MeulenBth section one corrected 06 06 03
208 pages
INSTEAD OF A MAGAZINE
Correspondence, what is left of it and has been found, between
ULRICH von BECKERATH, 1882-1969 &
HENRY MEULEN, 1882-1978,
It deals mainly with monetary freedom and ideas on free banking, but also with free trade, a free economy, criticism of overpopulation notions, anarchism, war and peace, revolution, liberation, totalitarianism, right and left type, racism, nationalism, tyrannicide, individual vs. collective responsibility, cooperative production, rights and liberties, philosophy, Kantian ethics, egoism, utilitarianism, atheism, Christianity, Buddhism, international languages etc.
Both were fans of Benjamin R. Tucker.
It spanned from about 1932 to 1959 (1969?) but only one 1935 letter is represented here. The rest is from 1946 to 1959.
Compiled, edited and commented upon by John Zube, jzube@acenet.com.au (02) 48 771 436,
35 Oxley St. or P.O. Box 52, Berrima, NSW 2577, Australia.
U. v. Beckerath was a man who came once very close to shooting Hitler. But then most of these and numerous other important letters and papers of his would never have been written. He was also associated with the resistance which culminated in the well-known tyrannicide attempt against Hitler on July 20th, 1944. He survived the subsequent and often atrocious mass murder, by the Nazi regime, of about 5,000 people, who were somehow associated with that resistance attempt, only because a friend of his close friend Heinrich Rittershausen managed to get access to their files at the Nazi's "Peoples' Court" and to destroy them. (See page 59. His letter of 4. II. 1949.)
At one stage, as one of the main contributors to the "Four Law Drafts", he might have come to help prevent the rise of the Nazi regime and WW II: Dr. Munzer, also a contributor, was a close advisor to Dr. Bruening then Chancellor and these drafts were waiting for Dr. Bruening's signature as emergency legislation to overcome the Great Depression - and as such they would have worked! - when the Bruening government was overthrown through the influence of some, who feared that Bruening, in desperation, might realize some popular "land reform" plan which would have expropriated some large proprietors of land.
His main and life-long labour was the development of sound monetary freedom ideas and techniques.
This correspondence is something of a treasure chest of ideas and references of interest to many freedom and peace lovers, from two thoughtful lives.
Both were fans of Benjamin R. Tucker. Meulen knew him personally.
The friendship between B. & M. persisted in spite of their strong disagreements on many subjects.
While B. had also many strong opinions and engaged in "prophecies" or forecasts which did not always come true and made at least two proposals which would have been better left unrealized (does anybody score perfectly?), Meulen was much more opinionated and prejudiced, especially when it came to the technical details of free banking, free trade and a free society. Beckerath, on the other hand, had frequently checked his own opinion again the facts, the own experiences and those of others, historical precedents, old and new literature references and looked at his ideas from almost all possible angles, or so it seemed to me. When he had to make guesses, they were at least well educated ones. Generally speaking, he stood up more consistently for individual freedom than did Meulen. In a few cases I rather side with Meulen but mostly I am on Beckerath's side.
The subjects are here dealt with mostly only in short segments, which gives the exchange almost the appearance of a periodial. One might call it a writen dialogue, but since so many references of others are included, it is more a "multi-logue", a survey of many different opinions. Because of this and because both appreciated Tucker's main book: "Instead of a Book" and his magazine "Liberty" this title was chosen here for this correspondence. (The same title has also been used and may still be used by a US anarchist magazine.)
U. v. Beckerath is insufficiently known as the author of 3 books on monetary freedom (soon to be placed on a website) and of numerous papers and letters on this subject. H. Meulen was somewhat better known, a,) as the author of "Free Banking, an outline of a policy of individualism", 1934, which is the second edition of his 1917 book: "Industrial Justice through Banking Reform" b.) as editor of "The Individualist".
The second edition of Meulen's book, 429 pages, was microfiched by me with some index notes by me and also a warning about this book by Ulrich von Beckerath, 7, April 1968, in PEACE PLANS 796.
All issues of Meulen's little Journal, "The Individualist", that I could get hold of and also my correspondence with him and some other material by and on Meulen were also microfiched by me in my PEACE PLANS series.
I have also microfiche-published thousands of pages of Beckerath's writings and many more of them are to come. Alas, most are only in German, with only few of them having been translated into English so far. But at least his three monetary freedom books were translated into English, however imperfectly. (Their French translation is much better.) In my edition of them in PEACE PLANS 9-11, I tried to eliminate most of these mistakes, as far as I could and also provided a common index to these three books. These 3 books are now available from me by e-mail, until they will appear on a website or on a CD-ROM.
The other writings by Beckerath, in my series, has not yet been indexed by me.
But an indication of his kind of monetary freedom thinking can be found in the preliminary but already long compilation of monetary freedom thoughts which is accessible on www.butterbach.net/freebank.htm A short representation of his monetary freedom ideas, largely in my own words, can also be found in my first peace book, now accessible on www.panarchism.info/
Numerous other monetary freedom titles were microfiched in my PEACE PLANS series and as many of them as possible could and should also be offered on CD-ROM and online.
I produced in 1990 a long monetary freedom bibliography, of about 124 pages, but have not yet got around to update it. It is also available from me by e-mail until it appears on a website or CD-ROM.
My main literature list and two supplementary lists are on www.butterbach.net/project.htm
The main literature list is also on my website www.acenet.com.au/~jzube together with some supplementary material.
All too little of the exchanges between B. & M. has found is way into M.'s small journal: "The Individualist", although M. believed that everything essential in his correspondence and reading had been abstracted or reviewed in it. Especially I missed, in those issues of THE INDIVIDUALIST that were accessible to me, B.'s criticism of M.'s free banking ideas. Maybe some of this is to be found in issues I have not yet seen. However, with only about 60 small pages published annually, M. could not include many contributions and filled his pages mostly without B.'s input.
B. alas, had never for long access to any periodical (the Annals, for his 3 books, excepted) and never got around to establishing one himself, although he had wished to do so from the time shortly before the Nazi regime began, in 1933. The Nazi period and the post-war years did not enable him to carry out this project. He remained largely confined to correspondence, of which probably more about 10 - 15 thousand pages remain to be digitized and microfilmed. Most of his correspondence up to 22 November 1943 was destroyed in an air raid on Berlin, with his extensive library.
The correspondence between B. & M. was, naturally, interrupted from at least 1939 to 1945.
B.'s letters sometimes amount almost to short "lectures", the only lectures he could provide as a rule, by writing letters, including his book reviews and comments on articles and clippings, with sometimes so many inserts included, that his envelopes burst.
He was usually very polite and even complimentary to the persons involved - but sharp, like Tucker, in attacks against ideas and opinions that he thought to be flawed. Usually they were. It is a pity that he had never a magazine like Tucker's and a readership like that of Tucker's "Liberty" at his disposal.
I knew B personally from 1952 to my emigration in 1959. Afterwards there was some correspondence between us, previously microfilmed by me. I may be biased in his favour, but I believe there are less flaws in his own ideas and those he preserved and transmitted, than in the ideas of most other writers of the past and present, who covered such a wide field. Most of the good ideas I know of I learned through him. Once I counted more than 200 of them.
The ideas and thinking of Meulen was, I believe, still rather flawed. But, judge for yourself the exchanges between these two long-term libertarian friends and fans of Tucker and of many of the other individualist anarchist classical writers.
B. always drew a strong distinction between letter writing and article writing and did not want segments of his letters to be published as articles but to remain characterised as mere letters. With articles he took even more care than with his very thoughtful and stimulating letters. In letters he sometimes resorted to all too general and collectivist terms like "Russia", when really meaning the Soviet regime. Here one should consider that most of these letters were written when he was old, under-nourished, sick, weak, tired or all too cold, in unheated or insufficiently heated room. Often B. could not write at all, when he was wide-awake at night, but had to stay in bed, sleepless, in an unheated room, the typewriter being too noisy for his neighbours at that time.
Taperecorders were only just becoming available in households. I once let him experiment with one heavy and large "Grundig" one that I had bought. He was not satisfied with the transcription of the record and did not continue experimenting with it. If small handy dictatating cassette recorders had been available to him -- or better, very quiet computer keyboards and computers - e-mail, websites, CD-ROMs, he would have been in his element, provided heat, food, health, old age and sleep would no longer have been problems for him.
Meulen could mostly write in relative comfort and with all his reference on hand and also many reference libraries not far away. For me he is a good example of the power which false and popular ideas and unchecked premises still have even over many libertarian minds and supposedly consistent adherents of free trade, free markets, free banking and free competition for institutions, which turn them into enemies rather than supporters of the best libertarian ideas and proposals.
That an old individualist anarchist like Meulen, a student of economics, persistent reader, publisher and editor of an individualist journal, could misunderstand free banking, gold standard and monetary freedom options, population questions as well as aspects of free trade, individual secessionism and exterritorially autonomous volunteer communitities, even rights and duties, as much as he did, as a long-term member of the Personal Rights Association, even after many years of correspondence with a man like Beckerath, shows well what an uphill battle lies still ahead for us, unless we do sufficiently mobilise all our resources, including especially the affordable, powerful and lasting alternative media and also realise the experimental freedom options in all spheres.
If I had done nothing else in my life than bring this correspondence within reach of everybody interested in it, then I could already consider my life as having been well spent.
Naturally, I could not sufficiently restrain myself from adding some comments. These are in brackets and marked with J.Z. and often the date. Those not interested in my opinion can thus easily go on ignoring them.
I believe that B.'s writings deal with many fundamental ideas, facts, proposals and possibilites that are all too much neglected by most other writers. Alas, he did not live to experience most of the large revival of libertarian thinking and writing, nor the rediscovery of monetary freedom ideas among academics and laymen since about 1974. But even in these new circles B.'s own writings on the subject, which I am inclined to call "classical" ones, remain largely unknown.
I have not yet got around to provide an index to this letter exchange. But it being digitized, such an index is less necessary that for ordinary print. One can always use the "find" command for certain terms that one is interested in. So, I may only get around to compile a list of words that I would recommend looking up in this exchange. But then I have already provided an index to many of the issues of Meulen's "The Individualist" and to the 3 monetary freedom books by Beckerath and these, as well as my first long and alphabetized compilation of monetary freedom ideas, definitions and opinions, can already serve as search aids for information in this letter exchange.
