____________________________________________________________________________________________
MeulenBth section three
U. v. Beckerath, ...
6.
III. 1950.
Dear Mr.
Meulen,
Some points in which we agree completely in Free Banking are:
1.) The liberty to issue notes should be without legal
restriction and should include everybody.
2.) The existing laws against swindle are sufficient to meet
swindle in issuing notes.
3.) The right to refuse to accept notes should be as
unlimited as the issue is. The observation of traditional manners and forms in
business is sufficient to avoid misuses. (Example: If a landlord does not like
the notes of a certain bank then he must say it seasonably, 3 or 4 days, or an
the usage may be, before pay day.) Probably there will
arise a right, founded upon custom, as some years before in
China - - with her numerous issuing banks and firms - - so that every creditor must accept
"local currency", if it is not expressly and by agreement excluded.
(J.Z.: Development in China would have gone very
different if most of its banks of issue would not have practised the metallic
redemption spleen, too. - J.Z., 2.6.03.)
4.) The standard of value, by which the face value of notes
is expressed, depends upon the issuer and nobody else. The issuer is obliged to
express the standard's nature, on the notes, so well that no doubt can arise.
(Examples: "The pound of this note is a bank note pound in the sense in
which Mr, Meulen's book defines it. Or: " The gold unit of the face value
is that of the bullion market of Liverpool quoted for one ounce. The last known
quotation binds the banker." Etc. Silver, Corn, gas, an index, nothing
should be excluded, if it is defined so distinctly that no doubt can arise.
5.) The time of validity of a note should be limited in a
distinct manner.
--------------------
It you agree, then
we are d'accord in all what is essential.
There seems to be a
difference in predicting how the public will accept the notes.
I say: If we have
complete liberty of issuing, there will soon be a state of affairs very
different from that prior to 1844. At that time money, including notes, was scarce.
The bad prescriptions concerning redemption allowed only a very restricted
issue. The option clause protected, to a certain degree, the banker, against losing
his store of gold coins or silver coinage, but did not take from him the
obligation to keep such a store and to limit the issue correspondingly.
But if notes are no longer scarce, then the public will, a short intervals, try
to utilise the notes. (J.Z.: I suppose, he meant: by converting them into rare
metals or redeeming them in rare metals, at least for some amounts they want to
save in this form. - J.Z., 22.3.02.) Keeping notes (no longer scarce - J.Z.)
for a long time in their pocket will then no longer be common usage. If then
the possibility to so utilise the notes in not (very) convenient, then the
public will refuse the notes.
It will and must be the banker's aim to arrange for many
places where the notes are accepted at par, even if their quotation at the
market is below par. In practice, there is only one possibility: The banker's
debtors must all be obliged to accept the notes at par. (This is no innovation:
Free Banking, page 81, lines 5 to 7 from the bottom.)
You say: The public
will keep trust in the banker, and one effect of that trust will be, that the
notes are used exactly as now cash is used. There will be no tendency to bring
the notes soon back to the banker - - directly or indirectly via the
banker's debtors.
I say: If the
banker grants long-term loans (with his notes - J.Z.), he and his debtors are
unable to realise the notes quickly, say all notes within a few hours. But such
a necessity must be taken into consideration.
You say: Such cases
will not occur and if they occur, the Bth-banks will be in no better
position than my banks. That needs no proof.
I say: If the
public, in a case of "panic" has notes that it cannot utilise, the note-holders
will come to the banker and ask him, what to do. The case will not be quite
desperate. The banker gets interest from the debtors and, therefore, he can say
to the note-holders: Good people - - I convert your notes into gilt-edged
securities bearing interest and convertible at my counters, or into securities
of my debtors for goods, services or payment of debts, also into cash or other
notes, if [and to the extent that - J.Z.] I get such means of payment. If the
interest is high enough the public will, probably, be content. For secured high
yield certificates there is always a demand. In the worst case, the owner of
the certificate will exchange it against local currency, suffering a discount
of 2-5 %, but - - if the interest is
the usual - - very probably not more then 10 %.
My banker
says from the first: Why the roundabout way? I begin by selling such
certificates, just like Swiss bankers still do today (Bank-Obligationen), as
everybody knows, who was at Basel and saw such Bank-Obligationen in the bank's
display cases, ready to be sold. (3 1/2 % interest and a 5 year term were usual
when I saw them in the year 1926.)
The difference will
be: My banker never has any trouble with the public. Your banker goes
the right way, after a considerable trouble with the public, which will even
lead to some distrust against him and, in any case, might prevent him from issuing notes the future.
You say: The
contrary will occur. No certificates will be necessary as the consequence of a run.
But that people buy security certificates and use my own notes as a means of
payment may occur, although not often.
----------------
There are still
some other points to be observed, which I tried to explain in several letters,
one of 29.12.1948, and others.
----------------
My system works
only if existing goods are to be exchanged for other existing goods.
The intention of
your system is: to exchange future goods for existing goods.
I say, that is
easily possible with the help of interest.
You say: Interest
may be replace by the trust of note bearers in the banker.
I say: The exchange
of present goods for other present goods is essentially different from the
exchange of future goods. For the former a transportation (railway, ship, car,
etc.) is wanted, and the bank finances that.
The exchange of future goods is a "book"-affair.
--------------------
Our main difference
seems to be that I believe in frequent "runs". (Their possibility or
likelihood, even their desirability in B.'s system! - J.Z.) (The short
expression may here be used, although the meaning is somewhat different from the word's former meaning).
You don't believe in them.
Both of us do not know the future. But, judge for yourself:
Who is "on the safe side"?
-------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 11.
III. 1950.
Dear Mr. Meulen,
I thank you very much for:
1.) City Press of 24. II. 50,
2.) The Weekly Register of
24. II. 50,
3.) The Economist of 23. II. 50,
4.) "The Crisis
of Liberty" by David Douglas,
5.) "The Individualist", Danville, Virginia.
August 17, 1945 (No. 60),
6.) A cutting from The Times of February 21, 1950
("Policy for Industry")
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Every issue of the
City Press is interesting. A bad news I learn from issue of 24. II.: Mr.
Alexander, whom I consider as a champion fighting on our side, although he
demands redemption of notes, on demand by the bearer, lost the L 150
deposited by him a candidate for election. He could have used the money for
better purposes.
On the other hand, I am glad that such a champion will not
be occupied by non-productive parliamentary work and
can now fulfil the task for which nature has destined him:
Fighting against the present state of English money. (If Alexander would know
that a paper money without cours forcé is better than one not subject to the
daily renewed investigations of a really free market, that could produce
surprising results, simply because his tribune is such, that every Englishman
must hear him.
-------------------
I learn from the
issue that Chilean merchants sell dollar coins to Americans for the price of 47
dollars an ounce. Both governments, that of Chile and the USA permit that
trade. In realty that means, I think, that the USA-Government confesses a
depreciation of its paper dollar in the ratio of 35 to 47.
People like the Professor Spahr in New York should
know the now paid price for gold coins and try to prove that, nevertheless, a
redemption of paper dollars in gold coins, on demand of the bearer (which they
desire) will be technically possible (at the old rate of 35 dollars per ounce -
J.Z., 24.2.03). I think it impossible, in spite of the great store of gold in
the USA.
----------------
Although both - -
Spahr and Alexander - - demand redemption at sight, there is a great difference
between them. Alexander is on the way to our money system. Spahr is a strict
defender of "exclusive currency". If Alexander would read your book,
he very probably would become an adherent of Free Banking. Spahr certainly
would not. Both are convinced that they are demanding the best for their
country.
-------------------
The Weekly Register
is as bad as it is interesting. At page 6 Peter Marriot says: "It is of no
use to return to a Christian form of society unless the fundamental spirit
pervades it."
What kind of spirit inter alia is required, the
Distributionists may learn from the emperor Constantine, who is the real
creator of Christendom - - a religion which already at his time had not much to
do with the reforms proposed in the Evangiles. Peter Marriott seems not to know
that the emperor (one of the greatest rascals of his time in private life, but
a very intelligent man, who understood the art if governing), abolished the
monetary system of the Caesars, whose unit was the Denar, a coin endowed with
cours forcé and whose value was determined by the Caesars according to the
requests of the public treasury. Constantine renounced the power of devaluating
the Denar, abolished the name and replaced it by the "Solidus". 1
Solidus was 1/72 of a Roman pound, so that it contained 4.55 grams of fine
gold, without regard to the fact whether gold coins were obtainable in the
economic sectors of the debtors. Perhaps, at the time of Constantine, the value
of gold was, to a high degree, dependent upon the annual supply of gold by the
mines. (Some contest that and assert that the store of gold in the Roman empire
was too great to be affected by the annual supply.) At any case, the system was
honest, although imperfect, and no longer at the mercy of the Caesar.
That progress was enormous. I am convinced that, at that time, many people
said: The religion of such an honest Caesar must be good: let us accept
it!
The Distributors do
not talk about re-introducing honesty into the monetary system!
----------------
Economist. News
from the race fights in South Africa. The Whites in South Africa do not
consider
1.) that their number is only about 3 millions,
2.) that the natives number about 9 millions and, probably,
much more, since statisticians are finding great
difficulties in
counting the people. In many cases young children and women are not counted.
(The old
superstition - -
II Samuel 24 - - still prevails in Africa that counted people must die.),
3. That there exists
a strong temptation for Indian governments to make a war against South Africa -
- 400 millions against 3 millions, aided (that is certain) by 9 million
natives. This war will occur before another 20 years are passed. (B. was not
much of a prophet! - J.Z., 24. 2. 03.) Then the Whites may be glad when their
the conditions for their race will not be much worse than they are now for the
coloured, Indians and Negroes. I am convinced
that the new Babur in India and a second Cetewayo in
South Africa are already born.
-------------------
There is an article
in the Economist: "Anglo-German Talks". The problem of paying for
English exports to Germany with German exports, could be easily solved if
people would listen, for some minutes, to their own reason. If the German
imports from England would be paid for by German certificates which stated:
We, the issuer, accept this Certificate for
the value of 100 Dollars (or 100 pounds, etc.) if the bearer buys anything in
our shop or at our store and pays with the certificate.
The Dollar
value is determined by the relation of dollars to German Marks at the Exchange
of London. -
This
certificate expires 5 years after the issue.
then the English exporters, who brought goods to
Germany, could sell the certificates to the English government and receive
pounds. The government may then determine what to do with the certificates. It
may buy, within the next 5 years, things really wanted in England and not
provided by the English industry. Or it may sell the certificates to other
governments, which do wish to buy useful things for their country and made in
Germany.
Under this system a German competition for English industry
is impossible and, nevertheless, both countries enjoy all advantages of an
English-German commerce.
These certificates
will be at a discount on the Exchange of London. This discount must - - of
course - - be paid by the Germans. I think that the discount will never be
greater than about 5 % and often will be less. The German railway money, at the
Exchange of Zurich, was often at par with the German Reichsbank Notes and the
discount was always small. (My library being burnt, I cannot tell you the exact
numbers.)
---------------
From the pamphlet
"The Crisis of Liberty" I learn that there exists in London a
"Society of Individualists". The pamphlet, so interesting it is,
disappoints me very much.
The author does not
see, that the basis of the present attacks on liberty is the compulsion
exercised against the people and every individual to accept the paper pound
note for a gold pound. If the paper pound would not be endowed with cours
forcé, all would be alright. At the bottom of the beginning of British slavery
is the cours forcé. Obviously, the "Society of Individualists" does
not see this. Nobody in England sees that. The political, social and economic
significance of the cours forcé was fully pointed out by Adolf Wagner,
Professor at first in Russia and then in Freiburg and later at Berlin, in his
work: "Die Russische Papierwaehrung" (The Russian Paper Currency),
Riga, 1868.
(This work honours Adolf Wagner no less than the emperor
Alexander II, under whose reign such works could be published without danger
for the author. If now an author would write such things, he would at once
brought to a concentration camp.)
Especially interesting for your would be Adolf Wagner's
"Die Geld- und Kredittheorie der Peel'schen Bankakte" (The Theory of
Money and Credit leading to Peel's Bank Act), Vienna 1862, which, at that time,
was considered to be by far the best critique of that 1844 Act. Wagner shared
your standpoint in what is here essential. Wagner's influence was so great that
the Prussian wars of 1864, 1866 and the German war of 1870/72 were carried out
without cours forcé for the paper money. When, after the war, a new paper
currency was introduced, the $ 3 of the Banking Act of 1875 prohibited for
every federated German State the introduction of a cours forcé. Here also the
influence of Adolf Wagner and his adherents was visible.
----------------
The
"Individualist", Danville-issue, says:
"There can be
no inflation without increased credit."
The inflation of John Law in France, the
Assignats-Inflation, and many others do prove that increased credit is
by no means an essential element of inflation.
The American
Individualists are men of good will - - certainly - - but they do not see
things as they are.
-----------------
Kong Foo Tse
was asked: What law would you enact as your first? His answer was: A law which
prohibits the use of well introduced words in a new sense.
If Kong would live
today, he would punish people, who changed the original meaning of the world inflation
and took it simply in the sense of dearth (or dearness - J.Z.) and also
those, who changed the original meaning of the world "socialism" and
took it simply in the sense of State capitalism.
Originally, inflation meant an increase of the volume
of fiat money beyond the amount that
could at any time be used to pay taxes with. Socialism originally meant
replacing private ownership of means of production with collective ownership,
cooperatives included. (Tucker, "Instead of a Book". Now the English do no longer possess a word
which expresses these notions and by that they are unable to talk about certain
social and monetary reforms and - - unluckily - - the most important of all.
(Well, at least for certain forms of socialism they do have: "voluntary
socialism" as well as "cooperative socialism". - J.Z.)
------------------
Very
faithfully Yours - signed : U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 24.
III. 1950.
Dear Mr.
Meulen,
The best result of our discussion was for me the
confirmation that we do agree in all that is essential and even in very many
details that may be considered as not essential.
Your statement, in
your book's chapter: "An Invariable Unit of Value" (page 247):
"In ordinary
economic language these two factors of value, desire and sacrifice, are
expressed by demand and supply",
has been overlooked by economists for its simplicity and
because it is so just that it seems self-evident after one has read it. But it
is a very far-reaching statement and. if applied to the problems of our time,
it may put these problems into problems into a new light.
Also your statements before the quoted sentence and the
following - are in strong opposition to all definitions of value known to me.
Most authors confound "demand" and "desire" or overlook
that desire is that which brings a genuine demand into existence.
(In Prussia until 1816 and in other European States during
the first decades of the 19th century, every family was obliged to
buy a certain minimum of salt, if they desired it or not, and to pay the
prescribed salt price.
Here the difference of demand and desire strikes the eyes
(taste buds? - J.Z.) and seems to invite every economist to distinguish, in all
prices considered, the "natural" element - - that is the desire - -
from the others.
Your philosophy of
price and value enabled you to criticise Professor Irving Fisher's "Compensated
Dollars" so fundamentally, that this dollar should never have got
adherents. The theory is now logically dispatched, and if the modern followers
of Silvio Gesell, Major Douglas and others would not be sinners against logic,
they would become aware of their spiritual death. But, as the existence of all
churches teaches, an awakening from this kind of death is a rare and difficult
thing and requires not only help from heaven but readiness to accept the help,
too. You quoted the Professor Sidgewick's example, where he made clear, that by
a "tabular standard" - - the father of the "compensated
dollar" - - very probably and in many cases - - rich people would be
favoured and the Poor had to pay more than they must pay if the tabular
standard would not be introduced. From your philosophy follows immediately,
that by no correction, either tabular standards or compensated dollars, may become just systems.
Modern adherents of
the index number standards are the most fanatic supporters of modern
"exclusive currency" - - to use W. B. Greene's suitable designation -
- with its central banking and its severe punishment for using other means of
payment than the authorised ones.
(J.Z.: Inventors or fans of special systems like to force
everyone to use it. They are convinced that they are the best possible
solutions and that, consequently, everyone, in his own best interest, ought to
be forced to submit to them. They also manage, like religious believers, the
fact of many different solutions being offered and that, therefore, the
likelihood of their own being the best one, is objectively rather small,
regardless of their own convictions or faith. The great risk of utilitarian
actions, made with the best intentions, but quite ignoring the rights and
liberties of other people, who do not agree but dissent. Only sufficient
tolerance for tolerant actions can finally dissolve this problems of various
idealists, true believers, revolutionaries, reformers and innovators fighting
each other and the conservatives or status-quo-preservationists and reactionaries.
To each his own - or: panarchies for all!
Let them commit their wrongs and mistakes only among themselves. And let
them benefit directly and immediately only form their own rightful and rational
actions. - PIOT, J.Z., 24.2.03.)
(In Germany the supporters of index currency call themselves
"Freiwirtschaftler", that is "freedom-economists", an
expression created by Silvio Gsell and, perhaps, the most misleading one ever
used by a political party.)
Desires can be
multiplied and increased to every degree that one may imagine. If it is true,
that desire is the basis of value, then the last good which may
be produced by the most improved plant still possesses value, if it satisfies a
desire. That is in strong opposition to modern economic theory. It
teaches, that the world's capacity to consume is restricted. It considers the
possibility of artificially reducing production by State interference as one of
the greatest advantages of government planning. You will remember, that the American
government reduced the area under wheat in 1949 by 17% for 1950, fully
recognising, that the now produced wheat was far below the desire of the
world. But - - the USA Government stated quite justly - - the 17 % would be
without value, because neither the USA Government nor other governments found a
means to transform desire into commercial demand.
That the free and
private issuing of notes is the first condition for creating the transformation
of desire into demand, is known to no government of the world, because no
responsible statesman - - it seems - - read your book. There you pointed out
how easy it would be, under a system of free note issue, to increase the demand
for labour, or, what here would be the immediate consequence, the demand for labour
products, to a higher degree than the offer of labour.
Future generations (if any - - atomic bombs) will may, that
this is, obviously, the natural state of things, for everybody is inclined to
consume as much labour as possible and to offer in exchange as little as he
possible can. If desire is permitted to appear as demand (*), then that part of
the social question, which Karl Marx believed to be the most important, is
solved. That part is the returning of the surplus (Mehrwert) to labour. Under your
system, wages and other recompenses of labour will rise, as long as the demand
for labour continues, until the technically possible maximum is attained, and
that maximum is the present amount of wages + surplus + avoided loss (by unemployment) + gain by improving the
industrial and agricultural plant.
It may be that the latter element is by far the most
important.
( (*) J.Z.: I would like to qualify this statement: The
satisfaction of the own desires can only be achieved through the issue of sound
notes, covered by the own goods, services and credits, as others are able and
willing to accept the own notes at par, or close enough to par, that is, to
the extent that the others desire the own goods or services or have to pay
back debts to oneself. To that extent the mutual and unlimited desires will be
balanced against each other and also limited by the monetary and mutual demand
for the other's goods services and receipts for debt payments. At the same
time, it is true, that in normal times, so much has been produced and is
offered ready for sale in goods and services, that the ability of consumers to
purchase these goods and services, is limited by their ability to offer
themselves and immediately or very soon equivalent goods and services in
exchange, in a process of unlimited division of labour - assisted by tools,
machines and automation etc. - and free exchange. Moreover, by their limited
ability to e.g. consume food items and to use more than, say, a dozen pots and
pans, watches, thermometers, toothbrushes, cars or planes. The immense stocks
of goods and services offered in every shopping centre, to the extent that they
can be soundly and freely monetised, would constitute an enormous and so far
unrealised monetary demand for labour, much larger than all the available
labour could immediately offer in return and thus realisable only in fractions
at a time, as far as turn-over credits are involved. [Beyond those amounts,
their utilisation for investments in capital goods, by those willing to do so,
can also be increased.] Unlimited desires of people, at least in some respects
- how many have their own yacht and plane so far? - will keep people working
and over-working themselves, to the limits of their abilities, while they will
always be - - objectively - - free to limit their earning- efforts and their
spending, reducing, rather than increasing their working hours. - J.Z.,
24.2.03.)
By your system those classes, considered by Marx as
exploiters, will become, in a short time, producers and, instead of consuming
surplus, produce wealth for the whole community, and that without State
planning and
concentration camps, but simply by setting free the economic
forces that are already developed in society no less than the force to
assimilate matter by digestion is developed in individuals and which works
there all the better the less it is controlled.
(I think that part of social biology is very well pointed
out in Bastiat's often misunderstood "Harmonies économiques".
(J.Z.: Marx
considered not only the owners and exploiters of legally established monopolies
as exploiters but all other owners as well, who do already now earn their
living by management efforts or by making pre-done labour in form of capital
available. Monetary and financial freedom and other economic liberties would
merely do away with legally imposed monopolies - or leave only those which are
freely and contractually agreed upon among volunteers. - J.Z., 24.2.03.)
The problem then to
be solved consists in distributing the social product among the different
groups of workers (the word taken in widest sense) as justly as possible. I
think that the now hated labour market will solve this problem as it will solve
the problem of abolishing exploitation and unemployment. Average people do not
see that only a free labour market can solve such tasks and that the
present labour market is not free. Merely the offer is free, the demand is
restricted by the limited amount of the "exclusive currency".
(J.Z.: The use of the term "distribution" is
misleading. At least the term "re-distribution" already indicates
that some looting and loot sharing is intended. But "distribution"
also applies that existing goods and services and properties are not already
distributed. Under free private and cooperative property rights everything is
owned and under freedom of exchange the owners are at liberty to exchange, and
thereby distribute their products, services and properties as they please. No
other separate "distribution" system is required than that of a free
market, a market not only free for labour but also for exchange media, their
value standards, negotiable capital instruments and, naturally, for all kinds
of products, services, raw materials etc., for all capital goods, except
those spurious and monopoly values that are only established by legislative
interventions and impositions. - J.Z., 24.2.03.)
The great error of average people (to which belong
politicians, ministers, authors writing in newspapers and "intellectuals") is to ascribe the
bad effects of the present labour-market not to its restrictions, which they do
not see, but to its very existence.
The superiority of
your system consists in is philosophical foundation, which connects the essence
of value with a technique to bring it into existence and to use it.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 25.
III. 50.
Dear Mr.
Meulen,
I reflected much on your question:
"What would
happen, if the demand for metallic gold should become greater than the offer? Must
not paper currency - - supposed to be at "libre échange"- - drop in
value, the value expressed in gold?
My answer is: Your Bank-Pound
Currency will, in this case, very probably drop, supposed that all commodities,
goods and wages are priced in Bank Pound Units.
Here we agree
completely, agree, too, in the opinion, that it would be a natural and
economically not prejudicial process.
Another question
arises:
What would happen? if
1.) all prices are expressed in weights of gold at, they
were before 1914, one sovereign being the same as 7,988
grams of standard
gold, 11/12 fine,
2.) all face values of the notes are expressed in weights of
gold, too.,
3.) all debtors of the issuing banks are obliged to accept
the notes at par in their business,
4.) the quantity of
issued notes does not surpass the amount which, in the case of a panic
may be exchanged, at
once, for goods
and services ready for sale at the debtors,
5.) an absolutely free and uncontrolled bullion market is
established,
6.) it would be permitted, for every possessor of bullion,
to get it coined - - by the official mint or, as in China at
the time of the
emperors, by private manufacturers. This freedom for owners of bullion was
legally granted
before 1914.
Every such owner, before 1914, had also the freedom to get medals manufactured
whose
inscription was:
1 gram gold, 2 grams etc., although - - in Europe - - nobody used such a right.
------------------
I think that
several different cases must be distinguished:
a.) the demand for gold arises suddenly, for great
quantities, but only for a short time,
b.) for a long time, so that, generally, the opinion
prevails: This increased demand will be for ever,
c.) the demand arises among all people, say as a consequence
of a new religion which requires for everybody holy gold vessels, gold statues
of holy people, and such things,
d.) the demand arises among such people whose incomes are
normally paid out in notes,
e.) the demand arises among people, who do not possess notes
but goods, exchangeable for gold.
My opinion is, that
a sudden demand for great quantities will simply remain unsatisfied. People
will help themselves by debasing the fineness of gold and sell e.g. rings which
contain 6/12 fine gold instead of 11/12.
In inflation times that is the usual means to satisfy the demand for gold. (One
of them, anyhow! - J.Z., 24.2.03.)
But I do admit,
that there may occur extraordinary situations, where the increased demand is
exercised by people quite willing to buy gold by a note of 2 grams face value,
for which they obtain only 1 gram fine gold. That would mean, for a certain
time, a depreciation of paper currency expressed in terms of gold weight. The
time may vary from 1 hour (it will very seldom be more) to longer periods. I
think that must be situations which, until now did not occur in history and are
in themselves extremely improbable. But improbability is not the same as
impossibility.
Please consider the
following circumstance:
It the first possessor of notes - - say wage earners - -
gave to gold owners two notes of 1 gram face value to obtain 1 gram of fine
gold, so that in this transaction the note gets a discount of 50 %, the man who
sold the gold is now interested to buy with the notes at the usual terms. The
goes with the fresh get notes to a shop. He will insist that the shopkeeper
will accept the notes at for their face value, that is at par. He knows that
the loan contract between the banker and the shopkeeper provides for the
shopkeeper's obligation to accept the notes at par, as long as he is a debtor of the banker. ("Free
Banking", page 81, line 6 from the bottom.) So the time of depreciation of
notes must be short. No businessman has cash in his pocket for long time. He is
not inclined to loose interest. Consequently, he buys something or he deposits the
notes with a bank. That this deposits will contribute to bringing the notes to
par I will point out in one of my next letters.
But let me shortly remark that it is an old tradition in
Germany (firstly used in Denmark, as far as I could ascertain) to prevent a
discount of notes by offering, to every note-bearer, gilt-edged securities,
bearing high interest, and which can be bought and paid by the notes at par,
may the quotation be as low as imagined. At the time of the Civil War the USA
Government used the same procedure. With greenbacks - - depreciated or not - -
one could buy certificates of the same face value, bearing 6 % interest,
payable in gold or in paper corresponding to the price of gold at the time of
maturity of the interest coupons. The same was offered for the certificates
themselves. Even for the German "Rentenbank-Scheine" of 1923 this
procedure was still used. The number of certificates sold for
Rentenbank-Scheine, which their owners believed to be depreciated or for which
they feared depreciation, was very small, if I remember well, for only 15, 000
Rentenmark.
The bank, with
which the notes were deposited, will hardly get rid of the notes, if they are
not at par. Greene reports cases in the USA, where notes circulated at a
discount without much difficulty. But at that time there were, in the little
towns and villages, where the notes circulated, certainly not shops like
Woolworth, where only notes at par are accepted. Artisans in villages may
accept notes at a discount without much trouble.
I beg to write more
about this matter in one of my next letters.
I forgot to remark,
that if in a country creditors are entitled to demand gold coins, or the
debtors promised to pay gold coins, and the borrowed money must be repaid and
exactly on time, then a crisis arises, an extremely vehement demand for gold
will be felt at every point of the country's economy, much more violent than
the most extreme industrial demand may be. That demand is a quite artificial
one. It may be satisfied, without any trouble, by a legal prescription, that
the creditor must be content with paper, valued at a free bullion market.
In the whole of
Asia, where no Western laws are introduced, creditors are not entitled to
receive metal, but only "local currency", as was the term in Chinese
documents. (Zander, perhaps, still possesses them. Please greet him cordially,
if you see him.
In England such
crises were several times ended by suspending the Bank of England's obligation
to redeem its notes.
We agree
completely, that credit should not depend on a stock of gold, and that an
exportation of gold to its technical maximum should not prevent the granting of
fresh credits, so as if no gold would have been exported. We agree also, that
such a monetary system is possible and could easily be established.
------------------
Aldred was
not elected - - I think. A pity that he lost his L 150 1. He should have used
the money to pay his debts.
"Mensch bezahle
deine Schulden,
("Man, you have to pay
your debts,
"Lang ist ja die
Lebensbahn, For
long is the course of life,
"Und du must noch
manchmal pumpen,
And sometimes you will have to borrow again,
"Wie du es so oft
getan."
As you have often done before."
- Heine, "Buch der
Lieder" -
Heine, "Book of Songs", tr. by J.Z.
The advantage for
him, his friends and England is: He gets now the time to study the right of
issue, to become aware, that it is a
fundamental right, much more so than the right to strike and to riot, and, if a
man like Aldred is convinced, then the true revolution made a step
forward. (An anarchist, who never wrote about this right!) (Just like
most others! - J.Z., 24.2.03.)
--------------------
I sent you the
"Weltspiegel" of 8. I. 1950. There I underlined the news that the
workers of the Maxhütte at Unterwellenborn (Thuringia) achieved a very
considerable progress in revolutionary thought by calling the present Eastern
system: "Plakat-Sozialismus". (Poster-Socialism - J.Z.) The
expression is excellent - - I think and deserves international spread.
-------------------
You spent much
money and three days of your rationed time to have intercourse with me! If I
say merely: I thank you, it would not be enough, but I cannot say more. What
consoles me is: We did not lose our time. Still three or four years of health
or at least of activity and we will produce something worth to be known.
-------------------
Very faithfully Yours
- signed: U. v. Beckerath.
The
"Individualist's" February issue arose much interest among my
friends. If you would send me still another copy or two, I would be very much
obliged to you.
Bth.
(Alas, he didn't even have a photocopier, far less
microfiche reading machine, a computer and scanner! - J.Z., 24.2.03.)
____________________________________________________________________________________________
U. v. Beckerath, …
26.
III. 50.
Dear Mr.
Meulen,
let me add to my remarks about monetary demand for gold in
my letter of yesterday, that this demand was rarely really satisfied, at
least not in the last decades of the old style gold standard.
For an interest of 7 % or more (in the years 1857 or 1873
for an interest of 1 % daily) creditors were ready to defer their claim to
gold. Thus was satisfied the creditor's real desire, and that was not gold
but profit.
If foreign creditors' claim to gold must be satisfied, it
was mainly because, before the days of cable telegraph, it was impossible to
deliberate with them. The demand for gold arrived - - say - - at the firsts of
August and the day for paying gold was the first of September. It was not sure,
that an English banker would get an answer, before the first of September, for
an offer to pay a high interest to the American creditor for deferring his
claim.
After the cable was
in use, the shipping of metallic gold merely for monetary purposes became
relatively rare, although it occurred
from time to time by imperfect arrangements of bankers. These things were
pointed out in a good book of the late Professor Liefmann at Freiburg,
"Geld und Gold", printed 1918. (burnt.)
---------------------
If a commodity is
made the basis of a monetary standard, then it wins new economic properties not
observed before it was made a standard. The commodity may be gold or silver or
corn (as in old Egypt) or cowry. After the good in made a standard, that is:
after prices are expressed in terms of the good (weight units of the good) it
profits from the fact the fact that all sellers tend to sell today for the
same price as yesterday. This tendency is very strong.
The tendency to sell cheaper than yesterday is by far not so
strong, but it is not zero. It arises merely from competition. (Or, expressed
more exactly - - as Marshall taught: for the purpose of making selling easier,
and this applies to monopolists as well.)
A little stronger is the tendency to sell at higher prices
than yesterday. But the strength of that tendency is generally overestimated by
average people. I apply to your commercial experience.
The same is,
correspondingly, true for buyers. Their main tendency is to buy for the same
price as yesterday. Their pressure for a lower price is not zero, but not
strong and hardly felt at shops.
Their resistance against a higher price is much stronger and
is felt at the shops. Shops are very unlikely to raise prices, as wholesalers
know well. (Unless they are forced to do so by the continuing depreciation of
the forced and exclusive paper currency. - J.Z., 24.2.03.)
The tendency
towards a stable price level is the stronger the more persons are involved. It
is a well known statistical fact, that shop prices are pretty stable for years,
even when wholesale prices for the same articles vary much. The curve of
index-numbers of retail prices offers a shape quite different of the curve of
wholesale prices expressed in index-numbers.
Gold as a commodity
varies much in price as a wholesale commodity (although less than every other
good - - except [Professor
Irving Fisher found that out] carpets [!!] ). It varies much less in price as a
commodity sold in shops - - as rings, watch cases and such things. It can
hardly vary in price if every owner of gold bars is permitted to coin the bars
and so transform his gold immediately into purchasing power.
If gold is not the
standard of value, that means: if prices are not expressed in weights of gold,
the gold traffic concerns only a few persons, and therefore the resistance to
price variations is relatively small, although it may be great, compared with
the resistance other commodity prices find. But if gold is made a standard, so
that prices are expressed in weight units of gold, every adult is concerned in
price variations of gold to the extent of his income.
If in England
prices would be expressed in terms of gold, England's 40 million adults
(payers) would be interested every day for an amount of several shillings that
the value of gold (the general price level) remains as stable as possible. Now, while prices are
expressed in paper pounds of the bank of England, there are only (about) 5,000
persons immediately concerned about the price of gold every day. About 2,000
persons marry every day and buy rings, and about 3,000 persons (I estimate) buy
golden plates, jewellery, golden watches, etc. The average amount daily sold
may be, per sale, 5 or 6 pounds sterling.
The difference in
economic resistance to variations in gold value may be seen from that
estimation. Better statisticians than I and in a situation to get better
information, may propose other numbers as a basis for estimates. But the
principle which I want to explain is, perhaps, already clear.
By becoming a
standard of value, gold plays the role of a retail sale commodity in whose
price every adult is daily concerned and all what I said about the prices of
commodities daily sold in shops, to a great number of persons, applies to gold
if it is a standard of value. (The standard of value or the most widely used
standard of value. - J.Z., 25.2.03.) Gold does not longer play this role when
some other good, such as the paper pound of the Bank of England, is made the
standard of value.
----------------
The tendency of
prices to remain as stable as possible, is to be observed even in times of big inflations,
like that in Germany from
1914 to 1923. Although prices did at last varied daily and to a great extent,
on most days they varied less than would have corresponded to the increase of
paper money. Only from time to time there came a sudden rise by which the
former resistance of the public was balanced. At the 23rd of October
1923 prices of victuals rose by 300 % in the course of the day. Severe riots
broke out in the North of Berlin.
(J.Z.: He should also have noted that towards the end of
that Inflation and in the expectation of further inflationary price rises,
prices did often rise faster they the output of the note printing presses. This
led to deflationary phenomena in the middle of this galloping inflation. But
for long periods they limped behind the output of the forced currency. Towards
the end it was no longer an exclusive one, since many emergency currencies were
issued, with or without approval of the authorities, some of them on a gold
basis. - J.Z., 25.2.03.)
--------------
To every good
chosen an a standard, gold, silver, the paper money of a bank, an element is
attached which contributes, to the stability of its value, an element which was
not attached to it before it was so chosen.
If gold would be
chosen, then that element would by far outweigh all economic properties due to
the fact, that the production per capita and year is at present only a few
grams. (At this moment I have no statistics.)
The same would apply to silver. I see no reason why silver
should be prohibited for people like Indians or Chinese, as a standard of
value, if they or a part of their population (a commercial body in the sense of
Jevons) desire to use it.
-----------------
The technical
maximum of economic freedom will reveal - - by competition - - the best
standard of value, that is the good, in terms of which other goods may be
advantageously priced.
The possibility, that the paper pound of a well-managed bank
is proven to be that good is by no means excluded and it should always be open.
The Egyptians curse
for all people, who do not agree: "May their soul be as restless as the
hat of a German."
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, …
27. III. 50.
Dear Mr.
Meulen,
If gold or silver or cowry are made a standard of value,
that is: prices are expressed in weight units (or, in the case of cowries,
simply in numbers) of these goods, the purely physical element of these
goods is quite overwhelmed by the thus newly acquired economic and even social
properties. The physical element may contribute in the case of gold (and,
perhaps, of silver, too) to variations a proportion of 1 % or so - - I
estimate. My assertion is based on the fact, that even at times of such an
increase of the gold production, that the increase right after the discovery of
America was very small in comparison to it, this increase was, nevertheless,
several times correlated with a sharp decrease of prices.
(In the 80's and the 90's of the 19th century.
The year 1883 - - others say the year 1895 - - was the year of the 19th century when gold's purchasing power was at
its maximum. At that time the gold production was far greater than e.g. at the
time of the discovery of the Californian gold fields.)
My assertion is also based on the fact, that at those times,
when a fresh supply of precious metals was correlated with an increase of the
general price level, there were quite obviously other causes working than the
increased supply with gold.
(Si omnes patres sic, ego non sic - - Abaelard.)
After the discovery
of America, in the whole of Europe the streets were much improved, ships were
built in great numbers and millions of
people, who were before paid in kind (also free artisans and peasants), i.e.,
were no part of commerce, became buyers of foreign goods. After transport
avenues were created, it became possible for feudal lords to sell corn at
distant places, while before it was without commercial value and consumed by
his serfs and his family. Thus the price of corn had to rise and it would have
risen even if no fresh gold would have been sent from
America.
Roscher says, that the art of salting herrings, invented by
the Dutch Beuckel (in German still: einpökeln)
caused an enormous
economic revolution and was the real cause that the economic centre of gravitation
wandered from Italy to Holland. By that art the people of Holland and other
countries at the northern seas were suddenly able to buy goods, such as corn,
which before had hardly any price.
(J.Z.: Elsewhere B. pointed out that it also caused the
defeat of the Spanish Armada, whose high-placed guns could not be lowered
enough to hit the majority of the English vessels, converted fishing vessels,
which were low in the water, but whose guns could easily reach the vast bulks
of the Spanish ships. Most history books do not stress such interesting details
enough but rather engage in general speculations. - J.Z., 24.5.03.
Generally
overlooked, by average economists, is the role of the fairs as clearing
institutions. Roscher reports that at the fair of Lyons, on the clearing days,
an amount of about 25 million ducats was made good by clearing. (The technique
seems to have been better than the technique at the clearing house in London,
which Jevons describes.)
From other centres of exchange no data are related. (As far
as I know.) I am convinced, that during
the Middle Ages the proportion of trade performed without cash was hardly
inferior to the proportions of our time. If that would be true, then an
increase or a decrease of the gold or silver supply would not have been of much
influence upon prices.
The increase of the
price level from about 1848 to 1857 is generally ascribed to the supply of gold
from California. But the harvest of these years were mostly bad and the year
1855, with its extreme cold (4/5th of all birds in England died - -
says Darwin) was decidedly a year of famine. In Germany - - e.g., the
potato-harvest was as bad as the corn harvest. Mortality increased and natality
decreased.
In Prussia there
were more born than dead, per 1000 in the population:
(Statistical Yearbook
for the Prussian State, 1913.)
1845 13.5
46
9.6
47
4.4
48
2.2
49
11.8
50
13.5
51
13.9
52
6.9
53
8.1
54
8.7
55
3.9
56
8.6
57
10.4
58
11.9
59
14.2
I do not believe that the supply with Californian gold
contributed more than about 1 % to the increase of prices in the 1850's.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 28.
III. 50. Your letter of 8 II. 50.
Dear Mr.
Meulen,
Paying for German Imports. The possibility to pay for imports depends
inter alia - - but essentially - - upon the prescriptions existing for the
method of paying. Belgium is free concerning the methods. For Germany exists a
code, whose weight I estimate to be at least one pound avoir du poids. Only a
few people know all prescriptions. It is their job to know and to apply
them. The more complicated the prescriptions are, the higher is their pay.
In German papers I read that smuggled goods (a very
great part of the imports as well as the exports) are paid without delay and in
a manner so that the foreign merchants are content. These methods should be
studied.
The best manner to
pay for German imports would be by Milhaud's purchasing certificates. (I refer
to my former letters about these certificates.) You say - - and you are right -
- that such purchasing certificates will be at a discount. But to what
percentage can the discount grow?
Suppose a certain German commodity - - say a medicine, for
which there is a demand - - can be paid for in Germany
a.) by 1,000 Dollars.
b.) by 4,200 Deutsche Mark West,
c.) by a Milhaud Certificate, face value 1,000 Dollars, on
which is stated:
This Certificate
is accepted for the value of 1,000 USA Dollars by XYZ, manufacturers of
medicine,
if used as a
means of payment for buying medicine within the next 5 years, etc.
(I refer to
Milhaud's publications and my own in the Annals of Collective Economy.)
Value of Dollars
as at the Exchange of London, New York, as the case may be.
Now suppose that a
merchant at Montevideo is interested in buying the medicine. He can buy USA
Dollars and buy the medicine with these Dollars. He can buy German Marks and
buy the medicine with these Marks. He can also buy - - let me suppose - - purchasing certificates
of a nominal value of 1,000 Dollars at the Exchange of London for 980 Dollars.
Do you not think that he will do the latter? I think, that he will do it. If I
am right, then the discount will not greater than 2 %.
The question arises, whether the German medicine
manufacturer would not calculate higher prices if he knows, that his purchasing
certificates will always be at a discount of 2 %. I do not think that he will
have to. By paying part of his own expenses in such certificates will save him
money and, probably, more than 2 %. Also other expenses of selling
(advertising, etc.) are usually much greater than these 2 % and he does agree
to bear these expenses but he should be unable to bear the 2 %? (Yesterday I
read in an Australian paper that the Australian chicken grower gets only 20
cents for a kg. of chicken grown by him, while in retail they are sold for at
least about $ 2 - 4 per kg. As high are the sales costs compared with the
production costs, under present conditions, in at least some instances. - J.Z.,
24.2.03.)
But concerning
principle you are right. The possibility to use Milhaud Certificates does
depend upon their discount. A discount of - - say - - 50% would make their use
impossible if it prevailed for a long time (say, 6 months) and often.
(J.Z.: Here, too, the opposite of the popular form of
Gresham's Law would prevail: The good monies would drive out the bad ones. As
good ones would in this case perceived the ones with some small and regular
discount but not those with a large and lasting or irregular discount. - J.Z.,
25.2.03.)
The question
arises, why did not the banks' debtors buy thed depreciated notes or borrow
them, with the intention to repay their debts with them?
Say, the discount
has been 10 %. Then a debtor - - say, a manufacturer - - could borrow the
depreciated notes for an amount of (say) 100 L face value and 90 L market
value. It the interest at the time of this transaction was 5 % p .a., then the
manufacturer had to pay to his creditor, after a year, 95 L in cash. He pays,
with the borrowed notes, at once his own bank, which the bank must accept for
the face value of 100 L. The pro-fit of the manufacturer is obvious.
The desire of the manufacturer to repay his debt to the bank
is diminished if the debt is a long-term debt.
I assume that the year 1846 there was less an over-issue
than too much liberality of banks to grant long term loans (in their own notes
- J.Z.).
If the archives of the banks were still preserved, one could
get better information on the true nature of the crisis than is now possible.
--------------------
Silvio Gsell. The main error of Gsell is: He did not know
or consider that the right of issuing notes can outweigh all effects of
the most exaggerated hoarding, provided, that the country's creditors
(landlords, workers, etc.) are not entitled to claim hoarded "exclusive
currency".
The true nature of the Wörgl experiment I tried to explain
in my book: "Does the Provision of Employment Necessitate Money
Expenditure?"
----------------
Meeting inflation
by varying the contributions to unemployment insurance. (Proposition of the
Conservative Party.) Scientists should protest against the misuse of the word
"inflation". Inflation means increase of forced currency
beyond that amount which can be used with the same advantage as before the
increase, say, by paying taxes. Dearness is not the same as inflation, even if
it may be the consequence of inflation. In the case here in question the means
would be of doubtful effect. One must consider that, probably, the poverty tax
must be increased to the same extent to which unemployment insurance
contributions are diminished.
-----------------
F. A. Butler should
be quite silent as long an he did not read your book.
-----------------
The continued
correspondence with Runge revealed a great error of R. He believes (or
believed - - I hope) that for mere clearing purposes, nevertheless, some
amount of cash (exclusive currency) is necessary. Many people believe
that.
(J.Z.: They do not distinguish between the cleared amounts,
for which, obviously, no cash is required, and the amounts which cannot be
cleared immediately and easily, i.e., the balance, which must either be paid in
cash or for which further clearing arrangements, in the near future, must be
arranged. The not yet cleared balance could be carried forward to the next
clearing date or opportunity. - Particular truths require the ability to make
those distinctions which particular cases do require. - J.Z., 25.2.03.)
At the Nazi-Time this was the official creed of the party,
that is, of those few, who were able to distinguish clearing from torturing
Jews. You know the "Giro-Bank" of Hamburg. It existed for about, 200
years and was founded on this error. ("Der Mensch ist dumm", says
Richet.) ("Man is Stupid.")
----------------
In an article of
the celebrated Pearl S. Buck, "Dangerous Errors about China", I read
that the food difficulty of China, in normal times is the selling of the
victuals, not producing them. China has plenty of victuals, says Pearl S. Buck,
but in cases of dearth or civil war victuals become scarce as in other
countries, too.
----------------
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, …
29.
III. 1950. Your letter of 16. II. 50.
Dear Mr.
Meulen,
Scots Indep.
As long as Gibson does not formally and as a thing of first importance
acknowledges the Scots Right of Banking, his movement is not worth to be kept
together. If Scotland would be governed by Englishmen acknowledging the Scots'
Right of Banking (that is: of issuing notes without cours forcé) the step of
progress would be like that from Darwin's original apes to Walter Scott's heroes.
If Scotland would be governed by Scots, denying this right, then there would,
very probably, be no progress at all.
There seems to be something tragic about free banking
propaganda,
you say.
"Alles Entscheidende geschieht trotzdem", says
Nietzsche, who said many good and true things, although he was a bellicist.
(Everything decisive happens - in spite of resistance. - J.Z.)
----------------
Truth does not yet see the last consequences of Free
Banking. Therefore it surprises sometimes with reactionary opinions. But you
may take the editor's remark as a confirmation of my assertion in one of my
letters:
Generally people think that Free Banking is a mere technique
of banking. They would tremble if they knew that it is a claimed right.
("Du passé faisons table rase, foule esclaves debout, debout", that
means Free Banking!!!) Tucker thought that the most revolutionary action
possible at this time is the issuing of notes in spite of the laws prohibiting
such an issue. For his time Tucker was in the right.
----------------
Zwangskurs.
Your opinion is: Banks are able to grant loans - - payable
in notes - - for a greater amount than the value of goods (services and credits
- J.Z., 25.2.03.) at their debtors.
I say: They cannot, because at short intervals the public
will try to get rid of the notes and will revolt, if people cannot buy for the
notes goods, without delay and trouble.
Consequently, you take the country's resources into
consideration.
I say: That may be a thing for granting credit in general,
which is essentially different from note credit.
You think about the possibility to grant loans payable in
notes, to such an extent, that the price level is rained.
I assert that such loans are practically impossible. If
prices begin to rise, the public gets suspicious, goes to the shops and buys
goods for its notes. If the public finds difficulties in buying them, it says:
Never again will I accept a note of this bank! I have experienced that
these bank notes are not to be realised. That has nothing to do with trust or
distrust, the words taken in the sense of 1843.
Notes of the old style were, in England, 5 L-notes and in
Scotland Pound Notes. Generally, most people never saw them, and their trust or
distrust was of no importance.
The notes of future Free Banks will be in the same
denominations as money is now. That changes all things fundamentally.
It may happen, that the note issuing banks of the
future will get no deposits at all and undertake no deposit business, but
merely work in cooperation with another bank doing deposit business. It that
would be the case, then the deposit business will not be - - as you think - - a
continuous test.
In my view it is the issuing bank's task to provide the
means to pay wages (salaries & running expenses - J.Z., 25.2.03.) and so
avoid unemployment (and many bankruptcies - J.Z., 25.2.03) in the cases, which
occurred so often in earlier days: raw
materials are at hand, orders as well, labour too, the machines are in order,
but there is no money to pay wages with. Therefore, the workers must be
dismissed, and once one factory has begun doing this,
then a kind of economic chain reaction begins, which may affect more
than 50 % of the country's workers.
To get long-term
credit is no problem at times when there is no unemployment. The experience of
centuries proves that.
Therefore, a note-issuing bank should not do
long-term loan business, word understood in the sense of the old banking
language. (I.e., paying out the loans in notes of the credit-granting bank.)
(J.Z.: The exchange of sound bills of exchange ["real
bills"] for notes, with the bills representing goods already produced and
sold to wholesalers and on their way to the retailers, is another matter,
namely that of mere "turnover-credit", for a short period,
essentially a clearing transaction within a "payment community", that
is facilitated by a sound, optional and refusable [for all but the issuer and
his debtor] paper currency issued for that purpose. Large bills, inconvenient
for wage payments and consumer spending etc., are thereby replaced, through the
"banking principle", in its most sensible meaning, by conveniently
denominated bills of the same total amount. These banknotes are then, by their
very nature, "clearing certificates" and should, perhaps, also be
called that. - J.Z., 25.2.03. - They need no other cover or redemption than
their power to mutually cancel the debts arising in any current division of
labour and free exchange process within any particular payment community.
Precisely because they are so immediately useful as "floating account
certificates" or exchange media, in an ongoing mutual settlement process,
they should be issued in very convenient denominations. Moreover, precisely of
this clearing or exchange media process all the debtors of a payment community
- those indebted to the issuing centre, must accept them at par, i.e., provide
the required "readiness-to-accept-foundation" for them, while others
must remain free to discount or refuse them. - Thus they can become a local
ticket money or local currency and will, automatically, be kept within the
limits for such a currency, provided only they and the goods and services that
they turn over daily, are expressed in a sound enough and widely enough
accepted value standard. - J.Z.,
2.6.03.)
A problem has been, for decades and still is (to a lesser
degree): Creating opportunities to invest on long-terms. I did write
about that particular problem in former letters.
You say: "The
future is always uncertain, and a prudent bank will keep some margin of reserve
against possible eventualities."
(When even theorists, historians and writers of Free Banking
books and articles, like Henry Meulen, still had such false ideas, and upheld
them in the face of informed and intelligent criticism, then one should not be
surprised that the vast majority of practical bankers had them and practised
them. - J.Z., 25.2.03.)
My opinion is: Note
issuing banks of the new type will - - at least in the beginning of their
activity - - have no reserves, except the interest their debtors must pay. The
reserve of a future bank will be the enlarged obligation of its debtors to
accept notes at their face value in the debtors' businesses.
Example: The bank's outstanding notes amount to 100,000 L.
The bank's "reserves" amount to 10,000 L. That will mean, that the bank found the
possibility to get 110,000 L of its issue accepted, although presently there
are only 100,000 L. still outstanding.
The obligation to accepting notes is in the best way founded
upon additional loans from means belonging to the bank as a property.
(J.Z.: This last sentence is in B.'s "English",
literally. It is not clear enough for me. Perhaps you understand him better in
this instance than I do? He may have meant: Beyond the issuing bank's debtors'
obligation to accept the bank's notes at par, a further issue of notes is best
founded upon the bank's own property, from which it may grant loans, in its own
notes, which, as its own IOUs, or clearing certificates or bonds, it would have
to accept at par in repayments to itself. - J.Z., 25.2.03.)
I think that the
possibility that the public will want to get rid of notes must always be taken
into consideration. That desire of the public may arise without the occurrence
of a real panic or a distrust in the banker. The Banking policy of old times
did not take into consideration such a desire but thought it possible,
to keep the notes always in circulation.
(J.Z.: Just as if they were coins. That is not surprising,
since many to most thought them to be just paper substitutes for coins. - J.Z.,
25.2.03.)
The great denominations of notes in old times (L 1 in
Scotland, L 5 in England) demanded or permitted a banking policy different from
the policy necessary in future.
Providing means for paying wages was obviously not the main
task of banks of issue in the days before 1844 and not of the Bank of England,
either, afterwards. (For a long period. - J.Z., 25.2.03.) By now wage payments
will be the by far most important element in banking policy. (For note-issuing
banks. - J.Z., 25.2.03.) I believe that this particular is of the greatest
practical importance.
Runge. I, too, doubt R.'s starting point:
"prices in Germany are too high" is well founded. I think that
German prices are, rather, too low. That
seems to be the general opinion in the whole world and seems to be the main
reason why competition from Germany is feared. But on the other hand Runge is
right: Although the "consensus sapienti" in always of some weight,
here can be a doubt, whether the consensus is that of "sapienti".
Party programmes.
What you say about Bevin is very
interesting. "Tschau, tschau" as the Austrians say.
That the
"Individualist" has no effect on Mosley was to be expected.
The reasons are more honourable for the "Individualist" than for
Mosley.
Ezra Pound.
One cannot be at the same time a good poet and a good economist, says Proudhon.
(The thought about Lamartine.) He could have mentioned Solon, who
transmitted his economic views to posterity in verses, but is the first, who
reported a devaluation. At his time paper was not yet in general
use, and insofar he is excused for not having introduced Free Banking in
Athens. Potsherds are not a good material for bank notes and were - - it seems
- - the general material used in writing.
Conscription. To demand its abolition under the present
circumstances is mere demagoguery. People will defend themselves against
Bolshevism, and as long as no other means is found than conscription, this
means must be regarded as morally justified.
(J.Z.: I cannot follow his logic here. If people will
defend themselves, then there will be enough volunteers! But our primary job
should be to become aware of and to defend allow individual rights and
liberties against the own government. Then we will really have something worth
defending and then there will certainly be enough volunteers. Moreover, then,
we would hardly have to fear an attack, for the soldiers and officers then
commanded to attack us would rather rise against their own despotic government
or desert to a rightful government in exile, or several of them, all of them
our allies against their despotic regime. Our example might then also lead to
putsches or revolutions overthrowing despotic regimes and introducing free
societies instead, just like on our side, all for voluntary communities only
and all applying only their own personal laws to themselves. However, there are
some rare instances, under current conditions, when fools have to be compelled
to do the right thing. I believe even enforced military service against the
Nazis was right - but it came all too late, was conducted all to wrongfully and
irrationally and should have lead, on the side of the Allies, to really free
societies, instead of more and more statist and nationalistic ones. Some of the
exceptions were mentioned earlier in these letters. Generally, territorial
governments are as inapt in defending people as they are in all other matters.
However, people mis-educated by governments and kept in a perpetual
kindergarten, even as adults, are not mentally, physically, financially and
morally prepared for rightful defence actions. They rather engage in wishful
and less than half-informed antics, and protests, like most of the recent
millions of peace protestors. Indeed, they would rather not have another war.
But they do not know how to prevent it, what really causes it, how to disable a
tyrannical regime otherwise and do not care about the details, either. They
rather put their feet into gear than their minds - in such matters and, by
ignoring certain dangers, drift into desperate situations. They have no clear
idea what makes for peace and security and what they could really do to achieve
them and maintain them. Such interests are rare even among anarchists and
libertarians, as I know from the response among them, to my two libertarian
peace books, or, rather, from the lack of response among them to such writings.
In this they are, mostly, just members of the common herd, exposing themselves
to raids by the own wolves or foreign ones. Some dogs and cats have better
senses regarding their own safety. - J.Z., 25.2.03.)
Conscription is not justified in cases like the
Commune of Paris in the year 1871, where it was introduced. The citizens of
Paris did not appreciate the advantages of the Commune highly enough to want to
endanger their own lives and those of their families. The great number of
"refractaires" under these circumstances is not surprising.
Nevertheless, a
means can and should be found to respect the attitude of real conscientious
objectors. In most cases, they are ready to do service in hospitals etc.
-----------------
The beneficial
influence of freeing banknotes from cours forcé, and even from being a legal
tender, is largely discussed in elder German monetary literature. It seems, in
English literature it is rarely discussed. In the Prussian State Library (4
millions of volumes, now destroyed for the greatest part), I found no English
book pointing out the probably economic influence of freeing bank notes from
cours forcé. I found no more than three or four books of American authors on
the theme. They were led to it by the greenbacks. The best book I found on the
subject is that of the then young Professor Adolf Wagner, "Die russische
Papierwaehrung", Riga, 1868. (The Russian Paper Currency. - J.Z.)
The elder German
economic science always took it as self-evident that cours forcé is the
condition qua non of inflation. "Vulgaer-Oekonomisten" and average
editors often did not distinguish notes with cours forcé and others.
At the bankers'
congress of 1908 one member had the courage to confess, that probably no other
member present then knew, that German banknotes were not endowed with cours
forcé, although this was explicitly stated in par. 3 of the Bank Act of 1875.
And it 1875 it was considered to be a very essential matter. Then the
government said: "People, you may accept the notes without distrust. They cannot
be inflated, because they are not endowed with cours forcé." As much can
the mentality change within a few decades.
---------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 30. III. 50. Your
letters of 24., 30. and 31. I. 50. Your
letter of 24. III. 50.
Dear Mr.
Meulen,
let me first confirm the receipt of the 25 Deutsche Mark
West. This was much more than I had spent.
Concerning the medicines, Pankreon, Ceadon, please let me
know whether you intend to continue their use and if; whether you will find
them at London, and if not, whether their importation to England is permitted.
Then I will be - - I hope - - able to sent to you from time to tome some boxes
to London.
-----------------
Prof. Niklas,
speaking of the agricultural production in Germany. As I understood the
speech of Niklas, he did not mean, that Germany has a surplus in the sense in
which the word was understood in the year 1913. Germany's production recovered
surprisingly (reason: freeing the economy from planning, price controls and
such things), but it seems, it does not yet suffice in all "sectors".
But vegetables are now produced in such quantities, that gardeners demand
"protection". It the economy would be free enough, gardeners
would change their occupation and Germany would import vegetables from Holland,
etc. The same may become true of potatoes and, perhaps, of grain. My own view
is: German agricultural production could be very much cheapened and thus
increased that imports would only be necessary in relatively small quantities,
if the plant would be improved.
In the years from 1945 - 1947 practically no tool could be
obtained, no nail, no hammer, no thread, no needles, etc. Now ploughs etc. are
wanted. If the Americans would not or need not, by order of their
government, demand dollars, then they could get a great market for agricultural
machines and implements.
Germany is now fully able to pay for all her imports. What
she needs is exportation of her own bureaucracy. All other kinds of exportation
and importation will then technically possible and would be without hindrance
by the bureaucrats.
---------------
The thing with the poets, reported in "New
Statesman", is a pretty mystical one. Some mystics think that thoughts are
beings endowed with vita propria and may manifest their life in several
individuals at the same time or nearly at the same time. You know the fact,
that the most strange ideas are sent to patent offices often at the same time,
and in these cases certainly no intercourse of the two individuals was
possible. I beg to write more about it in one of my later letters.
----------------
Private Press Conference of Mr. R. A. Butler. Concerns the avoidance of unemployment he
spoke de omnibus rebus et quibusdam aliis, but not of the one essential:
to provide payment for the unemployed after getting employment.
The Right to work must today be claimed in the form
of a Right of banking. Who knows that???
-----------------
Neither Aldred nor Butler even know of
the existence of the Right of Banking. One of the reasons is: Free
Banking, until now, has always been represented as a technical matter.
The Individualist's standpoint must be: Good or bad - - it is our aim
and we claim the right to do also those things (among ourselves - J.Z.,
25.2.03.) that seem bad to other people. That abbreviates discussion and brings
it to a very different track.
--------------------
Has Armand ever claimed the Right of Free Banking???
I am inclined to write a letter to him. It seems he understands German.
Your friend's
statement, that prices in Berlin are in the average not higher than in London,
seems to me well founded. In one of my next letters I will communicate to you
some Berlin prices and then you may compare.
----------------
Very
faithfully Yours - signed: U. v. Beckerath.
__________________________________________________________________________________________
U. v. Beckerath, … 31.
III. 50.
Dear Mr.
Meulen,
at the time of the crusades there arose the fable of a book
with the title "The Three Impostors". The book never existed,
although some centuries later authors wrote books with this title, in order to
get attention and a market for their book. The fable said, that in the book was
explained, that Moses, Christ and Mohammed were impostors, whose crimes were
glorified by other impostors, so that the two Testaments and the Koran did not
deserve any esteem or trust. The fable said, moreover, that the pope had strictly
prohibited the mentioning of the book and that owners would be pitilessly
executed and very cruelly, too. It was generally believed, that the Templars
possessed the book and were no longer Christians but adored
a god called Baphomet. This fable helped king Philipp much in the extermination
of the order. Although he proceeded without justice, the subjects said:
"Au fond il a raison!"
The good of all this nonsense was: There was a wide-spread
feeling, that Christianity was not well founded and only upheld by the
Inquisition. When the great enlightenment began, it found its field well
prepared.
A similar effect
took place in Germany by the prohibition of Nazi literature. The books - - and
especially "Mein Kampf" - - became very rare. (Russian officers paid
in the year 1945, in some cases of which I heard, 600 marks.)
But the very rareness of "Mein Kampf" has the
effect that many youths are convinced: This book contains all political
wisdom; there the Fuehrer pointed out how to nourish a people, how to give him
the best organisation, how to organise an irresistible warfare, etc. "If
the bourgeois-generals would not have betrayed him, he would now rule
Europe", that's what many believe. (Some young fools only. - J.Z.,
25.2.03.)
If the books still
existed, the matter would be simple. One would tell the young people: "Here
is, what the rascal wrote, and here is, what Goebbels wrote
and said, and here is Germany's older generation, which followed this
"wisdom". Be more intelligent!" The youth would certainly have
tried the latter, and the older generation would now stand in a very bad light,
the light that it deserves, insofar as it followed Hitler.
Prohibiting books
has seldom in history been a good way.
(J.Z.: There may be a case for reproducing all their output
- but always only with sufficient critical comments, from facts, reason and
morality, to every of their wrongful assertions. That might not require more
than a few CD-ROMs. A bibliography with abstracts to all the anti-Nazi
literature should also be included there. - J.Z., 25.2.03.)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
I think you read
the article in "News Chronicle" of 13.3.50, "The case of Seretse
Khama" by Vernon Barlett, translated in "Die Bruecke" of
16.3.50. Your impression will have been
the same as mine: Here is only one help: The application of the
principles of individualism. The natives have a just claim to unexploited
labour, and if the life in Kraals is preferred by them, there is no
reason to refuse them a life organised in this way. Even if, in consequence,
the gold mines would have to be closed for lack of workers. Let them be closed!
May people, who want gold, pay for it so highly, that the natives are induced
to leave their Kraals and work in the mines. And if the Boer-Government would
know a little more of colonial history, then it not only would favour the
immigration of Indians, but that of Chinese, too, and of other races. As
already Aristotle said: Mutinies of slaves, on a large scale, are only observed
when the slaves are of the same nation. That is true, too, if the slaves are
freed, have become wage workers, but are for some reason inclined to a mutiny
or a civil war against other races. If there are several races in the same
country, one outweighs the other.
(J.Z.: The old maxim: "Divide and Rule!", which
already the ancient Romans applied. The opposite to this rule and practice is
the complete division into voluntary communities, by free individual actions
(based on individual sovereignty and individual secessionism and personal laws)
with none of these communities retaining a territorial monopoly of any kind.
Then these communities can no longer be dominated by anyone, nor would they
have any strong reason or motive to fight each other or to try to oppress each
other. Any such attempt would arouse so much antagonism against it, that it
could be rapidly squashed with a relatively small effort. - PIOT, J.Z.,
25.2.03.)
Portuguese have always favoured marriages with
coloured people. Experience taught them, that natives, married with whites,
always are friends of whites, if they whites do not suppress them. History
reports no sedition of natives in Portuguese colonies, although they are as
badly administered as one may believe.
Very
truly Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, …
6. 4. 1950. Your letter of 3. 4.
50., received today.
Dear Mr.
Meulen,
I am very glad to learn that you are now at home and,
insofar, in safety. The trouble of such a voyage, certainly intensified by your
lack of money, thanks to modern exchange dirigism, would have been a serious
matter for a nature less energetic than yours.
I hope that in the
meantime you received my letter of 30. 3. 50, where I confirmed receipt of your
25 DM West. For every case, I confirm that you departed from Berlin on Friday,
the 24th of March (12h).
My advantage
from your visit was certainly greater than yours. I felt very bad, when you
arrived, and always used a cane, when I must walk on the street. At the very
moment, when you came, all such troubles had disappeared, and you know
yourself, that I was able to walk several hours without trouble and cane.
If you see Zander
please greet him cordially and hand over to him the enclosed copy. This copy is
the result of a discussion which I had at the family Vierkandt. Both,
the professor, born at 4. 6.1867, and his lady, born 10. 4. 1873, are extraordinary people. At first I
took the lady for a little more than 50 and felt myself superior in age. (Her
hair is not yet gray.) If our younger people possessed her energy and her
intelligence, reformers like you and I
would not encounter much resistance.
Last Monday there
was present a couple von Natzmer, very sympathetic and intelligent
people. (One of the family was a Field Marshal under Friedrich Wilhelm I of
Prussia, another was a general at the time of the Napoleonic wars. After the
convention of Tauroggen (30. 12.1812) it was his task to convince Napoleon that
this convention was without military and political importance, so that the emperor
would not undertake reprisals. But Napoleon judged this Convention from the
right standpoint.
We talked of modern scientific literature and that there was
no capital in Germany or Berlin to publish good literature, whose sale would
require 10 years or so, that means, the normal time. I stated, that it would be
very easy to get capital, more than necessary, by eliminating the bureaucratic
and legal impediments, partly created by the ignorant German governments,
partly by the Allies. I was sentenced to frame the sketch of a pronunciamento
fit for a society, whose aim should be to fight against these impediments.
Especially the Frau von Natzmer (between 25 and 30, I estimate) said to me: If
I get from your sketch the impression that your ideas are no nonsense, I will
do what I can to realise them, and if it should require many years. At the
moment my impression is: the ideas are good.
If Zander, with his
Bel-Color would still be in Berlin, he immediately would be concerned. Insofar
the copy could be of interest to him.
Obviously, there is
a limit where freedom from taxes for reconstruction purposes is no longer
useful, say, to extend the time, for which the relevant law is valid, to more
than two generations. Perhaps you will give Zander the tip:
Apply to the Jerusalem University Department for
mathematical economics to propose general principles, which may apply first of
all to Israel, but which will, after their publication, certainly be known in
the whole world and kindle a vivid discussion, on using freedom from taxes as a
means for reconstruction.
Let me remark, that in Germany, after all great wars, that
means was used, last time in the year 1920, for capital invested in houses. In
Prussia, after the great wars of the last 3 centuries, it was usual that the
king furnished timber from the royal forests to everybody willing to build new
houses or to repair damaged ones. Besides this was granted freedom from taxes
for at least 10 years and often longer.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, …
7.
4. 1950.
Dear Mr.
Meulen,
after our discussion about the gold standard we
agreed, that the word "gold standard" is now used in England in a
sense quite different from that in which it was used in the year 1850 and in
which it is still used in the USA.
If the modern sense would be the right sense, a country
without note-issuing banks cannot be on a gold standard, on the other hand, if
it would be the custom in this country to fix all prices, taxes, debts etc. in
gold coins, that would not be sufficient to constitute a gold standard.
I have tried to
collect all details which until now economists believed to belong to a real
gold-standard, the word used in the sense of 1850.
1.) All prices, wages and recompenses are expressed in gold
coins or in the same money unit in which the face value of gold coins is
expressed. But it is not considered as an attack on the gold standard if
certain wages are not fixed in gold, say, wages of agricultural workers. Also,
it may be permitted to certain classes of taxpayers to pay the tax by labour,
say road labour for peasants, which still is the use in some districts of
America. Such a use would also not be considered as being against the gold
standard.
2.) All owners of gold in any form, especially in the form
of ingots, are entitled to let it be coined into legal tender gold coins. This
right is not restricted and is not subject to a supervision, except in cases,
say, where the owner has probably stolen the gold.
3.) There in no restriction on transfers of gold in any
form, from one citizen to another or from foreigners to citizens or to perform
any other transfer of gold from one person residing in the State to any other,
or from any person to a person residing in the State. This freedom includes all
forms of gold, coins, goods and others, explosives like fulminating gold,
perhaps, excluded.
4.) Pretended or real alterations in the value of gold
cannot be maintained in fulfilling contracts, except in the manner that is
agreed upon or legally prescribed. (Index standard and similar things.)
5.) Gold coins are endowed with cours forcé.
6.) Every creditor is entitled to demand gold coins.
7.) Debts are considered as being contracted in gold coins
if there is no special debt clauses that appoints anohter measure of value.
8.) Bankers are obliged to redeem their notes in gold coins,
at the face value of the notes, either on demand or with a delay indicated on
the notes. (Option clause notes)
---------------
If there is a
silver standard to be described in the above 8 points, then the word
"gold" is simply to be replaced by "silver".
---------------
The authors of the
Four Bills thought that points 6 and 8 are not essential, so that the
respective laws may be repealed without repealing the whole of the gold
standard, the word used in the sense of 1850.
I learnt from a
collection of Persian laws that in Persia a creditor is not entitled to get
gold coins, but must be content with "local currency" to the value of
gold. That value is determined by the market price (of the local currency,
reckoned in gold - J.Z., 25.2.03.) at the day of fulfilling the obligation to pay.
But it is permitted to agree
upon gold coins as a means of payment. These laws were from the time of
Shah Nassr ed din.
Zander stated that
in China there existed the same laws at the time of the emperors.
------------------
It seems, that the
English language does not contain a word quite adequate to the German
"Gold-Rechen-Waehrung". (Gold-for-account currency or gold-clearing
currency may come close enough. - J.Z., 25.2.03.)
By "Gold-Rechen-Waehrung" the Germans understand a
standard, where prices etc. are expressed in gold units, but paid in
local currency as the market price of gold may be, expressed in local currency.
In the years 1922 and 1923 this Gold-Rechen-Waehrung was wide-spread in
Germany.
-----------------
In the whole literature before 1914 the case was hardly
discussed that the people may have a right to refuse means of payment which it
does not trust and this without being obliged to give explanations. Only coins
of prescribed shape and weight were excluded. Everybody had to accept them.
In Prussia, and in most other countries of Germany, the
right, to decline all means of payment not being legal coins, was always
acknowledged until 1.1.1910.
Obviously the investment policy of a banker must be very
different
a.) if he must expect that his notes are refused, at short
intervals (and be it only for a few hours), and
b) if he can trust that his notes remain as long in
circulation, that his investment policy is not disturbed.
----------------------
The word "inflation"
has lost its former sense entirely. The people - - not only in England - - are
now no longer able to talk about such an
increase of fiat money that the demand of the government for fiat money,
exercised by taxation, is much less than the circulating amount of currency.
And why are the people not no longer about to talk about this? Because the very
words, necessary for such talks, are amiss.
-----------------------
I think, that if it
would be impossible to restore the original meaning of the word
"inflation", then a new word must be invented to express what
originally was expressed by "inflation".
Very
truthfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
(U. v. Beckerath, Some Notes on Gold, dated 14. 4. 50. - I don't
know to which letter to Meulen he attached this note. - J.Z.)
1 troy ounce of water = 1.9 cubic inches.
The density of gold is 19.3.
Consequently, a troy ounce of gold = 1.9 : 19.3 cubic inches
or, approximately = 1/10th cubic inch.
To find the length (= width = height) of a gold cube,
weighing X troy ounces, firstly its number of cubic inches is to be determined.
This is done simply by taking the tenth part. Of this tenth part the cubic root
is to b extracted.
Example:
Length of a cube weighing 1 million of troy ounces.
The cube contains 1/10 of 1 million = 100,000 cubic inches,
The cubic root of 100,000 is 46.4
The length of the gold cube is o 46.4 inches.
By the following table the number of troy ounces fine gold
to be found in the statistics may be easily converted into cubes, whose side
length, in inches, is shown by the table.
Number of Length in inches
troy ounces:
of a cube, weighing the
number of troy ounces indicated in the left column
_________________________________________________________________________________
10 1
100 2.2
1,000 4.6
10,000
10.0
100,000 21.5
1,000,000 46.4
10,000,000 100.0
11,000,000 103.2
12,000,000 106.3
13,000,000 109.1
14,000,000 111.9
15,000,000 114.9
16,000,000 117.0
17,000,000 119.4
18,000,000 121.6
19,000,000 123.9
20,000,000 126.0
21,000,000 128.1
22,000,000 130.1
23,000,000 132.0
24,000,000 133.9
25,000,000 135.7
26,000,000 137.5
27,000,000 139.2
28,000,000 140.9
29,000,000 142.3
30,000,000 144.2
31,000,000 143.8
32,000,000 147.4
33,000,000 148.9
34,000,000 150.4
35,000,000 151.8
I read in the
"Tagesspiegel" of 13.4.50., that in the year 1948 the world gold
production has been 24.2 million ounces and in the year 1949 = 24.9 million
ounces.
That would be a cube of about 135 inches a side, or a little
more than 11 feet.
Let us suppose,
that of the 2. 25 thousand million
inhabitants of our planet 1,000 millions are buyers, then the annual production
would be 25 : 1,000 ounces per buyer or 480 : 40 = 12 grains per buyer.
About 1/3rd of the annually produced gold is used
for industrial purposes.
The legal weight of a sovereign was 123.274 grains.
Thus the quantity of gold added to the world's stock of gold
every year seems not great enough to cause an inflationary effect.
Signed: Bth. 14.4.50.
(The text is messed up. In the middle of the second page I
find inserted, between the lines: "A little joke." Bth. may have
meant this as the heading for this note. It is not really a joke but an
indication of the relative insignificance of the annual gold production, in
total size, in cubes, and in weight per person, especially when compared with
the accumulated and still preserved gold stock - J.Z., 25.2.03.)
____________________________________________________________________________________________
18.4.1950.
Dear
Mr. Meulen,
some days ago I received with much pleasure and many thanks
the "Individualist", April issue. I hope to write some lines this
week or next about the articles concerning Germany and Berlin; they are
excellent.
Very
faithfully Yours - unsigned.
____________________________________________________________________________________________
(U. v. Beckerath) 21. 4.
1950. Your letter of 19. cr.
Dear Mr.
Meulen,
a specialist may laugh at it, but: In text books on
physics one may read, that if an orange is placed between the two poles of an
electrical machine and the machine operates, then the sparks pass through the
orange and make it pretty transparent. The interior of the orange is - - I read
- - to be observed. Perhaps you have a boy among your friends, whose school
posses an electrical machine and whose teacher is ready to execute the
experiment. If I understood the experiment rightly, then the question is
(berechtigt) (warranted - J.Z.), whether it may be possible to make transparent
the human body by a suitable alteration of the device used on an orange,
without causing too much pain. (Or damage! - J.Z., 25.2.03.)
That the human body
really may be made transparent to a certain degree can be easily observed in
sunshine. My hands, e.g., not embarrassed with much flesh - - that's true - -
are transparent in sunshine, so that the bones can be distinguished from the
flesh.
If my idea
should not be without foundation, then it is, perhaps, possible to get a better
observation of your digestive apparatus than has been possible until now, and
so to learn to know what really has been the trouble. I think that Roentgen-Photographs have been
taken (for German physicians that would be the first, to take a
Roentgen-Photograph), but it seems, they have not been sufficient.
(J.Z.: Here B. was behind the times. I remember that in my
youth even better shoe shops had x-ray machines, that tested your newly shoed
feet, to determine whether the fit was quite right. The dangers arising from
such x-ray exposures was simply ignored in these cases. Later these machines
were, very quietly, removed. I assume that this was before 1943, perhaps even
before 1939. I was subjected to repeated compulsory x-rays in Berlin, at about
the time that B. wrote this letter, as part of the fight against tuberculosis.
When I came to Australia in 1959, compulsory mass x-rays were continued there,
for the same purpose, under threat of considerable penalties for
non-compliance, in spite of all protests that the radiation hazards thus caused
for so many people, e.g., by additional cancer cases, may have far exceeded the
savings of lives by discovering with this method some tuberculosis cases. Some
years later, some sense finally penetrated to the authorities and this mass medical
program was quietly discontinued, in spite of the resistance of the medical
bureaucrats involved. - J.Z., 25.2.03.)
That your health id improving so slowly is a great
impediment to our movement, but that it is improving, that is a
consolation. At present you are the only man in England who demands the
most important right of mankind, the right of issuing and accepting freely and
without State control standardised means of payment. Even Guy Aldred, who calls
himself an anarchist, does not go so far, obviously because he does not see
such matters as clearly as an economist and reformer should see them. Once this
right is established, then the technical and legal conditions, by which it can
be exercised, will, very soon, be taught by experience, our common
teacher. Our opinions will not be excepted, and what is now, perhaps,
impossible to justify, in the other's opinion, will be demonstrated by reality
or, it will be shown, in a clear manner, that it is not justified.
That brings me to
your letter, one of the longest I ever had the pleasure to receive from you.
You say: " ...
whether or not a man can sell his stock at a profit must always be
speculative".
That is quite right under the present economic conditions.
But by this statement the theme is not exhausted. The statement merely puts it in the right light.
I.
Jaques Bernoulli,
in his "Ars conjectandi", the first work about the calculus of
probability, first printed 1713, eight years after the death of this celebrated
author and still in high esteem (burnt) said, that a certain, very small degree
in probability in civil life must be considered as zero.
Example: A judge is convinced, that a man has committed the
crime for which he was accused. But he admits, that if there were 10,000 cases like
this, there probably would be one, where the accused is innocent, although all
evidence seems to be against him. In such a situation - - says Bernouilli - -
the judge should sentence the accused. Human beings are never so certain, that
the certainty is an absolute one, except the fact that the man must die. Even
this certainty may be considered as not being 100%, as long as it is merely
derived from the fact, that men of more than (say) 200 or so years have never
been found. You know, that Jonathan Swift, in one of the reports about
Gulliver's travels, reports from a country, where from time to time were born
"stultbruggs" (in the language of that country), immortal as men and
the most unlucky creatures on earth. The philosophic Swift found out, that his
report could not be considered as quite (that is 100 %) incredible, insofar as
merely the "stultbruggs" are concerned. Suppose that mankind existed
on earth for a million years (which may not be far from the truth) and that the
average number of men was always 2,000 millions (which, very probably, is to
high a number), then one can only say, that among the billions who have lived
during the million years, none have been found who were not dead after at most
200 years. In the first reports of the Portuguese from Goa, a rich man is
mentioned, who was several 100 years old, had generated more than 700 children
end was hated by his countrymen because he was considered a usurer.
Buffon in his
"Arithmétique morale" (burnt) says: The fraction 1 : 10, 000, proposed
by Jacques Bernouilli as to be considered as zero in civil affairs, seems to be
too large. A better fraction would be the probability for a sound average man to live still after
24 hours. Buffon estimated that probability at 1 : 100,000, which agrees quite
well with modern life tables. That probability is - - says Buffon - -
considered, by every man, as 100 % and, consequently, the opposite prohability
as zero. As for myself, I am inclined to prefer Bernouilli's fraction of 1 :
10,000, because it is - - I think - - beyond human capabilities to distinguish
such small probabilities otherwise than by calculus from other probabilities of
about the same magnitude. 1 :1,000 - - from this standpoint - - seems to be a
better fraction than even Bernouilli's 1 : 10,000.
If Bernouilli's or
Buffon's considerations are admitted, then a probability for not selling
one's stores may be considered as zero if it is less than one of the above
mentioned values. To give an example: The probability that Lyons will
suddenly cease to sell tea for some pounds, although the firm's and England's
circumstances are not essentially changed, is certainly less than 1 : 10,000.
So I would not hesitate to permit Lyons an emission of - - say - - 100 notes of
one money pound each, with no other cover than the tea at Lyons' shelves and
for which the notes may be used as a means of payment, although - -
theoretically - - your objection, also in this case, is not without foundation.
(Very probably, you will admit, that Lyons is good for much more than 100
pounds of uncovered (by gold or silver - J.Z.) notes.)
Here I need not
point out the generalisation of the foregoing notes.
II.
It's an old point
of German note issuing theory that only sold goods are fit to
serve as a base for note issues.
The issue of notes
does, in this case, serve to finance the sale.
(J.Z.: Not, directly, the primary sale of the factory to the
wholesaler, but the sale of labour to the factory and the sale of consumer
goods to the workers and the sale of the goods from the wholesaler to the
retailer. By these certainties, under freedom conditions, it even assures the
primary sale, in a continuously repeated process of production and exchange. -
J.Z., 26.2.03.)
The note issuing bank hands out to the producer of the goods
a loan (a short-term one, in its own notes, in exchange for his claim from
their sale - J.Z., 26.2.03.) equal to the amount of the sold goods. The
producer, who has meanwhile sent the goods to the man (firm) to whom he has
sold them, pays with the help of the notes the raw materials, labour, services
etc., which had been credited to him, when he proved that he would produce upon
a definite order. From the people, who received the notes - - so supposes the
theory - - the notes will find their way to the buyer of the goods, from there
to the seller and from there back to the bank.
(The main flow will be from the producer to his workers and
contractors and other suppliers, from them to the retail shops, from there to
the wholesaler to whom the producer sold the goods. Since the verbal
description of this process is always a bit unclear or even confusing, see my
circulation charts on this process, in PEACE PLANS No. 41, now also available
by e-mail from me, until they are available online or on CD-ROM. - J.Z.,
26.2.03.
Thus, and in
Germany, note credit was merely used to finance current production or current
sales of the usual kind to supply the people (with daily needed goods and
services. - J.Z., 26.2.03.).
Credit with newly issued notes was not used to
finance machines, buildings and other means of production.
Without being guided by theory, the bankers had obtained
very bad experiences with financing the means of production through note
issues. The common saying was, and it
was repeated in every book on banking: "Mit Bankgeld darf nicht gebaut
werden."
(J.Z.: "One does not build with banknote issues".
- Meaning with notes freshly issued only for this purpose and
"covered" only by the building, once it is finished, or a claim against
the builder. Long term loans, mediated through the bank or from its own capital
are quite another matter. - J.Z., 26.2.03.)
It is true that
some "reformers" asserted: As good a purpose, as the financing
of means of production (and the construction of such real values - J.Z.)
cannot have such a bad effect as the depreciation of the notes, if the loan is
good in the commercial meaning of the word. The experiences were too bad and,
although "practical men", like bankers, never read economists like Adam
Smith, they knew cases enough, as Adam Smith reports them. They generalised
these cases and were correct in doing so.
But the right
theory, which proves that bank notes issued, where, instead, the issue of
mortgage bonds would have been he right thing, m u s t get a discount,
that theory was explained as early as by Adam Smith.
I myself think,
that the German theory (Adolf Wagner, Roscher, Lexis, Lorenz von Stein, etc.)
is correct. My critique of the theory is that it did not go far enough. As
"buyers" the theory considered merely shopkeepers and other people
not being the last buyers. I consider the shopkeeper's customer as the
"last buyer". And I say:
These last buyers must be included in the system, if it is
to work as well as it can. So I proposed, in my dissertation on Milhaud's
propositions, that every worker, employee, peasant, employer etc. shall order
his supply for a time in advance, at least for some months. These commitments
should, I proposed, be performed on the well known scheme of "put",
of "call" and "put and call" of the London Exchange. (In
German: by "Vorpraemie" and "Rueckpraemie".)
Concerning the
details of the technique I refer to my book on employment.
If the details
should be found to be economically possible and would be applied, then the
speculative moment, which you emphasise,
is discarded. We agree, that the speculative moment does exist.
(J.Z.: Like all innovators, B. wanted to apply his
"order- system" by consumers for produced goods, to be applied more
widely than would really be necessary or expedient for the consumer. In practice, goods, from locomotives down to
computers, are already widely produced only upon orders. But there are many
other goods, which do not need advance orders in order to be regularly sold at
market prices, fluctuating with their seasons, e.g., for standard fresh food
items. For me the inclusion of workers and of all ordinary consumers - in the
monetary freedom process means mainly, that the provision of means of payment
for them, of wages, salaries, service charges, and thus of means of exchange
for them, to buy whatever they want in the shops, even in "impulse-buying",
is done freely and competitively. It means that these exchange media can and
must be competitively supplied by all those, who offer these goods and
services, namely the shops, the shopping centres, department stores etc. and
their special local associations for the issue of optional local currencies.
Only the issuers themselves [and their debtors by contracts] would have to
accept them at any time at their face value, as legal tender, in all their
sales and in all other debt payments towards them. The acceptance of such
"shop foundation" money would constitute already a
"generalised" order for consumer goods and services to the same
amounts. That freedom, so issue such self-committing notes, purchasing
vouchers, readiness to accept commitments, etc., would release an enormous
monetary demand for labour, for more labour than the available employed,
unemployed and refugees would be able to supply immediately. A large part of
all the ready for sale goods and service could be liquidified for this, limited
only by the readiness of potential acceptors to accept such notes in payment
for what they have to offer, e.g. in work and services. At the same time, to
the extent that such free note issues are used to finance, with very short-term
loans, current additional production, with additional labour, it would assure
sales of goods and services, to the extent that such issues are made for such
purposes, since such goods and service warrants, in money denominations, have
but one way to go: From their recipients, directly and indirectly, to the
issuers, to be redeemed in their goods and services. But B. was right insofar,
that all goods and services, whose sale is not sufficiently assured by current
and wide-spread consumer demand, e.g., extensive and costly dental work,
should, as far as is possible, only be produced upon orders, not merely by
speculating upon their possible chances to be sold in a free market, without
advance orders for them. I have certainly produced my libertarian microfiche
without sufficient advance and even current orders for them and, as a result,
most of them are still remaining unsold. However, I was clever enough to limit
the number of duplicates, that I ordered from my service provider, for each
title, to 100 only, so as to have at any time enough on hand, at least if no
sudden and relatively large "run" develops upon any of my microfiche.
More duplicates can be easily and rapidly ordered and then be automatically
produced. To that extent my libertarian microfiche output is also only upon orders,
a production upon demand. I can assure you that the monetary demand for it was
so far very small and does not even cover more than a small fraction of the
costs of expanding my PEACE PLANS series. To that extent it is still VERY
SPECULATIVE, even after a quarter of a century of such production and sales
attempts. But then I do not expand my series any faster than I can produce new
titles and can afford to pay for their microfiche reproduction in one master
copy and in 100 duplicates. - J.Z., 26.2.03.)
It is your opinion
that it will be sufficient if a banker appreciates a borrower's character. But
I assert, that the speculative risk (of not finding buyers at the time when
buyers are wanted) cannot be removed even by the most careful discrimination of
a borrowers character. The condition here to be fulfilled requires not only
trust in the moral and usual sense of the word. It requires the possibility to
make good the notes without economically hurting the bearer of the notes, and
that at any time when the bearer wishes to "realise" the note.
Insofar, I am an
adherent of the old "redemption on demand" requirement, but I say:
The redemption in gold coins being impossible in times of a crisis, the
redemption must be of a kind that is as good as possible. (Economically and
psychologically possible.) The "making good" of notes in commodities
and services is the second way. It also seems more natural and justified,
because it has been proven (and is even self-evident - - as you explained in your
book) that the note-bearers do not really want gold coins but they do want
commodities like consumer goods and services. (I took considerable liberties
here in rewording B.'s English formulations. - J.Z., 26.2.03.)
Let me add that it
is not my intention to discard individual bankers as note-issuers. (Did Henry
Meulen fancy himself as one such banker, some time, in his future and was
therefore so committed to this ideas? - J.Z., 26.2.03.) At least they are
necessary as competitors for other note-issuers. It may also be, that
experience will proves them to
be the best note issuers. But, certainly, the mere fact that
notes are issued by a private banker does not protect, in times as ours, the
most careful banker from getting his notes depreciated at the first occasion
where a depreciation may be possible. I here use the word "careful"
in the sense of 1844.
My demand
(insistence? - J.Z.) that the people should order their supplies for some time
in advance, has nothing to do with the question, whether the note-issuer is a
mutual cooperative or a private banker, as at the time of Adam Smith or a
corporation, as at Guernsey, or a simple merchant, as often enough happened in
the 18th century and, in some cases, during the German inflation, in
the years from 1919 to 1923.
A 100 % commitment
(which I myself consider to be psychologically impossible) would avoid
depreciations of notes (and crises) in every case. The same effect would - - I
estimate - - already be attained by commitments of about 1/3rd of the current supply,
2/3rd being of such a kind, that the people must buy it
(provided, they have the means of exchange). Examples: bread, vegetables,
tobacco, etc.
(J.Z.: Another order system, open to ordinary consumers,
would be their commitment to buy all their ordinary requirements from e.g., a
certain department store or shopping centre up to a certain amount, e.g. for
the next 3 months. They might commit themselves, e.g., to spending $ 1,000 at
Woolworth shops, during the next 3 months. Upon that commitment, which might be
technically be realized by buying a consumer credit in Woolworth "shop
currency" or in a Woolworth credit card for that amount of credit and
period [like a photocopy shop card or a phone card], Woolworth might grant them
an attractive discount on all their shopping for that amount and that period.
Consumers might benefit more from such an arrangement than form laboriously and
time-consumingly shopping around in several shops for the best bargains.
