of the spoken word, there would not be so great a need of memory.

To return to Malthus. You quote the case of herrings, and I remember that a few months back herrings were made into manure. But this catch was quite exceptionally large, and I suppose the fishermen might well have judged that they could not sell them at any price for food. After all the salting of herrings, and packing them into barrels, takes considerable organisation, and in the present state of the world it might be hard to work up a fresh market for just one consignment. Free Banking would, of course, help much.

(J.Z.: Weren't freezers already invented then? Couldn't the fish products factories have introduced 2 extra shifts for a few days, at extra high wages? Couldn't fish shops have sold them very cheap, together with self-pickling kits? Couldn't the fishermen have done their catches in instalments, as required, by wireless in touch with their potential customers? Free enterprise often is not very enterprising! - J.Z., 10.5.03.)

Glad you like Truth. It hits hard at the Socialists. For myself, however, I much prefer the Economist.

(J.Z.: Was there really that much truth to be found in either? - J.Z., 10.5.03?

Sincerely yours - signed: Henry Meulen

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My dear von Beckerath London, 23 July, 1949

Thank you for your letters of the 2, 14, 15 and 16 July.

I note Dr. Friedensburger's remarks: "Fuer das humanistiche Gymnasium"; but I cannot agree with him. When a man has tasted Western culture, and has liked it, he will defend it against an attempt to impose alien cultures by force, whether he has studied the classic and Christian origins of Western culture or not.

My school teacher friends here also assure me that nowadays children like to go to school. Personally I doubt if it applies to more than a small minority. If it applied to the majority, there would be no reason for compulsory school attendance laws all over the civilised world. Educationalists reply that parents are eager to cut short their children's education in order that the children may earn money or work. I do not think that more than a tiny proportion of parents are so lacking in parental feeling if they think that a child can benefit by more schooling - that is, presuming that the family is not faced with starvation.

Let school attendance be voluntary, and then let the people who are worried about the unsatisfied thirst for education establish libraries and evening schools for those children in whom the thirst arises in later years. If children forget their 3 R's after leavings school, it is a sure sign that money spent on their education was wasted: they are not interested in book knowledge.

I was a young Civil Servant, 19 years of age, just beginning to be interested in State Socialism, Tolstoy and Kropotkin, when Tucker's book fell into my hands. For the next ten years I spent nearly the whole of my leisure (and the whole of two summer holiday periods) in the British Museum Reading Room, reading everything on banking and currency that seemed useful. You and I had to do this reading in order to understand how the present mistakes in banking policy arose. But I think that some day the ordinary man will vote for Free Banking simply because it offers him a more attractive way of life than State Socialism - he will not trouble to read the 1844 debates on the Bank Charter Act.

Malthusianism. I fully agree with all you write about the part that Free Banking could play in increasing world production. The point on which we differ is as to whether, with agricultural science at its present or possible future development, population is not likely shortly to press hard on food supplies. I have met so many people who have lived in India, and there has, of course, been an enormous amount written in English on India; but I have never met one who did not remark on the terrible poverty of the average Indian farmer, due, they all say, to the very small size of the farm out of which he tries to earn a living. This is the crux of the matter.

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I, grant that the moneylender fattens on the farmer; but I am not quite sure how much Free Banking would prevent this. India suffers from periodical droughts and pestilences. The risk arising from these must raise the rate of interest in any system. And so long as these miserably poor people continue to have such large families, their

farms must remain small. I am not aware that land monopoly is a serious evil in either India, China or Japan: I rather think that small ownership is the rule, the land being divided among the children at the father's death.

But I agree with your criticism of Kerr's tables of the comparative amount of meat eaten per head in the various countries, in so far as it applies to the East. I rather think, however, that France could not develop her African possessions for meat-producing without enormous expenditure in irrigation, and this is the chief reason why it is not done today. Free Banking would help; but the available capital is limited today, and the demands on capital are great. Neither you nor I know how long it will be before we are able to get Free Banking introduced. Would it not be better in the meantime to recommend these people to have smaller families?

And are you not unduly apprehensive about Russia's potential military strength? I think that a free people, trained in self-reliance (*), has enormous military advantages today over a slave population. You have surely not forgotten how Germany rolled up the vast Russian armies with one hand, whilst holding off the British and French with the other. Had it not been for American intervention, Germany would have subdued Russia.

(*) (J.Z.: "…free people trained in self-reliance"? Where are they? Does self-reliance need training or merely the right to be practised, i.e., freedom of action, rather than laws and regulations, licensing, controls, compulsion and public inspectors? - J.Z.)

Rueckstrom. It seems to me to place an unnecessary burden on the borrower to insist that he repay by notes from the same bank as made the loan. What is the reason for this condition on loans?

Freiburg notes. You reply that it will be necessary to organise several Freiburg issuers into a larger concern. This however, raises my former objection that it is harder to get many shops to unite to form a note-issuing business than for a local firm of repute to start issuing its own notes.

Bertrand Russell. I have often criticised him; but I should not accuse him of superficiality. I think he has a most subtle and acute mind. In 1940 I bought his "Inquiry into Meaning and Truth" as soon as it appeared. It deals with what we really mean when we use quite ordinary words such as dog or cat. But the argument is so subtle and condensed that at the end of every page had to go back and read it more carefully in order to grasp his meaning. Yet he is not metaphysical or slipshod. It is simply that every sentence is necessary for the building up of his argument, and unless one reads every sentence until one understands it thoroughly, one is lost. I was much occupied with banking discussion at the time, and after a few months I had to put the book down. At intervals of one or two years since I have taken it up again; but I see that I have still only read about a quarter of it. Yet I am interested in the subject.

Vegetarianism. I too became Vegetarian in my 19th year, and

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kept up the diet for 9 years. Then I gave it up on a doctor's advice because I was fast slipping into serious nervous trouble. My nerves became much better after I returned to meat, and I have never since suffered seriously from nerves. It was not that I did not get the right foods: I studied the question carefully. I think it is simply that meat is more digestible than the vegetarian substitutes and some people are so made that their stomachs cannot extract the nourishment from vegetarian foods, although chemically the nourishment is there. Contrary to the opinion of most meat-eaters, I should say that vegetarianism is more suitable for a peasant than for a sedentary head-worker. But I agree that a vegetarian diet is superior aesthetically, and I always liked the food.

Sincerely yours -signed: Henry Meulen

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My dear von Beckerath 29 July, 1949

Thank you for your letter of the 20^th. I am glad the parcel was welcome. Two of the three people in our household are now on diet, and we drink little tea and no coffee. Hence most of our ration is saved.

Three days ago I sent you "The New Generation" containing a long reply by Kerr to your letter. But I am afraid you will not get it for about a fortnight. Meanwhile he has sent me another copy. I enclose his reply. If you care to reply to him (about a column), and will send your reply to me, I will put it into shape and send it on to him. You might return the enclosed cutting to me.

It is fashionable here to put part of the blame for our trouble on the fall in US prices. But surely the less we pay for imports from US roughly balances the less we receive for our exports. The volume of goods exchanged should be about the same. If competition were really active here, we should be able to reduce the price of our exports by the amount saved on imports, and both parties would benefit by the fall in prices. But if US produces x goods for £1, whilst we expect £1 for (x - y) goods, either because we are lazier or less efficient than Americans, no amount of exchange control will stop the balance of trade turning against us. I am writing the "Economist" on the subject.

The same argument applies to devaluation. After devaluation, the extra money we must pay for imports should about balance the extra we receive for exports. The trouble lies rather in the circumstance that competition is generally not active enough to spread the results of such changes quickly through the whole community. This is an argument for Free Banking, not for exchange control.

I want to get this letter away - so I will reply to your interesting letter later.

You ask why more revenue cannot be got from the rich. On incomes of about £50,000 per an. the tax is at present 19s. 6d. in the £, and the rise is gradual from about incomes of L 2,000, which pays 9s. in the Pound. I think Sir Stafford argues that any further rise will simply destroy incentive.

Even if we paid for imports in pounds, it would not help us. The US exporter can use only dollars, and must change the pounds at some US bank. As the pound falls in value, he will ask more pounds, which will turn the exchanges against us as before. Before 1914 our exports, visible and invisible, roughly balanced our imports. This is the reason why there was no dollar scarcity then.

Sincerely yours - signed: Henry Meulen

____________________________________________________________________________________________

The Editor of 8 August 1949

"The Times".

Sir,

in the course of a letter received today, Ulrich von Beckerath, a Berlin economist writes me as follows:

"Thank you for the cutting, from "The Times" of July 22nd, reporting the debate on Germany in the British Parliament.

What was not emphasised enough in the debate is the deep change in German opinion resulting from the dismantling of factories. Everywhere one hears: 'Oh, the British, there are very good people among them - remember the early days of the occupation, when British soldiers protected us against the Russians. But these British are of no influence. The influential people are the British industrialists. They fear German competition; and therefore they dismantle German factories. If they could, they would exterminate us. Our only hope of protection now is the Americans.'

I report only what I hear in trains, buses and shops. I wrote you some time back that in my opinion the best course, both for Germany and your country, would have been for Germany to have been given Dominion

status within the British Commonwealth. Two years, even one year ago the idea would have been welcomed by very many Germans. Today the project is impossible, owing to the effect of dismantling."

I am, Sir, Faithfully yours

(Henry Meulen)

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London, 11 Aug. 1949

My dear von Beckerath

Thank you for your letters of l8-29 July.

Malthusianism. I think you make a good case for giving Free Banking priority over Malthusianism as a reform. I shall be interested to see what Kerr has to say to your reply which I have forwarded to him. The arguments you give in your letters to me are stronger than those in your reply to Kerr; but I expect you were being diplomatic to him. I enclose a cutting from Boyd-Orr which supports you (please tell me it is noble of me to supply you with arguments against myself). Also I read somewhere this week that the French govt. has made a start on a very big scheme to bore for wells in the Northern Sahara. A French scientist declares that there is a practically inexhaustible lake beneath the Sahara. Furthermore in a radio debate on population here last night Professor Roy Harrod, Editor of "The Economic Journal", made the excellent point that labour employed in factories here can produce five times the value of the same labour employed on the land. If therefore we reduce our population, we will reduce factory and land labour equally, and will actually be poorer.

I would, however, point out that when Kerr says that the agricultural productivity per worker is far greater in thinly than in densely populated countries, he means productivity per man not per hour. If a man owns only so much land that he can cultivate it all in a week, he will obviously not produce as much as a man with more land.

I agree that it looks as though Colin Clark were wrong about the relative average incomes of Ireland and Norway.

Restriction of wheat planting in USA. I rather think that the inability of US to sell is due to the rest of the world not having enough to sell to her. We cannot sell to her because our labour (employers and wage-earners) demand a higher price than the US; and the continent generally has not yet recovered from war devastation. Still - I cordially agree that Free Banking and Free Trade are the remedies.

You did not reply to my little note on devaluation in my letter of 29.7. I grant that if the pound falls, our exports to US will be cheaper; but it is imports from US that we want, and these will be dearer. We cannot export today because our prices are too high. The remedy is to produce cheaper, which entails a certain austerity here, which we are not yet ready to face. It will not help this difficulty to pay in pounds. You write that in the old days a fall in the exchange value of the pound would have been followed in a few hours by an increase of exports, and the normal state was restored. No - the normal state was not restored if by "normal state" you mean the same level of prosperity as was the case before the pound fell. Where previously we exchanged X goods against X goods, we can, after the fall, get only X-Y goods for X goods. The trouble was that under the gold standard, unless the fall

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was rapidly followed by more production here, we lost gold, which stopped our production. The proper remedy was to allow prices to rise here. This discourages consumption and encourages production; which is precisely what is needed. Devaluation is only an indication of an unhealthy state; it does not remedy that state; the remedy must be increased production. You write (19.7) that gold currency does not come back, whereas paper must return home and buy goods. But paper will not be acceptable abroad unless the foreigner can get the right goods at the right price here.

(J.Z.: People fall too easily into the traps set by their own words, misconceptions, ideas, systems and world views and do not easily work themselves out of them again. Sometimes they get enchained in them for the rest of their lives and continue to love and uphold their flawed views at every occasion and against all sound criticism. An unreasonable love is involved for the children of the own brain. - J.Z., 10.5.03.)

Rueckstrom. I agree that if the bank gets due repayment of its loans, confidence in it will grow; but my point is that no rules are needed to induce a banker to insist on due repayment: his interest impels him to this course. And rules can only hinder the flexibility and variety of his loans.

(J.Z.: The basic economic law for ticket money is that the tickets must regularly and rapidly stream back to the issuer, to be redeemed in his performances. His performances must likewise be regular and sufficient and exert a demand for the tickets. Without that demand, sufficient and regular, the tickets will depreciate. The reflux should be as fast and regular as the issue and the amount of the reflux determines how many tickets can be issued and kept at par. Trust is irrelevant here. Readiness to accept the tickets is all-important and knowledge of that readiness. The goods and service offer must be all the time kept in balance with the monetary circulation or, rather oscillation. Continuous issues over a short time period and each only for a short term period on the one hand must have the corresponding continuous reflux over that period for the same amounts. Only sufficient reflux makes sufficient issues possible and can keep them acceptable not only at the issuer but among other local people. The reflux must be seen as a powerful and necessary DEMAND for the issued exchange media, a demand that gives them their value. - M. has still not realised the differences between short-term ticket or turn-over or clearing money and the issue and redemption of medium and long-term securities. With the latter two there is some of his "trust" involved. Naturally, all loans ought to be repaid. But within what time period and with what regularity is also very important here, not merely that some time in the future they will be repaid. That is not good enough to exert a sufficient demand for a currency, even if, after a medium or long-term it will be honestly redeemed. The in-between and quite necessary reflux is missing to keep up the value of a currency. Probably his notions of the need for and possibility to give them some kind of gold redemption, even if only at reduced gold weight values, prevented him from seriously looking on the need for and usefulness of a regular and sufficient Rueckstrom. Asset-"currency" hasn't got enough reflux. No shopkeeper is obliged or especially or sufficiently interested to accept these small bonds, shares, mortgages and other securities, instead of soundly based currencies they issued themselves and are obliged to accept. - J.Z., 10.5.03.)

Education. You write (25.7) that since children like other things more than school, school attendance must be compulsory. This contradicts the entire philosophy of freedom. A clever woman artist friend of mine used to say that the aim of education should be to give a child a love of knowledge.

A child cannot really be taught anything: it can only teach itself. Now it is only the exceptional child that has any interest in book-learning before adolescence. The effect of forcing book-learning on the average child before adolescence is not only a waste of time and money, but it gives the child a deep, often unconscious, dislike of all getting of knowledge from books. My brother and I both liked music; but my father sent us when I was 10 and my

brother 12 to learn piano, and he insisted on our practising every day. We both hated it; and as soon as we started to go out to work, we both gave up the piano. My brother never took it up again; but when I was 19 I fell in with a set of musical young men, and then taught myself piano, which has been a pleasure to me ever since. If children like going to school today, it is not, I think for the learning, but because they have more games, and learning is made interesting by stories and object lessons. It is the stories they like - not the learning. Actually they do not learn as much as we did. When my daughter had passed her Matriculation examination at 16, she did not know as much geography, arithmetic or history as I knew at 11; but I hated school. (J.Z.: I am closer to M.'s than B.'s views on school education, also on conscription and postal services. - J.Z., 10.5.03.)

Beatrice Webb. I heard her speak once or twice. As a woman she did not attract me - too dry.

King-Hall. I send him a copy of each issue of "The Individualist"; but it seems to have no effect in interesting him in Free Banking. I will write him, and try to get to talk to him.

I send you herewith a cutting of a letter by Lord Vansittart. - I think his opinion is shared by the majority of people here. For myself I think him wrong. Both we and Germany would profit more by allowing Germany to get on her feet as soon as possible. She should then be admitted to UNO; and UNO should see to it that there is no revival of militarism either in Germany or any other member state.