The single 1935 letter by B. and its following summary can well serve as an introduction to the monetary freedom parts of this correspondence.
The fact that these friends did not achieve agreement between them should make us ponder the conditions, under which such past, present and future exchanges could be more fruitful.
Both did obviously believe to have refuted the other, but could not prove this to each other. In this I belive that B. was much more right than M. - but then I am biased in favour of B., having known him much more and having been largely influenced by him from the time I was 19.
Among the improved conditions should be the permanent and affordable publishing of all monetary freedom writings, well indexed, abstracted and reviewed, also in bibliographical surveys and tabulations of their proposals, e.g. on the characteristics of their proposed exchange media and value standards.
All the uncontested views, insights and ideas should be combined, together with their proofs and references.
All the contested ideas should be published together with their best refutations and references.
An association of tolerant monetary freedom advocates should be formed, pushing towards full experimental freedom in this sphere and until then trying to achieve maximum and permanent publishing for their ideas, proposals and arguments, all properly confronted and interconnected.
Naturally, there should also be established a permanent and large magazine, at least on microfiche and floppy disk but also online and on CD-ROM for further detailed discussions on all aspects of full monetary freedom, with practically unlimited pages for this discussion and an easily accessible and comprehensive library on monetary freedom, for which as few as a dozen CD-ROMs may well suffice.
A suggest a voluntary but as "total mobilization" as possible of all monetary freedom writings, ideas, references and talents, to provide monetary freedom solutions to all the major problems of our times that can largely be solved by monetary freedom.
We have suffered under monetary despotism and its many and distrously large consequences long enough to finally come to the resolution to try to end all aspects of it.
But we should also establish, tolerate or even help preserve panarchies or private payment communities for advocates of central, monopolistic and coercive banking, to do their things to themselves, so that they could continue to serve as deterrent examples for all others. For man is always inclined to repeat old mistakes as if they were bright new discoveries: "Each new generation is a new invasion by barbarians!" somebody once said. Beckerath several times remarked, that communist ideas represent the "original sin" of man, I suppose he meant: against man's own rights, liberties and interests.
Realistic advocates of monetary freedom would recognize that they are outnumbered by money reformers that still try to advance one or the other form of monetary despotism. Only full experimental freedom can serve the rights and interests of all of them sufficiently. Let all of them "fight" - with arguments and experiments, not with laws, court and police actions. Only thus can progress be assured between them.
I am prepared to e-mail this correspondence in one or several files to anyone interested, upon request, free of charge, until it becomes available either online or on a CD-ROM.
I tried in vain to handle it as a single file, just over 6 Mbs, continuously numered, coming to 1197 pages. I was stopped again and again because of shortage of memory and all my file clearing did not clear enough. The computer played up, even to the extent of offering me help - but only in Greek! And several times I lost the file of my last correction effort. So finally I split the file into 6 sections, each about 1 Mb. in RTF.
The letters of B. are in his flawed English, somewhat, hopefully, improved rather than worsened by myself. Ideally, one day, they will be turned into good English by someone.
I possess the copyrights on B.'s writings but throw them into the public domain, inviting accurate publishing of all his ideas and opinions by anyone in any medium, just like B. himself would have done.
M. never objected to reproducing his writings but rather welcomed it. His book publisher was not enough interested in his book to promote it, so in the 1990's at least there were still a few hundred copies left. But when I asked, in a large London Economics bookshop, how much they would offer for the remainder, they offered only, if I remember right, 5 % of what they would charge for the book in their bookshop!
With publishers and bookshops in that kind of condition, we can only be grateful that floppy disks, e-mail, websites and CD-ROMs exist by now, so that one can completely by-pass conventional publishers and bookshops for some of the most important books and even for whole small and special libraries of them.
Beckerath himself had kept his own letters to Meulen separate from the letters of Meulen to him. He may have had his own reasons for this. Anyhow, I followed his practice.
Anyone wanting to place all the letters chronologically or to put relevant letters together may do so easily enough on his own computer.
My main catalogue is a guide to many other writings by Ulrich von Beckerath and Henry Meulen, so far mostly only available on microfiche from me.
PIOT, John Zube
(Panarchy In Our Time or: To each the government or non-governmental society of his or her dreams!)
____________________________________________________________________________________________
John Zube, LIBERTARIAN MICROFICHE PUBLISHING, P.O. Box 52 or 35 Oxley St., Berrima, NSW 2577, Australia, e-mail: jzube@acenet.com.au Tel. (02) 48 771 436. No FAX! Website: www.acenet.com.au/~jzube
LMP's website offers a 2,000 pages (almost 5 Mbs) guide to the first 1545 of the PEACE PLANS issues that LMP has produced since 1977, containing, on about 500,000 pages, libertarian and anarchist books, pamphlets, magazines, newsletters, dissertations, bibliographies, directories, indexes, essays & articles, letter, review & leaflet collections, etc., with an average of over 300 pages per microfiche: $ 1 cash each, post-free for orders of at least 10, or 2 International Reply Coupons or $ 2 other non-cash, with small cheques not accepted. Has any other individual published more freedom texts, more cheaply, in any medium? A supplementary LMP list for Peace Plans 1546-1779 can be found on: http://www.butterbach.net/lmp/
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WILL 300 LIBERTARIAN CD-ROMS BE ENOUGH?
HOW MANY LIBERTARIANS DOES IT TAKE TO FILL A CD-ROM?
How many libertarian Mbs can and will you contribute towards a complete libertarian publishing, library & information service on ca. 300 CD-ROMs, with all the desirable reference works, linked, like the Encyclopaedia Britannica on CD-ROM, to Internet sites? Get entered in the still small but growing list of interested people for the cooperative filling of CD-ROMs, all produced only upon demand. They are, currently, still the cheapest, easiest, most powerful, wide-spread & durable enough alternative medium for all freedom books etc. For further details see: www.geocities.com/libertarian_library/ or write to me. - PIOT, John Zube, Libertarian Microfiche Publishing: www.acenet.com.au/~jzube & http://butterbach.net/lmp/lmp_sup.htm - jzube@acenet.com.au - or: P.O. Box 52 (35 Oxley St.) Berrima, NSW 2577, Australia, Tel.: (02) 48771436. No fax!
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CDROM628words See also: www.butterbach.net/project.htm
LIBERTARIAN CD-ROM PUBLISHING & LIBERTARIAN LIBRARY
WHAT?
Complete libertarian publishing library & information services for all freedom texts not yet cheaply, permanently & easily accessible in any medium, supplementing & listing all of freedom texts etc. offered in all media, or cheaply combining them, with permission, if required.
BY WHAT MEANS?
CD-ROMs, zipped, later DVDs, then still better disks, until all freedom texts can be found on the Internet & large & multiple websites are easy, fast & cheap enough to set up, maintain & download
A public & growing list indicating all interested & inviting independent collaboration or competition.
CD-ROM disks, drives & burners are already wide-spread & cheap. CD-ROMs are commercially pressed for as little as 50 cents. Each can contain, zipped, 200 to 2,000 book titles. A lifetime's freedom reading on a mere 10 CD-ROMs! A complete freedom library on perhaps no more than 300 CD-ROMs!
Filling them will not only require extensive downloading & e-mailing of already digitised texts but also extensive digitising, mainly as a labour of love. Luckily, scanners have become cheap & efficient & division of labour for large jobs is an ancient invention.
WHO?
Anyone interested in contributing libertarian Mbs, keyboarding, scanning, proof-reading, editing & computer skills & copyrights permissions. CD-ROMs, like microfiche & floppies, are essentially self-help media but do mostly need collaborators to fill them. With cheap, lasting, powerful & efficient alternative media anyone can be a publisher, editor & compiler.
HOW?
By keyboarding, scanning, downloading, alone or in association with others. Sending Kbs & Mbs on floppies, partly filled CD-ROMs or via e-mail - to the compilers of CD-ROMs.
By dividing the chores of e.g. digitising whole books into manageable portions between those who like a particular book.
By collaborating with & publicising all who have already taken steps in this direction. See the slowly growing list of interested people.
WHY?
Because it is possible now, affordable, & achievable by enough interested people.
We could use all our resources at our fingertips. We have never had them yet. On CD-ROMs they could be made cheaply & conveniently accessible & linked to current websites. In combination they could be rather useful. Sufficient knowledge could give us considerable influence.
Climbing the mountains of liberty knowledge would not only provide us with a great view but also realistic blueprints, the best programs, strategies, tactics, advice, refutations & references. Remaining disagreements would come closer to being settled. All valuable ideas, discoveries, talents & opportunities could be brought to light & made widely accessible. The Internet can do much but not yet everything or optimally.
WHEN?
As soon as the growing list of interested people contains enough libertarian Mbs to fill the first libertarian & cooperatively compiled CD-ROM.
PRECEDENTS, DEMONSTRATIONS, EXAMPLES:
Few will be as productive with this medium as Dr. David Hart has already been, who produced 4 CD-ROMs on his own, mainly on classical French Liberalism.
Compare Encyclopaedia Britannica & The Library of the Future, each on one CD-ROM. The latter contains over 5,000 titles, not all book-sized, but includes some freedom texts.
There are thousands of music, games & software CD-ROMs.
It's high time for more libertarians to use of this freedom of expression & information opportunity, at least for freedom texts not yet otherwise available.
PIOT, John Zube, 3rd of October 2001.
(PIOT: Panarchy In Our Time or: To each the government or non-governmental society of his or her dreams! See also: www.panarchy.org )
CONTACTS:
John Zube, LIBERTARIAN MICROFICHE PUBLISHING, since 1977, Libertarian PEACE PLANS series since 1964:
www.acenet.com.au/~jzube
Supplementary LMP list: http://www.butterbach.net/lmp/
jzube@acenet.com.au
Also: Research Centre for Monetary Freedom, On Panarchy, Slogans for Liberty. 1779 PEACE PLANS issues so far, ca. 500,000 pages.
John Humphreys, LIBERTARIAN LIBRARY: www.geocities.com/libertarian_library/
AUSTRALIAN LIBERTARIAN SOCIETY: www.geocities.com/libertarian_society
libertarian_aust1@yahoo.com Also: ALS e-Newsletter & ALS Forum
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There arises from a bad and inapt formation of words, a wonderful obstruction to the mind.