Different supermarkets would still continue to compete with each other for such
advance orders, by continuing to offer attractive "specials" and
generally low price levels, so that the consumers would tend to prolong their
arrangements with them. Consumer coops have long operated on this basis but a
formal consumer cooperative does not have to be established to achieve almost
the same objective, namely a reduction of consumer prices, for the
participants. - Woolworth at Bowral, NSW., does already offer shoppers spending
at least $ 30 to $ 50 at their store, a discount at their Bowral petrol station
of from 2 to 6 cents per litre [which
presently is almost equal to the same percentage], which for many shoppers
achieves largely the same purpose. -
J.Z., 26.2.03.)
The principle of
the division of labour is, in the textbooks, often explained by two men on an
island, the one seeking berries, mushrooms, etc., the other cooking them,
making baskets. etc. But the textbooks regularly forget one most important
principle: If one of the two refuses to accept the other's labour or
labour-product, the declined labour or labour-product gets a very considerable
discount, eve if only two persons are involved. The textbooks always suppose a
tacit agreement to mutually accept the labour or - - what is the same - - a commitment
(Bestellung) (or mutual ordering - J.Z., 26.2.03.) I demand no more than
recognition that this is already the necessary supposition in the most
primitive examples.
If the commitments
are not executed or not fulfilled, a discount of notes is unavoidable from time
to time, even if the banker is most
trustworthy and all his debtors try to pay on time. (? Readiness to accept the
notes at par for consumer goods and services does remain. - J. Z., 11. 6. 03.)
It to true that
other economists until now did not take that aspect into consideration (as far
as know) but I speak with Father Abaelard: Si omnes patres sic at ego non
sic!
--------------------
You say: "In
the matter of the length of the loans again the banker is the best judge."
Certainly he is, may the banker be an individual banker or
of another kind, and I do admit here, too, the possibility that an individual
banker may be better than a mutual cooperative. (I learned from you, during
your visit, that
that Benjamin R. Tucker, the "grand old man"
expressed to you, in a conversation, the same opinion.)
But the banker, the individual one as well, must operate on
principles. And I say: the line between short and long loans can be
drawn, and the banker's principle must be to avoid long loans granted in notes.
(Otherwise, they are not much better than over-issued fiat
money, i.e., without an immediate and sufficient reflux or demand for them,
exerted by the issuer and his debtors. - J.Z., 26.2.03.)
(Long loans not granted in notes [issued for that
purpose! - J.Z., 26.2.03.] may be executed, from [suitably timed - J.Z.,
26.2.03] deposits or in another way. But old Huebner's principle must be
considered: The banker should not sell better, longer or cheaper credits then
he bought.) (The last sentence was printed bold by me. By the way, B. did
not have the bold option on his ordinary typewriter and he did not use capitals
instead. Thus he spaced words he wanted
to stress by empty intervals. These are sometimes hard to reproduce accurately
in a world processor. Therefore, I printed these words bold, as a rule. - J.Z.)
What you say of
bankers "… more liberal in loans to a man who was continually turning over
the money in his business, etc.", is quite my opinion, except that I say:
The degree of speed by which the money was turned over must today be much
greater than in old times. Your example of the forest financed by a note-loan
is very good.
You emphasise the safety
of the loans. You are right. But I always suppose that the banker (individual
or not ) was prudent enough to care for his loan's safety. For the
reasons I explained, it is not sufficient to care for the safety
of the loans.
You demand, with
the greatest justification, that the banker must be a prudent man. I
wish to explain in what his prudence must consist.
(The Germans say: A banker must be able to distinguish a
commercial [turn-over - J.Z.] loan from a mortgage, economically, and he
should never accept the legal forms, presented to him, as economic
facts. Debtors, who know the
banker's principle, try constantly to offer to banker pledges that are really
mortgages, instead of self-liquidating commercial bills [real bills - J.Z.]. Here
begins the banker's prudence.)
From your letters
as well as from your book, I get the impression, that you suppose: Means for
long-term loans or loans of medium length (say 4 or 5 years or so) are scarce
and that it is or should be the task of a note-issuing bank to provide
means for such loans (except such as for forests in your example). But is your
opinion well founded???????????? From the history of savings banks and of
Building Societies I conclude that the thing which is lacking is opportunity
for investors.
(J.Z.: Under the artificial and imposed conditions of almost
continuous inflation, avalanches of ever changing laws and regulations, ever
increasing taxes, amounting to penalties upon investments etc., one can,
naturally, often get the impression that savers and investors are almost on a
strike and that, in consequence, medium and long-tem investment capital is in
short supply. But this shortage is artificially produced and will disappear
with these man made restrictions and penalties. - J.Z., 26.2.03.)
Savings banks as well
as Building Societies always have been in a little - and sometimes in great -
embarrassment to invest the means entrusted to them. In the conditions
for Building Societies, framed by the old expert Scratchley, there is a
clause intended to protect the Building-Society against repayments without the
consent of the Building Society.
I assume your
attitude would be a quite different one, if you were convinced, that the
note-issuing bank is not needed to provide long-term loans.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Affecting prices
by note-loans. I do agree that prices are raised by loans in notes if,
without a note-issuing banker's activity a real scarcity of means of payments
had prevailed. In such a situation prices are what Roscher calls
"Notpreise" (emergency prices or forced sales prices. - J.Z.) In the
1890's an egg cost, if bought directly from the peasants, about 4 Pfennige.
Obviously, this price was too low. The ideal prices are fair and just
prices, not low prices.
(Here I differ, it seems, from Dr. Runge.) Fair and just
prices are possible - - and not otherwise possible - - than by the activity of
note-issuing private banks. This supposed, I do agree that prices may be
raised by the note-issuing bank's activity. The question is: When does a
raising of prices begin to become inflationary???
You say: "…
But monetary reformers have always remarked the snowball effect of a loan in
times of a slump." I
protest against the designation of "snowball effect" if, by granting
(turnover - J.Z.) loans (in times when the stores are glutted with goods), by
the note issued for this purpose, the possibility is established to sell these
large stocks. Whenever the stores are glutted with foods, then, and quite
regularly, the means of payment are lacking, and, through that shortage of
exchange media, the prices sink below the level that an economist can consider
as desirable. If prices are merely raised to a level that an impartial
economist must judge as just and fair, then the effect is no snowball effect.
Until now mankind
never had too many goods. The greatest "overproduction" never
satisfied the real want. But the want very often was not permitted to appear as
demand, because the means of payment were lacking. I refer to your book,
where you explained the thing in a very convincing way. The glutted stores must
be considered from that standpoint.
----------------
You refer to my
letter of March 4, where I opposed to your example, the case of a country,
which is destroyed by - - say - - an earthquake, but gets credit help from
abroad. My objection was not well founded. The quesstion is here of note
credits. But the credits to which I referred are not note credits but credits
of the usual commercial kind. Not as an objection to your reasoning but as an
interesting historical fact, let me mention here, that by the importation from
America, England, Holland etc., prices in West-Berlin are sinking continually.
(Sugar now - - since March - - 1 Kilo = DM 1.20, to give an
example.)
The greatest part of imported commodities is still supplied
on a credit basis.
----------------
Railway trouble in
England in the year 1846. The artificial connection of credit with the gold
supply may have caused many quite abnormal situations and unnecessary trouble.
The credit should be quite independent from a country's supply with gold. Even
if the last grain of gold were exported, credit should be available no less
easily than before. This aim is can be achieved and I think that Free Banking
can realize it.
-- - - - - - - - - -
The year 1846 was a
year of extremely bad harvests. In Ireland many people died and more emigrated.
Economic conditions like these must
raise prices without inflation. On the other hand, an export of gold and a
reduction of the quantity of exchange
media must lower the price level or - - if a tendency for rising prices
existed, temperate this tendency. If prices rose although the quantity of
circulating exchange media was diminished, that proves merely that the
influence from the side of the commodities was stronger than the influence from
the money-side.
---------------
Paying American commodities
by means of payment of British origin.
Please consider
that I do not demand that American imports must be paid by means of
payment of British origin. But I say: Neither should it be prohibited for
English merchants to pay in this way nor for Americans to accept them.
Concerning
England's balance of trade, it has often been observed, that the balance with
the whole world must be
considered. The balance - - so it was stated - - with a single country, USA or
any other - - has never in history been zero and never will be.
(J.Z.: Why would anyone expect it to be, when balances of
individuals with their various individual debtors and creditors practically
never amount to zero, except when a particular transaction is finished?
Otherwise they always either owe something to someone or something is owed to
them by someone. Only in their relationship with all others, that they do
economically deal with, can they strive to reach and maintain a balance between
their incomes and their expenses. - J.Z., 27.2.03.)
In your example it would be sufficient if England exports
the missing 50 million L to the rest of the world. Then a demand would arise in
the rest of the world for means of payment, whose creditor resides in England
or England may cede the amount of 50 million L, that the world owes to England,
to the USA. To the USA it is the same thing, whether the debtor is an English
firm or any other, if both are good. Goschen explained the thing very
well.
(J.Z.: Well, B., with his choice of English words here did
not, at least not for me, especially by speaking of "exporting" the
"missing" 50 million L - instead of "investing" them. But
then I haven't read the corresponding part of M.'s letter. - When a country, or
one or several merchants of that country, buy anywhere in the world, with their
own means of payment, then, to that extent, they do supply that country - or
any part of the merchants of the world, with the means of payment to buy from
the importing or investing country which issued these means of payment, or its
merchants, who did. The most simple way to consider the matter is to consider
money as tickets, with which one obliges oneself to perform. If one buys
anywhere, anything, with these tickets, then these tickets are accepted
anywhere only in the expectation that they are immediately or very soon usable
for whatever performance service or supplies one has to offer and as such they
will return to be redeemed in these performances. - J.Z., 27.2.03.)
You are quite
right, that paying for American goods with depreciated English notes or bills,
must raise the price for American goods, the price expressed in English Pounds.
But why will you not let the last buyer (the consumer) decide, whether he will
pay the price or not?
Is it really your
standpoint: English consumers should pay price for imports only with foreign
exchange, while English means of payment are not at discount, or they should be
prevented from getting foreign goods at all? I do admit, that the later is the
present standpoint of the present governments (It is the standpoint of all governments,
as far as their subjects are concerned.)
My standpoint is: The less a government meddles in
such affairs the better is the subjects' supply. Some passages from an author, whom I quote as an authority,
do obviously confirm my standpoint. (Individualist, April 1947,
page 11, line 12 and December 1948, page 43, "Germany
sets an example", and many others.)
What I demand is
simply Free Trade, also in means of payments and even freedom to try new
manners of payment. (Turned into "bold" by my. - J.Z., 27.2.03.
I am convinced
that, you overestimate the danger of a depreciation of means of payments of
English origin. If there is a depreciation, it will hardly be more than
2 - 3 % or so.
(J.Z.: Almost as insignificant as the gold-point
fluctuations of purchase and sales prices for gold, in different countries,
while there exists a free gold market everywhere, i.e., in the absence of
government interference. Seeing the mentality of government officials, they are
more likely to interfere with a gold market than with a free market in
"tickets" or ticket money, once that is established. They are more
interested in taxing increasing turnovers and even in that sphere they would
gain more by issuing their own "tax tickets" to pay taxes with, in a proper
way, to make tax payments easier. However, then they would lose the
"deficit-spending" option. - But ultimately, monetary freedom would
also lead to full financial freedom, i.e., the abolition of compulsory taxes
and also of compulsory and territorial governments. They will probably become
aware of that only once it is too late for them. Their understanding of
monetary matters is not large enough. - J.Z., 27.2.03.)
I apply to your own
business experience. Is it not so, that a discount of 2 % incites the attention
of thousands of merchants, quite able to find out those English goods which are
cheap at a discount of 2 % ?
Consider that for every commodity there exists some discount,
which will make that commodity the cheapest in the world.
Discount and its supposition, the free market, enables us to
export continuously, to get continuous employment and to bring in order the
feared balance of trade within a few hours - - without government interference.
Discount means private planning and is so effective, that it
works the very day when it begins to operate.
Discount is the most valuable invention ever made. Discount
enables the great warehouses (Woolworth, Wertheim, etc.) to reduce their prices
within 5 minutes without altering one price label at the shelves.
Discount provides all advantages of devaluation without one
of its disadvantages. Devaluation cannot be repealed (in practice). But a
discount is repealed without and law and help from Parliament, the very day
when it is no longer wanted.
If the hotelier at
Dunkerque refused an English Pound Note, it was because there did not exist a free
market for notes at Dunkerque. If
such a market would exist, the hotelier would accept the notes at their market
value. Arbitration would care for an honest market value. Consider that the
notes superfluous at Dunkerque would have been paid with an agio at other
places, say in the whole of Germany. Even Russian buyers would buy English
notes if they could do it without raising attention, buyers for the State as well
as others.
Disobedience may be
a great virtue. Theorists until now considered merely political disobedience.
They should, following Benjamin R. Tucker, the grand old man, investigate
economic and social disobedience too. Their guides should be the consistent
Free Traders in the beginning of the 19th century, who asserted,
that if Free Trade is a right of man, then smugglers are the champions of that
right and deserve the same esteem as other revolutionaries.
Buyers and sellers
at the black market (who has the right to declare a market as
"black"?????), "sinners" against the laws concerning
foreign exchange - - are worthy of being canonised. The next generation - - I
do hope and propose - - will build a temple for such venerable champions.
But: from the
sentence: "What is important is that traders should be allowed to buy
abroad what and where they will,
etc.", I conclude that, au fond de votre coeur, you share my opinion. I
add to your sentence merely: "and in the commercial and legal forms they
desire".
------------------------
Issuing of notes
by shops.
Please consider: If
the shops transfer the right of issuing notes to a bank (I do recommend that,
as you know) then the legal form of the bank is of no economic
importance. The bank may be a single banker, it may be a cooperative of the
shops which are its members. It may be the mayor of the town (less
recommendable), it may be one shop for all others (not bad, I think). All that
is not so important. In every case I protest against shops being legally
compelled to wait until they find an individual banker, who does this business,
and I protest as well against cooperatives getting a monopoly for it.
The legal
organisation has, obviously, nothing to do with the question, whether the notes
should be made good in gold (at the note's face value or another value) or in
other bank's notes (at their face value or another value) or in commodities.
(This time at their face value only.)
You are for
redemption, but not in commodities. You shall have the right to try
the economic possibility of your system and I hope that you let me try
my system.
You say, that your
plan is more in line with banking tradition. I admit that. But I assert, that
this tradition has contributed to bring us there where we stand, and that it is
an extremely bad tradition, not better than the more than 100 years old
traditions created by the act of 1844.
Let your banks
offer the public gold in varying quantities! Let your banks do that, while
other banks issue notes, accepted at their face value (counted in gold weight)
at the shops. I prophecy that your bankers will get beaten up by the workers, may their system be founded
over so well, at least theoretically. But the experience, to which we both
apply, must be gained.
You say, that your
system is easier to get going. Well - - and I think the same of my system.
Experience will teach us.
You say, that your
system is more flexible. I think that my system is more flexible. Here,
also, experience will teach us.
But I do agree with
you, that a system, excellent for times of revolution may not be fit for normal
times.
I conclude from your remark, that you find advantages in a
system founded on the cooperative principle, at least in case it is started in
times of revolution.
Well - - concerning the time after the revolution - - your
system shall get all its chances, provided that it fully explains its details,
so that every note bearer knows exactly what he may expect from it.
- - - - - - - - - - - - -
I expect the
papers, which you were kind enough to send to me. I received two issues of the
"Unique" yesterday.
----------------------
Communist coup to
seize Berlin. We are anxious, and I shall buy some victuals.
If Berlin is seized, then the Allies will
certainly and at once apply their principle of collective responsibility:
"The subject is an appendix of the government that
taxes and abuses him, and not only must he suffer the cruelties of his own
government but he shall also be made responsible for these cruelties - - a principle which, I must admit it, is
"justified" by the bible. In every case, the supply from the West
will cease, if West Berlin is occupied. If !!!!!!
(J.Z.: Compare the present preparations for a war against
Iraq, instead of a rightful action only against its despotic ruler, Saddam
Hussein, who is not even satisfied with being a tyrant over this country, but
prepares mass murder devices, to give him the chance to expand his tyranny. And
the "peace lovers" marched by the millions not only, as they did
rightly, against a war with Iraq but also against any action directly against
him. Hitler loved that kind of pacifists in England and hoped that they would
keep England out of his wars. The USA government does not know what
"liberation" of a country means. Nor does it know what full liberty
and individual rights in the U.S. would require. It cannot think in other terms
and conditions than those of territorial "democracies" and
"republics" and political party "voting", i.e., conditions,
which in countries, as split-up as many are in the Balkans and in the Middle
East, do sooner or later lead to authoritarianism, despotism, tyrannies and
totalitarianism. The voluntaristic and exterritorial alternatives are kept out
of public education, libraries, mass media and academic studies etc., in the
same way as individual responsibility is ignored in favour of collective
responsibility. Bullets against major criminals are condemned. ABC mass murder
devices against their victims are tolerated and even recommended, even while
one opposes these devices in the hands of some governments. Oh, the many major
wrongs and stupidities of modern politics! They, too, would tend to disappear
with the consequences of monetary and financial freedom applied anywhere,
perhaps first only in an obscure village or small town. - J.Z., 27.2.03.)
----------------
In my dictionaries
I sought in vain a word corresponding to the German:
"Groessenwahnsinnig".
Toussaint- Langenscheidt's pocket dictionary gives only the subject:
"Groessenwahn" = "megalomania" ("Swelled head - to the
extent of madness. - J.Z., 24.5.03.) The word must be quite new. In other
dictionaries it is not contained, also not in Webster's great dictionary,
weighing 4 1/2 kilograms and containing
more than 114,000 words. The thing itself was certainly already known at the
time of Webster. My edition is of 1880.
Very
faithfully Yours - signed: U. v. Beckerath.
(J.Z.: Megalomaniac, megalomaniacal. - My Shorter English
Oxford Dictionary, 1966 edition, contains these words. - J.Z., 27.2.03.)
____________________________________________________________________________________________
U. v. Beckerath, … 22. 4. 1950.
Your letter of 19. cr., received yesterday.
Dear Mr. Meulen,
that is touching and more than that - - that you will
contribute L 10 annually to the costs of a German "Individualist". I
thank you very much and will think it over again.
The trouble is: all my friends are either unemployed or as
old as I (or older) or fugitives or sick, so that none of them is able to
contribute money to a German "Individualist.
Moreover, my views concerning economics are considered as
"theoretical", even by my friends. You and Rittershausen are the only
people in the whole world, who at least understand me.
There is still
another thing. You were kind enough to send to me the photograph taken in the
Tempelhof Aerodrome. I found confirmed what Schopenhauer says: In spite of all
mirrors, we do not know how we really look. If I would not have known whom the
photograph represents, I would not have been able to identify it.
Sic transit gloria
mundi - - that is a (biologically) very old man, broken down physically and
mentally. And the fellow is, as he looks. It is not probable that I will be
alive next year at this time. Winter, with its cold and "Stubenluft"
(air of closed rooms - J.Z.) has always and in every year considerably
diminished my vital power. I told you, that I suffered a swoon in March, when I
was buying something in a paper shop. That was the first signal, I think. Under
such circumstances I will not begin a labour of more than a year. I will be
very glad if I leave the manuscripts, which I began, in a state so that they
may be printed. (I do not know which manuscripts he here referred to. - J.Z.,
27.2.03.) I am afraid, that my time is too short. But I am thinking about a
German "Individualist" continuously. Perhaps I get an idea before
next winter.
----------------
Greet Zander
cordially.
----------------
Two days without
breakfast and in such a state of health!!!
----------------
Some persons I know praise coffee as a
means to regulate digestion, so that they need no purgatives. One of these
persons is a woman of 84.
----------------
Very faithfully
Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
23.
4. 1950.
Dear Mr.
Meulen,
in the present state of our discussion it seems useful to
enumerate some differences.
1a.) You say: Note Issuing is raising loans from the public:
every note-bearer gives credit to the banker.
1b.) I say: Note issuing does not raise loans from the
public; it is an assignment to present goods or ready services, offered by
people, ready to accept the notes by a formal agreement.
2a. ) You say: Not yet manufactured goods (future goods) may
serve as a basis of note issuing, except in extreme cases, where the difference
of time is as it is usual in forestry.
2b.) I say: Not yet manufactured goods may be financed by
other kinds of banking than by note-issuing bankers.
3a.) You say: The main aim of note-issuing is to furnish
credit.
3b.) I say: The main aim of note-issuing is to enable the exchange
of present goods for other present goods or services.
4a.) You say: The amount of credits, granted by note issuing
bankers (honourable, wise, able, prudent, etc. men) is of no influence insofar
as fresh issues will never produce a depreciation of the notes.
4b.) The amount of note-credits is limited by the
value of present goods, ready services or due debts, whose possessors or creditors are ready or obliged
to accept the notes. A banker, who tries to go beyond that natural limit
will see his notes depreciated, even if only small amounts
of notes go past that limit.
5a.) You say: Trust is the last foundation of note issue;
trust is unshaken as long as the public believes the bankers to be able,
honest, wise, prudent, etc. men. Other causes of depreciation of notes than
lack of trust are not to be taken into consideration, at least not in normal
business.
5b.) I say: Notes obey the economic law of supply and
demand. I consent to take "demand" in a very wide sense and to
include readiness (obligatory of voluntary) to accept. Notes being, as
"things in themselves" worthless paper -scraps, there must always be
a demand for them, which gives them value. Demand cannot be replaced by trust.
6a.) Old time experiences are still valid, although in old
times the denominations of notes were too large (L 1 being the smallest, as far
as I know) to be used as means of payment for wages or for ordinary shopping.
6b.) The necessity to create means of payment, especially
for wages and the ordinary consumer purchases, creates quite new aspects,
impossible to be judged by the experiences of old times.
7a.) You say: The fact that the largest part of living
people never saw a gold coin and only old men and women retain an indistinct
reminiscence of gold coins does not influence the desirability to establish a
-redemption of notes in gold, although not in par and on demand.
7b.) I say: It is sufficient to observe the value of the
notes at the bullion market, the latter to be absolutely free from State
interference.
8a.) You say: A banker can issue notes only in the way of
credit.
8b.) I say: That is true, but it is only true because the
world's legal institutions do not provide for other forms of agreement that are
here to be applied. If we had laws sufficiently developed, then it would be
possible hire notes from a banker, notes with the obligation to restore
to him the notes (notes of the same kind and amount, mainly, or their
equivalent - J.Z., 27.2.03.) and not an amount of money equal to the
notes. Instead of interest, the banker would demand a fee for the permission to
use his notes. But - - I agree - - no court
would acknowledge such an
agreement, although it would correspond to the true nature
of that business.
9a.) You say: Notes should be in circulation as long as
possible.
9b.) I say: Notes should be in circulation only for a short
time. The quantity of withdrawn notes should correspond to the quantity of
consumed goods, services and paid debts, insofar as they were financed by
note-issuing.
The amount of goods and services consumed daily and of debts
paid daily might have been, in Germany, in the year 1928, about 200 million
gold-marks. If no coins circulated, then an amount of notes of about 200
million gold marks daily must be issued and destroyed. The average time of
circulation may be estimated to come to 3 or 4 weeks.
----------------------
These are the main
differences which I remember at the moment.
The points on
which we agree are, inter alia:
1.) Everybody should have the right to issue notes without
cours forcé, the latter word taken in the usual French sense.
2.) The only restrictions should be:
a.) that he finds
people who accept the notes,
b.) that he
publishes all details of his note issuing, so that everybody who accepts his
notes exactly knows or
may know
what a note is worth and how it may be utilised.
3.) Other people's opinion, that a man's or an institution's
technique of note issuing, or the principle by which that issue is guided, are
not right (or the best possible ones - J.Z., 27.2.03) should not be a reason to
stop the issue. Experience must decide and the right to decline notes, without
having to state reasons, is a sufficient protection for everybody for whom a
certain bank may be suspect.
4.) Business, employment and credit should be quite
independent from the fact that a nation or a community possesses gold not. The
exportation of the last grain of gold or a a general hoarding of gold should be
of no influence. To give a nation or a community this independence is one of
the most important aims of note-issuing and the right of issue.
------------------
Freedom of issue
will soon develop, in every civilised community, right technique and the right
principles of note issues. Insofar, it is even necessary to use not only the
right methods and principles but to try the others, too. Only by bad
experiences with unfit methods and principles can the good and right ones be
justified by experience.
Liberty - - the
mother, not the daughter of order.
Here we agree
completely.
-----------------
Very
faithfully Yours, signed: U. v. Beckerath.
____________________________________________________________________________________________
24.
4. 50,
Dear Mr. Meulen,
the "Taegliche Rundschau", the daily of the
Russian Military Government publishes in its issue of 9.2.50. a report of Scotch
miners from a visit to Russia in the summer of 1949. It is said that the
report is published by a Scotch trade
union of miners at Edinburgh.
That report is very
favourable for the Soviets. If the reported facts were true, really one would
have to change many views about the situation of Russian miners. Perhaps you
have chance to read the report. I defer my judgement until you or one of your
friends have read the report.
(J.Z.: There were dozens of such visits and reports by trade
unionists. They all managed to overlook the real situation in the Soviet Union,
its totalitarianism, its slave labour camps, its absence of trade unions of the
Western kind, the absence of the right to strike there and to negotiate wages
and working conditions, the low standard of living and much else and fell easy
victims to Soviet's propaganda and their Potemkin villages. - J.Z., 27.2.03.)
----------------------
Certainly you read
that now air mail letters from England to West Berlin and vice-versa are
permitted. The upper limit for
Berlin senders is 20 grams. Portage 55 Pfennig, that is: 30 Pfg. for the usual
postage + 25 Pfg. for air mail.
----------------------
In
"Truth" of 4. XI. 49., page 506, I found an excellent remark on the Balance
of trade. The writer, Jasper Moon,
quotes Adam Smith and says rightly, that opinions of average people did
not change since the time of Adam Smith. I add that also in the future the
opinions of average people (shop keepers, workers, manufacturers, editors, ministers, deputies, etc.) will be the same
as they have ever been. The problem for today is, therefore, less to enlighten
these people as to establish a state of society where not any part of the
people has the right or the power to impose crazy theories upon their fellow
citizens, and to take the "practical men" for that, what they
themselves believe to be, merely because they - - and they are proud of it - -
had never anything to do with science. ("theory".)
-------------------
I read again some
lines in "The Crisis of Liberty", printed by the "Society of
Individualists", 147 Victoria Street,
London, S. W. 1. I was unable to find individualism in the
pamphlet. But it is interesting and important because it lets us see how far
and how deep modern error go. They are shared by people from all parties,
people that try to be individualists, others who are Conservatives, others who
are Liberals, and others who believe it to be but are not.
At page 16 I read:
"The price of liberty today is not only vigilance, it is also sacrifice:
the renunciation of some temporary and illusory benefits (the author spoke of
tobacco, drink and football pools) for the sake of the future." A man of
the street would be right to answer: "Our pleasures are by no means
illusory, they are real, but to save money under a government which
shares your views and has the power to enforce these views, that is an
illusory thing." I would add: not sacrifice is what is needed but
resistance against those who have, for years, taken so many sacrifices from us.
-----------------
Do you know Gustav
Landauer? Before 1914 he played a certain role in Germany as
"Edel-anarchist" ("noble or idealistic and non-violent
anarchist" - J.Z.). He was founder of the "Der Sozialistische
Bund", a little Free-Socialist Union of people who tried to find the right
middle ground between Tolstoy, Stirner, Kropotkin and Henry Geroge. In the year
1908, the June issue of "Freie Generation", published by Pierre
Ramus, a friend of Landauer, printed the "12 Artikel" of the
"Der Sozialistsche Bund. Here is the German text and attempt of an English
translation. (Enclosed.) Nothing is said in it of m o n e t a r y
liberty.
Landauer became
Minister of the Bavarian revolutionary government 1918/19. He was murdered,
principally because he was a Jew.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
DIE ZWOELF ARTIKEL DES
SOZIALISTISCHEN BUNDES.
("Die freie
Generation", herausgegeben von Pierre Ramus, Juni 1908.)
Artikel 1. Die
Grundform der sozialistischen Kultur ist der Bund der selbstaendig
wirtschaftenden, untereinander in Gerechtigkeit tauschenden
Wirtschaftsgemeinden.
Artikel 2. Dieser
Sozialistische Bund tritt auf den Wegen, die die Geschichte anweist, an die
Stelle der Staaten und der kapitalistischen Wirtschaft.
Artikel 3. Der
Sozialistische Bund akzeptiert fuer das Ziel seiner Bestrebungen das Wort
Republik im urspruenglichen Sinne: Die Sache des Gemeinwohls.
Artikel 4. Der
Sozialistische Bund erklaert als das Ziel seiner Bestrebungen die Anarchie im
urspruenglichen Sinne: Ordnung durch Buende der Freiwilligkeit.
Artikel 5. Der
Sozialistische Bund umfasst alle arbeitenden Menschen, die die
Gesellschaftsordnung des Sozialistischen Bundes wollen. Seine Aufgabe ist weder
proletarische Politik noch Klassenkampf, die beide notwendiges Zubehoer des
Kapitalismus und des Gewaltstaates sind, sondern Kampf und Organisation fuer den
Sozialismus.
Artikel 6. Die
eigentliche Wirksamkeit des Sozialistischen Bundes kann erst beginnen, wenn
sich ihm groessere Massenteile angeschlossen haben. Bis dahin ist seine
Aufgabe: Propaganda und Sammlung.
Artikel 7. Die
Mitglieder des Sozialistischen Bundes wollen ihre Arbeit in den Dienst ihres
Verbrauchs stellen.
Artikel 8. Sie
vereinigen ihre Konsumkraft, um die Produkte ihrer Arbeit mit Hilfe einer
Tauschbank zu tauschen.
Artikel 9. Sie
schicken Pioniere voraus, die in Inlandsiedlungen des Sozialistischen Bundes
moeglichst alles, was sie brauchen, auch die Bodenprodukte, selbst herstellen.
Artikel 10.
Die Kultur beruht nicht auf irgend welchen Formen der Technik oder der
Beduerfnisbefriedigung, sondern auf dem Geiste der Gerechtigkeit.
Artikel 11. Diese Siedlungen sollen nur Vorbilder
der Gerechtigkeit und der freudigen Arbeit sein; nicht Mittel zur Erreichung
des Ziels. Das Ziel ist nur zu erreichen, wenn der Grund und Boden durch andere
Mittel als Kauf in die Haende der Sozialisten kommt.
Artikel 12.
Der Sozialistische Bund erstrebt das Recht und damit die Macht, im
Zeitpunkt des Uebergangs durch grosse, grundlegende Massnahmen das
Privateigentum an Grund und Boden aufzuheben und allen Volksgenossen die
Moeglichkeit zu geben, durch Vereinigung von Industrie und Landwirtschaft in
selbstaendig wirtschaftenden und tauschenden Gemeinden auf dem Boden der
Gerechtigkeit in Kultur und Freude zu leben.
--------------
THE TWELVE ARTICLES OF
THE SOCIALIST FEDERATION.
(Printed in the German
language in the "Freie Generation", June 1908, edited by Pierre
Ramus.)
Article 1. The
basis of socialist culture is the federation of autonomous and economically
independent associations, exchanging their products and services, discarding
every kind of injustice.
Article 2. Our
Socialist Federation will replace State power and the capitalistic economy in
the ways determined by history.
Article 3. The
Socialist Federation accepts as aim of its endeavours the word republic, in its
original sense, the matters of the common weal.
Article 4. The
Socialist Federation declares as the aim of its endeavours anarchy, in its
original sense, that is, order through voluntary associations.
Article 5. The
Socialist Federation embraces all working people who desire the social order of
the Socialist Federation. Its task is neither proletarian politics nor class
warfare, which are both essential parts of capitalism and the coercive State,
but labour and organisation for socialism. (Not State socialism.)
Article 6. The
Socialist Federation's real activity cannot begin before large parts of the
people have joined it. Meanwhile, its task is: Propaganda and organisation.
Article 7. The Socialist Federation members claim to
dispose of their labour products. (J.Z.: More literally: The members of the
Socialist Federation want to place their labour into the service of their own
consumption. - J.Z., 27.2.03.)
Article 8. The members unite their consuming power for the
purpose of exchanging the products of their labour with the help of their
exchange bank. (They combined their purchasing power in order to exchange the
products of their labour with the help of a barter bank. - is the more literal
translation. J.Z., 27.2.03.)
Article 9. They
send out pioneers who organise settlements, where all necessary goods,
agricultural produce include, are produced as far as possible.
Article 10.
Culture is not founded on methods for satisfying wants. Culture is founded
upon the spirit of justice. ("mentality of justice" said B. in his
translation. - J.Z.)
Article 11.
These settlements will be merely models of justice and joyful work. They
are not means to attain the proper aim of the Socialist Federation. This aim
can only be achieved if the soil and land comes into the hands of the
socialists by other means than purchase.
(Peaceful purchases rejected! Rather spend blood for the
acquisition of titles to land? - J.Z., 24.5.03.)
Article 12.
The Socialist Federation strives for the right and with it the power, to
abolish, at the time of transition, the private property in land through
fundamental measures and to provide for all citizens the possibility, through
the uniting of industry and agriculture, in autonomous producing and exchanging
communities and on the basis of justice, to live in culture and joy.
(Hopefully, some better translations are available by now. -
J.Z., 27.2.03.)
___________________________________________________________________________________________
26.
4.1950. Your letter of 19. 4.50.
Dear Mr.
Meulen,
here enclosed you get an aperient not harmful to the
stomach if you use, for one cup of tea,
1 teaspoon camomile-tea and
2 teaspoons of the senna-husks.
The father of my friends, the familiy Bloesz, 84 years old,
uses it for years with best results.
---------------------
In the Journal de
Genève of 21.9.49. I find these figures of a Swiss merchant, Maro Fontaine,
about prices at
Moscow in the winter 1948/1949. Fontaine observed the prices
when he was in Moscow.
The average workers
gets 800 Rubles a month.
"Spezialists" get 1,200 - 1,500 Rubles.
800 : 30 = 27 R. a
day.
1 Kilo black bread = 3 R.,
1 " gray
" =
4.40 R.,
1 " white
" = 7.80 R.,
1 " best
" " = 8.40 R.,
1 fresh egg = 3.50 R.,
1 orange = 7.00 R.,
1 lemon =
4.50 R.,
1 Kilo beef = 45 - 65 R.,
1 " pork = ca.
75 R.,
1 " butter = 70 R.,
1 Liter Wodka = 120 R.,
1/2 bottle beer = 11 R.,
1 pair of shoes = 500-600 R.,
1 suit,
second-hand. = 2,000 R.,
1 suit, new = 3,000 R.
------------------------------------------------
Very faithfully
Yours - signed: U. v. Beckerath.
(Still more informative were several comparisons, published
some time later, on how many minutes or hours the average worker had to work in
Soviet Russia and in the USA for ordinary consumer items. But presently I do
not have such a table on hand. - A
worker's paradise? Indeed not! - But then a large part of the total food
supply, ca. one third, under this regime, came from the small plots of land
that numerous people were allowed to keep and cultivate, coming altogether only
to 3 % of the arable land. The other 97 %, under the mismanagement of
government organised and run collectives or cooperatives, produced only about
2/3rd of the internal food supply.
I do not know how long rationing or quotas for consumers
persisted there. But for some necessities one had to wait in long lines for
hours - where and when they were available and others were simply unobtainable
for most people, most of the time. - But then there was a booming black market,
although such dealings could lead to forced labour camps and even the death
penalty. Its prices should be reported, too. - J.Z., 27.2.03.
____________________________________________________________________________________________
U. v. Beckerath, … 28.
4. 50.
Dear Mr.
Meulen,
the question: "Can standardised means of payment, not
endowed with cours forcé cause inflation?" is of very great importance. If
it would be possible, and if adherents of Free Banking or Mutual Banking must
confess themselves, that it is possible, and that only the prudence of
the banks can prevent inflation by bank money, then Free Banking or Mutual
Banking has no chance. People will say: "It seems that State Banking is
the lesser evil. In no case should the purchasing power of wages, rents, pensions,
etc. depend upon the banker's prudence, if their own advantage is so
intimately connected with note-issuing as it obviously is."
In your book, page
325: "Green proposes to retain the fixed price of gold and to use metal as
a standard of value. At the same time he admits that the issue of his money
must cause an increase in the price of general commodities."
I will now not
speak about the price of gold in form of gold coins. When a country is
on a gold standard, the word used in the sense of 1850 and not of 1950, that
is, if prices in shops are expressed in gold coins then gold coins have no
price. (J.Z.: Meulen never seems to have understood that point. For him prices
were always to be expressed in his managed paper-pound. - J.Z., 28.2.03.)
I sought for a
passage in Greene's pamphlet, where he expressed his opinion about the
inflationary effect of issuing notes without cours forcé. I found at page 65 of
the Indian edition, which you were so kind to send to me, this passage:
"Mutual money
is measured by specie, but is in no way assimilated to it; and therefore its
issue can have no effect whatever to cause a rise or fall in the price of the
precious metals." (Chapter VIII, last sentence.)
Greene uses here
the expression "price of the precious metals". As one may see from
the preceding passages in the chapter, he means not: "Price expressed in
paper money", but, instead, value expressed in its purchasing power, so
that other commodities appear as the price of gold or silver. That's no
good, consistent and logical expression, differs also from general usage of the
language, but in Greene's context it is intelligible. More important is that
Greene obviously protests against the assertion, that an issue of his
notes can raise the general price level, the latter expressed in gold coins or
silver coins.
--------------------
Let me add some
remarks. Greene shares the general opinion, that the note-issuing banks of
his time, restricted in their affairs by the quantity of gold or silver in
their vaults, really had the power to raise prices, or - - more exactly spoken
- - that an inflationary increase of the general price level by an over-issue
of notes - - the word taken in the sense of 1850 - - would be the consequence.
I contest even that, although I am certainly no friend of the note-issuing
banks at the time of Greene. I assert that cours forcé and nothing but cours
forcé of notes is the condition of inflation.
(J.Z.: If they had, as the exclusive currency, no compulsory
value but, as a very important monopoly "commodity", nevertheless
compulsory acceptance, for all desiring monetary exchanges under the rule of
that exclusive currency, then all prices, wages, rents etc. could still be
expressed in gold weight values and to that extent no inflation of prices,
wages, rents etc. would take place, although more and more paper money of the
over-issued currency would have to be paid for them. Then only the currency
would be inflated but not the price level. But the enforced value of the cours
forcé for an exclusive currency would change that and outlaw stable pricing in
gold or silver weight units. - J.Z., 28.2.03.)
Economists of
Greene's time, and most of the later times, did not distinguish between two
very important kinds of price rises:
1.) a rise starting from a normal and just level. Such a
rise is certainly an inflationary one.
2.) a rise from a level, which is to be considered as being
too low and which became too low due to a lack of currency. Whenever forced
sales contribute to a considerable degree to supplying the market, as was so
often observed in old times, then the general price level has become too low.
If then a bank begins to operate, i.e., to supply the debtors with currency, so
that the forced sales can be replaced by normal sales, then - - it is true, the
general price level will rise, but this rise is not inflationary. Modern
language has invented a quite suitable word for that: The issue acts "reflationary."
It is technically
impossible to exaggerate the issue of notes to which no cours forcé is granted,
so that the general price level is noticeably influenced. It is impossible to
over-issue notes or cheques. i.e., to issue them without producing additional
sales. The over-issued cheques or notes are worthless if they do not exercise
purchasing power. (As worthless as tickets to performance for more seats than
are available. - J.Z., 28.2.03.)
If in such cases a merchants wants to sell considerably more
than he sold shortly before, and if the notes of certain banks are offered
(more frequently than usual - J.Z.) as a means of payment, then he gets
suspicious. He tells the buyer: "One sees now so many of these notes,
issued in these days, as the printed numbers and the dates indicate. - - I
cannot judge if they are genuine - - please pay by transferring the amount to
my bank. As soon as I get the confirmation, you may get the
commodity." - Then the buyer goes
to the bank named by the merchant! There the thing is already different. If the
buyer is the first man, who brings notes of the kind refused by the
merchant, then he may have good look and get the notes accepted. Once the
second one comes with such notes, the bank says to him: We get too many notes
of this kind. We must first look into what is the matter with the issuing bank.
Come back in 2 or 3 days."
(J.Z.: I do believe that it was Meulen, who indicated first
to me, possibly in a letter to me, that the note-exchange between banks will be
the first indicator for them of over-issues. When after the usual and frequent
note exchanges all or most banks have still notes of the over-issuing bank
left, after they bought back - or cleared
- their own notes against those of the over-issuing bank, then they will
know immediately that the over-issuing banks had been over-issuing. At least within city-banks that note-exchange
or note-clearing will take place daily. Thus any over-issue would be discovered
fast. They would refuse or discount the notes of the over-issuing bank and
would publicise that fact. - J.Z., 28.2.03.)
Then the banker
goes to the other banker who issued the notes. He begs to look at the books of
the issuing bank. If that is declined, the banker says: Well, you have - - of
course - - the right to refuse that; but I have the right to refuse your note!
Good morning! An hour later the whole town knows, that the bank X refuses to
accept the notes of the bank Y and on the same day the note-issue of Y is
stopped. That's no theory, that's practice. No option clause protects a bank
from this consequence of an over-issue.
When in old times
the papers, the authors, the governments, and even bankers themselves, spoke of
an over-issue, as a thing really possible, it was only because they did not understand
their own business well enough. That could be easily verified, even in Germany,
as long as the libraries were not yet destroyed. It was possible to look
at old papers and old books, pamphlets etc. and to see, how
funny the views of average merchants and even bankers were, if they had to
published their opinions. But also in old times there were people enough who
saw the things in the right light and declared an over-issue of banknotes as
technically impossible, as long on there was no cours forcé of the notes and
opinions could be freely uttered. The best author on the subject was Horn,
whose works appeared also in French and certainly can still be viewed in
London. (My copy is burnt.) Horn was nearly a fanatic of Free Banking,
understood the thing completely and - - at his time, his books maintained a
great authority. For you he must insofar be of special interest, as he asserted
the possibility to always convert notes into precious metal. (You know, that I
cannot share this opinion.)
(J.Z.: I reproduced HORN, J.E., "La liberte des
Banques", 1866, 464 pages, 48x reduced, in PEACE PLANS 601 and the German
edition, "Bankfreiheit", 1867, 451 S., with a 2 pages comment by me,
in PEACE PLANS 333. All of my issues are still in print on microfiche, at least
in their latest version. Also some writings by Courcelle-Seneuil and Coquelin.
See my literature list on my main website - and many other monetary freedom
titles. - J.Z., 28.2.03.)
But at that time
not only Horn proved the technical impossibility of an over-issue of notes
without cours forcé. Courcelle-Seneuil, Coquelin and - - so I read - - Wilson,
the first champion of the "Banking Principle", too. There were still
many others, real scientists, which I cannot enumerate here, because their
books are burnt.
One may still
object: And if, in single cases an over-issue took place, although only for a
small amount? I say (with the quoted authors): Then the note becomes, quite
obviously, what it really was already at the moment of its
issue: A mortgage bond that does not pay interest. It gets a
discount, and after some time it disappears from circulation. Why? The issuing
bank's debtors procure themselves the depreciated notes and pay with the notes
their debts au pair. Thereby they win the discount.
To what level may
prices (gold prices!!) be brought by an issue of notes so far as is technically
possible? If it would be
granted, that rising prices are, in practice, a "causa occasionalis"
to increase wages, I could say: Prices and, consequently, wages can rise as
long until the workers in the goldmines learn that in other industries wages
are higher than in the gold mines, thus leave the mines and so cause a
reduction of gold production. At last gold must become scarce also there, where
it is really wanted. Then prices of commodities - - in general, and expressed
in gold - - will not rise any longer. Under "prices" are here only
understood prices expressed in gold coins.
I disregard here
the case where, by bad laws, creditors are entitled to claim gold for due
debts. By this a legally produced and additional demand for gold may arise (and
often arose in the past), which is to be considered as artificial and has
nothing to do with economics. By a law, that creditors are not entitled
to claim gold or silver for due debts, but must be content with "local
currency" (expression used in the report of 1931, of the Chinese Minister
of Finance, about monetary reform in China - - Zander possesses it), this
additional, unnatural and disastrous claim and the consequent demand of debtors
is discarded.
Let me here state,
that all reproaches ever raised against an economy based on money, e.g.,
by Tolstoy in his book "Money", do exclusively concern that
right of creditors to claim precious metal (or scarce legal tender paper money!
- J.Z., 28.2.03), without regard to whether it can be procured by the debtors
or not. But no author, from antiquity to our time, has observed, that the evils
of a money-using society, insofar as money is concerned, only consists in the
claim of creditors to money of that kind, which Greene, with a very good
expression, calls "Exclusive Currency". Also, all the arguments for
communism, from antiquity to our days, are. to 99 % taken from that right of creditors.
To confound money and the claim of creditors (workers, as
wage earners included) to money (in form of an exclusive currency - J.Z.,
28.2.03.) is one of the most fatal errors of humanity.
In my books I
tried, in vain, to direct my contemporary's attention to this fact. But Zander,
as long as he was interested in monetary problems, shared my opinion, that the
repeal of the laws granting to creditors a legal claim to exclusive currency,
especially to gold or silver, would be a social reform hardly to be
overestimated.
---------------
I think, that
individualists should oppose to the communist demand to abolish money or to
replace private money monopoly by a State monopoly, with the demand for
Monetary
Liberty.
That liberty means a
state of society, where transactions, exchange, credit, employment and any
other economic relations of one man to another man, do not depend upon the
monetary conditions of others, as far as these conditions can be technically
discarded.
20 years ago (about - - I think it was in the year 1932) Zander
contributed a very important (perhaps decisive) detail to that
"ideal". He said: The last consequence would be, that a debtor,
unable to procure local currency - -a case very possible at times of crises - -
will be permitted to pay his creditor by certificates, standardised in a manner
that their circulation is possible without difficulties, and which get their
value by the debtor's obligation to accept the certificates, at their face value,
in his business. The debtor should, in such a case, be obliged to compensate
his creditor for the trouble of not being paid in local currency. We reflected
upon the "surcharge" which businessmen would consider as just. I
proposed 30 %, as long as others did not propose other surcharges and give
sufficient reasons for their proposal.
I beg to point out
my reason. In India an interest of 5 % monthly is considered as just for debts,
not to be paid in money but in kind, for peasants in agricultural produce. The
experience of centuries has shown, that such an interest is economically
possible and does not ruin the debtor. If the credit is repaid within 6 months,
the debtor paid 30 % interest, the rule of compound interest not applied. On
the other hand, in the laws of Justinian is said, that the interest for
agricultural credits, to be repaid in agricultural products, shall not be
greater than 30 % p.a.
I estimate that
where there is a market for commercial bills, in the average, a bill
(certificate) of 1 Pounds + 6 Pence with
a text stating, distinctly enough, the debtor's obligation, may be sold for 1 L
at least, and that the possessor of such a certificate will, in the average, be
satisfied within 6 months. That considered, 30% seems to be a tolerable mean
between the 5 % monthly in India and the 2 1/2 % monthly (30 % p. a.) of the
Corpus juris. Considering the situation
economically, the debtor is in the position of a peasant, who pays his credit
not in money but in agricultural products.
Under a condition,
where Free Banking prevails, the necessity to resort to certificates, replacing
local currency, will rarely occur and will certainly be much less frequent than
bankruptcies are under our monetary organisation in times of prosperity. (For
calculations 25 % are more convenient than 30 % and that may be a reason to
prefer 25 %. 30 % seems also to be a little too much for a society, where a market
for such certificates in supposed to exist.)
Paying creditors
with certificates, whose value consists in the debtor's readiness to accept
them like money in his business, is a method invented and used before I was
born. In the Western State of the USA many factories, situated in rural
districts, were unable to always provide their workers' wages with USA Dollars.
Instead, they paid them with certificates which, in Scotland, in 1843, would
have been called "option notes". The factory promised to pay USA
Dollars for the note, after a delay of some weeks. In the report I read - -
very long ago - - it was not stated how many weeks, also not whether the bearer
could claim a compensation for the disadvantage of waiting. The report was from
a worker.
Replacing the
principle "value by acceptance", for which the brain of most men - -
it seems - - has not yet developed cells, by the principle: "mitigate the
disadvantages of cash payments by delay", thus introduces time,
for which cells in the brain are developed). It does so in the manner of
average people for tackling the problem of "liquidity".
("Liquiditaet", in German is the usual expression
for a man's ability to pay in cash. A word "liquidity" in this
sense is - - I confess - - not stated in Webster, edition of 1880, nor in
Muret-Sanders, abridged edition of 1909, nor in Toussaint-Langenscheidt,
Pocket-Dictionary (excellent) of 1929, post-war edition.)
In the reported case the workers went to the saloon-keepers
and discounted their certificates there.
---------------
In my opinion
monetary liberty is the most important right of man and citizen. All other
liberties, that of freedom of expression, to vote, to be protected for
arbitrary arrests, etc. (1789 rights) are worthless or in danger, if monetary
liberty is not realised and history proves that they really disappear in times
of crises.
Free Banking is a
very essential element of monetary liberty (monetary freedom - J.Z.), but it is
not yet monetary liberty itself. Let me here shortly state, what - - in my
opinion - - monetary liberty is.
Monetary
liberty
is:
1.) The right of banking, including the right of issuing
notes to the utmost economic possibility, if one likes to use
it.
2.) The right to reject every kind of means of payment,
privately manufactured gold coins included.
(Here and in the following, I omit certain necessary
additions [B. wrote: "completions" - meaning clauses? - J.Z.],
begging to add them in one of my next letters. One of these additional
conditions would be that the debtor must inform his creditor in time [at least some
days before payment] if he intends to use means of payment not to be considered
as local currency, and the creditor must inform the debtor in time, if he
intends to refuse certain means of payment which are generally considered to be
a local currency. [Abolition of cours forcé.)]
)
3.) The right to price goods or services in the manner the
possessor himself thinks fit. In paper money, in gold, in silver, in grain, in
makuta or in cowries, but at his own risk.
This right may, of course, be restricted by agreements, say,
with those banks, which granted loans, to price in fixed value units, say, in
the units of the loan granted by the bank. (Additional pricing, in other value
units, should not be prohibited. - J.Z., 28.2.03.)
4.) The right to possess all kinds of means of payment and
of the commodities to which the means may refer, that is, gold, silver, notes
of other banks, foreign-exchange, cowries, etc.
5.) The right to transfer any means of payment freely to any
person or group of persons and to accept means of payment. (Of any kind! -
J.Z., 28.2.03.) This right shall include the commodities to which the means of
payment may refer, as in No. 4.
6.) The right to profit from any public market, to
establish such markets and to offer any market facilities to everybody.
The right shall include the right to report details of the
business done at the market to everybody, also to publish them, and as well the
reports of offers and demands and of opinions expressed by people using the
market. The market must be free, especially from State interference.
7.) The right to conclude contracts, in any form, about
affairs in which money or money substitutes are provided, may it be as means of
payment or as measure of value. The contracts may also provide for the
avoidance of payments in "money", say, by an obligation to settle all
debts by clearing.
No basis of value shall be excluded, neither gold, silver,
cowries, paper money of any kind, nor notes of a particular bank, person or
corporation.
8.) The right to prepare commodities, so that they may be
used as means of payment, especially to coin gold or silver ingots privately,
but - - of course - - with the obligation to stamp on such coins the fineness,
the weight, the dimensions (diameter, thickness), the date of stamping and the
manufacturer. The coining may be for the own account or for the account of
other persons.
9.) The right to oblige oneself or to accept such
obligations to buy commodities of a certain kind for a certain period and for
certain kinds of money or money substitutes. (System of orders or commitments
to mitigate crises.)
------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, …
29.
4. 1950.
Dear Mr.
Meulen,
today 1 received
1.) "The Economist" of 8.4. &
15.4.1950,
2.) "Truth" of 14.4.50.,
3.) "analysis" of February 1950, & of March
1950,
4.) "Economic Intelligence" No. 20, March 1950,
5.) "National News-Letter",' No. 716 of 13.4.1950,
6.) "The Free Trader" No. 253, April-March 1950,
7.) "The Literary Guide'', March 1950.
I thank you very
much; it is stuff for a correspondence of many weeks.
(The postal stamp
was of 21.4.50.)
You read the
article "Neutrality for Germany" in the Economist of 8. 4. 50. All written there is interesting, wise and
deserves all praise, which may be justified from a literary standpoint.
But: The standpoint here to be taken is a military
one and nothing else. The Russians have - - as you know, perhaps from better information than I can get - -
more than 2 million soldiers at the Eastern front. The military quality of
these soldiers is as good as any - - English and Americans not excluded. Also
these soldiers, or the greatest part of them, are sincerely convinced, that a
war against the Western powers would be a kind of crusade for humanity, and
that if the Kremlin begins the war, it will do it for eternal peace and
everlasting happiness by "socialisation". That is a moral aspect, one
which outweighs the atomic bombs, which - - perhaps - - are still lacking. How
far the Russian soldiers' mentality is spread in Western countries, you do know
from the discoveries in the last months, that in the USA, in England and in
France some high officials, atomic experts included, are partisans of Russia.
Be sure that for everyone detected there are at least 20 not discovered.
In this situation
it is necessary, that at least 2 millions of English and American
soldiers be ranged at the Eastern front. The question of admitting Germans as
soldiers is, at the moment, of no importance. Also it is, at the moment not
important to decide, whether the rest of German ammunition factories shall be
destroyed or not. If the old Duke of Wellington would command, they would
certainly be used exactly for that purpose, which their destruction shall
prevent, that is: manufacture ammunition. But every preparation for wars is
hampered by errors, prejudices, blunders, etc. on both sides. At the Russian
side they will be committed, although we see and know nothing of that.
The main argument
against the forming of an army of more than 2 million soldiers at the Eastern
front seems to be: We have no money for that. Let me reply: In the Prussia of
the 18th century 1/27th of the population were soldiers.
And that was possible, although the country was without machines (the word
taken in the modern, popular sense) and its production per capita was certainly
less than 1/5th of what it is now in Western countries. If the
governments insist on the argument: "money is lacking", then they
should be pensioned off and, at the least resistance, be hanged. Their
successors should study the old Prussian economic system. It was not restricted
to Prussia. Several States paid an army still greater in relation to the
population (Hesse, for instance) and had means enough to maintain a court whose
splendour surpassed that of modern courts. Holland, after she had chased the
Spaniards out, was in a similar situation.
Are there still men
in England able to listen to such arguments and not to fall asleep at once?????
I am really doubtful, if there are more than a dozen, and this dozen,
obviously, lives under conditions where it cannot get a hearing.
(J.Z.: With a much
lesser effort the Soviet Regime could have been toppled then, by enlightenment
efforts and libertarian revolutionary actions. However for such efforts there
was then and is still even now less interest than for military actions then and
now. One does not have to spend $ 100 - 300 billion in order to get rid of a
dictator like Saddam Hussein, if one does not rely on "military
actions". Mere arms races have almost always led to war. And at that time
all too many people slept complacently on what they thought to be the
"security of the nuclear umbrella". - J.Z., 1.3.03. - - A fraction of
such military expenditures would suffice to finance and assure either the
execution or the capture of tyrants and dictators, sometimes by their very
aides. Read what Sir Thomas Moore, once Chancellor of England, had to say on
this, in his chapter "On Warfare", in his famous Utopia. - Supposedly
the "special forces" of governments are suitably trained for such
actions. In merely military actions against conventional forces of the enemy regime
their skills are largely wasted. They should aim for the head, for their
decision-makers, just as this Chancellor of England, almost 500 years ago,
recommended. - J.Z., 24.5.03.)
-------------------
At present the
situation is this:
At the very hour,
When the Russians (their and the other captive peoples' totalitarian rulers! -
When even B. used such terms, what can one expect from most others? J.Z.) begin
the war, England will be covered by missiles from V(2)-weapons and by atomic
bombs. Her home army and the navy will be unable to move and will be without
supply. That part of the army which is abroad - - still considerable (yes) will
in the meanwhile have killed half a million of Russian soldiers, is a bad
consolation. Also, it will be seen, that the effect of atomic bombs (especially
of neutron bombs! - J.Z.) upon factories & houses is very different from
that upon men. Factories and houses get destroyed in the moment when the bombs
explode. The greatest part of men affected do feel nothing in the first two
weeks. Then they begin to die and suffer horrible pains. But within the two
weeks they will have conquered France (I think France will cede, as Japan did)
and Europe.
(J.Z.: Let us assume that of 2 million Soviet soldiers,
commanded to attack, 100,000 will be immediately killed by nuclear blasts and
that of the rest, say, 1 million are walking dead, with a life expectance of
days to weeks only. They might, thereby, become easily quite fearless and
aggressive soldiers, much more dangerous than they were without the knowledge
that in a few days they will be dead, anyhow. Certainly, they would not be
inclined to desert and join the side, which dealt them this fate. In short,
nuclear "strength", at least for a few and decisive days, might produce
more real, even fanatic enemies than it destroys of assumed ones. At most,
after decades of communism, only about one third of the population were
convinced. And they were never exposed to the practice and effects of full
liberty, which would have won over most of them rather fast. - J.Z., 1.3.03.)
This Europe - - at least 100 million men -- will then work
for the Kremlin. Then, perhaps, a 3- year war begins between America and the
Kremlin. The end may be similar to that at the end of the 30-year war in
Germany: In 1618 Germany had 25 million inhabitants, in 1648 five millions.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
In
"Truth" of 14.4.50., I find at page 354 a poem of Yelland:
"The Century of
Shadows.
"The Century of the
Common Man,
"An Age devoid of
heroes
"Where Life's a
politician's plan
"For multitudes of
zeroes."
And no one of
those, who do really already see things as they are, seriously
reflects: how to change that. Or - - one must be just - - no one of
those, who see the things and have the possibility to speak to their
fellow-citizens, is seriously interested. If they would be, then contents of
contemporary literature would be quite another one.
---------------
How different are
the ("the"? many, perhaps even unusually many, but not all! - J.Z.,
24.5.03.) Russians: Always active, always interested, nothing escapes their
attention, also not those things that, at the moment, seem to be of no
importance, and if they had not that crank (their spleen or their fixed ideas
or their indoctrination - J.Z.) in their heads and would not be such fanatics
of their crank, I would say: The future belongs to them. But the way of the
Kremlin, in case of its victory, will be like that of King John of Abyssinia:
By his constant and "educational" wars against his own subjects, he
at last reduced the number of male inhabitants so that by some estimate only
1/10th remained. That was 100 years ago.
(Why assume that the internal despotism would remain
unnoticed and not resented by its victims, the "different"
"Russians"? Flawed ideas can be easily defeated IF a serious attempt
is made. Some even thought that the percentage of convinced communists
remaining in Soviet Russia was smaller than that in the West. This weakness of
that regime, and similar ones, was never sufficiently exploited. - J.Z.,
1.3.03.)
------------------
In "City Press"
I noticed your mark at the article: "Big US Wheat Surplus Feared".
And yet the average man's brain is so organised, that he is able to read that,
and then a sheet of the Malthusian, where it is pointed out, that the world has
not enough to eat and he finds no contradiction.
(J.Z.: Without the help of a frequently updated
encyclopaedia of the best refutations of popular errors, myths and prejudices,
most people do not have the time and energy to find the refutations to
ten-thousands of them and so they continue to be accepted and practised like
"proverbial wisdom". - J.Z., 1.3.03.)
--------------------
City Press reports,
tool, that "Interest rates hit Japan glove exports." I cannot believe
this to be true. An interest of 9 % p.a.
for industrial credits is quite normal for the Far East. Certainly, it has
seldom been less than 5 % p. a. The little difference of 4 % should stop
exports??? If the price of gloves is analysed: wages, raw material, taxes,
management costs, etc., then, very probably, the item "interest"
would be one of the smallest. But I will believe, that Japanese merchants published
in the papers, that an interest of 9 % prevented them from exporting, with the
intention of inducing the Bank of Japan to grant them cheaper credits. Very
probably, they will be successful. The same bank manager, who neither fears the
gods nor the devils nor anything else, he trembles, when he hears
"unemployment" and at once grants what the mighty employers demand.
(Just compare the billions of bad debts, which these "expert" bankers
accumulated, in many, if not most countries. - J.Z., 1.3.03.)
-----------------
I read with much
interest the marked passages in "analysis". In one of my next letters
I hope to write some words about these reports.
----------------
"National
News-Letter", No. 716, reports a letter from an American Senator, who will
create a federation of Western European countries for Free Trade, and
"strong defence organisation". The senator does not see, that countries,
that is governments, are by their very nature unable to establish a
semi-international Free Trade community and to do anything for defence.
When 100 years ago List could organise a German "Zoll-Verein"
(Customs Union - J.Z.), the true reason was: Prussia was very large, compared
with the other German States, and her government had good reasons to
want the whole of Germany as a market.
What is needed and
what senators will hardly see, is that private organisations are
the first line for a strong defence. Do you know of one man, who
listens, if another man talks to him about such things?
(J.Z.: How many libertarians and anarchists are now prepared
to serious listen to talks or study writings about defence, liberation,
revolution, from a libertarian or anarchist point of view? - J.Z., 1.3.03.)
---------------------
Very
astonishing the speech of Princess Margaret, printed in Free Trader No.
253. (Was it her speech or that of a ghost-writer? - J.Z.) It reminds me of
another woman of royal blood, which found words of reason and humanity, in a
world where bloodshed seemed to be the most reasonable thing: Queen Christina
of Sweden, the daughter of Gustav Adolf. When she was 18 years old, she ordered:
That war in Germany is to be stopped. I and my subjects, we got enough
of glory; now we want peace! You, Chancelor Oxenstjerna, begin at
once the pourparlers of peace. The Chancellor had to obey and the world got the
celebrated peace of Osnabrueck ("Westfaelischer Friede", in 1648).
The princess should
know something of Free Banking, the logical consequence of Free Trade.
(J.Z.: Not merely a consequence but also a pre-condition.
Essentially, with both extended to their logical limits, the two are identical,
like the best forms of capitalism within enterprises are identical to the best
forms of voluntary socialism within enterprises! - J.Z., 1.3.03.)
Bismarck spoke of
the "erbliche Nullitaet" of the English Royal Family. Whatever may
have been the opinion of that, it is no more justified vis-à-vis such a
princess!
(J.Z.: And what did the great abilities of Bismarck lead him
to? To help create a protectionist German empire, involved in all too many
wars, that later led Germans into WW I and II and never solved any of its
remaining major problems. He was also the first major promoter of the modern
"Welfare State". - Such "leaders" have no good reasons to
look down upon others. Their value is not zero but, rather, negative. It was
not the English Royals that favoured air raids against civilians but, rather, "great"
leaders like Churchill, in spite of his numerous historical studies, who
thereby prolonged the war and made it more bloody on both sides. - J.Z.,
24.5.03.)
--------------------
About the article:
"Scepticism and the search for certainty", in "The Literary
Guide", March 1950, I hope to write in one of my next letters.
-------------------
30.4.50.
I just got a letter
from Rittershausen, which informs me, that he became a professor at Mannheim
and will begin his lectures on 8.5.50. Provisionally, he keeps his lodging at
Frankfurt and uses his car to ride to Mannheim, on the days when he must
deliver his lectures. (1 1/2 hours and the same time to return.) The "Wirtschafts-Hochschule" at
Mannheim enjoys a good reputation. Please, tell this to Zander, if you see him.
The best is, that Rittershausen will get more time for a second edition of his
book: "The Other System". From the "samples" that I saw, I
know that it will be the by far most valuable economic book of the last 20
years.
(J.Z.: As far as I know, R. had ceased to work on this
because he could not get it published in time, before the currency reform of
1948. I microfilmed his manuscript. - J.Z., 1.3.03.)
--------------------
Very
faithfully Yours signed: U. v. Beckerath.
____________________________________________________________________________________________
5.
5. 50. Your letter of 1. 5., received
yesterday.
Dear Mr. Meulen,
I just bought for 50 Pfennig a German translation of a
biography of Sir Robert Peel, by G. Kitson Clark. Not bad - - as it
seems - - but the Act of 1844 is only
mentioned in 5 lines. (Number of pages in the book: 122.)
---------------
Let me point out
the difference
1 b.
There are two
legal reasons for which a payment - - the word taken in a very wide sense, so
that clearing is included - - is deferred:
1.) The creditor
waits and expects payment,
2.) the debtor
waits for his creditor to accept and take what he is entitled to get and what
is ready for him.
The latter is, what
German lawyers call "Glaeubiger-Verzug". (I do not know the English
expression.) (Literally: Delay caused by the creditor. - J.Z., 1.3.03.)
The most simple
case is when a shop pays with tickets to be realized in the shop. The firm Meinl
in Berlin, Leipziger Strasse (head office or main shop of a chain store? -
J.Z.), often paid, in 1922-1924, with tickets of 1 Gold-mark, 10 Gold-marks,
etc. The commodities in Meinl's shops were priced in Gold-marks, too.
(Victuals, coffee, tea, wine, etc.) The shops of Meinl waited for the bearer of
its tickets to buy something in the shops and to pay with these tickets. The
earlier the bearer brought his tickets to the shop, the more satisfied was
Meinl. Certainly, the bearer gave no credit to Meinl. Also the bearer was not
entitled to receive money. He was entitled to receive commodities sold in the
shops.
It seems that the
expressions "creditor" and "debtor" are not the best to
express the legal situation of Meinl on the one side and of the ticket-bearer
on the other. In German fit terms would be "Verpflichteter" (obliged
person - J.Z.) (Meinl) and "Berechtigter". (entitled person- J.Z.)
(bearer.)
As soon as several
shops like Meinl unite (the best legal form is still to be discussed), so that
a centre issues the tickets, which every one of the united shops accepts like
money, things change very much, legally, because our present legal system is
not prepared to acknowledge that legal form which would, in the bent way,
correspond to the true nature of this business.
Economically, it is
still the ticket-bearer, who lets the other wait, while the things destined to
satisfy him, are ready to be handed to him since the moment when the bearer got
the tickets. Therefore, economically, the bearer is no creditor.
Although not in every case but in this case the Roman rule
must be applied: " Summum jus summa injuria": The concern must have
the right to make good the ticket's face value (say) with 100 % in the first
week (I would say, at least month to 6 months! - J.Z., 1.3.03) after Meinl used
the ticket as means of payment (say, to Meinl's employees for wages), with 98 %
in the second week, with 96 % in the third week and with 2 % in the fiftieth
week. In the 51st week Meinl would not longer be obliged to make
good the ticket. (You will not take the here used numbers too serious, others
will be able to propose better numbers.)
The economic reason
to deduct some percentages, if ticket bearers let Meinl wait a very long time
(a weeks is hardly a very long time! - J.Z., 1.3.03.), is that Meinl must pay
rent, insurance premiums, supervision costs etc., while the ticket- bearer lets
Meinl wait. Thus a superficial resemblance may arise with the money system of
Silvio Gsell, which you know. The best solution is that of Professor Milhaud,
who proposed to declare such tickets as void after some years, say three years
or five. (J.Z.: I would rather favour 6 months or one year. - J.Z., 1.3.03.)
But within the 3 or 5 years the tickets should be valid for 100 %.
The banker,
under the present legal system, has no other legal possibility to do business
with the shop than to lend it the tickets, or - - as judges would say: to loan
it the tickets. For every time, when the banker loans tickets to
the shop, the banker is - - of course - - entitled to a
commission. For the banker it would be ideal, if the following would be
possible:
A.) The banker loans (lends) to the shop 1,000 L.
B.) The same day the shop uses the tickets as means of
payment for wages, for goods which the shop will sell, for rent, etc.
C.) 24 hous later the receiver of the tickets bought
something and used the tickets as means of payments in the shop or the
recipients found others, who accepted the tickets and these others bought
something and used the tickets as means of payment in the shop or they found
still others, who accepted the tickets and these others bought.
D.) The same evening the shop brought the tickets back to
the banker. So the shop avoids the interest, which in this business must
be so high, as to induce the shop to bring the tickets back as soon as
possible.
E.) Again, the banker loans 1,000 L to the shop and gets his
commission.
The interest
charged in this business must (or should) be distributed among the
banker's customers. The scale of distribution should be so, that shops which do
repay their loans very fast get all interest back, so that for these
loans Proudhon's ideal is realised: "Interest practically zero!"
I thinks that,
already by these few details, you will see the complete difference of a note
issuing being on the principle, which in Germany is called
"Glaeubiger-Verzug", and which - - of course - - is contained in the
legislation of all countries, from the principle, where the creditor
waits and for his waiting gets interest. All note theories - - I am afraid that
of W. B. Greene included - - are until now based on the principle "The
creditor waits". But this principle became impossible for our time as far
as note issuing is concerned.
Of course, I can
and I do not expect that such a revolutionary and new principle will be
accepted only because one of its adherents speaks and writes about it. Hard
economic blows are necessary to make the principle clear and to let us finally
realise, that it is the only economical possible one in our time.
What I explained in
the foregoing lines is the result of long discussions with Zander.
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2b.
What you say in
your book on pages 230 - 235 is all right and good, but it applies to bankers
in general and provides no defence for financing the loans you defend by
note-issuing.
I say: The credits here to be granted should be granted by
those, who give the substance of the credits.
Nothing can be
created from zero and even God - - if the biblical record is true - -
found a substance (water and. probably, other things, useful for a creation)
which existed, before he began creating.
If note-issuing is
an element of financing long-term loans, then it may only be used in the
following way (which I explained in my
books).
Suppose, Meinl
sells not only victuals, coffee, tea, etc. but also bonds, to be repaid by the
usual sinking fund method. Meinl sells such bonds for a total of 10, 000 L,
bearing 1/2 % monthly interest, and to be redeemed in 10 years, by 120 equal
payments for interest and redemption.
The tables of compound
interest show, that the debtor of such a bond must pay monthly 111 L. That
means, in this case, the bearer of the bond is entitled to use the 120 coupons
of 111 L each (subdivided into 111 tickets of 1 L each) every month. Every set
of 111 L. bears an option clause. It says: Not to be used before such and such
a date.
The nominal value of the bonds bought from Meinl is: 120 x 111 = 13,320 L. and the price is: 10,000 L.
The 10,000 L.
received, Meinl may lend out on terms corresponding to its own obligations, but
so that Meinl gets a profit and an equivalent for its risk. It may charge, say,
3/4 % monthly interest, so that Meinl's
debtor must pay monthly, for interest and redemption 126.67 L.
'The right means of
payment would be that Meinl's debtor applied the same system of payment as
Meinl itself applied and says: Come to me and buy monthly for 126.67 my
commodities. Here are tickets for this amount.
I gave some details
in my books and in former letters to you.
In every ease it is
possible to wind up the business without any use of precious metal.
(J.Z.: Alternatively, just before any of the monthly
repayments is due, Meinl could itself issue new Meinl tickets to these monthly
amounts and they would then soon stream back, directly or indirectly, in debt
repayments from its debtor. Meinl's tickets, being the banker in this case,
would be more widely acceptable than the debtor's. Likewise, in the original
subscription to the loan, by the bond buyers, they might use Meinl tickets, which
they had accepted in their sales of labour, services and goods, and want to
invest on the offered bond terms. So, the long term loan is not directly
granted by Meinl in its tickets, but by its savers and investors, using the
earned Meinl tickets for this purpose, just like they would use e.g. earned
legal tender for this purpose. - J.Z., 1.3.03.)
A very important
difference, between my system and yours, arises:
In your system the
notes lent (here 10, 000 L.) remain in circulation and are diminished in the
measure as the debtor redeems his debt. After 120 months the last note has
disappeared from circulation.
In my system the
debtor gets 10,000 L but he must use them (or others must, who got the notes
from the debtor) as means of payment in the shop. So the last note disappears
in very moment when the debtor has used all the credit for what it was
destined, say, buying machines (if the machine factory accepts Meinl's notes),
etc.
A single shop
cannot do much in this fields but a union of shops can do much. This union may
be called a "banker".
In your system
arises the question: When is the circulation so filled with notes, that no
further notes can be issued? For England you may estimate that the notes may be
issued at thrice the amount which is issued now by the Bank of England, perhaps
even the tenfold amount, but, certainly, there is an upper limit merely by
issuing notes for former credits. (for long-term credits of the former kind? -
J.Z., 1.3.03.)
(J.Z.: Even now there are limits for the total note
circulation to the total capital assets. All these capital assets could not be
monetised in form of notes, without causing an enormous inflation. Thus, if in
the Meulen system, future and additional capital assets are already to be
anticipated, by additionally note issues for loans, granted on long terms, in
these new bank notes, in a 1 : 1 proportion, then the previous proportion
between total circulation and total capital assets would be disturbed, in the
direction of an additional circulation that is neither "balanced" by
immediately available additional productive capital [still to be provided by
that long-term loan] nor by ready for sale and additional consumer goods and
services. Nevertheless, with that kind of additional and long-term note issue,
additional purchasing power is put into circulation, if everybody would readily
accept it at par. But then, why should they be so foolish? These means of
exchange are not their own, i.e., those provided by the producers, goods and service
providers. They are merely nominal claims upon them, which the owners of these
goods and services ought to be quite free to either refuse altogether or to
discount very greatly. They would accept them only if they were greatly
under-supplied with exchange media and if no well publicised competition by
sound other exchange media and value standards would exist. If one thinks only
in terms of an exclusive currency, with its forced value, then one omits such
considerations. But if market forces and full freedom of contract and trade are
coming into operation, here as well, then issues of Meulen's type would no
longer have any great chances for success. His tickets have no immediate
purchasing power corresponding to their total value. One can only, gradually,
repay the loan with them. For all others there is no natural and enforced
acceptance for them, unless they are given forced acceptance and forced value
for everybody in the State. - J.Z., 1.3.03.)
In my system such a
limit by former credits does not exist, although (of course) a limit
exists by the limited quantity of iron, coal, etc., labour, which is given for
every country. (I do not find his term "former credits" clear enough.
I presume, that he meant "long-term credits of the former kind, granted
all too freely in form of additional note issues". - Perhaps the term
refers to the use Meulen made of it in his letters. I have not yet compared the
corresponding letter of Meulen. -J.Z., 1.303.)
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4 b. (I presume that
these subdivisions refer to those of Meulen in his letter. - J.Z.)
All wisdom does not
help, if the natural limit is reached.
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5 b.
"satisfaction
there". That is the point which.
You say: What I
offer as a satisfaction will be received as a satisfaction.
I say: There is
only one way to satisfy note-bearers: Tell them: Use the notes as means
of payment in that and that shop.
Experience will
teach us.
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9 a.
"cash
reserve". I demand, that credits shall be possible at the usual terms, if
there are cash reserves or not.
My emancipation
from precious metals is 100 %, yours is much less.
(J.Z.: Precious
metals as exclusive value standards, as exclusive exchange media and as
exclusive or main redemption goods. Note that B. favoured free rare metal
coinage, free rare metal markets, free circulation of gold coins etc., free
clearing and accounting using gold weights and their market value as value
standards, free contracts of all kinds regarding them, but wanted merely to
abolish their legal monopoly position, especially the legal right to demand
rare metals - or legal tender - from a debtor who is not well enough supplied
them but who could always pay with certificates that he is obliged to accept at
any time at par from anyone. - J.Z., 1.3.03.
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Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
6. 5.
1950. Your letter of 1. 5. 50.
Dear Mr.
Meulen,
I agree: "… or in currency that USA will accept at
par." (Page 2 of your letter.)
But there is a real
possibility to pay in Dollars, if the restriction is discarded:
"Dollars of USA - origins."
(J.Z.: The "dollar" does not have to be the means
of payment. It may merely serve as a value standard. Then it would still be a
value standard originating in the US, even the exclusive one there, in its
current depreciation. - J.Z., 1.3.03.)
The commercial bill
may contain the clause:
"The bearer
gets so many pounds, as 1,000 Dollars are worth at the London Exchange at that
or that day. (Or an average of quotations.)
Or the commercial
bill may contain this clause: The bearer gets as many Dollars as that and that
amount of Pounds is worth at the New York Exchange.
Please, do not
suppose that in every case the L will get depreciated by the method I suggest.
(I cannot and will not think that I am the only being in the
world which proposes such a simple and easy method.) Consider, that there is no official purchase
price for gold in the USA. The law merely states: The government pays 35
Paper Dollars for 1 Troy ounce of fine gold. The Dollar, therefore, is by no
means a gold dollar.
Such a bad currency will not always be preferred to well
managed English Pounds.
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At Dunkirk
there was no market for Pound Notes, the word market taken in the
usual commercial sense. I wonder, that the depreciation at a commercially so
isolated place was not greater than 20 %. Towns without a market are
commercially isolated, even if daily 100 steamers land there.
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- - - - - - - - -
The Twelve
Articles" were not from Pierre Ramus but from Gustav Landauer, who
published them first in the "Socialist". From there Pierre Ramus
reprinted them.
I do understand
that Pierre Ramus did not impress you. Neither you nor I can be impressed by a
man, who calls himself an anarchist but does not know what monetary freedom
means. Such a man is not better than a State socialist. He believes to be
something and is nothing. (Not enough of an anarchist! - J.Z., 24.5.03.)
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Your argument
concerning the unwillingness of the USSR is very convincing. It should be
constantly repeated, and this at quite short intervals. The first thing that a
Russian revolution should do is declare: Russians, do go abroad as far as you
can. Visit all countries. Publish what you see abroad. Our - - the Russian
Revolutionaries' - - aim is to surpass all other nations in productivity and
social conditions. This can only be achieved, if we know what has been done
abroad.
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- - - - - - - - -
In the
"Individualist" much is said about unjust taxation. I think
that Individualists should propose themselves a just system of taxation. Until
now this has not yet been done. (See in my main literature list under:
"Voluntary Taxation". - J. Z., 1.3.03.) One of the first reforms should be: Paying
taxes by notes, so that, when the government spends the notes,
employment is created. (J.Z.: ??? Government cannot create productive
employment - although it can prevent it. Ever tax money surrendered to the
government means a confiscation of the corresponding labour product and its
handing over to the politicians, the bureaucrats and their favourites, for them
to spend or waste. Just to survive, many people work harder or longer or in two
jobs, and only in this way extra labour is enforced. If the government does not
provide sufficient notes to pay taxes with, then in this way it causes
unemployment. To the extent that, afterwards, it supplied enough notes for this
purpose, the prior employment situation is restored. But additional and
productive jobs are not provided by government spending, which always means
prior taxation or loans or the watering-down of currency, i.e., others lose
correspondingly and are prevented from spending themselves what they do thereby
lose. - J.Z., 1.3.03.)
The second reform
was proposed in Russia (I forgot the author) about 90 years ago. To every
taxpayer should be stated on his tax bill:
For the army: A L. For central planning:. B L. For … etc., etc. So that the tax payer knows, to
what extent he contributes to statism.
-----------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
II.
6. 5. 1950.
Your letter of 3.5., 'received today.
Dear Mr.
Meulen,
certainly, Greene is a "rara avis" (rare bird -
J.Z.), but concerning his attitude to gold as a measure of value,
he was d'accord with the best economists of his time, who - - a rare case - -
agreed with the just opinion of the public, that precious metal is a
better measure of value than any other commodity. I think that if an economist
like Tucker agreed here with Greene ("Instead of a Book", page
232), the latter's opinions deserve to be accepted with a favourable prejudice.
(I do not enter into the question, whether silver is better
or gold. For us the question has been solved long ago: Whoever prefers silver,
prices in silver, and whoever prefers gold, prices in gold.)
You refer to pages
36 - 38 of the Indian edition of "Mutual Banking". But my impression
is, that in these pages
Greene did not prove an influence of Mutual Money on the purchasing
power of gold or silver, but on the contrary, did prove that such an influence
does not exist. Greene expresses this opinion as well at page 65 of the Indian
edition, in the sentence:
"Mutual money
is measured be specie, but is in no way assimilated to it; and therefore its
issue can have no effect whatever to cause a rise or fall in the price of the
precious metals. "
By the words
"price of the precious metals" Greene does not mean a price expressed
in paper money or in notes of some bank. What Greene means, he expresses
clearly on page 59, where he says:
"A fall or
rise in the price of money, and a rise or fall in the price of all other
commodities besides money, are precisely the same economical phenomenon."
Tucker is - - I
think - - quite right when he says (p. 232): "This is one of the most
important truths in finance,
etc."
The expression
"mutual money" here should certainly not be understood in the sense
of "notes issues by a bank run by a committee". If the issue is
watched by a committee or by a single person is subordinate concerning the
economic and monetary property of the notes.
The words
"fixed paper price of gold", line 3 of your letter, lets me suppose,
that you mean: Greene demands that his notes should always be in a fixed
relation to gold (or silver), the relation being determined by law or by the
provisions of the issuing bank. It is important to know what Greene really
demanded. He demanded, that the face value of his notes should be in
Dollars, but that the notes should not be convertible into metal dollars at the
bank. At page 37/38 Greene says: "The bill of a Mutual Bank is a bill of
exchange, … payable at sight, but only in services and products."
To convertible
notes (convertible into precious metal) Greene ascribes the power to influence
prices, in page
57 and other passages. (I think, he overestimates that characteristic.)
(J.Z.: Assume that 100% gold cover is promised, but that in
practice only 1/3rd of the "gold certificate" notes are
actually covered by notes, also that, for a time, based upon misplaced trust,
the 2/3rds of uncovered notes are accepted on faith, trust or confidence,
however unwarranted, and not, e.g., upon sound commercial bills or "real
bills". Assume further, that such notes make up all or the greatest part
of a country's exchange media. Then these notes would have trebled the gold
coin circulation that they did replace. That would have an effect upon prices,
unless generally deflationary conditions prevail. Insofar I do agree with
Greene here. But, an exclusive gold coin circulation amounts almost to a
definition of deflation and, in most countries, even the threefold circulation
[in soundly issued and returning notes] would not yet act inflationary, even if
they were given legal tender power. All that they might do would be to increase
the pre-existing emergency sales prices somewhat closer to the prices that
would prevail under the practice of full monetary freedom. - J.Z., 1.3.03.)
I do regret that
Greene did not clearly point out when, at the bullion market, his mutual notes
would get a discount. To assert, as Greene did, at page 63, line 2, that a
discount is impossible, is going too far. A mighty banker, an enemy of the
Mutual Bank, might buy a great number of notes and then demand a quantity of
gold at the bullion market, which is, at the moment, not at hand. Suppose,
there is a little town, one of 10,000 inhabitants, which has a Mutual Bank. The
issue of such a bank can hardly surpass 500,000 Dollars. If now an enemy of the
bank buys, secretly, 100,000 Dollars and on the next day demands (from local
gold sellers - J.Z.) 1672 kilos of gold, 9/10th fine (which
corresponds to the gold contained in 100, 000 Dollars [in gold coins - J.Z.] at
the time of Greene), and offers as means of payment notes of the Mutual Bank,
then, certainly, these notes will get a discount. The question is: To what
degree and for what time? If the banker says: I want gold within the next hour,
coûte que coûte, the discount may be 99 %, if the town does not possess more
than 16.72 kilos and the owners of gold want to profit from their situation.
But if the banker has spent his 100,000 dollars in notes of the Mutual Bank,
all people say: The man was crazy! If he would have bought the gold by and by,
and not here, but at New York or at Frisco,
he would have got 1672 kilos. And at the hour when the demand of the crazy
banker ceases, the notes are taken in the shops at par, as before. And why ?
'Because the shops are debtors of the bank and are obliged to accept the notes
at par as long as they are debtors.
(J.Z.: Moreover, this crazy banker will be distrusted from then
on and lose customers. Shops might continue to accept the notes at par,
although, temporarily and on this local and limited gold market, they are no
longer at par. Moreover, if one fifth of such a small circulation is gradually
hoarded and temporarily withdrawn from circulation, only to be offered later
and this quite suddenly and only on the local gold market, then, unless
additional notes are issued, to make up for this artificial shortage of
exchange media, a temporary shortage of the Mutual Bank's notes will appear,
which will assure their par value, at least at the shops, if not even a
temporary small agio, due to the demand for the notes exerted by debtors who
want to or have to repay their debts with them, unless the are prepared to pay
a small penalty for paying them with other means of exchange. - J.Z., 1.3.03.)
You must consider: Your
proposition of an invariable standard of value was quite unknown at the time of
Greene. It is still unknown and not yet discussed. I admit, that it may be better,
than the 1913 method of pricing commodities in gold coins. The suppositions of
the new unit are to be investigated. But, even if you consider gold coins as a bad
and unstable standard of value, you will admit that it is a possible
standard of value.
Call it a "rubber money", as Irving, Fisher's
Dollar was called by the Americans. But gold coins have existed for centuries
and have done their work as a measure of value, and this so well, that the
people always returned to that standard, if this is not prevented by hard
punishments, as is presently the case in England and in Germany and in the USA.
(Here I do not consider your philosophical improvement, that
not the gold coin is the subject of appreciation but the desire to use it or to
possess it. Certainly, you are right and your standpoint is less refuted than
confirmed by the fact, that gold coins did their work, although the
psychological side of their function was not understood.)
---------------
You say: Under
freedom there is an automatic check on over-issue by one particular bank,
namely the system of clearing.
If the notes of
Mutual Banks are not convertible into specie, these words taken in the sense of
1913, they are not a subject of clearing in the sense in which you mean the
word in your letter.
The clearing of notes, of which you speak (e.g., the Suffolk
System in the USA, 120 years ago, or the note clearing at Edinburgh or at last
in other towns), supposes an obligation of the issuing banks to redeem their notes in specie on demand. A
mutual bank does not possess cash reserves. (Greene, page 62: "… as they
have no metallic capital, and never pretend to pay specie for their bills
...")
(J.Z.: Meulen may here have had another kind of clearing in
mind, namely, a literal exchange of those notes which each bank had accepted
from the circulation of notes of other banks. They are all IOUs of a kind, and
their literal exchange would have cleared them against each other. Small and
insignificant imbalances could always be carried over to the next
note-exchange. If one among several note-issuing banks had managed to
over-issue its notes, then all the other banks would have received more notes
of this over-issuing bank than it could offer them in return in form of the
notes of the sound banks. Those who had accepted this excess and would notice
this excess very soon, during the first note exchange, would thereby be induced
to discount or refuse the over-issued notes and would also make this fact very
well known and very soon, too. None of the banks participating in this form of
note-clearing, would have to be under the obligation to redeem its notes in
gold coins. - J.Z., 1.3.03.)
I spoke in former
letters of the method for avoiding a discount of Mutual Notes on the bullion
market in a free community. I use here the word "Mutual Notes" to
denote the economic and monetary system not the quite indifferent detail that
Greene preferred a committee as a manager. You prefer a single manager and your
reasons
are well founded.
You know my standpoint which, here, too is: liberty! - - He,
who prefers a committee-bank may use it, and those, who decline it, may use
banks of other legal shapes.
-------------------
What you say of Horn
true. He demands convertibility of notes at their face value and at demand.
That's in the long run impossible. But that Horn demands the abolition of all
State supervision in honourable for him.
You yourself demand
a cash reserve for your bank. You do not demand a fixed relation of
notes to your cash reserve. But - - I think - - you must demand an upper
(lower? minimum? - J.Z., 1.3.03) limit. If a bank issues notes for 1 million L and possesses
only for 100 I. in cash, you will - - I think - - believe that proportion to be
too small. What proportion do you believe to be tolerable?
--------------------
That you knew Wesslau
personally is very interesting. The people you knew personally - - Pierre
Ramus, Wesslau, Tucker - good, old, noble Tucker - - and so many others! You
should write a little book: "People I knew", and preserve your
impressions for the next generations (provided there will be such generations).
---------------------
I hope to say some
words on the Hake & Wesslau-System in one of my next letters.
---------------------
(You know the
booksellers' rule: Books on personal matters are bought!)
The Russians announced an attack on West-Berlin at
Whitsuntide. (What kind of attack? - J.Z., 1.3.03.)
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
7. 5. 1950.
Dear Mr.
Meulen,
I received yesterday:
1.) National News-Letter,
No. 717 & 718 of 20. & 27. 4.50,
2.) "The
Economist" of 22. 4. 50,
3.) "The
Malthusian", January and March 1950,
4.) "The
Literary Guide", May 1950 & March 1950,
5.)
"Truth", 13.1.1950,
6.) "City
'Press", 28. 4.1950,
7.) A cut from
"Sunday Graphic", 19. 3. 1950, page 7/8
8.) " "
" " " , " " 9/10.
I thank you very much.
-------------------
Stephen King-Hall
speaks in NNL of 20. 4. of "The
Revolution in Asia". It's a rule that things are not so simple as thinkers
represent them, but this time the contrary is the case: The true reason of
Asia's revolution is more simple, and it was foreseen many decades ago. In one
of my burnt books I read: England and well as France produce in Asia daily some
hundreds of young men, knowing all what the excellent English and French
Schools and Universities
may teach intelligent and knowledge-thirsty young men; but, after they have
left the schools and the universities, they do not find employment. For the
greatest part there is only one kind of existence economically possible:
becoming revolutionaries, writing for revolutionary papers and selling them.