Sincerely yours - signed: Henry Meulen

(J.Z.: In other words, this individualist anarchist had faith in international statism! - J.Z., 29.5.03.)

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31, Parkside Gardens, S. W. 19. 25th August 1949.

HM/ED

Ulrich von Beckerath Esq.

Dear von Beckerath,

Your letter of 4-13 Aug. Your ethic is very Christian: "Let Justice (with a capital J) prevail, though it kill me." You make me feel like an old man discussing with an impulsive youth. There will always be injustice.

Long after men are enjoying all the benefits of Free Banking some young men will grow hot about other injustices; but most men will live comparatively happily without a thought for von Beckerath who sacrificed so much that they might live more comfortably. For myself, I look on my altruist pleasure as one among other pleasures. I am ready to pay a certain price to indulge it, as I am ready to pay for my other pleasures; but I will not willingly ruin myself to indulge my love for music, or my love for my follow man. I will measure my brains against those of my fellowman, and devise a way of following my pleasure at the least cost to myself.

"An inglorious life" you will say - I agree; but many glories are too highly-priced for me. There are thousands of things I love in this world, as well as the welfare of my fellow man, or his good opinion of me.

I am not sure about your definition of notes as clearing certificates. The latter arise when two parties clear debts between then. If I owe B £10 and he owes me £10, it were obviously foolish for us both to pay over £ 10 to the other. But a bank note loan is different. The note gives the borrower the right to consume goods produced by the community before the community has received goods produced by the borrower. Hence the note does actually give the borrower the right to raise loans from the public.

(J.Z: Wrong on both points! Neither the community nor the shops are obliged to satisfy the owner of M.'s notes. If he granted his notes in long-term notes to others that is no business of theirs and of no concern or obligation for them, no more so than shares or mortgage letters would be that M. had issued as "notes", intended for circulation by him, based largely on "trust" towards him. He might be a nice guy and otherwise quite honest and sensible - but that would not give his notes a current value. And they would be quite right to distrust these notes and to reject them altogether, rather than merely discount them, unless they are interested in the fractional gold cover that he offers with them, immediately or some time in the future. - J.Z., 10.5.03.)

I agree that both the community and the borrower may have produced desirable goods; but neither is ready to give up his goods until he receives a ticket enabling him to buy what he wants. To sell his goods for such a note still involves trust on his part, trust that he will actually get the goods he wants, and in the interval between selling and buying he is making a loan to the buyer of his goods.

You write that if a promise to redeem notes on demand cannot in every case be fulfilled, the promise is a swindle. Are you not too severe? A company may insure me against fire, although we both know that if all the buildings insured in this company are burned down together, the company may be unable to pay me.

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But our differences over the meaning of W. R. Greene's words are not of immediate importance. I am content to leave you to your opinion that Mutual Banking is easier to establish than what I call Free Banking.

I do not agree; but if we are both prepared to allow free experiment, the most suitable type will emerge.

(Bold type chosen by J.Z.)

Cooperation. I do not know a single woman among my friends who deals in a Cooperative store. They all say that either the goods are slightly dearer or the quality not so good. Nevertheless, there are many small towns in England, especially in the Midlands, where Cooperative stores have practically monopolised the retail trade.

I think that the reason in that the dividends repaid to shoppers provide the women with pin-money over and above what their husbands allow them for housekeeping. (B. was mainly interested in productive coops, not consumer coops. - J.Z.)

Scarcity of dollars. I agree that there would be no scarcity if the exchanges were freed. The objection of the planners, however, to this course is that free exchanges would permit our importers to import here (un- - J.Z.)

necessary goods, to the exclusion of necessities. The rich here would buy luxuries and the poor would lack necessities. I think that a free price system would, by stimulating production, remedy this quicker and more discriminatingly than can State control.

Unemployment. If we want to buy from abroad, we must be able to export. But if US produces more cheaply than we, our producers must accept less. This means lower wages and/or lower profits. Our wage-earners

are however so strongly organised that they can threaten complete strikes. It is for this reason that I suggested that the only way out is to permit unemployment.

You write that the effective check to extravagant wages is the impossibility for employers to pay such wages. You are then, in effect saying the same as I. If the employer cannot pay the wages asked, he cannot employ. Therefore there will be unemployment. Our government proposes to remedy this unemployment by large scale State works. (Public works. J.Z.) I think this would make the evil worse. Of course the best remedy is Free Banking; but since this is unlikely to be adopted, it is, I think, better to allow wages to be reduced by unemployment than to tax people further to undertake public works. Does this lessen your indignation with me?

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Don't believe what the "Reader's Digest' may say about the miserable standards of life (living - J.Z.) of our wage-

earners. Our people are quite comfortable, even if not so comfortable as in USA. Just consider the amount our people spend annually on tobacco, alcohol and entertainment. The mount they spend on other luxuries (television, holidays, etc) is in proportion.

I sent a letter, of which I enclose a copy, both to the "Times" and the "Telegraph". Neither printed it. But the "Times" printed a letter from Gollancz covering practically the same ground. I commend to you this Atheist Jew who is an example to all Christians in spending so much time and energy in advocating forgiveness of your people who ill-treated his people so fiendishly.

(J.Z.: Those directly involved in these crimes should certainly not have been forgiven. But those who weren't shouldn't have been blamed in the first time! For instance, in my home-town, Berlin, about 5,000 Jews survived by being hidden by their friends, who shared their rations with them. - J.Z., 11.5.03.)

I live with my two sisters, 2 both older than I. The younger is dieting for cataract and rheumatism.

Sincerely yours - signed: Henry Meulen

enc.

P.S. I printed your note on the colour bar; but I do not altogether agree with it. I cannot forget the bad treatment of the Hereros in German South West Africa; nor the indignant protests of Germans against the "indignity" of the use of Senegalese as occupation troops - long before there were any complaints about raping etc. It is of course easy for a nation that has no colonies, and is not up against a large coloured population, to see the inhumanity of a colour bar. But the problem is not too easy. Are you quite reconciled to general intermarriage? (*) I suppose it is inevitable but I cannot say I like it.

I am sending this letter by ordinary post, since ordinary communication appears to have been restored. Let me know when you receive it.

(*) (What does an individualist mean by "general intermarriage"? Does he assume it to be compulsory or optional for individuals? What doesn't he like about the individual option for everybody, even if he himself would not have adopted it or would not have wished it for his daughter or granddaughter? - J.Z., 11.5.03.)

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London, 6 Sep. 1949

My dear von Beckerath,

Thank you for your letters dated 9-w2 Aug. Did you receive my letter in reply to yours of the 4-13 Aug.? I sent it by ordinary post, but I have not kept a record of the date when it was sent.

I am sending you under separate cover the last New Generation. You will see that Kerr has not printed your letter. If you care to send me an article embodying your chief objections to Malhusianism, I will print it in the Dec. Individualist (which goes to press on Nov. 6), unless Kerr prints your letter in the next New Generation. I will give you one page of the Individualist.

I note your suggestion that industry and agriculture should be turned into cooperative undertakings. We have many firms which practise profit-sharing. The results are varied. Some firms praise it; others have given it up. My main objection is that it is unfair to give the wage-earner a share of the profits unless he has subscribed to the firm as a shareholder, so that he shares the risk. And it will be more difficult to start new firms if the profits are lessened in this way. Furthermore, it is undiscriminating. Both good and bad workers share in the benefit. Altogether I would much prefer a system of private ownership under Free Banking.

(J.Z.: There are great differences between various forms of productive cooperatives and the one side and various forms of bonus or profit sharing systems on the other. These coops are also private and propertarian enterprises, but with many proprietors, all of them working in the business. Then there are the various organisation development schemes or work coops or autonomous work groups or gang work systems and various leasing systems for productive capital, many of them within the best meaning of capitalism and free enterprise, propertarianism and competition. It is absurd to equate all of them only with various profit sharing systems. - J.Z., 11.5.03.)

You may say that there is no hope of Free Banking before a Communist Revolution makes slaves of us all. This may be. But there are many societies here who are propagating cooperative industry. I prefer to spend my time urging Free Banking. Who knows? - it may catch on from one year to the next.

You quote from your friend Prof. Vierkandt that the extermination of life by the atomic comb may be an act of nature by which it corrects the blunder it committed by creating man.

Why do you suppose that "Nature" (say rather the universe) thinks at all? Is it conscious of the presence of man? Does it think the creation of man a blunder?

On the contrary I think man a most remarkably developed animal. I criticise some of his failings; but on the whole I like him well, and am not at all disposed to call his creation a blunder.

Sincerely yours - signed: Henry Meulen

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London, 12 Sep. 1949

My dear von Beckerath,

It was kind of you to send me the note about Cassia with your letters of 28. Aug. - 7 Sep. I have passed it on to my sister. She is remarkably experimental, and has tried a great number of cures, orthodox and unorthodox. At present she is under a German Jewish doctor in Brighton who has treated her with radiant heat, diet and medicines. She is fairly optimistic about him.

Jews. Yes - I can well imagine that that Jews are not well disposed towards the Germans. It comes back to the doctrine of collective responsibility, and I am not satisfied with your refutal (refutation - J.Z.) of that doctrine. After all, Germans well knew that Hitler was bitterly anti-Semite long before he first stood for the Reichstag.

(J.Z.: Was he actually ever elected into it as a representative? - J.Z., 11.5.03.)

My Black Forest friends showed me a violently anti-Semite pamphlet by him when I was there in 1931. Yet he was elected. After he was a elected he violently attacked the Jews (J.Z.: By proxy only, through his storm-troopers. He himself did not expose himself to such risks! - J.Z., 11.4.03.), and yet Germans supported him in increasing numbers.

(J.Z.: We do not have reliable voting records after he was installed in power. Even those in democracies like the US are often suspect. Public beatings, looting of Jewish shops, secret mass executions, concentration camps and mass extermination camps were not on his platform presented to voters. He engaged in such actions only after he was settled in power and he tried to keep these actions secret, so that even the Jews in the Warsaw Ghetto took a while to become convinced about the fate of those deported from there to the extermination camps. - J.Z., 11.5.03.).

Had enough Germans been outraged by his anti-Semitism they could have prevented his coming to power. History is full of records of great movements that sprung from small beginnings.

(J.Z.: Already during the last years of the Weimar republic there was no longer full freedom of speech, assembly, association and press. Both were largely suppressed by gangs of brown and red totalitarians. As soon as he was granted power by an all too flawed representative and presidential power system, these freedoms vanished completely. - J.Z., 11.5.03.)

"Consider the postage stamp, my son", says the Yankee character Josh Billings, "its virtue consists in sticking to one thing until it gets there."

A few thousand stood up for the Jews. If they had started earlier, and had emulated the postage stamp, they might have saved the Jews from the horrors of the camps.

(J.Z.: The first 300 000 inmates of the concentration camps were not Jews but other opponents of the Nazis. Those who survived their treatment there were mostly cowed for years afterwards. M. was unaware of the daily practice of totalitarian terror for every German who did not want to toe the Nazi line. - J.Z., 11.5.03.)

Anti-Semitism in any violent form is sternly repressed here. The Germans acquiesced in it, and I think they must all share the blame.

(J.Z.: Thus writes a radical individualist! "The" Germans never existed. Their 80 million were and still are all more or less flawed and responsible or irresponsible individuals. Obviously, M. did not hold B. individually responsible for the atrocities of the Nazis. - J.Z., 11. 5. 03.)

Dismantling. The next time that any German complains to you about dismantling, tell him that everybody in England, myself included, is quite certain that what punishment is being imposed on Germany for the terrific suffering that Hitler brought on Europe is a form of Christian brotherly love compared with what Hitler would have done to us, with the full approval, I am sure, of the majority of Germans, had he won the war.

(J.Z.: Are such matters ever submitted to a referendum, even in the best of democracies? - J.Z., 11.5.03.)

If the majority of our people had their way, Germany's punishment would be much harsher. But we happen to be guided by statesmen wiser than Hitler.

(J.Z.: Where they? They approved of bombing civilians, thus murdering about 3 1/2 million non-combatants, babies, women, sick and old people included - and that strengthened the will of Hitler's soldiers to fight for him, because they came to fear the extermination of all Germans, as envisioned by the Morgenthau Plan.

The Allies did not destroy the furnaces, ball bearing plants etc. They did not engage in tyrannicide promotion. They did not support a military insurrection. They did not recognise a German government in exile or recognised and supported the German resistance and for all too long they tolerated Hitler building up his terror and military machine. They did not make ethical and rational separate peace offers to deserters from the German armed forces. Against all historical experiences with it, they insisted upon unconditional surrender and did not liberate those German POW's that wanted to be liberated and deserved to be. Thereby the strengthened Hitler's position, prolonged the war and got also on their side hundred-thousands of their soldiers quite unnecessarily killed. After the war they handed hundred-thousands of opponents of Stalin over to his "tender mercies". They did not act against Hitler in time, when they could and should have and only relatively few lives would have been lost then, on both sides, for their victory. In some respects they were almost as foolish, ignorant, prejudiced and brutal as Hitler. After the war several books appeared which described how a regime like Hitler's could also have come to power in England. - J.Z., 11.5.03.)

As you know, I personally think that it was the European, or rather world slump, caused by the return to the gold standard, which caused Germans to turn in despair to Hitler.

(J.Z.: There was no return to "the gold standard", in M.'s meaning, after the German inflation of 1914-1923. Monetary despotism with its Central Banking remained. Only for a short time was the "Rentenmark" not legal tender or a fiat currency. The Reichsmark was, since 1909, the DM is still. - J.Z., 11.5.03.)

Nevertheless, I cannot easily forgive them for having turned to such a monster.

(J.Z.: The only ones who tried to execute him were Germans! The leader of the Allies rather sent their conscript armies against Hitler's conscript armies, for mutual bloodbaths. Great statesmen, indeed! - And then they built nuclear bombs: small, scientific, cheap mass extermination camp packages, and used them twice - and prepared ten-thousands more of them, obviously, not against despotic governments but against their victims. And for their tyrannicide attempt against Saddam Hussein, in Iraq, they sent, recently, an army of 200,000, hundreds of rockets and thousands of bombs - and still haven't managed to kill the bastard. They killed more Iraq civilians, conscripts and own soldiers, in "friendly fire" incidents and accidents than leaders of the Iraq dictatorships! Experts, indeed! - J.Z., 11.5.03.)

And I cannot forgive them at all (I am not in the least Christian!) for having allowed the bestial cruelties of the concentration camps.

(J.Z.: Did these depend upon permissions from all ordinary Germans? Where e.g. the brutalities in concentration camps of the Soviets of Red China or of the English government during the Boer War made dependent upon permission being granted by a referendum? Where the starvation blockades of whole countries submitted to referendum? In Iraq, before the second Golf War, they are supposed to have led to the death of 500,000 to 1 million innocent people. The Iraq government and its supporters remained well enough supplied. - J.Z., 11.5.03.)

Of course the majority of Germans are resentful. They would be just as resentful if we forgave them entirely. They would find much to hate in the knowledge that we are now more ready to lick our own wounds than to help them to lick theirs.

(Did he really imagine that he still spoke here as an individualist? - J.Z., 11.5.03.)

And, more fundamentally, they would be resentful just because they lost the war.

(J.Z.: Most of the decent and more enlightened Germans did not think that "they" lost the war but that the Nazis lost it while they themselves were somewhat liberated and personally saved. - J.Z., 11.5.03.)

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Most people are like that - even that very civilised nation, the French.

(Did their rule and wars in North Africa and in Vietnam show them as so much more civilised? Were they civilised towards French women who had affairs with German soldiers? Are their nuclear bombs more civilised than those of others? Was their fighting in WW I & II and their treatment of prisoners of war very civilised? - J.Z., 11.5.03.)