Francis Bacon
I would rather call it a self-imposed and terrible obstruction of the mind. Henry Meulen, alas, offered all too many examples for this and he could not be persuaded to drop these wordings but, rather, built his whole monetary system upon them. - But he does not stand alone. This is also characteristic for many other money reformers, even those who generally are rather in favour of liberty. - J.Z., 30.5.03.
I have partly scanned these texts and had partly to keyboard them in. The scanned texts contained numerous flaws, omitted words, sentences, paragraphs or whole pages on which only a few letters or words were recognized. I eliminated the mistakes as far as I could, tried to improve B.'s English - with my still flawed English - but did not try to eliminate or indicate all of M.'s spelling, grammar or punctuation mistakes. You can do that in your copy, if you like.
Nor did I always indicate their paginations or stuck to their paragraph arrangements.
Sometimes I underlined catchwords they had failed to underline. A few times I put words in bold without indicating that they had not stressed them. Mostly I followed their own stresses (extra-spacing by using bold) and underlinings.
I kept Beckerath's separation of his own letters from those of Meulen. Any reader may combine them as he likes.
Not all of the extras, like some letters by others and some clippings were always placed quite correctly with the corresponding letters. Mostly they are ordered by their dates.
I added frank comments, also biased ones, mostly in favour of Beckerath's point of view- and whenever I felt like expressing myself or wanted to clarify a point for myself and perhaps also for others. These remarks are added in brackets and can thus be easily recognized and ignored by those who prefer that.
That was in my first scanning/keyboarding, translation and commenting attempt, which took about 5 months. Afterwards I reread the 20 segments again, eliminating many mistakes that I had previously overlooked. That took about 10 days. I am sure that if I spent another 10 days on a revision, I could still find many further mistakes and would probably still leave many in, unnoticed by me. The Word programme does not always indicate them nor was my concentration and knowledge enough to find all of them at the first try.
But I will not try to spend further weeks on attempts to make these texts as perfect as I could. I rather expect some collaboration from those few to whom I send these texts in the expectation that they would be interested in them.
They should send further corrections to me and I will combine them and pass them on to whoever is prepared to put this exchange on his website or on a CD-ROM.
I would welcome comments by others to these letter exchanges, turning them into a "multilog" and also even more into something that resembles a magazine, with many short contributions from many sources on many subjects, through their "letters to the editor". I could at least offer to microfiche them in my PEACE PLANS series, together with this correspondence, thus helping to keep the discussion on these subjects alive.
PIOT, John Zube, 30.5.03.
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Translation of a letter of Ulrich von Beckerath to Henry Meulen, 1.8.1935, the only one of this correspondence that is in my possession, copied from Rittershausen's collection. Alas, an appendix to page 1: page 1a of this letter is missing still. I will insert it later if I can get hold of it still. I either failed to copy it or mislaid it.
Meulen burnt his correspondence and B.'s files and library were destroyed in an air raid in November 1943.
This letter and the following paper were previously microfiched by me with the 1896 volume of SOUND CURRENCY and some other material, e.g. a special edition by Robert Sagehorn, on Henry Meulen's views, in PEACE PLANS 350 - 354, pages 657-666.
J.Z. 14/6/81, revised: 21.5.03.
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A KIND OF INTRODUCTION
TO THIS LONG CORRESPONDENCE
BY ULRICH VON BECKERATH HIMSELF,
IN FORM OF HIS OLDEST LETTER TO HENRY MEULEN THAT IS IN MY POSSESSION
AND HIS SUMMARY AT THAT TIME, OF THE DIFFERENCES BETWEEN THEM.
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Mr. Henry Meulen, 1.8.1935
London W 12 Your letter of 30/7/35
Boscombe Road No. 19 received today
Dear Mr. Meulen,
our agreement goes still further than you express in the last sentence of your letter. Most of all, we agree upon the principles of the Personal Rights Association, which, in my opinion, will one day play an important role in the fight against communism.
One of the principles of the PRA appears to be that no one should force someone else to do or omit something when these actions or omissions have nothing to do with the security, the property, the job opportunities and the exchange with his friends and customers. To what extent is tolerance economically and socially possible? That is the problem proper.
Let us take an example: You know that the followers of Gandhi refuse to wear clothing that was produced by machines. Both of us hold this to be foolish and believe that Gandhi's followers harm themselves thereby.
But: Both of us would do whatever is in our powers to defend those followers of Gandhi who are to be the victims of an attempt to force them to wear machine-woven cloth.
By now we have both reached a point in our discussion where one can no longer prove or refute anything. In such a case one should examine whether the principles of tolerance could be applied here.
Again an example: The Brahmans cannot … to Englishmen ... (page 1a, is missing here - J.Z.)
Even the most extensive tolerance cannot go so for to permit the promising of services which can be fulfilled only by a happy chance. Example: I go to a lottery agency. "Here are 10 Mark. Give me one that will win." The agent takes lot No. 158 932 and gives it to me. The lot wins indeed!!! And hundred other lots which the agent sold in the same way, do also win! Was the agent a swindler?? I say: Yes! And even if the chance to win were 99%, the agent could not sell them at 100%, in the same way as a merchant may not sell a length of cloth, whose length he does not know exactly, as "10 m. length of cloth!" He may only sell it as a cloth: probably 10 m. long.
These considerations appear to me applicable to the option clause. Some years ago, in a book whose title I have forgotten (I must confess that then I did not recognize the full importance of this subject), that some Scottish banks - or were they English country banks? - had the following option clause on their notes:
Redeemable in silver, upon demand of the bearer, in case the bank is sufficiently supplied with silver.
In case the bank has no silver, it will pay interest on the note until the day of its redemption.
The bearer is also authorised to demand the surrender of a corresponding part of those securities
upon which the bank has issued the notes.
This is a good clause! The bank does not promise any more than she can fulfil. The government should never have prohibited such a clause.
But those option clauses by which the bank obliged itself to pay at a certain date were of quite another kind. The chance (end of page 1b, beginning of 1c) that the bank can keep its promise, may be estimated to be 90%, or 95%, or 99% or even 99.9% (too high!!), but one cannot estimate it to be 100 %!!
Consequently, the bank may not promise to redeem the notes after 6 months.
Perhaps you are of the opinion that such a point of view would be what one calls in German: "Haarspalterei" (hair splitting). That is a matter of opinion!!!
I would like to draw your attention to another important circumstance which so for was not sufficiently noted in the theory of convertibility (redemption, metal cover). At the same time as in Scotland, in England and in America, the option clause was frequently applied, the SILVER CURRENCY and not the gold currency prevailed generally. I still remember the old Prussian "Thalers", which circulated here up to the year 1907. On them was written: "30 equal one pound of fine silver". Thus, whoever received 30 Thalers, had to carry home one Prussian pound (500 grams, while an English pound is only 453,6 grams), and in addition to that he had to carry the copper admixture. A public servant who received his monthly salary in silver coins, risked torn pockets on his way home. The payment of somewhat larger sums of money in silver was considered as an unfriendly act. The public wanted paper!!!! Under such circumstances it was, naturally, quite considerably easier to keep notes in circulation than when the bearer of a note can demand gold. Whoever, in the year 1763 wanted to redeem at any bank notes amounting to 1,000 pounds into silver, would have had to bring a suitcase or a backpack along, perhaps even a wheelbarrow. That was, indeed, a strong obstacle. But, 1,000 English pounds in gold are another matter. In an emergency one can transport them without a suitcase and could fit them even into a briefcase. (End of page 1 c.)
To sum up: I have nothing against option clauses. Only they must not promise more than the bank can fulfil, especially when the redemption is to be mode with gold. Any bank which would promise more could, in my opinion, not be considered as an honest bank, not even within the most tolerant community.
Indeed, in your book you have nowhere expressed yourself against an option clause which confines itself to an obligation which the bank can fulfil.
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The question is now only which procedure is the most advisable one, provided one
a) wants to take the first step to abolish the crisis - which both of us have recognised as a monetary crisis - and
b) wants to prevents the recurrence of the crisis.
Here something else has to be taken into consideration, something that appears at first to be rather strange. Nevertheless, two very sharp minds, quite independently from each other, perceived it: namely W. B. Greene - who was made known again by your quotations - and Zander. This consideration is the following:
Should one not draw the last conclusions from the reasons which speak against the redemption of banknotes on sight??? Does not the same apply to every debt relationship what is right for the debt relationship between the bank and the note holder? Is it right that an individual promises to pay money, although it may happen that money will have disappeared from the district in which the individual resides??
Furthermore, are laws rightful and to be upheld as part of a legislation based upon honesty, clarity and reason, which attempt to enforce what has been found in the special case of the "redeemable" banknote to be dishonest, unclear and unreasonable?? (End of page 1d).
In other words: Should the system of "exclusive currency" - as Greene calls it - be preserved? On pages 14-17 of issue I/1934 of the "Annals" I have examined this question - or, rather, touched it. You have touched it on the top of page 241 of your "Free Banking". Still very much remains to be said on this. But I will not do so now and, instead, return to our special subject.
-------------------------
I proceed from a condition which really exists now, in the largest part of the world, in as differently governed countries as the USA, Russia, China, Japan, etc. Let us take an example:
In Indiana the depression is especially severe. There was a very abundant harvest - and consequently the inhabitants of Indiana starve! What is to be done? Presently, conditions are like in times of war: The government accepts tax payments from the formers in form of produce and distributes these to the unemployed.
Now let us assume that all the laws, which do not allow the inhabitants of Indiana to undertake an effective monetary self-help measure, were repealed. Let us further assume that the inhabitants of the capital Des Moines want to make a beginning and ask you for advice as well as m e.
You would then (if I have understood you right) answer:
Your banks should supply themselves with gold and issue redeemable gold-notes, as I have described in my book and in my letters.
I would answer: Your employers should begin to pay their expenses, especially for your wages, in goods warrants, which would contain the well-known text and, among other things, the following clause:
The issuer makes no difference between his own goods warrants and gold coins when somebody buys something from him. Thus this clause would run somewhat like:
"We, the bread factory Ward at Des Moines, supply for this goods warrant $ 5 worth of bread,
exactly as much bread as we would supply for $ 5 in gold (five times 1,50464 grams of fine gold)."