And it would have been easy to provide work for the young educated Indians, productive
work, in factories, as helpers in "scientific management", in the
growing cooperative movement as secretaries, and many other. Also, the
ignorance of the Indian people being still very great, the young could have
been employed as teachers. All these possibilities were used very imperfectly.
Besides that, all
is true what Stephen King- Hall says, but it is not of primary
importance.
As long as
Communism or Etatism says to the educated: I employ you as officials, you will
always get work - - ill-paid - - yes - - but always work - - as long as that is
the case, young people will be sincere Communists.
(Rather, opportunists. One should not omit to mention that
in State schools they are largely taught state socialist ideas from state
socialist teachers. - J.Z., 1.3.03.)
-----------------
In NNL of 27.4. the
Editor prints the percentages of National Income which are now spent for
military purposes.
USA
= 6.4 %,
UK = 7.6 %,
France = 4.9 %, etc.
Let me remind you
that rarely in history was such a low percentage of the social product
spent for military purposes. In old Greece and in the Middle Ages, every man
was obliged to buy or procure himself weapons and to a considerable percentage
of his time on military exercises. Certainly, in no case was the percentage of
productive power less than 10 % and often it may have surpassed 25%. And yet
the Western powers find difficulties in placing an army of 2 million men a the
Elbe-front. (These men expect to be highly paid and their arms are no longer as
cheap! - J.Z., 1.3.03.) Russia does not find such difficulties, or she meets
them with the Kremlin's usual energy and
intelligence, always guided by an unequalled interest in the own
affairs, an interest, which is lacking in all other governments.
(J.Z.: The Soviets paid their soldiers much less and had the
most severe military discipline. If they had really been interested in their
own affairs, would they have upheld their economic and political
interventionism for as long? As voluntary and exterritorially autonomous
experimenters they could have practised their ideas among themselves, with
voluntary supporters only, encountering practically no other resistance than
that which they caused among themselves with their own measures. People only
interested in a spleeny system like theirs, are not really interested in all
their rights and liberties, all their abilities, all their development
potential but are, just like some religious fanatics, altogether on a wrong
track. To the extent that they would not meddle with the affairs of
non-members, and would not terrorise members, they would have the right to
remain on the wrong track as long as they can stand it. - J.Z., 1.3.03.)
If the Western race
is not yet destined (I oppose both terms in this connection. - J.Z., 1.3.03.)
to disappear from the world's surface, it must now see:
1.) Governments are not longer able to defend the liberty of
their peoples. (Were they ever and did they every genuinely defend
"liberty"? - J.Z., 1.3.03.) The only thing that they do know and what
they want to do, for the last few decades, is: restricting the liberties
which they pretend to defend (and certainly, they seriously believe to defend
by their methods).
2.) The time has come, for private associations of
men, sincerely interested in their own liberty, to preserve their houses and
other property, to secure a promising future for their children, to do what
governments are unable to do.
The great change
must be introduced by a "miracle", which is no longer a miracle in
the Eastern countries but would still be in the Western ones: Two men
come together and talk more than two hours about this problem, not of
beer, cigars, prices, women and the weather. From such a discussion may arise a
future. Do you know such men? I don't.
But look at Russia.
In a very interesting novel: "Abschied von Sowjet-Russland",
published in the "Tagesspiegel", about 2 years ago, the author
described the new type of Russian girls of the "higher
classes" - - and my impression was: he knew something of what he
described. (Now I remember the author's name: A. Rudolf, and the novel was
first published by the "Schweizer Spiegel Verlag", Zuerich,
Guggenbuehl and Huber.) A young Western communist, who later fled from Russia,
had to do much with Russian girls, as it is natural. But he was terrified, when
some of them, at the morning of a night of love, began suddenly to talk of
l5-year plans, of increase of production in that or that factory, and such
things. When I read that, I was terrified, too. I thought, that the here
existing danger is much greater even than the danger from
Russian atomic bombs. So interested are the new born Russians, of
"higher classes", in economic affairs. You know what our youth is
interested in. Let them choose: Talk one hour a day about the themes about
which Russians talk with interest, or become slaves, like the lower classes
of the new Russia are. They will, very probably, say: No - - talk about such
things - - that is too terrible. Rather become slaves!
(J.Z.: How much can
one trust reports of individuals in their memoirs or novels? This defector was
probably, then and there, under questioning by a female KGB agent, to find out
whether he was a "true" communist. That he defected again,
demonstrated that the suspicion of the KGB was not unjustified. Many girls were
forced into such activities and so were many men. Talking about subjects the
government wanted them to discuss was also a safe subject for these spies. If
they tackled dangerous subjects, then they themselves could have come under
suspicion. This way they did not have to denounce anyone, either. As a
statistician, B. should not have generalised too much from this literary work.
Open talk, in private, was only possible among Russians who knew each other and
trusted each other for a long time. Otherwise, they talked about the propaganda
pap, with which everyone was only all too familiar, having heard the same old
stories over and over again and read them over and over again. - J.Z., 1.3.03.)
-------------
I read with much
interest your letters of 3.12.49. and of 13.1. 50, to the Editor of Truth.
(I took a copy of the letters of 13.1.50. and return them, because on the
backside there is a part of a hand-written letter.)
My opinion about
the UNO-Constitution is: "The principle is a very bad one and must produce
bad effects, such as were seen from the first beginnings of the UNO. The UNO
must be replaced or completed by private Unions. (Federations, Leagues,
Alliances, might be better terms. Trade unions have given the term a very bad
smell. - J.Z., 24.5.03.)
Apply the mathematical "method of limits" to the
problem: Let the whole world be one State, but San Marino still be independent.
Both States will form an UNO or continue the old principle. One sees at once,
that the old principle is impossible.
(J.Z.: This is as clear as mud to me. I agree only that
territorial divisions as well as territorial unifications are wrongful and
irrational at the same time and that this lies in their very nature. The
"independence" of territorial governments does not make their
citizens independent. See my two peace books on this. Something may have got
lost in B.'s translation into his English. The UN never represented
"united nations" but at most "united governments". And
these were and are rather disunited. The very "nation" concept
contains similar fallacies. A "nation" may have, at any time, one
territorial government, but such a governments does not and cannot represent a
single nation or a single people. Even the greatest number of political parties
cannot properly represent all the shades of opinion among millions of people,
who formally belong to the same State but, to a large extent do not, with their
hearts and minds and their particular "fixed ideas". - J.Z., 1.3.03.)
What the World
wants (Does is: Name ten people, who do! The world may need this but it
does not yet want this! - J.Z., 1.3.03.) is not a Union of governments,
but, on the very contrary, a Union of subjects. (Rather, unions of volunteers,
who strive only for exterritorially autonomy! Then they are no longer subjects.
- J.Z., 1.3.03.)
The last aim must be: To replace the old territorial subject
principle by a new one: The principle of personal associations. Perhaps we can
still discuss the principle, in Germany first proposed by Max Stirner. But in
Germany the principle was, 1,000 years ago, well known and acknowledged in
practice. Switzerland still calls herself:
"Schweizerische Eidgenossenschaft", that is: "Swiss
Association founded on the oath of the associated." (Panarchism, history.
- J.Z.)
------------------
On page 51, I find
a speech of Mr. Bibby, Chairman of Martins Bank. There is a passage of Mr.
Bibby's speech printed: "… that in inflation, which means too low
production and too much credit. ..."
No, Mr. Bibby, that is, in most cases an effect
of inflation (not always - - not in Germany from 1914 - 1924), but inflation is
(or meant, still in 1913): Increase of fiat money beyond the limits which would
be possible without the cours forcé.
It's an evil thing
that the English people no longer possess a word that permits them to speak in
distinct terms about the increase of forced currency beyond the limit which
would be possible without cours forcé.
-----------------
Of special interest
- - of course - - is for me your letter to the Editor of "The City
Press" of 17. 2. 1950.
My impression is:
The discussion about the gold standard would he much more fertile, if
the word would be used in the sense in which Jevons or one of his great
contemporaries used it. In my letter of 7. 4. 1950 I tried to define the notion "gold
standard" by eight possibilities to apply it. I do hope my list was
complete. If it was not, I would be thankful for a completion.
1
You and your
adversaries consider only one side of the gold-standard-system. That is:
the legal claim of note-bearers (and - - more important: of depositors) to
claim gold-coins from the bank. That legal claim is a specific case of the
general bad principle:
"Creditors are entitled to gold coins when their claims
become due."
Here the reform must begin, and if there is an
economist, whose opinion differs or who has not yet got his own opinion about
this point (like, obviously, the "City Press"), then this point
should at leant be discussed. He, who thinks it unimportant to reform the
presently valid paragraphs of the civil right, which award to creditors gold
coins, as long as a gold standard is preserved, should give his reasons.
In fact, the
problem is still a more general one and as such already seen by W. B. Greene:
It is the problem of awarding "exclusive currency" (whether merely
gold, silver, or paper) to creditors. Creditors here are wage earners as well
as landlords, depositors as well as railways.
------------------
In it true, that
before 1914 England was the only country in the world to maintain a gold
standard? And Germany, Russia and a dozen others, whose monetary lawn were for
9/10 copies of the English?
------------------
You state that the
producing classes of England lose between L 50,000 and L 200,000 per week from
a rise of 1 % in the Bank Rate.
I admit that at the
present state of monetary legislation in England (and most other countries) the
people loses what the Central Bank wins. But the effect of a high interest to
be paid to banks is a very different one if the banks are operating on the Free
Banking Principle.
-------------------
If the English laws
at the time of a cold standard did not award to creditors the right to claim
gold coins, the whole problem of a "drain of gold", would not have
arisen. People, who really wanted gold, would have gone to South Africa, etc.
(with their orders for gold - J.Z., 1.3.03.), and not to English banks.
-------------------
City Press says: 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."
City Press sees the
thing through the spectacles of old and obsolete doctrines.
What would happen,
if England would enact a law, stating that creditors are no longer entitled to
"exclusive currency", but must be content with "local
currency", yet are entitled to get such an amount of local
currency, that the amount equals in value the value of the debt amount,
expressed in gold (if no other basis is agreed upon) bought or sold at the
bullion market?
I admit, that
within the first 4 weeks, after enacting such a law, all the world (most people
- J.Z.) would think: Now any business with England is impossible. But in the 5th
week there would be some merchants who would speak thus:
If I import now tobacco to England, sell it here and get
local currency for it, then it is for me - - because I am a merchant - -
worthwhile to investigate: What is that English "local
currency". I do take, of course, London as an example. And now I see, that here are
circulating notes of the London Railways, the City itself, which accepts the
notes, when taxes are paid to it, a great association of shops, so that every
shop accepts its notes. In practice, every-body accepts this local currency and
is glad when he get it. The more he gets the more happy he is. Is such a
currency to be considered as worthless? Certainly not! I accept bills
redeemable in local currency of London!
And the gold value
of the local currency? Oh - - I learnt
that in London exists a free bullion market, where everybody is permitted to
demand gold and to offer the local currency or any other, and also to offer
gold and to demand whatever currency he likes. I learn, too, that the whole
public declines those notes, which are not au pair at the bullion market. Obviously,
such notes are not worth less than the old notes of the Bank of England, which
promised a redemption in gold, but saw to it, that only a small part of the
public took the promise serious.
The whole change is, I see, that the redemption for those, who
really want redemption, is now possible only at the bullion market. There it is
possible, while before it was promised by the bank, but was only possible as
long as the public did not take the promise serious.
And if I declared,
that I would accept the local currency only at a discount - - oh - - it only I
had no competitors, who are gladly accepting it without a discount!
-----------------
Never discussed, in
England, is the problem of pricing commodities in gold. Certainly,
pricing commodities, wages, etc. in gold is a very important detail of a gold
standard, this word taken in the sense in which Jevons took it, Greene,
Tucker and all great economists, until 1914.
--------------------
S. W. Alexander
uses the word "inflation", in the edition of 28.4. just like all
others do it now. For him there in no connection between the increase of
fiat money and social, monetary and economic phenomena. Consequently, he does
not demand: watch the issue of fiat money. That is what certain people
want. (They are either as ignorant or write what their masters want them to. -
J.Z., 2.3.03.)
In Germany, too,
most authors, who wrote at the inflation time about monetary themes, did not
write about the connection between note printing (of forced currency - J.Z.,
2.3.03) and the price level, and some denied that such a connection existed.
They rather held responsible - - and here most authors agreed - - that there
were 3 reasons for the price rises:
1.) the Treaty of Versailles,
2.) the continuous increase of wages,
3.) the "unfavourable" balance of trade.
My contempt of
university-economists dates from this time.
-----------------
I read the article
"Scepticism and the Search for Certainty", in the Literary Guide of
March 1950. (It deals with morals. Although everyday-life teaches, that only a proud
character is able to act morally, until now, I found only one moralist who acknowledged
that: Kant. ) (There ought to be a few more. It seems so self-evident:
Self-respect precedes morality. You cannot respect the rights and liberties of
others until you first respect them in your own person. - J.Z., 2.3.03.)
---------------
You marked the
critic: "Broadcasting and Society": Comments from a Christian
standpoint, by Grisewood. Let me remark that I expect a diminution of
Christendom from another side: India and China became powers. From India
I expect - - as I wrote to you - - an attack on South-Africa and a complete
victory of the Indians. Then Zulu and Indians will impose upon Europeans the
same race-laws, which the white imposed to coloured. China will some day compel
the white nations to repeal their immigration laws and then the world will
daily have to do with "unbelievers" as people, equal to
others. (Well, what could happen does not always happen and few succeed in
predicting what will actually happen. - The last aspect is already largely
realised in most cosmopolitan cities. - J.Z., 2.3.03.)
Until now the Christian world has not yet been in such a
situation. The Turks, whom the Christians must also consider as equals,
were no "unbelievers", insofar as they believed in "Allah",
who is generally considered as the Christian-Jewish god. But 500 years after
the first Chinese Joss-house was built at London, the Christians will,
probably, have been reduced to a little sect, as now the Parsi, so powerful at
the time of old Persia. The fact that unbelievers were, generally inferior in
military strength to Christians, has contributed very much to the rule
which Christendom played in the world.
----------------
"The Malthusian
is amusing. Very well, that you did not reply. It's not worthwhile. But your
"slogan, used in favour of Free Banking: "conversion of wealth into
capital", is excellent. In my books I described a possibility to transform
unsaleable goods, in times of a crisis, into capital, that can be lent out on
long terms, and that with the aid of private note-issuing. (Indirectly, not
directly! - J.Z., 2.3.03.)
The Malthusian asks:
" ... would Mr. M. deny that, as population increases, the supply of good
agricultural areas diminishes?" - The answer is - - of course.
1.) The notion of "good agricultural area" is
variable. In the Far East, not only in China, the soil became fertile by
the increasing population. Experience shows that an agricultural population of
1,000 per square mile is by far not yet the limit and that, also for such
seemingly congested districts, the most important problem is: How can we
sell the crop?
Obviously, there exists an optimum for every country.
Until now no investigations about this optimum exist. For China's soil it is
proven by experience, that a population of 500 persons per square mile is
better nourished than a population of 100 persons.
The erosion is
diminished in the most simple, cheapest and effective way by populating the
exposed districts. The people, who live in territory exposed to erosion
dangers, do watch that danger much better than officials do. In Germany
the soil is new much more fertile than it was in the Middle Ages. (Agriculture
means caring for the land, because it pays to do so - if the product can be
consumed or sold. - J.Z., 2.3.03.)
The reports from
China by Pearl Buck are very inconvenient to the Malthusians. That's clear. The
fact, that Chinese peasants, in general, are well nourished, the
"Malthusian" tries to refuse by the report, that the average Chinese
farm is little over five acres. The Malthusian should rather ask: How is
it possible, that a farm of little more than 5 acres can so well nourish its
owners??? Or are there errors in the statistics? (I do hope that you read Pearl
Buck's article. It is very interesting. The article confirms what I
learnt from German soldiers, who did service at Kiao-Chow and others, who took
part in the Boxer War 1900. All reported that victuals were plentiful in the
districts they saw and also very cheap. The same I learnt from civilians who
lived for years in China. But all said,
that the lack of transport facilities - - roads, cars, canals, etc. - -
is a continuous danger, and that a district, which had a bad harvest must
suffer hunger, although at a little distance cows and asses must help to eat
the surplus of victuals.
----------------
If England would
have followed Malthus' advice, when it was first given, then Hitler would certainly
have conquered the country, or long before him: Napoleon III or Bismarck.
---------------
I estimate the possible
population of the Earth to at least 8,000 millions.
---------------
From the
"Economist" of 22. 4. I learn, that (page 914) the West Rand Consolidated
Mines produced in the year 1949: 418,020
ounces of fine gold. This company paid in taxes
449,495 L, or 1.08 L per ounce. The price of an ounce is supposed to be
250 Shillings, the taxes are 14,4 % of the produced gold. Taxes must influence
the
value of gold, expressed in purchasing power. I did not find
investigations of the matter.
(Only to the extent that heavy taxation might reduce the
annual additional output of gold. But then this additional output, compared
with the already accumulated gold quantity, is relatively small and may not
even keep up with the increase in the population. - J.Z., 2.3.03.)
--------------
From page 911 I
learn that the price of gold on the free market fell to 38 Dollars per ounce.
That is a very remarkable and interesting fact - - I think. A year ago the
price was still about 50 Dollars. On the other hand, I take, from the
"City Press" of 24.2.50, the report that Chilean merchant sell
gold to USA buyers for 47 dollars and from "City Press" 27.1., that
gold produced by Philippine mines realises 57 dollars per ounce at the free
market. Should prices really have dropped so much in a few weeks????? To what
market relate the "Economist" 38 dollars per ounce?
---------------
If I were a gold
miner, I would demand, that in Germany gold may be freely owned, bought and
sold. I think that before the year 1914 there was so much gold owned in Germany
that, in the average, and for every family, an amount of at least one ounce of
gold must be ascribed, the gold in the Reichsbank included.
---------------
From page 903 I
learn that England spent in the year 1949 an amount of L 2,465 millions for
capital formation. (About 1/4 of the national income.) The amount of
outstanding notes of the Bank of England was L 1,282.7 millions on 19th
of April 1950. (Practically unchanged for a year. Astonishing!!)
Under a system, where capital formation is done by lending
notes, to those who will form capital, probably at least 500 millions are lent
out in this way. Thus in 10 years (if all loans are for at least 10 years -
J.Z.), the amount of outstanding notes would be about L 5,000 millions (from
this source alone - J.Z.) - - all conservatively estimated. Where is the upper
limit?
----------------
Excellent the
"Economist" 's remark about the 72.5 millions invested in commercial
vehicles and the 35 millions forecast by Sir Stafford Cripps' Staff. The
expressed blame of Sir St. C. is amusing.
----------------
R. W. Berman says,
on page 880: "Berlin is one of the trump cards in our hand for a general
peace settlement to end the cold war."
The same opinion is
widespread in Berlin. People say: "One day the English will sell us for
some advantage in the Far East or for a good commercial treaty or simply for
gold, which Russian now possesses in abundance."
----------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Note- Issuing Private
Banks and Public Banks
In Germany at the 1.
Jan. 1876, when the Banking Act of 14.3.1875 came into operation.
Drawn from
"Muenzgesetzgebung" of Dr. R. Koch, President of the Reichsbank, 4-th
edition, Berlin, 1900.
1.) Reichsbank (at that time still a private Bank), outstanding
notes
not covered by precious
metal
Mark
250 000 000
2.) Ritterschaftliche Privatbank in Pommern (Stettin) 1 222 000
3.) Staedtische Bank in Breslau
1 283 000
4.) Bank des Berliner Kassenvereins 963 000
5.) Koelnische Bank 1 251 000
6.) Magdeburger Privatbank 1 173 000
7.) Danziger Privat-Aktien-Bank
1 272 000 8.)
Provinzial-Aktienbank des Grossherzogsthums Posen
1 206 000
9.) Kommunalstaendische Bank fuer die preussische
Oberlausitz (Goerlitz) 1 307 000
10.) Hannoversche Bank
6 000 000
11.) Landgraeflich hessische konzessionierte Landesbank
159 000
12.) Frankfurter Bank 10 000 000
13.) Bayerische Banken 32 000 000
14.) Saechsische Bank zu Dresden
16 771 000 15.) Leipziger
Bank
5 348
000
16.) Leipziger Kassenverein
1 440 000
17.) Chemnitzer Stadtbank 441
000
18.) Wuerttembergische Notenbank
10 000 000
19.) Badische Bank
10
000 000
20.) Bank fuer Sueddeutschland
10 000 000
21.) Rostocker Bank
1 155 000
22.) Weimarische Bank
1
971 000 23.) Oldenburgische
Landesbank
1 881 000 24.)
Braunschweiger Bank 2 829 000
25.) Mitteldeutsche Kreditbank
3 187 000
26.) Privatbank zu Gotha
1
344 000
27.) Anhalt-Dessauische Landesbank
935 000
28.) Thueringische Bank (Sondershausen)
1 658 000
29.) Geraer Bank
1 651 000
30.) Niedersaechsische Bank (Bueckeburg) 594 000
31.) Luebecker Privatbank
500 000
32.) Kommerzbank in Luebeck 959 000
33.) Bremer Bank
4 500 000
385 000 000
7.
5. 50.
Bth.
(One can only wonder HOW history would have changed if these
banks had been really free banks, had made full use of their monetary freedom
and other institutions had been free to compete with them, not only in Germany
but in the rest of the world. Our
beloved legislators prevented any rightful and positive change in this
direction and most of the economics "scientists" did not even
enlighten themselves on this subject, far less the legislators and the general
public. A very high price had to be paid for this omission - and is still being
paid every day. - J.Z., 2.3.02.)
________________________________________________________________________________________
8.
5. 50.
Dear
Mr. Meulen,
Adam Smith expressed the prevailing opinion when he
asserted, that a lack of currency was impossible, Free Trade supposed. David
Hume completed this view by pointing out that the price level accommodates to
the quantity of currency, so that it would be quite unnecessary to care for a
sufficient quantity of currency.
(J.Z.: This view was still held by Rothbard, as if in the
meantime not hundreds of critics had arisen and hundreds of experiments to the
contrary had been recorded. Primitive notions have often a much wider appeal
than correct ideas and experiences. - J.Z., 2.3.03.)
Every quantity, says Hume, is sufficient, as long as prices
are free to rise or to fall. Smith and Hume spoke of a metallic currency.
(J.Z.: The metallic currency, that existed for many
centuries, had, nevertheless, not yet fully succeeded in replacing barter by
monetary exchanges, anywhere in the world, even in the most advance economies.
They could not overcome the continuing currency shortage, not even with their
emergency sales prices for goods and services. Thus we have had also an
experience with monetary substitutes and clearing, for centuries, but both
still imperfect, because they were largely tied to fixed ideas, mainly notions
on metallic redemptionism and, generally, the right of creditors to claim
payment in "exclusive currency. - J.Z., 2.3.03.)
If the great economists would have been in the right, all
note-issuing would have been unnecessary, as far as supply of the people with currency
is concerned. And, indeed, that has been their standpoint. But both,
nevertheless, were friends of note-issuing banks, it was because they esteemed
them as institutions to improve the supply of credit. This point of view
still prevails today and the legislation of all countries is adapted to it.
The laws of all countries and the theories of (almost -
J.Z.) all economists consider the sum of outstanding notes as a debt of
the issuing bank, a loan raised from the public.
Two consequences of
this standpoint are possible.
The one is to
decline all note-issuing banking and to say: If currency is to be
considered as always existing and this in a sufficient quantity, then this
principle applies also to credit. Credit banks should give credits in cash,
that is, in metal, and not in notes.
The other
consequence is: give up that false opinion, that currency is always available
for normal business.
David Hume - - e.g.
- - does not sufficiently take into consideration, that prices never vary for
all commodities and services at the same time and to the same degree and that
there are many money-claims quite independent from a variation of prices.
Sinking prices mean for these reasons, always for employers and others, a
diminishing income and a much smaller degree of diminishing expenses, so that a
gap in supply with currency must occur.
Thomas Jefferson, one of the
most logical thinkers, expressed this view in a letter to Gallatin, written in
1802, in his usual clearness:
"But it will
asked, are we to have no banks? Are merchants and others to be deprived of the
resources of short accommodations, found so convenient? I answer, let us have
banks; but let them be such as are alone to be found in any country on earth,
except Great Britain. There is not a bank of discount on the continent of
Europe (at least there was not one when I was there), which offers anything but
cash in exchange for discounted bills. No one has a natural right to the trade
of a money lender, but he, who has the money to lend. Let those among us, who
have a money capital, and who prefer employing it in loans rather than
otherwise, set up banks, and give cash or national bills for the notes they
discount. Perhaps to encourage them, a larger interest than is legal in the
other cases might be allowed them, on the condition of their lending for short
periods only." (Taken from:
"Democracy" by Thomas
Jefferson, edited by Saul K. Padover, New York and London, 1939, D.
Appleton-Century Company Inc., page 118.)
Jefferson includes
"National Bills" with currency. That is not consistent. He should
have been an opponent of
National Bills, too. He was not, and it is worthwhile to know the
opinion of such a man about the circulating medium, which he called (or
which was called at his time) "National Bills". In a letter to Mr. T.
Cooper, written in 1814, he wrote: (The
left corner was cut off. So I reconstructed the text as best as I could. -
J.Z., 2.3.03.)
"We are undone
... if this banking mania be not suppressed. Aut Carthago, aut Roma delende
est. The war, had it proceeded, would have upset our government, and a new one,
whenever tried, will do it. And so it must be while our money, the nerve of
war, is much or little, real or imaginary, as our bitterest enemies choose to
make it. Put down the banks, and if this
country could not be carried through the longest war, against her most powerful
enemy, without ever knowing the want of a dollar, without dependence on the
traitorous classes of her citizens, without bearing upon the resources of the
people, or loading the public with an infinite burthen of debt, I know nothing
of my countrymen. Not by a novel project, not by any charlatanerie, but by
ordinary and (also? - J.Z.) experienced means; by the total prohibition of all
private (notes? - J.Z.) at all times, by reasonable taxes in war, aided by the
necessary emissions of public money in circulating size, this bottomed on
normal taxes, redeemable annually as this special tax comes in." (Pages
119/120.)
Jefferson spoke of redeeming
the "public paper" by money which came in by the special taxes. He
did not mention the ability (inability? - J.Z.) to pay the special taxes
for the public paper, so that (… st) (most will- J.Z.) no be redeemed. But I
think that he included this possibility, (… ar) (with war? - J.Z.) at hand,
without mentioning it.
The inconsistency
of Jefferson here is, that he would not grant to privateers the privilege he
was ready to grant to government, that (it may? - J.Z.) issue paper of
circulation size, on the basis of payments due (…. e) (at the? - J.Z) time of
issue (not in future). (Precisely, allowing them to issue paper money upon
taxes due only in the future, is the wrong thing. But here I have not even B.'s
full text on hand, for the left side is partly cut off - J.Z.)
----------------
On the
certificates, sent by Swiss citizens to their friends in Germany, and for which
they may exchange goods at the Central Warehouse for Swiss Care Goods, is
printed, in three languages:
1.) Warengutschein,
2.) Bon pour marchandises,
3.) Voucher for goods.
So it seems, that
the best translation for the German "Gutschein" is voucher,
and not, as the Toussaint-Langescheidt Pocket-Dictionary (the best for modern
English) proposes: "Credit- (note?-J.Z.).
(Goods warrant might be better until a still better term is
found. - J.Z.)
If that were true,
I would say:
The certificates in
my note-system are vouchers. The goods, for which they are exchangeable,
are ready at hand.
The notes in your
system are interest-free mortgage bonds or interest-free bills of exchange or
interest-free promissory notes. In (this? - J.Z.) case they contain the element
"credit", which vouchers do not contain, although they contain the
two elements "obligation" and ("debt"? "credit"?-
J.Z.), or "claim".)
The public paper,
based on due taxes and whose issued amount does not surpass the amount
of the due taxes, does not contain the element "credit". Its
economical nature is that of a voucher, not that of an interest-free promissory
note. Jefferson saw that and there he was ready to admit it. Nevertheless, it
was an inconsistency of a man who seriously believed, that metal currency can
never lack.
That public paper,
based on due taxes, does not contain the element "credit" and,
therefore, is no credit note, was acknowledged by the eminent economists:
Steuart (the first, I think), Adam Smith, Roscher and some Prussian economists,
not known abroad but all named by Roscher. They all did not draw the
right conclusions from their observations and did not apply the principle,
(good? valid? - J.Z.) in public economy, to the private sphere. They should
have (remarked? - J.Z.) at least that there may exist beside the
"credit-principle" a "voucher-principle" for the issue of
private notes.
---------------
You know that I am
no friend of financing credit simply by lending notes to debtors and to discard
those as creditors, who possess goods or are ready to render services and are
ready, too, to delay their claim to an equivalent.
No trust in the banker will (…..t) (arrest? replace?-
J..Z.) the dependence of new loans, granted in this form, from the (debts? -
J.Z.) of previous loans, not yet repaid. Trust and this kind of (confid ? -
J.Z.)ence are two economic elements which have nothing in common. (…..e) (One?
- J.Z.) cannot replace the other.
I demand a system
of issuing notes and of financing credits, which (is for? - J.Z.) new loans
quite independent of former loans not yet repaid.
(J.Z.: Here, finally, ends the photocopy sheet with the text
cut off on the left side. I was never good at cross-word puzzles or got
pleasure out of them. - The Antiquarian Mr. Eckard Duewal, in Berlin
Charlottenburg, has the original letter duplicates but guards them and the
other written and printed inheritance from B. like a dragon, hoping, that some
time in the future, when he is no longer too busy as a second-hand book-dealer,
he may be able to deal effectively with this material. But at least he allowed
me to photocopy this correspondence and, unavoidably, I did make some mistakes
during my prolonged copying effort of uncounted thousands of pages. I also
plead guilty of having left this material unused for the last 12 years. I hope
that E. D. will not delay much longer accessing this and other material for his
own purposes and that he will also make much of it accessible to others, in one
form or the other, before he, too, gets old and decrepit. Sometimes one can
love treasures to their or one's own death, without doing much with them or for
them. - I shudder at the thought that soon I will be 70, i.e., as old as B. was
when I met him for the first time, back in 1952, when I was 19. Now one of my
granddaughters is already 17 and drives her first car. - J.Z., 2.3.03.)
On the other hand, I admit - - of course - - that credits to
finance the production and the consuming of articles made in bulk, or to be
used or consumed by many, require note issue. Avoiding the dependence of new
loans from former credits requires a special technique, which is here
quite essential. I wrote about that technique in former letters.
(J.Z.: Essentially, you will have to subscribe with earned
goods warrants etc., just as with earned legal tender, to medium or long-term
securities or fixed deposits, etc. and the lenders will have to repay the loans
with earned goods warrants. For each occasion, the subscription obligation of
the real creditor and the repayment obligation of the debtor, the bank can
issue goods warrants to that extent, to make the loan subscription, as well as
the loan repayment easier, as far as the supply of exchange media for these
actions is concerned. In the first case, the newly issued goods warrants will
stream back from the subscriber to the loan [if he does not merely subscribe
with a goods warrant account credit he has already at the bank, then he is
under a corresponding acceptance obligation for the goods warrants of the
issuing bank], while the later and properly timed issue or issues for
instalment repayments, stream back, when the debtor repays the loan. The
present balance for goods offered for notes and notes issued redeemable in
goods, must always be kept, even for such transactions extending over a long
time. Thus at least two issue and reflux actions are required. In the primitive
and unsound "asset-currency" or "loan from the public" note
issue cases, there is only one long-term issue, with most of the additional
notes remaining for a long time in circulation, seeing that they must stream
back only to the extent that the debtor repays in instalments, or pays interest
or when he finally repays the remaining debt in a lump sum. In the meantime,
all the other notes issues for this purpose do have NO reflux, no one obliged
to accept them at par, and, therefore, they will, under competition from sound
notes, depreciate. - Generally, the sound notes will drive such "asset
currency" notes out of circulation. They are also a kind of fiat money,
but one without the legal and wrongful power of forced value and forced
acceptance. The sound notes issues for long-term credit purposes, represent not
really a special technique but simply one of common sense and honesty. Any
deviation from this method (balancing issues with reflux at any time), and its
result, can be easily foreseen, like a false chess move. Alas, most people tend
to ponder chess moves more often and more thoroughly than they ponder questions
of issues and reflux of notes etc. -
J.Z., 2.3.03.)
I know your
objection: "In old times no special technique was applied and,
nevertheless, bankers gave credits in notes without caring about previous
loans.
Let me remind you:
1.) In old times the quantity of precious metals possessed
by a banker limited his issues. That was also true for bankers using the option
clause. (Or those using a fractional cover. - J.Z., 2.3.03.) That clause
prevented for the banker unnecessary drains; but it did not free him from the
necessity to sooner or later possess the precious metal wanted and
promised and he had to limit his loans to some multiple of his store of metal.
(There were also, in old times, people who observed, quite
justly, that bricks in the vaults of the bankers would
do the same service as gold or silver under such
conditions.)
(J.Z.: Most of the time. Especially when the bankers were
clever enough to assure another and sound reflux of their notes, i.e., by
merely issuing them in the discount of sound commercial bills (real bills) or
other and quite equivalent short term claims, assuring a regular, rapid and
certain reflux of their notes. - J.Z., 2.3.03.)
The issue was, therefore, always far below the amount which
the country's economy really wanted, and, therefore, interest-free
promissory notes get an additional value nearly equal to the missing interest,
so that the notes circulated at par.
2.) The large denominations of the notes (one pound being
the smallest - - I read - -) prevented them from entering into the economic
sphere of shops, of wages and (in practice) of more than 1/2 of the people.
Today, when clearing performs the payments in the sphere of
the former note-user much more perfectly than notes can do, and when financing
wages and shop traffic will be the most important business of future
note-issuing institutes, principles very different from the old habits must be
applied.
The old
"" redemption on demand" principle enabled, on the other hand, a
greater liberality in long-term credits. If this principle (which you call
"gold standard principle") is discarded, the old liberality is no
longer economically possible.
-----------------
The general opinion
of businessmen is not always true, especially in the theory of note issues. Let
me remind you, that in Spain the minister of finance lets the newly
printed notes be blessed by high officials of the Roman Catholic Church,
to prevent them from getting a discount and that the notes were also printed
from silver plates, to improve the relations of paper to silver. Businessmen
and (probably) the whole people believed that to be a good method. (In Spain.)
(J.Z.: A funny part of "Christian"
"culture". Like the blessing of newly built bridges. As if there were
statistics that proved that "blessed" bridges had less car accidents
and did not collapse altogether as frequently as the un-blessed ones. - I
believe that it was somewhere in Roscher's writings that I read about another
Spanish absurdity: At least somewhere in Spain the spectacle-makers complained,
that they did not sell enough spectacles. So the government
"protected" them by legally forcing everybody to buy and wear spectacles,
even if they had to knock out the lenses or replace them by plain glass, in
order to be able to see. I do not know for how long this absurdity was
enforced, but do know, that absurdities and wrongs like price and wage controls
persisted over 4,000 years and that monetary despotism and governmental
decision-making on war and peace and the postal monopoly and XYZ still persist
into our days. - J.Z., 2.3.03.)
--------------------
I include a
clipping from the "Tagesspiegel" concerning the supply of eggs by
German producers. They promised to supply the people, if only foreign
competition were discarded and demanded a protective duty. That was (of course)
granted. The name was avoided, because the people begin to conceive that the people
are not protected by protective
duties. They call it now: "Import-Ausgleichs-Abgabe". (Import
balancing tax. - J.Z.) The "Tagesspiegel" reports, that the supply
was not improved by the Import-Ausgleichs-Abgabe, although the prices of
eggs rose
considerably - - I think by at least 1/5th in the
average. Effect: Nobody bought the dear eggs. Since yesterday the prices begin
to sink.
------------------
I hope to write
some lines in one of my next letters about the very interesting article in the
"Sunday Graphic" of March 19: "Is a third world war
inevitable?"
------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
13.5.1950.
Dear Mr.
Meulen,
I sent to you by printed matter a clipping from the
"Telegraf" of 4.5.50.
The information is about the prescriptions for businessmen
in the Easter Zone,
1.) to pay-in, daily, by 12 o'clock, their receipts to a
bank,
2.) to pay bills of more than 100 East-mark exclusively without
the use of ready money, that is, exclusively by banks or the post office,
3.) to withdraw from the banks or the post office account no
more than the amounts for wages and 300 East-marks a month for personal
purposes,
induced me to complete my list of monetary liberties. I
found it necessary to append a 9th:
"The liberty
to establish money accounts with any person, institution or bank ad libitum and
to dispose of these accounts freely, according to the agreed-upon
conditions."
------------------
You see from the
clipping, that in April 5,600 refugees begged to be admitted to the Western
Zones, from the camp of Uelzen-Bohldamm alone, and that 4,663 were sent back.
By such a cruelty the authorities of the Western Zones prove, that they are not
better than those in the East. The officials here guilty deserve to be sent
themselves to the Eastern Zone, and to endure there what the sent-back refugees
must endure - - tortures in the concentration camps and such things. Uelzen is
situated in the British Zone. Is there no member of the English parliament, who
will protest against such an administration or the laws that permit it?
Free Banking would
enable the Western Zones to welcome every refugee able to work as a helper. But
that the authorities do not know this simple method does not excuse them. I
doubt also, that such a behaviour corresponds to the mentality of the people.
Some months ago I assisted an assembly of the Social
Democratic Party. The problem of the fugitives was discussed and very timely it
was, because then, in Berlin, about 100 refugees arrived daily. Just one
man protested about the burden on the labour market by the arrival of the
fugitives. But the lecturer said, that here such considerations were not at the
right place. Refugees must be helped, quite independent of the situation
at the labour market. There was no protest against this statement in this
assembly.
--------------
The little list of wages in Berlin will interest you.
(Apparently, B. did not keep a copy of it, so I could not photocopy it. - J.Z.)
--------------
The
"Bruecke" of 11.5.50, reproduces a Malthusian proposition on page 16.
But the same issue of the "Bruecke" translates an excellent article
by Ritchie Calder: "Hannibal and his Elephants". Here is can be read,
how districts, in antiquity populated by hundreds of millions, are now deserts.
(Hundreds or dozens? - J.Z.) Calder explains, too, how erosion is the
natural affect of depopulation by wars or bad administration. I studied, some
years ago, the question of soil erosion in Persia. (I usually replaced his term
"corrosion" by "erosion". But it is possible, that at least
sometimes he meant, instead, e.g. "salination". It's too late to ask
him now what he meant. - J.Z., 2.3.03.)
I am now convinced, that it would be easy to increase
Persia's population by at least 50 million men (say, by immigration from India)
and that, simply by the presence of these 50 millions the deserts would become,
what a great part of them still was at the time of Abbas: a soil surpassed by
very few in fertility. Moreover, the Persians know very well the art of
transforming a desert into fertile land. They use it, where, exceptionally, a
governor really governs instead of
plundering his subjects. The effect is always surprising.
---------------
The
"Monat" recommends reading James Burnham's "The Coming Defeat of
Communism", John Day, New York. From the extracts given by the
"Monat" (Month - J.Z.), I see, that the book really is extraordinary
and that one must have read it.
Very faithfully
Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
19. 5. 1950. Your letter of
16.5., received today.
Dear Mr.
Meulen,
it must have been about at the same time when you learnt
Esperanto, that I learnt it too. Like you, I think that Esperanto is one of the
most useful inventions ever made. I regret that, after Esperanto had been
invented, so many etymologists wasted their time to become competitors of Dr.
Zamenhof and so frittered away the power of an international language idea. It
may be that Zamenhof's epigoni introduced some improvements. But, as the German
saying states: "Das Bessere ist der Feind des Guten." (The better is
the enemy of the good. - J.Z.) In Russia - - I read - - Esperanto is
prohibited. I think that's one of the best arguments pro Esperanto. In
Berlin there is a little group of Esperantists, all men of very little leisure,
many unemployed, many old, so that the group's activity cannot be great. I regret that I have 100 %
forgotten my Esperanto.
----------------
Limit of a cash reserve for bankers. Maybe that the legal
prescriptions are objectionable. But the banker himself must have clear ideas on that
point. If he thinks that a cash reserve is necessary (an opinion I do
not share), his standpoint
cannot simply be: I think a cash reserve is necessary, but I refuse to get
clear ideas to what degree such a reserve is necessary.
-----------------
UNO. In general I do agree. But cases, where other groups
than governments do have the power to begin wars must be taken into
consideration. That subordinate generals began a war, without asking their
government, has, sometimes, been observed. (The Chinese-Japanese war about 15
years ago was begun by the commander of the 19th Chinese army.) A
case like the raid of Dr. Jameson (1895) may be repeated. John Brown, who began
a civil war in 1856, even deserves sympathy - - I think - - and I regret, that
the Anglo-Saxon race was destitute of such men in the years of 1947/1948. when
there was still time to use the atom-bomb-monopoly against the Kremlin, a monopoly
now broken.
(J.Z.: Here I strongly disagree with B. - and he did not
uphold this opinion later, but rather approved an approach like that outlined
in my first peace book, in PP 61-63, also largely based on his own ideas. (Now
online at www.panarchism.info/ - B. died before I published my second peace
book, dealing mainly with the nuclear threat. It's also available there. There
is a strong case for unilateral nuclear disarmament - and its moral position
can be greatly strengthened by numerous other rightful and rational steps,
which ought to accompany it or even precede it, as is likely to happen in a
natural development. Most of them have been outlined in my 2 books on the
subject. - J.Z., 2.3.03.)
-----------------
Gold standard considered as a fixed relation between paper
and gold.
Jevons reports a curious thing concerning the
obligation of the mint to buy gold. The option of Jevons was, that such
an obligation did not exist and, on the other hand, no obligation of the public
existed to accept notes from the mint for gold handed over to the mint.
Jevons knew the laws well and was an assayer of the Australian mint, too.
Jevons possessed a quantity of Australian gold and demanded from the mint that
it coin that quantity. He declined notes and coins made from other gold than
that which he had brought. The manager of the mint told him, that for decades
it was the first case that a citizen insisted upon such a demand, but at last
he ceded to it, because he knew the law, too. Jevons - - of course - - had no
intention to vex the mint but he wanted to clear up the legal situation.
In Germany the mint was obliged to exchange gold bars for
gold coins, but was not obliged to exchange gold bars for notes. He, who wanted
notes, was sent to the Reichsbank. The mint sold - - without being obliged to
do so - -
gold coins to the gold industry, before they were stamped.
These plates were of much use to the industry, their weight being very exactly
fixed and the fineness, too. Before the mint introduced that kind of trade, the
industry melted down freshly coined gold coins, which was not considered as
desirable from an economic point of view.
As far as I know, the legislation in most States was similar
to the German, which - - at its time - - was considered as the best. (It seems
that Michaelis, an excellent expert, was responsible for it.)
The obligation of Central Banks to buy offered gold for
notes or coins, as the deliverer choose, existed for all Central Banks
in the world. (Sven Helander, The System of Central Banking.)
An obligation, to
redeem on demand notes at their face value into gold, existed for the
Reichsbank, from its establishment until
1914, but only within the limits of the par. 18 of the law of 14. III. 1875, so
that your statement is true. This par. 18 said:
"The
Reichsbank is obliged to redeem its notes to bearers for German money, fit for
circulation,
a.) at the main office on demand and without delay,
b.) at the branch offices insofar as their cash and their to
be expected requirements permit it."
(Par. 18. Die Reichsbank ist verpflichtet, ihre Noten:
a.) bei ihrer Hauptkasse in Berlin sofort auf Praesentation,
b.) bei ihren Zweiganstalten, soweit es deren Barbestaende
und Geldbeduerfnisse gestatten,
dem Inhaber gegen kursfaehiges deutsches Geld einzuloesen.)
The commentary by
Koch, Presdent of the Reichsbank, adds: Without this limitation the export of
gold would be facilitated. (Ohne diese Beschraenkung wuerde die Goldausfuhr
erleichtert werden. Vgl. Stenographissche Berichte des Reichstags von
1874/1875, Seite 1332 ff.)
------------------
Objections raised
in Germany against private note-issuing banks.
The main objection was: Notes are loans of the banks,
granted by the note bearers. But nobody, also not banks, has the right to take loans from persons who are
not willing to grant the loans.
The adherents of
Free Banking tried to refute this objection by this argument: The notes of
Germany are not endowed with cours forcé (Zwangskurs). Everybody has the right
to decline the notes.
The adversaries
said: In practice such a right is never used. Everybody is glad to get a
payment. Experience teaches, that even prohibited notes are accepted. (In
Prussia other than Prussian notes were prohibited.) But the fact that everybody
accepts the notes does not remove the other fact that the banks raise
interest-free loans from the public. Such a privilege can only be granted to
the State or to State banks.
To the argument,
that the notes were redeemable on demand, the adversaries replied: For that
part, which exceeds the cash in the bank, the notes are not redeemable.
That is not very important in the case of a State bank, as the experience in
England has proven. Several times the Bank of England was released from the
obligation to redeem its notes, but that caused no distrust against the bank.
But if in Germany only one private bank would not be able to redeem its
notes, then that could produce a catastrophe.
There were two
reasons for the resistance by the note-issuing banks to diminish more and more,
so that it was easy for the Reichsbank to successively buy the privileges of
the existing banks.
The law permitted the Reichsbank to increase its own issue
for the amount that the bought private bank was permitted to issue, or - - more
exactly spoken - - to increase the tax-free issues of the Reichsbank.
The Reichsbank was permitted to issue ad libitum the amounts that it thought to
be necessary, but if the issue surpassed a certain limit, then the extra amount
was taxed with 5 % per annum.
That kind of tax ("Notensteuer") was an invention
of Michaelis and was much admired at his time. The general opinion was: By the
note-tax the Reichsbank is able to supply the business community with any
amount really wanted, so that nearly the advantages of Free Banking are
obtained. On the other hand, the par. 18 protects the Reichsbank to a certain
degree against gold speculations and gold exportations.
(The most important detail of the Bank legislation was
seldom discussed: that for decades the smallest amount of a
note, private note or Reichsbank note was 100 marks.)
Now the German Note situation is - - so they said -
- as good as it can be.
The two reasons why
private note-issuing banks did not resist the tendency of the Reichsbank, to
buy all private note-issuing banks, wore:
1.) The profit from
note issuing was very small. Competition had lowered the discount to 2 %, if
the loans were granted in the bank's own notes. (The Prussian State Bank took 4
%, that of Frankfurt on the Main, too, probably also the other State Banks.)
2. The danger, that
the Prussian State Bank would suddenly present a very large amount for
redemption was always great.
The discounting department of the great State
Banks and, especially, of the Prussian State Bank, were excellently managed and
- - in Prussia - - every little businessman could there discount his bills
without difficulty. The Prussian Bank was - so I read - - more liberal
than the other note-issuing banks, so that the public more and more preferred
that bank. (Apparently, the double interest rate did not outweigh that
advantage! - J.Z., 3.3.03.)
Even in Southern Germany the Prussian Bank had many
customers who were considered, by the banks of their own district as
"unsafe", because they had no collateral securities to offer. (As if
"real bills" were not security enough. In other words, they did not
understand their own business! - J.Z., 3.3.03.)
At the great crisis of 1857 (when Marx expected the social
revolution) the Prussian Bank continued to discount, while at Hamburg - - which
had no note-issuing bank - - it was considered as "unsound" by the
"experts - - the interest at the Exchange rose to 1 % daily, and no bill
could be discounted.
The Prussian Bank
was the pioneer of the Prussian politics in South and Middle Germany. Many
businessmen said: There are many objections against Prussia, but people like us
can get money from there, while our own government does nothing else in money
politics than to demand money from us.
After the war of 1866 and in the occupied territories, the
considerably improved liquidity, through the help of the Prussian Bank, was
appreciated and helped to let the old State become quickly forgotten.
If the law would
have permitted notes of less than 100 marks, there would have been a wide field
for private issuing banks - in supplying employers with means of payment for
wages. But even theorists (in general) argued against small notes and believed
Adam Smith and all the other great economists, who asserted: Small notes drive
out metal from circulation.
(If rare metal coins really would have thus been
"driven" out from circulation, then, as real economists, they should
have welcomed the economising of rare and expensive metals for this purpose.
Now everybody knows that for most purposes cheap metals or paper do just as
well, if not better, for this purpose. So, in this respect, these famous
economists were not so great. - J.Z., 3.3.03.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Greene's
notes. If the word value
would not be taken in the sense in which Greene used it, that is, in the sense
of purchasing power and in no other sense, your objection would be
right. Replace, in the two quoted passages, in your letter, the world
"value" by the worlds "purchasing power" and all is clear.
The words
"purchasing power" were - - it seems - - not yet in use at the time
of Greene. The corresponding German word "Kaufkraft" I found in
literature in common use since about 1850, in a few cases a little earlier. In
Fluegel's Dictionary, edition of 1861, it is not yet contained. Even
Thieme-Preussen of 1903 contains neither "Kaufkraft" nor
"purchasing power". Also in Nuttal's "Standard Dictionary"
of 1887, and Webster of 1880, "purchasing power" is not mentioned.
Greene, at page 56,
line 13, says: "… money … has … one value as an article that can be
exchanged for other commodities … " and means, obviously, "purchasing
power" and certainly would have used this term if the expression would
have been in common use at his time.
------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
26. 5.1950.
Dear Mr.
Meulen,
the day before yesterday I received:
1.) "The Economist" of 29. 4. 50.,
2.) "The Malthusian" of April 1950.,
3.) "City Press" of 5. V. 1950.,
4.) "The Free Trader" No. 253 (March-April), two
copies,
5.) "National News-Letter", Nos. 712, 713, 719.
I thank you very
much!
----------------
In the
"Economist" I read that the Egyptian Pound is worth too much in the
eyes of Egyptian exporters. The Egyptian Government tries many things to
devaluate it, so that exporters are content. It they world not be too stupid,
they would introduce Free Banking and a free market for foreign exchange. Then,
in a few days, they would get the quotation wanted, if honesty should play a
role. It they should think honesty to be a disturbing element (and it seems,
that they do think that), then they might also cancel the law which prohibits
forged money. It would prove an excellent means.
The article
"Capital and Savings" offers - - I think - - the possibility to
estimate the quantity of notes to be issued annually, if investment
would be financed by note-issuing. The quantity will be smaller than L 2 1/2
milliards (page 955), but much smaller?????? Now the quantity of issued
and circulating notes is about 1280 million Pounds.
In the article
"Indians in South Africa" the author remarks very well, that the,
Indian birth rate is a threat for European. It is really so, and only by
abjuring Malthusianism in all forms could the white race meet this threat. If
they do the contrary and follow the "Malthusian", they will be swept
away by an Indian army twenty times larger than the whole white population in
South Africa. (The experience of two world wars taught, that Indian soldiers
know how to fight.)
You read - - I hope
- - the article "Re-education in China". The effects are not to be
overestimated. In Japan they had, still in 1945, exactly that social
organisation which Orwell described so excellently in his
"l984": The "thought -police" existed, with torture and all
that belongs to such a government, and the "televisors" were replaced
by a system of spies perhaps only possible in Asia. And all that
disappeared, like snow in hot sunshine, when the Americans occupied the
country. The present mental revolution in Japan is, perhaps - - I think - - one
of the greatest that ever occurred in the history of a people. But nobody
realises that, by the continuance of the centralised money administration, the
conditions are provided, to restore the old excess statism, the latter being
nothing but the last consequence of monetary centralism. There is only as much
freedom for a people as there is freedom among them to procure standardised
means of payments - - a doctrine quite overlooked by sociologists, Herbert
Spencer included.
(J.Z.: At least Herbert Spencer was a Free Banking advocate,
explicitly, not only through the "right to ignore the State", which
he advocated in his youth. - The two world wars were fought under monetary
despotism. Japanese authoritarianism, Communist Chinese, Soviet and Nazi
totalitarianism arose under monetary despotism and it also facilitates the
present tendency towards World War III. - J.Z., 3.3.03.)
-------------
"The
Malthusian" is logically killed by the article - - meanwhile becoming
celebrated - - of Pearl Buck. Malthusians now resemble the souls of dead men,
of which Swedenborg reports: They hardly could perceive, that they would
be dead, then they still existed and their feeling was not very
different from the feeling before they died.
-------------
"The
Malthusian" quotes a passage from Adam Smith. The facts reported by
Adam Smith were true and for a very great part of the population still are
true. What Adam Smith did not report, simply because he was never in China, but
certainly would have underlined, if he had resided there, was: Side by side,
where the poor Chinese drowned his new-born child, because he could not buy
victuals for it, th fisherman throws his unsold fish into the river. The one
said: Too many eaters in China, the other said: Heaven, send more eaters, to
relieve the plight of us fishermen.
"The
Malhusian" quotes a statistic (who drew it up?? Professor Tawney himself
??) which teaches that 36 % of Chinese
farms contained less than 1,5 acres, 6 %
contained 15 acres and more.
We know that from
Germany and Italy. The peasants with dwarf-farms went to the "large"
farmers and worked there. Or will anyone pretend that it is possible in China
to cultivate a farm of 15 acres by one family???
-----------
I hope to write
still some words about the article "Do We Fear Competition?" in
"City Press".
-----------
"Free
Trader", No. 253. I read again with the greatest pleasure the extract from
the speech of Princess Margaret. If only this lady, already one of the best
heads of England and a noble heart, could be brought to read something about
Free Banking.
-------------
A friend of mine in
Switzerland visited Paris, some weeks ago. He reports that housing shortage in
Paris surpasses all what one can believe. He asked his friends - - all
well-trained insurance men, what may be the reason that nobody now builds new
houses or repairs the old ones.
Answer: That must be a funny man, who invests money on a franc-basis
after so many devaluations and the consequent price increases. And,
nevertheless: Nobody demands a stable currency, all still cry for price and
rent control, although the government itself now sees that price etc. control
is beyond its powers and a free market is the best solution or the least evil.
(This might have to start with a free market in educational
services. For who produced the present ignorance and prejudice among pupils and
teachers, students and professors - in the first place, with a prescribed
curriculum and selected text books and subsidies for flawed teachings? -
Libertarians have not yet provided an alternative education avenue, through all
their writings, made available on very affordable alternative media, and, e.g.,
through the new World Library being built up in Alexandria, Egypt. Make all
your texts available there, online, without copyrights restrictions. You will
not earn money thereby, but, maybe, freedom, sooner than otherwise. - J.Z.,
3.3.03.)
-------------------
I hope to write
more next week.
-------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
(Bth.) Essay of
a translation (Attempt at a
translation, here, as usual, with my attempt to approve it. - J.Z.)
Mr. Robert Picard, Actuary, 6.5.1950.
Troinex / Genève,
Chemin du Ruisseau.
Dear Mr.
Picard,
If I lived in Switzerland, I would try to influence, by
articles or in another way suitable, the Swiss legislation to come into
operation in the case of a war. I would propose to complete it by paragraphs
like the following:
1.) Switzerland acknowledges, as a part of international
law, the principle that aggressive wars are to be considered as murderous
assaults by the governments which began the war or prepared it.
2.) In the case of a war Switzerland is not at war with the
population subdued by the hostile government but with that government only.
3.) Switzerland does not consider or treat as prisoners of
war any people of the hostile army, who report themselves at Swiss authorities
or troops and declare, that they have been forced to serve in the hostile army
but recognise that the war of that army is unlawful. As the case may be, they
are then treated as subjects of an allied power or as neutral foreigners.
4.) The said persons (No. 3) are entitled to claim from
Switzerland at least those rights which the Hague Conventions on Wars grant to
prisoners of war, concerning treatment, maintenance and lodging.
The additional rights granted to said persons by Switzerland
will then be made known as soon as possible and, if circumstances permit, at
their first report.
5.) Persons mentioned under No. 3 have the right to choose
their residence, may it be in Switzerland or in another country. If they choose the latter,
Switzerland will send after them, as far as this is possible victuals or pay,
to secure to them an income with which they can purchase, in the other
countries, what they are entitled to under the Hague Conventions as prisoners
of war.
Should Switzerland enacts special laws for the residence of
foreigners in Switzerland, then these apply to the persons named under section
3.
6.) Persons mentioned under No. 3 are entitled to get a
compensation for war material brought by them to Swiss authorities or troops.
Switzerland will, as a rule, pay such war material the same price that
Switzerland would pay for similar war material to Swiss manufacturers or
merchants. For canons, machine guns, flame-throwers, armoured cars, wagons,
bicycles, life stock, aeroplanes and ammunition of every kind, if in good
condition, double this price will be paid.
7.) Persons mentioned under No. 3, who did not consider
themselves as hostile soldiers, although they were compelled to join the
hostile army, but, nevertheless, acted so as Swiss soldiers would have acted in
their place, may claim the same rewards and honours as Swiss soldiers. In every
case, these persons may rightfully claim rewards and honours for the
destruction of hostile war material, for propaganda for the world's peace, for
deposing the hostile government and for joining the revolutionary government
supported by Switzerland.
8.) Switzerland considers itself as allied with that part of
the population subdued by the hostile government, which is ready to make a
separate peace under the conditions proposed by Switzerland.
Switzerland will acknowledge a provisional government of
that part of the population, will assist it and will consider it as her ally,
if that government agrees.
Emigrants, who declare themselves adherents of this
provisional government and sign their declaration at a Swiss authority or
troop, are considered as subject of a government allied with Switzerland.
The same applies to persons mentioned under 3.
9.) Switzerland conquests and also reparations from those,
who were forced to participate in the war.
(J.Z.: In his translation of the 3 lines of the German
original, B. was more elaborate: "Switzerland renounces the incorporation
of territories won by military operations. Switzerland renounces, too,
reparations from persons who did not voluntarily partake in the war on the
enemy's side or remained subject to the hostile government, although a
possibility existed to give up that citizenship. - Again, slightly
"improved" by me in its translation. - J.Z., 3.3.03.)
10.) After the war Switzerland will not meddle with the
affairs of the country before subjected to the vanquished government, but
Switzerland will not tolerate a constitution of the country or an organization
by which a group or a dictator will get the chance to renew the war or to
prepare for a new war.
11.) Switzerland will call to account, after the war, and if
possible then during the war, all persons who caused the war, instigated the
population or committed crimes forbidden by the Hague War Laws. They will be
judged according to international law.
12.) Swiss Authorities accept at every time, in peace and
war, declarations of foreigners, that they will not partake in a war against
Switzerland and that, if they are compelled to do service in an army hostile to
Switzerland, they would consider such a restraint as unlawful as far as
Switzerland or her allies are concerned.
13.) Switzerland imposes upon every Swiss citizen the duty
to assist the Swiss government in maintaining peace and further, to
explain to foreigners at every opportunity the peace program of Switzerland.
Swiss citizens shall not associate with persons instigating
the population into wars.
----------------------
Considering, that
for decades and also in peace times, numerous persons fled to Switzerland, who
were under threat of conscription, or who were already conscripted into an army
(from Germany alone every day recruits crossed the Swiss border), the
possibility should be created to treat such persons in a, way that corresponds
to Swiss pacifism.
Until now such persons were considered as highly undesirable
for all Swiss citizens, because (seemingly or really) they were a burden on the
Swiss labour market. Swiss citizens will not accept these persons kindly before
it becomes certain, that each refugee can find work in Switzerland without
depriving any Swiss citizen of work.
To establish institutions for this purpose is not only
possible but easy.
It can be achieved that every fresh labour offering itself
to Switzerland will be no less welcome than a newly discovered waterfall or a
newly build wind power plant.
In one of my next letters I will try to say something more
about this.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
(J.Z.: Since the above is still a flawed translation and the
subject is important and acute again, seeing the current USA government
preparation for a war against Iraq instead of a tyrannicide action against its
dictator, I do append here the German original from those letters of B. to Dr.
Picard that are in my possession. For the general idea itself of this program,
I refer to the Beckerath letter extract that has been included in my two peace
books, in some more details than in this short letter, which was part of the
letters sent to Meulen. In each version of this plan that I have seen, there
are some details that are omitted in others. Perhaps one day I will get around
to pull all these different versions together or even fill a book with all the
references that I have so far collection for this plan under the heading
"desertion". In his
translation B. also added some details to the original.
A kind of military jiu jitsu [The term "Judo" is
better known & it employs largely the same technique. - J.Z., 24.5.03.] is
involved, which turns most of a despotic enemy regime's strength, its military
forces against it. Any really free societies or somewhat free States do have to
offer to the subjects of a dictatorial regime, including its soldiers and
officers, much more than that regime has to offer them. If that is clearly,
convincingly, honestly, publicly and in a trustworthy way offered to these
victims of a dictatorship, then they will either turn away from it, associating
themselves with us or becoming neutral, or rise against it, because their
government is then clearly their primary enemy and peace, freedom, justice and
prosperity can only be reached by them if they turn against it. The practical
details are all important and they must be made known to every subject, soldier
and officer of a dictatorial regime long before that regime tries to begin an
aggressive war. They are also captive people and really our secret friends and
allies, to a very large extent, if only we do consider and treat them as such.
Then an attempt of that dictatorship over new victims will become its death
warrant. Full monetary freedom and fully free trade and other economic
liberties are also necessities for this libertarian defence, revolution and
liberation attempt.
Some will realize, that
the above "translation" is still flawed and will, I hope, provide a
better one. The old slogan of the time of the French Revolution: "Peace to
the huts but war to the palaces" ought to become optimally developed and
detailed, so that mix-ups like the currently prepared "war against
Iraq", instead of "removal or destruction of its tyrannical regime,
preparing to threaten other countries, too, with mass murder devices",
will no longer happen. We should let friends, neutrals, allies and real enemies
let themselves sort out and separate, thus reducing "wars" to mere
police actions against criminals, with the help of all their victims. Quite
just war and peace aims, that could prevent wars and lead to just and free
societies, are still not declared and published by either side, not even by
libertarians.
For perfectionists,
working towards a better translation, I should and might provide a photocopy or
a scan or, if I can, an electronic image of B.'s own rough attempt at a
translation. Here and now I haven't got the energy for this but merely amended
my own somewhat corrected copy. But can one launch such an idea among people
still believing in mere marches, protests etc.? There are still so many flaws
among most of the present "peaceniks" or "peace lovers" as
well as among the "war-hawks" and among the "moderates" and
"neutrals". Each of them is right on a few points and wrong on so
many others. - J.Z., 3.3.03.)
____________________________________________________________________________________________
U. v. Beckerath, … 6.5.1950.
Lieber Herr
Dr. Picard,
wenn ich in der Schweiz lebte, so wuerde ich versuchen, auf
die Schweizerische Kriegsgesetzgebung einzuwirken und wuerde folgende
Ergaenzungen vorschlagen:
1.) Die Schweiz erkennt den voelkerrechtlichen Grundsatz an,
dass Angriffskriege fuer die Regierungen, die sie betreiben, als Mord und
Anstiftung zum Mord anzusehen sind.
2.) Im Kriegsfalle betrachtet sich die Schweiz nur als mit
der feindlichen Regierung im Kriege befindlich, nicht aber mit der von ihr
beherrschten Bevoelkerung.
3.) Angehoerige der feindlichen Streitmacht, die sich bei
Schweizerischen Dienststellen melden und dort erklaeren, dass sie zum Dienst
bei der feindlichen Streitmacht gezwungen wurden, oder dass sie die
Unrechtmaessigkeit des Angriffskrieges gegen die Schweiz erkannt haetten,
werden nicht als Kriegsgefangene betrachtet. Je nach ihrem Verhalten gelten sie
entweder als neutrale Auslaender oder als Staatsangehoerige einer verbuendeten
Macht.
4.) In bezug auf die Verpflegung, Unterbringung und
Behandlung stehen den unter 3.) bezeichneten Personen wenigstens diejenigen
Rechte zu, welche die Haager Landkriegsordnung den Kriegsgefangenen zubilligt.
Die von der Schweiz eingeraeumten, darueber hinausgehenden Rechte werden ihnen
baldmoeglichst bekannt gegeben, moeglichst schon bei der ersten Meldung.
5.) Die unter 3.) bezeichneten Personen koennen ihren
Aufenthalt beliebig waehlen, auch ausserhalb der Schweiz. Im letzteren Falle
wird ihnen die Schweiz, im Rahmen der bestehenden Moeglichkeiten, Loehnung und
Verpflegung nachsenden oder ihnen Einnahmen sichern, fuer welche sie sich im
Ausland wenigstens das beschaffen koennen, was nach der Haager
Landkriegsordnung Kriegsgefangenen zusteht. Sollte die Schweiz besondere
Bestimmungen fuer den Aufenthalt von Auslaendern in der Schweiz treffen, so
gelten diese Bestimmungen auch fuer die unter 3.) bezeichneten Personen.
6.) Den under 3. bezeichneten Personen wird die Schweiz eine
Verguetung (J.Z.:"Belohnung" waere hier vielleicht besser. - Man
sollte bedenken, wieviel Schaden sie anstiften koennten, wenn sie, stattdessen, gegen die Schweiz gebraucht
wuerden. - J.Z., 3.3.03.) fuer mitgebrachtes Kriegsmaterial zukommen lassen.
Grundsaetzlich gewaehrt die Schweiz fuer mitgebrachtes Kriegsmaterial
diejenigen Preise, die sie fuer gleichwertiges Material an Schweizer Hersteller
oder Haendler bezahlt. Fuer brauchbare Geschuetze, Maschinengewehre,
Flammenwerfer, Panzerwaffen, Wagen, Fahrraeder, Vieh, Flugzeuge und fuer
Munition jeder Art zahlt die Schweiz das Doppelte.
7.) Unter 3. bezeichnete Personen, die sich schon vor ihrer
Meldung von der feindlichen Regierung losgesagt haben und diese Haltung durch
Kriegshandlungen gegen die feindliche Regierung zum Ausdruck gebracht haben,
erhalten die gleichen Belohnungen und Auszeichungen wie sie Schweizerische
Soldaten fuer Handlungen gleicher Art erhalten wuerden. In jedem Falle haben
die under 3.) bezeichneten Personen einen Anspruch auf Belohnungen und
Auszeichnungen fuer die Zerstoerung von feindlichem Kriegsmaterial und fuer
Propaganda im feindlichen Heere fuer den Weltfrieden, fuer Absetzung der
feindlichen Regierung und fuer Anschluss and die von der Schweiz unterstuetze
Gegenregierung. (Mehrere aber nur exterritoriale Gegenregierungen fuer nur
freiwillige Mitglieder waere noch besser! - J.Z., 3.3.03.)
8.) Die Schweiz betrachtet sich als mit demjenigen Teil des
von der feindlichen Regierung beherrschten Volkes verbuendet, der under den von
der Schweiz festgesetzten Bedingungen Frieden schliessen moechte.
Die Schweiz wird eine provisorische Regierung (J.Z. bessere
mehrere, jede fuer ihre Freiwilligen und jede nur fuer exterritoriale
Autonomie! - J.Z., 3.3.03.) dieser Volksteile anerkennen, sie unterstuetzen und
ein Buendnis mit ihr schliessen.
Ausgewanderte, welche durch Erklaerungen gegenueber
Schweizer Dienststellen oder in anderer, geeigneter Weise zu erkennen geben,
dass sie die provisorische Regierung anerkennen, gelten als Angehoerige eines
mit der Schweiz verbuendeten Staates. Die gleiche Bestimmung gilt fuer unter
3.) bezeichnete Personen.
9.) Die Schweiz verzichtet auf Landerwerbungen und auf die
Leistung von Reparationen seitens derer, die an dem Krieg nur gezwungenermassen
teilgenommen haben.
10.) Die Schweiz wird sich nach dem Kriege nicht in die
inneren Verhaeltnisse des von der besiegten Regierung beherrscht gewesenen
Landes einmischen; sie wird aber keine Verfassung oder Organisation zulassen,
durch welche einer Gruppe oder gar einem Einzigen die Moeglichkeit gegeben
wird, einen Krieg zu beginnen oder Vorbereitugen dazu zu treffen.
11.) Die Anstifter des Krieges werden nach dem Kriege und
nach Moeglichkeit waehrend des Krieges nach den Grundsaetzen des Voelkerrechts
zur Verantwortung gezogen.
12.) Die Schweiz legt jedem Buerger die Verpflichtung auf,
die Regierung in ihren Bemuehungen um die Aufrechterhaltung und die Festigung
des Friedens zu unterstuetzen und bei jeder sich bietenden Gelegenheit
Auslaendern die Friedensziele der Schweiz darzulegen.
Schweizer Buerger sollen keine Gemeinschaft mit
Kriegshetzern haben.
----------------
In Anbetracht, dass
seit Jahrzehnten auch in Friedenszeiten zahlreiche Personen in die Schweiz
gefluechtet sind, die zum Heeresdienst gezwungen werden sollten oder gezwungen
worden waren (allein aus Deuschtland kamen ja taeglich Rekruten ueber die
Schweizer Grenze), muessten auch fuer solche Personen Bestimmungen getroffen
werden, die der pazifistischen Haltung der Schweiz entsprechen.
Bisher waren solche Fluechtlinge der Schweiz hoechst
unerwuenscht, weil sie (scheinbar oder wirklich) den Schweizer Arbeitsmarkt
belasteten.
Die Bevoelkerung der Schweiz wird Bestimmungen zugunsten
solcher Personen erst dann freundlich aufnehmen, wenn es gewiss ist, dass jeder
Fluechtling in der Schweiz Arbeit finden kann ohne einem Schweizer Buerger die
Arbeit wegzunehmen.
Einrichtungen dafuer zu
schaffen ist aber nicht nur moeglich, sondern es ist sogar leicht
moeglich. Es kann erreicht werden, dass eine sich der Schweiz anbietende
Arbeitskraft der Schweiz ebenso willkommen ist, wie etwa ein neu entdeckter
Wasserfall oder ein neu aufgestelltes Windrad. Ich werde versuchen in einem
meiner folgenden Briefe darueber einiges auszufuehren.
----------------
Mit
bestem Gruss Ihr - gezeichnet: U. v. Beckerath.
____________________________________________________________________________________________
9.6.1950. Your letter of 6.6.50., received today.
Dear Mr. Meulen,
gift got - - I think - - its present meaning in
German simply (by?) (resulted from? - J.Z.) an ironical use of the word. Poison
was applied mainly by mixing it into the food of the person or animal whose
life got a negative value, to speak the language of Jevons. Insofar the poison
was given. If Grimm's great dictionary would still be available
in Berlin, I would be able to state when the word was first used in its present
meaning. But I will try to get more information from other sources.
My impression is
that the English word "poison" (from the Latin "potio" - -
drink - - as I learn from Webster)
got its present meaning as well by an ironical use of that word, from
which it is derived, already among the old Romans who seem to have been very
perfect poisoners.
The word
"poison" instead of the old Celtic or Anglo-Saxon word, which
certainly existed, may have been taken from the Roman legislation, which was
early introduced in England. That legal terms replace vulgar terms is often
observed, and you will know examples from the English language as well as I
know them from the German.
(In my own profession, until 150 years ago, the word
"Assekuranz" was in general use for "insurance" and
"assekurieren" for "insure". But the different laws
concerning insurance used the word "Versicherung". In a few decades
the old word "Assekuranz" came out of use, except in conservative
Hamburg. The same is true for the word "versichern", replacing the
much better "assekurieren".
"Versichern" has now in German two quite different meanings,
which can only be distinguished from the context.
1.) "insure", 2.) "affirm". In Hamburg
the old Union of people concerned with insurance still conserves its name:
"Verein HamburgerAssekuradeure" and is proud of
it.)
In Germany the
Roman legislation was introduced for a few years before the Battle of the
"Teutoburger Wald" in the year 9 p. Chr. (9 A.D. - J.Z.) But - - as
Tacitus says - - when the Germans had won the battle and captured the first
officer of "justice", they nailed the man onto his law books. That
may have been one of the reasons that the Roman law expressions did not
penetrated the language of the people.
In Latin as well as
in German there is no original word for poison perhaps for two reasons:
1.) In antiquity words reminding of some mischief were
seldom and only unwillingly used. You remember that the word "left" in the Greek army
language was avoided to accommodate to the soldier's superstition. The leaders
spoke of "our well named wing". In the Bible the word
"left" is used 77 times, but the word "right" (in the sense
of direction) at least 300 times, as I see from Calwer's Concordance.
(J.Z.: Thus, if one perceives the Bible as being, literally,
"the word of God", then one can, logically, only conclude that even
"God" was, to a large extent, superstitious! - J.Z., 3.3.03.)
2.) Those, who really poisoned others (a crime, as it seems,
very frequent in "the good old times") often had to speak to their accomplices in a manner that
could not be suspected. So they used words like "gift".
Poisoning was in
Germany so frequent in the 17th and the 18th century,
that dispensaries were forbidden to sell any poison to women, also not
rat-poison.
(J.Z.: It seems that "women's lib", in its most
radical form, was off to an early start. Here it is also to be taken into
consideration, that most women were neither armed nor trained in the skills of self-defence
and weapons, and that all too many of them are brutalised and abused even now,
even by their boyfriends or husbands, or as children by fathers, brothers and
grandfathers. In such cases poisoning was often nothing but self-defence or
justified homicide. - J.Z., 3.3.03.)
---------------
Esperanto. Your
standpoint seems well founded and certainly you studied the question more
carefully than I did.
--------------
I hope to get
"The Malthusian" to-morrow. I do not know what Colin Clark means by
"real income".
From a philosopher's standpoint the best off people are the
Arab Bedouins. They do have what they want and desire and plenty of it, except
precious metals to adorn their women. Mohammed himself - - in general a meek
and generous man - - used torture against vanquished tribes to get their gold
and silver; he was a Bedouin. (And he had many women; but this - - I
think - - does not excuse him.)
(J.Z.: Was robbery among Bedouins and against strangers
taking place only to obtain rare metals? Were all their other desires
satisfied? - But, apparently, they have practised individual and small group
secessionism for a long time. - J.Z., 3.3.03.)
In the last years I
read some descriptions by travellers, from which I get the impression that
Ireland is still a poor country compared with others.
Island is now
a pretty wealthy country and by what? By Free Trade only. If they were
not permitted to trade freely, they would be poorer than the Eskimos.
The number of acres per capita in a particular district is
quite unimportant if Free Trade is permitted there. By Free Trade
Burma's rice fields belong to England and, since a few months, also to Germany.
Without Free Trade South America, under Spanish dominion, was a very poor
country, where oven rich landlords were unable to pay for glass windows. But at
that time she produced more gold and silver - - it seems - - than any other
country.
--------------
What you say of the
UNO is certainly right. But: does the UNO still exist??????
(Since it is a governmental organisation and one subsidised
by some governments, out of tax funds, it still exists, in a fashion, like most
parliaments, governmental boards and commissions, as mere expensive talk shops,
of no positive significance, but sometimes effective as obstructionist
institutions, preventing rightful and productive self-help and free exchanges.
- J.Z., 3.3.03.)
What the world now
needs would be a Union like the old International Working Men's Association - -
a mere private association, summoning the Russian workers in case of a war to
rise, form a new Russia and make peace on a new basis with the West. But for
that a program is needed, and I can find not even a single person to
talk about this point or at least to tell me what my error consists in, if
I am wrong here. Everybody, to whom I try to talk about this subject, at once
begins to speak of the sun, the moon and the stars and other interesting and
important things. But it seems that the brain cells for talking of their own
liberty are not yet developed in modern mankind, except in the brains of
Russian Communists, who at least talk about the means to suppress it.
(J.Z.: I just came from such a meeting - the local computer
user club - of deadbeats, brain-dead, mindless people [mostly old ones, as old
as I or even older], when it comes to as important subjects. But
discussed was, actually, the cause of two full stops in a file name, instead of
only one full stop! That point did interest them! "People dancing at the
edge of a volcano", unaware that it is as close to eruption as we may be
to WW III. However, many of them can handle their hardware and software much
better than I can. But for what purpose? Perfect designs of their own x-mas
cards etc.! Electronic banking was also lectured on and discussed - but
certainly not FREE banking. The world is in its present mess because the minds
of most people are in their present mess. I was also accused of talking too
much. I replied, that actually I don't talk enough [because nobody will listen
to me, at least not with sufficient interest and intelligence]. - J.Z.,
3.3.03.)
-----------------
I am curious to
rend your letter to the Times on the Schumann Plan.
All fear of German competition
could be removed by acceptance and already by discussing the Milhaud
plan in the form in which it was presented in the later editions of the Annals
of Collective Economy. (I have seen a full set of them only once in my life, at
the library of the University of Freiburg, Economics Department. - J.Z.,
3.3.03.) Discussing the plan would. in practice mean the acceptance of the
plan. It is as plain.
(But it is not as plain and simple a job to get anybody to
read and discuss it! - J.Z., 3.3.03.)
Anti-cartel-legislation was much used before the war. It never proved
very effective although not quite useless. A much simpler and more
effective means would be Free Banking, by which firms not belonging to a cartel
could be financed. Rittershausen, in his writings, proved that the real evil of
cartels was their exporting at low prices at the expense of inland consumers,
but that such a procedure would be impossible under the rule of Free Trade.
Free competition to
supply industry with capital: here we agree completely, although - - not quite
- - in the means to attain this aim. Liberty would, here, too, provide in a
short time the best system and discard the others, and, in demanding this
liberty, we agree also.
----------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
14.6.1950.
Dear Mr.
Meulen,
by kindness I received this week:
l.) 6 copies of the "Individualist", June issue,
2.) "City Press" of 2. June 50,
3.) "The Malthusian", Nr. 8, 1950,
4.) ''National News Letter", No. 721, 722, 723,
5.) "Truth" of 2. June 50, and 26. May 50,
6.) "Economist" of 20. 5.1950,
7.) Page 1041/1042 of the "Economist" of 13.5.50.
Thank you very much! The literature you send me would be
powder enough to blow up the whole social edifice; but it is rather a swamp
than an edifice and must not be blown up but drained.
In the "City
Press" I read with much interest the report of Mr. Edgar Wheeler, Common
Councilman for Lime Street, who just returned from Jordan and Israel. The Jews
care a people different from all others it seems. They created "Community
Centres" where "they work solely for the sake of their community and
receive no financial rewards at all". Voluntary Communism! But the thing
must be considered from the standpoint to which monetary science leads.
"Wherever the
money consists of "Exclusive Currency", there arise such Community
Centres, where men do not pay for what they consume, but get awarded
what they consume. The legal organisation of such communities differs according
to the culture, the general mentality and the degree of scarcity of money. In
antiquity the communities get the form of slave armies, such as Petronius
describes them in his "Banquet of Trimalchio"; but, besides them,
there existed economic spheres where people were able to pay and were
personally free.
The modern Russian "Combines" are economically the
same as the antique "familias", although the legal form is very
different. (The life of the concerned is not very different.)
The feudal system came into existence not only by wars but
also - - and probably mainly - - by the lack of currency after the fall of the
Roman Empire.
(J.Z.: That shortage existed already under the Roman Empire
and, previously, under the Roman Republic. But it got worse after the downfall,
new coins no longer being minted and trade becoming insecure, thus markets
absent and little money circulating. - J.Z., 4.3.03.)
Where currency was introduced, frequently the serfs bought
their personal liberty. (In Germany they revolted at many places where currency
was lacking and founded "Hansa-Staedte".)
Jews, a very cultured people, but unable to conceive
monetary liberty, created voluntary Community Centres, which will not produce
slavery because the members are free to leave the communities, if the chiefs
suppress them and steal from the common product more than is usual in such
organizations.
The influence of
currency supply on personal liberty is even now hardly investigated by
sociologists and - - as far as I know - - not recognised as a factor of first
importance, although it is.
Like all
modern "captains of industry", he judges the things not very
well although he sees them quite well. About Israel he asserts that it suffers
from "Inflation". But, not knowing exactly what inflation is, he does
not care about the most important factor of inflation, that is, the amount of
forced currency in the country and the degree to which it was increased. He
merely blames the workers in light metal industries earning L 17 a week, and
complains that a suit of cloth made from British cloth costs between L 50 and
60.
The world must now
face the fact, that there no longer exists an aristocracy of economics - - like
100 years before - -
(J.Z.: If it really existed, would we have gone through the
messes that did occur and still prevail? This "aristocracy" at least
partly caused them by not knowing and applying an economic program that was
clear and complete enough and well enough defended by them. - J.Z., 4.3.03.)
and that all what modern managers, editors, ministers,
bankers and such people say and mean (and do! - J.Z.) deserves the greatest
distrust, because they neither dispose of a suitable language to express
correct thoughts on economics nor a fit method to observe facts, and,
therefore, are generally in error about every detail. Reform plans cannot arise
from such a class.
(J.Z.: Often they talk and write as if all that would matter
are the interest rate and the exchange rate. They look at the economy with
narrow minds and through narrow slits. But they do know all so many details -
but have no rational and informed judgement about them. And their minds are
full of popular prejudices like a can of worms is full of worms. Enlightening
such people seems close to impossible. Anyhow, even if you are in touch with
them, they won't hold still and listen, or read, intelligently, patiently and
long enough. You might as well try to convert a religious fanatic. Enlightened
ideas and arguments and facts must become almost automatically offered, almost
everywhere, all the time, so easily, cheaply, convincingly, authoritatively and
almost unavoidably, so that those few, who still manage to ignore them, will no
longer be taken serious and listened and read but would rather be ridiculed or
ignored. The technology for this exists. But no one can, effectively enough,
handle it on his own, nor can he himself become a sufficiently enlightened and
respected "prophet" without the aid of many, who also extensively
utilise all available alternative media within their special interest spheres.
The supposed "free market of ideas", in print or speech, in mass
media or on the Internet, does not yet organise such an enlightenment
automation sufficiently and spontaneously, in a decentralised as well as
centralised way, but has just established another swamp of mutually opposing
ideas, opinions and systems, without arriving at tolerance for diverse actions
tolerantly practised and at methods for systematically and very publicly
refuting all untruths that are widely held to be true and are obstacles to
progress. In spite of automated search engines by the hundreds, if not
thousands, truths still get buried there as they did before, e.g. in books and
periodicals. - J.Z., 4.3.03.)
---------------
Most interesting is
the "Individualist". The numbers "57 s" and "67
s" a week, at the first page, second break, are striking. I communicated
them at once to friends. I think from the two numbers may be derived, at once,
the program point of Individualism: "" The State has no right to
intrude services which those concerned are able and ready to render
themselves." That they are able, they still do not know at
present. (That is the result of 300 years of political economy!)
-------------------
Chinese marriage
law reform. Experience in oriental
countries seems to have proved that a law which permits divorce by mutual
consent does, in practice, permit a man to divorce as he likes. The same
experience was made in Prussia before 1900, when the present civil law came
into operation. Before 1900 Prussia's civil law was the "Landrecht"
of 1794, a good law. It stated that slavery in Prussian territories was
unlawful and an addendum of 9. III.1857 prescribed:
"Par 1.) Sklaven werden von dem
Augenblick an, wo wie Preussisches Gebiet betreten, frei.
Das Eigentumsrecht des Herren ist von diesem Zeitpunkt an
erloschen."
(Slaves are free from the moment that they set foot on
Prussian soil. These property rights of their masters are void from that moment
on.)
In India the
situation of women after divorce is very bad. I am afraid that it will be bad
in China, too. Women without a manly "protection" by a husband, son
or father, are in China quite helpless. Moreover, they are very ignorant,
because the manners do not permit them to listen to the conversations of men.
Manners must become like those in Burma, where every woman may, at any
time, find a living by a little trade. The greatest part of Burma's petty trade
is done by women.
H. Fielding Hall, an English officer residing many years in
Burma, very well instructed and quite impartial, says in his excellent book:
"The Soul of a People", (first edition 1898, reprinted 1899, 1902,
1903, 1904, 1905 and, probably, later, too - - I possess the edition of 1905:
"It is strange, talking to Burmese girls, to see how much they know and
understand of the world about them."
You say:
"Evidently China has no need to encourage more births." - When I had
read it this, I went to the British Information Centre and looked there at the
Statesman's Yearbook, edition 1949. I found: China's population, all provinces:
457 390 000. Area: 3 380 692 square miles. That would be 135 per square mile.
The arable land is
said to be 192 060 square miles, which would be 1/17th of the area.
If the numbers are true, then there are certainly still possibilities to make
more land arable. Of course: without credit - - not on the basis of the
present-day paper money - - this cannot be done.
What China needs
is:
1.) Credit and a money standard which makes it economically
possible,
2.) better transportation facilities; but they are a matter
of credit as well,
3.) a better administration, by which men, property and
credit are safe.
I heard from
Chinese and read in books of travellers that only 1/7th of the land
which could be cultivated, is cultivated. The best book on the
subject was that of a German engineer, who visited the interior of China on
behalf of a German bank. He was to lock out for investment possibilities. I
forget his name, and the Prussian State Library, from which I borrowed the
book, is largely destroyed.
I am convinced, that China needs to encourage more
births. What Malthusians say about the matter deserves no
attention. Their logic is displayed in "The
Malthusian" of May 1950. There is said, that Ireland is now
one of the richest countries. (Which is certainly not true, but let up, for a
moment, assume it would be true.) The good economic situation is ascribed to
the diminution of the population from more than 8 millions to a little less
than 4 millions. But, in the years before the French Revolution, Ireland had
exactly the same population as now and it was one of the poorest countries
in the world. (Page 1 of the Malthusian.) From The Malthusian's own text it
must be concluded, that the number of men in a territory has not much to do
with their standard of living. Ireland will always be a good example for that
statement, although she is far from being such a rich country as the
"Malthusian" and its informant - - M. Colin Clark - - believe.
You should write an
article: China's problems to be solved by Free Banking and not by
Malthusianism. I am convinced that it would arouse attention.
------------------
Some mathematicians
suggested, that the population question may be considered from a standpoint
very different from that of Malthus. "Great men", such as great
scientists, great poets, great legislators, etc. are only possible in a large
population. Suppose - - they said - - there are 6 qualities required to form a
good legislator. Suppose further, that, in the average, one man among 10
possesses such qualities, then it is probable, that in a population of 1
million adult men just one man possesses the six required qualities.
For a money
reformer, who deserves that name, there are, - - I think - - at last 10
qualities (and conditions - J.Z.) necessary, and it would be optimistic to
believe that one man among 10 possesses one of them.
These qualities
are:
1.) a good education,
2.) a real taste for the gifts of a good education.
(I know women -
- and you will know such women too - - whose parents spent much money for their
education, but
at the very day when they get married, they jettisoned all that and displayed their true nature,
which was no
better than that of one of the dirty, crying and stupefied women who, on pay
days, fill the
saloons.)
3.) the gift to speak convincingly,
4.) the gift to write convincingly,
5.) a profession which corresponds to his education,
6.) plenty of time to study the matter,
7.) still more time to work out o good plan,
8.) an income - - even if it be small - - which enables him
not to think the whole day about the necessities of life,
9.) a milieu that is free from noise at least some hours a
day,
10.) being well married - - or not married - - so that he
must not hear, the whole day, lectures about household matters and reproaches,
that he did not attain what other men achieved, such as the big grocer
opposite, etc.
An easy calculation
shows, that, probably, among 1000 million of adult men there is one
money reformer, who deserves that name.
Therefore, to get
more than one money reformer in each generation, that means, in this
case, one who is able to continue the propaganda for Free Banking, we went
births, births and many more births. (Yes!)
----------------
Russian gold. You say: "… conversion ... into gold at
a fixed paper price, which is essential to a gold standard."
There are several
gold standards. Yours is the Ricardo type. If that type would have been the
single possible one, then the Romans, at
the time of the emperors and, especially, after Constantine, were not on a gold
standard. They did not possess banks if issue, whose paper could be
converted into gold. The same is true for the kingdom of Naples, whose standard
were gold coins, which had a fixed price expressed in Dukats, the latter
being a mere money of account (in Naples). Bremen was on the same kind
of standard, the "Gold-Thaler" being a mere money of account. But all
gold coins in use had their fixed price in this "Gold-Thaler", so
that if - - say - - Prussia coined "Friedriechsd'or", she supplied -
- much against her desire - - Bremen with money. But all economists agree that
Imperial Rome, Bremen and several Italian States were on a gold standard. I
think that, in this case the consensus sapienti is of some weight.
I subsume the
Greene-Tucker-System also under the notion "gold standard", although
it excludes the conversion into gold on demand of the note-bearer. (Except on
the free gold market! - J.Z., 4.3.03.) The same applies to the system of the
"Four Bills".