After 1870 what rankled in France was not so much the loss of Alsace-Lorraine, but the fact that she was beaten so quickly and decisively by Germany. This it was which gave rise to the "Revanche" feeling. The idea of revanche was gradually decaying as the generation of people who were alive in 1870 died out. It was a major calamity for Europe that this feeling had not disappeared before 1914. The majority of people resent punishment, however just.

But this does not prove punishment to be unwise; it merely teaches that the power that punishes must be strong enough to protect itself against the resentment of the punished. It is an argument for a strong League of Nations - not for Christian forgiveness.

(J.Z.: Rather, one for the panarchistic liberation of everyone, so that no one, who was not a criminal with victims, will have cause to resent any punishment. Once they experience exterritorial autonomy for the governments and societies of their dreams - they will rather be grateful and joyful than resentful. But M. could not think himself through to that liberty, either. See his last letter. - J.Z., 11.5.03.)

Which brings me to your Christian ethic. However Kant may have interpreted the Roman "Fiat Justitia" (and I think that our ordinary translation of that saying is truer than Kant's), the essence of the Christian doctrine was that Christians should follow Christ's teaching, and leave the result to God. This of course was a logical result of their belief that the world was coming to an end within their own lifetime. What did it matter if carrying out Christ's teaching (turn the other cheek, resist not evil, give all thou hast to the poor, etc.) caused misery and suffering in this world - it would all be redressed very shortly when Christ returned to judge this wicked world. Now you are ready to buy your altruist pleasure in attacking your intellectual enemies, not only at a very high price, but if needs be, at the cost of life itself. Admitted you do not leave the result to God; but I think that the idea of doing "Right", no matter what the results, is the basis of the Christian doctrine.

(Offhand, I cannot even think of a single Christian, now or in the past, who had comprehensive notions of what individual rights are and who was in favour of all of them. Can you? - J.Z., 11.5.03.)

And it is a bad doctrine. If everybody were strong enough to do what he thought (J.Z.: As if the "thinking" of the ignorant, foolish and prejudiced were here or equal value and consideration as that of the enlightened! - The old "chaos" objection to anarchism, in terms of this "individualist anarchist"! - J.Z., 11. 5. 03.) was right, even though it led to his death, living in society would be impossible, since society has no stronger deterrent to action that it thinks wrong than death. It seems also illogical to me to destroy the source of all my pleasures because I cannot satisfy one of them. "It is putting a very high value on one's opinions" said a Frenchman, "to be ready to die for them."

(J.Z.: Individual human rights are merely a matter of opinion - in the view of this individualist anarchist! - J.Z., 11.50.03.)

Of course if you deny that altruism is a pleasure like other pleasures, the bottom falls out of my argument. But you will find it hard to convince me. (J.Z.: That it was, indeed, on almost every significant point, no matter how wrong M. was on it. - J.Z., 11.5.03.)

Cooperation. I am ready to believe that the wages of managers in Russian cooperatives is (are - J.Z.) greater than that of many employers in capitalism. Russia is quite able to indulge in an uneconomic spending of public money, and watch unconcernedly the consequent wretched standard of living among ordinary people.

I do not believe, however, that any business that is run by a committee can, on the average, be as efficiently run, or with as much initiative and enterprise as that run by a private employer who makes his own decisions, and personally profits or loses according to the wisdom of those decisions. And I am surprised to read that you think that Free Banking should not be used by employers to exploit workers. Surely the great argument for Free

Banking is that it is the best way possible to ensure that unduly high profits by any employers will be reduced to normal by

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competition; and that this competition, by increasing the demand for labour, will guard against unduly low wages.

In England we now have full employment, and the danger is rather that the wage demands of organised workers will make it impossible for thousands of employers to remain in business. The workers' only hope (under our present ridiculous banking laws) for a bigger income is, not to become employers themselves, but to demand more and more wages.

The colour bar. Yes - I too would not prohibit intermarriage, or any other discrimination, except the flooding of other countries by the surplus population of countries that do not check their own population. But I cannot say that the idea of marriage between a negro and a white pleases me. I think that, apart from a few exceptional men, the average negro lacks concentration, and the capacity for continued effort. He also seems coarser-grained. This may be gradually eliminated; but it may be inborn.

By the way, do Germans pronounce the V in the Latin word "Veni" like the English F or the English V?

The Times recently published a useful set of economic definitions. I enclose it. You might return it to me at

your convenience. It will not be so useful to you as to me, since Germans probably have their own definitions of these words.

Sincerely yours - signed: Henry Meulen

P.S. You put too much gum on your envelopes. In every letter that you send me the top sheet is stuck to the envelope, and tears when I extract the letter. Sometimes this sheet is unreadable.

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27 Sept. 1949

My dear von Beckerath,

Thank you for your letters of 9-17 Sep. The inner envelope is quite effective.

I am glad you disapprove of A. K. Chesterton's article in "Truth". I have met him often: a sardonic, rather

melodramatic man - picturesque, but hardly a deep thinker. I think he and "Truth" are doing a serious disservice in

condemning all attempts to create some sort of a UNO. I have often tried, without success, to induce "Truth" to state an alternative. Their best proposal is an organisation of the strength of the Brit. Empire and the Dominions to stand against USA and USSR. But this involves ruinous competition in armaments, and leads to race suicide. On the other hand, both self-interest and altruism are served by some sort of UNO, and there is hope that way.

Yes - I received all your letters. It is, as ever, a great pleasure to read them.

Mutual Banking. Since you are so earnest on the point I have re-modelled the suggestion from your letter, and send it herewith. Amend it as you will, and return it to me, then I will try and find room for it in the December issue. It must, of course be short. Actually we have no unemployed, except in the lowest classes of labourers. On the contrary there is labour shortage.

The Observer article. A man must have the right to refuse to buy an article. You do not suggest that when he does so refuse, he shall be allowed to take the article for nothing. Why propose that a man who refuses to work for another shall be empowered to take over that other's business?

Nature's "blunders". I do not say that man is perfect. But I love many people in spite of their imperfections. Moreover, the courage of the individual ant or bee needs to be tempered by reflection. This summer has been so hot in London that my hive of bees has not been able to gather enough honey to last it through the winter. Yet, when I open the hive to feed the bees with sugar, the first bee emerging will sting me and kill herself, unless I wear veil and gloves.

English payments in sterling to US. I have written you before about this. I cannot see that it is important. If we want to import more from US than we can balance in exports, either US must stop exporting altogether, or she must accept sterling at a discount. In either case trade with her must be reduced.

Braddock. Yes - he is a fool - and yet he was elected M.P.

(J.Z.: Aren't they all? Only fools would vote fools - or clever men - into power. - J.Z., 29.5.03.)

Cataract. My sister says she regularly bathes her eyes with hot and cold water to stimulate them. She closes her eyes to bathe them; and she asks if you opened your eyes when you bathed them with cold water.

Collective responsibility. Yes - I cannot answer your questions. War is a mass hysteria, and I daresay that men will never settle these points of detail. (J.Z.: If it were a "mass hysteria", then why do men have to be forced into it with conscription and forced to contribute by taxation, forced currency and forced loans, compulsory delivery quotas and priced controls and forced labour? - J.Z., 12.5.03.)

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But if a community of ten men is faced with attack by another ten men, it is hardly likely to welcome two of its members who say that they do not want to fight. (Are they voluntary members? - J.Z., 12.5.03.) There is of course a lot to be said in favour of a volunteer as against a conscripted army; but, as Spencer demonstrated so impressively, war is the negation of individual liberty. You raise a difficult point in the case of the support of Hitler by the army. Nevertheless, we too have an army; but today it would be quite impossible (whatever it may be in the future) for one man to be allowed unquestioned power to order our army to do as he wishes. But Germans, by almost a majority, voluntarily gave Hitler that power.

(J.Z.: Even in democracies that power is presumed to be necessary and justified and not subjected to an election or referendum and hardly seriously questioned by anyone. - J.Z., 12.5.03.)

They were misled by his promises and his arguments against democracy, and I think his opponents were too busy

fighting amongst themselves to unite against him. They are to blame for this.

(J.Z.: That is one of the many arguments for panarchism. Panarchism gives the opponents of dictatorships and tyrannies the opportunity and incentive to fight together against the authoritarians, while remaining tolerant towards each other, in spite of their differences, because they are no longer afraid of each other. - J.Z., 12.5.03.

Ethics. For myself I am sure that no such man as the Christ of the New Testament ever existed. There is no saying of Christ that cannot be paralleled from earlier mythology. And most mythology is a dramatisation of the rising and setting of the sun moon and stars, and the procession of the seasons of the year. The Christian ethic is childish. and was adopted by an obscure tribe who believed that it did not matter what happened to them today so long as they carried out the wishes of a Messiah who, they believed, would return from Heaven within their own life-time to reward them for their fidelity. The Chinese and Islamic ethical systems are superior. I regard it as the crowning misfortune for the race that Constantine was led by his wife to make the doctrines of these ignorant Christians into the State church. If only he had adopted the ethics of Epicurus, how much misery we might have been spared!

Spencer. I have never agreed with Spencer's insistence on the right to ignore the State - that is, until the danger of war has disappeared. (J.Z.: In other words: He remained unaware how one could strengthen the own military might and weaken that of a wrongful enemy regime by recognising and practising this right and assuring the victims on the other side that its realisation would be among one's primary war and peace aims. He remained a conventional and superficial thinker on many subjects. - J.Z., 12.5.03.)

Cooperation. When I was in USSR in 1931, whilst a man was allowed to work for himself, he was not allowed to employ others. Has this been changed since?

The gold standard. Before 1914, when we were on a gold standard, with a circulation of sovereigns, international differences in the value of gold were so quickly levelled by the great Lombard Street bullion dealers and the action of the Bank Rate, that it was rarely profitable for ordinary people to collect sovereigns.

My health has suffered another setback. After 9 months treatment by the herbalist doctor, another ulcer formed and burst in my stomach last July. I then lost faith in the herbal cure. One of my friends then recommended me a doctor who had cured him and five of his friends. This doctor's theory is that as the stomach and other organs receive their nerve supply from the optic thalamus, weak stomachs may be due to weakness of the thalamus. He prepares tablets of sheep's thalamus and feeds it to his patients, in much the same way a thyroid gland is fed to thyroid patients. I started with him on Aug. 2 last; but he promises no improvement before about three months.

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I have been in bed mostly for a month, and am just beginning to improve a little. We shall see what happens. I have been so weak after this last loss of blood that it has been a pleasure to lie in bed. I read and write much, and write melodies to songs. I hope the next "Individualist" will show the benefit of my increased leisure. I do not want to bore you with my complaints; but I thought you might be interested in the medical theory. This doctor has been practising this treatment for about three years, and has not yet publishes it. He tells me he has had less than 5 % of failures. He does a lot of lecturing on the subject in England.

Sincerely yours - signed: Henry Meulen

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4^th Oct. 49

My dear von Beckerath

your letter of 30/9 received today. I have used a Kugelschreiber (ball point pen - J.Z.) (how practical the Germans are in their descriptions! We call these pens "Biro" pens by the name of the manufacturing firm - which conveys nothing) since I was in hospital last year. I hate the damned things - the absence of thicker down strokes takes half the character from the writing. But they are certainly convenient in bed. I did not know they were filled with powder.

Stupid of me to have written on the "Telegraph" cutting that I had written a note on it for the "Individualist". I should have said "to the Telegraph".

Your criticism, however, is precisely what Johnstone fears. We do not want to export to US except to get US goods. When our tourists take our currency abroad, it is equivalent to a gift of our goods to the foreigner.

(J.Z.: If the tourists get nothing out of their tours then why do they go on them and spend in and for them??? - J.Z., 29.5.03.)

Yes - a list of gold prices of the items in the ordinary cost of living would be useful. Our papers sometimes publish the pound prices of the cost of living items. I will send you the next one I see.

Your Berlin comment on the Russian atom bomb explosion is amusing and shrewd. I have seen it said that the sound may have been due to an enormous rock-blasting operation in Siberia; but the official view is that Russia has the atom bomb.

This letter is written with a Biro-pen.

I will send you the "Times" report of the Parliamentary debate on devaluation. And I enclose herewith a copy of my letter on Johnstone to the "Telegraph".

Kind regards - signed: Henry Meulen

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Wednesday 5^th

I find I have destroyed my copy of my reply to Johnstone in the Telegraph.

Your flattery of my writing pleases, without convincing me. I like reading; and the fact that my Individualist comments are nearly all critical is just due to the fact that criticism is more interesting to the average reader. A shrewd old Scotsman who used to attend a small debating circle that we held, used to say

"Never mind how many compliments a man pays you in his opening remarks; it is what he says after the world 'but' that matters."

I enclose a copy of the Scots Independent, to which I subscribe

(1) because it wants a decentralisation of government

(2) because the editor Gibson is a strong supporter of Free Banking.

He never mentions the subject, alas, in his paper - presumably because the Scots Nationalist movement is still small and he is afraid of destroying unity. On the first page he poses a question which you may care to answer. It is a nice point, and I am turning it over slowly in my mind. You might return the paper.

I have made the amendment you ask in the Mutual Banking note.

To return to your pleasant flattery. It reminds me of the famous correspondence between Nietzsche and Strindberg - in which they wrote to each other as the only people in Europe worth talking to.

I think we are in the same boat in economics - and with better justification than Strindberg. The only really useful contribution that Nietzsche made to philosophy was, I think, his criticism of Christianity as a slave ethic - the exalting of submission on the part of a people that saw no possibility of revolt. The whole doctrine of the Superman is, I think, just nonsense.

Signed: HM

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Sunday 9^th Oct.

My dear von Beckerath

For many years an amusing saying has been current here:

"He bore other people's troubles with Christian fortitude".

And yet, although I read almost daily of unemployment in Western Berlin, I do not ask how your financial affairs are going on. Perhaps it is a relic of my radical twenties when I resented the enquiry into a man's financial position rather than into his thoughts. My Jewish friends are shameless in finding out after a few minute's talk what a man's financial position is. They justify their inquisitiveness by saying how important the subject is (*). I suppose it is - but not so important as his thoughts. Yet, when one has a live interest in a man's thought, and an emotional desire for its continuance, one cannot but be interested in how he maintains it.

(*) (J.Z.: I suppose that such customary talk must have provided many business and job opportunities for them, which was very important for them while they were systematically excluded from many jobs and business opportunities among e.g. "Christians", who were supposed to love even their enemies, and thus, although only a small minority, they had often to make their own, among themselves. Anyhow, I, too, would have preferred such talks to talks about weather, health, affairs at court, sports, gambling etc. - J. Z., 29.5.03.)

I presume you must have some private income - you could not otherwise remain unemployed for so long. I hope so.

I offer you in exchange the information that, since my retirement, I live on the results of invested savings, invested partly in house property - which is today a liability - not an asset, and partly it stocks and shares, which are more remunerative.

My Dr. Gerson has been trying his stomach treatment for only three years, which he thinks, and I agree, too short a period

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to determine the no. of cases of complete cure, without recurrences. He tells me, however, that less than 5 % of stomach ulcer cases fail to respond to his treatment. And he travels a lot in England, lecturing on his subject in hospitals and universities.

Christianity. Years ago the Rt. Hon. J. M. Robertson, M.P. (Parliamentary Sec. to the Board of Trade) whom I knew, and respected as a man with a really massive intellect, wrote a book called "Pagan Christs", in which he traced the sources in pre-Christian mythology of the sayings attributed to Christ. I have a copy, and will lend it to you, if you have the time and inclination to read it. For myself I do not much care in these days. But it is a constant regret to me that people who reject the authority of the bible, still esteem the Christian ethic, which I find quite childish, and not for a moment to be compared with the careful work of Spencer on the subject.