(End of page 2.)
This the bakery could do within one hour after the prohibitive legislation has been repealed. After another hour the improvement in the economic conditions of Des Moines could already be considerable.
On the next day the most varied issuers of goods warrants will ponder: How can we combine into a community so that not 100 different kinds of goods warrants circulate in Des Moines but less than 100, &, if this is possible, only one kind?
On the second day they will have brought about such an association.
How such a thing functions in p r a c t i c e was described by John DeWitt Warner in his brilliant "The Currency Famine of 1893" in the magazine "Sound Currency", year 1895 or 1896. (It appeared in both years.)
Thus my advice amounts to doing that what our fathers have done in the year 1893 - and, by the way, to a still larger extent in the year 1907.
-----------------------
What would the inevitable answer of the inhabitants of Des Moines be to you???
Our banks should get themselves gold? Perhaps that would work very well - but, how could they do this??
We cannot wait until they have, perhaps, succeeded. We want to eat today, we want to pay our rents today. Your proposal is right now, technically unrealisable.
That would be their answer to you.
(J.Z.: I either read it somewhere or my mother reported it to me: Those tenants in Berlin, who, during the Great Depression, could no longer pay the rent and where thus put on the street by their landlords, managed sometimes to live in tents in the parks of Berlin, obviously tolerated there by the police, because of their plight. Not everywhere else was and is the police as tolerant towards the homeless, in such locations. - J.Z., 21.5.03.)
----------------------
You might perhaps reply: Immediately unrealisable - that may be! But, in a year or in 10 years my proposal can be realized and then it is the best, which you could accept.
And now we come to the point where proof and disproof is impossible. You say: Runs upon private note issuing banks have no great practical importance today. Today one could consider the danger of a run to be zero.
I say: Runs upon private banks of issue are today as well possible as they were previously.
You say: If it comes to a run then the option clause will suffice.
I say: There are cases in which the option clause suffices in a run and there are cases in which it is not sufficient. One may not apply the option clause before one has distinguished between the two.
You say: When the option clause comes into operation then, what gives value to the note, in spite of the option clause, is the hope of the note-holders for a redemption in the future.
I say: No!!!!!!!!! What gives value to the note, even after the option clause comes into force, that is the possibility to use it, immediately in the stores. If this opportunity does not exist, then the note will fluctuate so much in its value and will, moreover, depreciate that much, that it can no longer be a means of payment.
None of us can prove his opinion.
Nevertheless, your highly readable descriptions in "Free Banking", page 21, beginning with the words:
"The employers" etc., and ending with "... to accept the notes", do not leave me without hope that one day we could, nevertheless, agree upon this point, without proof and without refutation.
You say: Even after the option clause comes into force, the confidence of the note-holder in the banker is essential.
I say: After the option clause is applied, the confidence in the banker becomes the most unimportant thing. Moreover, then it is mostly equal to zero. However bad the banker may be, if only sufficient storekeepers
(end of page 4)
accept these notes like they would accept gold coins, and give for a pound note as many goods as they would give for a sovereign, then the public is quite indifferent towards the banker.
I speak here of shops. An equivalent to the shops is, naturally, the administration of a town which declares:
"We accept the notes in tax payments in the same way as we would accept gold coins."
The same applies to a landlord who would say: I accept these notes like gold coins. I need not multiply these examples.
You might perhaps object: But what if the shopkeepers have no confidence in the banker?
I reply: If the shopkeepers have no confidence then it could happen that they will not accept the notes. But if the shops are indebted to the banker then the confidence of the shops does not matter at all. The debtor need not have confidence in the creditor. The debtor has only to pay. The shopkeeper may consider the banker to be the worst kind of scoundrel. He may believe that his vaults would contain sand instead of gold. Nevertheless, if the storekeeper owes the banker 5 pounds, then he will accept notes of the banker amounting to 5 pounds and pay his debt with them. And if, moreover, the banker says right away in the loan contract that the shopkeeper has to accept the notes at par and has to pay his debt with the notes received by him, then the shopkeeper will accept the notes from any buyer and under all circumstances.
It may happen that not the shop itself but the factory is indebted from which he is supplied with goods. As long as this factory is indebted everything remains as I have explained above.
Thus I say: It is not the gold treasure of the banker or the confidence in the banker that allows notes with the option clause to circulate at par
(end of page 5)
but the debt relationship between the banker and his customers is the cause - and the obligation of the customers to accept the notes at any time at par.
It appears that in old Scotland the acceptance of the notes at par by the debtors of the bankers was not expressly included in the included in the loan contracts. Merely "good trading customs" were applied. It would be very important for the history of banking to clarify this point. But for the public it does, naturally, not matter at all whether the debtor of the banker accepts a note because he has to or because he does so voluntarily. (The Four Law Drafts want to oblige the debtor to accept the notes, like gold, and prohibit a discrimination between them.
-------------------------
You continue to maintain: The gold stock of the banker increases the confidence in him.
I state: This increase is so unimportant that the refusal of one newspaper vendor to accept the notes at par could undermine this confidence more severely than 100,000 kg. gold in the vaults can serve to restore it.
--------------------------
I hold: As the possibility to use the notes in the shops like pieces of gold is the real basis of the value of the notes, the banker must not grant any long term loans, that is, such loans in which the debtor may rightly say: I, the debtor, will accept the notes at par in my store or in my factory only when I am finally obliged to repay my loan.
If the banker, nevertheless, wants to provide long-term loans, then he must have a guarantor who would place him in the same position as if he had granted a short-term loan, that is, a guarantor, who will accept the notes at any time in his store like gold
(end of page 6)
although the guarantor has not taken up a loan.
Our views diverge especially for apart in this different concept of short-term and long-term loans. You favour especially long-term loans in many passages of your book and you demand no guarantor. I demand him.
---------------------------
I still want to clear up one small misunderstanding:
I do not think of any obligation of traders in gold (gold smiths) to accept notes in payment for bullion. I only-hold that once gold traders are no longer prepared to accept the notes of a certain bank at par, then this should be a signal for the bank and that the bank should then ascertain the cause. Probably it will be found that the bank has given the gold merchants just cause to value the notes of the bank less than those of other banks. I go further and say: the refusal of the gold traders should be publicised. Then it will be found whether the gold trader was right.
---------------------------
You say: But the old Scottish banks were organized precisely according to the principles whose validity you doubt.
I say: The old Scottish banks only seemed to be organized according to these principles. Several other factors preserved the value of their notes, factors which the history of banking (least of all that of Kerr) have not yet taken into consideration. First of all, one could pay one's taxes with these notes. That was very important. When I know that the tax collector will take my notes, then I do not ask whether the banker has gold or not or whether he grants short term loans or not.
(End of page 7.)
Moreover, the assets of the note-issuing banks were much larger, at any time, than their note circulation. What does this mean? It means that there were in reality very many debtors of the bank who gladly accepted the notes at par or even had to accept them, even if some of the debtors had taken out long term loans. I assert (without being able to prove it): If one were to search in the archives of the old Scottish banks, then one would find that the ready-for-sale goods or services of the debtors of the banks at these times were worth more than the note circulation. For this reason the long terms of many of the loans were harmless. (Nevertheless, a better system would have been possible.)
-------------------------------
We do agree on this that the present crisis is, essentially, brought about by an "insufficiency of money". What I desire, what the Four Law Drafts aim at, etc., that is not simply an "increase of the volume of money", but, instead, independence for all those who desire it from a situation of much or little money in a country, from a fast or slow circulation, from hoarded or quickly spent money. Thus our aim goes much further. But perhaps we agree also on this.
The right to make oneself independent, up to the limit of what is technically possible, of all money hoarders and money exporters - was derived by me from the principles of the PRA.
Now only the following questions remain:
a) HOW does one do this and
b)WHICH would be the BEST way to do this?
--------------------------------
Under our eyes a very important event is in the making: The rise of Russia against the Soviets. Such an insurrection becomes technically possible only when those who rise also provide themselves with a payment system;
(end of page 8)
and it must be one that functions immediately, i.e. within 24 hours.
Does your system offer that??????????
Please consider that the beginnings of this insurrection, namely the numerous issues of cooperative money a few weeks ago, were arranged without gold and have apparently functioned quite well. Otherwise the wrath of the men in power in the Kremlin would not have been as great.
----------------------------------
The laws of England, and those of all countries in the world, grant creditors even then the right to demand legal tender when all legal tender money is hoarded. In my opinion this is one flaw in these laws. In my essay I attempted to clarify this defect. I am pleased to hear that you have dealt with the legal tender problem in your book.
I would be still more pleased if, in the third edition (which will become necessary), you were to extend your examination to the following two problems:
A) What means legal tender for the debtor in case all legal tender is hoarded? In other words, what could a
debtor "force" upon his creditor in such a situation?
B) What can a creditor rightly demand when means of payment are scarce in a country, when e.g. all legal
tender is hoarded?
These are important questions which no legal man has so for answered.
(End of page 9.)
-----------------------------------
I see that I have already arrived on page 10 of this all too long letter.
Summary:
With the brevity, clarity and distinction that characterises all that you write, you have stated in one sentence the main difference between our opinions:
You say: "Before we accept inconvertible private money, we must have some knowledge of the standing and future prospects of the issuer."
I say: No!!!! and I add: Theory and practice speak against this principle!!!!!!
We must be informed about the situation of that person who accepts the notes, more correctly, of the situation of the one from whom we want to purchase something for the notes.
The situation of the one who issues the notes, does not matter - at least not for "the man in the street", whose readiness to accept the notes we have discussed."
With best greetings, yours sincerely, U. v. Beckerath.
____________________________________________________________________________________________
SOME DIFFERENCES BETWEEN THE MONETARY VIEWS OF
MEULEN AND BECKERATH
Compiled by Ulrich von Beckerath in German, on August 12th., 1935, elaborating on his above letter to Meulen on August 1st., 1935.
Prof. Heinrich Rittershausen marked this translation with "GOOD!". But it is only a rough translation by me, J.Z. It is intended to transcribe the German text as well, legible for a microfiche issue, for German readers and in the hope that some better translators will appreciate these thoughts which are of the greatest importance for all current efforts to denationalise money. J.Z.,15/6/81
=================================================================================
1.