The German language
possessed for a long time, for standards like that of Bremen, the word
"Rechen-Waehrung".
(Gold-accounting or gold-clearing standard. - J.Z.) It
seems, that the word was first used for the standard of the Hamburg Giro-Bank
(not note-issuing) whose money unit, the "Mark Banko", was not
coined. 59 1/2 Mark Banko were 1 pound (weight) of fine silver. (Which
"pound" was it? There were at least a dozen different ones! - J.Z.)
When the Reichsmark was introduced, this relation was fixed: 1 Mark Banko =
1.50 Reichsmark. A second relation, equal to the other, was: 27 3/4 Mark Banko
= 1 Mark of Cologne (Koelnische Mark =
233.8548 grams fine silver. The circulating Hamburg money contained less silver
(of course - - it was administered by a State, the Mark Banko by
merchants), so that 34 1/2 Mark Courant were equal to 1 Koelnische Mark.
The old Mark Banko
was in wide use in Northern Europe until 1870.
It seems modern
English does not possess a term equal to the German "Gold-Rechen-Waehrung"
or "Silber- Rechen-Waehrung". (Gold-clearing or gold-accounting
standard. - J.Z.)
You know that I
judge the real standard of a country from the unit in which prices are
fixed. In the last period of the large German inflation, most prices were fixed
in gold, although there circulated no gold coins and the circulating paper
money was not convertible. But the price of gold at the Exchange was daily
published in the journals. Insofar it can be said, that great parts of Germany
were on a gold standard already long before the stabilisation at 19. XI. 1923.
--------------------
What concerns the
shouts and groans from Russian barracks, you heard that, that - - I think - -
from Frankfurt / Main. (Russian barracks at Frankfurt/M? Rather: Frankfurt/Oder!
- J.Z.) The people, who told you, may have been well informed. But if such
groans were heard in barracks near Berlin, people would have supposed that
there German women were violated. (The rapes of them by Russian soldiers,
usually not the frontline ones, were not forgotten yet. - J.Z., 4.3.03.)
Russian soldiers
are often to be seen in the Eastern sector of Berlin, especially in the
evening, when their service is over. They do - - I heard - - much service, and
their education seems to be the best possible. (Certainly not on all individual
rights and liberties, including the economic ones! - J.Z., 4.3.03.) The first
what the Russian soldiers learn is shooting. The first what German
soldiers learnt was saluting their superiors.
-------------------
I hope to write in
one of my next letters something about the papers you were so kind to send me.
------------------
Very
faithfully Yours signed: U. v. Beckerath.
____________________________________________________________________________________________
16.6.1950.
Dear Mr.
Meulen,
as "Printed Matter, I send you
I.) Nr. 50 of the "Berliner Wirtschaftsblatt". the
Report of the Bausophon-Company and its
Apparatus for persons hard of hearing will perhaps interest you;
II.) a clipping from the "Tagesspiegel" of 15.6.,
containing
a.) an appeal to
the West-Berlin population from the Committee of Inquiry of anti-dictatorship
lawyers of (? I
suppose they
were from the "Ostzone" and had escaped! - J.Z.) the Eastern Zone,
concerning Wilhelm
Zaisser, a chief of
the Eastern political police.
b.) a report from
the Einstein School at Potsdam, from which may be seen that the Eastern Youth
is less
submissive
than the older generation.
The mentioned
Committee is much feared in the East. It is believed that, perhaps, one
day the Russians will leave Germany. If that happens, then some hours later
certain chiefs of the SED (Sozialistische Einheitspartei Deutschlands) will
hang at those trees, which are not yet cut down by the Russians.
(J.Z.: Another typical exaggeration by B. Although many were
cut down, during the Nazi time and post-war years, forests still existed there.
Satire! - J.Z.) The first who will hang, will be those whose names are publicly
exposed, like that of Mr. Zaisser.
-----------------------
If the Allies
should leave Germany one day, then there must be appointed an authority by the
UN, with absolute power to declare void all measure against humanity executed
by German authorities.
What induces me to this remark is the fact, that daily many
dozen refugees are sent back to the Eastern Zone. The real cause is, that the
West has no work for them. (A motive, or an opinion, without a real cause. Jobs
are there - but under monetary despotism
they cannot be freely financed. - J.Z., 4.3.03.) But sending back fugitives to
the Eastern Zone is not better than murdering them, what the authorities - - of
course - - know as well as everybody knows it.
(J.Z.: Although many "politicals" disappeared in
Eastern concentration camps and prisons, tortured to death or outright shot,
like some involuntarily returned deserters from the Red Army, I do not believe
that of the ten-thousands of refugees from the Eastern Zone, who were
involuntarily returned to it - many returned voluntarily, because they were
kept like animals, penned in, in refugee camps in the West, not allowed to look
for work or accommodation - many or most were actually murdered, although,
certainly, none of them were safe, before they had fled or after their
involuntary return. All will have suffered somewhat from having been returned,
e.g. loss of their accommodation, property and jobs. But not all or most were
murdered. News of that could not have been kept secret. They would have leaked
out - and didn't! One should not malign even the devil. Slaves are owned and
exploited. So are forced labourers. They are not always killed. B., too, made
some rhetorical points. After all, this is not an objective article, but just a
letter to a friend. - J.Z., 4.3.03.)
There cannot be a
difficulty to define a measure as inhuman. There are measures which the
officials themselves would call inhuman
- if they were the victims.
(J.Z.: Maybe, all of the politicians, who voted for the
present concentration camps in Australia, for illegal immigrants, will, at some
time in the future, if they have not yet died a natural death by then, have to
spend some years, or at least some weeks, in these camps, too, together with
all the loudmouths, who publicly demanded such camps for these refugees. They
might be forced to study why this internment was altogether wrong and
unnecessary. Or, a genuine courts of justice might come to decide that they
ought to be deported as undesirables. - J.Z., 4.3.03.)
------------------
Did you read in the
"Malthusian", May-edition, the article of Edwin Muller, "How to
Lessen World Hunger"?
The article is
rather anti-Malthusian. It explains how in India and in China the absolute lack
of capital prevents the peasants from acquiring even the most primitive tools.
What the reporter, Dodd, did not see, that was: neither the paper rupee nor the paper-Yüan is
an economically possible basis of credit. Credits on another basis are prohibited, just like in Europe
credits on another basis than the government-administered paper-money are
prohibited.
That India does not
lack capital, is proven by the good market for Indian loans in India at
the time, when the rupee was a gold rupee or - - earlier - - a silver rupee.
The Indian buyers of the loans were content with 6 % p.a. interest, although
the usual interest for agricultural loans still is - - since many hundred years
- - 5 % per month.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 17.
6. 1950.
Dear Mr.
Meulen,
A. S. Parkes, F.R.S. says in the May-issue of the
"Malthusian":
"To those who believe that pressure of population is,
ultimately the chief cause of war, the activities off the administrators and
the medical scientist must at best seem rather double-edged." (He speaks
of the Royal Society of Tropical Medicine and Hygiene.)
Do you know one war in the last 3,000 years whose
ultimate chief cause was population pressure, these words used in the sense of
Malthusians???? And what concerns Africa: Is it not well known; that 100 years
ago, when the population was much was much smaller than 1/2 of the present, the
natives were in continuous warfare? Will
Parker assert, that these wars ameliorated the support of the
inhabitants?
F.R.S., that means, for all I know: Fellow of the Royal
Society. These fellows are all very well educated, learned and trained. And
yet: quite obviously, Parkes did not ask himself such questions.
-----------------
Among my burned
books was the "Insurance Cyclopedia" of Walker, a very good
and valuable work in several volumes. Inter alia, it contained a set of all famines
known so far. The most terrible famines occurred at the time of
Charles "the Great" and his successors. That one
of their causes was lack of transport facilities is clear. That overpopulation was not one of the
causes is here clear, too. The famines were at that time at intervals of
about 10 years, in the average.
-----------------
Buffon said:
All empirical quantities of matter and force are limited. Forces of
unlimited power do not exist.
Really it is now - - as a consequence of Einstein's Theory -
Buffon being forgotten - - admitted, that e.g., the dimensions of all plants
and animals are limited by their constitution and that there is a connection
between their size, their lifetime and their constitution. Connected with all
other properties is also the normal number of the beings. As long, as it
is not attained, there is a strong tendency to replace the dead at once by
births. (Quite striking is the increase of births after wars and famines.) If
the normal number is attained, the sexual desire diminishes.
-----------------------
The USA and Western
Europe are still equal in numbers to Russia. But the Russian Army
increases every year by one milion of trained men and that simply by the
Anti-Malthusianism of the Russians. The West needs now the same degree of
Anti-Malthusianism and the following technical conditions:
1.) Free trade,
2.) FREE BANKING,
3.) a money standard fit for credit,
4.) a better military organisation and
5.) more interest for the own affairs.
Free Banking
versus Malthus, and hammering this slogan into the heads, that should be our
aims".
---------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
21. 6. 1950.
Dear Mr.
Meulen, (Desertion - J.Z.)
in the Article "Turkestan", Meyer's
Konversations-Lexikon, edition 1889, I find this passage: (Desertion - J.Z.)
"Im Winter
1876 - 1877 hielten die Chinesen Urumtschi, Jakub Beg hielt die kleine Festung
Dawantschi besetzt. Die Truppen Jakub's waren in moralischer Beziehung merklich
schlechter geworden. Die Desertation nahm ueberhand. Selbst auf die bis dahin
ergebensten Diener konnte Jakub nicht mehr rechnen. Die Ueberlaeufer wurden
von den Chinesen sehr freundlich aufgenommen. Am 3. April 1877 rueckten die
Chinesen aus Urumtschi gegen Dawantschi aus. Nach dreitaegiger, schwacher
Verteidigung verfuhr der chinesische Oberbefehlshaber Lu Tscha darin sehr
geschickt, dass er sie zum Teil wieder frei liess und ihnen versicherte, dass
er lediglich Krieg mit Jakub Beg fuehre. Um die Verbreitung dieser Nachrichten
zu verhindern, wurde ein grosser Teil der zurueckgekehrten Gefangenen auf das
Geheiss des Badaulet ermordet. Diese Massregel erregte in ganz Kaschgarien den
bittersten Hass gegen den Khan. etc." (Badaulet = the fortunate, was one
of the titles of Jakub Beg.)
I try to translate
the text:
"In the Winter
of 1876/1877 the Chinese held Urumtschi, while Jukub Beg occupied the small fortress
Dawantschi. The morale of the troops of Jakub had become noticeably worse.
Desertion became excessive. Jakub could not even count any longer even upon his
so far most loyal servants. The deserters were very kindly received by the Chinese. On the 3rd of
April 1877, the Chinese left Urumtschi and besieged Dawantschi. After a not
very strong defence, lasting three days, the fortress surrendered, also
Kunja-Turfan. The treatment of the prisoners by the Chinese commander-in-chief,
Lu Tscha, was very skilful, in that a released a part of them. He assured them,
that he was at war only with Jakub Beg. In order to avoid the spread of these
news, a large part of the returned prisoners was murdered upon an order of the
Badaulet. This measure provoked the most bitter hatred in the whole of the
Kaschgaria against the Khan. etc."
------------------
I take it from this
description that the military technique, employed some months ago by Mao, seems
to be an old practice in China. Insofar, it seemed to me important. The article
refers to the English translation of Kuropatkin's "Kashgaria",
London, 1883.
-------------------
Kong Fu Tse - -
about 2,500 years ago - - reports a similar kind of warfare by the old Chinese
king Wen.
------------------
A reprint of the
relevant passages from Kuropatkin or another author would be worthwhile for its
anti-militarist
interest.
I am still
convinced, that the methods of Mao and of Lu Tscha are apt to finish every war
in favour of the leader, who possesses courage and prudence enough to apply
them.
But the soldiers must be able to be confident, that their
country will not be worse governed by the new ruler than by the former one, who
forced them to enter into his army.
---------------
Very
faithfully Yours - signed : U. v. Beckerath.
____________________________________________________________________________________________
6. 7.
1950. Your letter of 4. cr., received
today.
Dear Mr.
Meulen,
here enclosed a letter which I wrote to Zander. (I do not
have it on hand at present. - J.Z., 4.3.03.) I had not the time to translate
it.
In the district
Neukoeln, some kilometres from Friedenau, 13 schools are closed because they
are without water. During the first blockade the Russians did not block the
water.
------------------
That your health
improved so pleasantly is one of the very few good news that I received these
days. I congratulate you and more the individualistic movement in England,
which is now based on your health.
------------------
"Truth". Every paper you were so kind to send
me is still at hand, except those burnt in 1943. I never destroy a paper or a
clipping which you sent me. The last two copies were of 2. VI. and of
26. V. 1950. These copies and the others of this year, which you sent me, did
not contain a review of a book By E. Marshall Tardy on fishing. If you meant a
copy you sent during the last days, I will certainly receive it this week. Then
you will get the said cut at once.
-----------------
Refugees from
the Eastern Zone. I read that in the "Bundesrepublik" a new law
is prepared to diminish the number of refugees sent back the East. Today I
found an article in the "Tagesspiegel" of 10.6. 50, which I enclose
and where the situation of the refugees is described who come to Berlin.
The treatment of
the refugees has confirmed my opinion that the West is not yet in a mental
state to govern itself. A supreme government to prevent obvious cruelties is
necessary. At present, only the UNO can produce such a government. I think a
High Commissioner of the UNO would be accepted by the population without much
resistance.
Would the Editor of
the "Times" have sent your letter of 23. 6. to the British High
Commissioner and could it have, in this way, induced the new laws in favour of
the refugees?????????
----------------
UNO. You
say: "… as witnesses the Socialists in Germany and England in 1914."
If some time before
1914 England would have accepted war laws as I proposed them in my letter to
Dr. Picard of 6.5.50. (You get an attempt of a translation.), then not the
Socialists alone but very many soldiers from all parties would have come from
the German front. Such an action has nothing to do with military strikes as Hervé
tried to prepare them in his book "Leur patrie", and as you think in
your letter. I agree, that the soldiers would not have come in August
1914. But from very numerous observations of my own, in the years
1916-1918, I know that the situation was very different in these years.
----------------
Chinese marriage
laws. What concerns the principle
you are right. But you know the obstacles to realise the principles as well as
I know them.
----------------
Malthusianism. You say: "… surely you would not
advocate larger populations before Free Banking is established, except as a
military measure."
That is not
my opinion.
I advocate larger populations for all cases where
1.) the peasants find difficulties in selling their
product. Those difficulties make it probable that not scarcotu of
victuals is the
cause of hunger but difficulty in selling is.
2.) the production of victuals could easily be increased by
capital and credit, especially in the cses where capital and credit are waiting
to be applied but cannot be, for the well-known reasons now existing in most
countries of the world and most of all in the Far East.
All Malthusians' opinion
(but I hope: not yours) is:
If by ignorance or indifference or superstitions - -
economic and others - - men are prevented, by governments or by their own faults, from producing the
victuals that intelligent, active and well governed men will produce, then - - of
course - - the means that mostly suggests itself is birth control to
overcome difficulties. The some means is mostly suggesting itself when, by bad
laws or extraordinary stupidity of the people itself, the victuals ready for
exchanges are not exchanged, although all technical possibilities for this are
given.
Birth control,
under conditions here indicated, will have no better effect than the
processions in Catholic countries or the sacrificing of young girls to the holy
crocodiles of the Ganges in tines of distress. The very contrary is the case. If
people are convinced, that by birth control the economic conditions can be
improved, then they are inclined to neglect all other means, also those
really at hand and in their power, and they demand more birth control
when experience teaches them that the former birth control remained without
effect.
Malthusians would continue to demand birth control even if
England would be reduced, by former birth control measures, to the population
at the time of William the Conqueror and the misery would increase, as a
natural consequence of such a small population.
The larger the
population is, the greater is the probability, that among this population some
men will live, who are convinced that burning victuals is a bad measure and
excluding victuals, by self-blockades, called "protective duties", is
no better measure to prevent hunger. The probability is also given, that in a
large population men will be born who conceive: Free Banking procures more mean
of payment than the procedures of the blockheads now ruling the world's Central
Banks.
I advocate the
contrary of birth control as one of the most effective means for social and
economic betterment.
The mentality of
birth control originated in the dark times when priests of Cybele castrated
themselves in honour of their goddess. This mentality was introduced into
Christendom and from there it came by the priest Malthus to us.
Malthusianism and Christian faith are in very good harmony. As long as that
faith is taken serious, Malthusianism will be taken serious, too. But we
are no Christians.
----------------
Some months ago I
bought a book for 50 Pfennig: "Durch Werkstaetten und Gassen dreier
Erdteile", by Edmund Kleinschmitt, 1928. The book contains contributions
to the seeming overpopulation in Japan. These contributions are all the
more interesting as the same economic conditions, as here described, prevail
also in the largest part of China, Indo-China and Korea. Let me reproduce here
the German text, page 123.
"Die Haelfte
aller Farmer in Japan sind Paechter. Theoretisch koennen etwa noch 2 Millionen Hektar
Land kultiviert werden, davon etwa 0.4 Millionen Hektar fuer Reis. (1 Hektar = 2.47 acres)
Auf diesem Gebiet koennte der Reisbedarf von 35 Millionen
Menschen mehr befriedigt werden. ….
"Es gibt in
Japan 5,5 Millionen Bauernfamilien: davon haben 3.7 Millionen weniger als je 1
Hektar Land. Die Pacht fuer Reisland ist hoch. Sie wird in natura bezahlt und
betrug nach der Schaetzung der Hypothekenbank von Japan im Maerz 1927 fuer
mittleres Reisland 10,2 koku (1 koku = 6 Hektoliter.) (From Hering's Conversion
tables I see 1 koku = 4.96 bushels.)
"Zieht man in
Erwaegung, dass die durchschnittliche Produktion im Jahre 1926 nur 18.9 koku
auf 1 Hektar ausmachte, so ergibt sich daraus, dass die Pacht mehr als 50% der
Ernte betraegt. (Und danach kommen noch die Steuern und unvermeidliche
Unkosten! - J.Z., 4.3.03.)
"Im
Durchschnitt rechnet man fuer die Ernaehrung eines Japaners, dessen
Hauptnahrung Reis ausmacht, 1 bis 1.2 koku das Jahr.
Stellen wir uns eine Paechterfamilie mit vier Koepfen vor,
die 1/2 Hektar Reisland besitzt, darauf 9 1/2 koku erntet und davon rund 5 koku
an den Landeigentuemer abgeben muss, so bleiben ihr etwa mehr als 4 koku, die
gerade zur reinen Ernaehrung der Familie notwendig sind. Diese Ueberlegung
macht deutlich, warum in Japan das Elend der Landbevoelkerung und insbesondere
der kleinen Paechterfamilien sehr viel mehr im Vordergrund steht als die
wirtschaftliche Lage der industriellen Arbeiterschaft, Die hier angefuehrten
Zahlen sind dem "Japanischen Jahrbuch von 1928" entnommen."
(J.Z. - translation: Half of all farmers in Japan are
lease-holders. Theoretically about another 2 Million Hectares could be
cultivated, and from these about 0.4 Millions for rice. [1 Hectare = 2.47
acres.] On this land the rice requirements for another 35 million people could
be satisfied. …
There are in Japan
5.5 million peasant families. Of these 3.7 million have less than 1-hectare
land each. The land for rice land is high. It is paid in kind, in rice and
amounted according to the Mortgage Bank of Japan in March 1927 for average rice
land to 10. 2 koku (1 koku = 1.6 hecto litres.) (From Hering's Conversion
tables I see: 1 koku = 4.96 bushels.)
If one takes into
consideration, that the average rice production in the year 1926 came only to
18.9 koku per hectare, then it follows from this, that the rent came to more
than 50 % of the harvest.
In the average one
reckons that the food for one Japanese, who mainly eats rice, comes to 1 to 1.2
koku p.a. If we suppose a peasant family of 4, who works on 1/2 hectare of rice
land, harvests 9 1/2 koku from it and has from this to deliver to the landlord
about 5 koku, then only a bit more than 4 koku would remain to just nourish
that family. This consideration makes clear why in Japan the misery of the small
lease holders is much more outstanding than the economic position of industrial
workers. The figures here cited are taken from the "Japanese Yearbook of
1928.")
------------------
From the here
reported facts it can be seen that reducing Japan's population to - say - 1
million, would not improve the tenants' situation, if the old system of rent is
continued. If the peasant is compelled to cede all production, which is not
necessary to maintain his producing power, to the landowner, then density of
the population may be as in the Sahara: the peasant remains as poor and as
hungry as he is and was.
In Korea and in China the Communists say to the peasants:
Keep half of the rent and give us the other half, and then we will slay the
landowner! That's a program and easy to be realized.
(J.Z.: Somewhere else B. said that in China they promised to
reduce the rent to 25 %, from a previous up to 75 % and, naturally, they would
have kept silent about their collectivisation and mass murder intentions. Where
can one get the true figures, that of the promises and that of the result of
these promises? That there was no great love lost between the tenants and the
landlords seems rather obvious. But a peaceful and rightful land-reform program
seems to have been absent there as well. It would also have required sufficient
knowledge of monetary and financial freedom. - J.Z., 5.3.03.)
The program is also convincing; it's in itself a propaganda.
Concerning pity for the to be slain landowners, the peasants say: We will apply
to them the same kind of pity - which they showed to us, when we could not pay
our rent.
But in the next issue of "The Malthusian" will be
printed and "proven" that the misery of Japan can only be removed by
birth control, and thousands of - - in other spheres - - intelligent Englishmen
will say: "How is it pos-sible to overlook such convincing
proofs!!"
-----------------------
Much honour for me
is in your letter of 4.7.1950 to "The Malthusian". What concern the
"Lebensraum" of Germany, the
Germans and all their governments (not only that of the Nazis) would not and
therefore could not see, that what the Germans needed was Free Trade in
victuals. But the government stood "between two chairs". Free Trade
in victuals meant a revolt of the peasants and "protective duties" on
food were very unwillingly accepted by the workers. What to do? Very simply:
They said both: We ("we!!") must conquer the Ukraine, Poland,
etc. The conquered land will be distributed to German peasants. There the
peasants will produce the victuals needed! That pleased all too many of the
peasants and too many workers. Until the moment came, when Hitler mobilised.
(Some people really believe in their nonsense! - J.Z., 5.3.03.) Now the
people conceived what before they were mentally too lazy to conceive. The
terror was general. The mobilisation took place in general consternation and
silence.
Very different from the mobilisation in 1914.
But I must admit
that from 1933 to 1939 the slogan with the "Lebensraum" was a very
good propaganda for Nazism.
To get a full
insight into the real situation, one must read the agrarian papers from 1930
(when the crisis began) to
1933. From every part of the country wore reported facts like: "The butt49
could not be sold. It was used as axle grease." And that was no fable. I
got very good information on that. "Wheat could not be sold. It must be
fed to swine."
I dare to say to a peasant: "What a good luck for your,
that by the Versailles Treaty the province Posen was yielded to Poland!
Posen was an "Ueberschussgebiet" (area of agricultural surplusses -
J.Z.) of the first rank!" He looked very stupified and did not know what
to answer. But since Mathus did not distinguish a distress caused by too
much food (unsold! - J.Z.) from a distress by a lack of victuals,
the Germans seem excused.
----------------
Gold standard. From Jevons' "Money" and
other books (all burnt) I learnt, that English economists admitted the
possibility of a gold standard also for countries without paper money. The
meaning of the expression "gold standard" has been changed by the
writers of the last decades. That's all.
----------------
Capital in India.
I think the facts must be recognised, because they can today be still
and easily verified:
1.) The interest in Indian villages is, usually, 5 % per
month.
2.) Railway bonds, yielding 6 % or so, p.a., were bought for large amounts by
rich Indians. Already the first issue of Indian railway bonds was bought, for a
large amount by Indians. That may have taken place 70 or 80 years ago.
Even if the real cause could not be detected for which rich
Indians preferred the 6 % (or 5%) p a. of Indian railway bonds to the 5 %
monthly to be got at Indian villages, the fact must be acknowledged.
(J.Z.: Lending to impoverished peasants, for whom sales of
their surpluses were not assured, was a risky business, just like lending money
to gamblers. The interest rate corresponded to that risk. - That is one
hypothesis. Brahmins may also have been too proud to lend money to low class
Indians. That's another hypothesis. Most Indians rather kept gold and silver as
jewellery than get it coined for circulation, thus making even metallic
currency unnecessarily scarce. That's a third hypothesis. Someone will bother
to dig for the truth on the matter and publish it, the sooner the better. -
J.Z., 5.3.03.)
In every large
European town, London as well as Berlin and Paris, there are money lenders at
the covered markets, who lend money to the retailing men and women. There is -
- to give an example - - a little dealer, who could easily re-sell apples,
which he buys in the morning for 10 marks, for 20 marks, so that he wins 10
marks and the purchase price of 10 marks, together 20 marks. But he has not got
10 marks in the morning, a the wholesale market. He has nothing, probably
because he wasted all in drinking the night before. The money lender lends him
10 marks on the condition that he gets back 11 marks the next day. Securities
are not usual. It is very seldom that the money lender is not repaid. The
interest is in this case 10 % daily. If one possesses 1,000 marks in cash and knows
the people and the trade (very essential), he may get a good income and
tax-free, too. And yet: if the same man wins - - say - - by an inheritance
100,000 marks, he is content with 6 % or so. Why??? You know it. (! or ? - the
edge is cut off! - I assume that it is because a bit of work, at least
experience and time spent at that place is involved and one has to get up early
for it, as well. It is not necessarily a pleasant or inherently attractive job.
- J.Z., 5.3.03.)
Let me add, that
the market women do not consider the money lenders as usurers. Indeed, the
interest they pay is quite negligible for them and, in my example, it comes
only to 1/10th of the earnings.
-----------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
7. 7.
1950. Your letter of 6.6.50.
Dear Mr.
Meulen,
what you say about my letter to Dr. Picard is quite right.
But what in my letter is contradictory to the principles you state in your
letter? My proposition holds true for every country, small or great, for Monaco
and for the USA.
And what you say in
your letter of 4. 7., of the usual war proclamations, the parades, and the
music bands, is certainly true, but only remains true until the first
grenade shell whistles. You know that sound from your own hearing. If, at this
moment, there is not a strong and sincerely believed principle behind the
orders that sent the men to battle, the men ask: Where is the chance to escape?
It is not cowardice
which lets the men speak so, but the unwillingness to be misused.
Yesterday I read
some pages of the History of James II of England. He was at last left by his
soldiers. You know the details as well as I. They prove that the possibility
for bad governments to misuse their soldiers is not limited to today but existed already some hundred years
ago. Here are characteristics of human nature which moralists do not consider
and historians seldom see in the right light. But, they do exist.
I read that the
very prudent resolution was taken to let the Allied fight under the UN flag.
Indeed: If Trygve Lie possesses energy and sees the things as they are, he can
change the world completely. But he must publish a proclamation as I devised it
in my letter to Dr. Picard.
In this case Trygve
Lie must also publish a program about the land-question and the peasant
question in the Far East. If he does not, then the 400 million subjects of Mao
will be easily convinced that the Americans fight merely to restore the old
land system and Mao will win.
(J.Z.: From an Australian soldier, who had served on the UN
side in the Korean war, I heard that the attacking Chinese soldiers were as
unwilling to fight, that they had to be drugged before their attack, so much
so, that they were just able and willing to stumble ahead, firing wildly, but
not aiming their guns and not seeing what was happening right and left before
them. Thus some Australian soldiers felt safe enough to stand up and shoot them,
one by one, like clay pigeons! Maybe, that that was a rare case. Maybe it was
typical. Well known is, that before many a battle a tot of rum or other liquor
was issued to the men, if available. On the other hand, there were reports
after the Korean war, that up to 9/10th of the UN soldiers, when
attacked, just ducked into their fox holes and fired wildly into the air.
Whatever aimed shooting against the attackers was done, was done by the
remaining 10%. Thus the soldiers on this side, too, were certainly not, in most
cases, quite willing war heroes. But when it comes to the situation of: Shoot
or be shot, then, most of them, will shoot. And once some of their friends have
been killed or they have seen some atrocities, committed against POW's, then
many of them do begin to fight with a will. - J.Z., 5.3.03.)
What was the ultimate cause that Napoleon got so obedient
soldiers? The soldiers, for the greatest part, were sons of peasants and the
Royal Family had proclaimed: The first thing we do, when we return, is to
restore the old feudal system. The soldiers defended their personal property.
Concerning Tshiang
Kai Shek: I think that he will, in the next weeks, offer his little army to Mao
and fight at the head of that army against the Americans. In this case
his soldiers will follow him with enthusiasm, which, at the moment, they are
certainly far from doing.
--------------------
A journal which
would be willing to publish articles about such subjects!!
---------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
9. 7. 1950.
Dear Mr.
Meulen,
today I received the packet of newspapers announced in your
letter of 4.7.50.
1.) Truth of
16.6.1950. I return the copy today and you will see from it, that it did not
contain a review of a book by E. Marshall Hardy on fishing. I looked for
the review in every copy of the other papers in your packet. It is not
contained in any of them. If you do not want the copy of 16.6.1150, I
take the liberty to beg you to return it to me occasionally.
2.) Economist of 10.6.50.
3.) Statesman and Nation of 17.6.50. You marked at page 677
a quotation from the "Badische Neueste Nachrichten" (CDU =
Christliche Demokratische Union) where this paper asserts that in the year 1949
about 100,000 skilled workers, scientists and artists went to the Soviet Zone,
while the people from the continuous flow of refugees from the Eastern Zone are
described as "mostly unwilling or unable to work".
I sent the copy to
Rittershausen, who certainly possesses better information than I can get in
this Abdera. He will write to you. I think it impossible to get a statistics
from which may be derived that "100,000 skilled workers, scientists and
artists" left the Western Zones and entered the Eastern. How would the
skilfulness of the persons be statistically stated? The number
"100,000" seems "round" and reminds a little of the numbers
in antique or biblical reports. I think this "information" comes
immediately (rather, indirectly! - J.Z.) from some Soviet office.
On the other hand,
the number of valuable immigrants to the Eastern Zone should not be
underestimated. It is an immense moral and economic asset for the Soviets that
they are willing and able to provide employment for skilled workers, for
scientists and artists, provided they are not anti-communists. Many more than
90 % of such people do not care about politics and are quite ready not only to
remain politically neutral but to join the SED (Sozialistische Einheitspartei
Deutschlands - - the ruling party) if the get a good job and enough to eat.
What concerns science, the Russians really hold it in high esteem, treat
scientists and scientific institutions well and my impression is: much
better than the West does. Most appreciated is medicine. I
heard that the "Charité" (founded by Frederic II. in Berlin) still preserves
its old reputation as one of the best medical institutions and hospitals in the
world. The same applies for institutions for agricultural research. Here I know
something from personal observation.
The reproach that
the refugees are mostly unwilling or unable to work is unjust.
(J.Z.: Not quite: At least for a period is was the policy of
the East German regime to grant permission to emigrate to West Germany only
to persons to sick or old to work and to induce these people to emigrate! They
wanted thus to over-burden the social security system of the West, while easing
this burden for themselves. - J.Z., 5.3.03.)
That the refugees
are unwilling to accept work which destroys their professional abilities is
clear. A watchmaker, who must work in the ruins and sort the bricks (which
playing children often jumble together after 17 o'clock, when the work in the
ruins ceases), gets many little wounds on his hands, so that he is hardly able
to do a watchmaker's work later. From time to time a journal writes some lines
about such conditions, but nobody
changes them.
4.)"Individualism" of June 1950. Interesting insofar as
a.) it may be seen
from the journal that there is much demand for Individualism in certain English
circles,
b.) that there are very
few persons in England able to satisfy this demand.
The editors should
read the "Individualist", so that they may come to know what real
individualism means. Obviously, they
don't.
5.) "The Free Trader" of May-June 1950.
Are they 100 % Free
Traders? As long as they don't advocate Free Trade in means of payment I do not
believe it.
100 years ago Free Trade was one of the most powerful
movements in the world, Now the Free Trader in unable to issue its paper
monthly and is happy to issue for May and June one edition.
6.) "analysis" of May 1950. A very good paper.
Since the title is "analysis" and not "synthesis", one must
not blame it for the lack of "synthesis". It does not promise more
than it keeps.
Sometimes, "analysis" 's analysis
does not analyse the problems as thoroughly as analysts should do. At page a 3
"analysis" says:
"Modern
economists make a great ado about 'effective demand'. They are, however,
somewhat hazy in defining this magic phrase. To the old-fashioned mind it means
the possession of goods or services for which other goods or services will be
offered in exchange; that is, if A has shoes and B has onions, and each wants
what the other has, both are possessed of
'effective demand'. That, say the modernists, is an over-simplification.
To them 'effective demand' is the possession of something produced by a
government printing press, preferably of a green hue."
Modern economists,
although lacking judgement to a much higher degree than economists 100
years ago (one may compare Wilson, one of the founders of the
"banking theory" to Keynes, point for point) are not as block-headed
as "analysis" represents them here.
Obviously, the
possession of shoes and onions is not sufficient to exchange them with that
ease which is required in the day-to-day economy. Consequently, required is:
1.) A market price by which the two owners know, at once:
under such and such conditions, the exchange relations are such and such. Then
they can judge what are the special circumstances differing from these of the
usual market conditions. Generally, there are none or merely negligible ones,
so that the exchange relation is given.
2.) Considered the (practical not theoretical) impossibility
that the two owners meet one another, there must be at hand:
a.) a mediator,
that is a merchant,
b.) a means of
payment, by which the merchant is able to buy from the one owner and to sell to
the other.
In a commonwealth
where the means of payment are monopolised, there the paper money produced by
the government printing press is the only practically possible.
But all that is not
yet sufficient. If both owners want shoes or onions respectively, then it is
not yet certain, that both of them want these things exactly at the same time.
It may very well be that one desiring new shoes, defers their purchase for reasons very well known to
Germans in general and Berliners especially.
(J.Z.: I grew up, mostly in Berlin, during the war and the
post-war years - and I had to wear mostly hand-me-downs or shoes that were
repaired, over and over again, as long as possible. A visit to a shoe shop, for
new shoes, was a very rare occasion. - J.Z., 5.3.03.)
The non-owner may apply "the golden rule of
technique" which is: "For this time it will still do."
(This golden rule not seldom fails, which in the case of shoes was and
is experienced in Germany in general and in Berlin especially.)
Also, it is well
known that even great friends of onions seldom eat as many onions in one
session (or even in the next few weeks! - J.Z.) as are the equivalent to a pair
of average shoes. They prefer to buy their onions in relatively small
quantities. That is possible only by the inter-mediation of a standardised means
of payment.
But that is still
not sufficient to constitute an "effective demand".
An effective demand
is a demand which the other part can accept at the very moment it is presented.
It must also be
presented in the form of a means of payment and, practically, in a standardised
means of payment.
It must be
presented at a time and in a quantity so that the other part is able to provide
the things demanded at the right time and in the demanded quantity.
All that is
economically possible in two ways:
1.) The offered means of payment pass continually a free
market. Here every means of payment may get a discount if it is offered in
greater quantities than the market is willing to instantly accept; through the
discount offer and demand are at every moment in an equilibrium.
2.) Everybody obliges himself to buy certain quantities at a
fixed time and in fixed quantities and to pay with agreed payments and at an
agreed price. Insofar these agreements are observed, the demand is effective
and the effectiveness is certain.
It can be
demonstrated that the until now used means of payment must be supplemented by a
means which Milhaud called purchasing certificates, if a 100 % effective demand
shall be established.
What prevents the
theory of effective demand to be so well known as it should be known, is the
prejudice of "official" economists, that the theory is already found
and that they know it and that every essay to improve the theory would produce
nothing more than confusion. Here modern theorists err extensively.
One of the first
attempts to direct the contemporaries' attention to the necessity of private
obligations to buy (in
other words: to buy by commitments extended as for as
possible) I found in an article "Preisbewegung von 1870 - 1890" by
Wasserrab in the "Erstes Jahressupplement 1890/91" to the 4th
edition of "Meyer's Konversations-Lexikon". I owned Wasserrab's book
on commercial crises, a good book (burnt), very learned, where the author (as
in the said article) emphasised that the money problem is deeply connected with
the crises-problem.
In the article Wasserrab says: " . . . ein ruhigeres,
gleichmaessigeres Verhaeltnis zwischen Nachfrage und Angebot im allgemeinen und
damit auch eine befriedigendere Gesamt-Preisgestaltung, ist schwerlich ohne
neue volkswirtschaftliche-organisatorische Bildungen zu erwarten. Ob nicht
schon in den heutigen Kartellen (Koalitionen, Konventionen, Verkaufskontoren,
Syndikaten) der Industrie ein Ansatz dazu oder doch ein instinktives Tasten
dannach vorhanden ist, kann nur die Folgezeit lehren."
(J.Z. translation: "… a calmer and more regular
relation between demand and supply in general and with it a more satisfactory
all-over price development, can hardly be expected without new economic and
organisational forms. Whether in today's cartels (coalitions, conventions,
sales offices, syndicates) of industry already such a beginning exists or
merely an instinctive reaching for such a solution, can only be determined in
the future. - J.Z., 5.3.03.)
The tendency of
replacing the missing private obligation to buy the things-produced, by
governmental guidance of consumption, is the real moving force of the growing
statism.
This statement show anti-statists the way they have to go.
The absolute
liberty of buying without regard to production, is not better than the absolute
liberty of savages to do everything they like doing at any moment. This liberty
is to be replaced by voluntary obligations and, if the savages are too
block-headed to organise such obligations, then it will be done by impositions
through the chieftains.
(J.Z.: At least to a limited extent is a highly developed
"futures" market - - if only hedging or withdrawal premiums are
sufficiently practised - - already replacing B.'s suggested "ordering
system" for supplies wanted in the relatively near future, as a guide to
production and also as an assurance that produced goods will be sold. But this
happens only among wholesalers, not among consumers towards their retailers. -
J.Z., 5.3.03.)
---------------
It would be easy to comment upon "analysis" 's
interesting remark at the length of a booklet.
---------------
At Paris they have
(or had before the war) a journal called "Plans" The aim of the
journal was
1.) to bring to the
public's knowledge all newly framed economic and social plans,
2.) to publish
criticism of these plans.
I could secure only
one copy of this journal (burnt). Pity.
(J.Z.: I suspect that my father, Kurt H. Zube, in 1939, upon
hearing B. mentioning this journal, conceived the idea of an "Ideas
Archive and Talent and Genius Centre" - if B. had not already otherwise
suggested this to him, and be it merely by him frequently mentioning old and
generally forgotten but still valuable ideas. My father knew B. for much longer
than I did - but, all over, was less influenced by B. than I was and still am.
- My father already had a few "fixed ideas" of his own (among them
Malthusianism, astrology, system gambling, variations of the Schoenstein -
later WIR, SAG, ESAG plan, a particular land reform project) and remained
faithful to them to his death, in 1991. My ideas were less fixed when I met B.
at 19. B. was then 70. KHZ met him about 1926, when he was 21 and B. was 44.
But over the fewer years during which I met B., personally - later our
correspondence was all too limited - the first visit took place upon
recommendation by my father, in 1952, and the last in 1959, when I migrated to
Australia, I may have met B. more often and for more hours than KHZ did over a
much longer period. Moreover, my father's semi-deafness made communication with
him rather difficult. - Need I mention that my "Peace Plans" series
was named under the influence of this hint by B.? J.Z., 5.3.03.)
'What
"analysis" tries in the analytical sphere, "Plans" tried in
the sphere of synthesis.
(J.Z.: Lately I have come to more and more to reject
writings, especially e-mail, that offer merely another analysis and fail to
offer some sound positive and practical conclusions, suggestions or ideas.
Sometimes whole books are rather empty of the latter, even if most of their
pages are filled with provable facts - apart from the usual hang-ups on popular
errors, myths and prejudices. - J.Z., 5.3.03.
-----------------
7.) "National
News-Letter" of 15.6. and 22.6.50.
Stephen King Hall is an extraordinary man and would be still
much more extraordinary if he would see the connection between political events
and the monetary state of the world. I hope that you read what he says in
No. 725 (15.6.50.) about
China. In one of my next letters I will write some words about it.
-----------------
8.) A clipping from
the Daily Telegraph of 21.6.50: "Why British Output per Head is less than
American".
The author omits the main reason: Government
interference. Government interference produces inevitably low wages. Low wages
produce a small output.
(J.Z.: Here he should have added that trade union mentality
and obstructionism, with its anti-industrial and class-warfare actions, in
England much more so than in the USA, and, in spite of its attempts to
artificially increase wages, actually reduced productivity and with them wages,
sometimes as much so, if not more so, than government interventionism usually
does. Moreover, most of the trade unions strongly support government
interventionism rather than economic liberties. - J.Z., 5.3.03.)
9.) "City
Press" of 9.6. and 16.6.5o.
In the issue of
16.6.50, S. W. Alexander writes many quite right things about Russia's poverty. He should speak, in this
connection, about the fact that Germany, in 1939, was a very poor country and
without reserves. But undertaking the first attack is a military
advantage which counterbalances many military deficiencies. Hitler created
military assets, too, by successively reducing production for private purposes
down to 1/16th of the normal level. (When I was "bombed
out" in Nov. 1943 and had lost all, one of the most valuable presents that
I got was a little brush, now to be bought in every store for 20 Pfennig. Its
lowest price in November 1943 was 10
marks and in the shops it was not for sale.) But the military effect of
such a reduction of production was, that the German armies could fight against
a much superior power for many months.
In Korea the
Russians
(Much more so the Chinese regime! And the North Korean
puppet regime. - J.Z., 5.3.03. - By now some of the puppet regimes have become
autonomous but not any better. Instance: Castro's regime in Cuba and the North
Korean regime. - J.Z., 2.6.03.)
possess all what they want and it is of no military
importance, that this potential is won by the distress of the civilians.
(Presently the North Korean regime is building nuclear mass
murder devices - while its population has been starving for years. The fat cats
on top don't starve, together with their victims, and they probably keep their
soldiers sufficiently fed, too. Another "paradise" for proletarians!
- J.Z., 5.3.03.)
-----------------
In
"Truth" of 16.6.50., which I sent back today, is contained, on page
615, a review of the book "The Garden of Perfect Brightness" by Hope
Danby. There is mentioned the destruction of the "Summer-Palace",
near Peking, by Lord Elgin in the year 1860. In the review it is said: "Elgin's
action was undoubtedly a blunder: it was widely denounced at the time as
vandalism. Even today it makes effective anti-British propaganda in China."
This destruction
was executed 90 years ago and the Chinese did not forget it. How do you think
the Chinese will accept the destruction of Korean towns by American aeroplanes in
these days, for no other reason than the fact that they were occupied by
communist troops? So begins the "liberation" of the Asians from
Communism!
The Americans destroy their towns! (Like they did destroy
towns in Normandy, when "liberating" France! - J.Z., 5.3.03.) Always
the old principle of "collective responsibility"! "The subdued
suffers for the actions of the subduer!" (The victims for the victimiser's
actions! - J.Z.) And, obviously, no protest against this in any paper or by any
party!
(J.Z.: This wrongful principle is not even clearly mentioned
now, for the coming war against "Iraq" rather than a police action
against Saddam Hussein, although particular instances, like children and
civilian as likely victims are mentioned. - J.Z., 5.3.03. - How many innocents
were killed in that war, compared with how many guilty ones? And how many of
the guilty ones escaped altogether? But at least it wasn't as bloodthirsty as
most past wars have been. - J.Z., 24.5.03.)
If the Americans continue their kind of warfare, then it
will be a very simple matter for the Communist to make all Asians unite
with them against the West; it will be sufficient to communicate to Asia what
the Americans did in these days. Asia will say: We prefer to be ill governed by
the communists than to get burnt in our houses.
----------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 22.7.1950.
Your letter of 18.7., received today.
Dear M.
Meulen,
the Allies should organise a service with the purpose to
distribute daily leaflets in the Eastern Sector of Berlin, win which is
printed:
1.) the report of the American commander in Korea,
2.) the same report in the translation of the SED papers.
Example: The American report says, that Seoul depots,
railways, etc. had been bombarded. The SED translation says, that the town
had been bombarded and adds, that this is the way in which the Americans
liberate the Koreans.
If the American
warfare really has changed since the last war and the principle of collective
responsibility ("no distinction between subduer and subdued! As long as
the subduer is not beaten, the subdued must suffer for him and with him.")
is no longer applied, that should be made known to the whole world and this
daily. It would be an excellent propaganda for America. Until 1945 there was,
in Berlin, much sympathy for Russia, because during the whole war only two
times were Russian planes seen at Berlin. (One time, we heard, the Russians had
confounded Berlin with the foundries ad Magdeburg-Buckau, the other time it was
an application of the principle of collective responsibility, insofar as the
attack was a retaliation for the attack on Moscow.)
------------------
India. Probably right???????? What has
been uncertain in my explications?????
------------------
Castille, Golden
Rule Banker. With many thanks I return, here enclosed, pages 85-88 of the
Reader's Digest.
You are right:
Castille applies unconsciously a general principle, which he could not
do if he were not an extraordinary man. But, as often remarked, practice alone
is not sufficient in the economy. Sufficient theory must help it, especially in
such an advanced state as, by the genius of Castille, the Sunset Bank has
attained.
1.) It is true that
loans without collateral security are considered, by average bankers and
average economists, as a financial heresy. But experience and theory teach that
well selected loans of such a kind are not only as secure as are loans
secured in the traditional way but much better. ((J.Z.: I think that was
generally the case for instance for student loans that were not run by
government bureaucrats. - J.Z., 5.3.03.) I think you may obtain in London the
"Personal Finance" Yearbooks of the American Association of Personal
Finance Companies. (I possess the 1933 edition, and if you like, I send it to
you. From these yearbooks you may see, that for much more than 20 years the
same experience as Castille's were well known to a large group of businessmen
and practically used. Even the general principle underlying this experience is
acknowledged by them.
Quite the same was reported by German Savings Institutions
("Sparkassen"), most of them municipal, and they would have done much
more of this kind of business if the antiquated legislation would not have
prohibited it.
The principle is a
special case of a much more general principle: Men are not - - as churches
assert - - 100 % rascals. They are only 80 % rascals. Preachers overlook the 20
%, moral optimists like Tolstoy overlook the 80 %. The realists takes the 20 %
as a reality and, after having found out the method not to fall into the 80 % -
sphere, he acts in his 20 % sphere with the same self-confidence as a seaman on
the ocean, although he recognises the German saying: "Wasser hat keine Balken". (Water
has no beams. - J.Z.)
To lend to students
books, equipment etc. - - as Castille does - - was before 1914 a business quite
usual in Germany and especially in Berlin. If my bad memory does not deceive
me, the interest was in the case of books about 15 % p.a. and was at that time
considered to be sufficient to cover the risk.
The great fault of
average people, that is, in this case, of such not possessing tables for
compound interest and amortisation, is to overestimate the meaning and the
value of interest.
a.) for the
creditor,
b.) for the debtor.
A debt of $ 1,000
may be repaid by 36 monthly rates of $ 29.52, if the creditor charges 1/3 %
monthly, which generally is considered as moderate (even as too low) in
merchandise business. If the instalment is $ 33.21, then the monthly interest
is 1 %, which average people consider to be usury, and if it is $ 34,67
monthly, (1 1/4 % monthly) people write voluminous books on the subject, always
only looking at the interest.
For the debtor the
amount that he has to pay every month is much more important. If a
philanthropist offered hm a loan of $ 1,000, interest-free and repayable in 12
monthly instalments of $ 83.33, the debtor, say a young student, generally
says: The philanthropist is my enemy. But a rate of $ 30, 20 monthly, 43 times
paid, that's what he can easily fulfil, although the monthly interest is 1 1/4
%.
The thing
considered from the side of the creditor is: For an interest of 1 1/4 % monthly
there is, in most cases, enough capital to be raised. For the philanthropic
interest-percentages no capital can be raised.
In this light I
consider the report of Ralph Wallace that the Sunset Bank offered to youthful
future farmers loans without interest. It's a very bad principle, also
from an (enlightened) philanthropic standpoint. The Sunset Bank cannot possibly
do with the help of such an unsound principle what it could easily do for 10
times as many young farmers with the help of an amortisation table and quite
discarding Christian philanthropic principles.
Christendom considers the special case. Economic science
considers the economic situation, and yet it will acknowledge Voltaire's
"Les grandes pensées viennent due coeur". In this sense I think
Christian charity should be replaced by philosophical and scientific charity.
Christian charity
says: "He that hath two coats, let him impart to him that has none;"
(Luk. 3, 11) Scientific charity
says: Enable the man to get two coats, and arrange the thing so, that
you yourself have, once the business is liquidated, three coats instead of two.
Christendom helps the man who is in want. Science helps not only
him - - without humiliating him - - but the lender, too.
Christian charity does not increase the number of coats,
scientific charity does. (Les grandes pensées viennent du coerur.")
--------------------
Ralph Wallace
reports that the Sunset Bank accepts time deposits and pays one percent
on them. (One percent yearly, I assume.)
I.) Time deposits
are an invention to be compared to atomic bombs. If, at the outbreak of the
crisis, 20 years ago, there would have been no time deposits in Germany, there
would not have been a time difference between the banks' investments (due after
some years) and the bank's deposits, due after a notice of some weeks.
(Did he mean, with "time deposits" in this case:
"short-term" deposits, that can be reclaimed after the short term is
expired, or "timed" deposits, that for whatever time the bank has
investment opportunities for? - B. seems to have believed the former, which all
too many banks quite wrongly and carelessly invested on long terms. Properly
timed deposits, corresponding to equally timed and sound investments, are
rightful and sensible. - J.Z., 5.3.03.)
The banks would not have stopped their whole business, the
workers would have continued to work, would not have listened to Hitler, the
world war would not have come, Berlin and London would not have been bombed, we
both would still have our libraries, scientists would not have invented atomic
bombs but atomic little stoves, small enough to be put into a pocket, and, once
charged, dispensing heat for the whole winter (for 10 pence for the whole
winter!!).
But the time deposits
(rather, the wrongly timed deposits, combined with wrongly timed
investments! - J.Z., 5.3.03.) prevented that and, with much grief, I learn that
Castille introduced them at the Sunset Bank and is - - it seems - - still proud
of it. My only consolation is, that Castille will grant only 1 % for time
deposits, so that he, who deposits his money in the form of a time deposit with
the Sunset Bank, must be a blockhead, which Louisiana people are not, as I
read.
II.) Castille should read the Californian Law for Building
and Loan Associations, the best law in its sphere, that I know. To Building and
Loan Associations time deposits are prohibited. In normal times deposits are
repaid on demand, and in practice that is nearly always possible. If there is
more money on notice than corresponds to the influx of fresh money, then the
notices are listed and the deposits are paid out in the sequence of the list.
What this system
still lacks is the right of the Building and Loan Association to issue
certificates, standardised like money, and based on the acceptance principle,
about which Rittershausen (who was the first German economist to work it out in
his writings) will tell you something, if you will ask him.
----------------------
Malthus.
Recently I bought for a few Pfennig a little book: "Zerstoerende und
aufbauende Maechte in China", by the Missionary of the Berlin Mission
Society, C. J. Voskamp. I know Voskamp from other writings about China and
learnt from them, that he is a trained observer and judges impartially, as long
as his Jewish-originated superstition is not connected. The book is not dated.
That is against the German law on books, which prescribes the indication of the
printing year on every copy. Missionaries should not violate such a wise law,
only with the intention to let their book appear as quite up-to-date (which is
here obviously the motive). From the content I saw that the book was printed
between 1897 and 1900.
At page 23 Voscamp says:
"Wer nur Macht
hat in China gebraucht sie, um den Schwaecheren zu unterdruecken. Kapital wird
verliehen zu 30%, und die Bauern muessen ihren Grundherren von den
gepachteten Reisfeldern 3/5 des Ertrages bei eigner Aussaat abgeben. Der
Bauernstand liegt darum auch aufs tiefste darnieder."
(J.Z. translation: Whoever has power in China does use it to
oppress the weaker ones. Kapital is lent out at 30 % and tenants have to pay
their landlords for the leased rice fields 3/5 of the harvest they achieved
with their own seeds. Peasants are therefore greatly impoverished.)
60 % of the crop to
the landlord and having to provide for the seed! If China were only populated
by 450,000 instead of by 450,000,000, then the misery among the people must be
the same under such conditions.
But Malthusians
say: All that is of no importance!! (I am not sure that Malthus himself would
have been quite insensible to such numbers as 60 % rent and having to provide
the seeds oneself. The seeds may be - - I think - - estimated to come to 1/10th
of the crop, although in Piemont, where there is capital to protect against
rats etc., from 60 kilograms of seed per hectare the crop is 3,000 kilograms
and, after husking: 1,500 kg.)
Conditions in China are still worse than in Japan. In
Korea - - I think - - always worse administered than China - - they are at the
limit of what a man can physically bear.
Hippolyte Taine in his "Origines de la France
Contemporaine", calculated that in France, in many parts of the country
(he calculated it for a typical part) the share of the peasant in the
crop was 19 %. The rest was taken by the feudal lord, the king, the church and
the beggars. That did not yet mean revolution, but when the first riots
began, that was a match in a heap of straw.
In Korea things might have remained unchanged for centuries
still, but they cannot possibly remain unchanged in the neighbourhood of
countries like Mao-China and Russia. The latter may, in a political sense, be
considered as a neighbour of Korea. Did the Americans consider this? Did they
reform Korea's conditions in at least one sector? I am afraid that they did
not. If now the troops of North-Korea keep a good discipline, do not apply the
principle of collective responsibility and say to the peasants: The land is
yours, stop paying rent! then, very probably, Korea never will be returned to
the Americans. They will find the same kind of resistance as the united Europe
found vis-à-vis France in the wars of the revolution.
---------------
You say: I cannot
think it prudent to advocate larger populations on the chance that more Free
Bankers will be born." I confess: I do think it prudent on that
chance, Free Banking being the basis of future culture, life and liberty and only
Free Banking. But the advantage of large populations is not only an increased
probability that more individuals with a free banking mentality are born.
The latter advantage set abide, there is still an advantage
for every detail of life and it will endure until the moment comes, when, in
spite of normal crops, of free trade, of sufficient transport facilities, of
absence of inflation and of similar monetary abuses, supply with victuals becomes
insufficient. During this period the country may still be far from free
banking. History, neither in China nor in any other country of the world, ever
offered one single example that under the said conditions such a moment
arrived. If you present me with one example, I change my opinion. But if
you are not able to present me with at least one example, then you
must wholly change your opinion and avow, that the whole Malthusian
method of thinking in population questions is, in every detail, the contrary of
truth and logic.
Consider the thing in the most simplified manner: Is not, in
the case of seeming overpopulation but of permitted free trade, the question of
transport the main question? And does not the overpopulation procure
exactly what is here required: men to man the ships, to build new ships,
railways, cars, roads etc.?
But I do admit: If
the population on the whole earth surpasses 6,000 millions, then in some parts
of the earth may arise the
moment when, in spite of all the said liberties and conditions, a further
increase produces no additional advantage and if the population surpasses 15,
000 millions, then, probably (the things seen in the light of present
conditions) there will be a real overpopulation in many parts of the
earth. I think a population of 6,000 millions would be quite natural and would
stress the earth's natural reserves for not more than 50 %. But under economic
conditions as now prevail in the Far East, the earth would seem overpopulated
even if there dwelt no more than 1,000 men.
-----------------
In the new religion
which I expect, every attempt to ascribe misfortunes, obviously caused by the
absence of liberty, of Free Trade, of Free Banking, and also by ignorance,
superstition, cowardice, or - - a very great crime - - not having read
page 342 of "Free Banking", to other causes, and, especially,
to "overpopulation", every such attempt will be considered as a
blasphemy against the Holy Ghost. (John 14,17 - - 15, 26 - - 16, 13.) Such a
blasphemy will not be forgiven on earth (where general contempt will be the
effect), nor in heaven. (Matth. 12,31 - Marc. 3, 29 - - Luk. 12,10.)
American
note-issuing until 40 years ago completely rejected the idea of a monetary
monopoly. Everybody could open a note-issuing bank when he fulfilled the legal
conditions. These conditions get their present form essentially during the
Civil War by the State Secretary Chase, but at this time were not considered as
monopolistic, although as heavy and to be fulfilled only by
"capitalists". I read that even today the possibility to open new
note-issuing banks is not quite excluded for men ready to fulfil the legal
conditions. But the conditions can be fulfilled only by rich men
("capitalists"), and that may have been the reason for which W. B. Greene
demanded not Free Banks - - Freedom in Banking existed - - but Mutual
Banks, that are banks which replace capital by a mutual
obligation of members to accept the notes at par.
W. B. Greene was
quite near to the truth. What he did not see was:
This obligation can practically only be imposed upon debtors.
If that is agreed, the restriction to mutuality is no longer necessary.
That is also proven by the history of note-issuing banks. (Free Banking, page
81, line 6 from the bottom.)
--------------
Obligation of
buyers to buy. You are quite right to doubt whether small purchasers will
bind themselves to buy fixed quantities of fixed commodities in a fixed period.
The matter is too abstract and the average man prefers to endure the natural
consequences of standing in full liberty before his own product, produced for him,
and to say: I decline to purchase the thing!
It is a similar
thing as pacifism. The average man prefers all terrors of war, mutual ripping
up the bellies, etc., to a serious conversation about the possibility to change
that condition. Very simply: The one thing he can do, the other thing he
cannot do. He does not even possess the words to talk seriously about
pacifism.
But a new aristocracy
will one day oblige itself to purchase that which it had produced and it will
also, and quite seriously, talk about the possibilities of pacifism, the words
are already now at hand.
This aristocracy
will then speak thus: People - - do not change your minds nor your habits. We
know, you cannot. But do not prevent us from changing our minds
and from changing our habits, and if you try to prevent us, then you
shall find a resistance that will be surprising for you.
-----------------
Russian tanks.
The thing must be considered thus: In consequence of the planning, tanks and
similar products cost about the fourfold quantity of labour as they would costs
in America. With that agrees the opinion of the Russian revolutionists (I read
in the "Tagesspiegel": they publish a Journal at Paris) that the
price level in Russia is about the threefold to the fourfold - - counted in
gold - - of the price level in America. But once this quantity of labour is
spent, the product is not inferior to foreign products.
(Well, their steel was often inferior, as was and is that of
many cheap tools imported from Red China to Australia. And, when they were paid
for chandeliers by their weight, then they managed to produce as heavy ones,
that they pulled down an ordinary ceiling! - J.Z., 5.3.03.)
That has been so
already at the time of the Tsars. Roscher reports that at the World Exhibition
of 1873 at Vienna, the Russian furniture was of excellent quality, but that its
price was very high.
Your conjecture that German scientists designed the tanks is
very probably right. There was a time when German scientists were only accepted
and permitted to work in Russia. Now the West bears the consequences. If one
would have permitted German scientists to create designs for peace production,
they certainly would have preferred it to producing tanks in Russia. But if, in
the year 1945, or later, anyone in a Western country would have proposed to let
German scientists work under the same conditions as others, that would have
been considered as very unpatriotic and would (of course) have been
declined.
-------------
If Germans told
you, that they suffered more gladly the English bombing of German towns,
because they hoped, that it would bring the destruction of Hitler's power
closer, they were very much mistaken. Every air attack strengthened
Hitler's power. The fury of the people against the Allies came to its utmost
limit and may be compared only to the fury of the English against the Germans
after the destruction of Coventry. I was very often in the public shelters, and
some of them offered room for many hundreds of persons. The non-Nazis knew
one-another nearly at first sight and from them I heard: The Nazis kill the
people, too and torture them as the Allies do, but they do not burn our houses
and they do not kill as many of us. It is possible to deceive them. But
here no deception helps. They treat us as their enemies: We will never forget
it, our children will revenge us.
A cosmopolitan like myself was received in the most unkind
manner, so that I - - I confess it openly - - kept my beliefs to myself, a few
cases excepted.
The principle of
collective responsibility is one of the most evil produced by the human mind.
--------------------
You can be sure
that neither in North-Korea nor in South-Korea will the people accept the
destruction of their houses by American bombers as may be concluded from the
attitude of your German acquaintances. If it should be true, that the
American bombers proceeded in Korea as in Germany 5 years ago, then these
bombers destroyed, in a few days, a long cultural pioneering work of thousands
of men of good will of all white nations.
The West does not
take things as they are. During the war there came millions of Chinese to
Russia (mostly to Siberia) to work there in the ammunition factories. As evil
as the conditions were from a Western point of view, for the Chinese they were
nearly a heaven on earth. To have enough eat, nearly every day (never in
China), to sleep in barracks that protect against rain, wind and cold. Compare
the huts in China. In case of sickness help was on hand and the possibility to
be healed, also being treated with kindness, as primitive as the hospitals were
organised. Every Chinese, who returned, was a propagandist for Russia. Also,
that the Chinese workers were not beaten and had even the right to complain,
get a radio and had to work only 12 to 14 hours a day, instead of 16 or more,
like in China, that was a great thing - for Chinese.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
What you say about
the article in Times of 18.4.50, about racial questions, is quite right.
To take an example:
I know that in the USA the Negroes prefer banks conducted
by whites and are very right to do so. But if they visit a theatre, they prefer
as keeper of the wardrobe a Negro. The latter never errs in returning their
clothing and, after a long time, he has still I mind to whom to return it.
White keepers sometimes err, in spite of checks (which Negroes - - I read - -
do not use.) (That may have been the case when Negroes, in such jobs, were
illiterate. - J.Z.)
At the American railways - you, probably, know it better
than I do - - Negroes are preferred to Whites for many labours, carrying
parcels for passengers and also working at the rails. But the theory that there
are no distinct differences in favour of the White, in many respects, certainly
is not believed, even by those who publicly defend it. Also, the Negro race
seems to be in regress since about 1,000 years. The first Portuguese
discoverers met powerful and well organised empires. The now living race was
unable to defend itself against a few Arabian slavers.
You know, that many scientists believe that the Egyptian
culture has been a Negro culture.
I return the
interesting article here enclosed.
-----------------
"analysis". The letter of Mr. Rothbard of 9.5.50. is one of the most interesting I ever
read.
Mr. Rothbard, like
all American writers for decades, does not distinguish
a) paper money with cours forcé, from
b) paper money without cours forcé.
The former
introduces the element of state interference, the second discards state
interference..
Inflation is
possible only where the paper money is endowed with cours forcé. If one
presents me with a single example of the contrary, I will change my opinion.
The modern stupid use of "inflation" and
"rising of prices" as synonyms proves nothing than the degeneration
of language and the dullness of the average professors.
What Rothbard says about the inflation danger of your notes
is therefore without foundation. Your notes cannot cause an inflation, even if
it would be the firm will of the issuers to inflate them. In the case of an
over-issue, the notes would get a discount. From this moment on almost
everybody would refuse to accept them and, a few days later (probably a few
hours later) the notes, together with their discount, have disappeared from
circulation.
Rothbard does not consider this possibility, although
America's monetary history offers numerous examples. In a community, where
cours forcé is not introduced, the price level cannot be raised by monetary
influences, at least not under present conditions.
(When a currency without cours forcé is an exclusive
currency, then sellers of labour, services, goods, accommodation, land,
etc., have no other legal option than to increase their prices, reckoned in
this exclusive currency. To that extent the status of an exclusive currency
is enough on its own to inflate the general price level in such a country
without the coins or notes being given a forced value. It has then, as the only
currency, a forced acceptance. However, if under this condition people refuse
to reckon only in the paper value standard of that exclusive currency and are
making use of the absence of cours forcé, to determine their wages, prices,
rents debts etc., in other and sound value standards, e.g., in gold weight
units, then the prices set in these units would remain the same, while their
paper money prices, and all transactions, would nominally go up when paid in
the exclusive currency, which is, under this condition, the only payment
option. I do not know how long it would take most people or the first few ones
to make this distinction and use the remaining legal loophole. Their example
would soon be followed by others. Naturally, the government would be inclined
to close it, too. However, until people become sufficiently emancipated in
monetary matters, this change-over to pricing in sound value standards, even if
it is legally permitted, might often take a considerable time. Provided cours
forcé is not introduced by the government, then all prices would become marked
out twice: Once in the sound value standard adopted and secondly in its current
equivalent in exclusive paper money. Sellers would tend to do that in self-defence,
in order not to become accused of driving up wages, prices, rents, fees etc.
themselves but laying the blame where it belongs, upon the institution that
issues the exclusive currency and the laws which permit it to do that. - J.Z.,
6.3.03.)
From ancient Rome it was reported, that the influx of Asian
gold after the victories over Macedonia and over Egypt raised the price level.
Maybe that this was the case, although I am by no means sure that the old
writers saw the things in the right light. Concerning the asserted influence of
the influx of precious metals from America after 1492, I wrote to you that here
the economists were mistaken. Bonn and Wieser proved it long before me. Whoever
does not believe them, may compare, from the well known statistics, the
quantity of gold produced since 1492, from year to year, with the population
number concerned with that production, which can be estimated to about 100
million men from 1492 to 1592. The quantity per capita is obviously too small
to be able to exercise a sensible economic effect.
What Rothbard says
about interest is partly right, partly false and partly incomplete. It
is right insofar as he demands a free market as regulating principle for
interest. Here he agrees with you completely but does not become aware of it.
That you expect very low interest as an effect of Free Banking and Rothbard
does not, does not concern the principle, on which you agree. Experience
will teach him and you and everybody, and I think we are all ready to accept
its instructions.
But what Rothbard
says in the following statement is false: "It is a part of the nature of
man that he prefers an apple today to an apple a hundred years from now, that
he prefers the same degree of satisfaction of his wants in a nearer time period
as compared to a remoter time period."
Daily experience proves that Rothbard errs here
considerably.
In a community,
where the State does not impose his care for old age, for the children's and
grandchildren's future and leaves this care to the individuals, there arises,
for part of the production, the tendency to apply it so, that the producer or
his children or his grandchildren or people who live 100 years after him, may
dispose of that part. Take the case of apples. There exists in parts of America,
as well as of Africa (here introduced by Englishmen among Negroes) the custom,
that at one day in the year the inhabitants of a village go together to the
fields or woods and plant there, with much solemnity, an apple, etc. The judge,
or another person of rank, speaks some words and tells the people, that
"we do now, what our ancestors did for us, and so as we eat apples from
trees that were planted 100 years ago, future generations may eat apples from
those that we are planting now."
(I never heard, saw or read about such a ceremony. Instead,
I saw, read or heard about ceremonies in which some decorative or memorial tree
was planted, or the first tree of a newly planted forest. - J.Z., 6.3.03.)
Concerning Africa I
read this: In one district of an English colony at West Africa the governor
found out that nearly every day a tree was damaged or cut down. At last he
found out, that a Negro had had a dream, in which one of his gods had appeared
to him and ordered him and his fellow Negroes to cut down a tree every day. The
Negro told it to others and they fulfilled the order of the god.
Some days later, the governor assembled the people and spoke
to them thus:
"I know what is the matter with the dream concerning
the trees. But the fellow quite misunderstood the god. Last night the god came
to me, too, and complained, that this fellow there fully misunderstood him. The
god had ordered him to plant a tree every day and not to destroy a tree.
Probably, the fellow was heavily intoxicated when he heard the god. But I do
agree with the god and, therefore, order:
I.) The fellow, who misunderstood the god, is from today on
our tree-planter. He must plant at least one tree a day. But we others, we will
go every month outside of the village, and in this town I will be at your head.
There we will put the seeds for many trees into the earth and will sing many
merry songs.
II.)This shall become a custom among us for ever and we will
beg every visitor to introduce this custom in his village."
The Negroes were filled with enthusiasm and kept the custom
still today and - - I read - - the custom is slowly spreading in Africa.
(J.Z.: True of false?
This is the first hint I received of this "custom". - J.Z., 6.3.03.)
In a community,
where the tendency to care for old age is strong enough, people will invest
money also if the money bears no interest but costs a little for deposit, as it
is usual at Swiss banks for daily money.
What Rothbard
points out and many others pointed out in the same way, is often true,
but it is no general rule. The general rule is: If a man produces more
than he can at once consume, then he likes to store his surplus. If he wishes
to consume it after 5 years, he will apply additional work for storing the
surplus, so that he is able to consume it after 5 years. The additional work
represents the value difference in favour of the goods which shall be
consumed later. If the community offers possibilities, so that the delay does
not cost additional work but, on the contrary, enables him to win the work of
others, the man, of course, will use the possibility.
Take the procedure
of the Bedouins in Palestine. They possess a method to store flour for 10 years
in caves of the desert. If such flour is sold, the purchaser must pay for that
flour more than for fresh flour. Quite justly so, for the storing has cost work
and time.
(I prefer a free market price here, too. Fresh flour is
probably also more nourishing. - J.Z., 6.3.03.)
Rothbard considered
only the case where the wish to consume at once is suppressed and for this
service a compensation is demanded. Rothbard did not consider the case where
the wish to defer the consumption must be suppressed or is voluntarily
suppressed to gain an advantage.
In the present
state of society the tendency to consume seems to be predominant.
(J.Z.: During an inflation, especially when the interest
rate is lower than the inflation rate, it is even advantageous to go into debt,
for a long time, and finally "repay" the debt with depreciated money.
The dishonest practices of central banks of issue lead to wide-spread
dishonesty of debtors towards their creditors. - J.Z., 6.3.03.)
-----------------
Rothbard does not
consider the most important origin of interest: The creditor's share in the
product which the debtor gets with the help of the borrowed capital. Insofar
his explanations are incomplete. I estimate that now in Western countries and,
in the average, a well-applied money unit purchases about 0.30 other money
units per annum.
-----------------
What concerns the Gold
Standard, Rothbard uses the word obviously in the sense in which it is
generally used in the USA and you use it in the sense in which most English
writers (not all) use it now. You speak of different things.
Some time ago I
bought for Rittershausen the book of F. Hultsch, "Griechische und
roemische Metrologie", 1st. edition, 1862. It is an excellent
and was at his time a celebrated book. Here Hultsch speaks much of the gold
standard of the Roman Empire, because the main currency were gold coins,
prices, taxes, debts, etc. were fixed in gold coins and silver coins were - -
as in England in the 19th century - - only a subsidiary currency.
But in modern English the monetary state of the Roman Empire cannot be stated
otherwise than by paraphrases and cannot be called a gold standard, simply
because the Romans had no paper money by which the "price" of the gold
could be measured.
Do you think that it is an advantage of modern English to
use the old word "gold standard" in this way??????
---------------------
Rothbard does not
see that a bank of issue, to maintain parity of its note with gold coins, does
not need a store of gold coins but only a continuous connection with a free
bullion market. That is one of the greatest discoveries in economics, and it
seems the honour of this discovery belongs to W. B. Greene.
I know that you
decline that kind of parity: A note of a nominal value of X gold units at par
with X gold units sold at the free bullion market. I know that you demand notes
of a very different kind. But as you will not prohibit other systems, and
Rothbard - - it seems - - will not prohibit your system, you may both say: Our
common principle is: experience shall decide the thing; we both demand liberty
of experience, exactly that which dirigists will prohibit. But Rothbard will,
in a later period of the discussion, be in a better position than you, since he
starts from the fact that the people will measure values in gold, as long as
they are not prevented from doing so by harsh punishments (as is presently the
case). In a community, where liberty is acknowledged, this fact cannot be
overlooked. On the other hand, every propaganda to replace the old manner of
measuring values, by other methods, should be permitted. But - - to repeat it -
- facts, regarding the preference of the people for the now prohibited
gold, cannot be overlooked.
------------------
That Rothbard does
not completely understand the problem is to be seen from this passage in his
letter:
"Under a
regime of absolutely free banking, with the proviso that any bank, at any time
fails to pay in full in gold, is bankrupt etc."
If the bank does
not promise to pay in full in gold, then it cannot become bankrupt for
this reason.
There are two
possibilities: It pays less than it paid a day before (your system) or it risks
that the public declines its notes as long as the parity at the bullion market
is not restored. (My system or that of the "Four Bills".)
Rothbard discusses none of these possibilities but speaks
about a system which you decline.
----------------
Rothbard speaks of
"soft money fallacies of Proudhon". That is unjust towards Proudhon.
Rothbard will not be able to quote a passage from Proudhon which makes it
probable that Proudhon declined gold as measure of value.
----------------
The great fault of
Rothbard is: not to see that the liberty to create means of payment, which the
issuer himself thinks fit and to offer them to the public (not to
impose them) is the "conditio sine qua non" of all other
liberties. That liberty includes the liberty of everybody to decline the
offered means of payment, if in the opinion of the man, to whom it is offered,
the means is not fit.
Further, Rothbard
does not see, that without a daily experience the best method of paying and the
best method of valuing cannot be ascertained by the people, and not even by the
best economists.
Methods declined by
Rothbard, by you and by myself, will be tried every day in a free community and
they will disappear at once if they were not well founded. About 1/1,000 of the currency will always
consist of such mock money, will always be declined by men of experience and
will be accepted by others until they, too, belong to the experienced people.
Special journals, like the French "Plans" will be
devoted to the daily arising really or seemingly new means of payment and their
volumes will be precious material for a future economy - - if the atomic bombs
let us have a future.
-----------------
In your letter to
Rothbard of the 27. 5. 1950, you write:
"The issue of
new money will then prevent a disastrous fall in the price of the machines."
The principle you
explain in your example is of the greatest importance. All people, when hearing
of Free Banking, do consider only the inflation possibility. Nobody considers
that the terrors of deflation are much greater. Inflation deprives the old and
the receivers of pensions. But deflation deprives the whole people.
Rothbard does not consider the best way to avoid deflation.
(J.Z.: He simply believed that all prices, wages, rents etc.
would automatically, sufficiently and fast enough adjust to the reduce volume
of means of payment. That was axiomatic for him and he did not bother to check
this belief out against the accumulated experience of mankind. - J.Z., 6.3.03.)
----------------
I share your
opinion about Mises. His book offers many interesting details about the
history of means of payment. But M. has not the least notion of the right of
self-help against monetary blunders of an ignorant government. His principle
is: All decisions of the government in monetary matters must be accepted by the
people and without opposition.
(J.Z.: I do not agree with this evaluation. While M. did not
favour fully free banking, far less complete monetary freedom, he at least
favoured freedom for gold-hoarding banks to issue gold certificates equivalent
to their gold hoards, as long as they were at any time prepared to redeem their
certificates with gold weight equivalents. That amounts only to a small
fraction of Free Banking and a still smaller fraction of full monetary freedom
- but it amounts to a limited form of Free Banking. He opposed State
intervention with this limited form of Free Banking. - J.Z., 6.3.03.)
-------------------
I enclose the
letter of Rothbard and the copy of your letter to him.
------------------
Refugees from the
East: I hope to be able to write an article about the matter and that a German
paper will print it. In my private life I suffer very much from lack of
concentration, for some evil reasons.
I cannot find a
copy of my letter to Zander. I mislaid it.
I still found some
engravings for some Pfennig. Perhaps you know a person who is interested in
such things.
You are right: The
people 130 years ago took much trouble over their works, in art and in economy.
Thank you for the
copy of your letter to "The Times" of 13.7.50.
Is it still your
opinion, that the only way to protect a country's gold is: prohibiting gold
coins as a measure of value and means of payment?
------------------
10 pages!!!! I must
stop.
------------------
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
28. 7. 1950.
Dear Mr. Meulen,
on the 25th of
July I had the pleasure to receive:
1.) "National News-Letter", No. 724, 727 and 729.
2.) "The Economist", 1.7. & 8.7.50.
3.) "The Malthusian", No. 9, June 1950.
4.) "The Scots Independent", July 1950.
5.) "Truth" of 16.6. & of 30. 6. 1950.,
6.) "City Press" of 14. 7.50.
Thank you very
much.
The most important
this time seems to me the "City Press", where S. W. Alexander
reports the conversion of J. E.
Holloway, former Secretary of Finance in the South African Government, to
honest money. I think the conversion of such a men in such a position may
mean for the Honest Money Party of the world what the conversion of Clovis in
the year 496 meant for Europe. I think that Holloway was one of the financial
dictators of the world. I do not know whether the report did escape you notice
and, if it did, whether some remarks about this would be suitable for the
"Individualist". Therefore, I do return the "City Press"
today and, if you will send it me again, I will be very much obliged to you.
The report about
prices of German Potash seems interesting. One sees from the report how small
quantities of goods can sometimes determine the market price.
----------------
What Alexander
lacks is the notion of what the Americans called 150 years ago "the right
of banking, that is: the right of every honest citizen to issue standardised
notes in small fractions (without cours forcé - - of course), which at that
time was considered as founded in the common law. (I learnt it from Prof.
Bullock's "Monetary History of the United States", NY 1912 - - burned.)
Obviously, he does not know that such a right ever existed and was exercised.
(Alas, all too much under the influence of rare metal redemptionism or even of
notions of "asset currencies". - J.Z., 6.3.03.)
-----------------
Truth of
30.6.50. contains an interesting report from Swazi-Territory, where now an area
of 110,000 acres will be irrigated at an expense of L 2,000,000. The plan seems
good. You know that it is now the opinion of all experts that the whole of
Africa may became what its known parts were in antiquity: A country surpassed
by none in fertility. What is lacking now are men and water.
Such a news as that
from Swaziland must be compared with the article: "Should poor land be
cultivated? in the Malthusian of June 1950.
Schopenhauer left a
little work: "Eristische Dialektik" (Reproduced by me on microfiche
in English and German! - J.Z.), where he points out that there are 37 different
kinds to win in a discussion not by logic but by the contrary, very amusing to
read. Trick Nr. 29 is: Say something which in itself is true, but has nothing
to do with the objective of the
discussion. Schopenhauer says, that it is used in most discussions and always
to great effect. So here.
What the Malthusian says is quite correct and - - by-the-by
- - is well known for many decades. Generally, it is much more profitable to
ameliorate land already under the plough than to transform deserts into arable
land. But sometimes - - as in many districts of Africa - - the cost of
transforming a desert into arable land is so small, that the yield is 100 % and
more per year. The possibilities found out in Africa and now used in
Swazi-Territory, do completely justify what Carlyle said more than 100
years ago and what the "Malthusian" quotes as: in a "… short
paragraph the ignorance of a thousand Georges, Shaws and Handmans is
concentrated!"
The words quoted
from Carlyle are:
"Meanwhile,
what portion of this inconsiderable terraqueous globe have you actually tilled
and delved, till it will grow no more? How thick stands your population in the
pampas and savannahs of America; round ancient Carthage, and in the interior of
Africa; on both slopes of the Altaic chain, in the central platform of Asia; in
Spain, Greece, Turkey, Crim Tartary, the Curragh of Kildare? One man in one
year, as I have understood it, if you lend him earth, will feed himself and
nine others."
It was not very
prudent to quote this passage. Carlyle was here a real prophet. The pampas is
now much more populated than England was at his time and produces victuals for
many more people. The savannahs became one of the main producers of victuals in
the whole world. China, at the time of Kong Fu Tse was, very probably, much
less populated (per square mile) than are today the old savannahs. The Altaic
Chain will, in a few years, nourish more people than whole Europe did at the
time of Malthus. It was one of the most honorable conquests ever performed by a
ruler. You know, too, what the Crimea produces. Carlyle was right and was
justified in every detail by facts within a century after he wrote the quoted
words (except, perhaps, for the Curragh of Kildare). And by what trick tries
the "Malthusian" to "refute" Carlyle?? By speaking of the
quality of arable land in the USA and saying some interesting things about the
production in the USA. Trick No. 29!
One of the great
moral and economic assets of the Kremlin is, that it does in every respect the
very contrary of what Malthus recommends: cultivate areas, which the Western
"experts" prove to be not worthwhile cultivating, favouring
the birth and the immigration of men, knowing as well as the old (real)
experts, that a man in agriculture and under normal conditions easily feeds
himself and nine others. (However, the Soviets introduced economic conditions
in which food production was rather low on all "public" land, while
it was high on the remaining few private plots. - J.Z., 6.3.03.)
If an editor will
teach his readers, he should be a little bit informed himself. In the said
article the editor says:
"We do not
know of any recent figure for this country, but a committee of the House of
Commons in 1821 (1821!) reported, that "the produce obtained from
the lands under cultivation in England and Wales, estimated in wheat, varied
from 36 and 40 to 8 and 9 bushels an acre." (McCulloch's Notes to Adam
Smith.)
It would have been
still more cautious to say that the yield varied from 1,000 to zero, which
certainly would have been true and also instructive. But more important is,
that the editor "does not know of any recent figure for this
country". An editor should. He should also know, that there exists (among
many other references! - J.Z.) a "Statesman's Yearbook", where I read
in the edition of 1932, page 48, a lot of figures for England and Wales, e.g.:
Year 1926: Wheat from 1,592,000 acres = 5,893,000 quarters. Without higher
mathematics the editor could calculate from these numbers, that in the year
1926, in the average, the yield was 29.6 bushels per acre. If the editor would
know more of the subject, then he would have read that, in the average, the
weight of a bushel of wheat increased since the time of Adam Smith.
The editor often
mentions the Law of Diminishing Returns. Obviously, he does not understand the
true meaning of this law. What the editor neglects is the fact that here exists
- - as in nearly all other economic relations - - an optimum. In the editor's
opinion the optimum is always connected with the least quantity of labour spent
on an acre, and that every additional labour hour per acre yields less. That
would mean: In agriculture does not exist an optimum, so as the word is
understood in modern economics. That this really is the editor's opinion, is
revealed
from this passage in his article:
"It is
therefore obvious that the way to a high standard of life for the world is to
have plenty of acres and as few people as possible."
If the editor would
be in the right, the first settlers in the savannah would have got the best
results per acre and every additional hand on the acre would have got a smaller
result per labour hour. The facts - - as every real expert knows - - are very
different from this opinion. I need not enter here into the details, which are
given in the voluminous literature on the Law of Diminishing Returns.
The return
diminishes per acre or per labour hour or per acre and labour hour, when
the return is equal to the optimum.
The editor says in the article:
"Another
aspect of the Law of Diminishing Returns is that the more labour you put unto
an acre of land, the less
the proportional result. Prince Kropotkin said the opposite, but there
are agricultural colleges and experimental stations on every continent, and
every one of them thinks he was wrong."
Firstly: Here also
the law is not well formulated, insofar as it is in the editor's formulation
only true after the optimal point has been attained. Concerning the stations
and their results, I tried to inform myself by the books in the British
Information Centre (to which I am much indebted in every respect). There I
found that the experiments about the law are surprisingly few in number,
especially in agriculture, and that the experiments are worked out so as to
show the direction in which further experiments should be made. But from the
experiments reported, certainly no peasant can derive where, for his
land, the point would be reached, where any additional labour is wasted. But
the literature of the BIC is not very extensive and it may be that you, in
London, may get better information.
On the other hand, it impressed me that a work like that of Marshall
- - certainly a writer of the first rank - - offered nearly nothing which could
contribute to the theme from a practical standpoint. Marshall quotes very old
statistics and I think he would have quoted more recent ones and better ones if
he would have found them.
What the writer says about the colleges and the agricultural
stations and their asserted opinions about the work of Kropotkin is very
probably not said on the basis of a study of their publications. Moreover, I
very much doubt that even one
of the colleges and stations knows the book of Kropotkin.
My impression is
that in no country of the world has the optimum been attained, in China less so
than in England. Of course - - to repeat it - - I do not contest that the
optimum exists for every acre in the world.
What the editor
says about vegetarianism I think to be true. Where an ox grazes, the food for
nine men may be produced (I read).
Another point of view is that meat eating is a barbarous
thing.
A further point of view is that among the record holders in
many kinds of sport there are many vegetarians.
Once I was dull
enough to consider the possibility that "The Malthusian" would accept
Cannan's notion of an optimal population. Of course, it did not. When,
on earth, has an average man changed his opinions in things that are
"theoretical"!?
------------------
The "Scots
Independent" publishes a nice picture of Mr. Gibson. A phrenologist would
conclude extraordinary faculties from the proportion of the skull part above
the eyes to the rest. Also phrenologists say that very intelligent men are, in
most cases, gifted with small eyes. That would be confirmed in the case of Mr.
Gibson, who certainly is a very intelligent man. What a pity, that he
excludes the money question from his program!!
Another important point is the system of taxation. Gibson
has no program about taxation, neither concerning its distribution nor
concerning the means of payment for taxes.
---------------------
"Economist". What the
E. says about Berlin, in the issue of 8.7.50, is true. But the E., like all
others, does not understand, that Berlin needs monetary independence,
including a free bullion market, as Berlin had until 1914.
I was very much displeased with what the E. says in its
review of the books: "Modern Capitalism and Economic Progress", by
Wilson, and "Making Capitalism Work" by Keezer. The authors and the
review defend "capitalism".
In reality they do not. What they defend is the contrary of State
capitalism or - - what is the same - - State socialism. Capitalism means the
excluding of men from a share in the earth, who do not possess capital.
(J.Z.: I do not agree with that definition. E.g., a man's
labour, over the course of his life, constitutes already a large capital and,
if law or stupidity etc. do not prevent him, he gradually utilises this capital
and supports himself and his family with it. No form of free-market capitalism
prevents that. Any other form does not deserve the term "capitalism".
Mostly it deserves the term "monopolism",
"interventionism", or "mixed economy". - J.Z., 6.3.03.)
Capitalism is possible only where and to the extent that
people are not interested in their own affairs. Such an evil condition is then
an unavoidable consequence, but certainly deserves no defence.
(J.Z.: The ownership of productive capital [in form of land,
machines, buildings etc.] by a few only is certainly not an ideal but the
ownership of such assets by many or by all can very well be considered as an
economic ideal. - J.Z., 6.3.03.)
Reformers must choose suitable words to indicate their
ideals. "Capitalism" is nearly the most unfit word. Anti-Monopolism
would, perhaps, be the best.
----------------
National
News-Letter: In the issue of 13.7. Stephen King-Hall says: For final victory,
we must defeat communism on the battlefield of ideas, and since the value of
ideas is usually related in men's minds to the value of the actions produced by
those ideas, democracy will never triumph over communism on the basis of being
able to show that its speciality is limited to military achievements."
Battlefield of
ideas - - in the more than 700 issues of the "National News-Letter"
neither the word nor the notion of monetary
liberty occurs - - the most important of all liberties, and by no means a
new invention but well known to millions of people 150 years ago and well
understood too. (Not well enough! - J.Z., 6.3.03.) And now Mr. King-Hall wonders that as a
consequence of this deficiency Anti-Communism is defeated continually and feels
itself to be in a state of uncertainty vis-à-vis Communism.
Alexander,
King-Hall, Gibson, Churchill, and so many others, all do demand or sympathise
with the " honest money idea", butt they decline to get a quite clear
notion of what that is, "honest money" and refuse much more to
connect the idea with liberty.
----------------
When in the year
1848 England was threatened by a communist revolution, there sprung up, in the
whole country, voluntary militias to organise an effective self-help in case
that the government could not help or would not, or could or would not help in
time, or had other checks as governments are often possessed of. Napoleon III,
at that time a simple fugitive, joined that militia.
The present
situation is very similar. A new militia beside the army is necessary.
1.) on a local basis, to get a beginning,
2.) on a supranational basis, that is, the local
organisations of England, France, Germany, etc. should unite on a scheme like
the Maquis-Soldiers in France or the "Geusen"in the Netherlands, or
the "Sons of the red spears" in China. (I cannot find the word
"Geusen" in the dictionaries. The count of Barlaimont called them, in
1566, "un tas de geux", which one of the members, the count of
Brederode, accepted as a fit name for their new union. The Geusen [Gueusen]
coined money, equipped ships and became a very valuable part of the Netherland
Army.)
The Supranational
Militia should have its centre at London.
A plan to finance
it must be worked out.
In Germany the militia would (or should) begin to claim
freedom from all the crazy laws which serve to hinder the new organisation,
inter alia, the valuing in other value units than those Bonn paper-marks, the
gun control laws etc.
No government has
the right to tell its subjects or to others: I decide whether you defend
yourself against a Russian (Soviet! Was there ever an invasion by Russian
volunteers, e.g. Russian voluntary militias? - J.Z., 6.3.03.) attack, and if I
am not interested in your liberty or in your life, then be so kind to obey
silently and to submit or to die or to
do whatever I order you to do.
What you say in
your letter of 6.6.50 of smaller States I think to be right for smaller groups
of men, taxed by a common government. States, at the moment, are institutions
of a doubtful military value.
You know the word of Clémenceau, who said that wars
are too important to be entrusted to generals. He went so far as to think that
not only States but generals, too, are of doubtful military value.
"In the case of war all able-bodied men should take
part according to their capacities", you say. I fully agree. And if the
governments, that tax the men, oppose this, then they must be considered as
being allies of the enemy.