Unemployment. There is no unemployment here, in spite of the low standard of living, on account of the tremendous need to export in order to get food, principally wheat. On account of this full employment, our workers do not work so hard, especially in coal mining, which again reduces our standard of living. At the same time there is a great demand for consumer goods which cannot be satisfied because so much of our product is exported.

Collective responsibility.

I am much impressed by Tucker's arguments for non-invasive association. But if one country adopts it before others, that country will certainly be overwhelmed. (Were Switzerland and Sweden? - J.Z., 12.5.03.)

I spend my leisure today in Free Banking propaganda. If I were to go round canvassing for votes for Anti-Socialists in Parliament I might more strongly

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ensure that we do not get a totalitarian regime it the next election. Since I do not do this, I must accept responsibility for my neglect just as surely as I shall suffer if I do not repair my roof.

Similarly it was not enough for Germans to vote against Hitler: they should have seen to it that he was not elected. Since they did not, they are to blame.

(J.Z.: Had M. forgotten what Spencer wrote in the chapter mentioned below about voting and consent? - J.Z., 29.5.03.)

"Social Statics" and the right to ignore the State.

If in 1939 German soldiers had refused in any number to obey Hitler's order to march, I should have reached down from my shelf my copy of Spencer with tears in my eyes. On the contrary, all we saw were photographs of enormous Nazi meetings with banners and the sound of deep-throated "Sieg Heil's" over the wireless.

(J.Z.: Did M. know nothing about stage management, propaganda and censorship and the broadcasting monopoly in Germany? Was he by then still unaware that the Hitler regime had become a totalitarian and terrorist regime? - J.Z., 12.5.03.)

Bees. In a good honey year they store up it the hive against a bad year; but beekeepers rob them of this honey, and feed them with the cheaper sugar in the bad year. I believe this is responsible for a lot of disease among bees, and I invariably leave mine enough honey to sustain them through the winter.

There are to examples of bees eating each other; except that the worker females kill off the male drones every season; also that the workers will kill robber bees from other hives that come to steal their honey.

The Observer article on strikes. Excellent - It was suggested here some time back that doctors strike if a general strike were called; but the doctors considered themselves morally bound to continue their services.

English payments in US sterling.

You write that if US are not content to accept our discounted sterling, they can keep their cotton. But, my dear man, we cannot afford to do without US wheat - we can get it from nowhere else. We have not enough goods to offer them to buy all that we would like from US.

I sent you yesterday the "Times" reports of our debate on devaluation. There is a lot of wearisome repition (repetition - J.Z.); but you will get a tolerable idea of our situation.

Sincerely yours, signed: Henry Meulen

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My dear von Beckerath, 18 October, 1949

Thank you for your letter of the 13th. You do not reply to Gibson's question; but in view of your analysis of the policy of the paper, I have deemed it good to send on your letter to him, with a covering letter from me, a copy of which I also enclose.

"The New Generation" has just arrived. Kerr has printed your letter without comment; but the policy of the paper appears to have stiffened, and Drysdale goes bald-headed for the notion that better distribution can help the problem. Hence you may care to make a further reply. If you care to send your reply to me, I will lick it into shape again.

Sincerely yours - signed: Henry Meulen

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ED/HM

18 October, 1949

T. H. Gibson, Esq.

Dear Gibson,

In the Oct. number of the "Scots Independent" you pose the question: "Who pays the subsidy on devaluation for the exporter?" The reply is, I think, the importer, who will pass on the excess price to the consumer if he can.

I sent the number to von Beckerath in Berlin, who has a keen head for these problems, and drew his attention to your question. He now replies without mentinioning your question; but he makes a critical analysis of your policy; and I cannot do better than forward his letter to you.

I had written him that although you were a generous supporter of this Association, and a keen upholder of Free Banking you never mentioned FB in "The Independent", and I presumed it was out of a desire not to imperil the unity of your movement.

Von Beckerath's reply is extremely a propos. Would you care to print an article from me on the Scottish heritage of Free Banking?, and I could advertise my book in the same manner.

Guy Aldred, of "The Word", a Left paper of 164 George Street, Glasgow C. 1, is printing shortly a pretty article of mine on "Individualist Anarchism", a long-delayed tribute to Benjamin R. Tucker, of Boston, USA.

Sincerely yours - signed: Henry Meulen

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London, 20 October, 1949

Dear von Beckerath.

Thank you for your letters of the 14th and 15^th.

But the whole objection to tourists taking currency abroad is that we do not get goods in return for their purchases. The tourists buy what they please abroad; but we do not get the food and raw material that we want.

(J.Z.: Isn't the tourist an individual with personal rights, too, supposed to get what he wants and getting it, too? Perhaps his excess newspaper reading induced M. to adopt the attitude of the planner and controller? - J.Z., 29.5.03.)

Christianity. There must always be the difficulty of defining what exactly constitutes Christianity. I think the qualities that separate it from most of the ethical systems of the past is the doctrine contained in the Sermon on the Mount. The doctrine of non-resistance to evil, and the exaltation of meekness. These doctrines certainly were not held by Cromwell, and the other Christians you mention, and in so far as they rejected them, they certainly would not be considered Christians by modern upholders of the cult. If Christ was the author of the Sermon on the Mount, he was no revolutionary.

I am glad you do not admire Rilke. His mysticism has always repelled me.

That a buyer should pay with the money of the seller. You do not deal with my repeated argument that the central problem for us the (is- J.Z.) that of trade deficits. We are not exporting enough to pay for essential imports. Whether Americans accept payment in our or their currency will not affect this problem.

I am much better. I have accepted an invitation to share a caravan on the salt marshes of Essex for a fortnight beginning next Saturday.

Sincerely yours - signed: Henry Meulen

(Marginal note, in handwriting follows. - J.Z.)

I am sending you an old copy of Liberty in which you will find an article by F. D. T. (Tandy) the author of "Voluntary Socialism" in which he condemns the cooperative element in Mutual Banking, and suggests that such banks will probably be better run by individuals. You might return the number. I have Tandy's small book.

(I microfiched it in PEACE PLANS 968. - J.Z.)

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31 Parkside Gardens, London, SW 19 26 Oct. 49

Dear von Beckerath

Thank you for your letter of 17^th (This could also be 14^th. This letter was hand-written! - J.Z.)

The plain fact is that the coal output per man hour has decreased since nationalisation, in spite of increased mechanization of the mines. It is generally agreed that this is due to

(1) increased absenteeism: there is so great a need of miners that the men do not fear dismissal;

(2) lower output per man hour; since the men do not fear dismissal, they do not work so hard.

Wheat. The trouble is that no country outside USA can supply it in the quantities we need, and it would take a good period of free banking to develop other sources.

I wrote to Gibson suggestion that the bonus accruing to our exporters to US after devaluation would have to be paid by either our importers of the higher priced American goods, or by our consumers, if the importers would pass the increase on.

He takes up this point in his reply. But I rejoined on the 23^rd that no bonus would arise unless the exporters actually sold their goods, and our importers actually bought goods in return.

This argument seems to me water-tight. You will see that he deals with the Single Tax.

You might return his letter to me.

Sincerely yours - signed: Henry Meulen

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7 November, 1949

Dear von Beckerath,

Thank you for your letters of 23, 28. & 29 Oct. I am glad you agree with my reply to Gibson. He has a good head: a was formerly Secretary to the gigantic Steel Federation, and he resigned because he did not approve of its monopolist tendencies. I cannot think why the problem of who pays the subsidy to exporters under devaluation worries him. He is printing an article of mine on "The Scottish heritage of Free Banking". The Scottish Nationalist movement is growing fast. If they would put Free Banking among their aims, it would be useful.

Christianity. I think I cannot do better than send you J. M. Robertson's book. Kindly return it at your convenience: I value it. But there is no hurry. I really think that the case against the historical existence of Christ - at all events the Christ described in the Gospels - is strong.

I am sending you also a copy of "The Word", an Anarchist Communist paper, to which, queerly enough, the Duke of Bedford contributes monthly notes on Douglas. His point of contact with the paper is his anti-war propaganda. He is really a remarkable Duke. He owns about six castles, and is generally dressed like an ordinary mechanic. His wife divorced him some time back, on the grounds that he did not give her the life she had a right to expect. He was always reading, and objected to her expenditure on ordinary pleasures.

"The Word" prints an article of mine on "Individualist Anarchism". I expect Bedford will not like it.

I am also sending you a copy of "The Economic Digest", which contains several articles supporting your opinions on the food-producing capacities of various countries, and one article on profit-sharing in India which supports my criticism of profit-sharing.

F. D. Tandy. If your contention were true that in a cooperative the employee feels that he is his own employer, much of the case against State Socialism would fall to the ground. The Socialists have always argued that under Socialism the workers would give of their best because they would know that they are working for themselves. Of recent years our Coop. Wholesale Society has had serious trouble with its employees, who evidently look upon their employers just as does the employee of an outside firm.

Glad you liked "Liberty". I have about six more copies if you would like to see them. Yes - Tucker had a sharp pen, but he had a genial personality, and was much loved.

Sincerely yours - signed: Henry Meulen

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10 Nov. 1949

Dear von Beckerath,

Thank you for your letter of the 4th Nov. I have looked up my letter of the 18^th Oct. to which you refer, and I find it is the one in which I suggested that you reply to Drysdale's article. Do I take it that your letter is that reply? I am afraid it is much too long: they will not print so long a letter in criticism of their views.

I remember that years ago a Socialist paper to whom I sent an outline of the Free Banking position replied that their paper existed to propagate Socialism - not to spread opposition views. The doctrine is sound - with the

qualification that a paper can spread its views among sensible people only if they think that it is giving a fair show to the opposition. One hears a lot of criticism of American journalism; but a friend tells me that no American paper could maintain its circulation unless whenever it printed an article advocating one policy, it also printed an article in criticism from the best exponent of the opposite view. Most European journalism is far below this standard. Would you like me to return your letter, or will you write me another shorter one?

Gibson writes me that he is much interested in the letter from you that I sent on to him. I will send you the copy of "The Scots Independent" in which he prints my article on "The Scottish heritage of Free Banking".

Aldred has sent me on a batch of pamphlets by him on different aspects of the revolutionary movement. I will send them on to you. You are probably more interested in these people than I. I have much respect for the Bakunins,

the Herzens and the Kropotkins; but they were all Socialists, and I think their activities did much to land us in our present mess. What a lot of these follows were Jews! A remarkable race. Whatever they do, they seem to do well. Yet - when I was in business I had considerable competition from Jews, and never feared it. I think they succeeded

rather by hard work than any special ability. I found many of them made just as big mistakes as anybody else. I remember a Jewish friend of mine said many years ago that Anti-Semitism was mainly based on jealousy. The ordinary Jew started with nothing, and began to push a barrow round the streets. But he saved his money, and presently opened a shop. Then he got other shops, and presently became rich. If now (only? - J.Z.) he had continued to push his barrow round the street, we should never have heard of Anti-Semitism. There is something in this.

(J.Z.: Does any of the other self-made men continue with his original jobs??? - J.Z., 12.5.03.)

Yet, Anti-Semitism is also a heritage from the time when the Christians really believed that the Jews killed the son of God. Also I personally find that most Jews have a certain vulgar brazenness. They will trespass on your good nature until you object, when (then? - J.Z.) they do not defend themselves, but are full of apologies. Also, so many of them have vulgar tastes. (J.Z.: Do other people have no bad manners and bad tastes??? - J.Z., 12. 5. 03.) But doubtless both these qualities are the result of the centuries of oppression under which they have suffered. I really think that the history of Jewish oppression (oppression of Jews! - J.Z.) by the Christians is the blackest page of European history.

Sincerely yours - signed: Henry Meulen

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Copy.

T. H. Gibson, "Highcroft", 57 Hamilton Ave., Pollokshields, Glasgow. S. 1. 20^th October 1949

Dear Meulen,

many thanks for your letter of 18^th (19^th ? - J.Z.) with sent from Von Beckerath in Berlin which is interesting.

Cripps in the House of Commons on 27th September gave as one of the reasons for devaluing the pound "American and Canadian prices, which had risen more rapidly than ours after the war (my note we {enjoy??} larger increases in wages than USA ?? during the war) were then falling more rapidly than ours, and as a result the sterling area sales in these countries were falling off. (my note our prices too high ) "At first we had hoped to reverse that tendency by a greater sales effort and a further increase in productivity and a reduction in costs (my note - in effect to bring about a decrease in our prices) But the July results were disappointing, and the evidence as to sales and forward orders at the end of August showed a continuing decline. The hopes of a revival of our export trade were not, therefore, being realised and meanwhile our reserves were being further dissipated"

(column 10 Hansard 27/9/49.).

American and Canadian prices were falling, and people therefore would not pay our prices, and our sales were falling - a greater sales effort, productivity increase, and reductions in costs failed - therefore we had to bring down the price to them - that is the buyer - and the only thing left was to reduce the selling price by devaluing the pound. How then can the importer pay for the difference between the two prices - pre-devaluation price - and the devaluation price and how can he pass an increased price to the consumer who had previously failed to purchase at

the price ……………..... before the devaluation - - supposing got 100 Dollars for an article or its equivalent in sterling, I now only get 70 Dollars or its equivalent in sterling - - who pays me the 30 Dollars - - no one, my sterling received for the article is 30 % less - - even if I sell more I still receive for each unit 30 % less. I must reduce my costs somehow, or lose on the transaction. Who is making 30 % clear profit on the selling price of an article - - materials will cost more, er the same - - taxation remains the same. The only thing is wages.

Your friend is taking it I am supporting Henry George's single tax - - that was not my article, but by Kinloch to show how a man of advanced ……………… went through the stages - - and one of them was the single tax one. Kinloch was in turn Liberal, then Labour, and then his further development was Scots Nationalist.

I am running a paper on behalf of a political party and must keep within its policy - it is published by the party and is its official organ. I am therefore rather limited in the views I can select. If however an article was received telling people what the old Scots banking system was, what it achieved, and how if we had a system based upon it would be of benefit, I could put it in - with an introduction that this was by the author of … and should be interesting to our readers etc.

After all Lord Lovat has gone in for cattle ranching in the Highlands. Against all official opinion "romantic nonsense" etc. he has increased his herd in deer forests from 40 to 640, thus disproving every official and politicians. But as he states he has only put the clock back a 100 years, and returned to the rural economy that was in existence then. I do not say that if we returned to the simpler and earlier method of free banking as exercised by the scots banks in ........ early days we would not have a better system. We now must have export credit schemes and so on - a most expensive business which as I know adds considerably to the cost.

So if you care I would be very pleased to accept an article but it should be from 1000 words to 1250 and certainly not more than 1500.

I do not know when I'll be in London but I expect it will be early November or so. As I am usually there four days, perhaps on your way home you could call in at Reform for teer(?) (a beer? - J.Z.) and we talk. I am very busy. Yours in haste

T. H. Gibson.

"The Scottish Heritage in Free Banking" would go well.

(J.Z.: The practical business men, editors, party men and publishers can, usually, only offer some short space for selected articles but have neither the time nor the interest nor the space nor the energy to enlighten themselves or others sufficiently. They can only offer muddled or flawed views - and are not accessible to others. Genuine enlightenment efforts will largely have to bypass them, as they will have to by-pass parliaments. The alternative, powerful, lasting and affordable media offer opportunities for such "by-pass operations". - J.Z., 12.5.03.)

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Dear von Beckerath, 16 Nov. 1949

The "Times" this morning prints a letter of mine, a copy of which I enclose. This is the first letter they have printed on Free Banking, and I am much gratified.

I suggest that you write the Editor ("The Times'', Printing House Square, London, E.C.4) pointing out the

desirability of introducing Free Banking in Germany. It will take too long if you send the letter to me for remodelling.

Could you not get somebody in Berlin to look over the English and then send the letter direct?