MEULEN: The first requirement to keep the value of paper money constant is the confidence of the public in
the issuer.
BECKERATH: Confidence is a highly unreliable and therefore bad foundation for value.
Good paper money must be issued with methods, which assure that its value remains preserved
even in cases of suddenly occurring and widespread distrust.
2.
MEULEN: Even for the first issue of paper money confidence is necessary, the confidence in the
convertibility into metal (gold or silver).
BECKERATH: Indeed, that one can begin an issue based upon a confidence in the redemption of paper money
into gold or silver, has been proven by experience. However, that one can just as easily - nay even
much more easily - begin with an issue of paper money based upon the readiness of shops and
similar suppliers - to accept the paper money like rare metal coins, that has also been proven by a
long and very extensive experience.
3.
MEULEN: It is (although perhaps not morally but, nevertheless, in practice) permissible to keep the
redemption fund smaller than the sum of the issued paper money.
BECKERATH: Exactly the contrary is right. Morality and religion have declared for over two centuries that a less
than 100 % metal cover is permissible. In practice this system has failed. Moreover, it has even
quite significantly contributed to the crisis.
4.
MEULEN: The fact that banknotes circulated in Scotland at par and without difficulties, even after the option
clause was resorted to, proves that the promise of future redemption suffices to preserve the value
of the notes and their capacity for circulation.
BECKERATH: Post hoc, ergo propter hoc!! Assume that the Scottish church would have blessed the notes before
they were issued: Would this oblige anybody to believe that the ability of the notes to circulate
depended upon this blessing??????? The notes circulated without difficulties at par because the
merchants of Scotland and the farmers accepted the notes a par. And why did they accept them at
par? Because they were indebted to the banks and could and had to pay their debts with these
notes at par! The redemption fund was right from the first day as unnecessary as the blessing by
the church would have been. Moreover, the fund was as harmful in its way as a blessing would
have been in its way - for the notions of the people would have been confused thereby.
5.
MEULEN: The risk of the bearer of the note consists in the fact that the bearer may not get the gold or silver
for his note upon presenting it or only after 6 months.
BECKERATH: The risk of the note holder consists in the possibility that the merchants around his residence will
not accept the note like cash.
6.
MEULEN: The risk of the note holder can be compensated for by means of an interest rate, of approximately
1/2 % per month, whenever redemption upon presentation would not be possible.
BECKERATH: When merchants and farmers will not accept the note at par then even a much higher interest rate
will not suffice to counterbalance the discount of the notes which will then occur. Experiences
have been gathered on this.
7.
MEULEN: I maintain my point: The redemption (immediate or postponed) is the essential foundation for the
value of notes. (J.Z.: Meaning: metallic and specifically rare metal redemption, not counting
redemption in goods and services at all! - J.Z., 21.5.03.)
BECKERATH: I maintain mine: The indebtedness of the merchants and farmers to the note-issuing banks and the
reflux (of the notes) following from this, combined with their "shop foundation" is the essential
basis for the value of the notes.
8.
MEULEN: The obligation which a bank of issue imposes upon its debtors: to surrender for notes as many
goods or services as for gold, has only a very minor economic effect.
BECKERATH: This obligation, imposed by the bank upon its debtors, is of very great economic significance. The
insistence upon this obligation enables the note-issuing banks to grant as much in credits as its
debtors possess in goods whose sale is assured. Besides, this obligation assures the par value
between gold an notes as perfectly, nay even better, than a 100 % cover of all notes by gold. It is
this obligation which enables the bank to begin its note-issuing business and to maintain it -
without possessing even a single gold coin. This obligation turns every run into an ADVANTAGE
of the debtors of the bank and of the bank itself, since the run can only be directed towards the
shops and not against the bank.
(J.Z.: And the debtors want to sell as much as they can and can pay their debts to the bank with the
notes of the bank they received in this run. - J.Z., 22.5.03.)
9.
MEULEN: One can provide for a paper money with constant purchasing power.
BECKERATH: A paper money of constant purchasing power is technically impossible.
10.
MEULEN: A paper money with constant purchasing power would be very useful.
BECKERATH: Even if it were technically possible - the economic harm done by a paper money with constant
purchasing power would be much larger then its usefulness.
11.
MEULEN: When the general price level has changed, then it does not matter whether the price changes
originated from the side of the goods or from the money side, whether they were caused by crop
failures or a flood of money, whether through abundant harvests or through money shortages. The
ideal is always: the creditor receives money with constant purchasing power and the debtor pays
with money that has constant purchasing power.
BECKERATH: When a crop failure occurs, then it is only fair that the creditor is disadvantaged by it to the same
extent as the debtor is, in other words, that the prices rise. And if a very abundant harvest occurs
then it is only fair that the creditor gains the some advantage from this as the debtor does. In other
words, the prices should fall in these cases. Gold, especially, permits to account for changes in the
purchasing power of money which were caused from the goods side, with an exactness that is
sufficient for the practice.
A money of constant value would be the sane for the economy as a 'balancing tank' of a ship that
works 100%, even in the open sea. It would mean that the ship would not give way to any wave or
any storm. For a while one could be quite comfortable in such a ship and then the waves would
destroy it.
12.
MEULEN: The English government has the right to declare any good to be "legal tender". It may even declare
a paper, which it considers to be of constant value, to be legal tender. The government may change
any debt contract as it pleases. It may declare silver, copper, anything at all, to be legal tender,
upon its discretion. Knox and Knix may not conclude debt contracts with each other in which a
certain good, which Knox and Knix consider to be suitable, is to be supplied as agreed upon.
BECKERATH: Such things were intolerable even to the Turks under the Sultans, for they rose when the Sultans
went too far. How much more in accordance with freedom and voluntarism is the old law passed
by Frederic the Great, according to which even in case of devaluation undertaken by the State, the
creditor, nevertheless, was not to receive any less in weight of silver than before! Does the
Personal Rights Association teach such a slavish submission to the current English government?
13.
MEULEN: The French government was quite in its rights when once it declared the Assignats to be legal
tender.
BECKERATH: King Louis XVI. was appointed as a guardian of the currency, not as its destroyer. The
compulsory acceptance for Assignats was the beginning of his downfall. Prussian paper money, on
the contrary (and with the exception of a few weeks at the time of Napoleon I.), had never forced
currency (compulsory acceptance at a forced value: legal tender) until Havenstein realized legal
tender in 1909. France's money shortage could have been abolished in a very simple way: by the
introduction of "free banking". The king could have received his taxes very well in private
banknotes.
(J.Z.: All central banks were given great and abusable powers and privileges as "guardians" of the
national currencies and all of them have failed to sufficiently guard their currencies and have
abused these powers and privileges, legally or illegally. Thus by now these central banks should be
deprived of their powers and competed out of existence. - J.Z., 22.5.03.)
14.
MEULEN: A country requires a certain minimum of gold so that its economy can function.
BECKERATH: A currency must be so instituted that the economy it not disturbed even once the last piece of gold
is exported.
-------------------------------------------------------------------------------------------------------------------------------------------
12. 8. 1935
Bth.
____________________________________________________________________________________________
LETTERS OF ULRICH von BECKERATH
TO HENRY MEULEN, 1946 - 1959
(By the man who thought himself somewhat responsible for WW II. See page 59. Letter of 4, II. 1949. He did have a small chance to kill Hitler - and did not use it. - J.Z.)
It is possible that B. corresponded with Meulen almost to his death - but, unfortunately, I do not have any of his letters to Meulen from 1959 to 1969. They may be still buried among the remainder of his post 1943 library, in Berlin. Alternatively, B. had given up corresponding with Meulen in 1959. That seems likely from the spacing of the last letters here reproduced.
They are slightly edited by me, upon retyping or proof-reading of the scanned text, to eliminate some of his English mistakes, hopefully without introducing too many of my own. - Ulrich von Beckerath, 1882-1969, did not like his German writings to be "corrected" or altered or editorially improved - because he had spent much time and thought upon them and, by his own high standards, had optimised them. However, he did not mind help with his English and was grateful to Meulen for the few "translations" he made of his texts into proper English. Thus I dared to try improve them as well, although not very carefully, just while digitising these letters and in spite of being still not as fluent in it as Henry Meulen was, who, unfortunately, included only all too few writings of von Beckerath in his THE INDIVIDUALIST, especially on points in which B. differed from M. on the subject of monetary freedom. - Note also that B. was usually extremely polite and generous with his compliments towards those whom he did appreciate in one way or the other. He had even some praise for some of his enemies, when he thought they deserved it. - J.Z., 7.1.2003.
==================================================================================
U.v. Beckerath, 1. 12. 1946
(1) Berlin-Charlottenburg,
Neidenburger Allee 16,
care of family BLOESZ
Mr. H. Meulen,
31 Parkside Gardens,
London, S.W. 19
Dear Mr. Meulen,
I received
1.) Your letter of the 16 August 1946,
2.) You letter of the 8 November 1946.
I hardly conceive why your letter of the 16 August did not reach me. You used the exact address of my employer and indicated even the number of the room in which I work, and yet the letter distribution department of the house sent the letter back to London!!
And I am by no means unknown at the house. I find only one explanation:
The men and women are member of the United Socialist Party (merely communistic) and I am not, and also declined membership officially, some time ago. Perhaps you think that such reasons should not be taken into consideration. I can only answer: they must, in this case. -
- - - - - - - - - -
I beg you to try once more to send to me a number of the "Individualist". Please use the address above indicated. But do not join the issues to a letter, but send them as printed matter.
I received the number of October in this way and it was a very great pleasure for me.
- - - - - - - - - -
Concerning price control: I am still convinced that besides war, earthquakes and great diseases, such as pestilence and cholera, there can be no greater disaster for a country than price control. And if price regulation is joined with currency folly, as it is in nearly the whole world, then Negroes in the thickest jungles at the Congo, where are neither prices nor currency, live better, more cultivated and less troubled than the so called civilised nations.
- - - - - - - - - -
Before the war I was an adherent of the gold currency, now, after so many years of paper currency with all its terrors, I am a fanatic of the gold standard though not of the gold standard model of 1913.