(J.Z.: I don't agree with that formulation. The war must be
a quite just and defensive war, rightfully fought with rightful weapons only
and only the defence of individual rights and liberties can make any war
rightful and defensive. If a militia cared for this job, then it would have
introduced already such a free and rightful condition that practically no one
would dare to attach such societies, since that would mean, with great
probability, a revolution or military insurrection against the attacking
regime, or massive defections from its armed forces to those of the attacked
free societies or to their allies, their own governments-in-exile. Maybe B.
wanted to lead M. only gradually towards such ideas. - J.Z., 6.3.03.)
For Germany ideas
like these are nothing new. In the years 1812 and 1813 in the whole country and
especially in Prussia, voluntary militias organized in the
"Landsturm". In all histories of that time is reported that the king,
Frederic William III, was very close to being deposed by them, since he
remained in doubt, whether it would be better for him to unite with the
beaten Napoleon or with the militia. The Freiherr vom Stein was very near to
being elected "Lord-Protector" of a new Commonwealth, the German
Federation, and to play the role of Cromwell. Finally some courtiers said to
the king: If you unite with the militia of your own country, you probably
lose your throne. But if you do not, you certainly will lose it. Unite!
That the king finally did.
----------------
The first action of
the militia should be to publish, as a militia law, the articles which I
proposed in my letter to Dr. Picard of 6.5.50.
And if the Supranational Militia Power would hesitate to
publish the articles, a local organisation should accept and publish them,
e.g., a German one.
----------------
"Du passé
faisons table rase, individualists, debout, debout!!
----------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
31.7.1950.
Dear Mr.
Meulen,
from the Statistical Yearbook for Germany, Year 1913, 1
learn:
Years: Gold
produced Silver produced Value of Silver expressed in
Gold
Kilograms
1493-1520
162 400 1 316 000 1 : 10.50 - 11.10
1521-1544
171 840 2 164 800 1 : 11.25
1545-1560
136 160 4 985 600 1 : 11.30
1361-1580
136 800 5 990 000 1 : 11.50
1581-1600
147 600 8 378 000
1 : 11.80
___________________________________________
754 600 22 834 400
Let me suppose that
in the average from 1493 to 1600 the value relation has been 1 : 11.50, then
the value of
22 834 400 Kilograms of Silver was = 1 986 000 Kilograms of
Gold. The gold amount of the production of precious metals has, consequently,
been exactly enough:
754 800
+ 1 986 000
_________________
2 740 800
Kilograms.
Let me further
suppose that the average number of people between 1492 and 1600, who valued
goods in precious metals, or used them as means of payment, was about 100
millions. Probably the number was larger, in spite of the many wars, diseases
and famines of that time. If this figure would be accepted, then the addition
of precious
metals from 1492 to 1600 was 27.4 grams per capita, or
pretty close to one ounce troy.( 31.1 grams.)
The great price
revolution is said to have taken place mainly in the 16th century.
Now, is it possible that such a small quantity as about one ounce per capita
can produce as considerable economic effects as are here reported?
That's impossible.
Moreover: From the production of precious metals at least
1/2 went to the Orient to buy there luxury goods. A very great part was used by
the churches, by the princes and by rich people for ornaments. Much was lost by
shipwrecks and by hiding it in the ground. And the one ounce was distributed -
- deductions made - - over more than a
century!
Adam Smith
says in the chapter "The rent of land", second period, that in
England the general rise of prices was not felt before 1570, although in this
year the mines of Potosi were known for more than 20 years. Adam Smith,
nevertheless, adhered to the general opinion that, especially the rising price
of corn, expressed in precious metals, was due to the abundant production of
precious metals. But Adam Smith does not enter into details, he simply refers
to the "consensus sapienti", which he seldom does in economic or
philosophical matters. The general opinion in simply a "fable
convenue".
The real cause must have been very different. I assume, that
the replacement of payment in kind by payment in money was one of the reasons,
and that this replacement was a cause and not an effect of the increased use of
money. I am led to this led to this opinion by the replacement of paying taxes,
tithes and rents, in the agricultural districts of Persia under Shah
Reza, the father of the present Shah. Reza was an excellent man and, although
not educated at a university, knew at least as much as his most learned
officials. He had seen that, by paying taxes, rents, etc. in corn and other
produce, the peasants had to pay at least the double amounts of what they
should have to pay and, nevertheless, the receiver (landlord, fiscus, church)
received only a small part of what they were entitled to receive. The officials
simple stole a part (a Persian author, whom I read, says: the greatest part)
and replaced it by dirt. (More likely chaff! - J.Z.) So the Shah ordered that
in future all was to be paid in money.
In Europe there were - - I think - - the same evils as in
Oriental countries. By the literature of the time, the increased travels and
the increased capacity to read and write among the creditors, landlords
included, every creditor learned that these evils were not only his
evils, but that they were general evils caused by the system. Therefore, and in
the whole of Europe, the tendency arose to replace payment in goods by payment
in money, even if the income of the creditors seemed to be reduced by
the replacement.
Another cause was
the exporting of corn to the northern countries, in exchange for fish, wood,
fat and whatever these countries produced. Before that trade both, corn in
England, Germany, etc., and the products of the North, were of little value.
The owners of the great estates got corn for nothing. Their serfs produced it,
were fed with about 1/4 of their product and the rest was taken by the great
lord, duke, church, prince, etc. When ship building and shipping were enough
improved, there arose a considerable exchange between the North and the South,
and, although there was no silver used in the exchange, the prices were
settled in silver. The exchange of corn, which before had no price at all, for
a price however small, had to raise the general price level. Roscher points out
what social, economic and political consequences had their beginning in trade
and exchange of fish against corn. The
nourishment of the whole of Europe was much improved. Roscher says that
the political centre of Europe began
to move to the North when Beuckel had invented the
art of salting herrings.
(J.Z.: Speaking quite generally, the markets expanded and
goods which had little value on the limited local markets had now access to
wider markets and thereby their value increased. I assume that roads, transport
wagons and the security of transport also increased by the suppression of local
robber barons, in which the invention of gun powder and canons helped, against
their formerly almost impregnable castles. The larger robbers - kings - tended
to monopolise the robbery trade and thereby, to some extent, increased
security: the king's peace. - J.Z., 7.3.03.)
Another cause
- - that's my view - - was the expansion
of clearing. Wherever bills of exchange are used, there is much clearing and,
correspondingly, coins are saved. Schiller says, in his History of the Revolt
of the Netherlands against Spain, that at Antwerp in one month, at its exchange,
more was cleared than at Venice in a whole year.
A very important
cause to use more metals has been - - I think - - the increase of armies and of
their pay in coins. It was not so - -
I think - - that the pay in coins was a consequence of the increased supply
with precious metals. As one may derive from the relatively small amount of one
ounce per head, in about 100 years, in the then concerned economical sphere,
this increase was not sufficient. Already before there must have been a great
quantity of precious metals.
The average annual
increase of precious metals between 1492 and 1600 has been 27.408 : 108 = 0.254
grams = 16.5 grains.
In the years 1881-
1885 were produced 774,795 Kilograms of gold and 14,042, 000 Kilograms of
silver. The average value-relation was 1 : 18.63, so that the silver value was
equal to 754,000 Kilograms of gold.
774,195 + 754,000 = 1,528,795 K. gold.
The number of men concerned with the value of gold and
silver, at that time, may be estimated to come to 1,000 millions, so that the
average annual increase per capita would be:
1,528,795 K :
5,000,000,000 = 0.306 grams.
The amount per
capita is practically the same, but it is well known, that in the years 1881 -
1885 a sharp decrease of princes took place.
The conclusion from
the above figures must be, that the influence of the gold and silver supply has
been very much overestimated by most economists.
There may be
objections against a gold-coin standard, that is, a monetary condition where
prices, debts, taxes, etc. are generally settled in gold coin units, whether
paper money circulates or not. But, firstly, it would be tyrannical to forbid
the acceptance of gold coin units for agreements among those, who prefer it to
others, and, secondly, the main reason against the suitability of such a basis
is obviously not justified by facts.
Such a thing an a
gold inflation has still not yet been observed even now. But, of course, I will
not pretend that it is technically impossible. Moreover, I agree that, if an
American Caesar one day seizes the American gold treasure, coins it and pays his army with the coins (an
event which I expect before the year 2000), there may be, for some years, a
small gold inflation in the whole world. But I think that this evil is very
small compared with the evil of paper money inflation.
(J.Z.: Well, I believe the once large gold hoard in Fort
Knox has been largely used up by the US government, but hardly to pay with it
and directly, a conquering American army. - J.Z., 7.3.03.)
-------------------
The present amount
of gold in the American Treasury is estimated at about $ 24,000 millions. If
they were coined and distributed over the Earth, there would, in the average be
an amount of about 6 Dollars per capita, which, probably, will raise the price
level. But even in this case no price rises would be caused if, in the
whole world, the cours forcé of paper money would be abolished. If this were
done, then gold coins would simply somewhat replace paper money and this
without influence upon prices.
--------------------
Jevons,
certainly an expert, recommended a standard similar to your standard
("Free Banking", page 236), but based on index numbers, for long term
investments. His reasons were well founded, if the political risk concerned
with long-term investments is set apart.
My own standpoint is now that of Savigny, a
celebrated German lawyer, who in his work "Obligationenrecht"
(published 1851/53, when S. was an old man: he was born 1779) recommended, not
to extend the period of long- term investments over a man's average life time
and use for this period precious metal as the least evil as a basis of value.
Savigny also distrusted the politicians.
Let me remark, that
in the monetary laws of West-Germany all value clauses for investments are
prohibited except the paper-mark of the Bank Deutscher Laender. Your investment
basis would fall under that law.
Under such tyrannical laws it is possible to agree secretly
on a gold value basis, but such an agreement cannot be enforced by a
law suit.
Moreover, it is practically impossible to agree on another
basis. The technical data of another basis are only given in a country where in
monetary matters more liberty exists than at present in West-Germany.
----------------
Very
faithfully Yours - signed: U. v. Beckerath.
__________________________________________________________________________________________
1. 8. 1950.
Dear Mr. Meulen,
the editor of the Malthusian quotes an old Parliament
Paper from 1821 concerning the yield of wheat per acre. In the quoted
passage the ranges within which the yield varies is mentioned, a point of view
quite uninteresting for the matter about which the editor writes.
The editor complains that he has no more recent statistics
on hand. Today I had some business near the British Information Centre
and used the opportunity to look at the Encyclopaedia Britannica, books
certainly to be got in London no less than in Berlin. On the shelves is the
edition of 1947. The article Wheat contains a table which I copy here.
Average Annual Yields of Wheat in Various Countries for the
5-Year Period 1930-1934.
Yield per
Country.
Hectare Acre
United K.
23 quintals 33.6 bushels
Denmark
29 43.0
Netherlands
30 44.2
Belgium
26 38.3
Germany
22 32.1
France
15 23.0
Canada
9 13.9
USA
9 13.5
Australia
8 12.2
India
7 10.7
Argentina
9 13.8
Russia
7 10.1
1 quintal is here
obviously 1 metric quintal which is (Herings, Conversion tables, which 1
possess) = 100 Kilograms = 220.462 Avoirdepois.
In Whitaker's
Almanac is said that 1 quintal per Hectare = 1.49 bushels per acre. That does
not correspond exactly to the above-numbers, 23 x 1.49 = 34.27, while in the
table 33.6 bushels are stated. Maybe the American measure does here differ from
the English British. (You know, that the Enc. Brit. is edited in Chicago.)
------------------
I looked also for
the latest editions of the Statesman's Yearbook on the shelves of the BIC, 1949
and 1946, and for Whitaker's Almanac. I found these issues, which the Malthusian
could have found as well as I.
Production of
Wheat in the UK.
1939 1766 000
acres 1645 000 tons, 0.93 ton per acre.
40
41 2265 2018 0.89
42 2516 2567 1.02
43 3461 3447 1.00
44 3220 3138 0.97
45 2274 2176 0.96
46 2062 1967 0.95
47 2163 1667 0.77
48 2279 2361 1.04
I forget to copy the figures for 1940. The last column I
calculated at home.
-------------------
The table from the
Encyclopaedia Britannica is interesting insofar as it confirms an old
observation: Fertility is a very relative. In
very wide ranges fertility is a product no less than wheat. When the UK
produces 33,6 bushels per acre and France only 23 bushels, it in certainly not
for a difference in fertility. France is a very fertile country, as is well
known. But it is not worthwhile to spent more labour and manure as the French
do now, because the surplus would not
find a market. If prices were higher, the French could easily get not only 33.6
bushels, as the English, in the average, per acre; they could get 40 bushels
and much more, as the English get in their best agricultural districts.
"Best" means here not only the most fertile but those, whose products
can be marketed with relative low costs.
Fertility is mainly
a matter of the product's price. Suppose the Earth would be populated by 6,000
million people, then an increase of prices for victuals would - - I am
convinced - - easily procure victuals for another 6,000 millions. I estimate
that the price increase could be less than 100 %.
From 1942 to 1945 I
worked at the "Price Commission" (B. wrote, perhaps, intentionally:
"Preis-Kommissar". - J.Z.) (where Hitler after July 1944 found so
many victims) and there I got information (not published) about the
rye-production in East-Prussia after 1939. You know, that after 1939 the prices
for victuals were limited, for rye, too. Effect: The production fell at once by
about 1/4 to 1/3. The first price control law was enacted 1936, but in the
first 3 years it did not do as yet much harm to agriculture, so that its output
was relatively high.
(J.Z.: During the war manpower was scarce and thus much land
remained uncultivated. Compulsory delivery quotas simply could not be enforced,
even if the price for rye had been a free market price. Later many prisoners of
war were employed in agriculture, to make somewhat up for the loss of labour
through conscription into the German armed forces. - J.Z., 7.3.03.)
A country as much
favoured by nature as India, does not produce more than 10,7 bushels per acre,
less than a third of the U.K. Nobody, who is informed about the economic,
technical and financial conditions of India's agriculture, will doubt that the
country could produce at least as much as the U.K. per acre - if the said
conditions would be the same. (Not only wheat.) That means, India could produce
victuals for about 800 million people and this not by still to be invented
technical means but simply by applying old and tried methods. And what a small
part of the Earth is India!
In Java and Madura
the yield of rice per hectare was, in quintals (= 100 Kilograms):
1929/30 - - 1933/34 - - 1934/34 - - 1935/36 - - 1936/37 -
- 1937/38 - - 1938/39 - - 1939/40
14.8 14.9 15.2 15.5 15.3 15.8 15.3 16.7
The difference of
time between the harvests is several months. I these months the Javanese plant
soy beans, so that the yield per hectare in high. And yet: The yield of rice
per hectare is much less than in Italy, although Italy is less fertile than
Java. Reason: Lack of capital. There are large possibilities for an additional
production of victuals even in as populated countries as Java (next to Egypt
the most populated - - per square mile - - in the world.)
In Japan the production of rice was, per hectare, in
quintals:
1936 = 32.8; 1937 =
34.8; 1938 = 33.9, although the
Japanese agriculture suffered much from lack of capital.
(Figures from: "Die Wirtschaft Suedostasiens",
Deutsches Institut fuer Wirtschaftsforschung, 1942.)
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
2.8.1950.
Dear Mr.
Meulen,
you know that in my view the free issue of standardised
means of payments, Free Trade, absence of cours forcé and absence of all
restrictions whose abolition old liberalism demanded, is the first
supposition of every social reform which takes itself serious. Exactly like
Tucker, I ascribe the evils which, by average economists are ascribed to an
excess of economic, social and political liberty, to a lack of these liberties
and demand one example from history to refute me.
Here we do agree to 90 % but not - - to my great sorrow - -
to 100 %.
You say: There is a factor producing misery of many kinds,
which must not be overlooked. That factor is overpopulation. The world's misery,
therefore, is to be divided into two parts:
1.) the quantity produced by lack of the above-said
liberties and
2.) overpopulation.
You insist - - like
Malthus and the Malthusians - - that China and Japan are examples to prove the
effects of overpopulation. With Malthus and the Malthusian you say: Social
conditions, lack of transport facilities, etc., etc. in the case of China and
Japan, are not to be considered. They would, - - in the case of these countries
- - be too trifling to matter.
Cannan's notion of
an Optimum Population you obviously decline. (Why??????)
You do not
acknowledge the calculations of some economists trying, to prove, that the
Earth is to able to nourish a multiple of its present population. (The
estimates vary from about 6,000 millions to about 15,000 millions). (Why
not???? )
If your standpoint
would be proven, I would repeal all what I said and wrote about social reform
in so many years and would say: We cannot introduce social reforms and not even
the most important of them: the right of free issue.
Perhaps the reason is
the same as that for which an ape cannot be taught Geek, perhaps there are
other reasons. But what we can do is to have no children. We can let them die,
we can sacrifice them in wars, as the elder generations so often did in
history. And if we feel defeated: Our enemies are ready to do what we cannot do
for lack of determination. Let us say, with Malthus: The enemies are on the
right track. Let them kill the children which we had let live in our weakness.
Their wars inflicted upon us are to be considered as salutary actions of nature
itself.
Like the man in the old poem I would
confess:
"And after a search so
painful and so long,
"In
his whole life he has been in the wrong.
----------------
Aut - - aut!!
----------------
But I will
not believe that your present standpoint to Malthusianism is your last word.
You are one of the most logical minds I ever met with. Until now the way of
history was: at last logic wins. In very logical minds it wins at last in the
individual. In others it wins after some generations are passed.
Therefore: Open
your mind to the Free Banking idea and cast out every idea claiming to
be an Ersatz for Free Banking or darkening its primary importance in the least.
In the mind of a Free Banking adherent there should - - I think - - not be even
one corner that is not open to 100 % to the Free Banking idea, also no
corner for Malthusianism or any other Ism claiming to do what only Free
Banking can do.
Only Free
Banking! That was the standpoint in your book, and that was what distinguished
you from every other writer in the past and present. Noblesse oblige. Jettison
the whole Malthusianism and do no longer nourish this snake at your bosom!!
Very
faithfully Yours - signed: U. v. Beckerath.
(Alas, he failed with Henry Meulen as well as with my
father, to turn them off their Malthusianism. Fixed ideas are fixed, even among
those who, with Stirner, believe to be beyond them. - J.Z., 7.3.03.)
____________________________________________________________________________________________
U. v. Beckerath, … 6.8.1950. Your letter of 3.8.50., received yesterday
Dear Mr. Meulen,
I state that Dr. Zybell (I think his ancestors were
of German origin, the name Sybel not being very rare in Germany. A
historian, whom I think to have been one of the very best, was called Sybel.)
does now for Individualism more than any other man in the world, you excepted.
What can a man do better for Individualism than to restore your health?
Thank him in the name of the Individualists in the whole world and that of
Germany especially.
(That at the moment they are reduced to a single individual
is of no importance. I am left here to cover the retreat.
We have connected our vital force with the Orion Nebula,
which is now becoming the finest Free Banking Centre in the Universe. After
some Sextillions of years, it will be finished and you may already admire the
beginnings by a good telescope. The elegant curves to be observed guarantee
harmony and steady evolution.)
Please great Dr. Zybell if you see him. I do hope that he
will publish his method.
-----------------
Marshall Plan Aid
and employment in Germany. You are right, but if in Germany gold coins (perhaps
of private origin) and agreements based on gold value and - - more important
than all other details - - a free bullion market would be permitted, further:
if Milhaud purchasing certificates would be permitted and Free Trade would be
restored, Germany would not need Marshall Plan Aid and, after less than 6
months, would have got full employment and - - as in the years before 1914 - -
would become a country in which labour is in short supply. West-Germany would
say to the Eastern workers: Come to us: We have more jobs for you than you can
do.
The real reason for
which Germany now needs Marshall Plan Aid is the currency law of 1948, still
much more crazy than yours of 1844. If the currency law were abolished, Germany
could and would help others.
(J.Z.: I just got an e-mail news, indicating that presently
unemployment in Germany exceeds 11%. I do not know what its inflation rate is.
Our politicians manage to produce both, inflation and deflation together. Shall
we be grateful to them? - J.Z., 7.3.03.)
----------------
I do not deny the
advantages of your System. (Free Banking, page 236 ft.)
But this system can be introduced only where it is
understood. At the moment it is not yet understood, least of all by the
government. The system I propose needs no establishment by laws. It is quite
sufficient not to prohibit it. Some years later, it may be improved by the
acceptance of the "Four Bills". The Four Bills permit any basis of
value, gold, silver, copper, index, etc. They permit your system, too.
------------------
A German
"Individualist. There is no more
generous heart in England than yours. L 20 a year!!!!! It's impossible!!! My
health is declining more and more, and if the winter begins then, probably, I
will become quite inactive. Not for L 20 and not for L 20,000, could I now
publish a paper.
But I thank you very
much.
(J.Z.: Actually, he lived still to 1968 and was rather
active in these years, writing letters and drafts, although, apart from the
"Berlin Programme", no longer essays or proposals. If only someone
else, or a small group, had tackled the chore of putting out a paper, we would
have contributed hundreds to thousands of pages to it. - The very chance to get
his views published might even have helped to prolong his life. - I wish I
could have done more in this respect. Only since 1964 did I have the chance to
put out at least my small and irregular PEACE PLANS series, from Australia and
in English only. Then I did not even dare to tackle translating my first peace
book into English. - J.Z., 7.3.03.)
------------------
India. Why
an Indian capitalist does not lend his money to a village money-lender, getting
about 15 % from him? For the same reason
as you never thought of lending to an English money-lender (who takes more
than 5% a month) your money, although the money lender would be only to glad to
pay to you 15 % p.a., even if the money lender would have his office vis-à-vis
your house.
If India would be a
civilised country, also in economics, there would arise similar situation as in
California in the first years after 1848: The peasant would borrow for an
interest of about 2 % monthly. The peasant would get himself a return of at
least 5 % monthly, so that the 2 % would not be a burden.
(J.Z.: Alas, in agriculture returns are not as regular and
frequent. Thus a commitment to such a regular and frequent payment would be
rather risky. For such cases interest should be fixed in percentages of returns
received over a 1 to 5 year period, in which the high and lows of returns might
level out sufficiently. Then the average return from such investments might
even be higher. B. pointed out elsewhere, that money lenders in India are
mostly relatively poor themselves. And the number and the total volume of
loans, that can be as productively employed, is also probably somewhat limited,
especially while, under an exclusive currency, sales are not always assured. If
the debtors where free to pay with suitable assignments upon their own goods
and services, then this would be quite another matter. But any of the scarce
exclusive currency received by them and then again spent by them, would not
necessarily return to them in payment for their own goods and services, like
their own vouchers would. Indian customs are also to be considered. If a
peasant family becomes prosperous, then poor relations might invite themselves
to share these riches and the may not be refused under these customs. This kind
of extended family communism can keep a whole country poor. Add to this the
customarily high expenses for marriages, funerals, festivals, religious
donations, special dresses, personal jewellery - and you have some more factors
which keep people poor. The list of factors which contribute to poverty in a
country could be a very long one.- J.Z., 7.3.03.)
After some years the
peasant would have become rich and would become a lender himself.
(The grandsons of the first Californian peasants are all
rich and all are lenders. Their credits enable the wholesale of
California fruits to all countries of the world.)
(J.Z. All rich? All lenders? That is an exaggeration. Among
all business enterprises, even under the most favourable conditions, there are
always some failures. - J.Z., 7.3.03.)
By competition among the Indian peasant-lenders, exactly as
in California, agrarian credit will be cheapened, although, perhaps, the gain
of the peasant from the borrowed capital may not be reduced. Interest on
agrarian investments in California is now less than 1 % monthly.
Your hint, to use
more than is done now, the services of finance companies (not banks of the
usual type) for the savings business, is very valuable. If such finance
companies would an organisation like that of the American Association of
Personal Finance Companies, and this organisation would create a credit
insurance for credits to finance companies, the premium would very probably not
be higher than 1 1/2 % p.a.
What is needed - - not only in England - - is a law,
permitting all institutions like savings banks, insurance companies, etc., to
buy every kind of credit-insured investment.
(J.Z.: Also any investments with any kind of agreed-upon
value-preserving clause. - By now one would also have to insist on exemption
from any further tax changes and tax increases for such investments for a
minimum period of, say, 5 years, genuine tax reductions excepted. At least in
Australia the laws on e.g. superannuation funds have changed so frequently that
they made long-term investment planning almost impossible. The government, in
at least this respect, seems to think much like the famous bank robber Willy
Sutton. When asked by a judge why he robbed banks, his reply was: Don't you
know, your honour: That's were all the money is! - J.Z., 7.3.03.)
But who listens if
one talks about things like this? 100 years ago people would have listened very
attentively and would have done something about it. (So, why didn't they leave
us a better world? - J.Z., 7.3.03.)
--------------------
Time deposits
(J.Z.: A very unsuitable name. When properly "timed
deposits" are not meant by it, as, apparently, they are not, then they
should be called something that indicates their nature as "instantly or
very soon claimable deposits. - J.Z., 7.3.03.)
If time deposits would be economically possible, then they
would be a good thing. They are not. The liquidity of time deposits at the time
of notice is a myth no less than the "guaranteed redemption" of
banknotes at their face value by a cover of 1/3rd or so in gold. The
"fact" that it goes on is no fact at all. The "fact" is,
that the people did not try the redeemability because there existed the tax
foundation.
(J.Z.: And most had debts to pay to the bank, or through the
bank, with its notes. With these notes they could not claim gold coins. Anyhow,
while notes are at par, they are usually preferred to gold coins as means of
payment. - J.Z., 7.3.03.)
It is not by ignorance that some great French and Swiss
banks do not accept time deposits or only with the clause, that the bank has
the right to offer a corresponding amount of the assets, if market condition or
other economic conditions do not permit the conversion of their assets into
ready money.
(J.Z.: Apart from this ultimate security for "timed
deposits", the banks could and should balance their returns from timed
loans to a very large extent with the timing of their timed deposits, so that
they would their returns from timed loans would almost totally balance with
their timed obligations from timed deposits. Probably by now a good computer
program could facilitate this balancing act. - J.Z., 24.5.03.)
----------------------
Russian tanks. You ask: "Where scientists prohibited by
the Allied from working in Germany?"
There was not - - as I ought to know - - a law which
prohibited scientists from working in Germany. The practice was very different.
Some of the world's greatest scientists, such as Planck, lived under
conditions which, before the war, would have been punished as cruelty to
animals, if applied to animals. About others I have personal knowledge. For
several years it was not possible (in Berlin) for a scientist to get the same
conditions which every mason can get at once and without difficulty. I do admit
that the German authorities were and are responsible for a great part of that
treatment, but only for a great part.
It is the same with German officers. Alexander assumes, that
the excellent plan on which the Koreans work was drawn up by German officers.
They would certainly have preferred to serve in a Western army. But paragraphs
prevented that.
Machiavelli says: Kill a beaten enemy or treat him as your
own subject. If you treat him ill and let him live, then one day he will
conquer you.
---------------------
Rothbard.
Here we disagree. That is, we have, for years. You are an adherent of the
redemption-idea and demand redemption, although not at face value. Also, you
suppose a clearing of notes at a clearing house, as in the old days of
convertible notes.
You do not admit the economic possibility of notes, that are
only to be used in shops to buy there goods or to pay there, or at the issuing
bank, debts, goods, or debts priced in fixed gold weight units, say sovereigns.
We do agree that experience will soon (very soon) teach what
is economically possible and what is not. On my side is the opinion of Tucker
and W. B. G r e e n e, also the experience of the years from about 1919
until 1924 in Germany. At that time there were issued many notes (certificates,
tickets, etc.), which were only to be used for buying and paying purposes, to
the largest extent by the German railway, whose issue rose to about 1,400
million gold marks. (If my memory does not deceive me, somewhere else were
"only" ca. 150 or 250 million mentioned. But then - memory plays its
tricks on all of us. - J.Z., 8.3.03.) These tickets were generally called
"Oeser-Bons", because their author was the minister for railways,
Oeser, a very able man. But many shops issued notes as well. Most prominent in
this was the firm Meinl, originally from Vienna but then on a large scale
active in Berlin, too. During the inflation-time I often saw Meinl notes. If
Meinl would have issued too many, then the public would have stood before empty
shelves. But the notes would have been unsuitable for the usual operations of a
clearing house, neither a modern nor an old one, say, under the Suffolk System,
for clearing redemption notes in the
USA, about 120 years ago.
(J.Z.: While that is true, shops like Woolworth and Coles,
which would both have, probably, also accepted the notes of the other, would
have exchange these "stray" notes for each other, probably daily.
Many other shops might participate in such exchanges, too. Any considerable and
lasting imbalance of notes in these note exchanges would indicate over-issues.
It would mean that other shops had received more notes from the over-issuing
shop than the latter had received from them and this not just as a part of
normal fluctuations. To that extent I do here agree with Meulen and would also
class these note exchanges as a clearing process. - Usually, the participants
in these note exchanges would be better able to exchange their own notes into
their goods and services than into gold coins. They would not promise the
latter kind of redemption anyhow. They rather want to turn over their goods and
services and have debts paid to them with their own notes. - J.Z., 8.3.03.)
Read Zander's
"Railway money", until now the best explanation of the principle.
Perhaps Zander still possesses an English or a French
translation. At any case, you may get such a translation in either the English
or the French edition of the "Annales de l'économie collective,"
("Annals of collective economy"). Perhaps Williams and Norgate, Great
Russell Street, retain copies of the 1933 edition.
In the assumed
case, when all issuing institutes, shops and banks, over-issued their
tickets, the public would stand before empty shelves in all shops that had
promised to accept the tickets. A free import of foreign goods will also in
this case be very good and even necessary. It is always good and
necessary, under all conditions. But in this case, the inability of the shops
to supply the promised goods and the refusal by the public to furthermore
accept the over-issued tickets, would take place before the foreign goods are
imported. Then the shopkeepers will get beaten up (quite unavoidable) and will
also be accused of and charged with and punished for fraud. Possessing goods
for L 1,000 and issuing notes of L 1,100 is fraud.
-----------------
I must insist that
Rothbard's "statement":
"It is a part
of the nature of man that he prefers an apple to-day to an apple a hundred
years from now" is false. That is once to be seen from the right form of
the principle:
"It is in the
nature of man that he prefers an apple offered to him exactly at the time when
he likes it, to an apple
offered to him at another time, or at once, but with the
obligation to consume it (or let it be consumed) at a time, when he does not
like it so much as at another time, when he would like it most."
The case that a man likes the apple at once, is a special
case. That this case, at the present state of society is the most frequent one, does not turn the single
case into a general principle.
-----------------
Page 397/398 of
"Free Banking". What you say
there is quite right under the conditions which you suppose. One of these
conditions is: Creditors are entitled to demand gold coins. I wrote to you,
sometimes, on this principle and the changes in credit of that old and vicious
principle is abolished.
------------------
We agree, that
lastly interest is determined by supply and demand. If, in any sector of the
economy, a debtor is able to win for himself 100 % p.a. and the rare of
repayment, then he is probably willing to pay a high interest, if he has to.
But, if he can get the loan at a very low interest rate and still wins for
himself 100 % p.a., then he will be very pleased. It is my opinion, that for
many years still, the demand for capital, applied to high yield investments,
will be greater than the offer and, therefore, the interest rate will be thus,
that the debtor wins much and the creditor as well. Being no prophet, it may be
that I am mistaken. But if I consider, that in the average and in agriculture
alone, there is the ready possibility to invest (from the debtor's standpoint)
at least L 100 per capita of the now living population of the earth, that means
at least 2 1/2 milliards times L 100
= 2 500 000 000 x 100
= 250 000 millions L at a high yield, I think the time of cheap (long-term -J.Z.) credit if not artificially
cheapened by State intervention) is still far away. Great Britain's annual
income may, at present, be about 10 000 million L.
That my estimate is
not too high, I derive from article of Edwin Muller, in the Minneapolis
Tribune, reprinted by Reader's Digest and taken from there by the
"Malthusian", May 1950. (I am very much surprised to find such
an article in the "Malthusian". Every word is [indirectly] a
refutation of Malthusianism.) In the article is reported the conclusion of Norris
E. Dodd, who visited recently a great part of the world. Dodd says:
"In more than
half the world the scythe has not yet supplanted the sickle."
Derive from that
fact what amount of capital may now be invested, in the average, in the world's
agriculture and compare it with the amount needed, if the same capital per
labourer would be invested as in England. (You will have the numbers at hand. I
have not.)
---------------------
Malthus.
(Here, in my attempt to scan in via computer a very simple
and hand-drawn comic, by B., I get, instead, 25 pages of computer code! Goes to
show, that in some respects a hand-drawn graphic is still superior to a scanned
one, if the print-out does not work properly and indicates it also how much
computer memory is wasted in this way.
In this graph B. shows a devilish and smiling face,
supposedly of Malthus, drawn on a balloon, with horns and a long and curly
tail, approaching the reader. This is then followed, after the next sentence,
by another sketch, in which this figure is in full retreat and already seen
from some distance. Location in my photocopies: Me 512. Perhaps, some day, I
can properly scan in and reproduce this "artwork". On second thought:
His images may represent, in the first case, a coming sperm cell and in the
second case one going away, to somehow illustrate the bachelor argument below.
- J.Z., 8.3.03.)
You say: "… a bachelor can be more prosperous on a
given income than a man with family, and that it is difficult to get the
capital to bring fresh areas under cultivation"
The Capital.
If the world's agriculture will be permitted to pay the
interest demanded, there will enough capital, although not at once.
Further: India's paper-rupee and China's paper-yuan form not
a very seductive basis for value reckoning, neither does Germany's paper mark
nor England's managed paper-pound. But, gold-basis restored and some decades
time,
and the capital for every practical increase of population
will be raised.
Concerning the
bachelors, there it is, at present, possible for one bachelor to shift the
burden of his subsistence in his old age to the children of others. But, in the
long run, it is not possible for many bachelors. (If they form a large
proportion of the population and haven't "sown their oats". - J.Z.,
8.3.03.) The number of bachelors that save so much as to be independent in
their old age (under present conditions! - J.Z.) is too small to be of economic
importance. But your statement is true only for these bachelors.
The real state of affairs darkened by the pensions granted
by the state or by other public institutions to old bachelors. These pensions
are granted to the same amounts as they are granted to persons with children,
many of whom are more than 21 years old, and to widows or divorced women to the
same amounts.
But how do these
things look economically?
The latter's
children are taxed and the tax is paid out to the father, in form of an old age
pension. The children are taxed, additionally, in favour of the bachelor, who
lives in the same house and used for himself the money with which he could have
produce a taxpayer. Is that just???
In a state of
society where the community does not care for old bachelors, the
children-problem looks very different. In China every average merchant
calculate to every foreigner what a profitable investment children are. At the age of 10 children already produce
their own subsistence, while they still learn pretty much.
I wrote to you at
another occasion of about a Chinese student named Yü, whom I met in Berlin.
(Zander knew him better than I.) He was the 18th child of a banker
at Canton and he was very pleased, that his father had so many sons and said to
us: The burden, to maintain our father when he is old, will be small for each
of his children. I wish, my father would get still more sons, then the burden
would be lower still.
A bachelor, in his
old age, in China, must become a beggar if he is not before accepted as a monk
at a Buddhist monastery. To have no children is considered, in China, not only
from a religious standpoint but from an economic one, as a very bad fate.
Quite the same mentality
prevailed in North America in the first half of the 19th century,
especially in the West. Western economists had calculated, that a child of 6
years produces his subsistence. At 55 - - they had calculated - - it produces a
considerable surplus. Also in the West children were considered as a very good
investment.
Having no children
can be justified only from philosophical or religious reasons. If in China a
child says his father: Why did you put me into such a terrible world? The
father answers: If I would not have offered you the opportunity to become a
man, you would have become a beast, perhaps an ox daily beaten by a peasant or
a rat, always hungry and at last tortured to death by mischievous boys, as you
see it daily in the streets. Then the boy is content.
Nearly the same said an old Chinese philosopher, when a
pupil asked him, whether it would not be good to act against a tyrant, so that
the tyrant at last gets neither taxpayers nor soldiers. The philosopher
answered, that a people has always a legal right to rebel against a tyrant, and
that it would be better to be killed in fighting a tyrant than to be eaten as an old beast by another
beast.
Free Banking is the
best means to maintain a population, growing or not. But here exists also what
the old Greeks called the "deuteros plous", an expedient second in
rank. ("If sailing will not do it, rowing will.") You do not
acknowledge Cannan's notion of an optimal population. This
optimum can be maintained with help of Free Banking or without. With the help
of Free Banking the people must - - I estimate - - work 8 hour a day. Without
its help, they will work only 6 hours (in the average - J.Z.) and will, from
time to time, suffer from hunger in the midst of plenty. But a man endures very
much. In the average the optimum population will be better off than a smaller
population.
Example: Dean Inge, now 90 years old
("Malthusian", June issue, page 7) says, that the optimum population
in Britain would be 20 millions. Well - - in the year 1861 England and Wales
together had 20 millions, and in the year 1851 Great Britain may have had the
same population. But was the population in one of these years better nourished
than in later years? You and I, we think that, if there would not be so much
State interference, then England's population today would be as well nourished
as in any year before the war and, probably, better. The consequence must be
that - State interference set apart - - this year 1950 is no worse year for
England than any previous year and that either this year will be the year of
optimal population or it will be a later year, with more people still. Or - -
in other words - this year would be still a better year if there lived more
people.
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 13.8.1950.
yesterday I received
1.) The Individualist, August issue,
2.) Truth of 14.7., 21.7. and 28.7.,
3.) The Malthusian, No. 10, July 1950,
4.) The Economist, 15.7.50,
5.) National News-Letter, No. 730 and 731,
6.) Individualism, July 1950,
7.) City Press, 28.7.50.
I thank you very
much. For some days I could not visit the family Bloesz and that was the reason
that I did not get the papers sooner.
------------------
The three pages of
"Truth" with your contributions
I tore out and enclose join them herewith.
The theme:
"How far goes the influence of patriotism if patriotism meets other Isms?
Is patriotism the
strongest of all Isms?" is of the greatest importance.
The fact, that an International Force is now created and acts, compels patriots
as well as internationalists of all tinges to consider the matter. Considering
it means here discussion.
Kant says: Wieviel und mit welcher Richtigkeit, wuerden wir
wohl denken, wenn wir nicht gleichsam in Gemeinschaft mit andern
daechten, denen wir unsere und die uns ihre Gedanken mitteilen!"
("Was heisst: Sich im Denken orientieren?", published 1786.)
(How much and with what accuracy would we think if we were
not, so to speak, thinking together with others, whom we tell our thoughts and
who tell us theirs! - Kant: What means: To orient oneself in thinking? 1786.)
(J.Z.: Compare also Kleist's remark: "Denken ist ein
kollectiver Prozess." - Thinking is a collective process. - J.Z.)
What the editor of
"Truth'' says against you, on page 59, displeases me very much. I miss
logic. He says:
"Another
factor which he would do well to remember is that the Slavonic countries would
hand-pick the men they sent to join the international force, and that these men
would have wives sweethearts, mothers and fathers to serve as hostages for
their good behaviour. Etc."
What the editor
does not perceive is: Here is one of the numerous factors stronger than
national feelings and, therefore, governments - - if possible - - will,
probably, use this factor when national feeling proves to be not strong enough.
You never asserted
1.) that family
relations are the same as relations of a man to his nation,
2.) that family
interests must always loose if in opposition to economic interests and that
not, perhaps, on the contrary, family relations will prove to have a stronger
influence, in many cases, than economic ones.
But the average
reader does read the articles carefully, line for line, and for him family
interests and national interests are about the same thing.
After the editor
had pointed out a view which you never held, he takes it for granted, that you
held it and says:
"It is a queer
view of mankind, and one which Truth is proud not to hold."
An impartial reader
must confess, that the editor here displayed much ability for
discussions, but that he would, probably, have raise against you better
arguments - if he would have had them.
--------------------
You remember, that
I always thought it necessary not to violate national feelings in the next war
and to so arrange things, that the real national feelings of average men and
their economic interests were on the one side and a commanded nationalism
on the other.
Take the warfare of
Mao a year ago (it seems that now it has changed) as an example.
Chiang Kai-Shek told his soldiers: I order that you consider
the territory I command as your fatherland. I order also, that you consider my
interests as identical with those of the fatherland. (All rulers of the old
type spoke thus.)
Mao said: The fatherland is calling for you, the part which
Chiang suppresses as well as that liberated by me. Come over to me! If you
follow me, the civil war is over. End the civil war! Fight against hunger by
working on your hereditary soil. I will send you to your family. You will have
nothing more to do than to apply to him and get the money for your voyage to
your village and enough food.
Such words are only
possible in a civil war. But - - as I pointed out in several letters, it is
possible to transform every war into a civil war, by organising, at the
beginning of the war, a revolutionary government and to declare: we are merely
the allies of this government. In this way the Romans won many wars as
Montesquieu describes in his book on the Roman Empire.
Masters of that
method are the Russians.
(J.Z.: Soviets! With the qualification: Real masters of it
can be only those who have all rights and liberties on their side! The others
can only achieve temporary successes with it. Unfortunately even when as bad as
Mao was, they can gain power thereby, if the better side does not apply this
method and is not all that much better, anyhow. - J.Z., 8.3.03.)
I refer to the examples in my former letters. I think that
you studied the matter as well as I did and do know at least as much about it
as I know. In the Eastern Zone of Germany, the Communists constantly appeal to
the national feelings of the Germans, organised a National Front, to
demand every day the "unity of Germany", and all that with the
greatest success. In every case the Russian method proves that it is in no way
necessary to construct an antithesis of internationalism and national feeling.
Democrats may use this method as well as the Russians. (Libertarians and
anarchists could do so even more successfully, especially if they left all of
their opponents the panarchistic option! - J.Z., 8.3.03.)
The true inventor
of the method is - - in my opinion - - Mazzini. (I possessed his works in an
English translation, burned.) He always declared: I am an Internationalist, but
before a man can be a good Internationalist he must become a good Patriot.
Statesmen like Bismarck accepted the principle, with the - - for them - -
necessary modifications. Bimarck often said: One is not a good German without
being a good Saxon, Bavarian etc. One day he openly declared: I do regret that
the last King of Hannover compelled us to annex his country. I would have
preferred a Hannover under her own ruler and I am sure, that such a state of
affairs would have very much strengthened German patriotic feelings in
Hannover.
In Switzerland the
method has been practised for several hundred years, with the best with the
best success and in the USA for about 200 years. The men of Rhode Island and of
Vermont do like their little communities no less than the inhabitants of the
little German towns at the times when these towns were autonomous republics.
That does not prevent them from being patriots of the USA at the same time.
(J.Z.: This method can be almost perfectly practised only
under full exterritorial autonomy for all voluntary communities. For then no
suppressed minorities would remain. Moreover, new minorities could at any time
become exterritorially autonomous, if they wanted to and individuals could
secede from any community and join or form other volunteer communities, just as
they do in religion, under religious tolerance. Alas, the modern
"science" of politics has so far failed to look at this other side of
that coin. It only contemplates territorial nationalism and the territorial
realisation of any other ism, either in a centralised or in a decentralised
way. B. did not always and everywhere express himself in favour of the "exterritorialist
imperative", although he did favour it. However, he was realistic
enough to take into consideration the present territorialist feelings, more so
than I do. But, from my point of view, exterritorially the real nationalistic
etc. feelings can be much more fully expressed than the commanded ones.
Even if that change-over will occur only in the future, after a major
enlightenment effort. The technical means, for that enlightenment effort to
become successful, do already exist. But they are not yet sufficiently used for
this, not even by me, a "true believer" in this respect. - Then
people could sort themselves out in accordance with their individual
preferences - as they do so already in so many spheres of their daily lives. No
major minority problem would remain, apart from gangsters and madmen of all
kinds. Territorialism pre-empts that option for most people only in the
political, economic and social spheres, which, for most people, comes only after
various other private interests, most of the time. - J.Z., 8.3.03.)
------------------
In these days I
read some passages from the history of France in an old book. (B., in his post
WW II library, had about 150 books on the French Revolution alone. - J.Z.,
8.3.03.) To what degree great economic advantages influence and counterbalance national
interests may be seen from the warfare of Louis XIV. In his wars with Austria
he had bribed the "Hofkriegsrat" at Vienna. The effect was that the
Austrian generals got the most crazy orders from Vienna, so that the Austrians had
to lose. Montecucculi complained that the designs of the Hofkriegsrat (supreme
command - J.Z.) were known at Versailles earlier than to him.
On the other hand, the history of Wallenstein teaches, that
in certain situations no gold can buy real patriots, even if they do not
possess any other good qualities or mind than their patriotism. Schiller, in
his "Wallenstein", treated the problem with mastery and displayed a
very profound knowledge of the human heart.
A book:
"Nationalism vs. economic advantages" should be written.
---------------
A great advantage
for nationalism is now the impossibility to provide for old age by saving or by
an insurance. At short intervals the value standards of all countries are
devaluated. The people, who still save and take out a life insurance, will thus
get their lesson. Others have already been taught it. Thus the possibility to
survive in one's old age depends fully on pensions etc. granted by governments.
That adds a strong argument to keep on the side of governments, may they be
ever so bad. Governmentalism and nationalism for most people is the same thing.
(Especially by the hordes of bureaucrats who are employed by
governments and at the taxpayer's expense! - J.Z., 8.3.03.)
----------------
The Malthusian
displays its old principles:
1.) The fact that at all times selling the produce
has been a greater problem than producing it, is not to be considered.
2.) The fact that Free Trade makes quite unimportant then
quantity of food produced within a state's frontiers, is not to be considered, either.
3.) The fact, that an unstable currency prevents
improvements of food production, especially those, which cannot be done without
credits, is quite unimportant. Wherever food is short, this is always to be
attributed to overpopulation.
4.) "Principles" of the Malthusian League, No. 2:
".... reducing
the reproduction of all individuals who suffer from serious hereditary diseases
or defects, or who are incapable of supporting themselves and their
offspring."
There is never to
be distinguished between an incapacity that is due to social or economic and
artificially created obstacles, and others. "Ca va sans dire." (That
goes without saying. - J.Z.)
On page 3 The
Malthusian publishes an article: "Hunger, The Politician".
If, upon this, one
would say to the editor: Did you never read articles in USA agrarian journals
or Argentinean ones, where it is pointed out that, quite obviously, there are
not enough eaters in the world, so that the producers must burn the unsold
victuals?
The editor would certainly answer: I never read such
reports. I wish that they don't exist and would rather deny the
existence of any agriculture in the USA and in Argentina than to admit this.
The literary
success of Malthus and the Malthusians is in favour of such a logic.
(It has the very great advantage to make observations,
facts, thinking and experiments quite unnecessary for them. Like some
Christians, and most Communists, Nazis etc., they are only expected to believe.
- J.Z., 8.3.03.)
Very
faithfully Yours - signed: U. v. Beckerath.
___________________________________________________________________________________________
Dear
Mr. Meulen, 17. 8. 1950.
you were so kind as to send me an article of the Times
10. 4. 50. about racial questions (which I returned in my letter of 22. 7.
50.).
Your and my opinion: Equality of rights does not
involve equality of capacities - - is confirmed by a passage, which I found in:
"Idyllen vom Lateinischen Ufer" by Ferdinand Gregorovius, first
published 1856. (F.G. is one of the best German historians and
stylists.)
"Hier zeigt
sich der Unterschied des nebelfeuchten Nordens und des sonnigen Suedens. Der
neapolitanische Fischer, so armselig er ist, halbnackt, im aufgeschuerzten
Beinkleid von Linnen und im blossen Hemd, die rote Beutelkappe auf dem Kopf,
lebendig, beweglich, uebersprudelnd vor Laune, vor Witz und gutmuetigem
Geschwaetz, immer sangesfroh und zu Schwaenken aufgelegt, macht neben unserm
stummen und einfaeltigen baltischen Fischer eine theatralische, ja
selbst ideale Figur. ... Man wird as nicht moeglich finden, das baltische
Fischer je eine geschichtliche Rolle spielen koennten, wie die neapolitanischen,
welche auf Masaniello stolz sein duerfen."
(Here shows the
difference between the wet and foggy North and the sunny South. The Neapolitan
fisherman, as poor as he is, half-naked, with rolled-up linnen trousers and
merely a shirt, the red baggy cap on his head, lively, mobile, overflowing with
good spirits, wit and good humour, full of song and inclined to practical
jokes, makes a theatrical, even an ideal figure aside of silent and
simple-minded Baltic fishermen. … One will not consider it possible that Baltic
fishermen ever played a historical role like the Neapolitan ones, who can be
proud of their Marsaniello. - J.Z., 8.3.03.)
The latter passage
is interesting and confirmed by history of the many decades following
Gregorovius' observation. But G. ascribes to the climate what obviously
is produced by racial conditions. In the summer the Baltic has much more
sunshine than Naples. But the fishermen of the Baltic have been slaves for many
centuries and perhaps longer, while the fishermen of Naples never were. On the
other hand, the fishermen of Norway never were slaves, as far as I know.
--------------------
In the Malthusian
of July 1950 is quoted from "Sunday Express":
"Why two
million families still wait for homes."
The Malthusian adds:
"Our explanation.
Because we have not
land enough to grow timber in this country."
Here is the whole
Malthusianism! You and every real expert would say: England has not enough
timber because the foreign exchange control prevents Norwegian timber producers
to sell their timber in England, something that
t they were permitted to do for centuries.
Malthusian
principles - - although not stated expressis verbis - - are:
A country's
political frontiers are to be considered as natural walls. The opinion, that
Free Trade makes the frontiers economically disappear, is a mere theory and has
nothing to do with practice.
Unconsciously,
Malthusians follow this rule of popular "logic":
Two facts or two
situations occur at the same time, consequently, the one is the cause
of the other.
By this kind of
logic Hitler won in all discussions.
"Here is your misery" - - he said - - and here are
the Jews", and you do not yet see where lies the real cause of your
misery??
To prove, that two facts, or two situations, occurring at
the same time, are not in the relation of cause and effect, requires
always some experience and reflection, both of which cannot be displayed in
discussions before a mass of average people.
---------------------
Some philosophers
contested that innate ideas do exist. Perhaps they are right. But
these philosophers did not become aware that innate methods of thinking
exist, of which Malthusianism is an example, although a deterring one. The
first who supplied a theory of innate methods of thinking was Kant.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear
Mr. Meulen, 18.
8. 1950. Your letter of 15. 8., just received.
Roman coins. If Del Mar - - whose book I did not
read - - asserts that Rome, at the time of the emperors, had two standards,
he is wrong. In Rome were coined gold, silver and copper, the latter (at the
time of the emperors) as "Scheidemuenzen" (small change coins). It
was the same as in England in the 19th century. England was on a
gold standard, although in the shops copper coins were widely used as a means
of payment. I do not know of any record from the time of the emperors stating
that copper was used as a measure of value and I am convinced that it was not.
But the main
question is: Can one say, that a country is on a gold standard (or a silver
standard or even a copper standard), although there is no paper money
convertible, at a fixed relation, into metal? The answer must be, that several
countries, such as Rome, at the time of the emperors, were on a gold standard,
although paper money not was in use there and then.
If that is admitted, then the modern use of language in
England (not in the USA) is not logical.
----------------
Japan and
Malthus. I will believe that in Australia per labour hour more food is
produced than in Japan. The Australian worker uses all resources of technology,
while the Japanese practically works as he did centuries ago. Also the Japanese
inflation (the word used in the sense as when the word arose in the USA)
prevents all improvements in Japan that are only possible by credit. The
question is: To what extent acts the number of inhabitants besides such
influences? Is there an overpopulation, the word used in the sense of Malthus?
------------------
Phrenology. Gall reports in his work (burnt) that
he opened more than ten-thousand skulls before he wrote the book. I am in doubt
whether any of his critics opened 1 % of this number. Perhaps no anatomist
before or after Gall opened so many skulls as he did and had such an
experience. Gall was the chief physician of the prison of Vienna. Before he
opened the skull of a dead prisoner, he studied the record of his trial, also
he asked the keepers and the fellow prisoners what character traits they had
observed in the dead. It there was a trait very distinctly marked, he compared
the skull with the skulls of animals in which the same character is to be
found. Since you studied the matter, you will remember his experiences with the
skulls of girls or women that had murdered their new-born children. In all
cases, he found at the place, where apes have a convex form of the
skull, instead, a concave form. Apes do lover their children more than most
other animals or men. Phrenology is one of the best-founded sciences. I think
that its adversaries are pious Christians. You know that theologians were the
most violent adversaries of phrenology and from their standpoint rightly so.
-----------------
Voluntary
Militia. And I agree with Adam Smith, who said that freedom of speech and
press will be upheld only as long as those, who are interested in it, are
armed. (He might have added: If they are also properly organised and trained
for this purpose and for upholding all other individual rights. - J.Z.,
8.3.03.)
------------------
Gold production.
It may be, that all my conjectures about the true reason of the increase of the
price level after 1492 are false, but that the production of precious metals
after 1492 cannot have been the reason is obviously proven by the numbers I
provided. (The numbers concerning the world's production.)
Jevons'
"Money" is burnt. (In B.'s library. I microfiched it in PEACE PLANS
No. 628. - J.Z.) When Jevons told that gold between 1789 and 1809 fell 46 % in value,
he means - - I think - - in purchasing power. (The word was not yet in use in
England at the time of Jevons.) Should an expert like Jevons really have not
become aware that in 1788 there was one of the worst ever harvests that Europe
experienced, and that, in 1792 began a series of wars destroying a great part
of the current production and of goods produced earlier, especially houses? And
that between 1809 (rather 1815) and 1849 technology improved relatively more
than at any period in known history? And that thus production per labour hour
become larger and larger and, thus and naturally, prices had to fall?
-----------------
My health. Goethe
dedicates to his Werther the verses:
"Zum Bleiben
ich, zum Scheiden du erkoren,
(Me to remain, you to pass, were selected,
"Gingst du
voran, und - hast nicht viel verloren!" You went ahead - but haven't lost much.
- J.Z.)
(Trilogie der
Leidenschaft.)
You might say the
same. In this Europe - - it seems - - the first who departs is the one best
off.
-----------------
J. E. Halloway.
You say - - and very probably rightly so - - that Halloway means "only a
circulation of gold coins convertible internally into paper at a fixed price by
weight".
To distinguish
a.) gold coins convertible into paper,
b.) paper convertible into gold coins,
may seem a distinction like that of old scholastics: If
there is a hole in the wall and the ball (of the player, in the kind of ball
game popular in the Middle Ages) cannot pass through the hole - - is then the
hole too small or the ball too large???????
But I would prefer
the expression: paper convertible into gold.
For many centuries in history paper money was not in use,
but gold always was, with very few exceptions. (Sometimes in old Egypt, where
the kings declared gold to be a royal monopoly.)
But the old
expression: "convertible" is today no longer sufficient. It must be
stated:
a.) convertible at
the issuer of the paper money? or
b.) convertible at
the bullion market?
Halloway and
Alexander certainly mean the first. They never imagined - - I think - - a paper
money
A.) convertible
only at the bullion market,
B.) without cours
forcé, so that everybody may reject it, if it is not quoted at per at the
bullion market. (Of for any
other reason
or suspicion they may have. - J.Z., 8.3.03.)
The latter is the
great discovery of the Four Bills. But I think that Greene and Tucker meant
about the same, but did not express it with sufficient clarity.
If Halloway and Alexander would consider with care the
possibility B.) then they would - - I am convinced - - support this system.
-------------------
Rittershausen and I
we agree, that Spencer's idea of the legal possibility of "ignoring
the State" contains the germ of a new social science and the very one
which is needed. Create a legislation (rather: constitutions! - J.Z., 8.3.03.)
by which the individual is permitted to do for himself what the State in
totalitarian (authoritarian and democratic! - J.Z., 8.3.03.) communities claims
to do for the individual (as a State monopoly) is the beginning. The first step
should be - - and here I agree with Rittershausen - - to insert a clause in the
social insurance laws:
"He who
insures himself is not subjected to the social insurance laws."
The next step would
be to provide oneself with employment.
Rittershausen and I agree, that at the moment there are many
people whose brain is not enough developed to conceive such ideas. Also that
these people are unable to provide for their old age or to insure themselves
voluntarily. They rather speak about beer, cigars and Toto-betting, never about
social insurance.
Perhaps one day all
these things will be permitted it those interested offer the ruler an indemnity
(bribe! - J.Z.) for such liberties. That would be an analogous Mohammed's admirable
invention of "bought tolerance":
"You will not become a true believer??? Well - - that
costs one gold coin per year and capita!"
That was excellent. By that invention the rulers become the
protector of tolerance. On the other hand, those, who were persecuted in their
own country, for their religion, always found an asylum in Islamic countries.
That may have been the reason of the military superiority of Turkey until about
1700. The great canons, by which Mohammed II. conquered Constantinople, were
built - - as Gibbon reports - - by a renegade, who fled from Hungary, with the
Inquisition behind him.
---------------------
Concerns German
students Rittershausen has a better insight than I have. In general it is true,
that the new generation is in many respects better then the old one. There can
be observed a true eagerness to learn, among
young boys and girl. (In my youth - -
I must confess - - I was pretty free from such an eagerness and most of
my comrades were, too.) But what I complain about is the absolute lack of
interest for political economy, if it would be permitted to generalise may own
observations.
(The "economics" of bureaucratic meddling, even
when mathematics and statistics are extensively used in it, is really not an
attractive and inspiring subject. Freedom economics is rarely taught anywhere.
It can inspire, especially if it is comprehensive and consistently taught. -
J.Z., 9.3.03.)
Heinrich von
Kleist, the great German poet
(He died by suicide, in the year 1811 at Wannsee, together
with his sweetheart. At his grave often flowers are to be found, put there by
young Berlin girls.) The grave is where he died, quite near the lake. All
visitors, even those, who know nothing of Kleist, are impressed by the strange
melancholy of the landscape.), this Kleist, wrote an excellent article on
education. He pointed out that, if the behaviour of one generation is too
bad, then it excites the contempt of the next, which tries to become in
everything the contrary of what their parents have been. This agrees with my
personal experience. (Kleist closes his article humorously: If his theory
should be accepted and persons should be wanted to excite the contempt of young
people, say, for drinking and sexual excesses, like in old Sparta, then the
government should take him. (Whom? - J.Z.) He would be ready to
sacrifice himself for the future of his fatherland.) (Would he? I do not get
this "joke" in B.'s translation. But I found another article by
Kleist worth reading: Über das allmähliche Verfertigung der Gedanken beim
Reden." - On the gradual manufacture of thoughts while one speaks. - J.Z.,
9.3.03.)
----------------
"Truth"
- letters. Your sister will agree with you it she examines the thing a
second time. What you say of "the primitive desire for the good opinion of
fellow-men" is widely confirmed by experience. Adam Smith and Darwin, both
profound connoisseurs of the human heart do here agree. ("Theory of moral
sentiments", "Descent of Man".)
But if one is contemptuous of one's government and of one's compatriots,
too, if one thinks, that both are on a false track, and if one finds comrades
who think likewise, then one's behaviour changes - - seemingly, not really - -
completely, and that is the case which the editor of Truth does not consider.
---------------
Letters to the
"Times". I agree with you that
Lord Hinchingbroke is too "theoretical". But I take from his
letter that North Korea really is
bombarded as Germany was. H. protests, for which he deserves esteem and
acknowledgement. The worst communist government could not bring Korea within 30
years into such a state as the present warfare brought it in a few weeks. One
day all of us will bear the consequences.
(Presently the North Korean Communist regime builds nuclear
weapons. Rockets it has already. - J.Z., 9.3.03.)
-----------------------
Suppose that the
present events could be observed from the planet Mars and suppose the highly
cultured population of Mars decided to end the war on Earth by sending a deputy
from Mars to Earth with a new and irresistible weapon. The deputy is ordered to
use the weapon in favour of that party which displays humanity (Mars-humanity!)
and whose actions are not in contradiction to its words. What would happen? The
deputy would return to Mars and report: If our moral principles would be
applicable in this case, then both deserve to become annihilated. Then he would
report the bombarding of Korean cities and villages and of Russian prisons.
----------------------
What Cecil
L'Estrange Malone's letter concerns, he is quite right. But it seems, he does
not possess a program.
(J.Z.: Who does? Very few do. What is deplorable, though, is
that they are not even aware of it and that they do show no interest in and
understanding of real programs once they are pointed out to them. All too
numerous popular prejudices stand in their way, which they hold to be truths.
Thus my interest in an encyclopaedia of the best refutations. - J.Z., 10.3.03.)
What William Fagg
from the Royal Anthropolgical Institute says, is right, too. But - - of course
- - he says not all what is to be said. One fact illustrates the
situation:
The only country in
the world, where Nazis are permitted to display quite openly their propaganda
against the coloured people, South Africa, treats the coloured in a manner that
Hitler would endorse. The number of the whites seems to be about 3 1/2 millions,
and a part of them certainly are not adherents of Malan. It would be easy to
bring to reason a community misgoverned by so few crazy people. But nothing is
done, neither by England, nor by the UN, nor by any other. Ask Zander about the
effect of this inaction. The coloured say: All what the whites allow to be
printed about democracy, humanity, etc. is mere swindle. Look at South Africa
and you see what their true opinion is. The world must be cleared of this race!
(J.Z.: Not that various Negroe people in Africa treated each
other any better or any worse than white people treated each other e.g. in both
World Wars. But then objectivity on such questions is rather rare. Emotional
and biased arguments have more popular appeal. - J.Z., 10.3.03.)
------------------
'The
"Economist" of 15. July contains several interesting articles. (J.Z.:
I would have liked to have B. as a selector and commentator for one of the
presently e-mailed libertarian newsletters. - J.Z., 10.3.03.)
"Taxes and
Korea." All English
"experts" take it as "self-evident", that whenever the
present yield of taxes will not be sufficient, then the Pound must again be
devaluated.
(J.Z.: That reminds me of the blood-letting "cure"
that was practised, perhaps for centuries, by medical "experts". -
J.Z., 10.3.03.)
England has to choose: either grant monetary liberty to get
as much in taxes as are necessary to pay for its defence, or to continue to be
led by her "experts" and to be easily conquered.
(J.Z.: Under full financial freedom and full liberties in
all other spheres, there would be no compulsory taxation, either, nor any great
need to defend these liberty against a seemingly strong dictatorship, which
could be rather dissolved, with relative ease, through these liberties, including
the well armed, organised, trained and motivated readiness of freedom lovers to
defend them, should that become really necessary in some cases. - J.Z.,
10.3.03.)
That a devaluation is no help, should be conceived
even by the present "experts". It is not. (J.Z.: Most of them are
more members of a priesthood and its dogmas than of a real science. - J.Z.,
10.3.03.)
'The, defence of
Germany". What I wrote to you about
a voluntary militia is - - I learn- - already realised by the Russians.
(J.Z.: Soviets - not Russian! Not so voluntary, either, was
the "people's police" (Volkspolizei) in East Germany! Moreover, this
"militia" was not to defend individual rights and liberties but,
rather, their systematic suppression! Thus there were ten-thousands of deserters
from it to the West. And of the rest many were merely fearful about what would
happen to their remaining relatives in East Germany or did not want to leave
their wives and sweethearts there. As for the rest: More were, probably,
mercenaries rather than fanatic supporters of the regime. - The technique of
repression is better known than the technique of liberation. - J.Z., 10.3.03.)
It seems not to be mere theory what I said. But the Western
Allies consider the militia idea as merely a "theory". They will,
perhaps, learn within a few months, that it is very practical, and that
weapon, which one ignores, so that everyone else can take it up, could easily
and really be taken up and used against him, who considered that weapon to be
merely "theoretical". It is not worthwhile to talk about it. The
Russians act (J.Z.: The Soviets did. If the Russians etc. had, the Soviets
would have thrown them out, long ago! - J.Z., 10.3.03.) and the others do not
do even as much as talk about it or at least to listen when others talk. What a
world! I am glad to be 69 and to have no children.
---------------
Very faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear
Mr. Meulen, 18.
8. 50.
on page 2 of
"The Malthusian", July 1950, a speech of Sir John Orr is
quoted:
"During and
immediately after the first world war, when the prices of food were very high,
we added about 111,000,000 acres. During the second world war we added almost
nothing, in spite of the great shortage of food."
But in the
June-edition, page 1, there is an article: "Should poor land be
cultivated?", where it is pointed out - - quite convincingly - - that it
is much better to improve land under plough and to "put labour on this
good land, and leave the poor land to whatever nature is willing to give".
Obviously this was done in the second world war. And now the Malthusian blames
this procedure, which it praised 4 weeks ago.
-----------------
The Malthusian
brings things as like permission of abortion and contraception together with
the economic part of Malthusianism. The first belong to the sphere of
personal liberty, and the here involved liberty should also be granted, even if
all economists agreed that children are the best investment.
-----------------
You will have read
in the "City Press" of 28. 7. 50. that the Swiss government has asked
all consumers to maintain certain minimum stocks of edible fats and oils. The
advice is excellent and if you would comply with it, you will invest your money
in the best way.
I enclose two
recent reports about the confiscation of parcel and, perhaps, letters by the
Russians. Berlin receives sends daily about 5 tons of mail. If an aeroplane of
the usual 7-ton type, would go once a day for the German post between Berlin
and Frankfurt/M., these confiscations would be impossible. I assume, that this
is not done because those, who have to decide, are bribed by the Russians. It
was the same at the time of the blockade. I wrote to you previously about this
matter.
(J.Z.: In many cases a bribe to the decision-makers might
not even have been necessary. West-Berlin had about 30,000 card-carrying
communist party members in its "public service". Not all of them were
placing their bets both way. Many of them were convinced communists. - In the
postal "service" and in the miseducation department, the percentage
of communists tends to be higher than usual. - J.Z., 10.3.03.)
---------------
The bribery by the
Russians is a very serious thing. English and American papers report, at short
intervals, bribery of high officials. I think that much less than 1 % of these
cases is detected.
-----------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 23.
8. 1950.
yesterday I received:
1.) "Truth" of 4.8.50,
2.) "National News-Letter" of 3. 8. 50,
3.) "City Press of 14.7. & 4.8.50,
4.)
"Economist" of 22.7.50,
5.) "The London Newsletter of 20.7.50,
6.) "The
Word", August 1950.
Thank you very
much!
In the "City
Press" of 28.7.50, which I received some days ago, ago, I find this hint:
"Maintain stocks of
fats, oils."
"The Swiss government has asked all consumers to
maintain certain minimum stocks of edible fats and oils.
Wholesalers have approved this measure, which they say will
help to reduce stocks at a time when a price decline is expected. The
government has a stock-pile of four month's supply."
I bought some
flour, oil and oats.
Since yesterday
West-Berlin is practically without coal for household purposes. Every household
needs now a special permit to buy briquettes, the latter being - - I estimate -
- more than 9/10 of household fuel.
----------------
In City Press of 4.8.50. is reported a boom in hire-purchase
business, concerning radios, furniture, etc. Retailers say that they could do a
much larger volume of business if they could get the money from the banks. The
government does not like the hire-purchase business because it thinks that kind
of business promotes inflation. If the word "inflation" would still
be used in the sense of 1913, such an opinion could not be conceived. The
correct use of words is an important matter. Now the English language does not
have a word to express that, what 1913 was expressed by "inflation",
that is: A greater quantity of forced currency poured into the economy than the
economy would accept if the currency would not be endowed with cours forcé.
If the people
expect inflation in the sense of 1913 or a devaluation, then it buys on
hire-purchase terms. By such terms they get the chance to pay a part of the
price in further debased money.
The government or
its speakers should state how and to what extent hire-purchase can cause an
inflation.
(J.Z.: While the true cause is denied, its presence is
ascribed to dozens of other "causes", whose connection with inflation
is merely asserted rather than proven. To the shame of the professional
"economists", governments, mass -media - and they themselves - they
do get away with this! They even speak and write about "credit-inflation.
Do not forgive them, for they do not know what they are talking and writing
about! - J.Z., 10.3.03.
--------------------------
In this issue is
reported the 15th annual meeting of the Marlu Gold Mining Areas,
Ltd.
Before 1914 very
many (perhaps most) reports announced the number of workers in the mines, often
separate numbers for whites and coloured miners. But for many years now I do
not find the numbers of workers mentioned in even one report of a gold
mine. This number is interesting for economists and shareholders. If old Strabo,
in his report on the silver mines of New Carthago would not have added his
number: daily output = 25,000 drachmas, the number of workers (40,000), then
his report would not have been so interesting. Now we are able to calculate
that the output per capita and year was about one Kilo (2.2 pounds av.), which
does not seem much.
For shareholders in
general it seems good to sell the shares if the daily wages are pretty equal to
the daily output. Without knowing the number of workers, the financial numbers
of the report are in an economic twilight.
-------------------
You marked a
passage in S. W. Alexander's report of the week, where he points out the true
meaning of importing Swiss watches to the USA, with the effect, that 19 of 21
USA watch-works closed down. The passage really is remarkable. Alexander is one
of the very few, who see that imports are good in every case. Either they
represent the payment for exports in the past or they enforce (not only favour)
exports in the future. But the logic of
the average businessman is: The man XYZ is prejudiced by the
imports. XYZ is an inhabitant of our country. Consequently, the whole
country is prejudiced; import must be stopped.
(J.Z.: Apparently, 19 of the 21 USA watch-making firms grew
up only under the umbrella of protectionism and collapsed once they were
exposed to free competition. They had existed for all too long,
monopolistically over-charging their countrymen. - J.Z., 10.3.03.)
Free Traders have
explained the true meaning of import and export for 200 years. But today the
number of people who conceive the matter in the true light is not larger,
percentage-wise, than at the time of Adam Smith. Perhaps this is one of the
symptoms that Nature has already resolved to exterminate this race and began by
blinding it in such an easy to be conceived and important matter.
(J.Z.: Free Traders have failed a) to put and keep all their
literature in print, at least in affordable alternative media, and b) to
combine all their best arguments and other data in a handy and very affordable
encyclopaedia, available to every journalist, economist and interested layman.
Truth, in the battle with swarms of lies, errors and prejudices, does not
automatically win but may be finally killed, like the 300 Spartans were, at
Thermophylae, by the multitude of attacking Persian serfs. Such an
encyclopaedia, as their defence in this battle, would have made them and others
immortal and victorious in every confrontation with the non-protecting
"Protectionism". The occasional new book for Free Trade and some
periodicals, that do not even include full monetary and financial freedom is
their explanations, are not sufficient to help even these plain truths to
victory over prejudices and vested interests. - J.Z., 10.3.03.
--------------------
(Euro & Central
Banking. - J.Z.) Truth discusses the Schuman-Mackay-Plan of a European
currency. Truth did not say all what should be said. My objection is:
1.) Has the main imperfection of the now existing European
currencies been their multiplicity?
2.) Has not the main imperfection of these currencies been
their monopolistic character? The fact that a little group of men, or even one
man only, has the power to commit the greatest blunders (devaluations,
credit-restrictions etc.) with the country's currency? And this imperfection (a
polite word in this case) should cease once the currency of the whole of Europe
would be subject to the power of a little group of men or of one man?
(J.Z.: In the meantime precisely this new man-made disaster
has happened, as a "progressive" measure! - J.Z., 10.3. 03.)
"Truth"
is unaware, that Europe had a common currency before 1914, namely gold
coins! That the weight of gold contained in a sovereign and in a 20-Mark-Coin
was not quite the same, was of no more importance than the difference of
Fahrenheit, Celsius and Réaumur degrees in temperature measurements. The principle was the same in all
countries.
------------------
At page 111 is an
excellent article: "How Britain Can Best Help". He finds out that
re-armament is necessary. Two years ago it would have been a good thing, what
the editor now demands. Now, perhaps, all is too late. Russia has several
million men under arms and possesses plenty war materials. Two million Russian
soldiers are at the Western frontier. That all was known in the year 1948 as
well. For a year now, it has been known that Mao has at least 6 millions under
arms. And what had been done before the present war? Nothing else than to so
reduce the American forces, that their number was, as McArthur said, 1/21 of
the North Korean army. Their ammunition supply was enough for 2 days. (J.Z.: A
good instance of "protection" through democratic governments. - J.Z.,
10.3. 03.)
Perhaps
there would still time for help by a voluntary militia that organised itself in
the whole of Europe. And if any of the governments protests, then it should be
taught that its rights cease where self-defence begins and that a government by
now cannot any longer be regarded as fit for the defence of a country. But
there are many people in all countries who say: Rather become subdued by the
Russians and give up all hopes for a better life for the future generations
than seriously meditate on such matters, so ver far from household
trifles, from card playing and talks on everyday matters, which are their concerns.
That - - as the author reports - - Morgenthau emphasises a new rationing and
allocation of materials is not surprising. That nobody tells him that America
won in spite of such crazy measures is still less surprising.
Page 112: Some
demand a capital levy. Obviously, they do not know that today a capital levy is
technically impossible. It is not possible to cede a part of a ship, of a house
or of a machine to the State.
And if the taxpayer takes from his income what he seemingly
takes from his capital (there is no other technical possibility) then the
raised tax cannot be stored as coins, it must be invested. It
must he invested so, that the government may dispose of it at any time. It is
impossible to find such an investment.
But it really seems that, in our time, a minister is
respected as an expert because he does not ponder over such
"theoretical" aspects and thus applies methods which, perhaps, were
to be excused in times when all taxes still had to be paid in coins and
when raising a tax on capital meant: The taxpayer must cede a part of his
stored coins to the government.
The general
mentality of the public and of statesmen is still the mentality of the
"coin age". The tax system, external and internal trade, the laws
concerning debts, all is still on the same footing as it was at the time of the
coin age. Very evil is that paper money and banknotes are considered as an
"Ersatz" for coins, and, consequently, clearing is considered as an
"Ersatz", too.
Until now no
economist or sociologist has found out that clearing is the normal kind
of payment. Consequently, scientists did
not find out that no creditor (landlord or worker, tax receiver or physician)
should be entitled to another claim than that possible of being settled by
clearing, but that every debtor should be entitled to pay with coins, if he
possesses coins and is willing to use them as a means of payment.
Coins are an "Ersatz", although an indispensable
one.
Economists, until now did not realise that clearing must
remain a privilege of those classes, that now use it, as long as clearing
cheques are not standardised.
Standardising clearing cheques is the means (and the only
means) to make the normal method of payment a general one.
But, who is
interested in such thoughts? I am glad that I did not lose my time in working
out a manuscript about the subject. Certainly, I would find no printer, and if
- - no reader, and if I would find a reader, it would be an average professor,
who contents himself by pointing out that the ideas of the book differ from his
own, and therefore must be nonsense.
(J.Z.: I do greatly regret that B. did not attempt such a
manuscript. At least Rittershausen began his "Geldtheorie" - but he
did not manage to finish it, either. However, its 5th version went
already very far - and, perhaps, all of them deserve to be reproduced at least
on microfilm or on a floppy disk, to be one day available to someone who will
write the classical work on this subject. - J.Z., 10.3.03.)
----------------
Excellent is the
National News-Letter No. 732. What Stephen King-Hall says of the atomic bomb is
quite right, especially that London and New York are certainly much more
vulnerable than Moscow. This weapon already turned against the West. Two
years ago, there was still time to destroy the Russian factories for atomic
bombs. But in England there was no Yorck von Wartenberg, as in Prussia in 1812,
and no Jameson, as in 1895. But an indifference was there which, nearly at all
times in history was the first sign of a coming defeat. Now all people
are wise enough and begin to see what they had so far neglected. I am afraid:
too late.
What can be done is to save the important literature to Java
or Ceylon or another place, probably not involved in the next war, but
cultivated enough, so that some of the inhabitants appreciate books and will
try to save them if the populace wants to use them as fuel.
(J.Z.: I believe B. never forgave those American occupation
soldiers of whom it was reported, that they managed to use the books or private
libraries, in the houses they were quartered in, as mere fuel when their
State-socialist administration did not manage to supply them sufficiently with
proper fuels. - Neither will I. I would have rather used up the last bit of
wooden furniture for this purpose, or chopped some wood in the remaining
forests etc. Perhaps he did not try too hard to persuade me not to try to
emigrate from Berlin to Australia - with this motive in mind? - J.Z., 10.3.03.)
But - - to whom speak about saving the literature, say,
books like that of Tucker? In the best case I would get a polite reply and the
assurance that the thing should be considered. And in the evening the fellow
reads the letter at his inn, so that his colleagues may have something to laugh
about.
---------------------
"Economist" - - very good - - as usual, points out in
"The First Casualties", the incapacity of all who had anything
to do with Korean affairs before the war. Now the same people are still in
office and try to make good, what they neglected, by burning Korea and a
warfare which may produce the extermination of the Korean race. The West is
vis-à-vis such a warfare as indifferent as it was vis-à-vis the Korean
administration before the war.
(One of the results of these events, half a century ago, may
well be, that the North Korean regime may now be able to prepare for a nuclear
war with its own nuclear "weapons". Actions have consequences,
especially those which the "activists" and "experts" did
not foresee. Carpet-bombing etc. does not spread love and brotherly feelings
among the survivors. - J.Z., 10.3.03.)
---------------------
"The London
News Letter". A very good paper. Sees quite well, that in economic sphere
there might be done something. It quotes - - as City Press did - - J. E.
Holloway and expresses the opinion that there may be a connection between the
present money system of the West and its present military situation. London
News-Letter
- of course - - has no distinct program. The editors
do not become aware that in economics - - as in war - - general ideas are not
that what is needed. LNL says - - to give an example - - "restore to
London the use of the King's money". - But it does not say: "Repeal
the act of 1844", repeal all acts by which British paper money is endowed
with cours forcé. That would have been distinct. And if one would tell the LNL
that such measures are necessary,
they would think: Such a fool!!
------------------
Of all these
intelligent people nobody becomes aware that Communists are superior to their
adversaries by the details of their ideas, may the ideas be ever so
crazy, like: monopoly of note-issue, monopoly of trade, etc. These are distinct
ideas, also easily to be conceived. Every worker conceives that. Distinctness
always wins over indistinctness.
(J.Z.: Not that Communism is without indistinct ideas, like
those on the "dictatorship of the proletariat", which lets it get
away with a dictatorship over the proletariat, that of "capitalism",
which lets it get away with a very much worse State capitalism, that of the
"surplus" value, which quite ignores the value of profits even for
the situation of labourers, that of "exploitation", which ignores the
much greater exploitation via direct and indirect taxation, etc. - J.Z.,
10.3.03.)
----------------
"The Word". In my next letter 1 hope to write some words
about it. On page 105 the editor quotes from "Benedetto Grace" - -
obviously Benedetto Croce - - some lines about the economic foundation
of liberty. I never read other things of Croce than quite general ideas, on
which Conservatives and Communists quite agree. His writings are - - from my
standpoint - - no contributions to progress.
---------------
Aldred says, page
107: "The road that leads to peace starts with Individual War
Resistance". Aldred does not see, that a men in the West, who now
effectively resists the war * will only change the master, who compel him to do
war service. He may resist being a British soldier, but he cannot resist to
being a Russian worker in one of the Russian ammunition factories And that he
will be - - some days after England is occupied.
(*) (How effective has individual conscientious
objection ever been to prevent or end a war? One of the few cases was the
collapse of the Tsar's army during WW I. - J.Z., 10.03.03.)
On the other hand: The last World War, as well as the
protest situation, teach that the present military leaders of a nation are not
the right men to demand military obedience. The whole system must be changed
completely - - if it is not yet too late!!!
How is it to be changed?
In a population like that of Western Europe, where nobody is
interested enough to listen to any proposition that is beyond the customary
thinking? Where even a man like Aldred is unable to go in his thoughts beyond
that which Antimilitarists demanded 100
years ago?
Very
faithfully Yours - signed: U. v. Beckerath.
___________________________________________________________________________________________
Dear Mr.
Meulen, 24.8.1950.
many thanks for your clipping from Times of 9.8.50: "In conquered Seoul". It
confirms my views on the effects of the present warfare in Korea. It the young
Korean, who wrote the report, thinks that two-thirds (of Seoul's inhabitants)
are glad that the United Nations are taking action, even if it brings suffering
to the Korean people, he is certainly mistaken, if he means that the Koreans go
so far as to be willing to endure such sufferings. It will be the
same as in Germany. Then one district of Berlin after the
other was burnt, many people said: That will be the end of the Nazi-Regime, but
many decades of the Nazi-Regime would not have produced such an effect.
(The Nazis, after murdering 5 to 6 million Jewish people,
children included, and many others of their active or inactive opponents, had
still stored, in readiness, poisons to murder about another 20 millions and
could have produced more such "weapons", upon demand by the regime.
But, mostly, it did not slaughter people quite openly, in the streets and in
their homes. - J.Z., 10.3.03.)
The Koreans speak similarly. On the other hand, the Western
writers do not consider sufficiently, that for the greater part of the Korean
people a condition like that of the peasants in Russia, now, with all its
evils, would still be a great improvement.
The young Korean
speaks of Korea's "surplus population". Korea contains 85,206 square
miles and, 20 years ago her population was estimated at 20 millions. May be
that today there are 30 millions. (Hardly more.) That would be 350 per square
mile. Germany has 481 ("Malthusian."). When Koreans emigrate it is
not because of a shortage of food in the country; the inhabitants flee from
their mandarins, their landlords and the robbers."
(J.Z.: Well, after decades of communist
"agriculture", production and trade, mass starvation did result and
many tried to flee, even to Red China, which had by now introduced at least
some economic liberties. - J.Z., 10.3.03.)
-------------------
Some days ago I
bought a book "Volk ohne Raum" by Dr. Fuelster, Hamburg, 1947. The
title is the same as that of the celebrated book (by Grimm??) which served as a
basis for the Nazi's propaganda. Fuelster tries to refute the Nazi-Theory of
the "Volk ohne Raum". Interesting is that Hitler was a 100 % Malthusian, although he probably never read
Malthus. Also he did not take the advice of Malthus to restrain births. He
said: Other peoples must be exterminated to the extent that the German people
increase. Fuelster quotes some passages from "Mein Kampf". Quite
common to Hitler and to Malthus is the absolute neglect of the possibilities of
Free Trade. Malthus founded his theory on the English population and the
possibilities of English agriculture (so as he understood them). He did not
speak of the possibility to nourish the people by Free Trade. It was beyond his
mentality to speak about such a possibility.
For people like
Hitler, Trade is to be considered as a Jewish invention and Free Trade
as the worst degeneration of it. That's "self-evident" and if one
will not believe this, such a nationalist will enumerate the names of some
traders, whose bankruptcy caused losses to some others.
For Communists
Trade is a capitalist invention and Free Trade the most evil abuse of it. For
them, too, that's self-evident.
Average people's
mentality is not different from that of nationalism or communism. Therefore,
both - - nationalism and communism - - get at once adherents when they promise
to exclude firstly Free Trade and secondly other trade and "replace it by
a just system of distribution".
Hitler was
consistent enough to choose the war as that what followed from Malthusian
theory ("Free Trade is not to be taken into consideration") for an
"Edelrasse". ("Noble race"- J.Z.) For other races he
admitted that birth control might be the right means. In every case: We owe the
last world war, to Malthusian ideas.
If the Germans and other people would have been Free
Traders, then Hitler would have been considered as a political clown, and he
would never have gained influence, but would, probably, have been beaten
up.
------------------------
Very faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen,
31.
8. 1950.
here enclosed I send you a clipping from the Tagesspiegel of
26.8.50. The commissariat of three Russian regiments in Hungary has been
arrested because the men sold weapons and ammunition to the Hungarian
underground resistance movement. Kenneth de Courcy is right: As dangerous as
the Soviet's power is: For money and vodka you may buy 9/10 of Russia. It in
the same as it was with Chiang-Kai-Shek's China. It was a powerful government
as long as its adversaries did not consider its real weakness: corruptibility
of everybody. Mao used the silver he had found at Tientsin, and the same armies
which, probably, would have resisted in battles, were no longer able to resist.
But neither England nor the USA possess a Mao.
----------------
You will have read
that the British High Commissioner forbade aerial sailing in his zone. And that
at the moment when even the British militarists see: without the cooperation of
the 2 or 3 million men which West Germnny could arm, if she had arms, a war
with Russia begins with a Russian military promenade to St. Malo!
-----------------
Yesterday I found
for 50 Pfennig the 12-th volume of Gibbon's "Decline and Fall of
the Roman Empire". I possessed the whole work until 1943, when it burned
with my library. I was very glad to get the 12th volume. I read some
pages, inter alia the page on the conquest of Constantinople by Mohammed II.
The canons he used, and without whose help he could not have taken the town,
were built by a Hungarian citizen, who fled from the Inquisition. So one may
say: It was the work of the Inquisition. Further: Gibbon explains how easy it
would have been to save Conpantinople by a little cooperation. But the Western
powers were then as indifferent as they are today. (Good words they
spent in great quantities and even some hundred soldiers.)
(J.Z.: Seeing territorial governments are almost always
incompetent to solve any real problem - being only competent to magnify and
prolong existing ones, we should no longer be stupid enough to entrust anything
as important as the defence of the limited rights and liberties, that we still
enjoy, to any territorial government and to expect that here they will suddenly
reveal competence. I suggest as a title for a dissertation: "The habitual
blunders of governments when it comes to defence." Usually too little, too
late and committing any conceivable wrong and mistake in the process, so that
the wars happen in the first place, then are prolonged and unnecessarily bloody
and destructive - and all too often are lost, even for the otherwise better
side. - J.Z., 10.3.03.)
------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen,
2.
9. 1950. Your letter of 30. 8., received
today.
Japan and
Malthus. If technical and social conditions in Japan and Australia would be
the same, so that the only difference would be the greater surface of arable
land in Australia per labourer, it is far from being self-evident that the
product per labour-hour must be greater in Australia than in Japan.
Until now experience has taught that the
output per labour hour is the greatest in the most populated countries,
if there are no cheeks by bad governments, by wars, inflations and such things.
That there must be a maximum, that's clear. But, obviously, neither
science nor daily observation revealed the necessary data by which the maximum
could be fixed with some certainty. Moreover - - and that's practically very
important - - it should not be overlooked, that there must exist two maxima:
the one for a given price of the product, the other from a mere technical
standpoint.
Germany proved the
practical importance. A slight increase in the prices for grain by the
Nazi-policy produced such an abundance of grain that its import practically
ceased. (I do not assert that it was an advantage for Germany. For Germany it
is, probably, far more advantageous to buy grain with industrial products from
wherever it is cheaply produced, Canada, Australia, etc.
Until now I could not
get information about the technical maximum. It would be easy to state
it by experiments. Experiments proper to contribute to the population theory
are not made, as I ought to know. The true reason for such experiments not
having been made, may be that at the present state of agriculture they would be
of no practical value. Every one of the more of 500 millions producing victuals
in the world - - Malthusians or not - -
will admit that, at his place, technical, social, political or
financial improvements would help him to increase his output very considerably.
What especially
concerns Japan would be an output per labour hour, producing victuals, superior
to countries like Australia,
simply because the way from producer to consumer is short in Japan, while in
Australia it is long.
Australian victuals require an additional labour for transport compared
with Japanese victuals.
-----------------------
Voluntary
militia. I know from the life of Napoleon III. that he had joined, in the
year 1848, the voluntary militia of London. I conclude that at this time such a
militia must have existed.
-----------------------
Mosley and
freedom of speech. Yes - - that's a moral asset of very considerable weight
for the English people and even for its present government that freedom of
speech has not yet been abolished, so that even people like Mosley may profit
from it.
Mosley is an
example that a politician, who displays not "theories" at all, and
simply pretends a logical connection between two simultaneous facts or
conditions, does get adherents. Success depends in politics not upon the
justness of a program but upon its logical simplicity. (For a collective,
territorial and majoritarian voting system the lowest common denominator has to
be appealed upon, i.e., usually, the opinions and prejudices of those who think
the least. - J.Z., 10.3.03.)
"Here is a Jew! - - Do you see him?? And here is a
starving family! - - Do you see it?? And you do not yet see why this family is
starving??????" - That's simple and for very many convincing.
(Astrology - - now wide-spread as ever in past times - - is based entirely on
such a logic.)