Sincerely yours - signed: Henry Meulen

Green's letter, which I sent to a friend, was a plea for small ownership in farms, and for a scheme of State loans to such farms.

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FREEDOM OF NOTE ISSUE

TO THE EDITOR OF THE TIMES (16. 11. 49)

Sir, - In connexion with Mr. J. D. F. Green's letter in your issue of to-day, it is interesting to note that cheap long-date loans were freely granted by the private banks in this country previous to the passing of the Bank Charter Act of 1844. Since that date the trend of banking policy has steadily been towards the confinement of long-date credit to holders of valuable security. There is no doubt that this policy was induced by the prohibition of freedom of note issue imposed by this Act. The Rt. Hon. James Wilson, the eminent founder of the Economist, and Bagehot both pointed out many years ago that the effect of the prohibition of freedom of note issue was to block the means by which fresh banks had previously been able to get established. Before the Act local men of repute frequently began to pay wages and make local purchases in their own notes. If the issue commanded confidence, it was extended, and the issuer then often relinquished his own business and became a banker. Nearly all our great banks were begun in this way before 1844. Since that date no bank of any importance has been founded in the United Kingdom.

It is now well established that the reason for the prohibition of freedom of note issue was to preserve the Gold Standard - not to check fraudulent note issues: there was very little criticism of the private banks on this score. The Gold Standard has now been abolished; and there is little likelihood of its reimposition. The time, therefore, seems opportune for consideration of the advisability of a return to freedom of note issue.

I am, Sir, yours faithfully, HENRY MEULEN, Honorary Secretary,

Personal Rights Association.

31, Parkside Gardens. S.W.19, Nov. 14.

(J.Z.: Most of those, who attempt to propagate ideas and spread enlightenment, seem to need first of all more enlightenment themselves. That they know, often, more than the politicians, bureaucrats and recognised experts is by far not yet good enough. They, themselves, too, have still, usually, too many spleens left in their heads - and defend them like their dearest possessions. - J.Z., 12.5.03.)

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My dear von Beckerath 29 Nov. 1949

I duly received your letters dated between the 5^th and 23rd Nov. Many thanks to you.

In your letter of the 5th you plead for liberty to the tourist to spend his money abroad as he will. But the point is that we need wheat from abroad. (J.Z.: The tourist, by his standards, needs his tour even more so! - J.Z., 29.5.03.) If our govt. would free the foreign exchanges, and allow our importers to buy where and what they wish, I think these importers would find sufficient supplies of wheat, although the price of wheat might rise at first. But the govt. refuses to do this. Therefore it is compelled (J.Z.: It merely feels under compulsion, in its ignorance and prejudices! - J.Z., 12. 5. 03.) to control the expenditure of our slender stores of foreign currency by tourists.

Love and children. Yes - I agree with you. It has often been noticed that when the mother is economically able to look after her children, the illegitimate child is generally a better specimen than the legitimate. If people realised this, the term "bastard" might become a sign of admiration instead of contempt. I remember years ago in Paris hearing the end of an altercation between two "cochers".

The one leaned back over his seat, and shouted to the other: "Bon jour, et mes compliments à Mademoiselle vot' Mère."

I went to our local library to look up Turgeniev's "The new generation" which you mention; but I could not find it.

Perhaps it is a short story, and is included in one of his volumes of short stories under another title. I took out a volume of his short stories entitled "Knock, knock", and much enjoyed it. In general I do not like the Russian novelists: they are too morbidly introspective (Tolstoy and Gogol excepted). But Turgeniev is excellent - he has originality in his plots, and a sane outlook.

Your letter of 11 Nov. You quote Machiavelli that the real beginner of a war is not he who first attacks, but he who provokes the attack. In my twenties we often discussed this point. We concluded that the only satisfactory test of who is the aggressor is to condemn the nation that first moves its armed forces over its frontier in defiance of the League's wishes. Any other test involves endless discussion, and often injustice. A nervous nation will find a threat to peace in almost every action of the nation it fears - witness the relations between France and Germany today. On the other hand, of course, it is dangerous to allow a nation to pile up armaments until it may be stronger than the League. But we always laid down the rule that the armaments needed by each nation must be fixed beforehand, and not altered except by agreement. Again, the nation that attacks without warning has, of course, the advantage. But it seemed to us wiser to risk that danger than to allow the League to interfere in the internal politics of the member nations. I am fearful of the misuse of its armed fore by the future UNO. After all, its armed force must be irresistible - that is its object.

(J.Z.: When even individualist anarchists go no further in their thoughts on preventing war than this - then we have to expect further wars. - J.Z., 12.5.03.)

2.

Hence it can easily become the most effective engine of tyranny the world has ever known.

Social Statics. If all prisoners of war who declared that they were not voluntary soldiers were allowed freedom of movement, they might constitute a dangerous body in time of war - a sort of Trojan horse - and I doubt if any govt. would permit it.

(J.Z.: Again, a judgement a priori, without bothering to check it against historical experience! - J.Z., 12.5.03.)

And really, I doubt if Russia has the atomic bomb secret. If she had it, she would hardly have waited for its explosion to announce the fact to the world. Possession of the bomb is too useful a bargaining weapon for that.

Your letter of Nov. 19. No - banking is certainly not understood here to mean the business of note issuing. In England a banker is a man who accepts deposits or uses his capital to make loans in cheques.

Your letter of Nov. 12. Yes, the Duke of Bedford is an advocate of the Douglas scheme. Aldred accepts his articles because the Duke is a tireless Pacifist who opposes conscription, and defends the conscientious objectors. I have sent you two days ago one or two of the Duke's pamphlets among the batch of Aldred pamphlets.

Christianity. I rather think that Christianity would have remained the doctrine of an obscure sect had not

Constantine, on the urging of his wife, made it the State religion. Thereafter it offered enormous economic advantages to converts.

Cooperative Wholesale Soc. I admit the force of your argument that the CWS pays its employees a fixed wage, just like an ordinary capitalist firm. But if wages rose and fell with profits, it would cause a good deal of quarrelling among the workers. The energetic do not see why the lazy should benefit from increased production.

I will send you the old copies of "Liberty" that I have. You might return them at your convenience.

J. M. Robertson. I have just been able to buy his two volumes "History of Freethought" (down to the French Revolution) for 10s. 6d. They cost originally L2. 2s. 0; but the publishers are selling them off. They are fat volumes; but I am looking forward to reading them.

I am glad you like Aldred. For myself I am no great admirer of his thinking powers, and I think he lacks sane judgement. He has, however, certainly suffered for his beliefs, and such men are rare. If you have no objection, I will send on to him the two letters in which you write your admiration of him. It will encourage him.

I think Gibson will print my article in the next issue of the "Scots Independent". If so, I will send it you. Zander calls himself a Jew. But his wife looks quite Aryan, although she also is a Jewess. She has fair hair, keen blue eyes, fair ruddy complexion, and a keen mind.

I note your decision not to write further to the "New Generation" (now re-named "The Malthusian). I have written them a letter embodying the criticism made by Sir John Russell at the recent meeting of the British Assoc.

I think your point about what would have happened had certain

2.

nations restricted their populations in the past a good one. I hope to print it in a future issue of "The Individualist", combining with it your fears of the Russian increase in population.

I think you underestimate the part that trust plays in nearly all human relations. The efficiency of modern industrialism is possible only because of the growth of mutual trust. Division of labour itself implies trust that

the seller of goods will be able to get the goods he requires. And all human agreements are liable to be broken by catastrophe and political disturbance.

There - this is a long letter for me. It would be six times as long if I dealt adequately with all the points you raise. But please be assured that I always read your letters with the greatest interest, and file them.

(J.Z.: Alas, not in his brain! And at last he burnt all his letters, under the delusion that he had already extracted their essence and expressed it in "The Individualist"! - Correspondence like this should be published and read by many. Then at least some of the readers would be somewhat enlightened by it. - J.Z., 12.5.03.)

Sincerely yours - signed: Henry Meulen

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Dear von Beckerath, 30 Nov. 1949

Thank you for your letter of the 26^th, received yesterday. I am glad you wrote to the "Times". Congratulations on your English. If the "Times" prints, I daresay they will alter some of the expressions which are a little foreign. If they print, I will send you a copy.

I note that you suggest that the British importer should pay in a note which he (J.Z.: or others, as British exporters - J.Z., 13.5.03.) guarantees to accept for goods. I hope the "Times" may discuss this point. For myself I still feel that the objections apply which I raised in our discussions on such notes issued, for instance, by a Freiburg importer. I think that with such a clause the German bank will either hesitate to change the note, or will charge a discount. But there - I suppose we must agree to differ on this point.

The data you suggest for establishing the existence of inflation are interesting. There is, however, the difficulty of fixing on a "normal'' relation between gold and paper. This relation is influenced by a score of

different circumstances, and it must be hard to decide which is the strongest factor. In 1926, for instance, we had but recently returned to the Gold Standard, and we were nervous about possible drains of gold abroad. This may have caused us to keep a bigger gold reserve that we would have before 1914.

(J.Z.: Here, too, he doubted the functionality of free market relationships and got stuck even in thinking about simple examples and aspects. Perhaps he read too many newspaper reports and took too many of their opinions serious and they gradually deteriorated his thinking on freedom subjects. - J.Z., 13.5.03.)

Christianity. You advance the life-like details of some of the Gospel stories as evidence for their truth. But most of the miracles related in the Gospels give similar details. Yet we now know that many of these miracles were simply copied from earlier myths. All over the world the phenomena of the rising and setting sun, and the procession of the seasons and the stars have been dramatised; and the circumstantial details of the drama depend on the imagination of the writer. The custom of storytelling is very old; and there is nothing surprising in the ability of the teller to imagine life-like details. (J.Z.: Here, at least, M. has a point. - J.Z.)

You will note from Bedford's pamphlet (when your receive it) that he comments on the folly of a nation paying interest to the banks or other lenders for money for the national debt when the State might create its own money. This proposal has often been made here. There is a good deal to be said for allowing the State to create money for its expenses when those expenses have been authorised by Parliament. Yet there are several objections. I have not time to detail them now but I should be interested to have your opinion.

Sincerely yours - signed: Henry Meulen

(J.Z.: Alas, here, too, neither Bedford, as a Social Credit advocate, nor M. as an advocate of "free" banking saw clearly the extent and limits of a government's sound tax foundation money, to the extent that anything can be "sound" that is based upon compulsory taxation. Tax foundation money, can, even on a sound value standard, clear the government's spending against its tax take, both reckoned in e.g. gold weight units, without the government possessing any gold stock and promising to redeem its notes in them. With such notes it could even anticipate the tax take for the next few month. But with them it could not pay for more of the government debt than its interest and repayment debt for the next few months. If such tax foundation money has only to be accepted at par by the government itself, then its discount in a free market, against a sound value standard like a gold weight unit, in which it is also denominated, like tax "debts" to the government, and the right of people to refuse the acceptance of government money altogether, would set a definite limit to such government money issues, a limit which Social Credit people and M. never seriously considered. - J.Z., 13.5.03.)

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Copy

HM/ED. 3 December, 1949

The Editor of "Truth"

Sir,

is not your criticism of Mr. Churchill's propaganda for European Union in effect a condemnation of democracy itself? In home politics we support a wide representation not because a committee-run government is more efficient than a dictatorship, but because only by representation can we reasonably sure that government will consider the interest of all classes.

(J.Z.: This presumes that "classes" exist and that true representation is possible for any territorial regime and that the "representatives" will consider the interests of all in that territory rather than their own interests. - J.Z., 13.5.03.)

The same reasoning applies to international politics. It may sound foolish to assert that Korean, Fijian, Dutch and other nationalities should have a voice in our (J.Z.: whose, exactly, if one does not insert wrongful and collectivist premises here? - J.Z., 13.5.03.) foreign policy; but this is the only saveguard (M.'s spelling. - J.Z.) yet devised against tyranny and exploitation by one nation, with the inevitable recurse (M.'s spelling. - J.Z.) to war.

(J.Z.: "Nations" are imagined "ghosts" and cannot, therefore, actively influence events and exploit anyone. However, the coercive territorial institutions, established by the believers in these ghosts, do inevitably lead to wars, civil wars, revolutions, oppression and exploitation of dissenters. - J.Z., 13.5.03.)

In home politics we Individualists seek to protect ourselves against the evils of wide representation by insisting that, so far as possible the government's powers shall be confined to the enforcement of justice and the fulfilment of contracts.

(J.Z.: As an individualist anarchist M. should have known that governments have never been good in doing either. On the contrary. - J.Z., 13.5.03.)

Truth would be on firmer ground if, instead of criticising the principle of wide representation on the body controlling foreign policy (J.Z.: Should there be any "foreign policy" for territorial organizations? Do the latter have any justification? - J.Z., 13.5.03.) it set itself to determine the limits of interference by that body in the internal politics it its members. (J.Z.: In other words: This individualist anarchists wanted foreign governments to have a "free hand" for dealing with "their" subjects. That notion represents rather the non-thinking of average journalists and newspaper readers on "foreign affairs". When the insufficient enlightened try to enlighten other unenlightened people only more nonsense can result. - J.Z., 13.5.03.)

I am, Sir Faithfully yours

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London, 17 December, 1949

Dear von Beckerath,

Thank you for your letter of the 11th. Glad you received the pamphlets. I wonder if you will like the pamphlets. Don't strain your eyes over them - they are not worth it. I am relieved that you have received the tea

parcel. It was posted so long ago that I thought it must have gone astray. I think it is quite disgraceful of you to call up the poor ghosts of Kant and Schopenhauer to support you in your tea-bibbing, whilst I drink milk and water instead of the tea I love, and dandelion coffee instead of the fragrant beverage from Mokka.

Yesterday I sent you the remaining copies of "Liberty" that I promised. Also six copies of "Individualist Anarchism".

Here are a few cuttings that will interest you.

The Lucas plan of selling shares to the workers seems to me preferable to other forms of profit-sharing.

Boyd-Orr's figures will probably interest you.

The letter "News Values" was printed in the "Telegraph". Do you think any German paper would print such

a letter (bearing in mind, of course, the perfectly ridiculous eulogies of Hitler that your press published during the war)?

The Christianity discussion has no end, and I will not continue it. I think Christianity is damned and dying; and I will waste no tears over it - neither will I tax my already over-taxed eyesight in reading the parts of the

bible that you recommend. Economics and philosophy attract me much more.

The tea and coffee will, I suppose, ensure you a faintly riotous Christmas. Good appetite !

Sincerely yours - signed: Henry Meulen

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(J.Z.: I reproduce here, first, another letter response, unsigned, no source mentioned, dated: 9/12. It may belong to another letter by M. - J.Z.)

* * *

MR. HENRY MEULEN writes to complain that I am urging a return to the gold standard. He says that if I do so I must reply to the standard objection raised by practically every professional economist that since a gold standard necessitates legal compulsion upon the Mint and the Bank of England to buy and sell gold at a fixed paper price, it throws our gold reserves open to and defenceless against any demand for gold from abroad, regardless of the need for gold at home as a basis of credit.

" When that gold has been drained away, the gold standard leaves only one method of recovering it: a rise in bank rate.

"This penalises industry here in order to give an incentive to the foreigner to return the gold to us."

The economists, says Mr. Meulen,

"have at length decided that it is more important to our well-being to preserve our home credit than to maintain fixity in the foreign exchanges - one cannot do both together."

Mr. Meulen apparently is under the impression that I have a hearty respect for the professional economist. I have not.

The great majority of them - like the late Lord Keynes and those who follow his views - have done immense harm to this country and, in due time, even the Americans will wonder what his teachings have done to them.

* * *

THE answer to Mr. Meulen is that there is no abnormal demand for gold from abroad if our goods are saleable, at world prices. It is the inability to sell goods at a price which the buyers are willing to pay that creates an abnormal demand for gold in payment for imports.