------------------
I am convinced that Germany could buy food, new machines for the machines taken on reparation account, clothing and what she wants, if Germany would offer the sellers a gold basis.
Even under the present state of affairs that would be possible and even easily possible. I think, that Zander explained to you the ideas which our little circle, authors of the 4 bills, worked out already in 1933. If I would not have to work so excessively (I must reduce my sleep to 6 hours a day), then I would write some articles in one of the papers controlled by pro-reason editors, say the "Tagesspiegel", the "Kurier" and such papers.
I am pretty sure, that they would be printed. But never in my whole life did I suffer such a lack of leisure time as now. (They were not reasonable enough ever to accept his submissions! - J.Z., 7.1.03.)
----
If I had the pleasure to see you, if you visited Germany, that would be the realization of a hope of many years.
----
Today I have not the time to write to you about Zander and his interest in Jewish mysticism. I was very much surprised, that the very logically thinking Zander, that such a matter-of-fact man, has anything to do with mysticism. I hope to be able to write to him.
What you write of Hitler's crimes in treating the Jews is perfectly true, but if governments have no programme that is a real programme, they begin to persecute any class of the people -- the Jews in the greatest part of Europe, the Koreans in Japan (where they were accused to have caused the conflagrations after the earthquakes of 1923), the Germans in the USA (before the war and, I am afraid, the more after) -- but the world's history is full of examples.
-----
I hope to be able to write to you next Sunday.
My best regards to you - signed: U. v. Beckerath.
___________________________________________________________________________________________
U. v. Beckerath, 7. Dez. 1946.
(1) Berlin- Charlottenburg 9.
Neidenburger Allee 16,
care of family Bloesz.
Mr. Henry Meulen, …………
Dear Mr. Meulen,
My economic programme for Germany:
1.) A free trade in gold and silver should be permitted; that means abolition of every restriction in the possession, transfer, importation and exportation of gold and silver in form of coins or in any other form.
2.) A free trade in money of any kind, in foreign bills, bonds, scrip, securities, etc.
3.) Permission to use gold or any kind of standard or measurement of value in the determination of prices for goods (bread not excluded), services, (hired labour not excluded) and debts (leases not excluded ).
4.) Permission to publish offered, demanded or really paid prices or quotations for gold, expressed in paper money of any kind, or for paper money of any kind, expressed in gold, also for goods, securities or any other thing, expressed in any standard or measure of value.
5.) Repeal of all restrictions of the stock exchange, of the money exchange or any other kind of exchange; permission to do business in options or futures.
6.) Abolition of the forced currency, repeal of all laws, old and new, by which people are compelled to take paper money at par or at a prescribed rate for gold. (Forced currency was introduced into Germany as late as September 1914.) (The law on legal tender came into force on 1.1.1910 but gold redemption for a while and was ended with the beginning of WW I. - J.Z., 7.1.03.)
7.) Settling of all taxes in gold, including the taxes for reparation purposes. The financial authorities stipulate from to time a rate for paper money, bank-money and other means of payment, accepted from tax-payers, by which is known the quantity of such means of payment accepted instead of 1 gram of gold.
8.) The quotations of war loan bonds and any other security certificates emitted by the Reich, the States, the towns, etc., will be statistically observed, and if, for a period of three months the quotations are not higher or lower then 5% of the average quotation, the shares are converted into gold shares on the basis of the average price or quotation. (I disapprove all arbitrary relations of the quotation or value of the old loans to the presently used currency or to the future currency.)
9.) Certain taxes should be selected to be paid not in money but exclusively in securities of the loans of the Reich, the States, the towns, etc., especially all property taxes, death duties. etc.
10.) English or American Corporations or both, which, by nationality, are not exposed to requisitions for reparation purposes, and others, erect factories and other enterprises in Germany. These factories and enterprises are considered as exterritorial; are submitted to no tax or duty, but have free communication to England and to America, are also free to employ English or American workers or others. (I see no better and even no other way to supply the Germans with bread, shoes, nails, clothing, tools, umbrellas and so many things, which are not on sale now for three years.)
The factories and enterprises must have their own and sufficiently armed police: A very essential point.
Some of the factories may perhaps use "second-hand machines", which will be cheap enough in England or in America. The Industrial plant in Germany is presently in no better condition than a plant equipped with English second-hand machines would be.
The products of the factories have free admittance to any German place. That can be agreed by private treaties with the governments of the newly organized States.
11.) Every price control for goods or services, hired labour included, is at once abolished.
12.) Every law, regulation etc. by which people are prevented from using their faculties or their property in any manner they themselves think to be the best, are at once abolished. The laws concerning labour-passports are repealed.
13.) Free thought, speech and any kind of expression of opinions or any kind of learning other people's opinions are permitted in the same manner as they were in 1929, at least concerning economic matters.
14.) Bills, securities and obligations of any kind, in which there is no redemption promised but merely a promise is given to accept them for their nominal value at a fixed date or a fixable date in payment of debts or goods or services of the issuing corporation or enterprise are permitted.
------------
These would be the most urgent measures.
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I still have very much to write to you, also about your private affairs, of your unique library, which the war destroyed -- oh, what a pity, what a pity !!!!
But my daily work is go excessive, that I must work on Sundays as on others.
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Most kind regards to you
signed: U. v. Beckerath
Lack of time prevents me to talk about my political programme whose essential feature would be:
Dominion status for the newly organised German States, English princes as governors or an English prince as Chief governor for all States together.
Bth.
Re-reading this letter I find that I omitted an important point at No. 8:
Not only the shares should be treated in this manner, to find out their real gold value, but also the circulating paper money. The price of gold, expressed in paper currency, should be quoted every day. After some time the quotation will be a constant number, supposed that the quantity of the circulating paper money is not considerably increased or diminished. If in the course of three months (or so) the highest and the lowest quotation did not differ more than 5 % from the average quotation, then a new currency should be created, equivalent in value to one gram of gold.
The conversion can be performed in the usual manner if an old kind of currency shall be replaced by a new one: The financial authorities, the railways, the post office etc. keep the received old currency, in this case the Hitler-Mark, and destroy it. They make their payments by the new currency, whose denominations may be 1/4 gram, 1/2 gram, 1 gram, 2 grams, etc. of gold.
After some weeks the traffic purified of the old currency without the trouble of a conversion action at the counters of the banks etc. And the value of the new currency, expressed in units of the old, is found and not ordered.
The public takes the proceeding merely as a denomination and not a conversion by depreciation.
Bth.
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27.11. 1948
Dear Mr. Meulen,
in the common note of the Western powers to Bramuglia is demanded:
1.) Influence (control) of that part of the Bank of the Soviet-Zone which operates for Berlin,
2.) guaranty of sufficient bank- and credit-facilities for the whole territory of Berlin without regard to the limits of the sectors,
3.) supervision of export - and the export licences to be granted by the magistrate.
(I cite the text today published by the daily "Der Kurier", a French licensed paper.)
I think that in these times the adherents of free banking should contribute something to solve the Berlin currency question, although the probability of being heard may also be very moderate.
"The man who possesses a clear program will win", is an old experience. I think that free banking men are the sole economists who are able to represent a quite clear and constructive programme. The propositions of the others do not deserve the name of a programme, being a compromise of the worst monetary plan so far known in financial history, that is still the currency law for the Western sectors and the communist currency principle.
The free banking men of Berlin have no right to speak up; if they had, they would demand:
1.) The right of issuing notes should no longer be a monopoly.
2.) The old German paper currency rule, confirmed by many laws of many German States - "paper currency shall never be a forced currency" - should immediately be restored. It is forgotten that this rule was abolished not before the 1. 1. 1910, when the notes of the Reichsbank became legal tender.
3.) Banking business should no longer be a monopoly or dependent upon permission by the magistrate. (Banking business in the sense of lending money, accepting deposits, granting clearing accounts and other business belonging to the above-mentioned.)
What is here demanded are no privileges for bankers but rather rights for workers. Bankers and bank institutions, as they have been until now, have proven to be incapable of supplying the workers with currency sufficient to enable the frictionless exchange of labour among the different classes of the working people.
Banking institutions of today totter between inflation and deflation without knowing where the limit of the one or the other is to be drawn. They are to be excused, for nobody knows these limits under a system of forced currency.
The amount of "West-mark" in the Western sectors of Berlin is now 200 per capita, but was less than 100 per capita in Germany before the Nazi government. Considering that in West-Berlin more than 3/4 of the wages, all rents and the greatest part of the victuals (food requirements - J.Z.) are legally paid in Eastern money, obviously, there is inflation in the Western sectors of Berlin. Nevertheless, money is very scarce in these sectors, so that many firms now pay their employees two times a month or weekly, who before the currency- "reform" paid them monthly.
Personal and political liberty are in the long run impossible, if the worker is not able to exchange in small parts, of equal amounts (as money is subdivided [denominated - J.Z.]) his labour against the labour and goods of others. Under the present system of note issuing and banking such an exchange is either impossible or depends upon the good will of two or three men, who are not duller than others but who are vis-à-vis a task like that of shooting a bat in a great dark stable (as one of the German economists called it). (Never forgive them - for they do not know what they are doing to us and do it nevertheless! - J.Z., 22.5.03.)
Only abolition of the "cours forcé" of paper money can help and introduction of a free market for every kind of paper money, the word "free market" taken in the sense which it had in the 18th and 19th centuries.
To bring the system of free banking to its fullest extent, the right of every group of workers to choose any person of their confidence as their note-issuing banker should be expressly acknowledged. The readiness of the workers to accept the notes as payment for their services should be acknowledged as a sufficient cover of the notes.
The free exchange rate of the notes and the right of everybody, except the issuers, to refuse their acceptance form the most effective barrier that is imaginable against the misuse of not-issuing, much more effective than any governmental control.
Inflation is technically impossible if the means of payment are submitted to free market rating. A means of payment, whose rate is 99% instead of 100% is refused by the public.
Inflation is possible only with the help of a forced currency.
(Since the end of WW I some economists used the world "inflation" simply in the meaning of "dearness". Now this misuse of the world "inflation" has become almost general in the whole world, although the old sense is not yet quite forgotten in scientific literature. It is not superfluous to remember that the word is taken from the slang of the butcheries of Chicago in the American Civil War. It meant the practice of the cattle-dealers to give the cattle firstly salt, as much as they liked, then to let it become thirsty and then, immediately before delivery to the slaughterhouse, they gave them plenty of water, to increase their weight.