Voluntarism and
war. Certainly, voluntarism is not sufficient to win a war, but it should
not be underestimated, either. The armies of the French Revolution consisted
essentially of volunteers. I read in old books of Prussian officers of the
consternation which was produced the French tactics at that time, only possible
in an army not compelled to fight. There was told how the French
tiralleurs, without being watched by corporals, came to the Prussian
fortifications, everyone seeking out for himself a good place and than he began
firing, and every shot was aimed. Before the officers had themselves seen
such a tactic, it would have been "self-evident" and "proven by
long experience", that soldiers fight only if a corporal with a stick is
behind them. During the last years of Napoleon this revolutionary tactic had to
be abandoned and the French tactic became similar to that of the Prussians
before 1813. The fact that about 60,000 deserters were hidden in the French
woods - - an estimate of 1811 - - explains the impossibility to maintain the
original revolutionary tactics. But in 1813 the Prussians became revolutionists
and, although ill armed, they were superior to the French veterans. (J.Z.: They
were also more convinced than the French were that they were fighting for their
homes and for whatever little liberty they already had. - J.Z., 10.3.03.)
In the year 1914
the Germans counted that one German regiment equalled about four Tsarist
regiments and experience justified this estimate. But in the last war the best
German troops were vanquished by voluntary Russian
militias, of whom (sometimes! - J.Z.) only every third man
had a rifle and who were without any military experience But a revolutionist
German army would, certainly, not be inferior to any army in the world.
-------------------
Ignoring the
State. Politically, economically, socially and militarily the situation of
a State, whose population consists for a great part of people who have
abandoned citizenship, is the same as if this part would be foreigners. I
assert: In cases of distress or war, these foreigners will become allied to the
citizens, if they were well treated and the citizens' distress is not caused by
their own fault and their war is a war of just defence. Must I quote historical
examples?
------------------
Interest in
hire-purchase sales. It is true,
that the interest in such sales is high. And yet the sellers prefer cash -down
sales and gladly concede a discount (in Germany 15%), equal to the high
interest, to cash-down payers. That proves, that the interest is not too
high.
Often the
people who cannot save are at the mercy of those who can. But the hire-purchase
system, in times of depreciating money, enables the debtor to exploit those,
who were unintelligent enough to finance the hire-purchase business with their
savings.
---------------------
Tuesday (5.9.) I
come to the family Bloesz and will get the papers you sent me. Thanks in
anticipation.
---------------------
"Volk ohne Raum." That's a real Malthusian
slogan. The Nazis themselves refuted it (without becoming aware of the fact) by
their food politics. In the last two years before the war food imports
practically ceased (except for oranges and such victuals), because the
government the government granted to the peasants a moderate increase in
prices. At once production increased correspondingly.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 3.
9. 1950.
as a printed matter I send you "L'unique", No. 50,
where on page IV the April-issue of the Individualist is quoted. Would
you be so kind, as to return to me, occasionally this issue, provided you will
not retain it?
-----------------
Gibbon,
speaking of Manuel Palaeologus, a descendent of the last emperor of Trebizond:
"If there
be some animals of so generous a nature that they refuse to propagate in a
domestic state, the last (*) of the Imperial race (**) must be ascribed to
an inferior kind: he accepted from the Sultan's liberality two beautiful
females; and his surviving son was lost in the habit and religion of a Turkish
slave."
(J.Z.: I had to read this passage several times to get some
sense out of it. [*] Apparently, he was not the last, but already inferior,
because he bothered to have a son. [**] To speak of an imperial
"race" makes no sense. At most an imperial "family" was
involved. And, according to the logic of this passage, the son who was lost in
slavish concerns, was to be considered as superior or generous in nature because
he had no children? - I had expected more clarity from Gibbon. - J.Z.,
10.3.03.)
The problem:
"Should a free man have children as long as his country is governed by a
tyrant" was much discussed in past centuries, most - - it seems - - in the
16th. (J.Z.: In that
condition he is hardly a "free" man but at best a partly free man. -
J.Z., 10.3.03.)
The problem has nothing to do with Malthusianism. Chinese
philosophers discussed it, too, and answered: yes! Having no children under a tyrant is a kind
of escapism, but tyrannies cannot be conquered by flight. From Indian
philosophy I know of no writer, who wrote about the problem. But interesting is
Buddha's standpoint: Even under the best government and being in the best
situation life is not worth living and its evils always surpass its good;
therefore: in no case children! But avoiding children, by means now known as
Neo-Malthusianism, means only to turn off human vital force into an animal's
existence or a worse one. (I possessed Buddha's speeches, but I forgot in which
speech he spoke thus. In the long oration: "The emperor" he said:
Social reform, so that every kind of social
misery is discarded, is a presupposition of general redemption from
life. As long as poverty and servitude are not
abolished, men will be in the error that definitive
salvation may be attained by social reform. Therefore, social reform must be
performed in order to realise the true nature of life and to convince men that
life is not to be cured by improving its condition.)
(J.Z.: Thus, by making life worth living one will prove that
it is not worth living? Pain will always exceed contentment and pleasures?
Playboys, who, unnecessarily, risk their lives e.g. in car races, seem to prove
this conclusion. For me it is so absurd, that I can only conclude that only
empty heads, without intellectual curiosity, intent only upon physical kicks,
can arrive at that conclusion. But at Buddha's time the attempt to achieve
significant social reforms would have appeared to be an even more hopeless
attempt than to achieve them in our times. Apparently, only the fear of
becoming reborn as still lower animals kept such people alive. But at least
they did not always propagate themselves. To that extent they did help to
improve mankind. Buddhism has not increased my respect for Indian religions and
philosophies, to the extent that I cam across any of them. - J.Z., 10.3.03.)
I read some lines
about the possibility of winning food from the sea. The writer said: From land
may be won food only from a depth of much less than one meter. (Roots of trees
go deeper! - J.Z., 10.3.03.) But from the sea food may be won in a depth of
about 1,000 meters.
From the article "Fishing"in "Meyer's
Konversations-Lexikon" I learnt, that the sea near Eckernfoerde (North
Sea, Schleswig) yielded (60 years ago) about 16 kilograms per hectare, near
Hela (Baltic) 32 kg. Carp breeding in ponds yields 76.5 kg and in agriculture
one hectare yields per year 83.5 kg meat.
The Caspian Sea yielded 70 years ago 560 millions kilograms.
The surface was 43,941,800 hectares, so that the yield per hectare was 13 kg.
In Japan, I read, they catch so many fish that always a part
of the catch cannot be sold but has to be turned into manure. As such it can be
sold. (I found no further details.)
--------------------
Saving Saving is in most countries (Germany and, I
think, England included) no longer possible. (As a rational activity. - J.Z.)
Frequent devaluations and, from time to time, inflations, will make saving
useless. Providing for old age by saving is also no longer possible. One of the
greatest social changes!
-------------------
Very faithfully Yours - signed: U. v.
Beckerath.
____________________________________________________________________________________________
4. 9.
1950. Your letter of 30.8.50.
Dear Mr.
Meulen,
(Desertion-project
- J.Z.)
"high patriotism" of soldiers. I discussed
with very many soldiers, at the time of the first world war, the question: How
many soldiers would remain at the front, if today would be proclaimed: The war
will be continued only with volunteers! The others may go home, at once!
All said
that at least 9/10 or so would at once go home. Some added: Not I! But
they, too, were convinced that the by far greatest part was only by force
retained at the front. Others added: For me it is all the same it we are
misgoverned from Berlin or from London or from elsewhere.
But the same men who spoke thus, very probably, would not
have been induced, simply by bribery, to leave the army. On the contrary: If
someone would have come, who would have offered money, ever so much, such an
offer would, very probably, have been received in a very unkind manner.
Essential was that
the government was generally hated or regarded with contempt.
This mentality,
probably, did not yet prevail in 1914. But in 1915 it was already wide-spread,
and in 1918 it was almost general.
Now this mentality
may have changed. In the years 1915 - 1918 nobody (or very few) in Germany
believed that they defended their women and their children. They also believed
that the enemy would spare their houses. Now, when warfare has completely
changed and the war against the civilians has become a habitual part of
warfare, it may be that many more soldiers than in the first world war
would remain voluntarily at the front.
I wrote already
several times: If a government wants to avoid battles, as much as is
psychologically possible, then it must:
1.) Induce the revolutionaries of the other side to proclaim
a revolutionary government with a clear program,
2.) Conclude a treaty with that government and proclaim its
own and just war aims in clear words and not in
general terms.
3.) Proclaim that soldiers from the other side could choose:
a.) to come over
and be free, that is, be no prisoners of war, or
b.) become
soldiers of the revolutionary government.
If such principle
would be proclaimed only after the outbreak of the war, then they would,
probably, have not much effect. But if they are proclaimed in time, they could
be irresistible.
--------------------
I doubt that the
Soviet government would win-over many German soldiers by proclamations or
promises. Perhaps some Germans would submit, because they think that a
resistance is hopeless. But they could, very probably, not be won-over
by promises. The experience of 1945 was terrible and will not be forgotten for
a long time.
-------------------
If "the power
behind the world", which, certainly, is not a benevolent god - - as
experience proves abundantly - - but which may in some form
exist as a "tendency" towards something, would have resolved to let
the West win, then this power would raise, in the minds of Western people, and
perhaps even in those of Western responsible people, a great interest for
questions like the above. But, nobody is interested. In no newspaper are
these questions discussed, but
merely ideas are offered that were pardonable in 1850, but no longer in 1950.
--------------------
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen,
6.
9. 1950.
yesterday I received by your kindness:
1.) "City Press" of 11.8., 18.8. & 25. 8.,
2.) "National News-Letter" of 24.8.1950, and of
17.8.,
3.) "Truth" of 25.8.1950, & of 18. 8.,
4.) "Free Trader", No. 255, July/August 1950,
5.) "Economist" of 5.8., 12.8. & 19.8.,
6.) "The
Malthusian", No. 11, August 1950,
7.) "Chrema kai
Nomos" with a translation of chapter 6 & 7.
Thank you very
much. If it would be possible to deal with all what the authors wrote about,
one could easily fill many issues of an English "Individualist" as
well as a German one.
I confess that
"Chrema kai Nomos" of Marinos E. Constantacatos (The Greek names all
are of a pleasant sound, much more so than e.g. the German. It proves that
there is still some sense for harmony in the mind of the people.) displeased me
very much.
Costantacatos takes
it as self-evident that a government has the right to inflict all kinds of
theories and planning on its subjects, whatever the government itself thinks
fit. Although he does agree here with his slavish contemporaries (less than 1 %
doe not agree, you, Rittershausen and my humble self belonging to this
aristocracy), he should have contributed some argument to the old theory that
State-slavery is the natural and rightful condition of humanity. Although mankind still adheres
to this theory, it does no longer adhere to it - - it seems - - with such
fanaticism as they did 20 years ago. My impression is, that the young people -
- between 15 and 20 - - begin to feel a just contempt for all what the elder
generation took as self-evident.
"… the
objective criteria, which ought to govern the exercise of the prerogative of
the State to issue money in sufficient quantities . . . " C. says in
the first paragraph of chapter VI.
The logic of a
State's priest.
C. recommends as a
suitable formula, to determine the right percentage of the annual issue of
money in relation to the existing circulation at any time (I don't find "root"
signs under my Word version of symbols! - J.Z.)
Cubic root of NR (square) x MR x f or:
Cubic root of NR x MR (square) x f or:
Square root of NR x MR x f (square) or, as an approximation:
Square toot of NR x MR x f.
Obviously, C. did not discuss the matter with
mathematicians. If he would have done so, the mathematician would have asked
him: But which of these formulae do you recommend for the practice?
And you let open the possibility of other formulae, whose general shape is:
n'th root of NR
(raised to n-x) x MR (raised to x) x f (raised to y).
Moreover, you
should have stated an opinion on what numerical values you prefer for n, x and
y.
But that's not all.
C. will have to take into consideration the fluctuations of the population.
Like all theorists, who will do that, he becomes not aware, that new
born children, for the first 15 (or so) years of their life, are of no great economic
importance. Their economic importance begins when the children become producers,
that is, about the age of 16 or 18 or so.
What you replied to
C. in your letter is insofar better than the here pointed-out mathematical
arguments, as C. certainly will understand them.
The impossibility
to separate statistically the influence on prices from the money-side, from the
influence coming from the side of the priced goods themselves, is the strongest
argument against every kind of index standard.
When I first became
acquainted with the index money idea (it was from Irving Fisher's
"Purchasing Power of Money"),
I was quite convinced. Then, impressed by the German inflation, I began to
distinguish money with cours forcé and other money and, afterwards, I found out
that this distinction, so familiar to the authors of a century or so ago, was
quite forgotten by modern authors. But still I was convinced, impressed by Adam
Smith and others,
that the production of gold exercised a considerable influence on the price levels
and that, therefore, it must be possible to separate the influence on prices
from the money side, from other influences, by introducing, in the right way,
the quantity of the newly produced gold into the investigation. But later I
found out that such an influence of gold production did not exist.
That a paper money
without cours forcé cannot influence prices (at least not considerably) that
was pointed out in a very convincing manner by the authors of the old
"banking school", Wilson and others, so that now, after discovering the non-influence of gold
production on prices, there remained not a single means to detect a monetary
influence on prices in a system of honest money (to which no system of
paper-money with cours forcé belongs).
Consequently, all
systems of index-number money must be rejected as a value standard to replace
gold. But in private contracts for long terms one may try to improve upon the
gold standard (this word taken in the sense of Adam Smith or of the old
Romans), by considering the general price level, say, as you recommended it in
your book or in other ways which experience may show to be possible. This
consideration cannot be undertaken in the simple way which theorists believed
to be possible in old times.
Let me repeat here
what I wrote in a former letter: Adam Smith, always judging by his own
reasoning and always investigating the problems himself, never reproducing the
opinion of authorities as a proof, did, in this single case, rely on the
consensus sapienti, when he tried to explain the general price increase, after
the re-discovery of America, with the increased production of precious metals.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
The Malthusian.
The author quotes Julius Caesar, who reproduced the opinion
of the Helvetii (or of their leaders) of the too
numerous population in old Helvetia. I regret that
the learned author did not add what Julius Caesar reported further, namely,
that the arguments of the Helvetii impressed him not in the least and that he
compelled the immigrants to return to Helvetia.
Moreover, Julius Casear did not report that the
emigrated Helvetians looked undernourished. It may be that the latter fact was
the real reason for Caesar (a rascal, but certainly no dunce) to tell the
Helvetians to return to the country which - - as the Romans saw - -
still nourished them so well.
Furthermore, the notion of Free Trade was quite familiar to
Julius Caesar and it may be assumed, that he referred, in his deliberations
with the chiefs, to the possibilities of Free Trade, by which the greatest
population can be maintained on the smallest area, for which so many great
towns in the Roman Empire were an example. That after Caesar the inhabitants of the Alps used Free
Trade as a means of subsistence is proven by antique authors such as s Strabo.
The Malthusian
quotes also Plutarch's explanation of the war between the Romans
and the Gauls, or to speak more exactly: The explanation, which Plutarch
reports expressly as the opinion of others. Plutarch says, as the
Malthusian justly quotes, "are said" and "were said".
Plutarch, one of the wisest men who ever lived, will not have been insensible
to the fact, that the Gauls, after having vanquished the Romans so completely,
did not exterminate them to win their fields, but were content to get their gold.
Then they returned as victors to the country which "is said" to have
nourished them so poorly. By this return it is amply proven, that not victuals
were missed by the people but merely gold by their leaders. Plutarch certainly
did not overlook such a simple conclusion from the reported facts. (The defeat
of the Gauls by Camillus is a legend, as modern historians believe.)
What concerns the Cimbri
and the Teutones, they vanquished the Romans severely, several times, as
the Malthusian knows as well as others. If they had been undernourished people,
they could not have won battles against the trained Roman legions. Interesting
is also, that after their first victory, at Noreja, the Cimbri did not to the
South but to the North. That they would not have done if there would have been
a lack of victuals.
The true reason of
the irruption becomes evident from a line of Tacitus, who says of the
Germans:
"They disdain
to earn by sweat what can be won by blood". (They neither wanted to become
farmers, nor, perhaps, as free men, slave-holders. - J.Z., 11.3.03.)
It must be
considered also, that game was considered to be necessary food by the
optimates. (Aristocracy. In cultivated upper Italy there was probably little
game left, apart from birds and rabbits. - J.Z.)
What a mentality
such a prejudice produces may be seen from the history of William Rufus of
England, who destroyed 60 villages to win room for hunting. If those villages
would not have been on William's own territory, then some
"historians" would not have failed to report that the "lack of
food" had "compelled" the noble William Rufus to conquer the 60
villages. Rufus followed the example of his noble father, who had devastated
the district of Winchester for a similar purpose.
The Malthusian
quotes a speech of pope Urban II at the Council of Clermont in 1095.
What the pope said, on the scarcity of food at that time, is not without
foundation. But this scarcity must be considered in the light in which Adam
Smith represented it, in his chapter "Of the discouragement of
agriculture in the ancient state of Europe, after the fall of the Roman
Empire". It is well known that famines were frequent at that time. (In
Walford's Insurance Cyclopedia - - a admirable work - - the most remarkable
famines are enumerated.) But, as in China and other countries of Asia, the main
reason was the lack of transport facilities, which made it impossible to
transport the abundance of one district to the other. And, nevertheless, those,
who participated in the Crusades, were not the people exposed to the dangers of
bad harvests, but exactly those, who, perhaps, never in their lives felt real
hunger, not even at times of famine. They were the aristocracy, their knights,
servants, etc. The people exposed to famine remained at home.
The others felt hunger in those countries where, supposedly
"floweth milk and honey", as the pope probably believed himself.
(Much more than 1/2 of the crusaders starved in the Holy Country, so that
Jerusalem was besieged by only 20,000
men.)
The Malthusian
quotes Jacques Bainville and styles him "certainly the French
historian of most repute between the world wars." Bainville says: "…
Germany wanted war. She had too many men." What Bainville did not say,
but what an impartial historian should have said is:
Immediately after the war, Germany (that is her ignorant
government) laid a custom duty on corn, meat and other victuals, which before
came from the provinces ceded to Poland. The German peasants demanded such
tariffs and proved that the imports of victuals from Poland would an insupportable
abundance of corn, meat, etc. in Germany.
And while many friends abroad, of Germans, sent parcels with victuals to
German families, the government did what it could to prevent import of
victuals. That remained the policy of all German governments, the Nazi one
included.
The same men who proved that Germany was a "Volk
ohne Raum" and must starve, if she did not conquer the Ukraine, etc. and
that she must re-conquer the territories ceded to Poland, watched the
frontiers to provent the import of food not declared.
It would be unjust
to speak here of logic among Nazis only. Before 1933 this lack of logic
was the same at all parties and I do not remember one book which
explained the contradiction.
More important
seems to be that before the crisis, beginning 1929, the Germans were one or the
best nourished peoples in the world. Its problem was: selling the
products of its agriculture. The trade, although not Free Trade,
placed at Germany's disposal the products of the whole earth.
And that was, what neither the Nazis saw, nor
their adversaries saw, nor Bainville saw, nor - - it seems - -
more than 100 persons in Germany saw.
The Malthusian's
quotations do not prove what the Malthusian wants to prove, but they prove
something. What they do prove is: The mentality of peoples and governments,
past and present, has proven to be unable of becoming aware that:
Free Trade and Free
Banking are able to provide every community in the world with victuals and
employment in abundance.
Malthusians, Nazis
and other Nationalists offer Ersatz, with the one not allowing people to come
into existence, with their problems (a simple-minded means to "solve"
the problems), while the others exterminate that part of men, who seemed to produce
the problems.
(J.Z.: Here one should also consider that voluntary or
involuntary abortion, even in peace-time, tends to kill many more innocent
people, the own unborn children, mind you, than the Nazis managed to murder
innocents, adults and children, among those, whom they considered to be enemy
aliens. Merely judging by the numbers of this particular kind of slaughter of
innocents, a "Holocaust" has happened again and again, since, WW II.
- J.Z., 11.3.03.)
Let me add, that
Malthus at some important paragraphs of his book, confounded victuals and
employment, so incredible as it seems. But this confusion is quite familiar to
average people and to governments, and Bainville, obviously, also confounds
these notions.
(J.Z.: Under a real food shortage, people would not be
unemployed but over-worked, in their attempts to produce more food, and would
die more from over-work than from hunger. - J.Z., 11.3.03.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - -
You know the
passage of an article in the Daily Express of July 10th,
1950:
"There is now
an abundance of food in the world. There is enough to bring variety and plenty
to the diet of every British citizen. And not merely to those lucky enough to
have friends or relatives overseas. Etc."
The Malthusian
quotes a passage from Lord Boyd-Orr, who says about the contrary.
Proudly the Malthusian adds:
"If the Daily
Express has better authorities then these, let it produce them."
I do hope, that the
Daily Express will not have failed to produce the order of President Truman
of 1949, by which he decreed a decrease of the area, producing wheat in the USA
and based his order on the difficulty of selling the wheat.
The Daily Express
may add the numerous passages from all agricultural literature in the world,
books and journals, where the difficulty of selling is, quite justly,
explained and where it is pointed out, that this difficulty is the main reason
of the poverty of peasants on one side and of the under-nourishment of the
industrial people on the other side.
Remember that you,
Rittershausen and than 6 others are the men, who have the possibility to
replace the Malthusian mentality men by the Free Banking mentality. Noblesse
oblige.
-----------------
(J.Z.: The Malthusians imagine that they have found the
cause of hunger in the shortage of production options for food. At the same
time, they manage to ignore existence abundance and waste of food, and the
shortages caused by artificial restrictions upon production of food, upon
trading food, and upon the supply of sound exchange media, of sound value
standards, and of sound credits, all required to let production, trade and
population achieve their optimum levels. They ignore price controls, taxes,
regulations, monopolies and numerous other obstacles to production and
exchange, being stuck on their "fixed idea" of "overpopulation".
In this they are as primitive as the Christians, who ascribe all evils to
"sin" and see all solutions only in "charity". Not
surprisingly, Malthus was a priest. With such mental blockages, they never
understand the world they are living in. - J.Z., 11.3.03.)
Very faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
10. 9. 1950
Dear Mr. Meulen,
if you possess a
printed programme of the Personal Rights Association, I would be very much
obliged to you if you would send me a copy.
----------------------
Dr. Zybell. I was insofar in error, as I believed the
Doctor would be a resident of London. But he lives in
Frankfurt on the Main. That should be s reason for you to
travel every year at least one time to F. and to consult him. Consider it - -
please - - seriously.
----------------------
At the 6th
of September there was a large meeting in Berlin, convened by the
"Schutzverband der Zwangsversicherten der Versicherungsanstalt
Berlin". That concerned nearly every inhabitant of Berlin, for the by far
greatest part is legally obliged to insure with the VAB. The Schutzverband is
an organization of businessmen, artisans, etc., who would like to found their
own insurance institution as they had the chance to do before the war. The (Too
many of them! - J.Z.) workers of Berlin believe firmly, that their interests
would be severely injured, if this intention were realised. The contrary is the
case as could be proven from a mathematical standpoint. But - - of course - -
such a standpoint cannot be explained at a meeting before hundreds or thousands
of workers, of whom nobody knows anything about actuarial science.
The workers are
convinced that the Schutzverband is financed by the insurance companies of
Berlin. I think that it is not, although some companies may contribute some
marks from time to time. (I am not sure that they do.)
The atmosphere of
the meeting was a very bad one. When the speaker had begun, at once a well
trained chorus interrupted him. About 15
minutes later the "Stoertrupp" (organised group to disturb a meeting
- J.Z., 11.3.03.) had destroyed the loudspeaker. The meeting had to be
dissolved.
More interesting for me - - I was outside the
meeting room - - was what followed. There were about 7,000 people present, a
great part of them got no admission, but listened to speakers before the great
hall at the Funkturm. I was part of that crowd.
Most of the visitors (workers) expressed their satisfaction.
But some expressed the contrary and, although they were opponents of the
Schutzverband, demanded freedom of expression for all, also for those, whom the
workers presently considered as their enemies. That they did exclaim loudly and
did not fear the multitude. I expected that they would be attacked, but this
was not the case. Although the great place was covered by thousands, I saw not
one of the numerous opponents attacked. It seems that the majority became aware
that those, who had disturbed the meeting, acted as enemies of democracy and
they felt ashamed because of them. For England it may be self-evident that in
meetings there is to be free speech. In Germany it is not self-evident.
All the greater was my pleasure, that so many people later disapproved the
behaviour of the speaking chorus and of the "Stoertrupp".
Of course,
communists were also present. Generally, the right of free speech was not
granted to them. While I was speaking with an old worker, a young communist
girl of 19 (as she said later), very nice but still much more
the fanatic than nice, interrupted us and demanded to
explain to us her standpoint. My worker answered her, that he was 56 years old
and did not want to be taught by such a suckling. I replied that I was 69 and
would be curious to hear what she had to say. And that all of us had once been
19. We should remember that. Then she was permitted to speak. She was quite
well trained and demanded a united Germany, which presently was seriously
demanded
only by the East German parties.
"United Germany", that's a thing which always
impresses the Berliners, socialists and others. I asked her, why the workers
from the West were not permitted to visit the East, so that they may report at
home, how nice it was there and how much better the Eastern workers lived than
the Western ones. She denied that the Western workers were prevented from
visiting the East. She asserted that daily numerous delegations came to the
East and were quite content with what they saw. Here she was not quite wrong.
Communist delegations come frequently to the East, are very well received and
report about their splendid reception. Then I asked, why are Eastern workers
prevented from visiting the West, say, the USA. "Oh" - - she said - -
after being confused for a moment - -
that would only cause trouble." She was an intelligent girl, and
she knew as well as I that she did not speak the truth there. And that is the
interesting part. All these Communists know - - at least in Berlin - that, in
spite of the large unemployment, things in the West are much better than in the
East. And yet they do adhere fanatically to the SED (Sozialistische
Einheitspartei Deutschlands - purely communistic), and are ready to utter the
greatest lies in favour of the East and believe that, in a short time, they
would have a kind of paradise, and that only the malice of the Westerners would
delay this.
The greatest moral
asset of the East seems to me, that it simply orders, where in the West the own
decision is demanded from every person. (If only that were so! However, in
relatively trivial matters this is true. - J.Z., 11.3.03.)
Average men and more than 99 % of young people like
to be commanded.
(J.Z.: There is also such a thing as "rebellious
youth"! However, this is more along the lines of hair styles, meals,
drinks and clothing, time for getting home and to bed, than on matters of great
social significance. - J.Z., 11.3.03.)
That was the secrete of Nazism, that was the asset of the
military forces at the time of the emperors and the kings, that explains also
the successes of Catholicism and the surprising increase of religious orders.
Here one does not meditate for oneself, here one obeys and many people want no
more than that. From time to time one must be reminded of this partie honteuse
of human nature and meet the obedience (one can say: slavish mentality) of
people and see them and speak with them.
(B. overlooked one point here: While in the West the
seniority principle still widely prevailed - for the filling of many positions,
in East Germany promotion upon merit (provided there were no political
objections) prevailed, so that very capable young people often came to occupy
senior positions, rather soon. That would have made them even more biased
towards a regime which gave them that chance. They were also of an age where
many can be indoctrinated fast and easily - having little knowledge or contrary
experience and with their critical capacities not yet having been sufficiently
developed. - J.Z., 11.3.03.)
-------------------
At the moment I got
a copy of Runge's letter to you of 7.9.50.
If a reform
proposition contains as an essential point the issue of additional notes of the
Central Bank, that means, cours forcé notes, it means, after deducting all the
less important details, a solution simply by inflation, the word taken in the
sense of 1913. Much more than 9/10 of all reform-propositions are of this kind.
For Runge, also, the cours forcé is essential. His system could not work
without the cours forcé of the Central Bank.
But his proposition
to separate the cash accounts and the others in the banks does deserve
consideration. 15 years ago, I proposed a similar separation and expressed the
opinion, that all accounts should be honest cheque-accounts, without a right of
the customer to draw cash from it. (Or cours-forcé notes or gold coins.) The
banker's opinion is very contrary, but I say with Abelard: Si omnes patres sic,
ego non sic.
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
11. 9.
1950. Your letter of 9. 9. 50.,
received to-day.
Dear Mr.
Meulen,
I confirm the
receipt
1.) of "National News-Letter" of 7. 9. 50,
2.) of a cutting from the Times of 8. 9. 50, reproducing
speeches of Mr. Havenga and Mr. Gutt,
3.) the Unesco Publication No. 769 "Unesco Statement on
Race."
Thank you very
much.
----------------
A real Free-Thinker
should always remember that there are several methods to evaluate the
things of this world. The long discussion between adherents of silver standard
and gold standard contributed much to loosen the brain cells of mankind of this
time. The habit of many to think not only in the standard of value prescribed
by the government but also in index-terms created a revolutionary class. (More
than a small group? - J.Z.) Quite justly Irving Fisher remarked that most
people get a feeling akin to irritation if they must hear that the value of
standard money - - gold in Europe and America (he said that in 1911) - - silver
in India - - is exposed to alterations.
Irving Fisher reports an example from an Indian he was
acquainted with, who, for a long time, did not understand him. At last he said: Now I
begin to see clear: You mean: gold expressed in silver coins became cheaper and
merchandise dearer.
An as revolutionary
thinker as Adam Smith did not merely think terms of silver-value but in
labour-units, in corn-units and others. He thought of many centuries at the
same time, the future included.
Modern men or 99 %
of them are unable to think in other value units than those prescribed by their
government. Havenga, certainly an intelligent man, speaks (as all
others) of the price of gold and thinks it quite natural that gold is to
be valued in paper money units. He should valuate paper pounds in gold as well
as in labour as in index units and he would get an idea what a bad, uncertain
and unstable unit the paper pound is. But Havenga is, as Buddhists say:
"On the path." He proclaims the individual's right to possess gold.
("The right to hold gold was one of the few remaining
safeguards for the individual to have free enjoyment, safe from pernicious
depreciation, of that part of his earnings, which the authorities left in his
possession.")
Mr. Gutt is an
adherent of "exclusive currency", and, obviously, never tried to
imagine other monetary systems.
For many years now
I thought that Tucker was on the right track, when he demanded a monetary
revolution as the beginning of the social revolution which - - we hope - -
will come. The monetary revolution begins by thinking in other value units than
the prescribed ones.
(J.Z.: I rather think that it begins by thinking in terms of
other exchange media than the prescribed ones. Thinking on other value
standards would soon follow once clarity on this primary objective has been
achieved. Most try it the other way, and get more or less stuck in their own
attempts to re-invent the wheel, a new and better value standard for all,
rather than relying upon freedom of contract and mutual tolerance, expressed in
the principle: Free choice of value standards for everyone! - J.Z., 11.3.03.)
------------------------
I share your
opinion about the Unesco Statement on Race.
Things are not so simple as the author represented
them, assisted 21 professors, whose names are stated.
Take as an example the situation in States like Alabama,
Florida, etc., after the Civil War. The Negroes got the right to vote. Their
deputies were nearly all corrupt. They received "reconstruction
loans", of which the State never got one Dollar. The representatives got
the Dollars (they were content with a few dollars and - - it is said, some
whisky) and the bankers who negotiated the loan.
(Where the "whites" really so much less corrupt?
Are they now? Even if that were not the case: Would it not, all-over, have been
beneficial to have the "representative" way or running the lives of
others become thoroughly discredited? Thereupon the individual liberties to run
the own lives and dispose of the own dollars might have become expanded, rather
than more and more restricted by more or less corrupt or more or less
conscientious "representatives", regardless of their skin colour and
convictions. - J.Z., 11.3.03.)
Schools for Negroes, medical services, justice in the courts for Negroes, all
that was impossible under such a Negroe Parliament. The reconstruction and
cultivating the Negroes must begin by eliminating the Negroe majority from
government and administration.
(J.Z.: Rather, by allowing them as well as
"whites" and all other majorities and the majority to opt out to do
their own things to and for themselves. The territorial subordination and
majority-despotism system does not work well enough for any race, religion or
ideology, any minority or any majority. Neither then nor now. - J.Z., 11.3.03.)
Race discrimination
in Java. A European, who marries a Javanese girl, is never sure whether the
girl will not, one day, sell all furniture in the house to get money for some
worthless but brilliant and red or yellow coloured finery. (I doubt that this
would be typical even now. It may have happened previously, with some girls
still adhering to some primitive tribal customs. I would also like to know
about the age of these married girls.
Were they only 12 or 13 years old? - J.Z., 11.3.03.)
The Javanese husband finds ways and means to hold
responsible his wife's parents, brothers, etc. He finds also ways and means to
get his furniture back from the Chinese to whom the girl sold it. The European
is helpless here. The Javanese girl would hardly dare to treat a Javanese
husband in this way. She knows, that he will cut off her nose and send her back
to her parents. The European would not do that and the Javanese girl knows that
well.
(J.Z.: She might still feel like a slave and may even have
been bought from her parents! In that case, I would rather side with the girl!
- J.Z., 11.3.03.)
The European 's impression is, that Javanese girls are
inferior. They are not, but they must be treated and kept in Javanese style.
(J.Z.: Are they the only people who are not adaptable to
other customs??? - Customs, religions, traditions, habits etc. do clash
greatly. But they have less to do with race than with these other factors,
regardless of race. I do not believe in an inherited and racial inability to
make a fair trade but merely in greater or lesser experience and interest in
trading opportunities. Children and even adults among the "whites"
are quite capable of making silly trades themselves. There are some in my own
past as well. - J.Z., 11.3.03.)
--------------------------
The National News-Letter of 17. and of 24. August I read
with very much interest and pleasure. Stephen King Hall now writes all what I
wrote to you about for 2 years. Dismantling: craziness! German rearmament: must
be - - of course. (But how?? Under those governments that produced so
much unemployment? - - the single thing that they were able to produce. The
economic production went on, as Professor Roepke remarked, in illegal
ways. In legal ways it would not have been possible.)
(J.Z.: The more things change, the more they remain the
same: A recent figure of unemployment in Germany came to over 11 %. Uwe Timm
recently wrote me that turnover on black markets came to 350 Milliards in
Euros, p.a. Under a free market economy, which also would mean monetary freedom
and no taxes, unemployment and inflation could very rapidly become zero and the
standard of living could improve rapidly. That is not impossible but merely
outlawed. - J.Z., 11.3.03.)
----------------------
Voluntary
militia. Certainly, neither the English Militia nor the American were
created to be used against the government. But if - - say, in the USA - -
anyone would try to establish a dictatorship, some hours later the whole
militia (much more than 10 millions) would march against him.
I did, in this
case, think that a voluntary militia would be a good organisation - - besides
other organisations - - to defend the country against invasions.
(J.Z.: Voluntarism of
a militia would not be enough. It must be one motivated, organised and trained
to defend nothing but individual rights. B. and I stressed that elsewhere. -
J.Z., 11.3.03.)
------------------
Japan and
Malthus. You are quite right in saying:
"If ….
the Japanese farmer has to stop work after an hour because he has no more land,
whereas the Australian, with 100 times as much land, can go on working, the
production per head will be grater in Australia."
If !!!
Certainly !! But I never read anything from Japan that lets assume such a state
of affairs. If the farmer owns only as small a block of land that he can manage
it with one hour's labour, then he is compelled to lease more land, from those
who own it. I wrote to you, some time ago, about the conditions of such lease
contracts. Many Japanese also work as labourers on the land of others.
In every case, the farmers work long and hard and so hard
that many travellers report that lack of sleep is one of Japan's social
misfortunes. It seems to be in the Japanese character that everybody, who has
subordinates, lets them not sleep enough, not in the army, not in the railway
service (where the staff's excess fatigue causes many accidents), nor in the
household. The pupils come tired to the schools. The parts and even the streets
often exhibit sleeping men, children and women.
(J.Z.: Very long working hours have not been unknown in Europe,
either. Japan was much longer under Feudalism. Now, in "Western"
countries, like Australia, we do have still some forms of it in form of
voluntary or involuntary overtime work. Part of it is very well paid and part
of it is still unpaid, especially among some professionals and executives. I
did much overtime work, well paid for it, for most of my working life - but it
was not hard work. My workmates competed for that overtime opportunity. And
even a fraction of an overtime hour counted as a full hour, so that once a work
mate boasted, that he got home in time, to have a "naughty" with his
wife, while still being paid for overtime work.)
I admit that a
state of things as you suppose it, one time may occur, the thing considered
purely arithmetically.
If a yearly increase of the population of - - say, one
percent - - is supposed, then with the help of a logarithms table it is very
easy to calculate at what time Japan or any other country is so populated that
a herring-barrel, by comparison, would seem to be under-populated. However,
such calculations are of no more value than the well known other calculation,
which starts from the fact, that every man has two parents, 4
grandparents, etc., so that 1,000 years ago England must have been populated by
several hundred millions of crowded Englishmen.
--------------------
I took the output
per labour hour instead of the output per head to eliminate the factor
"average labour hour". I think that in Australia the agricultural
labourer works about 10 hours a day and in Japan 14 hours or so.
You think that the
output per labour hour is greater in Japan than in Australia. This point is not
essential for our discussion, I think. But from the latest reports that I read,
my impression is that the Japanese agricultural labourer is very handicapped by
the lack of tools and transportation facilities. I would wonder whether his
output per labour hour is 1/2 of the Australian output. Probably, it is much
less.
-------------------
I am very glad that
you agree with my arguments against Malthusian. But its editor will hardly be
convinced. Most people believe themselves what they said two or three times and
are then immune against all kinds of arguments.
-------------------
Berliners - -
Western people and Eastern Volkspolizei - - expect an invasion of the
Volkspolizei (Eastern "people's police" - J.Z.) October. If you read in your paper of such an
invasion, please stop every letter to me and the mailing of sending of printed
matters until you receive a letter from me. If this invasion is successful,
many West-Berliners will be brought to the KZ's.
-------------------
"The Unesco's
Statement on Race quotes Darwin's "Descent of Man". I have this book
in the 1896 edition. The quotation - - of course - - could not be complete. But
what Darwin says in the next and not quoted lines is remarkable. The quoted
passage:
"… there is
only an artificial barrier to prevent his sympathies extending to the men of
all nations and races"
is followed by that passage:
"If indeed
such men are separated from him by great differences in appearance or habits,
experience, unfortunately, shews us how long it is, before we look at them as
our fellow-creatures."
------------------
I disagree with Dr.
Runge in nearly every detail, insofar, as his plan is concerned to raise the
value of money by compelling the people to pay 20% or so of the taxes in cash.
I wrote to him that your arguments against his plan seem convincing.
----------------
In the National
News-Letters I found the expression: "Universal declaration of human
rights". Is that well expressed? I think what is here universal are the
rights, not the declaration. (*)
----------------
Very
faithfully Yours - signed: U. v. Beckerath.
(*) Neither the title of the UN declaration of human rights
of 1948 is correct, nor that of the UN itself, nor are many of the particular
listed rights genuine rights, far less universally formulated individual rights
for all human beings and other rational beings. Many of its rights are merely
wrongful and collectivist claims. Nevertheless, it has found all too little
opposition and competition by better drafts. See my compilation of private
human rights declarations in PEACE PLANS 589 & 590 - and do help to make it
a more complete one, perhaps even by adding your own declaration of individual
rights. - J.Z., 12.3.03.)
____________________________________________________________________________________________
Dear Mr. Meulen, 12.
9. 1950.
at the meeting of the joint boards of the International
Monetary Fund and the International Bank for Reconstruction and Development,
held at 6. 9. at Paris, the managing director of the fund, Mr. Camille Gutt,
said:
"… 3.)
inflation, once, it had crept into an economy, could be temporarily disguised
by controls but not indefinitely
suppressed, and the disruption it caused destroyed (destroys? - J.Z.) the
balance of international
payments, so that, while import restrictions and exchange
controls may conceal the situation for a while it would ultimately force
(italics mine) a devaluation."
Here every word is
in error. (Well, almost every significant one is. - J.Z., 12.3.03.)
a.) Inflation does not creep into an economy.
Inflation is produced by increasing cours-forcé-monoy to an amount which the
economy would not accept without cours forcé.
This increase requires an order, duly signed by the
manager of the Central Bank, insofar as notes are concerned which it issues, or
one by the minister of finance in the case of State notes. If "book
money" is concerned, it requires an order of manager of the bank which
issues the cheque.
(Book money is rarely endowed with cours forcé and may get a
discount, as it was or still is at the Eastern Zone.
In Italy there was a cours forcé for cheques of the
note-issuing bank already in the 19th century, when the notes were
endowed with cours forcé, if I remember right, in the 1860's.)
Therefore, inflation does not creep into the economy.
It is always forced into the economy. A rise of the price level through paper
money that is not endowed with cours forcé is to be considered as a genuine
dearness - - a word that has disappeared from literature. Here one sees the
consequence of the degeneration of the scientific language (not only in
England), which takes inflation and dearness as synonyms.
b.) The effect of
inflation cannot be disguised, neither temporarily nor indefinitely. The effect
is seen from the first day by the discount of the notes on foreign markets.
c.) Import restrictions and exchange controls never conceal
the situation; on the contrary: their mere existence reveals it.
d.) It is not so that devaluation is the effect
of a cause, devaluation is an act of the responsible (rather:
irresponsible! - J.Z., 12.3.03.) government, which is guided by reasons
(errors are also reasons) (J.Z.: "motives" instead of
"reasons" would be a more suitable term here. - J.Z., 12.3.03) and
not by causes.
If devaluation would be the effect of a cause, there would
not be a responsibility, and that is, what the statesmen want to have
believed. Quos ego!!
(Despotism is contemptuous of philosophy or prosecutes it -
- and from its standpoint - - despotism is quite right in doing this. The
distinction of acts from effects is what philosophy performs. In
the West philosophy teaches the people that acts are not effects, in the
East it (what there counts as philosophy [rather its biased ideology! - J.Z.]
it teaches the people: effects are acts, and to look out in every case
for a guilty person [say, when a locomotive runs off the rails], is no less
illogical than the Western kind of thinking, where guilt is often disguised and
camouflaged as an effect.)
----------------
Popular
thinking follows the language, it is not so - - as most authors represent it -
- that the language follows thought.
----------------
(J.Z.: No wonder most young people get turned off from what
is offered as "economics": The babble of most of its supposed experts
make often no more sense than that of the various preachers of religions. -
J.Z., 12.3.03.)
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 13.
9. 50.
In its August issue
the Malthusian says:
"… The
criterion of overpopulation is the product per head. If it is impossible to pay
the worker a decent wage in return for a day's honest work, then the country is
overpopulated. In Japan, for instance, the workers work extremely hard, yet
they can buy hardly anything with their wages, except a few handfuls of rice.
The consumption of milk is only half a gallon per head per annum, and meat,
butter and cheese are almost unknown. Even of fish very little is
consumed."
Concerning the
nourishment of the Japanese the Malthusian is right insofar as the quantity of
food, which the Japanese worker is able to buy, is very small. Insofar it is no
objection to state:
1.) The portion of fish as a percentage of the total
nourishment is large.
2.) The people are disgusted with milk and milk products.
Very slowly do milk products begin to be consumed by the upper classes, whose
example is gradually imitated. Old religious prejudices, by which cows were
considered as holy or semi-holy, may have caused the prejudice. (J.Z.: The
avoidance of milk products has led to very much lower rates of breast and
prostate cancers in Japan and in China! - When Chinese and Japanese change over
to Western diets then they do get the same cancer rates! - J.Z., 12.3.03.)
3.) Even very rich people do not eat much meat.
Vegetarianism is a part of the Buddhist religion. Only fish are tolerated. (I
never saw B. eat meat. But a few times I visited a fish and chips shop with
him. - J.Z., 12.3.03.)
But everybody in
Japan knows that the parts that are taken from the peasant's product by the
landlord, the the mortgage creditor, the tax collector, the church and the
numerous beggars, do amount to much more than 50 %.
(I gave you some figures, in a former letter, drawn from the
report of a Japanese bank.)
The social
organisation of Japan is now such, that if the product would be thrice as
large, the peasants would, nevertheless, get only their physical minimum to
exist or less.
Under such
conditions what is needed is:
a.) a social reform by the government or
b) because the government does nothing, a social revolution,
like that in the agricultural districts of France in 1789.
Malthusianism
cannot help. Even if the number of inhabitants were reduced to 3 persons, one
being recognised as the exclusive proprietor, the situation of the other two
would be the same as now.
The "Malthusian" confuses the "product per
head" with the part of the product, which is left to the head. The opinion
of Malthus and his disciples is: The distribution of the social product is
unimportant when the economic situation of the people is judged.
Undernourishment always proves lack of land to produce more victuals.
The Malthusian's
theory is: Industrial production,
exchanged by trade for agricultural products, is to be considered as quite
unnoticeable, if the trade goes outside of the political frontiers. It is
sufficient to state such a theory; a proof, after having stated it, is not
necessary.
The Bishop of
Birmingham, the Right Rev. E. W. Barnes, Sc. D., F. R. S., in the same
issue says:
"We have to
buy large, and ever larger, quantities of food from abroad. As we all know, the
task, for a virtually bankrupt country, is most difficult."
The Bishop does not
see:
1.) that every country under such a restricted state of
trade, as is now imposed upon Britain, must lastly go bankrupt,
2.) that freedom of trade, includes freedom to use means of
payment, including those created by Free Banking, and that this freedom opens
the way to the agriculture of the whole world, may the country be bankrupt or
not.
The Bishop should read the order of President Truman, by
which he reduced the wheat production area of the USA by 17 %. He said - - and
was right - - the wheat could not be sold.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 14.
9. 50.
take into consideration that, if Malthus is right, then Free
Traders and Free Bankers are wrong, and that then the work of your life has
been in vain. The matter is of decisive importance. This importance may excuse
me when I come back to it so frequently.
In a former article
the Malthusian enumerates some "Malthusians before Malthus". The
Malthusian could have done more and could have stated, that Malthusianism, for
several thousand years, has been the usual manner of blocked or illogically
thinking people to solve economic and social questions. What Malthus did was
merely to point out the Christian side of the subject. Ancient
politicians always said: You people are a "Volke ohne Raum".
Conquer the "Raum" and prepare the conquest.
Exterminate your neighbours. The heaven is with you, for you are the better
race. (The myth of the "chosen people", the "salt of the
earth", the "supermen" etc., - J.Z., 12.3.03.)
And if your neighbours are stronger at the moment:
"Toujour y penser, jamais en parler!" (Thiers.)
Other politicians
said: We never will be stronger. To be stronger, we must do exactly what our
situation forbids us to do: we must have more children. Therefore, we do what
we can and murder our children.
(Here I transcribed B. literally. At least his English
version of whatever he wanted to ascribe to a stupid leader does not make sense
to me at all. Even politicians do not as a rule argue AS illogically. Perhaps
he merely left out, accidentally, a "no" between "have" and
"more"? - J.Z., 12.3.03.
You know how firmly the Australians (Aborigines - But
abortion rates and voluntary sterilisations are high among other Australians as
well. - J.Z.) were convinced that Australia was overpopulated by them, and how
often they killed their children.
(J.Z.: Dr. H. G. Pearce, a libertarian Georgist and fan of
Bastiat, told me once, many years ago, that the Australian Aborigines knew of
and used over 70 prophylactics! - J.Z., 12.3.03.)
It would be easy to enumerate some dozens of other tribes
which did the same.
Malthus found out a
new means: Let the children not come into existence, then you are not compelled
to conquer "Raum" for them. Then you are not compelled to murder
them, all is done in peace and with a Christian mentality.
(If only that had been done for all Christian and other
preachers! - J.Z., 12.3.03.)
Quite common to all
those theories is: The problems are not to be solved. Instead: The men must
disappear, together with their problems!
----------------------
If one consults
history, one must state: The "Volk ohne Raum" theory really has been
the pretext for numerous wars, from the time of the Cimbri and Teutones
to Hitler. But since the discovery of Free Trade that theory can no longer be
used as an honest motive, what it could have been, perhaps, at the times of the
Cimbri. For average people this excuse is very convincing and, seemingly, it
does not need a proof: it seems self-evident. One can even say: It is the most
convenient pretext and insofar has produced very many wars.
But the other two
species of the "Volk-ohne-Raum-Theory" do produce wars to no lesser
degree. They provide motives to begin a war not for the people who are,
supposedly, a "Volk ohne Raum", but for its neighbours. If the tribe
captivated by Malthusian dogmas has sufficiently reduced its numbers, e.g. by
murdering its offspring or by abortions, then a prince in the neighbourhood
will find out that these people can and must be exterminated.
Europe and America are already in the same situation. Listen
to Zander and his report from Chinese and other coloured people. Many and very
influential ones among them talk already: We are far superior in number. Their
birth rate is declining. They are a degenerate people. They will be our
prey - if only we are determined!
Insofar it is true that Malthusianism itself is a motive for
non-Malthusian people to begin a war with Malthusian people.
---------------------
Repeatedly I have
begged you to become again an adherent to your own earlier doctrines: What
Malthusianism will never procure, Free Trade and Free Banking can achieve in abundance!
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
21. 9.
1950. Your letter of 17. 9. 50,
received yesterday
Dear Mr.
Meulen,
with much pleasure and interest I read about the little
incident you report from your voyage to Russia. You could have added, in your
conversation with the little Jewess, that many capitalists (not a good word,
entrepreneur or Unternehmer is better) share in the work to be done in their
enterprise; they organise, look out for sales opportunities, which means, they
act to achieve constant employment for the workers, etc., which is, in Russia,
a very well paid job. The difference in
the payments for simple workers and managers may be greater in Russia than in
many firms in England. But the worker in England does not see what the
man, whom he calls a capitalist (more, usually, "boss". - J.Z.), does
for him. If he sees that, as in Russia, he is quite willing to cede to
him a part of the common product, worth his labour.
(J.Z.: Are working owners and managers really more seen in
Russia? And is it either there or here up to the worker to "cede"
income? And is only the labour of the owner or manager involved or also his
special knowledge and his capital risk? - In letters and conversations too many
points remain, usually, neglected. -J.Z., 12.3.03.)
That's the reason why I sympathise with the transformation
of firms into productive cooperatives. The effect on the distribution of
incomes will, probably, not be so great, but the legal form of a cooperative
lets the worker see what
the work of his manager is worth, and thus he acknowledges as the wage
of the manager a sum that he would assume to be theft, if it appeared legally
as profit. Economic events must not only be good, they must also be seen
as good. In the usual wage system they do not.
----------------------
Runge. He
wrote to me that he will now write a book about his system. I answered, that I
will retain further objections until the book is printed.
----------------------
Voluntary
militia. The beginning of Hitler's avatar was the revolt of the
"army", that is, not, of the soldiers but of the generals. He would
not have won without the help of the army. The army would have met with the
strongest resistance if the Germans had a militia like the Americans. Adam
Smith is quite right.. An unarmed people will at last fall into slavery. I
think that bearing arms belongs to the primary rights of men and citizens.
---------------------
Japan and
Malthus. I do not think that in all
cases and under all circumstances hand-worked land produces more than
machine-cultivated land. But what are machines? (Predone labour! - J.Z.) The
Malthusian printed a report of a Mr.
Dodd, who saw in Egypt peasants carry water in buckets from the Nile to their
fields. A machine would have - - estimates Dodd - - performed 20 times as much.
The watering by bucket is hardly an advantage in any respect. Mutatis mutandis,
the example holds good for Japan.
Whether a labourer
on a field of 1 acre produces more than another on a field of 100 acres with
the help of machines (for each of these 100 acres - J.Z.), depends entirely
upon the manner in which the labour on the 1 acre is organized, equipped, etc.
(And upon how many hours each of the two workers is prepared to spend upon one
acre. - J.Z.)
Near the great
European cities there are many market gardens, quite small, but with a good
water supply, a windmill and numerous implements, e.g. sprinklers. Per acre
they produce very much and certainly not less than is produced in Japan or in
Australia. Moreover, the production per labourer on these small fields is
greater than on fields of the same size in countries like Japan or Australia.
Important is: The
agricultural situation in Japan is not so, that the average peasant must be
idle for a part of the day because his possibilities to work for himself are
exhausted, seeing that his own field offers him only the opportunity to work
productively for, say, one or two hours every day. Such "small"
owners work at the fields of other landowners, exactly as is common usage among
European labourers, who also possess some square feet of land.
Concerning the fishing
of Japan (You remember that The Malthusian said that it would be of no
significance.), I obtained these figures, from "The World Almanac for
1934" (Page 356: The Fisheries of the World):
Japan, 1929 = 10,300,000,000 pounds (Value: $ 232, 000,
000.)
(That would make it about 103 pounds p.a. for each of 100
million Japanese. Not very much but not to be belittled, either. - J.Z.,
12.3.03.)
The Statesman's Yearbook 1949, page 1123. (The British
Information Centre is a good thing.):
Fishing in the average of 1935-37 annually: 7,055,000 short
tons,
1947 = 3,735,000 "
"
In England and Wales (World-Almanac)
1931 = 1,943,254,000 pounds. (Value: $
79,642,000.)
In Japan the output per capita is much greater than in
England.
At page 669 the Almanac reports that in Japan 1,500,000
people are employed in fishing.
It is well known, that the sea near Japan is very far from
being exhausted. The diet view of the matter being set aside, it would be
possible to nourish a much greater population than the present by fishing.
Herodot reports a people, whom he called Ichtyophagi, who
ate nothing but fish.
The fact that many Japanese are undernourished is due to
social and economic reasons (rather, irrationalities - J.Z.) which have nothing
to do with overpopulation.
------------------
Rittershausen moves to Mannheim on 4. X. 50. New Address:
(17a) Mannheim, Gutenbergstrasse 19.
(17a) is the "Postleitzahl" (Postal code. - J.Z.)
Germany is divided into 2 dozen or so postal districts and it is prescribed (no
one is punished if he does not observe this rule) to add the Postleitzahl to
every address. The advantage is that the sorting out of letters etc. at the
post offices is now much facilitated. A second advantage is that untrained help
can be used in the sorting, which before was not possible.
----------------------
Some months ago I
wrote to you about the photophone, invented by Bell, the inventor of the
telephone. In the latest edition of the Encyclopaedia Britannica the photophone
is merely mentioned in one line in the article on Bell. Obviously, the
invention is forgotten. I still believe it would be good to use ultrasonics in
war.
----------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen,
22. 9. 1950.
the common opinion of
average people about gold production is: The gold owners accumulate the
produced gold, then they "speculate" with the gold (how?? That
the people cannot say) and get enormous profits from such
"speculations".
It average people
would be taught that the gold mines work with very considerable costs, that
they must sell their gold at short intervals, to get money for wagons
etc., the opinion would be another one. In England the possibility for such a
change of opinion is given, for here the production figures are published. In
Germany they never are. From Truth
of 4.8.1950, I take these numbers, published in an advertisement of the
Johannesburg Consolidated Investment Company, Ltd.:
Name of the Gold Mine:
Production Cost per ounce:
The East Champ d'Or Mining Comp., Ltd. 202/1.
New State Areas, Ltd. 233/3.
Government Gold Mining Areas, Ltd. (Modderfontein) 202/3.
The Randfontein Estates Gold Mining Comp., Witwatersrand,
Ltd. 215/8.
The purchasing price of the Bank of England for one ounce of
fine gold is 248 shill.
--------------------------------
Japan's population
is, by the Census of 1.8. 1948 "ascertained" to 80 216 896. When it
was 60 millions or so, the Malthusians asserted a terrible overpopulation. But
the hunger is today not greater than it was decades ago. That proves, that the
condition of 1925 was not overpopulated, when the population on the
present Japanese territory was 59 736 822. (Statesman's Yearbook of 1949 and of
1931.) In 20 years the population will be (atomic bombs, civil war etc. set
aside) about 100 millions. And again: the hunger will not be greater than
today.
-------------------------
"The Malthusian, August 1950: "The criterion of
overpopulation is the product per head. If it is impossible to pay the
worker a decent wage in return for a day's honest work, then the country is
overpopulated."
(I underlined "to pay". The Malthusian does not
see, that the payment system may prevent the payment of a "decent"
wage, even if fertility and highly developed plant would produce in one hour
what is now produced in ten.)
A better definition
is:
"A country is overpopulated if, at times of normal
crops, good transport facilities, of real free trade, free banking and in the
absence of government planning, the people stands in queues before the food
shops."
As long as the
world exists, such a condition has not been observed. The Malthusian does not
admit free trade, free banking and the absence of government planning as means
to supply a people. Here is the centre of its errors.
------------------------
Of Japan, in the
issue of August 1950, it says: "Even (of? - J.Z.) fish very little is
consumed."
I do not know any great country where, per capita, more fish
is consumed than in Japan.
-----------------------
Very
faithfully yours - U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen,
24.
9. 1950.
by your kindness I received yesterday:
1.) "The Economist" of 9. 9.50,
2.) "Truth", 11.8. & 1.9.50,
3.) "The London Newsletter", 7.9. & 14.9,
4.) "City Press", 1. 9. 50,
5.) "Statesman and Nation", 9.9.50,
6.) The Scots Independent", Sept. 1950,
7.) "International Financial News Survey",
11.8.50,
8.) "National Secular Society Tract"
("Scrupulously Fair, as a General Rule".)
9/) a cutting from an American paper: "Planned Economy
fails again," with a striking illustration by Karl
Hubenthal.
10.) "Lloyds Bank Review", July 1950.
11.) Copy of your letter to The Malthusian of 6.9.50,
12.) "L'Unique", 15. 7. 31.8.50.
-----------------------
Thank you very
much. Seldom did I get by your kindness a more interesting mailing.
-----------------------
Economist. There are now several (or many?) papers
published without the help of skilled printers. That induces me to hint at a
possibility about which I have thought for many years.
Among skilled
workers are the most haughty people I have ever met. I think that your personal
experience will have been a similar one. Manual labour leads people to contempt
for other kinds of labour. The whole State socialism of the last decades is
based on this contempt, and it is one of its essential errors.
Manual workers believe: We are the essential part of
human society, our manual labour supports it. Our general strike
will cause this society to break down. That is the mentality of more than 4/5
of the workers, I estimate.
It would be useful as well as necessary to refute this
mentality in a ways that average workers would understand. Printing papers by
those, who are interested in publishing the paper to a first step.
Benjamin R. Tucker published in this way
his "Liberty" and gave thereby a great, great example, one not enough
appreciated, even by his adherents.
Intellectuals
should do all the work necessary for their own support themselves! As far as is
technically possible, and the technical possibility goes very far!
Unemployed intellectuals should buy, in the manner which I
explained in my book on employment, factories, workshops, agricultural estates,
etc.
(Buying a factory, worth, say, 1 million, by handing over to
the former proprietor 100 000 bonds, nominal value 10 Pounds each, bearing
annually 10 shillings interest, based on gold.
- - This has nothing
to do with that kind of gold standard which you justly reject. - -
If the debt should be repaid within 25 years, there must be
expended annually 70 952 Pounds.
In the first year 50 000 L are spent for interest, 20 950 L
for drawing 2095 bonds.
Redemption of drawn bonds and of coupons by the
Milhaud-Principle: No redemption in cash but redemption by
acceptance in payment for goods and services.)
Three years later, intellectuals will do the same work,
which average labourers do in 8 hours, in 4 hours or less.
Trade unions and average workers will violently oppose that
competition, perhaps by force. Force will answer.
You know that the
Jewish Rabbis must all learn a trade, so that they must never depend on the
manual work of others. That's an excellent principle and, if logically
accomplished (which the Jews never did) may lead to an enormous social reform.
(Compare what Robert Heinlein said on the competence of a
man. I am also reminded of the electrical work of Dr. H. G. Pearce, a
physician, who, at an advanced age, still did the re-wiring of his house
himself. There would also be physical health benefits connected with such
self-supporting work. Moreover, since most intellectuals do not want to live in
luxuries, they could arrange their self-supporting physical work in a way that
it would take only a few hours a day - or per week, flexibly arranged - so that
enough time and energy would remain for their intellectual activities. They
would no longer have to serve in 9-5 "prisons". - J.Z., 13.3.03.)
Truth. Did you
read Mr. A. R. Davis' Letter to the Editor in the issue of 11.8.50.? You
did not mark the letter and therefore I ask. Davis uses the old trick to refute
assertions which the adversary did not make. His historical examples are badly
selected and are no examples at all. Most importantly: He does not take into
consideration
that England is now a small country of 50 millions, very
badly governed, militarily quite weak by a very strange change in the High
military command, placed now under the V-2 range of the Russians, bitterly hated
in a very large part of the world (unjustly - - of course - - what has England,
the real England, to do with the changes of government?), in the first stage of
a decomposition process, whose symptoms (for people able to see) are the
numerous sabotage acts in the military sectors, fettered by a financial and
monetary system, which could not be invented better by England's enemies, and
all that in a state which cannot be reformed in a few years, although action
may be necessary in a few days, - - and Davis represents things as if they were
still as they have been at the time of Gladstone.
That Davis says:
"… which makes his faith in U.N.O., inclusive of Russian veto, so touching ...." gives
a very bad impression to those who read your letter.
Everybody knows
that your standpoint is: Use every possibility of reform and use it quickly,
and do not forget the possibilities given by the UNO, even in its present
defective shape.
I send you back to
you No, 3855 of "Truth", and would be obliged to you if you returned
it occasionally.
------------------------
"The London
Newsletter". What is the use of
government controls, when it is possible that English precision instruments are
sent to Russia under the pretext that Russia sends victuals???? The victuals
might have been got from anywhere; the world is full of victuals that are hard
to sell. But I doubt if anyone, except the English, would have sent precision
instruments to their prospective enemies.
(Before 1914 the Germans did. At Tsing Tao (Tsingtau) the
German soldiers were shot by Krupp canons and ammunition made with the help of
German machines. Even still in 1915 German manufacturers sent lathes to
Denmark, which from Denmark went to Petersburg, without being reloaded, a fact
which certainly the German manufacturers were not dull enough not to foresee.)
J. H. Clifford
Johnston pleads for the restoration of gold coin circulation (which you do not
decline, as I read with great pleasure in your letter of 3.8.50., page 2.) and
for abolition of foreign exchange control.
Johnston says:
"… The first step is for the National Debt Commissioners to buy for the
sinking fund, or other purposes, reversions to Government Securities over a
period of years at 20 to 40 points below the present market prices, thus taking
large amounts of stocks off the market."
I confess that I do
not understand what he means. If the Commissioner's means of payment is another
kind of Government bond (say, like the Mandates of 1795, by which the
Assignats should be bought and so withdrawn from circulation) then new bonds
simply replace the old.
A better means
seems that proposed by Zander in his writings and in use in England for
decades. Some taxes, first of all inheritance taxes, should be made payable in
Government bonds. The advantage is inter alia, that the bonds received
in this way, need not be bought back by the government with the returns from of
taxes. L 100
of money won by taxes are (invisibly ) loaded with
(about) L 12 of administration costs to
levy the tax. These costs are saved if the taxpayer brings the bonds, so that
they need not be bought.
-----------------------
You do not agree
with the London Newsletter in many details, as I can see from your remarks. I,
too, do not agree, but all in all it's an excellent paper, whose editor judges
by own resources. I do much appreciate this paper.
-----------------------
City Press. "The Indonesian Government does not
allow the rubber planters to sell their rubber for foreign exchange, but
insists that the planters and the companies accept Indonesian currency, even
when crops are sold for other currencies and shipment overseas.
Foreign Exchange
Control is one of the, severest impediments for a country, and England may be
glad that her enemies do voluntarily fetter themselves by foreign exchange
controls. If England were to abolish that crazy control today, then her
economic and, consequently, her military power, would at least be doubled, more
quickly than by any government plan, and this even if an angel from heaven
would have designed it.
----------------
Brazilian rice
producers try, in vain, to export 200 000 bags of rice to Great Britain. The
British Government successfully keeps that rice from the English consumers. The
Malthusian still denies that there are victuals enough in the world, and that
that what is lacking is merely the permission to buy them.
----------------
Canada produced 544
000 000 bushels of wheat. By the International Wheat Agreement (did British
consumers agree too???) she is permitted
to sell 211 000 000 bushels. If Stalin would have bribed the people concerned,
they would not have acted more in his interest. What the whole Russian fleet, using
the best blockade methods, would not have performed for him, some lines in a
written agreement, have done: Canadian wheat is kept out of Britain.
And "The
Malthusian" will, nevertheless, "prove", that wheat is exactly
the thing which in so scarce, that consumers would do best to mutually kill
themselves in a war. (Why not have the government spread pestilence and cholera
instead? That's much cheaper than a war, much more effective and leaves the
houses unburnt. That an Anti-Malthusian has to find out such a simple
alternative!)
-----------------
"Machine
Import Folly", by S. W. Alexander. Alexander is quite right but lacks
courage. He should publicly state that there are limits for every government
authority to ruin its country's military potential. Under the present
conditions, every machine, imported to England, increases her military
potential, directly or indirectly, even if it were only a machine for
button-making. Alexander should summon every custom officer not to obey the
orders with regard to machines, and let them pass customs free, and he should
add, that every smuggler of machines deserves the country's thanks. Such an
article would open the eyes of many. Dangerous??? The danger of the soldiers in
the trenches is much greater and, nevertheless, they were expected to endure it
merrily.
--------------------
The first words of
the issue are: "Dollar shortage". - There exists no Dollar shortage.
There exists only a prohibition to use Sterling as a means of payment. Tell the
Americans: Accept Sterling or keep your goods! And you will see!!
-------------------
The New
Statesman and Nation. Your
hand-written remark: "I rather think that the Africans will not bother
much about independence if they can get good wages, bicycles and radio
sets", is certainly right.
Do you know the system of "Statut personal"
(Personal Law - J.Z.) of the French in Algeria? It's an excellent system.
Combined with Free Trade, Free Banking and the own courts for the coloured, it
would be a good basis to
sufficiently separate the affairs of the whites and of the
blacks.
Free trade also means: We, the whites, do not prescribe to
you, the blacks, to pay the prices which we wish. Buy where you think
you could buy best.
Free Banking will give the blacks all the independence from
the white money-policy the may wish. If they prefer cowries as a standard of
value or makuta - - please!
(J.Z.: Under personal laws or exterritorial autonomy for
volunteer communities, non-racist and multi-racial or mixed communities, also
e.g. "protectionist" communities, would get their optimal chance,
like all other communities, no matter how extensively they are, voluntarily,
segregated, at their own expense. What fanned the flames of hatred in Algeria
was, perhaps, mainly the practice: No unemployed Algerian is to get a job until
the last unemployed Frenchman is employed! That practice, including family
members, affected at one stage about one third of all Algerians. When
libertarians fail to advocate and do their things, the Statists will certain go
on advocating and practising their "solutions". Not all the people
living in the same territory - borders are arbitrary fixtures - do want to live
under the same and more or less imposed rules. So, let all of them live under
their own, at their own risk and expense. Then they can rightly complain only
about what they have done to themselves - and they will be free to change their
rules as they please. The same freedom can even be extended to individuals:
Individual sovereignty, exterritorially quote complete, can be realized through
individual secessionism and voluntary associationism. Naturally, it finds its
multiple limits in the individual sovereignties of others, especially those of
people with whom the individual is not associated in his own protective
voluntary community. Let them do their things to and for themselves, as they
please. Experimental freedom for all. Minority autonomy for all. Let e.g. the
abortionists gradually abort themselves - well, their kind of morally defective
people, in this way, with their own unborn children, bearing similarly
defective genes. And let the anti-abortionists have their own and naturally
growing volunteer communities. The number of cases for justified
interventionism would be very greatly reduced, at least for the foreseeable
future. -- J.Z., 13.3.03.)
--------------------
"The Scots
Independent". Nothing is said about a Scotch currency. Pity!
(Korea, land reform, Hitler & Governments in Exile -
J.Z.)
It seems that now
some people in England find out that the land system in Korea has something to
do with the present political situation in the world, and that it would have
been well to be interested in that system. Too late! It is honourable for Dr. Robert D.
McIntyre to write an article about it and for the editor to print the article.
Suppression exercised in the most distant country may easily become a matter
still more urgent than suppression at home, as Korea proves.
(It was a very different case with the suppression of the Germans
by Hitler. But if, in February 1933, the English would have mobilised against
him, would have assisted a revolutionary government, provisionally placed at
London, the whole Hitler spook would have been removed in a few weeks and with
the loss of less than
10 000 men. But the "practical" English said: What
does that matter to us??!!)
Interesting the
article on Ireland by Arthur Donaldson. I am much surprised that there is so
much being built in Ireland. Where do the credits come from? And is
their base the Irish Pound? If yes: It seems that the Irish trust in
that pounds. On what is that trust founded? Or is the trust simply a symptom of
lack of thought? That the Irish pound is a mere paper currency and that there
is no reason that it will not share the fate of all paper currencies,
must be seen by intelligent Irish people, who certainly are to be found in
Ireland.
Some days ago I
read in an old book ("Beckers Weltgeschichte") about the fights
between Protestants and Catholics on Irish fields. At that time nobody thought,
that Irish and Scots are, essentially the same race. The religious difference
seemed to be insurmountable. And now, although the Irish are still a very pious
people - - 97 % of them
regularly go to mass, I read - - no word of religious difference but merely
impartial and also sympathetic
judgements. The world has not become worse in all respects.
(J.Z.: Northern Ireland, still under English rule, is
another case. Personal laws and exterritorial autonomy for all of the
contending groups, has not even been discussed, far less practised. - J.Z.,
13.3.03.)
---------------------
City Press. Machine importation to England. I forgot to
add that, at the time of the Napoleonic Wars, it was estimated, that that the
machines of England did the work of 700 000 workers, who could thus be used in
the war without hurting England's industry. France had at that time about 28
million inhabitants, England only 10 millions, and, notwithstanding, the forces
were equal.
--------------------
International-Financial
News Survey. Interesting article about land distribution in China. I read
in a German paper, that the peasants were treated about the same way as in
Russia. The "Mehrwert" is confiscated by the government officials, who
waste the greatest part. The situation of the peasants is hardly better than
before. An
armed government against a disarmed people: that's always
the same. Adam Smith is right: The fundamental basis for the solution of the
social question is a militia independent from the government.
(J.Z.: Provided this militia knows, appreciates, applies and
protects individual rights and liberties, especially the economic ones. Does
any of the still existing or newly founded militias do that? - Even in
Australia the government is so afraid of the people, that it tries to disarm
them completely, under the pretence of thereby protecting them against private
criminals. - It is unable to disarm even the small minority of private
criminals. But it went far in disarming their victims and prosecuting those who
defended themselves against these criminals. Naturally, it, too, would severely
prosecute those who dared to defend themselves against governmentally inflicted
wrongs. About a million Australians recently peacefully demonstrated against
the intended war against "Iraq". The prime minister ignored their
protest. Would he have ignored it, if these protestors had been armed,
militarily organised and trained? They would have far outnumbered the
government's armed forces! At least the protestors could then have achieved the
old demand: Decision on war and peace questions by the people themselves, not
by one man or a few, granted a decision-making monopoly on as important
questions! However, presently the
"war hawks" are wrong by wanting to use a war to disarm Saddam
Hussein. They know no better way. The "peace doves" are right by
opposing war as a method to disarm S.H. - but they don't know and don't care
about a better way to achieve that, either.
Neither side is prepared to study the problem objectively
and to arrive at some rightful and rational conclusions and actions. The
wishful and statist thinking on both sides is just not good enough. Nor is
their lack of imagination and interest in genuine solutions offered. Primitive and
false ideas abound on both sides, just as they did during the war in Vietnam.
This kind of behaviour can make one ashamed of belonging to the human race. -
J.Z., 13.3.03.)
-------------------------------------
National Secular
Society Tract. From this little tract I learnt for the first time, that
Pope Leo XIII, in the Encyclical "Immortale Dei" of November 1, 1885,
held "that heretics were justly burnt."
I will submit that to a Catholic friend and I am curious
what he has to object. Germany at present is under a Catholic Government and
that explains much, also the attitude against the political refugees, of whom
most - - I think - - are not Catholics.
-------------------------------------
Karl Hubenthal.
The picture is excellent. In the article I miss an application of Thoreau's
principles of civil disobedience to resist a planned economy. As the Arab
proverb says:
"Not by pronouncing 'honey, honey' comes sweetness to
your mouth."
(One of the least informative car stickers I recently saw
was: "No war!" - J.Z., 13.3.03.)
--------------------------------------
Lloyds Bank
Review. You were so kind as to mark the article: "The Dollar
Siege". On 22 pages the Banker says what - as far as it is right - - could
be said on two pages.
But to justify his fundamental principle: "The Dollar
gap exists, and paying dollars to Americans, pesos to Argentineans"
(but they decline pesos, they are very intelligent people!!) "and
ice to Greenland" (the Eskimos prefer Schnapps) "is the natural
kind of paying" - - to justify that, even 2,200 pages would not be
sufficient.
In the marked
passage on page 35 I read:
"From lower
production less would be available for export; etc."
For a banker that may be a thrilling truth, worth to write
pages and pages on it. To others it seems rather to be self-evident and thus
not to be mentioned when one judicious man speaks to another.
-------------------------------------
Your letter of 6
(or 8) September, to my dear friend, "The Malthusian":
I must thank you
very much for your kind support of my views vis-à-vis "The
Malthusian". It will not help much. Against reasons these people
are armoured by a threefold cuirass. Malthusianism is a comfortable way of
thinking and for that alone it will always have adherents.
If England would
have accepted that truth from Malthus, that a population may easily
double in 25 years, then in the year 1798, when Malthus first published his
book, she would have had 10 million inhabitants, which, in Malthus' opinion
already amounted to an overpopulation. In 1825 England would have had 20
millions, 1850: 40 millions, 1875: 80
millions, 1900: 160 millions, 1925: 320 millions and 1950: 640 millions. The
whole of England would now be a town like London is now. England would have
ruled the world for decades. To Russia she would have sent 1/4 of her policemen
to restore order there. The whole world would compete to nourish England. All
peasants of the world would be glad to get such a fine market. The wars of 1914
and 1939 would have been impossible. A simple order from the British government
to keep the peace would have made governments abroad tremble.
You laugh, although
thing would have been quite possible, including the 640 million inhabitants of
Great Britain. By Free Trade and Free Banking it would have been an easy
thing.
-----------------------------
Concerning the
starved Cimbri and Teutones: In one of my burnt books (Plutarch?) I read that Marius
encamped for several weeks vis-à-vis the Germani, so that the Roman legions
might get accustomed to the terrible sight of these "starved"
warriors, their height - - all 6 feet or more, it seems - - their incredible
physical strength - - and all that may impress a soldier. If the Germani would really
have moved from the North for lack or subsistence, the legions would have given
them some bread and told them: Now, be good boys and go where the commander
tells you to go. And the Germani would have gratefully accepted the bread and
said: What nice fellows are the Romans! Quite possibly, the Romans might have
sent one legion to the camp and would have made slaves of the whole
German army.
But things were very different. Obviously, the North had
nourished the Germans so well that they were, in strength, superior to all
other peoples, so that they could dare to undertake one of the usual Germanic
raids, but extend extended it to Gallia.
I hereby return the
copy, because on its backside is a letter from Zander, which I was
indiscreet enough to read.
Of The Malthusian's
arguments remains:
The assertion
that a people is a "Volk ohne Raum", while hiding from the people the
possibilities of Free Trade. That has produced many wars.
In some cases this
assertion was simply a lie, as it was in the case of Japan.
When a great part of China and the Philippines etc. was
conquered, the Japanese Government forbade the emigration to the
conquered territories. The government was intelligent enough not to believe in
an overpopulation. During the war the "Berliner Tageblatt" sent a
correspondent to Japan and the newly conquered territories. From his report I
learnt that emigration from Japan was, in general, forbidden and only permitted
only for a few people, of whom most were officials and many of them known as former
opposition members. They got little jobs, e.g. as a commander in a village or a small town and,
suddenly, became ardent adherents of the government.
(The correspondent reported inter alia, that the Japanese in
the Philippines had forbidden sleep during midday; as was there customary for
centuries. Their principle was: Instead of sleeping, they could work for our
emperor.)
-----------------------------
The inability of
all Western governments, their adherence to crazy financial and economic
systems, has now attained a limit, one where patriots must asks:
To what extent is a
government entitled to jeopardise its subjects' lives, wealth and independence
by its attitude?
When begins the
subjects' right of resistance and what kind of resistance is possible?
And if the majority
of the people shares the governments attitude or is indifferent, where begins
the minority's right of resistance, and what are its possibilities?
-------------------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
28. 9.
1950. Your letter of 23. 9., received
25.9.
Dear Mr.
Meulen,
you were so kind as to send me a cutting from the Daily
Telegraph of 18. 9.:
"Devaluation has not solved the pound's problems",
by Francis Whitmore.
The article is very interesting, and the impression is, that
Whitmore is a real expert in the problems here concerned. Whitmore could have
added considerations like these:
What is today a gold-reserve?
It is not the thing, which was called so in 1913. The
English gold reserve is not a stock of precious metal at the disposition of
England or her Government.
The modern gold reserve is a $-amount, corresponding to a
debt of American firms merchants, etc., whose creditors of first order are
American banks, of second order the Federal Reserve Board, or the American
Government, of third order: England.
Obviously the commercial value of this kind of reserve
depends on two factors:
1.) the honesty of the debtors,
2.) their ability to pay on demand.
In times of war or
politically strained relations the American Government has to choose between:
a.) honesty vis-à-vis its own people, the word
"honesty" taken in modern Jingo-language, the only language
admitted in such
times,
b.) honesty vis-à-is other governments, the word
"honesty" taken in its usual, commercial sense.
In times of
strained relations, the brawlers, who represent "public opinion",
demand - - of course - - that the reserve is blocked up. The American
Government will not be able to resist.
In normal times the
firms, merchants etc. are able to pay on demand, if they find another creditor
on the day they pay. If they do not find one - - as will be the case in
crisis-times - - then they do not pay and the reserve is
"frozen".
The real
solution of the problem here concerned is: England must pay either in pounds or
in Dollars of English origin.
Yesterday I had an
opportunity to look for a moment into the "Economic Journal",
March-edition 1950, at the West Berlin University. Professor Machlup wrote
there on the Balance of Trade. Like all others he starts from these
presuppositions:
1.) The system of exclusive currency us a self-evident
necessity. It requires no discussion.
2.) Free Banking is not an economic possibility worth
discussing.
3.) Paying Dollars to Americans is quite natural, paying
English debts with English Pounds should not be
discussed.
4.) The principle "value by acceptance" need not
be discussed.
He does not tell this expressis verbis, but it is his view.
Pity!
-------------------------
More interesting in the same issue of the EJ was
an article by Prof. C. H. Blackburn: "Import-Replacement by British
Agriculture". I think that the figures he provides are valuable. His
conclusion is: The present manner of production in England is not the best, so
that at the moment home production could be advantageously replaced by
imports, the thing considered merely from an economic
standpoint. Blackburn gives numbers for the yield per acre. I would like to see
his numbers compared with those from the Far East, especially of Japan. It
would be a valuable contribution to judge about the seeming or real
overpopulation in the Far East. Blackburn would be the right man for such a
task.
-------------------------
Some days ago I
visited the British Information Centre and used the opportunity to copy from
the Encyclopaedia Britannica the following lines from the article
"Japan":
"Thus, in
spite of the enormous amount of fish consumed as food, as fertiliser, and in
manufacturing year by year by the Japanese, the seas continues to supply vast
quantities."
------------------------
Total population.
Urban. Rural. Year.
55 900 000
18 000 000 37 900 000 1920
73 100 000
36 400 000 36 700 000 1940.
------------------------
Under a feudal
regime, the population remained fairly stable throughout the 18th
century and the first half of the 19th century, at a level of about
30 000 000, owing to limitations imposed by natural conditions such as plagues,
famine and floods, by an inelastic political system and by such artificial
checks as abortion and infanticide.
------------------------
The density of
population is, on the other hand, very high, standing at 469.3 persons per
square mile in 1935. This figure is exceeded (1930) by England and Wales: 685,
the Netherlands: 623, Belgium: 687 and Java: 819.
------------------------
The above figures
show what trade can do for a population. The whole increase of the population,
between 1920 and 1940 was absorbed by the urban districts. Without trade that
would have been impossible. Obviously, trade replaced also abortions and
infanticide to a high degree, although - - perhaps - - not to 100 % .
From reports of
travellers in the 60's and the 70's of the 19th century, I learnt that
the misery among workers and peasants at that time was very great and much
greater than in Europe among the corresponding classes. Certainly the misery
(or hunger) now is not greater than 80 yearn before, probably it is much less.
If it could be taken as certain that abortion and infanticide today are less
used than 80 years before, then it would also be certain, that the hunger is
now much less.
"The
Malthusian" judges matters "a priori" and not by facts that are
easy to get.
----------------------
S. W. Alexander.
It may be possible that there are not the best personal relations
between him and Whitmore. In every case - - and here you are fully in the right
- - Whitmore should have said some words about Alexander's aims, pro or contra.
As evil as the
present state of English currency is, a simple return to the "Redemption
Gold Standard" of 1913, would
(that's my view) not be a reform.
The redemption gold standard brought to fall (Rather: to
prohibition! - J.Z., 13.3.03.) the other gold standards existing at the same
time and much more important than the redemption standard:
1.) The standard given by a free bullion market.
2.) The standard given by the custom to value goods and
services in gold coins.
These two gold
standards have nothing to do with the redemption standard which you justly
decline. Both existed long before there was any paper money used.
Alexander should
read your book and discuss it.
---------------------
Your letter to
the "Times" of 18. 9. 50.
I am quite touched that you took so much trouble to spread some of
our views, in which, in this case, I
shared a little in formulating them, attributing to me - - not quite justly - -
the main part.
--------------------
If you agree with
the German Anti-cours-forcé school (about 100 years old, and, at the beginning,
not confined to Germany) you may, I
think - - publish all concerning the effect of cours forcé in your name only.
If you think that
the Times did not publish your letter because the Times thought it too
technical for average Times-Readers, you overestimate the Times very
much. There are other reasons. Large papers do never seriously discuss
serious reforms of the existing money system, not in any country.
(J.Z.: Did he merely state this observation as a fact here
or did he hold a particular hypothesis or theory on this, another conspiracy
theory? I don't know. I rather hold that, like most economists, the economics
writers of newspapers simply take the central banking system and exclusive
currencies for granted. Private currencies are for them at most subject for
some humorous headlines and remarks on and quotes from offbeat characters,
usually called "money cranks". Furthermore, they know the interests
of the vast majority of their readers. - J.Z., 14.3.03.)
--------------------
Malthusianism.
You writes: " … You write that the Malthusians confuse production per head
with the part of the product that is left to the head. I think you are a little
severe."
I stated a fact;
that's all.
You say: "Kerr
often gives figures of production per head". Kerr sometimes gives numbers
for the "income per head". I agree that these numbers - - if they are
right - - may, to a certain degree replace numbers for production per head. But
if in one case Kerr says, how the average income per head is distributed,
I change my opinion about the value of Kerr's statistics. Kerr never cares
about the distribution of the average income to the various classes of the
people. But it is certainly of importance what share is the income of those
classes which never suffer hunger and that of the others.
(J.Z.: Take a slave society as an extreme example. Averaging
out the support costs of the slaves with the income of the slave masters would
not supply a very informative "average income". - J.Z., 14.3.03.)
That in the case of
Japan the share of the richer classes must be great, follows inter alia from
the fact that real estate in Japan is distributed nearly in the same
proportions as in Scotland. A small percentage of the Japanese population owns
more than 1/2 of the territory. I hope to be able to give you exact numbers in
one of my next letters. I saw them in a book at the British Information Centre.
From other
information I know that the agricultural money lender takes a very great part
of the product - - the same as in India and in China before the Communist
revolution.
(J.Z.: I wonder, whether the percentage take of the
communist regime has become smaller or larger than it was before. The total
cake produced has certainly often to mostly become smaller - due to lack of
property rights and contract incentives and planning and direction mistakes.
Slaves and serfs are never very productive. - J.Z., 14.3.03.)
No statistics shows
the restriction of incomes for the lower classes due to bad laws - - no Free
Banking permitted, etc.- - restrictions so bad and so crazy, that they are not
even for the profit of the rich classes, money lenders excepted.
You say: " ...
You write that if Malthus is right, the Free Bankers are wrong. I cannot agree.
Both are right, etc."
I cannot find that
Malthusians are right in one detail of their doctrine. Also, it is not
so, that they deal with different problems. You will (I hope to be in
the right here) relieve the hunger in Japan by Free Banking and Free Trade.
Malthusians never care about these or other economic conditions and merely aim
to reduce the population. The problem is
the same in both cases.
That you prefer to
spend your time dealing with Banking problems is commendable. Nobody in
England, besides you, and the people who read the Individualist, knows anything
of Free Banking. But if Malthusians meddle with problems that can only be
solved by Free Trade and Free Banking, then I do protest and if I can, I show
them that their point of view is as false as it can be. (Here I set aside
astrology and such things, being still more false.)
---------------------------
I agree fully that
differences in fertility and other natural conditions may produce different
incomes per labourer. It may also be that an Australian labourer
produces more per labour hour (the calculating per labour hour cannot be
avoided in considerations like these) on his 100 acres than a Japanese labourer
on his 1acre. It may be. It found no proof until now, but it may exist.
In no case is it self-evident, that 100 acres produce more than 1 acre.
Agricultural details are given in special books, which I
need not copy here.
(J.Z.: 100 acres, cultivated by one Australian with the help
of machines, are likely to produce, per acre, more than 1 % of the output of
the one Japanese farmer cultivating only one acre, that is, more in total, than
the 1 acre of the Japanese, except when the 100 acres are flooded or during a
drought. - It is also likely that, with the help of his machines, the
Australian farmer will be more productive per labour hour, just like the
Japanese farmer would be, with better tools or machines. - In one on one
discussions the two are often not very objective, even with minds like those
two had. - J.Z., 14.3.03.)
----------------------------
You say: "…
There I think that the Malthusian is right when he says that reforms of
distribution cannot remove poverty so long as this inequality of land resources
persists (poverty of course, being a relative term - - the Jap is rich compared
with the Arabs I have seen in Morocco).
At the moment I do
not remember whether Kerr speaks about a new distribution of land in countries
like Japan. I, too, think, that a new
distribution may not be the best reform, a collective form of property
perhaps being superior, such as the Italian Cooperazione rurale, one of the
greatest advances. But I am firmly convinced, that Free Trade and Free Banking,
together with a reasonable "Sozial-Politik" (does there exist a quite
corresponding word in English?) will remove poverty from Japan,
although, perhaps, Japan may remain less rich than Australia. (Perhaps, perhaps
not.)
And if the whole of
Japan would become a town instead of a country, populated by several
hundred millions of men, then such a dense population would not prevent this
Japan from being very rich, provided Free Trade and Free Banking are in
full swing there.
A town Japan would be in the situation of Athens,
which was a rich town, although she depended mainly upon trade and manufacturing. (Its slaves weren't
rich but, probably, better off than many other slaves. - J.Z., 14.3.03.)
----------------------
As Schopenhauer
says: All errors are in a secret alliance and all truths too. Removing an error
in population theory may, indirectly, remove many errors in political economy,
trade and money theory included.
Our discussion
shows me how valuable is Prof. Cannan's theory of optimal population.
If Kerr would read Cannan, then he would at once change the title of his paper
into:
"The Cannan
advocate, formerly The Malthusian, formerly the New Generation". (Would
he? - J.Z.)
---------------------
I forgot: An
Italian name for the greet agricultural cooperatives, which leased the great
estates of bankrupt landlords, is: "affitanza collettiva". The
movement was at its highest between about 1905 and 1914. If the labourers would have added a small sum to the rent,
they would now be owners of these estates. (J.Z.: Mussolini's storm troopers
would probably still have destroyed these farms and organisations. - J.Z.,
14.3.03.)
If the monthly rent
of an estate valued at 10 million old lire would be 1/3 % = 33 333 lire, an increase to 52 784 lire would
have been sufficient to pay off the 10 millions in 300 months = 25 years.
-------------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen, 29.
9. 1950.
in the average of the year 1931 Germany possessed a currency
in the amount of 5,826.5 million
Reichsmark. The
population was not counted in that year but may be estimated at 64 millions or
so.
Thus there was in the average and per capita a currency
amount of about 90 RM.
For the purpose of the following calculation this amount may
be taken as "normal" for Germany.
As, legally, 2.79
RM were equal to 1 gram gold (fine), RM 90.- where equal to 32.3 grams fine gold.
The number of
inhabitants of the Western Zones is a little more than 40 millions, and the
currency amounts to about 8, 000 millions Deutsche Mark. (DM) That's per capita
about 200 DM.
1 $ = 4.20 DM;
1 ounce troy (31.1
grams) = $ 35. From these relations
follows that 1 DM contains, legally:
31.1 divided by 35
x r.20 = 0.212 grams fine gold.
This number being
accepted, 200 DM contain 42.4 grams fine gold.
Thus the quantity
of gold per capita is now, theoretically, much greater than it was in the last
year before the great crisis.
If one supposes,
that the above 32.2 grams - - as in 1931 - - are the normal amount per capita,
then one may expect at the exchanges a devaluation (disagio) in the relation of
32.3 : 42.4.