The raising of the bank rate has other effects than the attraction of money from abroad to secure the higher rate of interest. It helps to bring about the adjustments in our internal economy which will restore our competitive position. It is that adjustment that Mr. Meulen is afraid of.

But the fact is that if the wrong things are being made in too great a quantity at too high a price then someone has to stop making them. The trouble in this situation arises not in the process of making the adjustments but in the resistance to the process. It is that resistance that creates long-term unemployment.

We cannot maintain our basis of credit by refusing payment in gold or goods or by persisting in policies which undermine the exchange value of our currency.

* * *

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WORKERS TO GET 15% ON SAVINGS - - SHARE BANK ESTABLISHED (Times, 8. 12.49)

Workers at a Birmingham factory queued last night to apply for membership of a workers' share bank, set up by their employers, Joseph Lucas, Limited, and associated companies, which will derive its income from 100,000 redeemable Preference shares issued for cash at par with Treasury approval.

The establishment of the bank was announced to the firm's 25,000 employees yesterday by the chairman, Sir Peter Bennett, M.P., who said that each year the company would declare in advance the rate of interest payable on deposits. For the first year, 1950, the rate would be 15 per cent. per annum. Only employees paid weekly or hourly will be allowed to join, and the number of depositors will at first be limited to 2,000. The maximum amount accepted from each will be £ 50.

Full details will be given to shareholders of the scheme - who originally approved it some years ago - at the company's annual meeting on December 22.

(Would over-all productivity be much increased if only 2000 among 25 000 employees could thus get an extra return of 7.5 pounds per annum? What do these managers comprehend about incentives? As a higher return on savings the offer was interesting, but not when these savings are limited to L 50! They were fiddling with trivia, instead of radically improving fundamentals. Mostly they are blind to fundamentals. - J.Z., 13.5.03.)

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How Diet Improved

In his book "Feeding the People in War-time", Lord (then Sir John) Boyd wrote that the rate of increase in improvement of the feeding of the people had shown a great and continuing acceleration over the period 1914 to 1939, and particularly in the latter part.

(J.Z.: He talked about them as if they were farm animals to be fed, rather than people feeding themselves by working in a division of labour and free exchange process. He was part of the system to prevent that self-support. - J.Z., 13.5.03.)

This he substantiated by a table giving changes in the consumption per head of the principal foods. Taking the average for 1909-1913 as 100, the percentages for 1937-8 are as follows:

Eggs 229

Vegetables and fruit 172

Butter 157

Margarine and other fats 140

Cheese 133

Milk 112

Fish 111

Potatoes 107

Meat 103

Wheat and other cereals 89

The table speaks for itself. The fairly big fall in cereals reflects the ability of the poorer sections of the population to afford a more varied and expensive dietary in place of bread.

(J. C. Johnstone. Tel. 29. 11. 49.)

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NEWS VALUES

From Maj.-Gen. J. W. SLATER - To the Editor of The Daily Telegraph

Sir - As Big Ben struck nine o'clock last Sunday evening the thought uppermost in everyone's mind was,

"Has Princess Elizabeth arrived safely at Malta?" We got the news headlines in the following order:

1. Arthur Deakin and the unions.

2. Sir Stafford Cripps's speech.

3. The safe arrival of Princess Elizabeth at Malta.

Presumably items 1 and 2 (politics) were considered more important news than item 3 (the safe arrival of the Heir to the Throne).

Yours faithfully, Crowcombe. J. N. SLATER.

(When "minds" like this are in charge of thousands of soldiers, what else can one expect than more senseless slaughter? - J.Z., 13.5.03.)

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My dear von Beckerath, 3 Jan. 1950

Thank you for your letters dated 23-27 Dec.

I found them most interesting, and agree in the main with your contentions. This may be dull for you; but it is comforting to me. I hope to print your proposals for dealing with Russian deserters and with refugees in the Feb. "Individualist".

What a pity you cannot issue a periodical journal - a German "Individualist". It should make most interesting reading, if only you could manage not to march too far ahead of the average German Individualist.

Can't you find enough German sympathisers to finance it? Our journal costs about £12 per issue.

You rather misunderstood my question as to if any German editor would have printed the letter of which I sent you a cutting. I meant to ask if any German editor would print so foolish a letter. Frankly I doubt if more

than a tiny minority of people here cared twopence whether the princess reached Malta safely or not.

Yes - I still doubt if USSR has the atom bomb.

If there is another edition of my book, why should I not use the expression "Banking"?

What you call "Cooperation" we should call "Piece-work". Employers here have been for years gradually standardising jobs so that they may be paid by the piece.

They have been opposed by the Trade Unions who fear that this is a device to make wage-earners compete in fast working; and that when the standard is established, it will be set up as a minimum. Still - the system obtains in many industries today.

(J.Z.: And it has nothing to do with the ownership of enterprises by the former employees and with forms of decentralised self-management. - First he mixed up productive coops with profit sharing, then with consumer coops and now with piece work! - J.Z., 13.5.03.)

Runge writes me that Germany formerly had a free note-issuing system, and he says you describe it in the "Annals of Collective Economy" No.1 Jan.- July 1934. pp. 93-6.

I have not this volume; and I suppose you have not a copy now. Can you tell me the name of any book wherein the

system is described? I was under the impression that the small German States all suffered from much State control in the matter of note issues.

I am sending you a very interesting copy of "The Thinker's Digest", together with a few other papers.

Sincerely yours - signed: Henry Meulen

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Dear von Beckerath, 11 Jan. 1950

Thank you for your letter of the 6th.

I beg you not to give up hope of issuing a journal. Although there are probably few supporters of Free Banking in Germany, there must be thousands of Individualists, and a really Individualist journal would make an appeal. The important thing is not to press the subject of banking too much in the beginning. Most people look upon banking as a minor commercial operation, of no importance to the social question. I first began writing notes for the "Individualist" in 1921, when Arnold Lupton was editor. Although I was just as convinced then as I am now of the fundamental importance of the banking question, I only very occasionally devoted notes to it. But eventually Lupton was converted, and began to write and speak on the subject. Had he only lived, he might have done much, since he was rich. But he died in a few years, at the age of 84. And you talk of being old at 67!

Princess Elizabeth. Yes - I know Germany was very Monarchist. (My grandfather, on my father's side, still was one. But my father was early on transformed into an individualist anarchist. - J.Z., 13.5.03.) But that was 30 years ago. I remember how I laughed in Weimar in 1908, standing outside the royal castle watching a file of ten soldiers who popped out of a guardhouse, with a roll of drums, to present arms whenever anybody entered or left the castle, which occurred three times in the 15 minutes I was there. But I should have thought, that there was a strong Republican majority in Germany today.

Your English is excellent; and it has improved surprisingly since you have been writing to me.

Cooperation. I agree that piece-work can be combined with profit-sharing. But the "New Statesman"

writes this week, regarding the Trade Unions: "They resent a situation in which the semi-skilled worker on piece-work way often earn more than the craftsman whose output cannot be measured - for example because he is on maintenance work, and not directly producing any commodity." I think the reduction in incentive to an employer who becomes a manager outweighs the added incentive to the worker. We do not expect a social revolution here. Although the employer may not get more than the manager of a cooperative, he has the incentive of the prospect of a fortune.

(J.Z.: Compare H. Dubreuil's "A Chance for Everybody", which I microfilmed not so long ago, after finally seeing a copy in a local bookstore, one that I could effectively photocopy. Previously I had only a very flawed and ancient photocopy. - J.Z., 13.5.03.)

Banking. Bankers should be free to make whatever innovations they please. This is the reason for our use of the term "Free Banking".

(J.Z.: Even if they go beyond the natural limits a really free market also sets for free banking? Should whim and error be here a substitute for reason and experience? Sufficient publicity will act largely as a preventative or stopping power for all too silly, absurd and flawed "innovations". - J.Z., 13.5.03.)

I will ring Williame & Norgate to find out if they still have copies of your book.

Sincerely yours - signed: Henry Meulen

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Copy

Telephone: Wimbledon 0950

Personal Rights Association, Founded 1871

Hon. Secretary: Henry Meulen. 31, Parkside Gardens,

London, S.W. 19.

Prof. H. Rittershausen, 11. I. 1950.

Dear Prof. Rittershausen,

thank you for your card. I have duely noted your change of address in our file.

I have been trying for some time to induce von Beckerath to issue a German Individualist paper. He tells me that he was on the point of getting out such a paper just before the Hitler Regime; but that he abandoned the idea, and now cannot get the financial support. Can you not help him? He now has leisure, and is full of ideas. Such a journal would be invaluable if only he can be persuaded not to march too far ahead of German Individu-alist opinion.

I began writing notes for our "Individualist" in 1921 after 1 returned from the war. In the beginning I was careful not to write too much about banking, and only gradually did I bring the subject in. At present most of our members are content to read about the subject, although few of them accept it. For me the subject is second in importance only to the question of peace.

Let me know what you think.

Sincerely yours - signed: Henry Meulen.

____________________________________________________________________________________________

(B.'s copy)

(Henry Meulen)

The Editor of ''Truth". 13 Jan. 1950.

Dear Sir,

I hasten to reply to Mr. A. P. Davis that in writing that Individualists advocate wide representation in home politics.

I meant Individualists generally - not the Society of Individualists.

Personally I think the vote should be granted only to such people as can pass a simple oral examination in the aims of the great political parties; but I should deplore any class or property test.

Likewise I deplore any nationality test for membership of UNO. The Attorney General recently criticised the principle under which small nations have an equal vote in UNO with the great nations. I equally think this principle foolish. But a just voting system for UNO is not easy to devise. It should be discussed.

(J.Z.: One might start by admitting only voluntary communities and excluding all territorial ones. Moreover, not governments should be represented there, but individuals. Nor should any majority have the right to infringe any individual rights. Anyhow, are there any rightful and necessary functions for any international government or federation? I would find, e.g., an international Free Trade Association, with voluntary individual members only, an International Clearing House, and an International Federation of Local Voluntary Militias for the Protection of Individual Human Rights somewhat useful, others some other international organisations - but all of them should be only exterritorially autonomous and should have only voluntary members. - J.Z., 13.5.03.)

Mr. Davis appears to disapprove of the entire principle of the surrender of national sovereignty involved in UNO. But if we abolish UNO, we must compete in the race for armaments.

(J.Z.: The arms race, between territorial governments, all of them wrongful as such, and even extending to mass murder devices, got even worse under the UNO! - J.Z., 13.5.03.)

With the present cost of lethal weapons, such competition would shortly swallow up our whole national income. Has Mr. Davis considered this?

I am, Sir, Faithfully yours (Henry Meulen).

(J.Z.: There is not such thing as a "national" income. The costs and threat of territorial organisation is even greater than that of arms races between the governments of territories and territorialist rule causes arms races in the first place. - Meulen was not in favour, either, of free competition between experimental and exterritorially autonomous volunteer communities. See their last letters on panarchism. - J.Z., 13.5.03.)

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24 Jan. 1950

Dear von Beckerath,

Thank you for your letters of 10-14 Jan.

I wrote to Rittershausen and Runge suggesting that they help you to get out a German "Individualist". Runge replies hopefully, and thinks you would be an excellent editor. He is trying to found a German "Personal Rights Association". A very good idea.

Your remark about the Hamburg employer who employed only girls with a child is interesting. The human

mind is endlessly ingenious and inventive if only it is allowed to be.

I note that you expect a violent revolution here. You do not say in what year the revolution will break out. I see no indication of it at present. One can hardly say that the 1917 Russian revolution was unexpected. Russia had been seething with discontent for half a century; and its constitution allowed no outlet for reform ideas. The same applies to the French revolution. I agree with Tucker that violent revolution is not advisable so long as there is freedom of speech and a free press. We have both to a very large degree.

You propose a "Citizen's tax" in order to confine voting to those who have an interest in politics.

But such a tax would confine voting to the richer classes. I prefer an elementary viva voce exam. in politics. If

local tribunals were set up, composed of members of all four parties, I think they could be run pretty smoothly. The people not interested in politico would not trouble to present themselves for examination. Hence the tribunals could afford to be pretty liberal.

(J.Z.: "Voting" on "public" affairs has numerous other flaws and is, basically, wrongful. Compare my several compilations of thoughts on voting. - J.Z., 13.5.05.)

The usual English translation of "Cours forcé" is "Legal tender", which means that the offer of such money constitutes a legal discharge of debt.

(J.Z.: Again, he does not distinguish between "compulsory acceptance" and "compulsory value". - J.Z., 13.5.03.)

Your questions for Parliamentary candidates are interesting. But first of all we must convince the electorate of the importance of monetary questions to the matter of social welfare. At present the electorate generally sees no more connection between the two than between the moon and green cheese. Of course, to ask such questions at election time is in itself good propaganda.

But I do not care to spend my time in listening to boring political lectures for the sake of putting one question at

the end of the lecture - a question which will probably not

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be understood by the audience. Actually I dislike lectures altogether; I always prefer to read a man's book than to

listen to his lecture. I can turn over the leaves of a book when it bores me; but I cannot turn off the lecturer.

(J.Z.: One can, e.g., on radio, tape, computer, TV and turn away from a lecturer and listen to another, instead, e.g. in an open air free speech centre, or simply dare to leave a lecture meeting if it becomes uninteresting for oneself. - J.Z., 13.5.03.)

I am glad you disapprove so strongly of "Die Nuwe Orde." I am sending you a cutting from today's "Telegraph" on Rommel. I agree with the writer. There has been too much tendency today in this country to hold Rommel up as a German "Sir Galahad" (a brave and pure knight of the ancient and perhaps mythical Saxon King Arthur's "Round Table"). There is attached an excellent letter by Sir Ernest Benn.

Your talk with a bookseller about a German "Individualist". Certainly a man who gets credit has an advantage over a man who confines his trading to his own savings. But if your friend was a poor man, who would give him credit to the extent of 100,000 M?

Yes - I have Raglan's book on "The Hero" - very interesting. I will lend it you if you care to read it - it is quite a small book.

I have subscribed to "L'Unique", and its fore-runner "L'En dehors" for the last 30 years. I met Armand in Paris in 1910. He was then a Kropotkinian Anarchist. Later he came across Tucker's book, and adopted Tucker's views. I agree with you that "L'Unique" contains a lot of windy nonsense about the individual soul; and I sometimes think he has a kink about sexual problems. But the paper occasionally has interesting articles; and I like Armand.

A friend recently returned from Berlin says that in Berlin one can buy almost anything today, at prices not much higher than in London; and one can get many things not obtainable in London. On the other hand I enclose a report, from today's "Telegraph" of a speech by Strachey in which he says that Berlin prices are much higher than ours. I dare say some Berlin prices are higher than ours; but now that Germany has returned to a comparatively free economy, I expect prices there to fall sooner than ours will. Germany's production is now 93 % of her 1938 level. Yet she is not able to export enough to pay for the food etc. that she imports. Presumably this is because she consumes most of her production at home to repair war devastation; but I should like to have your opinion.

Sincerely yours - signed: Henry Meulen

25 Jan. 1950

I was about to post this letter when I received your letter of the 21st. Our papers do not take so serious a view of the Russian road blockade as you. It is called "Another pin-prick by the Russians". We shall see. Meanwhile I am sending this letter by Air Mail.

Curiously enough I had just written a note for the "Individualist" showing how Germany would benefit today from free banking. I had always thought that beyond cotton, wool, petrol and colonial fruits Germany was comparatively self-supporting in food and raw material. Since her production is now 93% of her 1938 level, how comes it that she cannot afford to pay for her imports?

Yours H.M.