Nobody has a right to bring as good, distinct, old and generally understood words as "dearness" in English and "Teuerung" in German into disuse. The distinction between the two different facts depends upon the use of the suitable words.
Inflation simply means the augmentation of forced currency beyond the amount accepted by the economy, if the paper money were not given "cours forcé".
Dearness is the consequence of bad harvests and similar causes. It is, as all elder economists pointed out, in itself the best means for a return to normal conditions because dearness -- of course -- encourages production and trade. Adaptation of wages to dearness is no obstacle to a rapid return to normal conditions. Wages do require today in England (and in Germany before the Nazi-regime), about 50% of the national product. If wages are doubled, prices increase therefore only to 50%. If then the wages are increased by 50%, prices rise then only by 12.5 %,. If wages are then increased by 25%, the price level rises only about 6% and so on. That may be called a "spiral, but it is not a "spiral without an end".)
The free market of the notes must be acknowledged as the right of every worker to judge about the value of the notes himself and to risk his own property when he accepts the notes for a value over par or agrees to a discount when he pays with the notes.
The right to form a group for the issuing and the acceptance of notes is to be acknowledged as a part of the right to associate for any non-criminal purpose.
The right of free banking includes the right to possess and to legally transfer any material fit for measuring value or serving as a means of payment, gold, silver or other materials always having been used in the economy. The laws of the Western Powers that prohibit the possession or the transfer of such materials are to be formally repealed.
The above right includes the right to subdivide gold or silver etc. into equal parts in the form of coins, either in multiples of the old gold-mark or in grams or multiples of grams.
If Berlin does have factories for minting coins then any factory abroad, that stamps medals, should be permitted to coin gold or silver in commission for the people of Berlin.
Every coin should have inscribed:
a) the weight of gold or silver contained in the coin,
b) the weight of copper or whatever is used alloy in the coin,
c) the addresses of the manufacturer and the commissioner,
d) statement of the thickness and diameter, expressed in millimetres or another international standard measure,
d) the date of coinage (day, month and year).
In one word: The state of the English currency system before 1844 should be introduced with the alterations now required, due to the experiences of two wars, three years of inflation, 12 years of nazi-slavery and the years of ignorance and incapacity, in money matters, in the years before.
Very truly yours - signed: U. v. Beckerath
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(Appendix - page 4)
That import - and export - licences are the most superfluous thing in the world under the rule of a currency without "cours forcé", I need not explain to you, an old champion of free trade.
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"Experts", and other economists that believe themselves to be experts, will find it very insolent if simple workers demand freedom, majority and permission to dispose of their own affairs, if these affairs seem so complicated as the currency affairs. To them may be answered:
Under the rule of the experts, the best times of the national economy were characterised by the destruction of many thousands of tons of victuals, while in the same economy there were many hundred-thousands, who would very much have liked to consume these victuals, if the government would have allowed them to pay for the victuals by the system of free banking. Bad times were characterised by the destruction of many hundred thousands of tons of victuals and the hunger of millions. The difference was great - - admitted - - but was certainly not to the honour of the experts. After so many years of expert-government, the workers have claim the right to take their affairs into their own hands and claim also the right, which President Roosevelt claimed at the beginning of the New Deal:
To make mistakes, at their own risk, in the first steps and learn from their own experiences.
Roosevelt, although probably to be mentioned among the 100 most intelligent men in the USA, committed the mistake to realize the advise of his brains trust. The effect is known.
The effect could not be another one, for monopolised banking and cours forcé darken the path of the most able rulers. Besides that, the New Deal was an experiment without foregoing experiences.
But workers, who claim the right of free banking, in the above-mentioned sense, take a road illuminated by the natural movements of a currency not submitted to a cours forcé and by a century of experience, elevated from the simple observations to true experience by the most enlightened authors, the last but certainly not the least being the author of Free Banking. Therefore, the workers will not be forced to use their incontestable right to make their own mistakes before becoming experienced themselves.
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U. v. Beckerath …. 4. XII. 1948
Dear Mr. Meulen,
Free Banking means also the liberty for everybody to base contracts in general, and banking contracts especially, on any measure of value that he and his contracting party like to agree upon. 100 and more years ago this right was acknowledged, not only in England but in the world, although not expressis verbis. But many contracts of old times, still kept, prove the existence of this old right. Fixing obligations in terms of corn was frequent in agrarian business and, as Adam Smith remarks, such obligations often preserved their purchasing power while contracts, stipulated merely in money lost it. For the rest of the people took, as measure of value, the best known in their economic world, gold in England - - but also silver - - on the continent in most cases silver.
The official standard of value meant merely that this standard was to be applied if no express other value was mentioned in the contract.
Then began, prepared by the law of 1844, which gave the Bank of England a monopoly for the note-issue, a time when paper money got a cours forcé and by that became also a measure of value.
Now, in perhaps all countries of the world, the paper money is the only legally admitted standard of value.
The greatest part of the population, especially the working classes, thinks such prescriptions to be quite right, while peasants and merchants still distrust the paper money as a standard of value and demand permission to conclude contracts on the basis of gold.
Kant says in his political writings that the people form their ideas of right from the existing legislation, while it is the natural privilege of the men in government and administration to form the legislation from the philosophical ideas of the true right.
(A privilege they seldom use, while, on the other hand, only that part of the people, whom Aristotle calls Banausoi is in the habit of framing their ideas from the legislation of the times -- both, in most cases, requiring very many improvements. So the application of right to legislation is, as a rule, entrusted to men of letters and - - as Kant also emphasises - - therefore the right of free speech and a free press is always the most important of all political rights.)
Since the legislation established the unit of the circulating paper money as the unit to measure value with (certainly a very bad law), so that e.g., all prices in the stores must be indicated in that unit and all wages, too,
the people, as far as it belongs to the banausoi, in the sense given to the word by Aristotle, considers paper money as the given and true measure of value as well as the given means of payment.
This idea will not disappear before the cours forcé of the paper money is repealed and even after the formal repeal it will remain for some time, for months or even years. That is true for England and for all countries in the world. For these reasons the unity of paper money must be admitted, also in Free Banking, as a measure of value (besides other possible measures of value - - gold, silver, even copper and grain).
Free Banking will here say: It should not be prohibited, although it seems (hardly? Corner cut off! - J.Z) the best and certainly will be abandoned after some experience with different measures of value has been made possible. At last gold (will? Corner cut off! - J.Z.) be accepted as the best measure. Some German economist (Roscher?) said:
Nature gave men gold and silver as measure of value as it gave them iron as a natural material for tools, water for drinking, oxygen for breathing, the stars for measuring of time and the foot for the measuring of space. The acceptance of gold as a measure of value is therefore not an arbitrary decision.
Herbert Spencer wrote about 80 years ago a chapter: "The Coming Slavery", in which he prophesised in much detail all terrors of a centrally managed economy. But what neither Herbert Spencer nor anybody else seems to have observed is that the abolition of Free Banking laid the foundations for that coming slavery - - for several hundred millions of men, not coming but then existing.
Free Banking presupposes political and economic freedom as well as political and economic freedom presupposed Free Banking. Both must, therefore, be established at the same time, from a new spirit of liberty, a spirit which, in nearly the whole world, seems extinguished now, but in today's England is still not extinguished, as proven by the continued publication of "The Individualist".
Very truly Yours - signed: Bth.
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5. 12. 1948. (I)
Dear Mr. Meulen,
cold fingers and lack of light prevented me from answering all details of your letters. I am very much obliged to you and esteem highly the honour that you took the trouble to translate some of my utterings into English and even will publish them in the Individualist.
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In your letter of the (left open! - J.Z.) you expressed an unfavourable opinion on the gold standard. We discussed the matter some years before the war. Our correspondence is burned (That of Meulen as well as that of Ulrich von Beckerath, by air raids, but at least B. did not burn himself his later correspondence, like Meulen did. - J.Z.), but I remember the main content.
There are different kinds of gold standard possible and each kind contains several details. Perhaps the English word "gold standard", in its present sense and the German word "Goldwaehrung" in its past and in its (somewhat different) sense at present do not mean the same.
In the older scientific economic literature the word gold standard meant in Germany simply, a condition where the debtors were obliged to pay in gold coins if the creditor demanded it and no other kind of payment was agreed upon. Such was the state of law in old Rome at the later time of the emperors and was e.g. the state of law before 1870 in the city-state of Bremen, where a gold standard was introduced though no Bremen-coins were minted. Foreign coins had a fixed exchange rate.
When the central banks came up, then it was considered to be essential for the maintenance of a gold standard that the central bank gave gold coins for its notes at any time. It was held to be sufficient that only a part of the amount of the outstanding notes - in most cases 1/3rd - was held in the vaults to satisfy even excessive demands of the note holders. Of course, this rule was as arbitrary as dishonest and was disproved by experience.
During the war of 1914-1918 the Bank of England did no longer redeem its notes into gold but still gave notes the old relation if anybody brought it fine gold. The obligation to redeem the notes was not formally repealed - as Maynard Keynes explains in his work on money - it was discarded by the practice of redeeming: Everyone who brought large amounts of notes for redeeming had to wait so long that he and his successors at the counter (only one counter was opened for redeeming) lost patience and went home. But formally the standard of gold was maintained during the war. After the war, the obligation of redeeming was formally repealed; there remained only the obligation to exchange gold, delivered to the bank, into paper money, which can produce no danger for the bank. Economists pretended that this condition rightfully deserved the term "gold standard". This system is now accepted by several central banks, also by the American, with the natural effect, that the price of fine gold, expressed in notes, is much higher (on a free market) - - e.g. Mexico for USA or Tangier for England) than the purchasing price of find gold declared and officially maintained by the central bank. The last mentioned circumstance does not prevent economists from declaring that all the central banks or this kind are still on a real gold standard. (I consider that to be a misuse of words.)
If I demand a gold standard for Free Banking, I demand the following detailed role for gold:
1.) Gold coins should not be prohibited. Everyone should have the right to get gold coins stamped and there should be mints in all communities to coin gold in the same way as it was used in 1913. If a community does not possess a
mint, then private institutions should be allowed to coin medals, the size of gold coins, as was allowed in California during the first years of the gold boom.