In other words, it may be expected, that 1 $ would not
cost 4.20 DM, but 5.50 DM.
At the Hamburg Exchange there was, on 28. 9.
("Tagesspiegel") the "spoken" quotation of 5.40 DM.
That this
calculation gives a result so close may be a chance happening. But I
think that the present amount of cours forcé money in West-Germany is already
too high, so that Germany is now really in the first stage of an inflation.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
On the backside of
the copy of your letter of 18.9. to the Times I find a call of the Responsible
Enterprise Association at Detroit. That seems a sympathetic association. Do you
know it?
I re-read your
translation of my letter into English and find it very elegant!
- - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - -
In most stores of
West-Berlin sugar is sold out. I got 500 grams of powdered sugar today. More
than 500 grams were not sold to one person. Normal sugar and sugar cubes can
hardly be got. But I do possess enough for some weeks.
Everybody buys
shows. In the stores only cheap shoes are to be seen. The others are sold out.
Madame Roland used
to say: "Je préfère les orages de la liberté à la sureté du
despotism."
------------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen, 29. 9. 50.
yesterday I received a letter from St. Kilda - Melbourne,
dated from 21. 9. 50 by air mail. 7 days passage, that's quick, I think. Not long ago letters in
Germany, from one quarter of Berlin to another, required more days.
(Not only bureaucratic incompetence of a monopoly
institution but censorship might have been involved, then and there. - J.Z.)
My acquaintance is
a young man, 22 years, father a Jew, mother German, and at the Nazi-time of
course considered as a Jew.
(J.Z.: Thus, it seems, the Nazis themselves did not quite
believe in the superiority of their own "race"! Biologically,
according to this point of view, it would be dominated rather than dominant.
What a "Herrenvolk"! - J.Z., 14.3.03.)
(I told him, when I met him at Berlin, in May 1950, to
subscribe to the Individualist.
G. Goldberg, care of Nussbaum, 1 Waterloo Street, St.
Kilda-Melbourne, Victory.)
He sailed with the
emigration-steamer Anna Salen (Swedish) on 24.6. At Port Said my young friend had many
discussions with the workers at the harbour. He wrote to me, that all workers
that he met there had been Communists. They all suffered much from hunger.
(The Malthusian would say: No wonder! The most populated
country in the world! Still more densely populated than China and Japan. But, selling
the victuals is the problem in Egypt as in the whole world.)
At Colombo Goldberg
again had many discussions with the workers at the harbour. They were
Communists, too, as far as he could ascertain. One of the workers told him: If
you come back here in 1953 or 1954, everything here will have changed much.
Now he works at the
Melbourne Harbour Trust. He gave me some figures for wages per week. (Saturdays
they don't work.)
Paviours
= L 10/ 1 / 6,
Joiners
= 9/19/ 6, overtime = 10 % extra.
Electro-Installers
= 9/17/ - Saturday afternoon =
50 % "
"Ankerwickler"
= 9/18/ - Sunday and Holiday = 100 %
"
(The translation is not in my dictionaries. Anker = part of
dynamo-machine.)
Tiler
= 9/14/ -
Tinsmith
= 9/14/ -
Pipe-layer
= 9/14/ -
General work at
machines
= 9/ 2/ -
Unskilled labour
= 8/ - / -
Goldberg writes
that the wages, in reality are higher.
Example: Electro-Installers, whose wages are by the tariff 9 / 17 / - . But in the very numerous
advertisements, where Electricians are wanted, the offered wages are never less
than 11 L. (40 hours-week.)
That workers come
by work by car or motor-cycle is frequently observed. Nearly all workers
possess their own little house, often made of wood. Some are thrifty and become
soon wealthy, most bet and drink.
Literature in bookshops is at a low level, lower than in
Berlin. Romances, adventure stories and the like. Women like Tarzan stories and
similar. Few theatres and opera houses. Much rugby and horse-races, which the
workers like much, just like all others.
Prices are rising
and Menzies must hear many reproaches. Russia bought very much wool. Farmers
use their sheep mainly to get wool from them. Meat is expected to become dear.
Laws against the
Communist Party are being prepared. The Australian Labour Party opposes them,
although it is in a fight with the communists. But the workers consider a
prohibition of the Communist Party as a violation of democracy.
(That pleases me. Always compel the Communists to defend
their aims under full publicity!)
Concerning the third world-war; it is
expected: but people are not so anxious as in Berlin. (No wonder! IN Australia
they never heard bombs and saw no destroyed houses.)
(J.Z.: Even the latter is not quite true. Darwin was
attacked and Sydney received a few shells. Otherwise, the above is partly
amusing - but, obviously, no more than the report of just one young and curious
man, making his first comparisons. B. broke off his long correspondence with G.
after G. joined a secretive sectarian group. - J.Z., 14.3.03.)
----------------------
Rittershausen moves
to Mannheim on 4. X. 50. (Gutenbergstrasse 19.)
He just published an excellent article in the monthly
"Deutsche Wohnungswirtschaft", September 1950:
"Miethoehe und Wohnungsbedarf", where he demands a
free economy in housing, rents, etc. Points ut, justly, that higher rents would
supply the capital for new houses, and much more than the State could ever
grant. I would be still more pleased with the article, if he would have said,
that the Deutsche Mark, since the devaluation, is no longer a fit measure of
value for mortgages. In Germany only gold, sold a bought at a free bullion
market, can be the basis. But currency is a "hot iron" for German
economists.
-------------------------
I myself published
an article: "Goldwaehrung und Immobilienkredit" in the
"Westdeutscher Immobilienmarket", September issue. I send you a copy.
I demanded a gold index and rejected redemption of notes in gold coins at other
places than the bullion market. The editor wrote me, that he had no money to
pay for articles. His paper is still in the "Aufbau". I was not surprised. The offer of articles is
now so large in Germany, that even authors who demand no pay do hardly have a
chance to get their articles printed, except government officials and such
people.
------------------------
What do you think
of a Free Banking Calendar for
1951????
"Nichts schreibt sich leichter voll,
"Als ein Kalender!" - says Goethe.
Reprint in the
Calendar the paragraphs by which Free Banking is now prohibited, but
"Bons" to be redeemed in goods or services are permitted. Reprint as
well those paragraphs by which English people have to pay debts to a
Americans in $ and are prohibited to pay in L.
You would be the first economist who publishes these
prescriptions.
------------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
2. X.
1950. Your letter of 23.9.50.
Dear Mr.
Meulen,
by your kindness 1 possess 14 copies of the Malthusian and
of the New Generation. Yesterday I studied each copy and tried to find at least
one line about one case where social conditions may influence or
not influence the supply of a population, as is the question in the Far East,
where this matter seems doubtful to some authors. I found not a single line.
For the Malthusian there exists an immediate relation between density of
population within given political frontiers (which it considers as that
thing from which one must start) and the state of nourishment. The Malthusian
applies it’s a priori theories to Japan. But observers get a quite
different impression.
The British
Information Centre possesses: "Dilemma in Japan", by Andrew Roth,
Left Book Club Edition (not for sale to the public), London, Victor Gollancz
Ltd., 1946. The author is an American and writes from an American national
standpoint. (Not "nationalistic"; he treats the Japanese race as equal
to others.)
Roth seems well
informed about Japanese affairs.(About German subjects he is badly informed and
writes on page 97: "In short, Germany lived on the loot of all
Europe" - - and means the time of the second world war. I can only say
from my personal experience, that here in Berlin there was nothing to perceive
of such a living. Continual hunger was the normal feeling of average people.
(J.Z.: I remember that just once during the war we had an
abundant supply of at least cheap tomatoes in Berlin. That was explained by a
report of a U-boat having captured a freighter loaded with tomatoes. That
roused in my young mind the question: Did we have to have a war to sometimes
get cheap tomatoes? Berlin was relatively well supplied. I was for long periods
evacuated with foster parents in the countryside and my mother occasionally was
able to send me some applies from Berlin. They roused great envy where I lived,
because there they could not be bought in any shop. Fruit and vegetables
produced had to be delivered by the producers to the State at fixed low prices
and was rationed out by it, often rather unevenly. - J.Z., 14.3.03.)
The fact that
high-loaded wagons carried away the food from the villages to the towns or the
stations, he does not interpret as meaning that there were too many people
in the villages and, therefore, they had not enough food. Instead, the says,
quite correctly, that the still existing semi-feudal agricultural system, where
the peasant is hardly more than a slave, makes such things possible.
He gives many details, of which every one characterises the
situation. In the whole book I did not find the words "Malthus",
"overpopulation", "birth control".
I quote some
passages:
Page 119. "As
the peasant owner loses out, he in compelled to rent small bits of land because
the small section he retains is not
enough to support his family. These part-owners, part-tenant, comprise some 42
% of the agriculturists.
But the lot of the
full tenant is the worst of all. … He pays a rent in kind for the use of rice
land which amounts to a fixed number of bushels per acre, irrespective of
yield, but generally amounting to 50 - 60 % of the crop of the land. Out of the
remainder of the crop the tenant has to buy high-priced artificial fertiliser,
implements and seed, in addition to feeding and clothing his family. …."
Page 120: "In
addition to the fluctuations of the market, the tenant is also afflicted with
insecurity of tenure, a condition which has given rise to many agrarian
conflicts in the last two decades. . . . Therefore, if a tenant works hard,
improves the land by putting in a good deal of expensive fertiliser, or
improves the irrigation, he is likely to be evicted to make way for another
tenant, who is willing to pay a higher rent to the landlord for the
improvements put in by the previous tenant."
Page 126: "The
crisis of 1929 tremendously accelerated the ruin of the peasantry. There was a
sharp drop in agricultural prices. … As a result of the fall of agricultural
prices, the small landlords attempted to secure additional rents in kind, to
enable them to pay interest on their debts to the banks. Without mercy they
shifted the weight of their depression losses to the backs of their tenants.
Water, to irrigate the rice-fields in the hot summer months,
was so scarce that peasants, armed with stones, bamboo pikes and implements,
frequently fought over the division of the water.
Page 128: "In
Saitama prefecture, some
3 000 peasants fought each other until some 200 police
stopped the battle.
The left-wing
tenant unions attempted to divert this internecine struggle into more effective
channels. An appeal to the peasants in Scarlet Banner (Akahata) indicates the
approach they used:
"There is no
sense, brothers, in fighting each other about water. We must make it clear who
is the real enemy. …
The water problem would be quite easy to solve if we had the
money to build a dam, to drain the underground waters, and to build large
basins and reservoirs. We know exactly what needs to be done but we have no
money to do it, because we are exploited by the Emperor, the landlords and the
capitalists. …"
Page 129: "…
The landowners, working through organisations like the Imperial Agricultural
Society, brought pressure on the government to make heavier purchases of rice
and to control the import of cheaper Korean and Formosan rice, so as to boost
the price of Japanese rice."
(That is very
interesting: Misery caused, obviously, not by lack if rice but due to
abundance of rice!!!!)
----------------------
Page 115:
"Some 1 100 Peasant revolts are recorded in the last two and one half
centuries of the Shogunate."
Page 116: "In
the early years of the Meiji Government, however, the extraordinarily high rate
of agrarian exploitation, which had prevailed under the late feudalism - -
about 60 to 70 of the crop - - was legalised and strictly enforced, regardless
of circumstances. Furthermore, this land tax had to be paid in cash, in
rural regions, where cash was scarce. When the tax payment fell due, the
peasant had to barter a disproportionate amount of his crop in order to acquire
cash. In many cases this did not leave him with enough food to feed his family
for the remainder of the year, and, frequently, he had to borrow at usurious
rates of 30 - 40 %. … In a score of years almost a third of the peasantry had
suffered expropriation.
Page 117: "Despite Japan's limited arable area,
there is an amazing concentration of ownership. It is estimated that, while
half the farm families own less than one tenth of the land, 7.5 % of the
families own more than half of the land. Perhaps the largest single holding,
outside of the Imperial Household, is one of 4 000 acres on the Echigo Plain, a
tract which is tenanted by 2 500 families, or 14 000 persons. In all there are
over 3 500 landlords in Japan, who hold more than 125 acres each. These large
landlords have an average of just under 200 tenants apiece, and, between them,
do account for one-third of all the tenant households in Japan. There are about
50 000 moderately large landowners, with holdings of between 25 and 124 acres
each. In addition, there are another million absentee landlords, holding up to
twenty-five acres."
---------------------
Concerning the
absentees I found interesting information in the book: "Durch Werkstaetten
und Gassen dreier Erdteile" von Edmund Kleinschmitt, Berlin, 1928.
Seite 124: "…
Ein scharfes Kampfmittel der Paechter und der Kleinbauern gegen die Landeigentuemer
ist . . . der Boykott, das ist, die Verweigerung der Lieferung von Waren und
Leistungen and die boykottierten Landeigentuemer. So kann es vorkommen, dass
diese oft nicht einmal die notwendigsten Dinge zum Leben sich verschaffen
koennen, und manchmal gezwungen sind, nach den Staedten zu ziehen."
(J.Z. translation: "A severe fighting method of the
tenants and small farmers against the landlords is … the boycott, that is, the
refusal to supply them with goods and services. Thus it can happen that these
cannot even acquire the most necessary things for survival and are sometimes
forced to move into the towns.")
Page 118: Frequently the non-cultivating landowner also runs
a saké-brewing factory or is the part-owner of a silk-reeling establishment. Silk
reeling and a number of other small-scale industries are run for the most part
on the labour of peasant girls. These peasant girls go to work most frequently
to pay off their father's debts, and, naturally, the landowner, to whom the
peasants are indebted, is in a good position to force then to work in his shop
on pretty much his own terms. Furthermore, when the big textile mills want
cheap labour, they go to the landowner-money- lender, who acts as a procurer by
forcing the peasants to send their daughters off into indentured servitude in
the mills to work off their debt to him."
Page 199: "… Of the 5 500 000 farm families tilling the
soil, some 30 % own the soil they work, slightly less than 30 % are tenants only, while the
remainder, over 40 %, are part-owners or part-tenants. This division has
existed, with only slight changes, since the beginning of this century."
"… The peasant proprietor ... is generally so deeply in
debt and his farm so heavily mortgaged, that he frequently, remains an owner in
name only."
"Many a peasant owner pays nearly as much in interest
to usurers as the tenants pay in rent, and, in addition, is burdened by heavy taxes."
Page 117: "… It was computed, that in the mid-thirties,
for example, rents in Japan were seven times those of England, about three
times those of Germany, about four times those of Italy and three times those
of Denmark and
Holland.
As a result of this
high rent, absentee landlordism in Japan is a purely parasitic institution,
since the landlord contributes nothing to agricultural production, being
interested exclusively in collecting rent."
Page 115: "Most of the Japanese peasantry have to
render half or more of the harvest from their tiny farms as rent in kind to a
landowner, or as interest on a debt owed usurer. They still cannot, for the
most part, eat the rice they wrest from the soil by the difficult, unpleasant
and unending hand labour of the entire family. Even at the best times many have
to live on millet, sweet potatoes and some imported rice of inferior quality.
And during recurrent crises they are forced to sell their daughters to the
brothels of the towns or send them as indentured labourers to the factories.
… although Japan's prospects for great agricultural
prosperity are made dim by natural limitation of agricultural resources, its
dire agrarian poverty is a product of a man-made system of semi-feudal
agriculture, a system of sharecropping and hand-labour on small farms,
averaging two-and-a-half acres in size."
-------------------
It is an
interesting book. Every page is interesting. The agrarian conditions are
treated only on a few pages. The main object of the book are modern political conditions.
If you read the book, you will not regret the time. (208 pages.)
------------------
Yesterday I read
the article "fishery" in the Encyclopaedia Britannica. The very
learned author states, that the 30 000 (or so) fishermen of England secure to
every inhabitant of England (sucklings included) 40 pounds of fish annually. He
thinks that fishery is only at the beginning of its economic role.
The Malthusian, in
its issue of May 1950, page 3, says:
"If the sea
were full of fish, is it likely that our trawlers would go to Iceland to get
it?"
That's a good
specimen of Malthusian discussion. Nobody ever pretended that "the sea
were full of fish" in the sense that fish is to be found in every cubic
foot. Further: The distance from England to Iceland is a few days only.
Furthermore: The Encyclopaedia Britannica says that already
at the time of the Tudors English Fishermen exploited the sea near Iceland.
Obviously, they did so because the abundance of fish there surpasses the
abundance of other parts of the sea.
In the April issue,
page 6, the Malthusian says about fishery:
The animal life in
the sea can therefore never exceed the vegetable life in sea. Does Mrs. Buck
believe there is much vegetable life in the sea?"
If the Malthusian
would have taken the trouble to look at the article seaweed of a good
encyclopaedia, he would have found that vegetable life in the sea is not only
very considerable, but that some sea plants are used as human food (in Japan
too). I read some years ago (I forgot in which book) that the quantity of sea
plants surpasses by far the quantity of plants on the continent. I think that
to be true, for the simple reason, that the quantity of animal life (fish etc., measured in pounds) certainly is
much greater than the quantity of mankind, measured in pounds. If the whole of
mankind would be drowned in the Lake of Constance, its level would be raised by
a yard or so. (less)
---------------------
The Malthusian
doctrine is false in every details. Malthusianism cannot solve one social
or economic problem.
Take again Japan. The Malthusian quotes the Times of
8, III. 1950, where it said: "Japan would be a rich country if it had
fewer people. … The director of the Japanese Institute for Research into
Population, Dr. Okazaki, has said the best population would be 50 millions or
less." (Malthusian, May 1950, page 4.)
Here is what a
Japanese author, Kyugu Tanaka, wrote in the year 1868, when Japan had 50
millions or less:
(Andrew Roth, page 115.)
"These people,
whom we call peasants, are no better than cattle or horses. The authorities
pitiless compel them to pay heavy taxes; they are the objects of a most onerous
corvée, but they have nothing to say about it. We hear of many cases, where
they lose all their fortune, sell their wives and children and suffer all sorts
of violence or are even put to death. They pass their whole life enduring the
blows and insults. … Petty officials lord it over them, so that the peasant
cringes before their threatening stare. … The arrogant behaviour of those
officials is like that of a heartless driver of some horse or ox; after loading
it down with a great weight, he proceeds to rain blows upon it; then, when it
stumbles, he becomes more and more angry, cursing it loudly and striking it
with even greater force - - such is the fate of the peasant."
-----------------------
For Japan there was
and never will be any other help than political freedom, Free Trade and Free
Banking. Malthusianism is the contrary of an assistance.
----------------------
In its issue of
January 1950, page 1, the Malthusian quotes his darling Colin Clark, who
said, that although the population of the world now increases at the rate of
about 1 % p.a., it would be possible to increase agricultural productivity at
the rate of 1 1/2 %. He quotes that
under the heading: "Colin Clark's Logical Fallacies."
The manner in which Colin Clark is refuted, is not worth to
be mentioned here.
(Re-reading it, I find it is worth mentioning. The
Malthusian says: "It is also obvious that even if food is actually
increased by 1 1/2 % per annum, that would be totally insufficient to satisfy
the needs of the world."
Before that, it quoted Lord Boyd Orr, who said:
"… two thirds of the world's population have not enough
food, clothing and housing, and two families out of three suffered premature
death through lacking of these necessities."
Clothing and
housing have nothing to do with food. Kerr can ask any merchant,
whose business is the selling of clothing. He will answer: "Never
has it been a problem to produce clothing or to procure the raw
materials for it. The problem has always been to sell clothing.
Concerning housing
I need not demonstrate to you its problem, since you explained, with great clarity,
that it is neither a problem of
producing bricks nor mortar, but that here is given the problem of finance.
That in the whole
of Asia the nourishment of the people, for centuries, is under conditions as
pointed out by Andrew Roth for modern Japan, Kerr could have come to know from
the numerous reports of European travellers, since centuries.
So - - it is true -
- Kerr is in the right, when he says, that an increase of 1 1/2 % of food
production would not relieve 2/3 of mankind from hunger. But it is true not
because the number of men is too great, but because there exists essentially
the same feudal or semi-feudal land system, which would let the men starve even
if production would be doubled tomorrow.
I do not know what
to say about Kerr's manner of discussing the problem. He writes well and
certainly is as intelligent as his adversaries. But many people believe firmly
the opposite of the truth and when they have asserted that opposite, firmly,
two times, these two times bring in good faith. Then they lose the capacity to
see the matter
in the right light. At the third time they believe their own
assertion like pious Muslims believe in Mohammed's heavens, even if they are
good astronomers and do see clearly that such heavens do not exist. Their brain
cells are formed and act and produce their faith like the ball bladder
produces bile, also against the will of the bearer.
-------------------
Let me still tell,
in short, a word about the seductive assertion that a man on 100 acres, with the
same manpower, must produce more than on one acre.
(J.Z.: The one man, working 100 acres, usually uses
machines, while the one on 1 acre usually uses hand-tools, and is thus less
productive. - J.Z., 14.3.03.)
The product is, first of all, a result of labour.
Whether it is better to direct that labour on 100 acres instead of on 1 acre,
depends upon technical conditions. (J.Z.: Also upon land-ownership and finance
conditions!) In a former letter, I wrote to you that a labourer, in the
vicinity of London, certainly produces a greater quantity of food than an
Australian labourer on his 100 acres. What the average product per acre
is in Australia, you may take from the Statistics.
(J.Z.: B. could be obstinate, too, in holding on to a
wrongful position that he had once taken. If he himself would have bothered to
look up the productivity statistics for market gardens and ordinary farming
methods, then, I believe, he would have found out that even the best market
gardeners do not produce on 1 acre more than hundred times as much in produce
than a farmer produces, in the average, on one of his acres. Even facts do not
always win out in discussions, especially the "one on one" ones. -
J.Z., 14.3.03.)
-------------------------------
Malthusian thinking
in that which paralyses "social reform thinking" in every individual
who also thinks in a Malthusian way. If it were be possible to extinguish
Malthusian thinking, then "social reform thinking" would become so
powerful that no other power could resist it.
(J.Z.: As long as social reform thinking and its references
are so incomplete, or dispersed or inaccessible, out of print or un-translated
or too expensive, so that it cannot even cope with the fallacies of
Malthusianism, it has simply not educated, trained and mobilised its own ideas,
arguments and facts sufficiently. If it had, Malthusianism would no longer be a
problem for it. The same applies e.g., to Free Trade vs. Protectionism, to
monetary freedom vs. monetary despotism, to exterritorial autonomy vs.
territorialism, to voluntarism vs. compulsion, to rightful and rational peace
ideas vs. pro-war trends, to voluntary taxation vs. compulsory taxation, etc. -
J.Z., 14.3.03.)
------------------------------
Remember that you
belong to the very few men in the world (perhaps no more than 1000) that
see: The evils of the world are, essentially, Banking disorders.
The liberty of Banking, now demanded probably by less than 1 000 persons in the
world, is the basis of all other liberties, the latter being pretty worthless
without the Liberty of Banking (the word used in the sense of your book). The
unjust repartition of the social product is the unavoidable consequence of the
monopoly of means of payment.
(J.Z.: Nevertheless, these ultimately decisive few have not
yet bothered to gather and publish their addresses, all their scarce collected
writings, all their own writings, a bibliography to all their literature, all
their abstracts, all their reviews, all their discussions, a combined index to
all their writings and have not yet made them all and permanently as well as
cheaply accessible in all major languages. For this purpose possibly less than
a dozen CD-ROMs would suffice, whose raw material, for the original set, the 12
blanks, is likely to cost them less than $ 12. With all their resources
combined, they could rapidly become the most sought after consultants in all
communities experiencing monetary crises. But will they bother to arm and
prepare themselves in this way, with the "weapons" and
"ammunition" that should be closest to their hearts and minds? How
can one motivate them into this kind of action. I do not know. Do you? Under
monetary freedom principles, including mutual tolerance for diverse ideas,
i.e., without endless and fruitless arguments between them, or mutually
ignoring what they have to offer to each other, all subscribing, instead, to
full experimental freedom for all kinds of monetary experiments among
volunteers - not to speak here of all the financial freedom options - they
could come to turn, between them, the present trends around and turn present
conditions into their opposites. Will they bother to do so? - Will you? - J.Z.,
14.3.03.)
The other (seen)
reasons of the unjust repartition are not primary but are secondary ones, such
as private land property and the private property of other means of production.
The importance of
monetary liberty is a discovery like that of the heliocentric system in
astronomy. This discovery is darkened by Malthusianism.
Social and economic
problems are not solved by men disappearing from the world, say, by not being
born or by being put to death.
------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
7. X. 1950.
Dear Mr.
Meulen,
I tried to ascertain the 10. X. 1882 and the, 10. X. 1950 in
the revolutionary calendar of 1793,
with the intention not to offend your anti-christian
mentality. It must have been the 18. vendémiaire or so. But the prescriptions
of the revolutionaries about leap years were insufficient, so that today nobody
can use this calendar. What to do? You will not take it as a faint-hearted
concession to the clergy when I congratulate you on the
10. X. 1950.
Although we do not
quite agree on the definition of duty, you must this time
acknowledge the duty imposed upon you by all readers of the Individualist,
to continue its editions at least until
10. X 1972.
Asahi, Zivio,
Muchos annos, Cheer, Cheer !!
Yours
- signed: U. v. Beckerath.
(J.Z.: Well, M. made it, with his life and THE
INDIVIDUALIST, to 1978. Alas, its few dozen readers were not individualistic
enough to manage, between them, to keep it going permanently. Furthermore, M.,
contrary to B., seems to have given up, long ago, to learn anything new, i.e.,
to really listen to opposing arguments. But others can and should still learn
from the positive ideas that he had to offer, as well as from his mistakes and
from the ideas and errors of B. as well, much more so than was so far the case.
Therefore I bothered to digitize this old correspondence. - If only a man like
B. had been given the opportunity to edit, freed from the publishing and distribution
chores, a long-term magazine, filling its pages, many more than THE
INDIVIDUALIST had to offer, and more frequently, too, largely with his own
scholarship, ideas and comments, without having to work at some bread-earning
chores that were not to his liking. Now men like him would at least no longer
be held back by the costs and labours of using paper, printing, postage and
distribution of their published output. They could, instead, produce only upon
demand, using microfiche, floppy disks, e-mail, websites and, especially,
CD-ROMs, for massive quantities of writings. - Alas, present freedom lovers
have still to make optimal use of all these alternatives. - J.Z., 14.3.03.)
____________________________________________________________________________________________
8. X. 1950.
Dear Mr. Meulen,
with much pleasure I received the October- issue of the
"Individualist". I do appreciate the honour you rendered me on pages
39 & 40.
-------------------
From page 1 I learn
that Mr. Kerr is a member of the PRA. I do hope that one day he will
notice that his Malthusianism and the Free-Banking-Principle are in great
contrast. He will then - - being a logically thinking man - - decide for Free
Banking.
-------------------
Colin Clark defines
Communism as "… effective ownership by the political
authority."
If that would be the right definition, then there would be
no difference between State socialism and communism. Communism is abolition of
private ownership of means of production, combined with the individual's right
to consume according to its necessities. There are several kinds of Communism
possible, inter alia:
1.) Abolition of private ownership of means of production by
associations (Robert Owen and others),
2.) Abolition of private ownership by replacing that
ownership by ownership of the State.
Both are to be
combined with the right of consuming.
Some Communists will regulate this right by officials,
others think it is sufficient to let the individuals decide for themselves. The
latter brings a utopian element into the scheme, while mere State socialism is
not utopian but a most real thing.
Capitalism defines
Colin Clark by:
"… effective
ownership of the means of production by a small section of the people."
I cannot agree with this definition. Capitalism is a social
state where those, who don't possess capital are wholly dependent upon those,
who possess it. That the latter form only a small part of the population is not
essential.
From the foregoing
definition of capitalism follows that State socialism and State capitalism are
the same thing.
(J.Z.: I do not agree with B.'s definition of capitalism,
because "wholly dependent" we are also, e.g., upon suppliers of daily
needed consumer goods and services, e.g., those of doctors, plumbers,
electricians. But we do know, that these services are competitively supplied
and that we do enjoy, if we are also sufficiently supplied with exchange media,
"consumer sovereignty" towards them. Well, in the USA alone there are
about 10 million employers. Employees do have the "employee's
sovereignty" to choose between them. Moreover, if they, with their dozens
of millions as voters, and concerned about being employed by employers able to
pay them, and also to pay them in sound exchange media, bothered to vote-in
full monetary and financial freedom, then their choice among millions of jobs
would become even greater, and their employment and payment more secure. But if
they leave the legal conditions for monetary and financial despotism untouched,
unquestioned, quite out of their usual discussions, then they will have to put
up with the results - and will, largely, have only themselves to blame for
this. Moreover, once they really
disliked the employer-employee relationship and aspired to liberation at the
workplace, from the degrees of personal dependency presently associated with
mere "employee" jobs, then they would also study monetary and
financial liberties, to enable them to buy or start up their own enterprises,
under propertarian, associational and contractarian conditions that please them
and they would then have no great difficulties to finance such attempts and to
achieve sales for whatever products or services they would offer between them.
In other words, what is blamed upon "capitalism" and
"capitalists" is really the old slave and servile mentality among
employees, without the gumption to consider their economic liberty
opportunities and to see to it that all of them are realized - by and for them.
As my father pointed out, in his Manifesto for Peace and Freedom, German
workers, by 1975, had already then, in their savings accounts at banks, six
times the amount required to buy all the controlling shares in all the German
share companies, i.e., the workers of large share companies, could, if they
wanted to, buy the controlling shares of their firm from one day to the other.
I believe that their financial situation, in most cases, has even improved
further - but, they are not making use of it in a capitalistic, free market,
financial, business-like and enterprising way but rather continue in their
class-warfare mentality and activities and fail to complain about their own
servility and lack of enterprise and business-sense. If they had had at least
the good sense to save in savings and loan departments of their employers
instead of in the usual banks, getting thus a much higher interest return for
their savings - after seeing to the abolition of prohibitive legislation
against such investments, then they would soon have come to realize how
financially powerful they are and would have used these funds largely for
take-over bids. But they almost never discuss such options and thus have to
suffer the consequences of this apathy or "Denkfaulheit" (Being too
lazy to think.) In Germany they do not even look at the company statements
published in daily papers, which do already indicate that employees, as a rule,
get already 85 to 95 % of the returns from enterprises, while owners and
financiers get only 5 to 15 %. Thus, even if they had no savings in their
bank-accounts, they could easily make take-over bids on long terms, ultimately
repaid through the additional earnings they could achieve when finally working
for themselves, as owners of the means of production. - J.Z., 14.3.03.)
---------------------------------
It is true, that
the idea of a community of individual independent proprietors is now spreading.
I regret that this idea spreads. Technology opposes that ideal.
(J.Z.: Not in all spheres! On the contrary. Technology has
provided many opportunities for small contractors etc. - J.Z., 14.3.03.)
In industry the idea can be realised only for a minority of
labourers. The great factory is the naturally developed means of production, in
some branches for much more than 100 years.
(J.Z.: Even the rolling mills of steel works have become
relatively small plants through new and more versatile machines, operated with
the aid of computers. And small business firms, between them, do employ more
people than the large firms do in combination. So the concentration of industry
has not led to its feared or predicted ultimate concentration. The large firms
often exceeded their optimum size. Many large firms have greatly shrunk in the
numbers of their employees and they do employ a multitude of small firms as
contractors. Yesterday I read in a paper that Queensland alone has over 60,000
food producing firms, which was considered to be a problem for
government-authorised inspectors. - J.Z., 14.3.03.)
To attain an optimum of personal independence as well as a
just share for the single labourer in the product is the problem. But it is no
great problem to dissolve great factories into small ones. The former problem
has been solved, as well as is possible, under the present state of social and
economic science, by Bata, the founder of the great shoe-factories at
Zlin in Czecho-Slovakia.
That for many
"sectors" (to express it in the Russian manner) of agriculture the
great estate is by far superior to small estates, that is proven by daily
experience. Here the same problem is to be solved as in the great factories. As
far as I know, the best solution was found by the Italian "affitanza
collectiva". (Best at the present state of social and economic science.)
----------------------------------
Colin Clark says:
"… there may be circumstances under which the maximum of production of
wealth is incompatible with the human rights and dignity of some of those
engaged in production."
(J.Z.: On the reverse is the following note, without an
insertion sign. I do not know, whether B. wanted it inserted here or elsewhere.
- J.Z., 14.3.03.)
The false
definition of capitalism by Colin Clark leads to a quite wrong way to combat
capitalism. From Clark's definition would follow that a reform of ownership
would be the most urgent measure. From the Free Banking Principle it follows,
that it is most urgent to restore the right of Free Banking. A new and just
distribution of ownership will follow nearly automatically. Clark is on the
false track of Karl Marx. Every opinion not considering the right of free
issuing standardised means of payment, leads to the erroneous opinion, that the
problem must be solved by redistribution of ownership.
I do regret that Colin Clark did not point out his opinion
about such circumstances. As long as no one refutes it, I am convinced that Free Trade and Free
Banking, consistently and rationally applied, not only yield the maximum
production but also guarantee human rights and dignity in the most effective
and simply way. I am glad, that your book and all you wrote in the
"Individualist" as well as in English papers, agrees fully with this
view.
--------------------
At page 34 you
quote inter alia two figures from Colin Clark's statistics: Percentage of the
population who are working proprietors or family partners in
1.) France = 33
%, 2.) Japan = 32 %.
At first sight the
impression must be that the economic conditions in France and in Japan resemble
each other. You know that the very contrary is the case. Japan is a hell for
working people, peasants as well as industrial workers (still? J.Z.), while the
French peasant is, in the average, one of the richest in the world and the
French industrial worker, before the war, was one of the best paid. The figures
of Colin Clark are quite worthless for judging the social and economic
conditions of the people concerned.
-------------------------
What you said at
page 35 about "the 5 s = meal limit and fair shares" pleased me much.
Every one, who reads the article, must admit: Government regulations cannot
possibly solve the problem here concerned.
------------------------
"A queer
lesson in democracy". Excellent!
Let me add, that if King Leopold would be more interested in the economic
affairs as he seems, he could easily become the president of the United States
of Europe. A union must be run by a manager and not by a committee. If Prussia
would have had, in the year 1933, a president, Hitler would never have won.
Prussia had, as supreme government, the committee of her ministers.
-----------------------
The dollar gap in
Germany. Let Germany pay by means of payment based on the Milhaud principle
(dollar units, mark units, any other),
then the dollar gap will be filled up.
-----------------------
"The
fundamental problem." I regret
that you did not print special copies of this article and paste them on the
advertising pillars of London. You would have won many subscribers.
----------------------
That such an
important man as Mr. V. R. Kimmitt wrote such a letter seems of greatest
importance. Certainly, yo will, as the German saying goes: "Das Eisen
schmieden, solange es heiss ist." (Shape the iron, as long as it is hot. -
J.Z.)
And Deryck Abel won too!!! Dawn of day?!?!?
----------------------
Concerning the
letter of Josiah Oldfield: "The old scholastics said:
If a good god created the world - - whence the evil? And if
a devil created it - - whence the good in it???
Kant's and Schopenhauer's philosophies solve the problem so
far as human understanding can solve it.
---------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear
Mr. Meulen, 9.
X. 1950.
the German August-edition of "Reader's Digest"
reports that a Dr. Immanuel Velikowski "proved" that several Biblical
wonders "must" really have happened, inter alia also the sun-miracle
at Gibeon, described in the book Joshua, chapter X. I reread the chapter and
found:
1.) The author of the book Joshua, obviously a cruel but a
reasonable mind, dares not to tell the story as proven. In verse 13 he says:
"Is it not written in the book of Jasher?" This book is one of the
several quoted in the Bible, but lost.
2.) Joshua did not pray: "God, let the sun stand
still", but: "Sun, stand thou still upon Gibeon; and thou, Moon,
in the valley of Ajalon". Joshua directs his prayers directly to the
Sun and the Moon.
The Book Jasher has
probably been an old book at the time when the Book Joshua was written. If that
could be accepted, then one must ask:
a.) in what language was the book written?
b.) in what dialect
of that language was it written?
c.) was the dialect
altered in the course of time?
The latter may be taken as certain. E.g., the German
language has so widely changed from Luther's to our time, that even learned
people hardly understand elder texts. At that time (Luther) there existed
several written German dialects, all equally used:
I.) in Northern Germany
"Platt-Deutsch", which today is no longer a written language and is
not understood in
Bavaria,
Tyrole, etc.
II.) The language
of the South, which the Imperial Court used, if it did not prefer Latin in
documents or Italian as
colloquial
language.
III.) The dialect of
Meissen, a town in Saxonia, which Luther spoke, which he also used for his
Bible translation
and which, in
consequence, became the mother of modern German.
At Luther's time the dialect was called "Saechsische
Kanzlei-Sprache". It was carefully worked out already at Luther's time and
was the language in which the Electors of Saxonia and many other German princes
published their laws and which they used at their court.
A man, thoroughly learned, who takes information from a
historical work, written in the dialect of the South, although his
mother-tongue was (suppose) the German spoken 100 years later, will often be
mistaken, if he is not very learned. This is all the more true for a
modern reader. He will hardly understand Luther's original Bible translation,
and of the old and other German dialects he will understand still much less.
What I say here of
the German language is mutatis mutandis true for many other languages, also
e.g., for Greek. The Athenian dialect was, for a long time, one of the
Greek written languages, besides Dorian etc.
So it may be
supposed, that the author of the Book Joshua did not understand every passage
in the Book Jasher. I think the passage in the Book Jasher ran thus:
"And in the
presence of whole Israel Joshua prayed and said: Thou God of the sun, whose image
at Gibeon is adored and thou, Goddess of the Moon, whose image at the valley of
Ajalon we adored, stay with us until the battle is won by your worshippers. And
the gods listened to Joshua and were on the side of the children of Israel the
whole day, until they had won the battle."
If the Jehovah had
the intention to do a miracle, it would have been quite sufficient to let the sun
stand still. Also, to pupils and pious listeners of sermons, regularly only the
standstill of the sun is mentioned. What use the standstill of the moon
could have had, is not to be seen. But if my foregoing interpretation would be
right, the mentioning of the moon is quite natural.
-------------------
There are several
dozen passages in the Bible where the Hebrews are mentioned as worshippers of
the Sun and the Moon. The last of these passages is - - I think - - Job 26/27,
where Job is proud not to have blown kisses to the moon. (The English
translation is here less distinct than the German.)
Further: The word Baal
means "Lord", so that confusions was hardly to be avoided by readers
not fully acquainted with the ancient language.
Moreover: It is
well known, that Ezra "revised" the old texts after the Jews had
accepted the Persian religion. Ezra, or the priests who helped him, were so
awkward, that the "corrections" are still to be distinctly seen. In
some cases even the necessity of mending escaped their notice, so that in the
modern text the words "the gods" are to be found, where Ezra would have
written "God", if the passage would not have escaped his notice.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
In the Columbia
Encyclopaedia of 1945 I find that "gold standard" is used, in the
articles "gold" and "Bimetallism", so as it is used in
Germany, France, etc., that is:
The price of gold expressed in paper money is no detail of
the Gold Standard. Essential is the use of gold coins for measuring values and
as a means of payment.
Kitson's terminology seems to be confined to England. Also
there - - I found - - it is not universal.
----------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen,
12.
X. 1950.
it may be that some of your readers asked you whether Individualism
has nothing to contribute to the problems of the Korean war, apart
from the general principles of pacifism and a warfare as humane as possible,
principles which today nobody contests. But Individualism has - - that's my
opinion - - to contribute much more to the problems and better things than all
others.
Individualism is
the tendency of unterrified Individuals to bring authoritarian power and
monopolies to the technically possible minimum.
Individualism teaches that every Individual possesses rights, which
cannot be lost and which even a majority cannot suppress. Individualism teaches
too, that such rights exist in the economic and social spheres no less than in
the political. Here Individualists differ from most Liberals. Although the latter do not deny that general
economic and social rights do exist, they never stated these rights in clear
words.
History has shown
that the individual's most important rights are to buy and to sell.
The Germans and the Russians are, perhaps the peoples who,
for more than three decades got the most impressive lessons that all political
rights become worthless and even disappear when the right to buy and to sell is
restrained by
tyrannical currency laws or no less tyrannical and foolish plans of the
government. On the other hand: When citizens are in a position to sell their
products or their labour and to buy the just equivalent, then they get, by and
by, all other liberties, and this even if the society's original political
state was the most far-going absolutism.
Buying and selling
are impossible without standardised means of payment, freely transferable,
sufficiently fixed in value - by the nature of the means of payment- and free
of cours forcé.
(Excuse me for using here this French expression, but the
English language does not possess an expression quite equivalent to the French
"cours forcé" or the German "Zwangskurs". In the English
language exist only expressions like forced currency or fiat money, which means
money exposed to cours forcé but not cours forcé itself.
I invite you to give a translation of cours forcé into
English and enrich this language with a new word. (Forced value? Compulsory
value? - J.Z., 16.3.03.)
"Legal tender", which Adam Smith uses in judging
the American Colonies' emissions, would not be sufficient today.
(J.Z.: It means only a "legal offer", meaning:
"compulsory acceptance" but not: "forced value" or
compulsory acceptance at face value. - J.Z., 1`6.3.03.)
The Russian paper money before Witte's financial reform
("Credit ruble") was legal tender in all payments but did not have to
be accepted at par. The Prussian and the Danish monetary history offer similar
examples.
From your book, page 106, I learnt that the notes of the
Bank of England, although legal tender, at the time of the Napoleonic wars were
without cours forcé, until the law of 1811 prohibited making any difference in
payments between guineas and bank notes.
If fiat money is used in transactions, then the vendor is
always injured by the difference between the forced quotation at domestic
markets and the free quotation at free markets and is, insofar, not paid but
robbed.
You are the only
English author in our times, who revived the old statement, that a government
is unable to supply its subjects with means of payment sufficient in
quantity and quality by means of a monopolised paper money. Private
standardised means of payment must supply the gap.
The right for private people to issue them was, in old
times, called the right of banking.
Really, this right (for which I would like a modern name) is
a fundamental economic right of men and citizens. It is your very great merit
not only to have again claimed this old right, but to have discovered, that for
notes not redeemable on demand in gold, this right is not abolished by the act
of 1844. (Not by later acts, either? - J.Z., 16.3.03.)
Obviously, this precious right is forgotten in England,
although it could be widely utilised and this with the greatest advantage.
All that has to do
with the Korean question and very much so.
From the individualist principles, laid down in your
writings, and those of the never to be forgotten Benjamin R. Tucker, I derive
the following design of an individualistic pronunciamento, fit for a really
democratic Korean party (the word "democratic" here taken in a modern
sense) and every Korean citizen, who declines private capitalism
(J.Z.: That of a few, usually combined with monopolies or
privileges and great ignorance on economic matters, combined with many
prejudices and disinterest in economic rights and liberties among these few
capitalists and most other people. - J.Z., 16.3.03.)
as well as state capitalism, the latter very improperly
called today socialism.
(J.Z.: Not quite improperly. It is simple the one form of
"socialism", among hundreds of other types, that is most widely known
and realised. - J.Z., 16.3.03.)
(You know, that by the economists of the 19th
century Proudhon's doctrines were considered as "liberal
socialism", a notion quite lost in our century. The unjust claim of State
capitalists, to represent the only kind of real socialism, is now,
unfortunately, fully recognised, although thinkers like Tucker always declined
it.)
(J.Z.: What is usually called "libertarian socialism or
libertarian communism is usually more communistic than liberal, especially when
it comes to economic rights. - J.Z., 16.3.03.)
Here is the design
of the
PRONUNCIAMENTO.
1.) No Korean government shall have the right to impose upon
the Korean people its own belief in its economic, social or monetary theories.
2.) No Korean government shall have the right to impose upon
the Korean people, or groups of the people, plans elaborated on the
basis of such theories.
3.) Every Korean has the right to act socially, economically
and monetarily as he himself thinks best, provided he acts at his own expense
and economic risk. That the government, or churches, or parties, or groups, or
prominent, or other people, entertain another opinion about the best way to act
for oneself, does not entitle them to suppress different opinions and actions.
4.) The right formerly called the right of banking, is an
essential right of every Korean. It includes the right to issue and to offer standardised
means of payment, provided the manner of issuing, the quantity of the issuer's
formerly issued standardised means of payment, and whether it is redeemable on
demand in precious metal or not, the manner to exchange them into goods and
services, the issuer's obligation to accept it on demand and at par in his
normal business, the current number of every note, together with the date of
issue and the issuer's complete address, are all stated, as well as the date of
the expiry of the note and that it is expressly declared, that the notes are
not endowed with cours forcé, except towards the issuer himself.
5.) Correspondingly, it is the right of every Korean to
refuse any means of payment that is undesirable to him, without being obliged
to state the reasons for his refusal, provided he declares his refusal in time.
6.) Korean citizens have the right to manufacture, or place
an order for their manufacture, coins, medals or standardised ingots, similar
to the Chinese sycee, provided the coins, medals or ingots are engraved with
the manufacturer's complete address, the date of manufacturing, the diameter,
height, gross weight, net weight, specific weight, fineness and the kind of
alloy. Citizens have the right to possess coins freely and without controls,
also to transfer them to whoever they like.
7.) If a Korean government prescribes exclusive means of
payment for private transactions, then it is guilty of tyranny.
8.) No government or group or single person in Korea has the
right to exclude certain persons or groups (say: workers or peasants) from the
general clearing system or to forbid them to create clearing facilities
themselves, by using standardised clearing cheques or other suitable means.
9.) Every Korean citizen has the right to judge himself
whether in his sphere means of payment, of a quality that he claims to be good,
are scarce or not and he is entitled to meet that scarcity in the best way he
things fit, may it be by his own activity or by using the offered activity of
others or by forming a group with others to clear debts and payments, and in
cases of emergency by barter or by agreeing upon credit.
10.) Korean citizens are entitled to consider as inflation
the introduction of government money, with the aid of cours forcé, beyond that
amount which the country would accept at par without cours forcé. Citizens are entitled to refuse, publicly and
by their acts and words, other definitions of inflation, such as an improved
standard of living, an increase of wages, a natural rising of prices as a
consequence of scarcity, e.g., by a bad harvest.
The right to publish such declarations shall include the
right to resist government actions, unless such actions are merely improvements
of freedom of trade, of transport or credit facilities or similar means to
overcome a scarcity of goods.
11.) Korean governments do not have the right to tax one
part of the people in favour of another part, say, by duties on importation or
exportation, not even under the pretext that such duties are protective duties.
12.) Korean governments have no right to restrain Korea's
commercial and other relations with foreign countries, say by controls of
foreign currency or other means of payment, by forbidding certain imports or
exports, except in times of war or immediate danger of war.
13.) Korea's taxpayers shall have the right to pay their
taxes with standardised assignments, issued by themselves or others, which they
accept in payments at par in their usual business, e.g., peasants for selling
agricultural products.
Workers ready to accept such assignments for the payment of
wages shall not be excluded from the application of this system of tax
payments. Ignorance of government officials in monetary affairs or their
indolence is no reason for Korean taxpayers to support the levying of taxes in
kind or by socage. (I.e., in services. - J.Z., 16.3.03.)
14.) Every person residing in Korea has the right to agree,
in his transactions, upon any measure of value, precious metals, commodities, a
combination of commodities, index numbers, the purchasing power or the market
price of coins at a fixed date in an earlier period, notes of a bank or other
measures of value that they think to be suitable.
15.) Every person, residing in Korea or abroad, has the
right to participate in Korea's open markets, to organise open markets, other
markets, and to use market facilities (offer, demand, information, etc.)
without restrictions or controls. This right shall not be restrained for any
goods, services or values, including precious metals, coins, any means of
payment, domestic or foreign. (*) This right includes the right to publish
information obtained at the markets.
(*) (Here I would
exclude ABC mass murder devices or means to build them. - J.Z., 16.3.03.)
16.) Every Korean has the right to oblige himself to buy
commodities or services of any kind for any agreed-upon means of payment, at a
future day or within an agreed-upon period. This right includes the right to
cancel such agreements by paying a certain sum or granting certain advantages.
Every Korean has the right to accept such obligations from others and to add an
agreement to cancel the acceptance by paying a certain sum or granting certain
advantages. Local authorities are entitled to instruct the courts in their
districts to interpret such agreements as having been concluded with the
intention to avoid or to mitigate commercial crises. The government shall not
have the right to prescribe exclusive means of payment to fulfil obligations
resulting from contracts to insure against crises.
17.) Every Korean has the right to price goods he possesses
and offers for sale, or services that he offers, as he things fit, provided the
measure of value that he uses is distinctly enough specified. The measure of
value may be a coin, a note or anything else.
18.) The validity of every Korean laws should end 25 years
after the date of enactment, unless the then elected parliament extends its
validity by a special law. For provincial, communal and other local laws or
prescriptions, this time limit should be 15 years. (Jefferson's principle that
no generation has the right to impose prescriptions upon the next one.)
19.) It is the patriotic duty of every educated and
intelligent Korean to be constantly interested in his fellow-citizens'
economic, social and monetary rights, to watch carefully over these rights; to
use every opportunity to enlighten his fellow-citizens on the true nature and
the supreme importance of these rights; to enlighten, especially, officers of
the army, of the militia, of the police, soldiers, policemen, and every man who
bears arms.
He must instruct them, never to help suppressing the
people's rights and to consider all orders, given to suppress these rights, as
void, and constituting a crime by those who gave the orders.
It is his patriotic duty to create centres, where the
people's rights and the best means to protect them, are at least once a month
discussed, publicly if possible, secretly if the government prohibits the
discussion, to call for meetings, when these rights are violated and to
elaborate for such a case means and ways to resist.
Individualistic,
economic, social and monetary sciences are pioneer sciences. They require very
much in learning not demanded by examiners of government schools and
universities.
What scholars of individualistic sciences disdain to learn
is respect for all governmental opinions that are not based on reasons,
experience and free discussion but merely on military superiority.
Korea expects every Korean, man or woman, to conduct
themselves at every moment and in every action and in every word as good and
courageous pioneers of enlightenment, freedom of expression and concerned with
the coming generation, its freedom, its honour, welfare and culture.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
To be solved is the
Korean land question. Individualism does not protect landed property based only
on suppression. There is, until now, no information that Korean land property
of the great land owners had any other basis. If Koreans renounce retaliation
and offer the former land owners jobs as secretaries etc., in the now and in
every village constituted numerous cooperatives of every kind, or as bankers of
the kind which you pointed out in your book, then the former land owners would
be better treated than they could expect from any other regime.
------------------------
Very
faithfully Yours - signed: U. v. Beckerath.
(Will the US secret services, with their huge manpower,
computers and other resources, spy out such programs for the liberation of the
people in North-Korea, by the overthrow of its despotic regime, and would they
comprehend such a program? I doubt it on these two points. They, too, are
guided not by genuine knowledge and intelligence but, rather, by the usual
popular prejudices. They are merely government bureaucracies and as such almost
always inefficient. I know of only one exception of that rule and I cannot
document it, either. - J.Z., 2. 6. 03.)
___________________________________________________________________________________________
Dear Mr. Meulen, 15.
X. 1950.
by your kindness I received yesterday:
1.) The Malthusian, Sep. 1950,
2.) The Economist, 23.9. & 30.9,
3.) The London Newsletter, 5. X. 50,
4.) Truth, 11.8. & 22 9. 50,
5.) The Liberal News, 29. 9. 50,
6.) The Interpreter, 15. 8. 50,
7.) City Press, 15. 9. & 29 9,
8.) National News-Letter, No. 738, 739, 740, 741.
9.) A cutting from the Times of 4. X. 50, "Dollar
Surplus".
10.) A cutting: "Trial of War Criminals', letter of 1.
X. 50. of R. A. Savory to the Editor of the Times.
I thank you very
much. If Robinson had got such a collection, he would have left his island as a
perfect economist and - - being a logically thinking man - - as a
revolutionary, too.
----------------------------
1.) Malthusian. This
issue is better than all the others which I saw until now. What Kerr says of
the submarines is quite right. They are a terrible weapon. I read in a German paper that the new Russian
submarines are coated with rubber (originating in Malaysia?) and in this way
well protected against radar. On the other hand, everybody knows that magnetism
penetrates rubber with the greatest ease. As the German saying has it:
"Die Baeume wachsen nicht in den Himmel." ("Trees don't grow
into the sky." - J.Z.)
At page 2 Kerr
again asserts that a dense population is a cause of war, but this time
he is cautious enough not to state reasons or historical examples for
this strange view. If he would have said: A dense population has often been an
effective pretext for governments to drive them into wars, he would have
been in the right and could have produced many examples, as the last and most
impressive the Hitler-war. When Hitler began to "govern", Germany was
a country very well nourished and, probably, not worse than any country in the
world. And yet it was possible, by using
Malthusian arguments, to convince a great part of these people (My scanner read
this as: "fools"! - J.Z.),
that they were a "Volk ohne Raum".The Malthusian arguments
chloroformed the best brains, so that they found no contradiction between their
own dinner table, the Malthusian arguments of the imperialistic papers and the
numerous advertisements in these papers, where chemists recommended their
drugs, pills, etc. to get more slender.
Certainly, it was an exaggeration when some people asserted,
before the war, that in Europe and, especially in Germany - - but also in
England - - more people died from being overfed than from lack of good. But it
was not much of an exaggeration.
Malthusian
arguments, like the following three, are the best anti-pacifist arguments
invented until now. Their penetrative effect on average brains is well proven:
1.) The fact of
overpopulation is to be derived from the number of people in a given area on
one side and the
quantity of
good produced in this area on the other side.
2.) It is of no
importance, that the area is formed by old dynastic wars, treaties, marriages
etc. and that it is quite
an artificial
thing.
3.) Trade is no means
to supply a population.
Interesting and
important is, what The Malthusian says at page 2 about the effect of full
employment upon the nourishment of England. It is now about the same as the
nourishment of the unemployed in the year 1933. Of course, The Malthusian does
not derive the right conclusion and does not investigate the presently used
methods of
supplying work. The present method costs money
instead of producing money.
The Malthusian's hint, that there live now too many people
in England, is refuted by its own statement, that in the year 1933 (when the
number of inhabitants was not much smaller) the people were very well
nourished. But to enter into such details would at once prove the 100 %
craziness of the fundamental (and tacitly held or implied - J.Z., 17.3.03.) Malthusian
doctrine:
"Economic factors
should not be taken into consideration when the bad nourishment of peoples is
to be
investigated."
At page 3 The
Malthusian talks of the celebrated Malthusian series:
1, 2, 3, etc. (approximate ration in which the quantity of
good can be increased) and
1, 2, 4, 8, etc. (approximate ratio in which a population
may increase, if there is no check).
It is astonishing
that so many critics overlook the main fault of the here developed train of
ideas.
Both series begin
with the numbers: "1, 2".
Interpreted: In the first stage it may be possible to increase the
quantity of good to the same extent as the number of inhabitants is increased.
(History until now has proven this possibility.) And what date deserves such a
preference, that it should be chosen as the date of the beginning? Here lies
the rub!
The Malthusian
quotes Liebig, who said: "It is easily understood that the yield of a
field cannot be proportional to the labour applied to the field, but that it
rises at a far smaller rate."
Is it not
astonishing that the economists are not able to prove this theory by facts?
(I do not count here some small fields observed
by scientific institutions and under conditions not occurring in practice and related in works like those of
Marshall.) The simple explanation is, that in the sentence of Liebig the world labour
is used in the physical sense, that is: 1/2 times m times v square, where m is
the mass and v the velocity. But such a kind of labour is never applied, simply
because the labour is provided by men and not by machines. Labour in
agriculture, and even if it is slave labour, is always intelligent labour, and
may the degree of intelligence be ever so small. Not labour is applied in
agriculture but intelligence and good will, assisted by physical labour.
Scientific language
at the time of Liebig was not yet so well developed as to permit a right
explanation of the true nature of agricultural or any other kind of production.
Since the time of Liebig, naturalists have learnt to distinguish labour in the
popular sense and labour in a pure physical sense and call the latter energy.
If Liebig would have expressed himself quite distinctly and would have said:
"It is easily
understood that the yield of a field cannot be proportional to the number of
meter-kilograms (foot-pounds) applied to the field if there is no intelligence
to direct the additional energy, but that it rises at a far smaller rate",
everyone would have answered: To state such a self-evident
fact we do not need science. Please speak about the tendency for diminishing
returns in connection with intelligent labour, as it is given in
practice.
In this case,
Liebig would have said: Ye people: Obviously, there, too, is a limit, but at
the present state of science or daily experience nobody knows it.
The fact is, that
even in Japan the peasant is glad to accept additional skilled labour.
Therefore, he is glad if his women get as many children as possible - - also at
present - - because a child produces its own subsistence already at the age of
4 years (some say at three) and elder children produce a little surplus.
But it is - - of
course - - to be admitted, that if the number of workers in a field would be as
great as there are - - per square foot - - people in one of the narrow streets
of Yokohama, then even a very great intelligence, at the present state of
science, could not apply them with profit. It seems that Malthusians think
primarily of cases like this.
(J.Z.: I read about proposals for growing food at each level
of skyscrapers. That would provide, possibly, a higher density of workers per
square foot on the ground, than can be found in a crowded street. The same
could be said of underground tunnels, at many levels, in which, e.g., mushrooms
would be grown, or about levels of hydroponic gardens in space habitats. It
would largely be merely a question of energy supply. - J.Z., 17.3.03.)
The quantity of
food produced by increased use of labour (man's labour, assisted by tools)
should be taken from books of experts, such as are used at agricultural
schools. They should not be calculated from the thoughts of writers far from a field and thinking
quite a priory.
The Malthusian says:
"Malthus however, who was brought up in the country, knew very well that
merely by putting more labour to work on a piece of land you cannot increase
the crop proportionally."
The Malthusian may
state where Malthus spoke of his own experience. (I regret, that I don't
possess the works of Malthus. Some time ago, I got a German translation of the
second volume of the "Essay".) I am convinced that Malthus did not
possess such an experience. In the 19th century it was so, that
peasants always complained about the lack of labour and demanded
"measures" from the government to provide the country with labour. In
Eastern Germany Polish labourers - - quite content with wages that German
labourers refused - - were always welcome to
the peasants. Many of these Poles stayed at last in Germany,
so that Germany, in the years before 1914 became a country of immigration,
while still in the 80's it was a country of emigration par excellence.
The
Reichsbank-Praesident Koch, a very able man, may have contributed much to
Germany's welfare before 1914. He used the crisis of 1907 to demonstrate to the
public and to the Reichstag and his government, that the old crazy law of 1875
must be repealed, by which only notes of 100 marks and more were permitted.
(The old law was an imitation of the corresponding English law.)
In the whole 19th
century experience with additional labour, applied to the same field, turned
the rule of diminishing returns to a quite contrary rule.
The cause of this fact, surprising for Malthusians and such
people, is: We are still only at the beginning of agricultural science.
That this is true
may also be derived from the facts observable on Formosa, which the
Malthusian is honest enough to repeat on page 4. The Malthusian asks, highly
astonished: How is that possible? A country as populated as Japan and not
hungry???
If the Malthusian would take the trouble to learn more about
Formosa from reliable reports, it would come to know that the "overpopulated"
Formosa exports more rice than she imports, and exports as well great
quantities of bananas and other victuals. An impartial study of the
Formosan economy would overthrow the whole Malthusianism. It would reveal the
decisive importance of trade and credit, even in such a primitive
shape as is used by Chinese merchants at Formosa.
------------------
What "The
Malthusian" says about "mixed marriages" at page 3 is quite
right. Most people confound the right to mixed marriages (which
should never be limited) with the suitableness of such marriages. The
experiences which The Malthusian quotes are well founded. The few cases, where mixed marriages are not
worse than others, are so rare that experiences derived from them cannot be
generalised. From personal experience I know of two marriages of Chinese with
German women. The one case was a good matrimony, the Chinese being a perfect
gentleman. (Restaurant-keeper - - now in Frankfurt/M - Tai-Wan-Restaurant, if
my bad memory does not deceive me.) The other was an average Chinese but
supportable. I do not speak here of the many other mixed marriages I know of,
convinced that your experience on this point is probably greater.
That the race
war atrocities reported by The Malthusian do not belong to the Malthusian
theory, does not lessen the value of The Malthusian's reports. Excellent is
what The Malthusian quotes from Prof. Kimble:
"… when the
first white man came to Africa, he had the Bible and the native had the land.
Now the native has the Bible, and the white man has the land."
After the South
African Nazi's Land Reform, the South African Europeans had 156 acres per head,
the Bantu less than 7 acres. If the Whites continue in this way, then the Bantu
districts will appear soon to be terribly overpopulated. But the answer of the
Bantu will certainly not be "moral restraint" but rather the answer
that Haitians gave in 1791 to their white oppressors.
(J.Z.: According to what I have read about South Africa, the
Whites there were among the early immigrants. Most of the present Black, or
their ancestors, were later arrivals. But even first occupation should not
grant any exclusive title to a whole country or continent. - The black
Haitians, in their response, were extremely racist and applied th principle of
collective responsibility. - J.Z., 17.3.03.)
--------------------
From former issues
of The Malthusian I learnt that Malthusian propaganda in Japan and in India is
successful, at least insofar as many people there are now convinced:
"There are really only two possibilities - - restriction of the population
and war."
It seems that China as well gets more and more of that
mentality. But the Malthusian is quite wrong if it thinks that the Asians will draw the same
conclusion: Ergo we restrict the population. The Asians will draw the same
conclusion that the German imperialists drew: Restriction of such a valuable
population as ours would be a crime that Heaven would punish. War is the
conclusion here to be drawn.
What may be the
consequence of a "Volk ohne Raum"- mentality is not only proven by
the Hitler-War, with its l extermination of the inhabitants of so many villages
not only Jews but also Serbians and Poles and probably others. About Serbia and
Poland I received reliable personal information.), it is also proven by the
wars of
Genghis Khan, who destroyed the villages and killed probably
more than 50 million men to get pasture for the Mongol horses and cattle. He proved to his Mongols, that they, too,
were a "Volk ohne Raum".
Before Malthus was
known in Asia, the Asians made war for the honour of their kings, for booty and
to get slaves. Now they have "scientific" and thus, supposedly, well
founded reasons.
Many people in Japan will today certainly say: Look, look!!
It was not so, that the former regime cheated us; we really were a
"Volk ohne Raum", the whites say it themselves. While under the old
regime the right to begin a war seemed doubtful, now it is proven.
The series of wars
to be expected in the next decades, may be fairly attributed to Malthusian
propaganda.
There is only one
means against this propaganda (perhaps too late already): Propaganda for
Free Trade and Free Banking. Both would open the whole world for all its
inhabitants and would clearly show that what Malthusians ascribed to "overpopulation" is
caused by very different influences.
The latter point of
view may excuse me when, at this time and on other occasions I wrote so much on
Malthusianism.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Economist. Page 507
(issue of 23.9.) you marked a passage from the Economist of 21. 9. 1850
and were kind enough to add: "An argument for you!" - I regret that
you did not add as well: "… and also for me!" (You will remember the
passage.) What a time of independent, clear and logical thinking - 100 years
ago!
-------------------
Page 508 you marked
a critic of K. William Kapp's book: "The Social Costs of Private
Enterprise". Certainly, your thought was the same as mine: All these
people do not investigate what private enterprise would have been if Free Banking
would have been permitted, or at least used in the permitted form:
Clearing cheques without redemption in gold on demand. An
economy, and I dare say a civilisation, based on such a currency, would deserve
Buddha's verse, which I quote in German:
"Om amitays! Such
das Unerschoepfliche
("Om amitays! Such the Endless
"Nicht auszuschoepfen! Und das Unermessliche (" which can't be exhausted! And the
Immeasurable
"Nicht auszumessen! Es irrt, wer fragt und wer erwidert. )
("which can't be measured! He errs, who asks,
"Schweig!" (as well as he who
answers. - Be silent!" - J.Z.)
----------------------------
At page 509 a book
is criticised: "Dialogus de Scaccario", Nelson's Medieval Classics,
144 pages, 15 s., concerning medieval
finance. Probably this book is interesting. From German writings about the
subject I know that Clearing was used so widely, some centuries ago, so
intelligently and so effectively, that the then used clearing methods deserve
the attention of moderns.
In Cantor's "Geschichte der Mathematik" is
reproduced a page of a merchant's ledger. A quite modern ledger could not be
better.
The main tendency was: avoid cash payment and use clearing
to the utmost technical possibility.
The clearing at the messes of Lyon, Cahors, etc. seems to
have been much better organised than the clearing described by Jevons an being in use at London
at his time.
From a commentary
to the German Cheque Law I learnt that the 30-year-war the following financial
method was much used in German towns.
E.g..: a mason did some work for the magistrate. He was paid
by the promises to pay a pound of farthings. But he
did not demand payment from the magistrate but, instead,
used the promise itself as a means of payment to pay debts - - taxes, private
debts etc. Always there was found a person who had to pay taxes - if the
promise had circulated for some time.
Then the "cheque" was used as means of payment for taxes and so
disappeared from circulation. What was -
- it seems - - not done was to standardise 'the promissory notes.
If the 30-years-war would not have come, then, very
probably, this standardisation would not have failed to come. It reminds much
of the state of currency in England at the time of about 1800, described by
Fullerton, when promissory notes were the main medium of exchange.
-----------------------
At page 510
Professor Roepke's book: "The social critics of our time" is
criticised. Roepke is a good man, knows much and is an adversary of
totalitarianism - - all's well, but he knows nothing of Free Banking, and
exclusive currency is, for him, the natural and only currency to be considered.
Roepke and all others do not see, that Exclusive Currency leads to totalitarianism,
even while they do fight against it. I
will not read it.
-----------------------
Page 538. Report of
the Mercantile and General Reinsurance Company, Ltd. The report says nothing
about the consequences of instability of currency. American insurers are
more attentive. I include a copy from an extract of the "Mutual
Life's" report.
-----------------------
Issue of 30. 9.,
page 547: "The dangers which confront the British nation are legion, and
many of them cannot be solved by the application of pure liberal
philosophy."
The Economist
should state:
1.) What in its opinion is pure liberal philosophy,
2.) What dangers would not be confronted by the application
of pure liberal philosophy.
Some lines lower,
the Economist says:
"Because
liberty is an uncompromising question, its cause can only be upheld by a
political party - - even, if it must be, an extraparliamentary party - - whose
main concern is not with power nor with princes but with what is right … A
party never likely again to form a government, yet with access to the
formidable sounding board of Westminster, has a chance to stand on its
principles, to ferret out what is wrong, to speak out for what is right, and to
expose the shallow compromise of routine politicians. This is not an impasse,
but a glorious political opportunity."
I do not remember
to have read in the Economist a passage more serious, more wise and more
practically spoken.
Dear Mr. Meulen - -
should it not be your chance?????????
I think you will have
young friends willing to take the trouble of party work. What your young
friends do not have, but what you could procure within a few days
that is a program.
These three things
brought together:
1.) your young friends' activity,
2.) your program,
3.) the old English freedom of speech, that glory of the
Nation, still England's best asset, much better than lost India,
these brought together must act as in old days, when
intelligent people brought coal, sulphur and saltpetre together.
Remember, that the
Hitler-Party began with seven men, taking themselves serious, so serious
that Hitler saw at once: Here is my chance, here is the best
basis to get master of Germany and more.
Do you know possess
seven friends, taking themselves serious???
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
I will continue
tomorrow or later.
Consider: It's not
I who speaks to you - - it's the Economist that speaks, and I think he
can claim to be heard.
---------------------
Who shall be meant
by the Economist if not men like you?
---------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 16.
X. 1950.
some days ago I bought (very cheaply) Marco Polo's travels.
M. P. gives some considerations to China's population at that time. He
saw well that there dwelt very many millions of people. He asked himself, how
it was possible not only to produce victuals for the people but also to provide
so many men for the emperor Kublai Khan's
service, of which the postal service impressed him most. His explanation
was: The people live in polygamy and get many children by their
women. M.P. expressly says that victuals were in great abundance and report
that a measure of rice or buckwheat or millet - - the main victuals at that
time - - produced about 100 measures if used as seed. M.P. reports that wheat
is not as productive. But - - he says - - Chinese and Mongols do not know bread
but use wheat in the form of vermicelli or as pies. (Obviously, he means that
in form the quantity of water consumed with the wheat is greater than in
bread.) Explaining good supply with a high natality pleased me much.
----------------------
What M. P. says
about the magic used at the Imperial Court is most astonishing. Perhaps you heard
of the cups at the emperor's table moving by "magic" from one place
at the table to another.
----------------------
"The
Interpreter'', you were kind enough to send me, contains at page 2 an article
by L. Labadie, 2306 Buchanan, Detroit 8, Mich., which is an answer to R. C.
Bryant's article: "Is Interest Necessary?"
(Address of Bryant-Investment Securities, 621, South Spring
St., Los Angeles.)
Labadie says: "All I am pleading for is the freedom of
note issue, and then let interest persist if it can."
If you like, I return the "Interpreter". Send him
a copy of the "Individualist".
----------------------
I always regretted
that the very different things called in common language interest, are
all named by the same word. An important
part of political economy would get another face, if only there would have been
invented, in time, suitable words for
the different kinds "interest".
If the thing would not be so serious, it would be amusing to
read the celebrated discussion between Bastiat and Proudhon on
interest. Both were very intelligent men (personally I prefer Bastiat), but
they did not notice, before they were at the end of their discussion, that they
had talked about different things.
Bastiat insisted, that owners of capital would
not, normally, renounce interest, say the owner of a house, a ship, a plough,
etc.
Proudhhon never answered until one of his last letters
and said: Of course - - but that is not the subject of our discussion.
Proudhon, on the other hand, made clear that exchange
should not be prevented by the economic necessity to use a monopolised good,
say, gold, notes of a monopoly-bank (say the Banque de France) or State notes.
Bastiat at last understood his concern and answered:
But of course, dear friend, but what you pretend to have invented, as a means
to meet the necessity to exchange, independent from gold or other and similar
means, is in full use in America. There exist several thousands of
"banques d'échange" and before such banks flourished in Scotland.
Instead of proposing to abolish the kind of interest you mean, you should
demand the right for citizens to create banks on the American model.
------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen, 17. X.
1950. Your letter of 12. X. 50.,
received yesterday.
Josiah Oldfield. I think we agree here fully. Kant says,
life is worthless and the whole of nature is worthless, but both may get
a value by the existence of men who try to solve the problems of their social
life.
Restriction of wars to the technically possible minimum is
expressly enumerated by Kant as among the things that
man could or must do, so that life and nature may get a
value. Kant points that out in paragraphs 83 and 84 of the "Kritik der
Urteilskraft" (Critique of Judgement - J.Z.). These paragraphs turned me
into a fanatic Kantian.
Schopenhauer here does not share Kant's opinion and says:
Life an nature are, in every case, worthless and social reform is a hopeless
thing. Schopenhauer confesses himself a Buddhist and says: Nirwana is better
than the best that life and nature can offer.
Kant, although he wrote many decades before Schopenhauer,
investigated the value of a metaphysical zero, too, and said: Men should not
judge about things that are obviously beyond their understanding. We can judge
of the role we are condemned to play on the earth and can judge of the part of
nature with which we have to do it, but that's all.
Evil in general
would not be the problem, if there did not exist unsupportable evils. Buddha
says in one of his speeches, that the mere existence of a "justice",
that uses torture, would be a sufficient reason to leave a ssociety and a world
where such things are possible.
-------------------------
I share completely
your opinion, that our spirits depend very largely on our bodily health.
Perhaps they depend wholly on it. Schopenhauer says the same.
------------------------
If your father
would have been a pious Muslim, he would never have been certain that you would
still be alive at the age of 21. Mohammed says: Nobody knows when he or
somebody else will die.
I was in a similar situation to yours and my colleagues told
me that I would be dead at most by the age of 50. I believed it myself and
arranged my life correspondingly and not in the best way.
-----------------------
To have a daughter,
as you have, is not only a great consolation, but in every respect an asset
which counterbalances many negative values (very many). I would be
interested to learn whether she shares the semi-buddhistic views of her father.
----------------------
Communism.
There were many socialists also rejecting Communism as an ideal. Marx and
Engels, in the second period of their lives, were no longer communists - I
think - but merely State socialists. Both had scientific minds and emphasised
that State capitalism and State socialism are the same thing. Both said, in
terms of Hegelian philosophy (which I do not use here), that capitalism by
developing to State capitalism becomes socialism. They lacked the experience
which we sustained.
------------------------
Idea of
independent ownership. Obviously, this idea has nothing to contribute to
the problem of solving in the best way the unavoidably given fact that, on the
one hand, men must work together at the same means of production (great
machines, great estates, ships, etc.), and, on the other hand, that the product
won by united labour must be shared. Independent proprietorship can solve
social problems only for a very restricted number of persons and requires
additional institutions to share a product won by division of labour, the instruments
of labour being in independent proprietorship.
I think , Adam
Smith treated the matter already very well in the first book of his "The
Wealth of Nations". But his investigations need to be completed.
(Example: his first chapter "On the Division of
Labour". Adam Smith should have investigated the case of the men in the
great manufactures that he considers, are not obliged to accept the work
of their colleagues.
Most simple example: Two men on an island. They resolve to
divide their work. The one goes into the woods or the plains and collects
berries, mushrooms, other victuals, wood for heating etc The other stays at
home, cooks the things and keeps the home in order, provides baskets, bows,
spears, etc. That's all well, but if the second does then, one day, say: I
don't want your berries, etc. Now I will fast some days, be it to annoy you or
to please the spirit of the island. Then the berry seeker is in great distress.
At last both will find out, that division of labour is not sufficient but that,
moreover, an agreement is required that neither of the two shall have the right
to decline the other's labour within an agreed time.
The latter point is - - as far as I can ascertain it - -
neglected by all economists. They considered merely the technical side
and neglected the legal side.
The first man, who seems to have perceived the logical gap,
seems to have been a simple worker, who wrote about the matter a letter to
Robert Owen, who published it in his "Crisis". From this man's
observations may be derived a new kind of political economy.)
(J.Z.: Notes on B.'s "order system" are spread all
through his writings. I hold that an order system can play only a limited role
to assure sales. The most important need is to solve the exchange media and the
value standard problem, so that most goods produced for the market can be
"liquidified" into purchasing power and assure the sale of the goods
and services so offered and enough credits become available that are fair to
both sides. For long term and large goods like ships and planes, we have
already an order system. Nowadays even for personal computers. Theatre, opera,
music performances and some book publishing as well as magazines we have
already subscription arrangements. The same could be arranged for fashionable
clothing, shoes etc. or bargains could be offered for those who so commit
themselves on longer terms to certain amounts of spending for certain goods and
services. Insurance arrangements are wide-spread for certain services and would
spread more widely under sound and plentifully supplied currencies. - J.Z., 17.3.03.)
You say: the
liberty and dignity of the wage-earner depend on his ability to choose between
several employers and to start a business for himself, if he wants to.
I cannot agree and
refer to the Italian affitanza collettiva. They were founded (most of them)
under the influence of the Russian Revolution of 1905. Here the agrarian
workers displayed aa before not seen and quite unexpected dignity, by saying to
the bankrupt real estate owners: You are unable to use the land. You can no
longer pay us. We rent the land and constitute ourselves as a cooperative. Of
course, the haughty Marchese, Barons, etc., at first did not listen. Such insolent
proletarians have nothing to say to us! But when a number of their buildings
were burnt down and they themselves got beaten up, they got interested, to the
same extent that they lost dignity.
The Italians here found a way which - - I think - - is one
of the most valuable economic inventions ever made. The Italians did not
choose between several employers and also did not start the business for
themselves, in the sense that every worker became an independent peasant for
himself.
What concerns dignity:
After the great reforms of 1832 the owners of houses got the franchise and, at
that time, the Building Societies claimed the franchise, too, for their
members. As I ought to know, they got it, so that (if my bad memory does not
deceive me) here at least an English law acknowledged the dignity of one
with shares in a collective proprietorship.
The objection of
Prof. Hearn (you refer to it - - page 29 of Free Banking) is quite
right. But the invention of Bata, about which I wrote to you sometimes,
seems to offer a means to overcome the difficulty of too large cooperatives. I
was also reported, that the Italian agrarian cooperatives farmed out a part of
their land to those of the members, who liked to produce vegetables or flowers.
Here the non-cooperative kind of production gives better results than the
cooperative one (at the present state of the technique).
You refer to pages
351-360 of Free Banking. There you said many good things and if these passages
would be reprinted, it would be a nice contribution to current
literature (which is far below literature in the 30's, if I may generalise the
impression I get from the new books to be read here in the British Information
Centre). But it does not refute what I pointed out above.
--------------------
Colin Clark.
May be that he wished to illustrate his point that no country in the
world is so deeply sunk in capitalism as England. He failed to illustrate it.
Also, it is not true that no country is sunk so deeply in capitalism as
England. If he would know what I heard from well-informed people, he would
confess, that in this respect the Far East widely surpasses England.
(Capitalism is monopoly of capital.) Carlyle quotes an example from the
early Middle Ages, where an abbot got a mill destroyed that the peasants
had built. Carlyle reports this in the tone of a sincere admiration, which I
take amiss.)
(J.Z.: If one understands under "capitalism" only
"monopolism", then one should always clearly express that, so that no
misunderstandings arise. One might use e.g., the term
"monopoly-capitalism" and then most free-market and free-enterprise
advocates of a laissez-faire type of capitalism would agree with the opponents
of this kind of "capitalism" or "anti-economic statism." -
Too many people are misleading themselves and others by ill-defined terms. -
J.Z., 17.3.03.)
Colin Clark represents his figures, in the quoted table, in
a manner as it he would not recognise other factors. affecting the
prosperity of individuals in the country, than those expressed by the numbers
he gave. Until now I saw only one really
good passage of Colin Clark. That is the passage attacked by the
Malthusian, where Colin Clark points out that if the population now increases
by 1 % p.a., at the same time the production of victuals could be increased by
1.5 % p.a. (or 1.25 % - - I forgot the exact number).
-----------------------
Japan and
Malthus. I would be very much interested to learn why for you it is obvious
that under the conditions you pointed out, an Australian would produce more
then a Japanese.
(J.Z.: One Australian, cultivating 100 acres with machines,
would bother to do so only if on the 100 acres he could produce much more than
one Japanese cultivating only one acre. Land that is as infertile that it could
produce only as little as 1 % per acre as the one acre cultivated by one
Japanese, and thus on 100 of such acre not more than is produced by the
Japanese on one acre, and this in spite of the use of much labour, assisted by
expensive machines, would be an infertile semi-desert, useful at most for some
grazing animals, not for regular machine cultivation. - J.Z., 17.3.03.)
That there may arise special conditions, where it
occurs, I admitted. Also I admitted that in every case (theoretically) there
exists a smallness of average arable land per head, which - - if cultivated in
spite of its smallness, and this by too many persons at once - - produces less
than the 100 acres in Australia at the conditions you supposed. The question is
here: Are such conditions, as you seem to suppose for Japan's agriculture (too
many labourers per acre, so that their reduction would be profitable for the
workers themselves) really given?
Where are the reports to be found?
Further: I do not admit that if all the other
causes (I refer to your letter) of poverty were removed in Japan, whilst the
population increased, the Japanese would still be poorer than the Australians.
(J.Z.: By now there is much disagreement on whether the
Japanese are more prosperous, in the average, or the Australians! Australia is
still rather sparsely populated, even after considerable population growth,
while the Japanese population has further increased. - J.Z., 17.3.03.)
If the
Japanese will be poorer, certainly, it will not be for reasons, which have to
do with overpopulation, the latter word taken in its usual sense.
What reasons are in favour of your opinion? For reasons
I am very receptive.
Density of population is an important economic asset,
as already Petty saw. (You know, he proposed to gather England's,
Scotland's and Ireland's population at a relatively small district in England,
to get all the advantages of a dense population.)
The asserted difference in average output in the USA and in
England is due (I wrote about it in a former letter) to
the necessity for Americans to use a great part of their
labour for transportation. In England this extra expense need not be spent.
(J.Z.: To the extent, that England trades with the world, it
spends as much on transportation. Figures I saw on productivity differences
between the US and UK in the output e.g., or cars per worker and year, which
indicated a much lower output in the UK, were explained a) by less union
restrictions and b) by more automation in the U.S. Moreover, the US benefits
from having a much larger internal market that is accessible to all its
producers and facilitates cheaper mass production. - J.Z., 17.3.03.)
But there you are in the right: If all countries
would increase their population, which would - - I think - - be profitable for
England (several 100 millions, so that England would not longer be a country
but a town), there would arise an impossible situation. England should
then do the contrary of what Malthus recommended and spend many millions
each year for Malthusian propaganda in other countries. - - I would
recommend this, if I were an English die-hard.
At line 7 of your
chapter "Japan and Malthus" you say: "… and it is the basis of
Malthusian Propaganda."
I do not agree. The
basis of Malthusian propaganda is the absolute neglect of economic and social
causes of misery. To fill 10 printed pages with proofs of this assertion would
be easy.
-----------------------
You say: "It
is possible that we may be able to bring the vast deserts under cultivation,
but I would like some greater assurance of this before I should advocate large
populations."
You may get this
assurance very easily be reading the numerous publications about the
cultivation of Mesopotamia, of Africa, etc., etc., They are without effect,
because those, who would have to finance the cultivation, do justly ask: And
where are the eaters for the additional victuals?
Refute that or accept the opinion that until now the
Malthusian problem does not exist and will not come into existence for many
years.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Payments abroad. You say: "I cannot see how it would
benefit us to exchange pounds for dollars in New York rather than in
London."
That in not the
problem. If American goods are paid in means of payments of British origin,
these means of payment certainly return (quite quickly) to England and buy
there anything.
Each hobnail imported to England and paid with pounds or
other means of payment of English origin, extorts an exportation to exactly the
value of the hobnail. You do not believe, that the Americans shelve the
received pounds or whatever may be the means of payment whose debtor is an
Englishman.
Free first the
import. Prices will be settled by private agreements, and justly so, since this
will be profitable for both parties.
Balance of trade. From Adam Smith and
David Hume I learnt that such a thing simply does not exist. In our times that
is still much more true than 200 years ago. If there is, at a given date, no
export, but there are many hundreds of millions of imported goods in England,
while the foreigners wait for payment, that has nothing to do with a balance of
trade, the word taken in the usual sense. It merely means: No necessity exists
to fill out the difference in value with cash. The foreigners can be
paid with many hundreds of millions of means of payment of English origin,
reckoning in pounds or other value standards. Then the foreigners are free to
come and fetch the equivalents of these means of payment in England. It is
waiting for them. The gap only proves that the imported goods were sold on a
credit basis.
----------------------
London
Newsletter. You should proceed like a military commander. He uses all kinds
of people under his command.
That's his trick. You can also use Kimmitt. At least he is ready to accept an
article from your pen. If he is a scare-monger, it is because he had not yet
studied, thoroughly, the right of Free Banking. All people that did not study
this right are scare-mongers, from Keynes to the last of his pupils. Cure them!
----------------------
If J. H.
Clifford Johnston defends the Gold Standard of the old style, then
this is certainly due to lack of enlightenment. Why not enlighten him?
Redemption at the bullion market and not at the counter of
the note-issuer - - that is the possibility which nobody studies, except a few
persons in Germany, where they are backed by old German practice. (That
practice being, obviously, unknown in other countries.)
-----------------------
Wheat sales
restriction in Canada. The main reason is: the eaters of
wheat are lacking, because all what Malthusianism asserts is false.
-----------------------
War with Hitler
in 1933. I think that practice proved very amply, distinctly,
impressively and convincingly, that the principle "not to interfere with
the internal politics of another country" is one of the most pernicious
theories ever invented. The contrary of the principle is true. I reported to
you a passage of Fichte about the matter and you were kind enough to
print it in the Individualist. Korea, China and tomorrow Greenland are English
and German
matters.
We - -
Rittershausen and the collaborators of the Four Bills - - were convinced, that
Hitler would carry out all that he promised to do in his book "Mein
Kampf". Among the promised things was a war with the East.
I remember a day (it was the day of the first Hitlerian
Reichstag) when Dr. Ramin - - then my employer - - looked from his window to
the Nazi formations entering the Reichstag (the window was opposite) and then
turned to us and said: "Remember this day! In a few years grass will grow
over this very place!"
Installing a German
revolutionary government in England, alliance with that government and then
declaring war on the Nazis: The losses would have been trifling and Berlin and
Warsaw etc. would still stand. But the people, who failed so terribly in 1933,
still are there and govern the world. (Stalin was one of them.)
----------------------
Napoleonic wars.
When saying that England's 10 millions and their machine power were equal to
Napoleon's 28 million Frenchmen, I did not - - I think - - overlook the
continental allies. Napoleon waged his wars, in his last years (the decisive
ones) with troops of the Rhine-Federation and Italy. (The latter put up with
the Russian frost better than French, Russians and Germans.) In the campaign of
1812 less than 100,000 Frenchmen perished, but at least 300,000 Non-French of
the "Great Army".
----------------------
Andrew Roth.
What a pity that such an author is a communist. Perhaps he does nto live in
Russia. If he did, he would certainly be among the fugitives or in a
concentration camp.
----------------------
Sig. Einaudi. All agreed!
----------------------
Lectures on Free
Banking in London. You will report the latest news in the next issue of the
Individualist.
---------------------
Dr. Otto
Strasser. Until now I took him for a 110 % Nazi. But I may be mistaken.
There was a group of Nazis, for whom Hitler was not orthodox enough and who
revolted in 1934. Hitler killed those, who could not escape and also
competitors like Schleicher, as a precaution. Strasser was one who escaped. I
will believe that he now realises
himself what an ass he has been. I will submit the question to
Rittershausen. He possesses an excellent memory for persons and personal
matters. You will get further information.
---------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr. Meulen, 18.
X. 1950. Your letter of 15. X. 50.,
just received.
it will please you that your proposition to use as a
standard of value the value of gold on one particular day is carried
into practice for many years in Germany, in a special but very important branch
of insurance. Here I suppose that the price of a good, at a particular
day and at a time when there existed a gold standard, (the latter word
used in the sense in which it was used in the 19th century and still
is used in the USA) and the value of gold at that day is the same thing.
Let me report from the "Berliner Wirtschaftsblatt"
of 13.X.50, the article on "Neuwert-Versicherung".
(At the moment I see that the article is too long to be
copied. Thus I send you the Wirtschaftsblatt as printed matter.)
Some words will not be contained in your dictionaries. I try
to get the English version of terms like "Neuwert-versicherung",
"Baupreis-Steigerung, and similar ones. (New-Value-Insurance,
Building-Price-Increases. - J.Z.)
'The system was
firstly used by the societies of which the "Deutschland
Rueckversicherungs-Gesellschaft A.-G." was the re-insurer. Then the
professor Dr, Paul Riebesell, an excellent mathematician and manager of the
Hamburg Public insurance institution ("Hamburger Feuerkasse")
proposed to the Senate of Hamburg to introduce this system by a Hamburg law and
provided the text for such a law. His propositions were accepted and the law is
still in operation for the "Feuerkasse".
Riebesell (who died
some months ago) was an old acquaintance of mine, since the year 1916, when I
met him first. In the year 1922, when I was an actuary of the Deutschland
Rueckversicherungs-A.G. ("Rueckversicherung" = re-insurance) I
proposed to the manager of the Deutschland, the Dr. Ramin (a quite
extraordinary man, of whom I could report very much - - at last he became one of Germany's best
experts in matters of value standards) an interview with Riebesell and promised
him an interesting discussion. The discussion took place. Ramin explained to Riebesell the organisation
against inflation which he had created. Riebesell understood it at once (within
a few minutes) and concluded a re-insurance contract for the Feuerkasse with
the Deutschland and elaborated the quoted law. This law became the basis of all
similar clauses, laws, agreements, etc. to protect the insured against
inflation. (Very few in Germany will
today remember the origin of these clauses.)
Now - - I think - -
it is no great difference to say either:
I.) This house was worth 100 000 gold marks before the war,
in 1914. If the house is destroyed by fire then the insured shall get so much in paper marks,
that he can build a new house, which in the year 1914 would have been worth 100
000 gold marks, or
II.) The basis of the insurance contract shall be the value
of gold, expressed in the price of building material and bricklayer's wages, in
the year 1914. (In doubtful cases at the 3.8.1914.)
Economically the
clauses are the same.
If you agree to the
foregoing, then I myself helped to introduce your system into such an
important branch of the economy as insurance is. It would also be true, that
your system is, in this branch, still in operation in Germany and is here
considered as the best that is available at the moment and as one that has been
approved by practice for decades.