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My dear von Beckerath, 30 Jan. 1950

I return to your letter of Jan. 15. I think it should always be pointed out that the financing of industry requires an adequate amount of savings to support the fresh credit until the goods from the fresh production come on the market; otherwise inflation must result. The virtue of the creation of money by the banks rather than by the State lies in the fact that a banker's resources roughly correspond with the community's savings, whereas the State has no such check.

It should always be borne in mind that new production involves buying raw material and food for the workers. Unless the community has enough surplus to support these purchases, inflation must result.

In the famous Guernsey Market Scheme we are given no details of prices before and after the issue of notes. Guernsey saved the interest on the loan; but it is possible that it lost an equal or greater sum by a rise of prices.

An issue of notes serves to mobilise the community's resources and canalise them towards the new industry; but it does not create those resources.

The Russian blockade seems to have been relaxed a little. Do you think it will be lifted?

Last week I attended the private Press Conference at which Mr. R. A. Butler outlined the policy of the

Conservative Party. He said that they would meet possible unemployment by the control of finance. I questioned him as to the nature of that control. He replied that investment would be controlled, and also financial policy. The proposal somewhat resembles Runge's, except that they propose to lower insurance contributions during a slump, and raise them during a boom. If this does not suffice, they will vary taxation, and so time govt. spending that public works will be undertaken in slump periods. There was, of course, no opportunity for discussion. On the whole the proposal to vary insurance contributions seems to me superior to Runge's method, in that it occurs weekly, whereas his proposal to compel payment of a proportion of taxes in cash would operate only once or twice a year when taxes are paid. Of course both proposals suffer from the fact that the State has no certain data on which to base its decision when inflation or slump are present. Free Banking would be much more preferable; but there is as yet no sign of it being even discussed.

I am, however, in correspondence with one or two M.P.s on the subject.

(J.Z.: Sometimes, apparently, our memories are so bad that we cannot distinguish between one and two! - J.Z., 13.5.03.)

The general proposals of the Conservatives are almost indistinguishable from those of Labour - the same

dreary list of State controls. The only hope is that Conservatives will reduce (J.Z.: Promise to reduce! They don't keep their promises any better than do other parties. - J.Z., 13.5.03.) govt. expenditure, whereas Labour seems likely to increase it.

Aldred is standing for Parliament, and has sent me the enclosed election address. I think he will lose his £150 deposit - an expensive bit of propaganda.

Sincerely yours - signed: Henry Meulen

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Dear von Beckerath, 31 Jan. 1950

Your interesting letters keep my typewriter very busy. It in a good thing that I have leisure. If I were still in business, either that or the "Individualist" would suffer.

But I cannot refrain from pointing out, in reply to Prof. Niklas, that if Germany has so much surplus product, how comes it that she is unable to export enough to pay for her essential imports

Vaccination. I have been against it nearly all my life. I think the arguments against it, and indeed against inoculation generally, outweigh the benefits alleged to result from the operation. I took my daughter away from a very good school because they wanted her to be vaccinated during a smallpox scare. She was never vaccinated (or christened!) and is very healthy. Unfortunately she is now married to a doctor who insists on inoculation for smallpox, diphtheria, typhoid and the common cold; and her children are always ailing. The belief in vaccination in face of the evidence is one of the strongest evidences of the innate conservatism of mankind. When Jenner started vaccination, he used to practise "arm-to-arm" vaccination, that is, he inoculated the healthy child with the pus from the sores of a child suffering with smallpox. This practice resulted in such an epidemic of syphilis and other beastly diseases that eventually Parliament had to pass a law forbidding it - there was no other way to stop the doctors from using this form of vaccination!

Yes - I have always thought the Labour insistence on full employment a foolish policy - there is full employment in every prison.

(Maybe in those of totalitarians, their forced labour camps, but not in those of "Welfare States", which "protect" consumers from the "cheap" labour of convicts. - J.Z., 13.5.03.)

Yet Mr. Churchill recently declared that Conservatives place full employment in the forefront of their policy.

("Full employment" is also the policy of slave owners, for their slaves. - J.Z., 13.5.03.)

This is, of course, merely a bait to catch the Labour vote. The ordinary working man fears unemployment more than anything else.

(J.Z.: But does not want to spend even a minute pondering upon the real causes of unemployment, far less the days to weeks that would be required. - J.Z., 13.5.03.)

How much Free Banking might say to this question!

Dr. Runge has translated into German an article of mine proposing Free Banking for Germany. He is optimistic of being able to induce a German editor to publish it.

(J.Z.: From what I have so far read of B.'s correspondence with R., R. suffered even more from fixed ideas than did M. But thus he forced B. to express himself at length on many important subjects and their aspects. - J.Z., 13.5.03.)

My health is sufficiently re-established that I have today applied for a military visa to enable me to visit Germany in March next.

(J.Z.: Was there any rational purpose in such visas, either way, for anyone? - J.Z., 13.5.03.)

I am taking my car to France (if I do not have a relapse), and will drive down to Grasse A/M to visit an old friend, with whom I will stay for a fortnight. I will then drive on to Mullheim/Baden, and to

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Heidelberg to see Runge. Then to Frankfurt where I hope to see Rittershausen, and then on to Berlin where I hope to meet you. If you would like to meet me at Heidelberg, we could drive on together! I should be there about the 16th of March.

I am sending you a copy of the "New Statesman" with some interesting articles from the Left point of view. There is a particularly interesting article on two poets who wrote an almost identical poem, although both assert

that they had not before seen the other's poem. I think the most likely explanation is that one of them saw the other's poem, and forgot that he had seen it. I remember years ago that my brother-in-law, who came of a musical family in Paris related how his father came down one morning and announced that he had thought out a beautiful melody. He hummed it to his daughter, who wrote it out, and the family congratulated him. A few weeks later my brother-in-law returned from a business trip, and the new melody was played over to him. He immediately recognised it as a melody that an organ-grinder played under their window occasionally. And this proved to be true. In this case all the family had forgotten the origin of the melody.

I will write to Gibson about your coin catalogue. Has it no value for sale?

Sincerely yours - signed: Henry Meulen

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Dear von Beckerath, 4th Feb. 1950

on applying for a military visa for Berlin, I was told that application would have to be made to the Russian authorities, and that there was so much delay in their replying that it would now be too late for me to get the visa by Mar. 1^st.

(As much "liberated" were Germany and English people by then! - J.Z., 13.5.03.)

Unless therefore you can come and meet me at some place outside the Russian area, I am afraid I shall not be able to see you.

Yesterday I rang our Post Office to ask the air rate charge for printed matter to Berlin. They told me there was no air service to the continent of Europe, either for letters or printed matter. Letters were generally sent to Berlin by air, unless a boat were just available and no extra charge was made. I pointed out that four years ago they had told me that the extra charge for air mail letters to Berlin was 1-1/2 d., and that I had been sending about a letter a week ever since. They replied that I had paid too much! No offer to refund! What a service!

If all goes well, I shall start from London on Mar. 1^st and spend about a fortnight at Le Rouret, near Grasse, A/M, and then drive on to Heidelberg, Frankfurt and home through Belgium.

Sincerely yours - signed: Henry Meulen

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Dear von Beckerath, 8 Feb. 1950

Thank you for your letter of the 5th. I have now received the military visa for Germany, and have booked a passage for my car to Calais on Mar. 1st. I am sorry to learn that you are ill. If you cannot travel, we shall not be able to meet. But I will willingly pay the expenses of your journey and hotel accommodation if you can travel to any point outside the Russian zone.

(J.Z.: I believe B. was stuck in Berlin from 1945 to his death in 1969 and I do not know for how many years before that. - J.Z., 13.5.03.)

I think you will understand my English. Most English people speak too quickly to foreigners. I myself can hardly understand uneducated Americans. But you could speak in German, and I in English. I think we would understand each other.

The Morgen article was poor. I hate having to treat a serious subject briefly - one has to leave out many essential considerations. Runge has already asked me for a further article, and I have sent him one on Scottish banking history.

Lectures. I cannot lecture in German; and an English lecture would have little effect.

Paying for German imports. But Belgium exports more than enough to pay for her imports, although suffering from the same foreign exchange restrictions as Germany. The reason is, I think, that Belgium has more to export than Germany. Moreover, unless foreign trade is approximately balanced, it will not help Germany much to pay in bills of exchange. If the exchange goes against her, either she must pay in gold or foreign currency, or the value of her bills must sink proportionately. (J.Z.: Which would make it cheaper for foreigners to buy in Germany! - J.Z., 13.5.03.)

Inflation. Yes - the term is unfortunately often used here to indicate a mere general rise of prices, regardless of the cause. It would be better to confine it to a rise of prices caused by over-issue of money. Yet - a general rise of prices may occur if banks make more loans than the resources of the country can stand. If such loans were made in notes, the notes would not depreciate, except in relation to gold, because the banks would make no spectacular losses; and the ordinary people have little use for gold. You will remember that the Scottish option clause notes circulated at par although they were at a discount in relation to gold. I do not think that the remedy for this is to limit bank advances. High prices in themselves discourage consumption, and encourage production. If the trouble is frequent, debt contracts should contain a clause dividing between debtor and creditor any variation in the value of the credit medium. But such general over-issue by banks has been rare. It occurred in England in 1846 when the banks made too large loans to finance the building of railways.

Runge. I do not understand your objection. Runge's method would deprive banks of cash, and force them to restrict advances; and therefore prices would fall. The disadvantage

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of the scheme lies in its indiscrimination: it would hit all banks and all producers. It would be better to prohibit

State creation of money, and allow free banking; but Runge's proposal is one to meet present conditions.

Gesell mentions the Woergl experiment. I believe Woergl used his method of progressive reduction of the value of notes. I have never agreed with Gesell, although he has a large following in U.S.A. He thought that monetary shortage sprang from the tendency to hoard currency. I think this an error.

It is interesting that the Conservative party here proposes to meet inflation by varying the contributions to unemployment insurance - which is very similar to Runge's scheme. I have sent a copy of the proposal to Runge, and he proposes to write to Mr. R. A. Butler, who is the brains behind the Conservative financial proposals.

I hope you will write me that you will be able to travel by the time I come to Germany - about the middle of March.

Your last letter was all burst open along the edges. But the contents were intact.

(Apparently, he sent him copies of letters, clippings and notes - all burnt by M.! - J.Z.)

Sincerely your - signed: Henry Meulen

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16 Feb. 1950

Dear von Beckerath,

I am very sorry about your health, and I will not tempt you further to make the journey. If I can find some way to get into Berlin, I will visit you; but I am not hopeful.

Scots Ind. Yes - I agree. But Gibson has to keep the movement together, and must not take longer steps than the rest of the battalion. I have lost many readers of our journal through banking propaganda.

Weekly Register. Sagar was formerly a member of our Association, and has read the "Individualist" for many years. Some people are stolidly proof against our propaganda. But then, all the contributors to the paper are Catholics. Pepler, an old friend of mine, the Asst. Editor of the Register, wholly approves of free banking; but he is very ill with heart trouble. There seems to be something tragic about free banking propaganda!

Truth surprises me sometimes by its reactionary opinions. Collin Brooks, the Editor, told me some time

back, in the course of a tel. conversation, that he is much interested in the "Individualist", and reads it regularly

and carefully. Yet when I offered him quite an elementary article on free banking, he returned it, saying that it was too technical for his readers.

Zwangskurs. What is the precise difference between this and "Annahmezwang"? In the case of notes with cours forcé, you write that "Business men observe the influx of fresh notes." This brings me to a general criticism of your opinion on this subject. You do not reply to my criticism of this contention in my letter of Feb. 8. I wrote that a general rise of prices can occur if bankers make more loans (or at longer dates) than the resources of the

country can stand. In such a case the banks would make no spectacular losses, and business men would expect an influx of fresh notes, and would not lose faith in the issuing bank.

I think the only reply is that the banks have an interest in not endangering their position by engaging themselves too deeply in loans. They have the continual test, obvious to them, of the volume of their loans in comparison with their deposits. The future is always to some extent uncertain, and a prudent bank will keep some margin of reserve against possible eventualities. But, and this was my point, the mere absence of cours forcé will not render such over-issues impossible. I think we should admit this.

I am glad to read your criticism of Keynes. A pamphlet on "The mistakes of Keynes" would be of real service to the free banking movement.

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Runge. Yes, of course, he proposes to increase the proportion of cash in tax payments only when prices are

"too high". I have often written him to point out that the State has no exact data on which to base an assertion that prices are too high. It seems to me that R's proposal would work only if the State destroyed a portion of its paper money as it received it back in taxes. Yet - since the State uses the tax revenue to pay its expenses, it will have to create more notes if it destroys the old ones. The total effect will therefore be merely to slow down the process of inflation. But this must have its effect on prices.

The Party programmes. Yes - they are disappointing. About two years back Bevin admitted that unemployment during the last century was largely due to shortage of money. But for election purposes he copies the other Labour leaders in ascribing that unemployment to the absence of planning, and to "free" competition.

One of our members sends me a few papers, among them our Fascist journal "Union". Mosley seems to be copying Mussolini's "Corporative State". He receives "The Individualist"; but it seems to have no effect on him. It is amusing to find him urging proportional representation (the chief hope of the Fascists of getting some members into parliament), whilst at the same time he denies the fundamental principle of democracy - free election.

(J.Z.: Rather: Respect for individual rights, especially those of dissenting minorities. And this would require that "democrats" would give up territorialism, i.e., rule by "representative" minorities or by majorities, of all people in a whole territory. - J.Z., 13.5.03.)

I am sending you these papers. They are more diligently annotated by our member than any papers I have yet seen. His markings lose their weight through their frequency.

Ezra Pound, the author of the pamphlet on Money, is an American poet, whom I met here many years back. He moved to Italy, and became a great admirer of Mussolini. He was later prosecuted in USA for treason, but was judged insane. He did some magnificent translations from Provencal poetry.

It is interesting that we have a paper to advocate the claims of old-age pensioners.

The Peace paper may interest you through its advocacy of the abolition of conscription. The Liberal Party here makes the same claim. I think we would get a more, efficient army by voluntary methods.

I hope you will get well. It cannot be the food, since you eat so little, and are mainly vegetarian. Our govt. has recently discovered that the chemical bleaching agent that it has been putting into our bread for the last ten years produces convulsions in dogs. It therefore proposes to use a fresh bleacher which does not affect dogs. It says there is no evidence that the old bleacher affected human beings; but I am doubtful. At least one eminent

doctor has ascribed the great increase in duodenal ulcers to this bleaching agent. And we have been eating it for ten years!

Sincerely yours - signed: Henry Meulen

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The Editor of

"The City Press". 17 Feb. 1950

Dear Sir,

When I wrote that practically every professional economist today condemns the Gold Standards, you replied stoutly that you did not care two hoots for the professional economists. Yet I notice that your contributor Mr. Geo. Winder twice quotes Professor Lionel Robbins in defence of the Gold Standard. Professor Robbins is, however, a most lonely knight in his defence of that seductive blonde, the Gold Standard.

Still - let us leave professional economists and look at the facts. The fundamental objection to the Gold Standard is that whereas it leaves bullion dealers free to profit by moving gold to whatever country sets up a demand, it leaves only one method of getting the gold back, namely, a rise in the Bank Rate, which means that all our industry must be choked back in order to give bullion dealers the incentive to return the gold. Before the 1914 war we were the only country in the world to maintain a Gold Standard.

During the period 1875-1900 our Bank Rate was altered 167 times, whilst Germany's rate was altered only 84 times, and France's 25. Professor Andreades states that the Bank of England was the only bank at which the range of fluctuations during the same year had on three occasions amounted to 5 1/2, 6 and 6 1/2 %.

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Elsewhere as a rule the fluctuations were 1 or 2 %.

It is estimated that the producing classes of this country lose between L 50.000 and L 200.000 per week from a rise of 1 % in the Bank Rate. Moreover, and perhaps more important, the inability to foresee a drain of gold under the Gold Standard compels banks to enact more valuable security as a base for long-date advances. This is a grave handicap on enterprise.