2.) A gold-clearing-standard should be permitted (not introduced but merely not forbidden) whose essential feature would be the general permission for everybody
a) to possess, sell and buy any amount of fine gold in the form of coins or in another form,
b) to conclude contracts by which the debtor is obliged to fulfil his payment obligation in so much local currency. (Paper notes of private bankers, town money, railway money or whatever may be in use in the community) as at the exchange or at the free market - - the word taken in the sense of Adam Smith - - is quoted for gold.
Example: The local currency is a paper currency issued by the town where the contracting parties live. The town money may be at the nominal value of old gold Marks. An old gold Mark was, by the old German mint laws 0.35… grams of fine gold, or 2790 gold Marks = 1 kilogram. By an over-issue or for other reasons the town money may be at a discount, so that at the exchange for 1 kilogram of find gold in form of known coins 5580 paper Marks of the town must be paid. Then a worker, whose wage is fixed at 10 gold Marks a day, shall be entitled to get 20 paper Marks. Such a system was in use in Germany in the years 1922 and 1923. My own salary as actuary of the Deutschland Rueckversicherungs-Aktien-Gesellschaft, Berlin-Nikolassee, was in 1923 fixed at 80 gold Marks a month. At that time the purchasing power of gold was so high in German, that 80 gold Marks a month was a high salary. I had plenty to eat, was well dressed and bought many books. [Books and clothing were consumed by the flames on 22. XI. 1943.] To tell the truth: the trade unions did not encourage the system. But the higher officials in private firms demanded and obtained it often.)
Obviously, the system is not merely applicable to wages. In its general application it was at that time called "Gold-Rechen-Waehrung" (Gold-Accounting-Currency - J.Z.), which was a good expression.
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Such a gold standard cannot be considered as injurious or oppressive for anybody. It needs no introduction by the government. It is sufficient if the government does not forbid it. If the people in all countries would not be prevented by very hard punishments and the formal declaration of the law, that obligations on the basis of such a gold standard will not be acknowledged by any court, then this kind of gold standard would be an action of the people themselves, introduced in the whole world.
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Today is election-day. Therefore, the electricity works of West-Berlin grant a few hours of additional current. (Reason: The votes must be counted, which can hardly be done at the light of candles.) The additional light enables me to write to you some more words than I would be able to write, otherwise. (Freedom of expression infringed by electricity rationing! - J.Z., 8.1.03.)
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I hope that the Russian gazettes of these days are preserved. If one reads them, then the Western Allies have divided Berlin, also Berlin is not blockaded, the nearly 5,000 tons transported daily by the air-fleet are a pure bluff, etc., etc. They are "documents humains". The nazi-propaganda was far inferior to that.
Very truly yours - signed: U. v. Beckerath
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5. XII. 1948 (II)
Dear Mr. Meulen,
where Free Banking is prohibited or not used, because the economic ideas of the people are not sufficiently developed, there the supply of the individual with means of payment (that is the possibilities of exchanging his labour against the labour of others) depends, first of all, upon the chances in the distribution of the stock of currency.
Suppose the community is inhabited by 10 millions of people able to deal with money, then the distribution of the stock of money, according to the wants of each individual, is no more probable than any supposed distribution is the effect of 10 million tosses of a coin in the well-known game of hazard called "coin tossing". The most probable is 5 millions of "heads" and 5 millions of "reverse". But the odds, that exactly 5 millions of "heads" will come out are practically zero, and the odds, that say - 5 millions and 10 "heads" will come out is a little smaller and practically - - of course - - also zero, the thing considered from an economic point of view. Indeed, practices showed in all periods of history that there, where Free Banking was not in use, nobody had as much currency at his disposition as he wanted - - some having too much and the greatest part of the people not enough.
Secondly, the supply of the community and of each individual depends, wherever Free Banking is not used or not sufficiently used, upon the ideas and the good will of the men to whom the note issue is entrusted.
The experience of decades in many countries teaches that the emission of a forced currency cannot safely be kept in the accurate middle position between inflation and deflation. A more developed theory of currency will even prove that in the case of the issue of a forced currency always one part of the economy is under inflation and the other part under deflation, so that the problem of a rightly dosed emission would be altogether insoluble.
But Free Banking solves the problem with ease: Under-issue at once induces any banker to offer his emission-services to that part of the community which suffers from a lack of means of payment, although it has, ready for exchange, goods wanted by other parts of the community. Over-emission is at once answered by a discount of the notes. Notes that suffer a loss in exchange are refused everywhere and at once disappear from circulation, before they influenced the general price level.
Free Banking is not merely an improvement in banking or note-issue: Free Banking is an essential part of economic life. All restrictions of Free Banking, by law or bay a low standard of economic customs in a community, are a restriction of economic life (and by that of personal and political life), and all other kinds of banking are mere "Ersatz".
Free Banking is a very good and probably the best means of economic education of the people. An economically educated people is able to watch over the economic institutions and the economic activities of the government. Under the rule of monopolised banking and monopolised note issue, it is not the people that watches but it is watched.
If the prices rise, the government, the papers and the churches reproach the people, for having lost their old buying morale and for driving up prices, in their eagerness to obtain real values. If prices decline, the people are accused of saving money in an excessive manner and admonished to "spend wisely", and so to avoid unemployment.
Under the rule of Free Banking, any man, who would try to influence the buying habits of the people by moral exhortations, would be looked upon as 200 years ago the end-of-the-world-prophets were by enlightened people, if the latter were summoned to stop going to the pubs, to save their souls instead and, to make a beginning, to assist the prophet's preaching by a decent donation.
To suppose that monopolised banking and note issue could render the same services as private bankers in Free Banking business, note-issuing included, is about the same as supposing that motor cars and bicycles were superfluous because we have excellent great railways. The use of motor cars and bicycles compelled men to acquire a great quantity of technical and even scientific knowledge, which would never have spread if only railways were in use. So the use of Free Banking will spread a great quantity of economic knowledge among the people which can never be acquired by reading weekly reports of monopoly banks and considering papers on them.
The present political situation leads us to reflect on the best method of war financing. I assert that in times of war, too, a worker, whose wages are financed by free banking, will produce at least five times the quantity of war material that is produced by a Russian worker under the Soviet system of monopolised banking and note issue. The evil effects of this system are more indirect than immediate but, nevertheless, severe. The Russian historians glorify the valour of some Russian armies than vanquished the nazi-invaders though only one third of the soldiers were equipped with rifles, the supply of the 2/3rd not armed being the rifles left by the dead and wounded. From a military point of view they are quite right. Such a valour is nearly unequalled in history. But this fact was no reason for boasts for the Russian arms industry. If there had been private bankers and private businessmen in Russia, they would have easily mobilised the reserves, contained in the incredible waste in production, transportation and distribution.
In the war of 1870/71 Moltke "produced" one dead Frenchman with an expenditure of about 80,000 hours of labour. At that time Germany did not have a system of completely free banking but the number of note-issuing institutions was more than thirty. The French government, with its monopoly bank, needed about 300,000 hours of labour to "produce" one dead German. Of course - the great strategic ability of Moltke and the good training of the German soldiers contributed to Moltke's success. On the other hand, the French Chassepot-rifle was far superior to the Prussian needle-gun, and the courage of the soldiers was equal on both sides.
The "white" armies which fought in the first years of the Russian republic against Moscow were all lead by men that had not the least understanding of war-financing. Their system amounted merely to plundering the peasants, a system which mainly contributed to Napoleon's defeat in 1812. (Explained in the work of the German General Staff: "Heeresverpflegung" (Provisioning an Army), published in 1913. The principle of Free Banking could have been applied to finance the civil war in Russia against the Moscow regime. How? That was explained, although in very general terms, in the book: "Cash payments in Occupied Territories" by the late Dr. Holzhauer, a young economist, who completely understood the system of Free Banking. It is not generally known that Holzhauer's system was applied by the Japanese armies in the first years of Japan's war in China, to the very moderate pleasure of the author, whose intention was mainly to provide a system of finance to German anti-Hitler forces, which were, in the year of the publication of this work (1938), already in the process of being organized. Holzhauer used so general terms that the nazi-department for military literature found nothing dangerous in it and even recommended studying it.
Very truly Yours - signed: U. v. Beckerath
____________________________________________________________________________________________
9.12.1948.
Dear Mr. Meulen,
some time ago I wrote to you about persons who are able to move a magnetic needle by pure will power. Such persons are very rare - - possibly only a few in a million, but they do exist.
If such a natural power as magnetism can be influenced by the pure will of some person, then the question arises whether other natural powers can also be influenced in this way. It may be that there are quite new ways of acting upon things that are seemingly or really without life, by living bodies and by action from a distance, actions that can still be discovered, equivalent to the phenomenon with the magnetic needles.
One may even discover that the action from a distance, as used in this instance, is not bound to a living body but can also be produced by some kind of apparatus and is not restrained to iron or metal but is, rather, of a universal nature.
Probably you have read of the strange procedure of Chinese thieves, who by their will are able to move light objects, say pearls and jewels, and compel them to come so near to them that the thieves can grab them. That agrees with the report of Marco Polo in his memoirs, that he saw, at the court of Kublai Khan "magicians", who were able to transport, merely by their will, and acting from a distance, the goblets of the Khan from the end of a table to immediately before the Khan.
A friend of mine, the manager of the Assurance Company "Volksfuersorge", in Hamburg, Mr. Emil Thiele, saw one of his acquaintances move a box of matches in a similar way.
Systematic exploration of such facts may lead to a procedure by which men, merely by their pure will, are able to bring atomic bombs to an explosion in the air, may, or may not -- but you know, what Indian Fairs are capable of doing.
Very truly yours - signed: U. v. Beckerath
(Note by J.Z., 8.1.2003: Nuclear weapons are set off by H.E. and this can be set off by detonators, which essentially produce fire, i.e., high temperature gases. There are numerous reports that some people can start fires at will, at least not very far away from themselves. Thus they might also be able to set off nuclear weapons nearby - in suicidal attempts, if not at a great distance. But more useful would be a power, from a great distance, to prevent the explosion of any nuclear weapon, perhaps by teleporting sufficient neutron-absorbing materials into the