I do explain this
so circumstantially so that you may not get the opinion that I reject your
system or thank it even unfashionable. I do still appreciate it. In my article
in the Westdeutscher Immobilienmarkt I demanded as a
"Sofort-Massnahme" the permission (no more than a permission)
to create a bullion market by those interested in such a market (not by the
government) and the permission to base on the prices quoted at this
bullion market (or markets) the prices of those goods whose owners desired to
price them in this way. I had good reasons (in my opinion they are good) which
I beg to explain to you here, shortly.
1.) One has to distinguish between goods like insured houses
and goods in the stores ready for sale. To express the value or worth or gold
price or whatever is required to be expressed by the persons of whom the one
will pay and the other receive payment, of a house or a similar good, is
relatively easy. In cases of doubt the persons concerned can apply to experts.
But if the manager of Woolworth would undertake to state the prices of the 3.
8.1914 for goods to be sold in his store, then he would, after an hour, confess
that he is confronted by an impossibility.
2.) If a measure shall be carried into practice within a few
hours, then it must be done in a simple way, which does
not require long explanations. Your system, although well
known to insurance people, in quite unknown to other people. In England it is even not even known
to insurance men, but only to those who read your book.
The system I propose may be applied at once and without
preparations, as is proven by practice during the Great e. Inflation. (This
inflation ended in November 1923, but long afterwards people expected a new
inflation every day and, therefore, priced their goods in gold mark, the gold
mark defined as 1/4 $ (exactly enough),
quoted at 12 o'clock at the Exchange. Every storekeeper knew this system and
applied it needing further information.
3.) If the system I propose is permitted, it
will be impossible to keep merchants from applying it in the way I proposed or
- - what is here the same - - in the well known way.
These are reasons
drawn from pure practice. But there are also economic reasons:
A.) A bank of issue, on the basis you propose, does not
exist, never existed and cannot possibly be created in short time. However,
everyone, whose opinion on this differs, shall, of course, have the right to
try it.
B.) You say: the bullion market in disturbed by other
influences as well as by changes in the cost of production of gold. Well, it
is. But what matters here is, whether these disturbances are so great as to
deserve much attention in practical business? I do not know of even one case of
the last centuries, where changes in the cost of production of precious metals
(silver by no means excluded!) caused such a trouble that the unit of value in
the stores (shops) had to be replaced by another or caused any attention by the
public. The same is true of other influences.
The changes in the
cost of production, if expressed in gold weight, are very small, expressed in
fiat money they are sometimes great.
C.) The importance of your argument concerning the import or
the export of fine gold is only given if there exists an obligation for note
issuers to redeem notes on demand. If that obligation does not exist,
then the import or export of gold does no more affect prices than the
transportation of gold from Edinburgh to Dover. Political frontiers do then no
longer play a role.
D.) You say: "… they will demand more paper for their
gold price." Yes, they will and they did so regularly in the years before
1924, during the inflation time. But that means and increase in paper money
prices and not of gold prices.
So much in short!
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 19. X.
1950. Your letter of 15. X. 50.
I think we do agree on these points:
1.) No system concerning a standard of value should be
imposed by a government, so that the people who do not use the government's for
their business, or in relations with others, are not punished.
The government may publish a table of quotations or value
relations whereby is said: Due taxes may be paid, for 1 sovereign old style in
x1 units of bank notes of the y1 Bank or in x2 units of banknotes of the y2
bank, etc., or a similar table.
(In old Prussia and some other German States, taxes could be
paid in nearly every coin, according to the conversion table published and
posted at the wall of every revenue office. The taxes could also be paid in
paper money at its nominal value, even when a "Paper-Thaler", at the
market was cheaper than a Silver Thaler. The latter measure proved very
effective. Everywhere in the country, where the Paper-Thaler got a little
discount, people bought it and paid, taxes with these Paper Thalers. The effect
was that in the whole of Prussia the Paper Thaler was practically always at par
with the Silver Thaler.)
The means of
payment to pay taxes with is a very important thing and must be - - I think - -
worked out in every monetary system.
2.) For notes in Meulen Units there will be a market after
the system has grown to some extent. If the market is really free, then its
units will be daily compared at the market with gold coins, notes of other
banks, etc.
Neither in No. 1
nor in No. 2 is there something to be rejected - - I think.
The market is the supreme judge of the value of all kinds of
means of payment. It may be that the judge errs from time to time. Then the
public or interested groups must wait until the judge passes another sentence.
Meanwhile, there are always persons that can profit from the erroneous market quotations.
If the market value the notes too low, debtors win if they buy the under-valued
notes and repay their debts with them, or a part of them. If the market
over-values the notes, their owners win - if they sell them.
If you do not agree
here, please, write to me about this.
Of special interest
is the value relation of notes to gold coins.
The old objection
against cold coins as a measure of other values is:
The market for gold coins is often disturbed by influences
of many kinds, and also by the changing production costs of gold.
Here one is to remember the replies of the old economists:
The problem is not to construct a medium value of gold from the observed
changes of the value. The problem is rather: How to explain why the
disturbances are so very small and in practice negligible! The elder economists
tried to explain this phenomenon by the great quantity of gold accumulated in
the world, a quantity so great, that a fresh supply provided by all the means
of an advanced technology is trifling compared with all the metal on stock.
There is - - they said - - no other good in the world where such conditions are
given. These conditions justify the fact that the value of gold was chosen,
since centuries, as a standard for all other commercial values.
Do you reject the
opinion of elder economists on this point?
---------------------------
The value of your
units will be very much influenced by the lending policy of your bank. If there
will be several banks operating on the principles you established, then there
will unavoidably be as many lending policies as there are banks. Some
differences of lending policy will affect the note value (at the market),
others will not.
Examples:
Bank A resolved to
grant loans only for a year and to charge interest as usual, say, 5 % p.a.
Bank B resolved to
grant loans for different durations, to the maximum of, say, 30 years. It
charges interest as usual. It grants no loans with a sinking fund but only
loans to be repaid in total at the agreed date.
Bank C grants loans
with a sinking fund only. It charges interest as usual.
Bank D grants loans
with a sinking fund but charges no interest but only its real administration
fees. so that a loan of, say, 30 000 is repaid by 30 annual rates of 1 000
units each + the administration fee, say, 7.50 units annually.
Bank E grants loans
as bank D but charges no interest and only administration fee. A loan of 30 000
units, if grated for 30 years, is repaid after 30 years with 30 000 units.
Besides, the debtor pays annually 200 units administration fees.
All loans are
handed over in notes in denominations as money is usually subdivided.
Some of the banks
oblige the debtor to accept the notes for the amount, due at the maturity term.
Others oblige him
to accept the notes at any time for the full amount he got originally. (This
seems to be the opinion of W. B. Greene, which I do not share.)
Others don't oblige
the debtor to accept the bank's notes.
Still others use
mixed systems of note acceptance.
Do you not think that
such differences - - none excluded by your system, as I understand it - -
influence the market value of the notes?
Supposed is always,
that the public trusts in the bank's managers and believes them to be no less
honest than the most pious Quaker is.
Also supposed is, that the bankers know very well that part of a bank's lending
business where securities are examined.
If several banks
issue notes which the market values differently, do you not think that these
differences prejudice the system in the judgement of the public?
-------------------------
It is my opinion
that gold coins,
if there exists a very large stock of gold, which may be
coined out any day,
if gold in every form is quite freely transferable,
if, furthermore, there exists a quite free bullion market,
that then, a few weeks after these conditions have been
established,
these gold coins will possess all the good properties you
expect from your units, so that, for practical purposes, gold units may serve
as well as Meulen units.
---------------------
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
26. X. 1950.
Your postcard of 23. X. (stamped) 24. X., received today.)
Dear Mr. Meulen,
thank you for the nice view of Edinburgh! From your card I
learnt for the first time that Chopin lived for a time at E. Climate of
E.: As an old statistician I would like to know if mortality and morbidity at
Edinburgh were worse - -
statistically represented - - than elsewhere.
-----------------
Certainly you know H.
L. Follin, the founder of the République Supranationale and later of Cosmométapolis,
the first international union which demanded for its members a charter of economic
rights of man and citizen. (Economic
here including: monetary.) Follin died 1949. In the journal
"Friedenswarte", year 1949, appeared an article about Follin (born
1866) by Harold F. Bing. I try to get a copy. In this Abdera it will be
difficult. All
libraries are destroyed and the bookshops seldom sell journals, of which
the profit cannot be great. The "Friedens-warte is one of these papers.
(Published by the Verlag fuer Recht und Gesellschaft. Basil, Bundesstrasse 15.)
I got the notice
from Rittershausen.
-----------------
If you did not yet
read "Paroles d'un voyant" of Follin, you should now read it. The
book appeared 1934 at Paris. (It is microfiched by me in PEACE PLANS 332. - J.Z.) I forget the editor. A
translation into English would be worthwhile.
-----------------
One of Follin's
doctrines was: Not labour endows products with value. Labour
brings them into existence. Value
they get by exchange. Certainly, here Follin was in
the right.
You will not conclude that I don't agree fully with your
definition at page 247 ff of your book: "… the determining factor of value
is the normal human mind. (Compare the "subjective value theory". -
J.Z.)
----------------
I was in continual
correspondence with Follin. The war and the events after 1945 compelled me to
stop the correspondence. I could tell
many things of him. I believe him to have been one of the greatest thinkers of
his time.
(J.Z.: I asked about Follin at several Alliance Francaise
centres. There he was quite unknown. Does his correspondence with B. still
exist? Can anyone supply me with it in photocopy? I believe that it would
deserve to be published and translated. F. was also an advocate of individual
secession. - J.Z., 18.3.03.)
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Strasser. I hope,
Rittershausen will write to you.
----------------------
I hope you read No.
739 of "National News-Letter". Stephen King-Hall writes the same that
I wrote to you about, a year or more before: Since the Russians possess the
Atomic Bomb the West is lost, and if Stalin or his successor one day simply
asks for submission the West must submit. Possibly, the Western governments
will say: We will submit after the destruction of a dozen or so of our great
towns, and after 10 million or more of our subjects are dead. Honour demands
that. I can only say: Before the destruction or after - - they must submit.
It will be a bad consolation that before that happens
perhaps all Russian towns will be destroyed and many millions of Russians will
be dead.
If the English would have had a second Jameson in their air
force then by now the Russian Atomic
Bomb factories would be destroyed. They had not. But, much worse, there are not
even so many people in England interested in the new situation that a meeting
would be possible. Men like Stephen King-Hall write, a dozen others read it
(probably not more - - at least not with the interest it deserves).
That's all.
At the time of Gladstone there would have been, every day, a
meeting in every town of England to talk about the situation. Perhaps the
meetings would have been in vain, but perhaps not! If millions of people
seriously meditate in such a situation, then at least a chance is given,
that one man gets a good idea, and in the general milieu, then created,
a further chance is given, that others listen to him.
(J.Z.: The point here is: "Serious" thought. The
millions don't think seriously. Nor do they listen to those who have thought
seriously. Nor is there a medium to publish serious thoughts on the matter -
and to get it read, seriously, by millions, in that medium. My two peace books
have been online now for several months - and I have not yet received a single
response to them from any reader! They remain ignored, just like they were
before on microfiche and the one of them in print. - J.Z., 18.3.03.)
In Germany general
discouragement. The papers do not talk about it. But in a paper of Frankfurt I
read that in all dispensaries a continuous demand is observed for medicines by
which one can end one's life quickly and without much pain. The sale of such
medicines is reported to be 5 times greater than a short time ago. Most people
- - if they think - - think that Germany is a lost country and will soon
be either destroyed in a war or occupied by the Russians, which means about the
same.
My metaphysics is
still that of Kant and of Schopenhauer. But also other philosophers taught that
ideas are beings sui generis, such as grains of seeds, and once formed
with clearness and distinctness they do get a tendency to become realized
anywhere in this universe. So I continue to develop - - as far as the
conditions of my life permit it - - the ideas you know. If the metaphysical
principle, which leads me, should be erroneous, I can't help it. In this case,
I can only say: I followed my own nature, and that is - - here we agree - - the
best to be done for people such as I belong to. *
-----------------------
Very
faithfully Yours - signed: U. v. Beckerath.
(*) (J.Z.: At least on this planet and among human beings
the nature of ideas and talents, to be successful, requires the establish of
special markets for them. This has not yet been done, although now, with
alternative media like microfiche, floppy disks, e-mail, websites and CD-ROMs
it could be done much more cheaply and easily than ever before. But, e.g., the
millions of peace lovers rather put their legs into gear in protest marches,
than their minds. And among ideas they are all too satisfied with the most
primitive slogans, no matter how unrealistic they are. On the treatment of
ideas and talents: See PEACE PLANS 20 & 183. - J.Z., 18.3.03.)
____________________________________________________________________________________________
28.
X. 1950.
Dear Mr. Meulen,
nearly at the same time I read:
1.) In the Berlin paper "Der Abend" (West) of
13.12.1949 a report from Algeria. Algerian farms bought many machines
and today (1947) there are occupied on the farms about 1/2 of the number of
agricultural labourers as were in the year 1937. Algerian economists demand
subdivision of the great estates into small farms, to diminish the
overpopulation;
2.) a speech of the deputy of the Prussian Landtag, von
Below-Saleske, a great landed proprietor, before the Union of tax and economy
reformers, delivered on the 25. II. 1889. He explained to his listeners that
the East of Germany was not, as generally supposed, overpopulated. The
continuing emigration from the East to the already densely populated,
industrial districts in the West was caused, he pointed out, by the
impossibility to find work for the labourers in winter-time. Their unemployment
in winter-time, regularly repeated every year, is so great a burden for the
labourers, that they prefer to give up their little houses and emigrate to the
West, simply in the hope to get work there. He also proposed to subdivide a
number of the great properties and create small holders. Further, he pointed
out that emigration cannot solve the problem, because there really is no
overpopulation. The fact is proven by the necessity to replace the emigrated
labourers, at harvest time, by Polish labourers.
3.) In the book "Die Arbeits- und Pachtgenossenschaften
Italiens" of Dr. W. D. Preyer, Jena 1913, the author explains that in some
Italian districts the landowners employed labourers only at the time of sowing
and in harvesting. That was at the time observed (80's and 90's of 19th
century) in some districts only about 1/4 of the year. The author agrees with
the general opinion that the necessity for the workers to look out for
employment for the rest of the year constitutes all characteristics of an
overpopulation. Emigration was in full swing. It increased the wages of the
remaining but did not improve their employment conditions. Proprietors were very
dissatisfied with the emigration. All agreed, that if it were possible to give
the labourers their own land, the overpopulation question would be solved.
(Prayer is a good economist, but no theorist.)
Obviously, most
people overlooked that here was not given a problem of overpopulation - - the
word taken in its usual sense - - but of bad social and economic as well as
technical organisation.
(J.Z.: I visited in the fifties - 1953? - the properties of
an Italian millionaire, Gaetano Marzotto, in upper Italy, around Valdagno,
where he had a large wool factory. It was practically a company town. I did so
in support of my father's Ideas Archive project, for which he wanted G.M. as a
sponsor. Alas, I did not meet up with G.M., who happened to be absent then, and
was, by all reports, an interesting character and reformer, but was conducted
around his extensive properties, including a large agricultural estate. There
G.M., a paternalistic employer, effective in dealing with trade unions, had
tried to solve the still remaining unemployment problem during winter-times, by
establishing small factories, one a soap factory, which operated only during
the winter and employed the then otherwise unemployed agricultural labourers.
At the same time, this particular factory made use of the fats derived from the
raw wool. His own building department also built houses for his employees. I
was informed by my guide, a young Swiss, that by this "saving" method
about double as much was spent upon the houses as would have had to be paid to
outside contractors to get houses built of the same quality! The public
insurance company, that I worked at in West Berlin, did also have its own
transport department, to "save" money. Its leading executive told me
once that per patient and kilometre thus transported to baths etc., about
double as much was spent as would have been charged by an outside contracting
bus companies. Large corporations can be that inefficient, in spite of the best
intentions at the top. Naturally, the subordinates involved did not reveal such
facts to the top brass. They had a vested interest in keeping silent about
them. - Hopefully, by now, a good computer program would rapidly reveal such
loss-makers in an enterprise, if the right questions are asked of it. Then, in
spite of modern book keeping, that was obviously not done. - J.Z., 18. 3. 03.)
Interesting is: All were convinced that if the workers
worked on their own land, they would easily find opportunities to utilise their
labour, although the "experts" did not see how they would perform it.
Among my burnt
books were two connected with the foregoing question.
One was written by
the Freiherr von Goltz, who at this time (70 years or so ago) was considered as
one of the best experts on agriculture. He advised to abolish the threshing-
machines and to return to flail-threshing, so that more workers might be
employed in winter-time.
(J.Z.: My mother, when unemployed, was offered to work at
the "labour-intensive" job of building the airport at Tegel, in
Northern Berlin. There earth-moving was done, intentionally, not by bulldozers
but by workers with shovels and wheelbarrows - just to employ more people! In
Red China similar methods were used by the Communist Regime. I heard a Canberra
lecturer of economics praise that method as the only possible one, in an
economics seminar! My mother, with weak wrists, lasted only long enough at that
job, to earn unemployment benefits again, rather than the still lower social
services, by me helping her to fill her wheelbarrows. I wasn't employed there,
being too young, but was just tolerated as her unpaid helper. Most professional
economists tend to get along, unprotestingly, with every anti-economic
absurdity a government practices - or may even recommend it! - J.Z., 18.3.03.)
Exactly the same advice was offered by a French
"expert", owner of a great estate. (I forgot his name.) He wrote in
the year 1875, if my memory does not deceive me. He said: France lost the war
of 1870/72 by the threshing machines. These machines depopulated the agrarian
districts. The effect was that France had not enough soldiers. The
overpopulation, which now exists - - he said - - in the agrarian districts, is
merely caused by the threshing- machines, the worst invention ever made (he
said). Abolish the machines and there will be room for millions of labourers
and soldiers!
Popular opinions do
not impress a good and logically thinking economist. If the people observe
unemployment they at once conclude: overpopulation! Ministers, editors,
professors of average type and business men belong mentally to the people in
more than 99 % of all cases. They, too, see overpopulation where, in reality,
nothing else exists than bad organisation and general stupidity. In the
foregoing examples one can say: The labourers were permitted to produce their
food but not their clothing, bricks for their houses, etc. Average people are
not so blind as to ignore that totally. But they see it from a false
point of view. They say:
Yes - - if industry would be ready to accept the labourers
in the time of idleness, there would be no overpopulation. But the money
for such additional employment is missing. And here the average people are in
the right, although their language is not adequate.
Not money is missing but
a.) means of payment, standardised as money is, to pay
wages,
b.) people that accept this money-Ersatz,
c.) credit on a stable basis, so that creditors are
attracted.
So here, as in all
cases which history has presented until now, overpopulation is only seeming (not
real) and is in reality a problem which Free Trade, Free Banking and general
economic liberty can solve.
It can even be reasonably expected that the same country,
which before seemed to be terribly overpopulated, will now become a country of
immigration.
--------------------
There is still a
circumstance which lets an economic mischief appear as unemployment. In
countries like England and Germany more
than 50 % of the population gets an income fixed in an amount of money. Whether
a clerk works much or little, he gets his weekly salary. If such a clerk has no
children, that is for him personally an
advantage. The fact that a child of 7 years is already
produces its own subsistence, if rationally employed (which does not mean
exploited), cannot produce an economic effect upon a clerk of people similarly
paid. The mentality of the whole class must, therefore, be a Malthusian.
But in an advanced and scientifically improved economy, the
child of a clerk, a musician, a banker etc. will be a good investment,
as already now the child of a peasant is. At the age of 13 (about), it begins
to produce a surplus.
Even the children of certain artisans can help the fathers
in their work and insofar are an investment. For shopkeepers a child is an investment as good
as for a peasant. (J.Z.: Provided only that compulsory miseducation does not
interfere! - J.Z., 18.3.03.)
The manner in which
in future people like clerks will bring up children, without being burdened by
the children, will, perhaps, be to raise a credit for each child, which the
child repays when it begins to work.
That kind of credit will, probably, be more profitable for
investors than any other.
This idea is not new. The first who pronounced it seems to
have been Professor Engel, director of the Prussian Statistical Office,
about 90 years ago.
Of course, nobody took the idea serious, although Engel had
thoroughly proven to be an excellent expert. He founded several mortgage banks
on a mutual basis and state quite new principles - - still valuable - - for the
emission of standardised bonds. Engel also founded the first credit-insurance
company in Germany, tried also (in vain, of course) to introduce the English
Building Society principle in Germany.
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
Dear Mr.
Meulen, 29.X.1950.
Concerning the London "Newsletter" I cannot
quite agree with you. Certainly, Kimmitt does not see the monetary problems as
you see them, but my impression is, that by reading what you wrote, he got the
impression that there is still something to be said and that you are the man to
say it. I think that if you will furnish him some lines, he will publish them, especially
if you point out, that Free Banking is simply Free Trade applied in the
monetary sphere.
That Kimmitt is not
very enthusiastic about the UN you will understand. I think it is less the idea
which displeases him than the form in which it represents itself.
That he, as an
Englishman, is proud of Sheffield steel and such things is to be understood,
for the steel is good and it does not harm anybody to glorify it.
That he agrees with
the Major C. N. Douglas may be excused because Kimmitt, probably, did
not yet fully study your book. Douglas' system is not worse than the present
international system, with its cours forcé and exclusive currency. One day
Kimmitt will write to Douglas that he can no longer sympathise with his ideas
and will prophecy to Douglas that D. himself will no longer sympathise with the
Social Credit system if he reads the writings about free issue of notes without
cours forcé.
What pleased me
very much is the article: 'Trade - the touchstone", in the issue of 5. X.
50. Kimmitt is a real and sincere Free Trade and that deserves sympathy, I
think.
--------------------
"There is only
one way to free trade, and that is to free trade."
That's a sentence!
Kimmitt considers
Free Trade from a national standpoint. That does nobody any harm. I do
not consider him to be a nationalist for that. Good ideas connected with national
feelings become irresistible in the long run.
(If the Scotch would acknowledge that, they would connect
the free issue of notes with Scotch national interest. They do not and will
thus attain nothing of real importance.)
Kimmitt is no
nationalist, the word taken in its usual sense. He is a patriot, and true
patriotism is in no contradiction with the kind of internationalism needed.
-------------------
Very
faithfully yours - signed: U. v. Beckerath.
(Sometimes B. spells "yours" here with a capital
"Y" and sometimes with a "y". In this I just follow his
usage. - J.Z.)
____________________________________________________________________________________________
10. 11. 1950.
Dear Mr.
Meulen,
by your kindness I received yesterday:
1.) "The Economist" of 28. X. 1950,
2.) "Truth" of 3. XI. 1950,
3.) "Individualism", No. XXXVII, Oct./Nov. 1950,
4.) "The London Newsletter" of 2. XI. 1950,
5.) "International Financial News Survey" of 13.
X. 1950,
6.) "analysis", September 1950,
7.) "City Press" of 3. XI. 1950,
8.) "National News-Letter", No. 742 - 745, 12. X.
- 2. XI. 1950,
9.) A cut from the "Times" of 28. X. 1950,
10.) A cutting from Daily Telegraph and Morning Post of
17.X.1950.
I thank you very
much. But my impression is, that the money sacrifice - - expense for the papers
and postage - - peu à peu - - must become a heavy burden for you, not to speak
of the trouble to post the papers and packing them up. There are many editors
in Germany, who would envy me, if they would see the great pile of papers for
which I am indebted to you.
----------------------
The Economist is
published again as an Emergency Edition. Hereby Benjamin R. Tucker is
justified, when he demanded that editors and their staff should be able to
print papers themselves in cases of emergency.
At page 650 begins
an article "Premature Inflation".
(I would object that inflation is never born "in time"
but is always a disaster. But when it comes to "premature" price
increases, then these may be timely speculations that help to rapidly reduce
shortages. - J.Z., 18.3.03.)
As usual, the notions dearness and inflation
are confounded. Even intelligent writers, to whom the author obviously belongs,
are, due to the degeneration of the language, no longer able to talk about that
thing, which 40 years ago was called inflation.
In Germany it's a little better but not much. Here still
live a few people - - old men - - who remember what an inflation really is: A monetary
phenomenon, not an economic one, although the consequences are
economic and in most cases very evil.
(Franklin, in his dissertation "On the American Paper
Money" proved that even he - - certainly one of the best heads of his time
- - did not know what an inflation is. Insofar the epigons are excused.)
You marked the
article "Can Germany Plan?" The author does not see that only
stopping every foreign exchange control can solve the problems here concerned.
Under a regime of monetary freedom such a thing as a dollar shortage cannot
develop. Modern economists look at this simple statement as an obsolete
economic credo "of the times when no radio and no aeroplanes
existed".
If it would be true, what the author signifies, that Germans
are unable to plan, it would be a great honour for the Germans, like the
complaint of the Romans was about Sardinians, that "Sardinians are bad
slaves". (There really were. The Roman proverb was - - you will know it -
- "cheap as a Sardinian".)
But now they do not deserve this honour. They can
plan, and - - much worse - - obey the planners.
----------------------------------
Under "Books
and Publications" is announced "While Memory Serves", Cassell,
25 s., the memoirs from India of Lt. General Sir Francis Tucker, in the years
1946/47. What neither the General sees
nor - - it seems - - anyone in England sees, is this: If there exist badly
governed great peoples, as the Indians were under the Rajas, 300 years ago, there
are two possibilities:
a) Break the rule of the former governments, educate the
people to self-government - - which may require centuries - - (J.Z.: Not under
panarchism! - J.Z., 18.3.03.) and win over primarily the intelligent among the
people, which is always possible.
b) Do not do so. Let any conqueror occupy the badly governed
country, then let the conqueror's power be strengthened by the subdued people
and then become attacked, one day, by the conqueror.
The English choose
possibility b.) and asserted that here political principles were applicable
which - - if they held good - - do so only in the case of politically
educated peoples, such as the English were in the 19th century.
(J.Z.: Education in democracy is not much of a political
education, far less an optimal one, especially from the panarchistic point of
view. - J.Z., 19.3.03.)
The consequence will be, before 30 years are elapsed, that
India, with her 400 million inhabitants, becomes a dependency of the Kremlin
and the Indians will manufacture ammunition for the Russian armies, some will
even immediately join these armies. So the English people - - and not only the
English - - will get a lesson that a people like the Indian may be endowed with
wonderful gifts, mental, physical, etc., may be able to work very well and may
be able to obey, but all that does not prove an ability of
self-government.
(J.Z.: All the very diverse Indians to rule themselves under
one institution and one set of law? That is an absurd concept. One that has
always failed to satisfy all the hopes, and predictions associated with it.
Genuine self-government does not get away from individual choices. It
means, that alike volunteers are free to rule themselves and not that people
who, dislike or even hate each other, are forced to live "peacefully"
together under one "democratic" system. It requires individual
secession or divorce options. It does not ride roughshod over individual
sovereignty and its consequences. What obviously does not work in private
households does, obviously, not work any better on the national and territorial
scale. The equivalents of skiers, cricketers, tennis-players, golfers, mountain
climbers etc., must there, as well, be quite free to their own things for and
to themselves. An average or compromise sports activity will not satisfy anyone
except the power-addicts mediating such choices. Compare religious liberty and
then apply its principles to the economic, political and social spheres. Even
B. did not always and consistently think and write as a panarchist. - J.Z.,
19.3.03.)
All theories that "political justice" etc.
demanded renouncing the English rule, will appear as that what they are,
namely, complete nonsense, once the first India-made missile explodes over
England.
(J.Z.: We do have to get away from the notion that
territorial bodies should rule "themselves" and others and can do so,
in the long run, justly and peacefully! While "Pax Romana", "Pax
Britannica" and "Pax Americana" did have some advantages, they
did not personify justice, freedom and peace in all respects but continued to
have severe defects, closely associated with their territorial and governmental
nature. - J.Z., 19.3.03.)
In an old pamphlet which I possessed (it was translated from
English into German), it was said: England could dispose over India as a
valuable ally, if England were able to solve the problem: How to provide every
educated Indian with employment? But England is not able to solve that
problem and does not even see it.
(J.Z.: If Englishmen granted experimental freedom to
themselves and others, correct solutions would become rapidly demonstrated.
Parliamentarism, combined with territorial rule and uniform laws and
jurisdiction, prevent that, not only in England. - J.Z., 19.3.03.)
Therefore, the educated Indian must publish revolutionary
writings only, with the Intention to sell them and to live on their sale. One
day - - the author said - - the educated Indian will join a foreign conqueror
and England will lose this dominion. The pamphlet was written in the 70's of
the 19th century.
(J.Z.: Even then it was probably not possible for most
intellectuals to make a living from writing and selling revolutionary
pamphlets, however strong their revolutionary aspirations may have been. -
J.Z., 19.3.03.)
On page 657 a
correspondent tries to explain India's poverty by overpopulation. Some months
ago, I sent you an article by an Indian economist who proved by figures that
this supposition is nonsense. Meanwhile, you have read yourself that agrarian
tools, like scythes, are not used in a great part of India - because the
peasants cannot pay for them.
-------------------
"Truth": It writes very
well on the invasion of Tibet. It does not yet mention the fact that Tibet's,
India's, China's and the world's fate depends:
a.) on a Dalai Lama of 16 years and his court,
b.) on a man like Pandit Nehru and other old Congress men,
c.) on Mao, no blockhead but educated by Soviet teachers.
The problem is: How
to organise an international resistance-body against these people.
Benjamin R. Tucker seems to have been the first man, who saw that such a
problem exists.
Concerning Nehru
and his Congress men, they remind me of the English Members of Parliament, of
whom Macaulay says":
"All the
continent could not show such skilful and wary leaders of parties, such
dextrous parliamentary tacticians, and such ready and eloquent debaters, as
were assembled at Westminster. But a very different training was necessary to
form a great minister for foreign affairs." (Chap. XI, 1789, Tauchnitz
Edition, 1855, vol. IV, page 14.)
(J.Z.: I deny that there are such animals as "great
ministers of foreign affairs", although some were and are less stupid than
others. - J.Z., 19.3.03.)
---------------
Parliamentary activity seems to be a bad
preparation for the tasks of a governments.
(J.Z.: The "tasks" of territorial governments are
all merely imagined, not real! - J.Z., 19.3.03.)
Bastiat proposed a paragraph in the constitution of
every country, stating that no member of parliament could become member of a
ministry. How many men may live today, that have read these pages of Bastiat,
one of the wisest men who ever lived?
(As far as I know, in Australia only M.P.'s can become
ministers. To that extent ministerial positions are monopoly positions as well.
What are proficient debaters good for? Can you think of anything else that they
could properly do? - J.Z., 19.3.03.)
---------------------
"Individualism": Like all others, "Individualism"
uses "Socialism" as a synonym for "government socialism".
The consequence of this abuse of words in the English language, and most
others, is, that in these languages no word exists for movements with the aim
to realise a society in which injustice and exploitation of men by men are
reduced to the extent to which is technically and psychologically possible.
As the article "State Socialism and Anarchism", by
Benjamin R. Tucker proves, the word socialism was quite
apt as a name for such a movement.
If I am here in
error concerning the English language, I would be very much obliged to you if
you would be kind enough to inform me.
(Tucker insisted on the name "Anarchy'' for his aim. If
he would have invented a new and proper name, he would today, perhaps, be
acknowledged as the reformer.)
"Individualism" speaks also of "nationalisation"
where it means expropriation by the government. As far as I know, the word
"nationalisation" has been invented by the leaders of the Irish Land
League about 60 or 70 years ago. They knew their public and knew, too, that the
mere word "expropriation" would be an insurmountable obstacle. But
"nationalisation" must have seemed to the people of that time to be
merely a little exaggeration of patriotism.
German socialists
of that time declined the name "nationalisation" for two reasons:
1.) They had stated in their programs that
"expropriation des expropriateurs" must be an international action,
2.) that nation and government are two quite different
things and that taking over a sphere of production by the government does not
yet mean to bring it into the possession of the nation, apart from
socialistic aim to abolish the notion of "nations" as political or
economic elements. Here the Marxists and their opponents agreed.
A reform government
should punish every public use of the word "nationalisation" with so
many paper shillings as 5 old gold shillings are worth at the day when the
criminal uses the word.
-----------------
There are still
many good articles in "Individualism", but not one word (on 24 pages)
of "Individualism against State money". Nevertheless,
"Individualism" pretends to be the organ of a union called: "Man
versus the State". It is the same as if astronomers would decline to speak
of sun, moon and the stars.
---------------------
11. 11. 1950.
I have still much
to say about the interesting printed matter you sent me. But I beg to adjourn
it to my next letter. I must at least confirm the receipt of your letter of 1. Nov.,
which I received on Nov. 3rd.
Seven young
friends. It is seldom that I differ from your opinions but here I do.
(J.Z.: When it came to compliments, to preserve good
relations, B. never believed it necessary to stick to the truth. On the contrary.
To that extent he was, mostly, a diplomat. - J.Z., 19.3.03.)
You do possess more than 7 young friends, although
you do not know it. An invitation in the "Individualist" would show
that here I am in the right.
I am very pleased
to hear that you played such an active role in the pacifist movement during the
first World War. There are very few men with such honourable memories. I regret
that the Union you created did not publish an appeal to collaborate with German
pacifists after the war. Something good would have resulted from this, although
I do not see quite clearly what. But you know the old English saying:
"Where there is a will, there is a way."
Many historians believe that in old Greece there was a secret
alliance of worshippers of Apollo, whose centre seems to have been at Delphi,
with the aim to do what could be done to avoid the destruction of towns and the
cutting down of olive trees. It seems that in Sparta the alliance had
adherents among the higher classes. Historians ascribe the surprising
forbearance of Athens, after the Peloponnesian War, to this alliance.
Would such an Alliance have been impossible in Europe and in
the USA?
Its aim should simply be: Realisation of the laws of war
resolved by the Congress at The Hague in the year 1908. This aim is very
modest, considering that in all States its resolutions are officially written
laws.
------------------
If one gets such a
daughter as you did, it is worthwhile marrying. That you considerably underestimated
her, in such an important matter as philosophical convictions, confirms an old
German saying: No father fully knows his daughter! But it is a very great
consolation that there live in the world some women whose horizon is not
limited to interests in little household matters and to whom - - as Jean Paul
said - - the ocean is more than a great herring barrel.
What I do not
understand is, that the physician is a sincere Christian. How can a scientist
be a Christian?!?! But in his favour may be said what the Apostle Paulus wrote
to the Corinthians, I epistle, chapter 7, verse 14:
"For the unbelieving husband is sanctified by his
wife." Also, the continuous influence of such a woman as your daughter
must, in the long run, produce what the electricians call
"Gleichschaltung", whether he is willing or not.
----------------
Korea and my
proposals. That Syngman Rhee will not accept the proposals I believe
myself. Koreans committed a serious blunder when they did not hang him the day
after his coming to the presidency.
("Despotisme
tempéré par l'assassinat" is proven, by long historical experience,
as a possible and by far not the worst of constitutions. For Korea, perhaps,
it is the best for the next few years.
----------------
Dignity of wage
earners. The tyranny of committees, cooperative and others, will be the subject
of individualistic philosophy and politics for the next 1000 years or so. That
it exists and, may be much worse than the tyranny of a single man, I
fully admit.
----------------
Foreign
interference with internal politics. I fully agree, that if a government acts
like the British, after the French Revolution, against the idea of this revolution, and acts,
consequently (in its own opinion consequently), against France, then it
deserves resistance from its own subjects and the contempt of upright politicians.
Cobbett in his writings (of which I read an extract in
Heine's Letters from England) describes well this action of the ruling British
classes against the French peasants, expropriating the same classes in France. That
was the cause of the British action.
The Bourbons were a matter of very little interest to these
classes, although the Court may have been very much interested exactly
in this matter.
When Napoleon had abdicated, the position of the Bourbons
was so strong, that, perhaps, they would have been restored without the help of
the foreign powers. It must also be considered, that Louis XVIII. kept his
promises and that under his reign there was a relatively great liberty of
opinion in France, very much more than under Napoleon. There is still much to
be said about the theme.
----------------------
I will close my
letter. If I use a 5th sheet, then I must also use a large size of
envelopes than the usual, and a bad experience - - confirmed by my last letter
- - proves that the German post office is likely to destroy all letters of a
greater size than the usual of 11.4 x 15.9 centimetres.
---------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
23. 11. 1950.
Dear Mr. Meulen,
I did not yet confirm the receipt of "The
Individualist" of December 1950 and of two very valuable mailings of
printed matter. I hope to get a little time in the next days. Besides the usual
trouble - - lack of coal, etc. - - I had much additional trouble which prevented me to write.
Today nothing then
on Otto Strasser.
You remember, that
I wrote to the "Tagesspiegel". The day before yesterday, I got a
reply. A member of the editorial staff, Dr. Privat, invited me to look at the
clippings, which the Tagesspiegel had gathered, and to see him. I went to the
T. the next day and copied those items which seemed to me to be the most
interesting for you. I enclose these copies here.
In great haste
yours very faithfully -
signed : U. v. Beckerath.
After having read
the cuttings of the Tagesspiegel, I got the impression that Otto Strasser is a
nationalist of the usual type, as they are now very numerous in all countries
and that S. hardly has "ideas".
His economic program does not deserve the name
"program". His nationalism is about of the kind of Kimmittt, and
insofar of no international danger. (But Kimmitt as an editor is 1000 times
superior to O.S.)
Clay is right, that
O.S. would not be a gain for Germany, but much less will he be an evil of
significance. The man is too insignificant. Also, he has, obviously, lost all
real insight into Germany's new conditions, into the new mentality and,
probably, he has also lost his connections with important men. A real emigrant!
If the governments
refuse to let him return, they would not only violate the par. 13 of the
"rights of man", but would also give the man an importance which he
does not deserve.
O. S. is - - I
think - - so unknown to the present generation, that most people, who still
remember the name Strasser, will confound him with his brother Gregor.
But, certainly, S.
is no Nazi, but a pronounced Anti-Nazi. Many officers of the old army were
adversaries of Hitler - after they got a little insight into his real aims, and
when old Hindenburg (whom I personally consider as a traitor, although the
officers of the time from 1914-1918 consider him as a saint) was dead, they
looked out for a leader from their own ranks. Schleicher had many adherents
among them and by some was considered to be a fit successor for Hindenburg - -
one of reasons for which Hitler murdered Schleicher.
Bth.
____________________________________________________________________________________________
Auszug aus dem von
der Redaktion des Tagesspiegels gesammelten Materials ueber Otto Strasser.
(Zeitungsausschnitte, Drucksachen.)
(I did not bother to translate these extracts. They are of
limited interest, I believe, only to a few Germans. - J.Z.)
-----------------------
Internationales
Biographisches Archiv.(Munzinger-Archiv.)
Otto Strasser wurde
am 10. 91897 zu Windsheim (Bayern) geboren, wo sein Vater Kanzleirat war. Sein
Bruder, der bekannte Gregor Str., wurde in der "Reichsmordwoche"
im Juni 1934 umgebracht.
O. Str. begann nach
dem ersten Weltkrieg seine politische Taetigkeit als Sozialdemokrat. Als
student war er Fuehrer der "Linken" auf den Kongressen der
"Deutschen Studentenschaft" in Wuerzburg, Jena und Goettingen. Nach
der Promotion zum Dr. rer. pol. war er kurze Zeit im
Reichsernaehrungs-Ministerium, darnach in der Industrie taetig und uebernahm
schlieslich die Leitung eines sozialdemokratischen Korrespondenz-Bueros.
Waehrend des Kapp-Putsches war er Fuehrer einer sozialdemokratischen
Hundertschaft.
Durch seinen Bruder
Gregor kam Str. dann 1925 zur NSDAP. Hier war er Mitarbeiter am
"Voelkischen Beobachter". 1926 uebernahm er den von seinem Bruder
Gregor gegruendeten "Kampf-Verlag", in Berlin, und die
Hauptschriftleitung der dort erscheinenden Blaetter. Seine revolutionaeren
Ansichten brachten ihn jedoch rasch in Gegensatz zu den Parolen der NSDAP. Er
verliess daher 1930 mit dem sogenannten "Kampfverlag-Kreis" die
"Bewegung" und gruendete mit Majur Buchrucker eine "Kampfgemeinschaft
revolutionaerer National-Sozialisten", die indessen schon voellig
bedeutungslos geworden war, als Str. am Tage der "Machtergreifung",
am 30.1.1933 nach Wien auswanderte. Im Oktober 1935 wurde ihm die deutsche
Staatsbuergerschaft aberkannt..
Von Wien verlegte Str. seine dem Sturz der
Hitler-Regierung gewidmete Taetigkeit nach Prag, wohin er auch sein Organ,
"Die schwarze Front", verlegte, und wo er in den Jahren 1934/35 einen
"Freiheits-Sender" fuer Radio-Sendungen in deutscher Sprache zur Verfuegung
hatte, bis die SS ihn zerstoerte. Auch die Gestapo blieb ihm unablaessig auf
den Fersen, und sie sah ihn staendig als den Anstifter hinter
Verschwoererplaenen. Str. wechselte darauf wiederholt seinen Wohnsitz, indem er
von Prag nach Frankreich, nach der Schweiz und dem Ausland und von dort
schliesslich nach Amerika ging.
Im November 1947
wurde ueber Str. von ihm befreundeter Seite mitgeteilt, dass er bei der
Militaer-Regierung fuer Wuerttemberg-Baden einen offiziellen Antrag auf
Zulassung einer von ihm geplanten neuen politischen Bewegung, "Bund fuer
Deutschland's Erneuerung", gestellt habe. Str. habe sich gewandelt und
trete heute fuer Solidarismus, Volkstum und Christentum ein und einen nach dem
Muster der Schweiz staendissch gegliederten, kantonal aufgebauten Bundesstaat
Deutschland ein.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Aus
"Interpress, internationaler, biographischer Pressedienst", Hamburg
I, Speersort 1, Presse-Haus.
O. Str., Rebell
gegen Hitler.
"… er verwarf
vor allem die 'Streicher-Richtung' und verwandte Richtungen und setzte sich
fuer die Loesung der
Judenfrage auf dem Boden der europaeischen Minderheiten-Politik ein.
Sein Gedanke, eine
"Deutsche Legion" in den Reihen der Alliierten gegen den
National-Sozialismus marschieren zu lassen, blieb unverwirklicht."
-------------------
Eine andere, vom
"Interpress" hergestellte Vervielfaeltigung, enthaelt folgende
Angaben.
Verheiratet mit
Frau Gertrude, geb. Schuetz. V
Veroeffentlichungen:
1.) "Wir suchen Deutschland", herausgegeben
gemeinsam mit Buchrucker *& Blanck.
2.) "Soziale Revolution oder Wirtschaftskrieg",
1934,
3.) "Der 30.6.1934."
4.) "Die deutsche Bartholomaeus-Nacht 1934",
5.) "Die europaeische Foederation", 1935,
6.) "Hitler und ich",
7.) "Germany speaks",
8.) "Germany to-morrow".
9.) "History in my time".
24.11.47.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
In der "Welt
am Sonntag" (kommun.) lehnt ein Schriftsteller namens Rud. Pechelm in der
Nummer vom 27,. 11. 49. den 0. Str. scharf ab. Tatsachen, um die Ablehnung zu
begruenden, bringt er nicht bei, bemerkt jedoch, dass der "Bund fuer Deutschland's Erneuerung"
hie und da Anhaenger habe, meistens ehemalige National-Sozialisten.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
Eine dpa -
Information: Str. hat unterm 14. 8. 1949 eine Erklaerung erlassen, dass alle
Geruechte unberechtigt seien, wonach er mit dem Kommunismus sympathisiere; er
lehne allen Totalitarismus ab. Str. verweist auf sein
Programmbuch: "Deutschland's Erneuerung".
--------------------
"Die
Welt" vom 19. 11. 1949 berichtet, dass Str. sich in einem Schreiben an
Frau Roosevelt auf den Artikel 13 der "Menschenrechte" berufen und
Frau R. gebeten habe, seine Bemuehungen um seine Rueckkehr nach Deutschland zu
unterstuetzen.
---------------------
"Die
Welt" vom 24. 11. 1949 meldet, dass Str. in Deutschland ueber etwa 1000
"Kadermaenner" verfuege.
---------------------
Die in Canada,
Staat Saskatchewan, Stadt Regina, erscheinende Zeitung "Der Courier"
steht anscheinend St. nahe. Diese Zeitung erichtet, dass Str.'s Buch,
"Hitler und ich" in der Franzoesischen Zone nicht verboten sei.
Hierzu erklaerte die Franzoesicshe Militaer=Regierung: Das Buch verherrliche
weder den National-Sozialismus, noch greife es die Alliierten an. Auch garantiere
die Badische Verfassung die Freiheit der Meinungsaeusserung.
----------------------
Eine Zeitungsnotiz,
deren Herkunft nicht erkennbar ist, besagt, dass Str. ein von der Zeitschrift
"Die 7 Tage" geschaetzter Mitarbeiter ist. ("Die sieben Tage"
- a Catholic weekly.)
----------------------
"Hitler und
ich" ist sowohl in der Britischen als in der Amerikanischen Zone verboten.
---------------------
Ein Ausschnitt,
anscheinend aus der "Welt", berichtet, er Britische Staatsminister
McNeil erklaerte: "Die Anwesenheit Str.'s in Deutschland ist
unerwuenscht." - Datum: 23. 1. 1949.
--------------------
"Die
Welt" vom 25. I. 1949.
"Obwohl die
Organe sich als "ueberparteilich" bezeichnen, so erklaerte Mayhew,
seien ihre Ziele deutlich parteiisch, und ihre ultranationale,
aussenpolitische Einstellung sei darauf abgestellt, Gegensaetze zwischen den
Besatzungsmaechten hervorzurufen." (Betrifft anscheinend Zeitungen, die
mit Strasser sympathisieren.)
--------------------
Fraenkische
Landeszeitung vom 21. X. 1948.
Unter Uebernahme
des Gedankens der Werkgemeinschaft (Otto Dickel) schlaegt Str. vor, die
kapitalistischen Unternehmungen sollten Werkgemeinschaften bilden, an denen
Unternehmer, Arbeiter und Staat beteiligt sind. Auf diese Weise soll eine
"Synthese von Masse und Persoenlichkeit" gefunden werden.
---------------------
Der Doctor-Titel,
der dem O. Str. vom Senat der Universitaet Wuerzburg aberkannt worden war, ist
ihm jetzt wieder zuerkannt worden. (Nachricht etwa vom Oktober 1948. Nicht zu
erkennen, woher die Nachricht stammt.)
---------------------
Der Catholic
Herald hast sich fuer die Rueckkehr O. Str.'s ausgesprochen, meldet die
kommunistische Zeitung "Nacht-Express" und greift den Catholic Herald
an.
---------------------
Clay warnt in einer
Ansprache im Januar 1949 vor den "kleinen nationalistischen Gruppen".
Auch der National-Sozialismus sei einmal eine solche Gruppe gewesen. Es sei bei
der Amerikanischen Militaer-Regierung eine Lizenz fuer eine Partei eingereicht
gewesen, die die Ziele O. Str.'s vertritt. Die Lizenz wurde abgelehnt,
zunaechst allerdings nur as formalen Gruenden. Der Antrag enthielt naemlich
nicht die erforderliche Anzahl von Unterschriften.
---------------------
In einem langen
Aufsatz in der Nummer vom 11. 1. 1949 berichtet die Times ueber die
Ansprache Clay's, ueberschrieben: "Nationalism in Germany".
Ist mit Clay einverstanden.
--------------------
Dem Material lag
bei der "Rundbrief" Nr. XVIII vom 10. 4. 1950, herausgegeben von O.
Str. Ein Druckort ist nicht angegeben. Daraus, dass das Wort "für"
mit den Typen "fuer" gedruckt ist, ergibt sich, dass der Druck in
einer auslaendischen Druckerei erfolgt ist, die keine "ü" - Type besitzt.
Offenbar ist der Rundbrief in Canada gedruckt. O. St. wendet sich gegen die
Beteiligung Deutschlands and einer West-Armee.
-------------------
Es lag bei ein
Nachdruck aus der Zeitung "Der Courier", ueberschrieben:
"Antwort an Churchill". Es kommt darin der Satz vor: "Noch am 30.
III. 1950 meldet die New York Times, dass 5 Jahre nach Kriegsende noch 1.4
Millionen Deutsche gegen ihren Willen von den Siegermaechten zurueckgehalten
werden - - darunter auch ich."
Str. lehnt jede
Bewaffnung Deutschlands ab, die nicht zum Zweck hat, Deutschland und nur
Deutschland zu verteidigen.
-------------------------------------------------------------------------------------------------------------------------------------------
Einige Worterklaerungen zum vorstehendem Text.
A.) Dr. rer. pol. Doctor title of the universities given to
economists.
B.) "Streicher-Richtung". Streicher was a Nazi
even under contempt by most other Nazis. His daily "Der Stuermer"
demanded the most oppressive measures against the Jews and described the Jews
in such an obscene manner, that decent people did not read the paper in public.
C.) The "30. 6. 1934", the day when Hitler
murdered (had murdered by his henchmen, J.Z., 19.3.03.) all his adversaries,
also the former Reichskanzler Schleicher, his old collaborator Roehm,
and many hundreds of prominent other Nazis. Some days before, there was a real
rebellion of the SA against Hitler. It seems the rebels were Nazies for whom
Hitler was not yet antisemitic enough and who demanded a general pillage of the
Jews by the SA. But the real reasons may still to be discovered. Hitler,
prudent as ever, used the movement to kill all men who had become
suspect or inconvenient or, by their abnormal sexual nature, a burden. (Roehm.)
Strasser's brother Gregor was murdered, too.
D.) "Kadermaenner". The men able to form
"cadres" of a new movement.
---------------------
U. v. Beckerath. 23. 11. 1950.
____________________________________________________________________________________________
24. 11.
1950. Your letter of 1. 11. 5o.
Dear Mr.
Meulen,
I did not yet answer to all items of your interesting
letter, touching on many questions of great importance.
---------------------
Dignity of the wage
earner. Here I agree fully with you. Your opinion, that the committee of a
cooperative can be just as tyrannical as any government, is confirmed by
experiences with shop councils in Germany. The present practice is that in
great factories and administrations the shop council is asked whether
engagements of new hands are approved by the council. The applicant must fill
in a questionnaire or present themselves at the shop council. Then it may
happen, that in factories, where the Christians are in the majority, they
protest against the employment
of a Social Democrat and vice versa. So a new monopoly is
(in practice) constituted. It is unavoidable, that such a practice ends in a
new legislation, which grants the State the right to cancel all decisions of
the shop councils, that were, obviously, taken from a political standpoint.
Such a development would be regrettable from a non-statist standpoint as ours.
My impression is that often a private employer would accept workers, who are
refused by the shop council merely for political reasons.
A way out is,
perhaps, the principle of the Italian affitanza collettiva. The workers
excluded by shop councils or private employers for political or other reasons,
which have nothing to do with work and could be tolerated by reasonable men,
may unite, rent a factory on terms which I described in my book: "Does the
provision of employment necessitate money expenditure?" and then offer a
job to every unemployed of the branch, if he is ready to acknowledge the
principle of political and economic tolerance. A private employer might also proceed
in this manner. But that would require a degree of initiative very seldom found
in this class.
Also - - because all things in this world must be financed
- - it would require a system of Free Banking.
(The system of the affitanza collettiva is also - - in the
long run - - impossible under a state of monopolised means of payment.
The only economist
- - as far as I know - - who treated the problem of a possible monopoly of land
and means of production by cooperatives, is Theodor Hertzka. In his books
"Freiland" und "Eine Reise nach Freiland" (Freeland and A
Journey to Freeland, microfiched by me - J.Z.) (Mainly by these books I was
converted in my young years from Marxism to that what at the time in Germany
was called 'Sozial-Liberalismus'.), he explained his propositions with much
detail, into which I cannot enter now. Today, I am no longer quite satisfied
with his propositions, although I still consider them as quite valuable.
Hertzka seems to be quite forgotten in our days.
Discussion between Proudhon and Bastiat about interest. In
"Meyer's Konversations-Lexikon" I find under the heading
"Bastiat", that his edition appeared 1850, "Gratuité du
crédit". I could not ascertain the title of Proudhon's edition of this discussion.
(Both books are burnt and my memory is bad.) But I do remember well that
Bastiat's edition was by far the better one. Moreover, Bastiat printed two
important letters, one of his own, the other a letter by Proudhon, which
Proudhon did not print in his edition. I think the book department of
"L'Unique" can procure both books. (E. Armand, 22, Cité Saint-Joseph,
Orléans (Loiret). But it is probable that one of the great London book-sellers
for second-hand books can supply the books. I think they will be cheap. In any
case, they are very interesting.
---------------
Benjamin R. Tucker
calls the discussion the "immortal discussion with Bastiat" (page
195, line 6 from the bottom). Yet even he did not see the matter in the right
light. Like nearly all economists, he by far overestimates the importance of
interest. Statistics were not available. Today we know, that the sum of all
interest in a modern community is about 5 % of the community's income. We know,
too, that of this interest only a very small part is paid to banks and
the smallest part to note-banks.
The crisis-experiences taught us, too, that interest in some
cases is a heavy burden less because it is high - - say more than 6 % p.a. - -
but because it must be paid in fiat money, which is nearly always scarce.
Further, Tucker as
well as Proudhon and Bastiat did not distinguish sufficiently:
a.)
note-bank-credit to finance the exchange of existing goods against other
existing goods, and
b.) credit to
finance the exchange of existing goods against goods not yet existing.
The first can be
done without a bank-capital or another capital, the world "capital "
used in the popular, commercial sense.
The second requires
capital, in the first line to provide raw materials and wages, also to replace
the depreciation of the used machines.
In both cases interest is unavoidable.
Tucker cites a
passage, written by Proudhon, page 197, where Proudhon estimates the interest
paid in France at his
time to about 5 000 million Francs. I think that this sum is very much
exaggerated.
----------------------
Inherent rights. I
meditated much on the matter and I think now you are right. But Kant expresses
the situation well, when he states, that it lies in the nature of man to grant
to feeling creatures certain rights. If man does not, then he does not feel
well, like every being not acting according to its own nature. One may reply to
Kant, that there exist very many men, who do not think of granting the least right
to any of their fellow-sufferers among mankind and animals. I would agree and
only reply:
1.) that some men
do exist, who grant such rights, and that the number of such men is larger than
pessimists
estimate,
2.) that some men
suppress their own nature under the influence of propaganda, evil conditions of
life, bad
examples by
parents, etc.
It's now 20 years
ago, about. Then I came along a little place before the Berlin station
Friedrich-Strasse. There were about 20 people looking at a man broken down,
obviously, by an apoplexy of the heart. He was still alive and suffered much.
From his utterings one could conclude, that he was a member of one of the
numerous nationalist officer-organisations, most of them still more evil than
the Nazis. This man confessed his sins before the public and said (I heard it
myself) that in his heart he was always an adherent of Ebert and an adversary
of the terror groups to which he had belonged. I could not hear the rest of his
confession, because I searched for a litter at the accident room of the
station. (They had none.)
I think: Until some
minutes before his apoplexy he was not clearly aware that in his heart he was a
man quite ready to grant rights to others.
--------------------
If a man is
so organised, that he is ready to grant rights to others, then he will
distinguish between rights which a man can give up and other rights, which he
cannot give up. He will make this distinction also for himself. And if the whole
community, in which he lives, is of another opinion, he will say, as old Abaelard
did: Si omnes patres sic, ego non sic.
It's a fact, that the Catholic Church always claimed the right
to express its opinion freely, but if this Church becomes a ruling power, then
it regularly denies this right to others in religions matters. That is not
surprising. But surprising it must be to all people, who consider man as a 100
% egoistic being (the word "egoistic" taken in its popular sense),
that this behaviour of the Catholic Church produces utmost contempt in all
Non-Catholics and even among many Catholics. Men are 80 % rascals, not 100 %,
which simple fact is the phenomenon's solution.
-------------------
Payments abroad.
Your statement is right but - - I think - - it does not prove what it should
prove. If the importer (the US exporter! - J.Z.), who sent hobnails to England,
sells the 1 L note he got from the buyer, that is obviously done on his own
risk. The man, who bought the note from him, will now buy in England some
article and pay for it with the L 1 note. For England there is no difference.
Any buyer is, under the considered conditions, welcome as a buyer.
If American
dollars, expressed in English L, depreciate, then, certainly, future
transactions must be executed on another basis, and England can no longer buy
raw materials in the USA as cheaply as before. That's a fact occurring under each
system, yours as well as mine and any other. But the English notes, formerly
given in payment for American goods, will return to England and there buy
something. The tendency of the note to return to the country where the note was
issued, is - - as Zander expressed it - - at least as strong as the tendency of
a pigeon to return always to its dovecot.
To pay American
goods with English notes is not the only possibility. American goods may also
be paid for by Dollars of English origin.
(J.Z.: Not US dollar notes printed in the US, as if by forgers,
but by English notes that use the U.S. paper dollars value as a value standard
for whatever deals are involved, with the issuers accepting their own notes
back, from anyone, as if they were US dollar notes, in payment for their goods
or services or in payment of debts. - J.Z., 19.3.03.)
If an English concern of the rank of Lyons pays by bills of
- - say - - $ 50, and on the bill is written: We - - Lyons - - accept this bill
for so many pounds as $ 50 are worth at
the date of 3 months after the issue of the bill, at the New York Exchange,
then the money risk is transferred to the English.
Before 1914 the
buyer always was the stronger party. It was he, who determined the means of
payment - - Dollars, Pounds,
Piasters, the vendors accepted all and would have accepted English
railway tickets, if the buyer would have insisted on this means of payment. In
reality the buyer, today as well, is the stronger party.
If greater
quantities of goods are negotiated regularly, the receiver of the money has
made out what the German merchants call the "Gegengeschaeft" (I don't
know the English expression), that is, he knows already for what quantity of
foreign money he will sell the money received. The kind of business, called
"futures" has its basis in such transactions. It was - - generally -
- not so, that the American seller firstly received English L (very usual
1914), then sold the pounds for American money and then looked out what to do
with it. But if smaller quantities of goods were negotiated, the parties - - it
is true - - did not apply to the futures market. ("Termin-Devisen".)
(J.Z.: Anyhow, all the dealings between merchants, e.g.
those with mass murder devices excepted, are their business and not
actions for any bureaucrat to control or any intellectual to question,
especially when they do not understand international business transactions and
competing value standards and various business usages. "Laissez nous
faire"! All their transactions added up, on both sides, tend to be
profit-making rather than loss making in their totals. The more free their
transactions are, the more certain that result will be. Not one of them is in
the business to make losses and if he suffers too many losses then he simply
will get out of the business, while those making profits remain. All their
profits added up also benefit their countries, directly or indirectly, even if
they were no longer subjected to any compulsory taxation. - J.Z. 18.3.03.)
---------------------
Foreign
interference in internal politics. You say: "… that so long as a nation
does not attack its neighbours, it should be allowed to arrange its internal
affairs as it pleases."
I cannot agree, but here I do agree with Fichte. Take
Germany in the year 1933 as example. The nation had nothing to say.
(Also before it had, in fact, no influence on external affairs.) It could not
arrange a single internal or external affair. Hitler, or the people who had
influence on him - - astrologers, a photographer, crystal gazers and such men -
- was the absolute ruler. Thus such a ruler sooner or later attacks his
neighbours is one of the best proven experiences in history. If a man like,
say, Halifax ,acknowledges a duty against his own country, then he must prevent
a ruler like Hitler was. (J.Z.: … from running all the affairs of a whole
country or nation, as if they were his own personal affairs, regardless of the
wishes, rights and liberties of all his present and future internal victims and
those of all his future external victims. The term "internal affairs"
does not give him any rights and does not excuse any of his wrongs. Such a
"Fuehrer" and his voluntary followers, deserve no more respect than
the French King (L. XIV?), who once stated: "L'état, cest moi!" The
more leaders claim a right to regulate "their" "internal
affairs", despite all complaints from the own and other countries, about
their actions, the more criminal their actions tend to be and the less rights
do his victims in "his" country have to arrange their own
affairs within their basic rights and liberties. - Alas, even libertarians and
anarchists are still falling for such a slogan by all kinds of authoritarians,
dictators and totalitarians. - J.Z., 19.3.03.)
What the mentality
of the German nation really was, in the year 1939, everyone could have
seen at the railway stations, where the troops were brought to the wagons.
Silence of the public, interrupted by the weeping of women. But - - to tell the
truth - - once the wagons were on the way, the soldiers, if young, became quite
merry. That is normal for young soldiers, going to war, getting Schnapps as
much as they liked and often encouraged by their officers. Nevertheless, the
atmosphere was by far not that of 1914. (In April 1915 things had already very
much changed. Then the troops were brought to the stations without informing
them that they were being sent immediately to the front. The soldiers were
told, instead, that they would merely be "registered". So it was with
the company to which I belonged. So nobody could say adieu to his family.)
----------------------
Value. Today
I cannot treat the matter in full. But let me remark:
What you say about
the willingness of "countries" (I think you mean governments - -
countries are never asked) to grant
loans, is true in many cases, but - - as the example of America and of England
proves, the very contrary may be true, too. In these days Tito gets ample
loans, not although there is danger of a war but because his country is
in danger of war.
You say: "When
the depreciation of a country's currency reaches a certain point, it may be
cheaper for the country to pay in gold."
Perhaps such cases
occurred; I do not know them. But I know that all countries, whose currency
was, in the last decades, very much depreciated (Germany, Hungary,
Italy, Austria, China, Japan, etc.) did not pay in gold.
What you say of the
possible fluctuations in the value of gold is certainly true. But
experience shows, that in times of uncertainty the people considers these
fluctuations as quite negligible, compared with the possible fluctuations in
the value of any other good. (Especially that of any forced and exclusive paper
currencies. - J.Z., 19.3.03.)
But that does not
concern the main point. I beg to deal with it in one of my next letters.
----------------------
I write very
incorrectly. One of the reasons is the cold. A great number of Berlin
households is without coal. The vexations by the Soviets were very effective. At
last the transportation of coal was impossible. Always I write with very cold
fingers and I err often.
Although Berliners and myself do not know Latin, our
mentality is that of Horaz:
"Si fractur
illabatur orbis, impavidum ferient ruinae".
For 10 years now, except the past year, we had trouble with
the coal supply. Now we are almost habituated to it.
-------------------
The Bezirksamt made
me a "stellvertretender Wahlvorsteher" for the elections at Berlin on
the 3. 12.50. I found no creditable reason to decline the honour, which I would
have done, if possible.
--------------
Very
faithfully yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
25. 11.
1950. Your letter of 3. 11. 50.
Dear
Mr. Meulen,
my impression is, that Germany is at the eve of great
changes in her social, economic and political conditions.
I.) Social order.
The trade unions demand what in Germany is called
"Mitbestimmungsrecht", that is the right to ratify all important
decisions of a great factory's manager, including the engagement of workers.
The resistance of the
employers is feeble and their argument are awkwardly chosen, so as if they
themselves would not be quite convinced to be in the right. It's a class which
- - in my opinion - - has no future, and if it disappears, the loss will not be
very great. Whether the trade unions will govern better is - of course -
doubtful. At the moment I cannot find reasons to believe, that the trade unions
will be able to replace the old class of employers.
On the other hand, the people distrusts State management.
Nobody has a program. Those who possess a program, or believe to have it, have
no possibility to be heard - - my own situation.
Something unexpected - - although, probably, not good - -
must arise under such circumstances.
II.) Economic
order. That the present paper money standard is suspect and cannot inspire
trust is widely felt.
On the other hand, the people do not know any other
standard. The return to a gold standard, the word taken in the sense of 1850,
is considered a hopeless thing. All - - the ministers, the deputies, the
editors and the authors say: "We have no gold!" and forget the gold
standard of 1923, created by a monetary revolution, which worked quite well
without more gold than the few kilos (or less) daily sold and bought at the
Exchange.
The people demand a
reduction of prices. (All people did that, in all countries, at all
times.) But at the free market price at
Frankfurt on the Main, one Gram gold (= 15.4 grains) is sold for 7.50 paper
marks (about).
Under the gold standard the legal relation was: 1 gram gold
(fine) = 2.79 mark. So one may easily calculate that the new paper mark is
worth about 40 old gold-pfennig. This admitted, prices - - expressed in gold -
- are already very low and in many cases lower than 1914, although the means of
production in Germany are generally in a bad state.
Under these conditions a reduction of the prices, expressed
in the new paper mark, is as good as impossible. On the contrary, an economist
may easily predict an increase, soon and considerable.
That the German government, some days ago, fixed a maximum
price for gold (a gram gold = 5.17 paper mark, bought = 5.03 paper mark) is more amusing than of
economic importance. The said prices are for the 14. 11. 1950.
The Ministry for Economy will daily publish maximum prices.
What a nonsense the
prices of 5.17 or 5.03 paper mark are, can easily be deducted from these
figures:
1 $ = 4.20 DM (legally),
1 ounce troy = 35
paper dollars (legal purchasing price in the USA, not selling price, but,
generally adopted as standard price.)
1 ounce troy = 31.1 gram.
So the legal price of 1 gram gold should be: 35 times 4.20, divided by 31. 1 = 4.73 DM.
When the government admits a higher price for gold, it
declares, indirectly, either:
The American dollar
is depreciated, or
The "Deutsche
Mark" is depreciated.
Certainly, the government intends neither the one nor the
other. In any case, the gap between the standard price of gold and the admitted
maximum price and, more so, the price paid at the free market, announce great
economic changes.
-------------------
Sometimes great disturbances
create a situation where the voice of reason is heard.
(Sometimes, on the contrary, during great disturbances, the
reasonable people are accused to have caused the disturbances by their
reasons, which undermined the trust in the government or the standard of
value, etc. Then the adherents of reason are persecuted and at last killed.)
So I think that
there may arise a situation like in the year 1923, when the people began
to revolt against the paper mark. In such a situation it is perhaps possible
to start a new bank of issue or another centre of issue, at least in a small
district. If that should be the case, the promoter must present a plan, one
which the people do understand and which can be executed within an hour.
Your plan, even if it may be the best, does not possess this
quality. It cannot be explained in a short time to as many people as are
needed to constitute an issuing bank and a group of customers of this bank. It
can be developed in times of peace and hope in a nation, whose citizens are
interested in a scientific treatment of monetary affairs. The time of Adam
Smith seems to have been such a time.
If someone would
try to realise your plan now - - in England or in Germany - - then one
must meet, inter alia, these difficulties, set aside from the legal
difficulties.
a) He must find
shops, ready to price their commodities in units of your money, workers to
accept wages in units
of your money,
employers ready to pay such wages, etc.
b) Your plan,
leaving much liberty in details, makes it impossible that all banks of issue,
based upon your plan, operate on the same terms. In my letter of 19. X. I
pointed out some possibilities. If every of the new banks finds its customers
and shopkeepers, who price their commodities in notes of their bank,
then there must arise differences in the prices of goods. These differences are
not supportable in normal trade. The shopkeepers will look out for another
possibility to price their goods. If you admit that, then please tell me what
other possibility comes here in question than gold coins and their fractions.
It is already so, that in all countries the people are prevented only by
harsh punishments from pricing in gold weights - - may that be right or wrong,
it's a fact, and banks of issue must consider this fact, if they want to
do business at once, after they are legally permitted to do so.
----------------------
You propose as a
value basis the value of gold at a particular day - - well - - but what day?
There are (practically) only few days economically possible: The day when the
monopoly of the former Central Bank ceased or - - perhaps - - some day after
this day., say, the day when the bank of issue began its business. Not suitable
is a day under the rule of the monopoly. Why not? Under the monopoly the true
value of anything, gold or whatever may be concerned, cannot be ascertained
with doubtless certainty.
----------------------
I admit that there
is a great logical difference in the construction of future values by your
system and the system at present applied by German insurance companies in
determining the "true" value of buildings. But, arithmetically, both
methods will lead to the same sum in many cases. If this fact, in our opinion,
is not sufficient to justify the insurance method as a first approximation to
your method, I will not insist that it is.
----------------------
My
"Korea" Program is not intended to be brought before one of two
present Korean governments. The presently ruling Korean politicians would
rather die than take a single of the points serious and contribute to realise
it. The program is intended to be read by an intelligent Asian and induce him
to reflect on the modern theories of money and compare these theories with the
elder Asian theories. He will find that the latter were not yet solution but
were far nearer to truth than the modern, the latter presupposing a mass of
stupid, slavish people, not interested in the own affairs, on the one side and "experts"
of the same quality ruling over this mass. To give an example: In China, until
about 1931, the right of every banker to manufacture silver currency (sycee)
was acknowledged and even considered as a quite self-evident right, one not
needing legal confirmation.
Dans un rapport du
ministre Chinois des finances de l'année 1930 our 1931 (Zander posseses it) est
dit que des notes pas remboursables en métal mais accepté pour leur valeur
nominale pour moyen de payer des achats ou des dettes sont en usage en toute
Chine et surtout au vieil centre bancaire, la province Fokien. Ici même les
coiffeurs
émittent de tels billets. Le ministre - - naturellement - - demandait la
suppression de ces "abus", qui rendent la
province indépendante de la politique monétaire du
gouvernement.
(Excuse me - - I
just looked at the book of Haupt to ascertain the weight of a
sycee (36.65 grams or 565.6 grains), which is written in French
("Arbitrages et parités) and already I write French!!!! Partly such a
forgetfulness is caused by the cold in my chamber.) (J.Z.: It is also a common
mistake in old age, as I observed in my mother and in myself. - J.Z., 2.6.03.)
------------------------------------------------------------------------------------------------------------------------------------------
"The
Malthusian: of September 1950 says:
"… Suppose that our only escape from starvation were to
use the atom bomb against Russia, would it be our duty to let the Russians starve
us to death rather than use the atom bomb against them? Pacifists are not very
wise if they cannot think out anything better than that."
The Malthusian
should state one name of a pacifist, who protested against the
application of atom bombs in the case he means.
(J.Z.: Well, I would protest and deny that atom bombs are
rightful and suitable means even in that case. To execute a Stalin one bullet
or knife or small explosive charge would have been much more rightful and
efficient than to mass murder his Russian and other victims in his empire.
"The more thinks change, the more the are the same" says a French
proverb. From today, according to our Prime Minister John Howard, Australia is
officially at war with Iraq. He, too, would rather have, incidentally, have
thousands of innocent civilians, including conscripts, murdered in a
conventional war action than approve of and reward a tyrannicide action against
Saddam Hussein. He is also the guy who outlawed weapons of self-defence in
Australia and did not welcome Asylum seekers from Iraq and other countries but
rather put them into concentration camps, when they arrived as "illegal
immigrants".
With such friends, who needs enemies? - Even B., sometimes
and all too thoughtlessly, advocated nuclear weapons! - J.Z., 21.3.03.)
But what "The Malthusian" says of the "only
escape" is nonsense. If the Russian submarines are fit to starve England,
the Kremlin will use them in the case of a war to the utmost limit of technical
possibilities. If the English atom bombs kill 100 million of Russians and
destroy all Russian towns and, nevertheless, there is a technical possibility
for the Kremlin to continue the submarine warfare, then the Kremlin will
continue it.
That "The Malthusian", even after the experience
of two world wars (not to speak of other wars) is not yet convinced of
Voltaire's "Every government possesses moral strength enough to endure the
sufferings of its subjects", that's astonishing and more than that.
The only escape - -
to take the matter from a mere military standpoint - - is: a store of victuals
for at least one year and so preserved that they are safe - - a means not
invented by me, but many centuries old. To keep such a stock was the general
rule of German towns in the Middle Ages.
Valuable is what
"The Malthusian" says of mixed marriages and is explanation by an
example from marriages between Danes and English. Here "The
Malthusian" does not start from hypotheses but from simple practice and is
quite right.
-------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, …
6.12.1950. Your letter of 23. 11.50.
Dear Mr. Meulen,
It was force majeure or, more exactly spoken, there were two
forces majeures:
1.) the cold in my
chamber. You know how easily I get chilblains. I use much ointment and remain
in the bed 12 hours, 14 hours and more. If I would have the possibility to
write down what comes into my head while I am in my bed, I would produce a
voluminous MS within a few weeks.
(Alas, he neither had a secretary, not a dictaphone or tape
recorder, far less a computer with a voice operated program. Many of our best
minds suffer fates like his. - J.Z., 20.3.03.)
2.) 4 weeks ago they made me a deputy of the
"Wahl-Vorstand" of the 113th voting district of
West-Berlin. That was quite interesting, but cost me the small rest of leisure
remaining. Now the elections are over, and I hope to write some more letters
than I could during the last 4 weeks.
The semi-blockade
some weeks ago was very effective. I had prepaid my coal, and, possibly, may
get my money back. The coal monger fears that this winter, again, many families
in West-Berlin will be without coal. A little consolation is, that in 5 months
or so it will probably be warmer than now and that perhaps (perhaps)
Berlin then still stands, is not occupied, etc.
As printed matter
I send you a little statistics about the result of the elections. The main
reason for the defeat of the Social Democratic Party is - - I think - - that
the Magistrate (most members SPD), published a bill by which the amount of the
assistance for unemployed shall be reduced; and that in a town where about 1/3rd
of the population lives from that
assistance! I hope to write in my next letter something more about the
elections.
In my district
(113) there were 703 persons entitled to vote. 648 voted. I estimate that about
1/2 of the voters had grey hair. There was seldom a young face to be seen,
although the age for voters was reduced to 20. So worked the war!
-------------------------
By your kindness I
received two weeks ago:
1.) City Press of 17.11.50,
2.) The Economist, 11.11.50,
3.) Truth of 10.11.50, with your interesting article:
"The takers of power". In what is essential I do agree with you.
In my next letter
I hope to write some lines about the article.
4.) The London Newsletter of 9.11.50, 16.11.50. & 26.
10. 50.
5.) Individualism of December 1950,
6.) Economic Intelligence, Nr. 27, October 1950,
7.) analysis, October 1950,
8.) "Wage Supplements", Research etc. by the
Chamber of Commerce of the USA.
9.) International Financial News Survey, 20. 10. & 27.
10. 50.
10.) Economic Digest, November 1950,
11.) "The Malthusian", Oct. 1950, my old friend,
whose reply to your letter gives me the impression of what the Germans call a
"Rueckzugs-Kanonade" (A cannonade to cover the retreat).
12.) A copy of your letter to Mr. Philipp Cortney with 2
attachments,
13.) a cutting from the Times of 17.11.50. "Excess
population in Italy" (a very under-populated country, where the bakers are
looking customers and not the customers for bakers).
14.) a cutting from the Times of 17.11.50., "Korean war
and after" (if there will be an "after", which seems by
to no mean certain).
I thank you very
much. In my next letter I hope to write something about the papers.
-----------------------
Dr. Otto Strasser. I wrote to the editor of the Tagesspiegel
and asked him for information about Strasser. I left it to him to answer me or
to write directly to you. (Compare the information B. supplied above, in
October 50. - J.Z.)
---------------------
Gold coins. You will believe that I have much to say about
the matter. But I will post this letter still today and, therefore, postpone my
answer.
---------------------
Follin. Many
thanks for the "Individualist" of April 1935. Follin was a very great
man and perhaps in rank not less than Benjamin R. Tucker. His domain was the
organisation of individualist activity on an international and quite new basis.
He was a strong adversary of cours forcé and of all kind of planned economy.
Follin's mental horizon was as wide as it can be for a man.
----------------------
Russia. Your remarks at the bottom of the first page.
Every government needing a program but not possessing a suitable one, is
inclined to make a war. Mao and Stalin possess many programs but do not know
how to let the people enjoy the product of their labours and to provide
employment in another way than by ammunition making and building economic
pyramids. (Rather, uneconomic pyramids! - J.Z., 20.3.03.) In Marx they
cannot find the solution, this great (? J.Z.) man satisfying himself by saying
(when he was asked to frame a program for the Commune of Paris): It's not my
task to imagine recipes for the future's kitchen. Here he was quite in error,
for exactly that is an
economist's task.
Meanwhile, both - - Mao and Stalin - - do what Hitler,
Napoleon and other heroes of history did with good success: They let kill the men and women,
who may become inconvenient with their criticism and their
claims or they send them to the concentration camps.
Killing the people by leading them to the battlefields is
easy, simple, honourable and the costs are paid by the people themselves.
----------------------
"… so you read as much current German economic
literature as I do English … "
There is no German "literature". The moles (did he
mean mole-hills? - J.Z.) of the publishing government officials and such people
do not deserve the name " literature''. I do not read them, although in a
certain respects they are a miracle, like the creation of the world by the
Jehovah, as the pious Christians represent it. They make something out of nothing,
and the empty space behind their noses, where real economist have a brain, is
even very productive.
----------------------
"When we gave India independence". - I would be
interested in the address of one Indian who is now more independent than
he was before.
----------------------
Bastiat. I posses merely a German translation. Caption:
"Parlamentarische Unvereinbarkeiten". The translator says, that Bastiat published the article in
March 1849. He quotes: "Oeuvres", V., 518.)
----------------------
Very
faithfully Yours - signed: U. v. Beckerath.
____________________________________________________________________________________________
U. v. Beckerath, … 7.
12. 1950. My letter of 6. 12. 50.
Dear
Mr. Meulen,
I forgot yesterday to confirm receipt of "National
News-Letter", No. 746 & 747 of 9. 11. and 16. 11.50.
Stephan King-Hall
is a very intelligent man, but his influence, obviously, is zero. What he
says about China coincides with a book that I read at first 50 years ago, when
it appeared and which I found in these days among the second-hand books of a bookshop and
secured for a few Pfennig. The book contains letters that Baroness von Heyking
wrote in 1899 and 1900 to a friend in China. This friend was killed in the
defence of the embassies of Peking in 1900, when he tried to save a wounded
Chinese. Some days later Baroness Heyking died. Her friend never read her
letters. Her brother published them under the title "Briefe, die ihn nicht
erreichten" (Letters which never reached him - J.Z.), anonymously, but
soon the author became known. The letters were very well written, and the copy
I got is the 19th edition, printed 1903. The views expressed in the
letters were generally declined at that time, but in these days they are
confirmed by the events.
The baroness had
met at New York a Dr. Silberstein, who at that time had published many articles
in a New York daily. He had studied China very well and his views differed much
from those of his colleagues.
He predicted a war
of the Western World with China, in which the West would be completely defeated
and that for two reasons:
1.) The Chinese - - he said - - is an excellent soldier.
That at the moment the admiral Seymour, at the head of 2,000 European soldiers
defeats more than 10,000 "boxers" proves nothing. The
"boxers" are practical unarmed. Let the Chinese get modern arms and
an idea for which to fight and also a government, which they consider as a
national one, and then the European armies are drowned by the yellow flood.
(J.Z.: The "Yellow flood" of the Yellow
peril" has been a fixed idea of many intellectuals [even Henry George was
afflicted by it] and governments for all too many decades - and led to
protectionism, immigration barriers, the "unequal treaties" and
contributed to the arms race, thus, to a large extent, contributing to the risk
of a war with a despotic Chinese government. "Equal treaties", Free
Trade and Free Migration, combined with Free Banking, would have spread Chinese
people peacefully all over the world, together with prosperity for them and all
other people, everywhere. Wars do not
just happen. They are produced by wrongful and false ideas, institutions and
actions. - J.Z., 20.3.03.)
2,) The West did not assist the only man who could prevent
the otherwise inevitable war with the West and would have prevented it: tho
young emperor Kwang Hsü. The West tolerated that he was deposed by his mother,
Tsu Hai - - a real dragon (she assumed the title "dragon majesty, 10,000
years old") - - and all reforms he had begun were repealed. That must,
Silberstein said, produce a revolution. The revolution must, in the long run,
produce a military recovery of China and that must produce a war with the West.
(J.Z.: As if territorial rule, conscription, monetary and
financial despotism and government monopoly decision-making about war and
peace, compulsory State membership etc., were all inevitable. However, with
their practice, even under democratic governments, although less so than under
despotic ones, large populations like the Indian and the Chinese, do become a
threat to world peace, even small ones can be, as is proven by the present case
of Iraq under a tyrant like Saddam Hussein, who was, a few years ago, supplied
even with biological and chemical warfare devices by Western firms, perhaps
even by Western governments. - J.Z., 20.3.03.)
To the baroness of
Heyking these views (which she, obviously shared) seemed reasonable enough to
communicate them to her friend.
----------------------
Gold coins.
You and other adherents of paper money
consider only one possibility of pricing goods and services: that is,
expressing their price in terms of paper money, consequently, you speak of a price
of gold and do suppose, as quite natural, that gold always possesses a
price expressed in paper money. I assert, although I cannot prove it exactly,
that all shopkeepers, all wholesalers and even all workers, tradesmen, etc.,
will price their goods in fractions or multiples of gold coins if they are
permitted to do so.
If today all the prescriptions which prohibit this kind of
pricing (directly or indirectly - - the latter by cours forcé of notes) would
be repealed, within less than a year all things would be priced in gold exactly
as in 1913.
Once that is done, gold coins do no longer possess a price.
Gold ingots will have a price, but this price will not be expressed in
paper but will be expressed in gold coins. How far the price of gold ingots can
differ from that of coined gold is pointed out in all old books on money.
The difference is, practically, the cost of coining.
If, before 1914, a
central bank intended to buy gold and would not use gold coins as a mean of
payment (the latter being senseless, if a bank intends to increase its gold
stock) the central bank regularly proceeded in this way: The bank used as a
means of payment bills of exchange due - - say - - in 6 months. The normal
price of such bills at exchange is par, deducted the interest counted from the
day of purchase to maturity of the bill of exchange. If now the bank offers
such bills as means of payment without deducting interest or deducting less
interest than usual at the market, the seller of gold gladly accepts the bills.
I think there will be books in English commercial literature, in which the
manner is described, and in which examples are given. It was not so, as some
people believed, that the bank simply offered a greater quantity of its notes
than would have corresponded to parity.
For the German Reichsbank details are given in a report
presented to the meeting of bankers in the year 1908. (Bank-Enquête 1908.)
--------------------------
Economists until
now did not sufficiently consider the fact, that whatever good serves as a
measure of prices, thereby gets an additional stability in value, which it
loses if is not longer used as a measure of value. Surprising was the
experience in Germany at the inflation time. In the years 1920 and 1921 (the
first months of the latter year) the purchasing power of notes was pretty
stable, although the quantity of notes was increased. But the increase was
moderate. Now the said economical law worked. One of the foundations of this
economic law is: Everybody tries to resist to all influences which will lower
the prices of the goods he has on sale and resists - - as far as he can - - the
influences which increase the prices of goods he intends to buy.
This law is the
main reason why gold prices are so relatively stable. (Gold prices means
here prices in shops expressed in gold coins.) But if the general measure of
value of goods in the shops is a note of a monopoly-bank, gold loses the
additional stability in value (purchasing power) which it possessed before and
becomes a simple commodity. However, in this form as well its value stability
is very great. The elder economists pointed out, that the stock of gold in the
world, in relation to the annual fresh supply, is greater than the stock of any
other good. Therefore, the fresh supply cannot alter the value of gold very
much. Indeed, facts showed that often there was a great fresh supply and at the
same time a sharp decline of the general price level. Therefore, if the "natural"
stability of the value of gold is increased, by using gold as a measure of
value in shops, for wages, etc. (not to forget taxes), then its stability is so
great that even the best manager of a note-issuing bank will hardly attain it
with his notes, except when he formally connects his notes with the value of
gold.
Please remember,
that the foregoing has nothing to do
a.) with the
obligation of note-issuing banks to furnish for notes on demand (or a maximum
time after demand).
b.) with the right
of creditors to demand gold at the maturity of a debt.
You know that I and
the authors of the Four Bills decline these obligations. We recognised that all
reproaches against the use of gold for monetary purposes were arrested to a
false address and that not gold was guilty but the obligations a.) and b.)
(J.Z.: As professor Rittershausen put it: Not the gold was
guilty but the bank directors were. - He might have added: And the legislators.
- J.Z., 21.3.03.)
----------------------
In a former letter
I pointed out to you, that your system leaves much discretion in the manner of
covering your notes by securities, especially loans. You will admit that this
discretion will be used if the issuers are permitted to use it. It's psychologically
impossible that 1,000 men - - although prudent, intelligent, honest, well
trained in affairs - - all use the same system of granting loans.
On the contrary, all possibilities will be used, at
least in the beginning of the new note issuing business. That must lead to
differences in the market value of the notes. If there exist clearing
institutions for notes, the differences will be felt much more rapidly, and you
are quite right to emphasise the great importance of clearing institutions for
notes. In the absence of clearing institutions the general market will work,
although not as quickly as clearing institutions have to work.
If gold
should not be used as a common denominator for the value of notes, then some
note of a great bank will be the common
denominator. Say, that there are 1,000 banks of issue in the country (fewer for
England), then there would, in the beginning, be a disparity of notes for at
least 500 banks, whether by agio or disagio. Judge for yourself whether that
would foster the use of gold coins as a reliable measure of value.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - -
I do hope you read
the article "British Experience in Korea". (Truth" of 10. 11.
50.) Here a British commander complains bitterly, that the Americans treat the
two British brigades as "given the status of native levies". They are
very insufficiently supplied with planes, tanks and heavy artillery. (J.Z.:
Yes, by their own government. The American government can hardly be blamed for
that. - J.Z., 21.3.03.)
On the other hand, the Americans use their war machines in a
way that can only be called wasteful.
(J.Z.: That would be better than wasting lives - unless this
war machinery is used for indiscriminate destruction, as was often the case
with artillery barrages and air raids. Purely militarily, it was often
effective. One of my former superiors was the only survivor of 250 men dug in
at some coast of Italy. He with his commander was in the safest bunker. All the
others were killed through heavy shelling by the US navy. - J.Z., 21.3.03.)
If a single sniper is detected in a village, the American
commander phones for a plane, for tanks and heavy guns. Here the British
reporter cannot suppress the remark: "Valour remains the cardinal military
virtue".
That all corresponds to the experience in the second world
war. As the reporter says, the American soldier "… is a badly spoilt
soldier, taught to do nothing which machines can do for him.'' (Why should he?
- J.Z., 21.3.03.)
Certainly: If the American soldier sees, that he must fight
without machines, he will fight and not worse than any other, as is shown by
American history. But, at the moment, he is "badly spoilt"
(J.Z.: I would not call it being spoilt and
"waste", if lives are thereby saved, on the American side and also
lives of non-combatants on the other side. Indiscriminate and massive
destruction of a whole area is also not a sensible military objective.
Moreover, not everyone on the other side, even when uniformed and armed, should
automatically be annihilated by war machinery, although many of them might be
inclined to desert, surrender or even rise against their regime. Machines
cannot make such fine distinctions and act accordingly. - J.Z., 21.3.03.)
All that just as an
introduction to the expression of my opinion and that of many others, that in
WW III the protection of Germany by the Americans will be very moderate
and, practically, zero.
The America army in Germany has very few war machines (the
English still less, as it seems), and the Russians have very much and of
excellent quality. The Germans have no war material at all. These thinks are
much discussed, though not in the papers. A wide-spread opinion is: submitting
to Russian superior power would, perhaps, reduce the war destruction to a
minimum. Fighting can have no other effect than destroy the rest of what the
second world war did not destroy, the dismantling considered as connected with
that war.
(J.Z.: Public opinion of that time, as far as I remember it,
was summed up in the belief: Whoever wins the next war does not matter for
Germans, because Germany will be the battlefield and as such it will be totally
destroyed, all its soldiers and all its civilians. No wonder that there was
much opposition against the establishment of a new German armed force, although
most people greatly preferred the Western side to what was offered to them by
the Soviets. - J.Z., 21.3.03.)
--------------------------
After the third
world war the Russians may build splendid monuments to Malthus, Shinwell and
Schuman. If the latter would not have prevented their armies from occupying the
Eastern frontier the situation would be very different, and great Malthus did
the same as a Russian war expert would have done, who killed 20 millions of
Western soldiers.
-----------------------
I enclose here a
pamphlet of the "Deutsche Partei", published for the elections of 3.
12. 50. This party (DP) is generally considered as a revival of the old Nazi
Party. The whole program consists of general demands, which all other parties
have accepted for a long time, but as a positive point contains the demand to
end the "Entnazifizierung" and to restore the civil rights of the not
convicted Nazis. The party got 3.7 % of the votes. A proof, that Nazism does no
longer play a serious role in Berlin. From the 3.7 % must be deducted the votes
of Non-Nazis, which were seduced by the name of the part, which is quite attractively
chosen. I estimate that there remain less than 1 %.
Very
faithfully Yours - signed: U. v. Beckerath.
___________________________________________________________________________________________