The 1929 depression was due to a demand for gold from U.S.A., a demand which the Gold Standard left Europe powerless to resist. The demand drained our gold reserves, and threatened to bring our entire credit system to the ground. Had we not been on the Gold Standard, we would have suffered only in a diminution of our experts to U.S.A.

Mr. Winder states that we did not deflate between the wars. Deflation here began already in August 1919, when Mr. Chamberlain complained of inflation.

In Nov. 1919 the Bank Rate was raised to 6 %, and to 7 % in April 1920, where it remained for a year. By the spring of 1921 prices were falling headlong, and unemployment spread through industry. Whereas for forty years unemployment had only once reached 10 1/2 %, in 1920 it sprung to 17 %.

And I must demur to your frequent assertion that the Gold Standard is a "free" system. The Gold Standard rests on legal compulsion upon the Mint and the Bank of England to buy and sell gold at a fixed paper price.

If coffee were traded under the same conditions, would you call it a free coffee market?

Faithfully yours (Henry Meulen)

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My dear von Beckerath, 28 Feb. 1950

Thank you for your letters of 9, 18, 21 and 22 Feb. I have been rather occupied with overhauling the car, and have not had leisure or peace of mind enough to digest your letter of the 18^th properly. But I will

put it in my bag, and take it with me for quieter reading. Meanwhile I write my present impressions of your argument.

Zwangskurs. Thank you for your lucid explanation. I think our expression "Legal tender" would be used both for Zwangskurs and Annahmezwang; but we have never had, I think, Annahmezwang for a currency of fluctuating value in gold. You will remember that a charge of "Incivism" was brought against Lord King for making a difference between gold and paper notes.

Inflation. I rather think that your principle that a banker cannot issue more notes than his debtors could issue (accept!!! J.Z.) is vague. What amount of notes could his debtors issue?

(J.Z.: ??? He could and should, by contract, accept the Bank's notes at least up the amount of his due or soon due debt to the bank. - J.Z., 13.5.03.)

You write that the "natural" limit would be his ability to redeem his notes (or his banks! - J.Z.) by existing goods or services, or in satisfaction of debt.

But let me return again to our period of railway building (see P.115 et seq. of "Free Banking"). The railway companies borrowed freely from the local banks. But the companies would have been quite unable to redeem those notes for some years; yet the banks were so certain that when the railways got going, the loans would be duly repaid, that they engaged themselves deeply - too deeply - since prices rose, gold was drained abroad, and a crisis ensued. In a long-date loan the entrepreneurs must

(J.Z.: ??? That, too, should be voluntary and not done by "the community" but by individual or corporation etc. investors! - J.Z. 13.5.03.)

be supported by the community until they are able to market their goods. Now - what test has the community of its ability to support fresh production? This is one of the most thorny problems for a Socialist State, which must rely on production figures and estimates supplied by the State factory managers. Russia long ago found out how unreliable such figures can be.

(J.Z.: Here, once again, M. did not notice that B. did not propose, like M. did, note issue for medium or long-term investments, on trust and to finance the capital costs to produced future goods, but only note issues for turnover-credits, the promotion of immediate clearing of already produced goods, even goods that are already sold [at least from the producer to the wholesaler], a sale represented by a "real bill" or "sound commercial bill", which the issuing bank discounts with its fresh notes, with these notes also and immediately covered by ready for sale goods or services or labour or receipts for due debts in local shopping centres, among all the debtors of the issuing bank. For all capital issues B. like most other economists, proposed the issue of suitable capital securities, also suitably and gradually retired, like bonds or giving, like shares, ownership decision-making power over capital assets and all being transferable capital securities in the capital market, not in the currency market. J.Z., 13.5.03.)

I think that freedom offers a better test. Under freedom the private investor and the banker are the two sources of long-date loans. The private individual can invest only if he has savings; which indicate that he has abstained from consuming. Therefore when he invests there is little danger of inflation, since it is unlikely that many men will hoard vast savings, and then invest them all at the same time in quantities enough to cause inflation. There remain the banks. And here I think the banker ordinarily has the test of the comparison between his deposits, cash and his loans. His deposits and cash are a rough indication of his customers' wealth.

(J.Z.: I certainly would not have trusted Meulen as a note-issuing banker, even after he had supposedly studied note issues, rather than capital security issues, for many decades. - Somewhere in his correspondence B. quoted someone as saying that the art of sound note issues consists in the ability to distinguish a real bill from a mortgage or capital loan. M. showed all too little of that ability. - J.Z., 13.5.03.)

2,

The banker is able to look ahead in a way that no other man can. He knows when his loans will be repaid, and he knows when his borrowers are likely to begin marketing their goods. He may well be able occasionally to make long-date-loans - he does it today, though not as often as circumstances warrant - and I think he should not be prevented.

(J.Z.: And what shall his acceptors do with his notes before his medium or long term loans become due, or even any of the instalment repayments? Eat the notes? What purchasing power do they have? M. never bothered to answer this "reflux" question properly, because he relied on "trust" and "good reputation" and on gold metal redemptionism, although only at a fluctuating value of gold, reckoned in his notes. By his arrangements no retail shop would be obliged to accept the notes of a Meulen bank and no service provider and no debtor would have to accept them, except the debtors of the M. bank, in the future, to the extent that all or parts of their debts to the Meulen bank would become due. The refusal or strong discount for M. notes would soon prevent M. to issue any more of them. Those who accepted a note from him might get it framed with the comment: I, too, was a fool once, and accepted such a note as "currency". At most it is "scrip" with which I can buy from the M. bank a part of the long-term loans or securities it invested in. Otherwise one would have to rely on his unreliable gold metal cover. - J.Z., 13.5.03.)

Of course, individual banks may make mistakes. In rare cases (our South Sea Bubble, and the US crises of

1907 & 1929) a lot of banks may be carried away by popular optimism. But the harm done by such collective optimism is both less and rarer than that which occurs under State planning. After all - the banker has always the sobering thought that the future is not wholly predictable; and this will make him cautious of engaging himself too far ahead.

(M. did not realise, that his proposal of lending fresh notes for medium and long-term capital loans did also constitute an extreme case of unfounded and all too popular optimism. - All his note issues not based on immediate "shop foundation" or its equivalents were incautiously engaging his kind of bank too far ahead. - J.Z., 13.5.03.)

You write that since loans are so small in comparison with production, loans are unlikely to affect prices.

(J.Z.: I doubt that B. ever expressed himself as vaguely and inaccurately. Capital loans can be very large compared with current production. But short-term turn-over loans are small compared with large and long-term capital loans. Which type of loans did M. mean here, when he put words into B.'s mouth or letters, which cannot be found there, I am sure? M. did not state their kind. - J.Z., 13.5.03.)

Are you not overlooking the fact that a pound note may effect the exchange of hundreds of pounds' worth of goods?

(J.Z.: As long as each time it does turn over 1 Pound's worth of goods or services, it does thereby do good and does not do anybody any harm or wrong. But hundreds of traders are only obliged to accept the one pound note at par when they are debtors of its issuer! Thousands more are free to refuse it altogether or to discount it. But precisely because the hundreds of debtors are under great pressure to pay back their short term debts, soon [these debts being one of the foundations for the issue of notes] the pound note will sooner rather than later return to the bank in payment of one debt or the other. - If, in the meantime, it has helped to turn over dozens to hundreds of pounds worth of goods and services, all in 1 Pound transactions, who would have any right or reason to complain about these voluntary turnovers for mutual satisfaction? After all, that is what exchange media are for. And if dozens to hundreds accept a private and competitively issued 1 Pound note readily at par, for their exchanges, then, apparently, that note was soundly issued and had a sound reflux path. - J.Z., 13.5.03.)

Yes - I am familiar with the Jevons sunspot theory. I have never been impressed by it. I think a more plausible explanation of the periodicity of crises is given in my book where I trace the course of booms and slumps. It is a fact that during the 19^th century every rise of prices, if it persisted long enough, caused a drain of gold in exchange for cheaper foreign goods. If the rise was due to trade activity and increased lending by banks, that trade activity may have been due to sunspots; but it is simpler to suppose that after the slump, men are relieved to find prices rising a little, indicating a revival of demand, and that they hasten to supply that demand.

Option clause. When I wrote that these notes circulated at par, I meant at their face value. Shortly after their introduction all the Scottish banks marked their notes with the option clause in order to protect themselves against unforeseen demands for their gold. The banks in northern England also used the option clause; but I believe the practice never extended further south. The option clause notes would of course be accepted only at a discount by bullion dealers who wished to convert them into gold.

I duly received the Sotheby coin catalogue. Thank you. I will put it on my shelf.

There - that's enough. I've not yet finished packing, and I must be up at 5.0 tomorrow morning, since I have to be at Dover at 9.35 a.m. If I can find a means of flying into Berlin from somewhere, and if I still have money enough, I will see you. Letters will be sent on to me from home until the 16th Mar.

Yours - signed: Henry Meulen

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(Another Nazi Law, applied long after the regime was, otherwise, destroyed. I copied the whole "Auszug aus der Reichsmeldeordnung vom 6. Januar 1938 Reichsgesetzblatt I S. 13) but here reproduced only 3 significant passages from this extract. - J.Z., 13.5.03.)

"Zur Meldung verplichtet sind: …. " (Obliged to notify are: (all kinds of public accommodation facilities)

"Die beherbergten Personen sind binnen 24 Stunden nach ihrer Ankunft auf dem fuer Beherbergungsstaetten vorgeschriebenen Meldevordruck zu melden. … (The hosted persons are to be reported within 24 hours after their arrival on the form prescribed for the accommodation providers.)

"Verweigert eine zu meldende Person die Ausfuellung des Meldescheines, die Angabe ihrer Personalien oder die Unterschrift, so hat der Wohungsgeber unverzueglich die Meldebehoerde zu verstaendigen (par 17).

(If one of the persons to be reported refuses to fill out the report notice, the details on his person or his signature, then the accommodation provider has immediately to notify the responsible police office.) (Under the Nazi regime the Gestapo might then have arrived a few minutes later. - J.Z., 13.5.03.)

(M. filled out this "Meldeschein" fuer die "polizeiliche Meldebehoerde" on 22. March 1950, at the Pension Heltzel, Berlin-Friedenau, Kaiserallee 137 I. 83 0237. As birthday was noted: 15. Oct. 1882, as birthplace: London. - Did these two ever meet before or after? I do not know, but somehow doubt it. - J.Z.)

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V I A A I R M A I L P A R A V 1 0 N

with AMERICAN

AMERICAN AIRLINES, INC. AMERICAN OVERSEAS AIRLINES, INC. … Friday 24. III. 50

Frankfurt

My dear von Beckerath

Here are the Marks I owe you. The extra is for the extra money you spent on my behalf.

It is kind of you to have given me so warm a welcome. I can only regret that you were bothered with an invalid, instead of an interesting companion.

But we will continue the discussion by letter as soon as I am back home.

Sincerely yours - signed: Henry Meulen

Enclosed 25 M

_____________________

If everything goes well, I shall reach London on Mar. 31 st.

____________________________________________________________________________________________

3 April, 1950

My dear von Beckerath,

Here I am, safely back, although I reached Calais with only 2s. 3d. of my fifty pounds. My stomach was only moderately good on the journey back; but with rest it is already improving.

Thank you for your letters, all duly received. I will read them more carefully, and reply when 1 have settled down a little.

It is kind of you to write that you enjoyed my visit. I am sure that I enjoyed it more than you, for I must have upset your settled routine. I apologise for not having given you notice of my coming; but I did not know until the last day if I could be allowed to fly.

On the return aeroplane journey the stewardess handed round postcards and notepaper to the passengers, and we were told that the Company would pay the postage. I used the notepaper and envelope to write to you, and enclosed 25 DM which you paid out for me.

I find that most of the cards did not arrive, and I am wondering if you got the letter. Would you write me? If you did not receive the letter, I must write to the Company.

I hope to see Zander shortly, and I will give him your message. I am sure he will be envious of me for having been able to see you.

With many thanks for your kindness to me during my brief stay. What a nuisance it was for you to have an invalid on your hands.

Sincerely yours - signed: Henry Meulen.

P.S.

I think I returned to Frankfurt on Friday the 24^th Mar.; but I should be glad if you could verify this. I must be able to tell the Company what day I travelled.

____________________________________________________________________________________________

Dear van Beckerath, 19 April, 1950

I have now read carefully through your letters.

They are extraordinarily interesting, and I have made several extracts for use in future Individualists. Indeed I could fill a whole number with extracts if my editorial prudence did not lead me to satisfy readers with some comments on current topics. It is a thousand pities if you do not edit your own journal. I make an average annual deficit of £ 10 on the "Individualist". I am ready to subscribe £ 10 annually towards the cost of a German "Individualist" if you will edit it. Can you not get a few of your friends to do likewise?

Now for a few points of controversy. In your letter of Mar. 3 you write that my question

"What amount of notes can the debtors issue?"

can be easily answered: it is that amount which the debtors are able to convert into articles of day-to-day use, plus the amount they are obliged to accept for due debts.

I would point out that whether or not a man can sell his stock at a profit must always be speculative. Whilst a banker may make an advance against a man's stock, he is (or rather, was) generally guided rather by the borrower's character. A man of good character will generally find a way to pay his just debts, whereas a rogue will find a way of evading them. Therefore, should say that the community is wiser to trust a banker's judgment.

In the matter of the length of the loan again, I think the banker is the best judge. No fixed line can be drawn in a free system between short and long loans. The old bankers tended to be more liberal in loans to a man who was continually turning over the money in his business, because that meant that money was constantly coming into the bank; whereas a borrower who used the loan to clear a forest, for instance, would be able to make his first repayments only after some years, which might embarrass the banker.

Moreover a main test of the banker was the safety of the loan - it was the more risky loans that he left to the private investor. After all, the chief asset of a banker is his reputation as a prudent business man. If he made a bad loan, he lost not only the money but his reputation; whereas the private investor lost only his money.

(J.Z.: As usual, M. made no distinction between A) a loan of capital, the own and that invested with the banker and B) the loan of exchange media issued to promote turnover, and secured 1) by shop foundation offered by short term debtors of the bank and 2) for each batch of issued notes also by a short term IOU or bill of exchange that represents goods produced and already sold, to wholesalers and on their way to the retailers, in the discount business for these short-term securities, which constitutes the turn-over credit business of applying the sound "banking principle" of note-issuing banks. Just because historically and due to the metal redemptionism most banks did not clearly distinguish these two kinds of business, is no reason not to make these distinctions now for sound note-issuing banks, which keep their capital trade apart from their note-issue trade, unless they use for their capital trade 100 % covered gold certificates. To the extent that they own their gold hoard or that it is entrusted to them for medium or long terms, they can, naturally, also dispose of it in medium or long term notes with their gold certificates. [Currency principle for note issues.] For their turn-over credit notes [real bills or sound commercial bills, temporarily replaced by notes in convenient denominations] no gold cover is required and no gold redemption need be promised and, nevertheless, they can express gold weight values and can be so soundly issued and regularly taken back in payments of debts owed to the bank, so that these notes stay at par or close to par within their sphere. - J.Z., 29.5.03.)

In my letter of Feb. 26 I wrote "You write that since loans are so small in comparison with production, loans are unlikely to affect prices." (Where did B. write this??? - Was there no qualification to the first mentioning of loan in this sentence, like "note-issue loans", "turn-over-credit-loans" or real bill discount loans? -J.Z., 13.5.03.)

Are you not overlooking the fact that a pound note may effect the exchange of hundreds of pounds' worth of goods?"

You reply that every sale - as far as its price influence is concerned - is balanced by the succeeding purchase. But

2.

monetary reformers have always remarked the snowball effect of a loan in t