Saturday, September 16, 2017

Paper Money and the Gold Standard

Paper Money and the Gold Standard
Thomas Allen

    Many people who are hostile toward the gold standard assert or imply that all purchases have to be made with gold coins or perhaps gold bars under the gold standard. Paper money, checks, and electronic transfers are not used. Some suggest that they would be prohibited. Some hold this view out of ignorance; others, out of hatred of gold as money. Unfortunately, even some proponents of the gold standard seem to hold this view.
    To the contrary, paper money and checks were used during the era of the gold standard. More purchases were made with paper money, checks, and token coins than with gold coins. When the gold standard returns, many more purchases will be made with paper money, checks, token coins, and electronic transfers than with gold coins.
    The primary purpose of gold coins is to keep everyone honest. It prevents an unsustainable expansion of credit. Redemption of paper money (bank notes, government notes, checkable deposits) on demand keeps credit under control and smooths the business cycle.
    Under the gold standard, people, especially business people, often deposed gold coins in checking accounts. Others exchanged their gold coins for paper money because paper money was more convenient to carry.
    A check under the gold standard is an order to the bank to transfer gold from the account on which it is drawn to the bearer of the check. A bank note is essentially a check that a bank draws on itself. It is an order to the issuing bank to pay the bearer of the note the amount of gold stated on the note when redeemed.
    The major problem with bank notes and checkable deposits is that banks can over issue them. It can do so either deliberately or accidentally. For example, when a bank buys treasury bills with bank notes or checkable deposits in excess of its unencumbered gold deposits, it is deliberately over issuing. When it converts a real bill of exchange to bank notes or checkable deposits and the person on whom the bill is drawn and the endorser of the bill go bankrupt, it inadvertently over issued (this lost should be covered by gold reserves set aside for this purpose).
    Thus, as banks do today, banks under the gold standard can, often did, practice unsound banking — borrowing short and lending long. Also, when banks use the same money (gold) for multiple loans, it is practicing unsound banking. However, unlike the current fiat monetary system that enables unsound banking to be used for an extended time, the gold standard ends such practices fairly quickly with bank runs — the conversion of bank credit money (bank notes and checkable deposits) into gold.

Copyright © 2016 by Thomas Coley Allen.

More articles on money.

Friday, September 8, 2017

The Southerner, the Black, and the Yankee

The Southerner, the Black, and the Yankee
Thomas Allen

    [Note: This article has been inspired by A Glance at Current History by John Cussons (1899). Most of the description of the Yankee is his.]
    Southerners have been told to put the past behind them and devote their energy to building a common country. This they have been doing since Lincoln’s  War to Suppress Southern Independence.
    While Southerners have devoted themselves to building the country, the Yankee has devoted himself to vilifying the South. The Yankee is the Puritan of New England and his descendants in New England, New York, and along the Great Lakes and on the West Coast and his philosophical kin, mostly European radical immigrants and their descendants. To the Yankee, the South represents everything wrong with the country and every evil on earth.
    Public schools teach children, especially Southern children, to hate the South and Southerners and to hate, or at least ignore, the great accomplishments of Southerners. Southerners are demonized as traitors and harbingers of everything evil with the Yankee defining evil.
    Until recently, many historians have presented the South as a region of savagery and the North as the land of great virtue. Now these historians portray Whites, both Southerners or Northerners, as wicked monsters of oppression and Blacks as virtuous oppressed saints.
    Although the South has been accused of seeking to destroy the government of the United States with secession, it did not. If the South had won the War, the U.S. government would still have existed. It would just have ruled over a smaller area.
    Lincoln is the one who destroyed the U.S. government as established by the Constitution when he called forth troops to invade the South. Contrary to the Constitution, he concentrated political power into the U.S. government and much of it into the office of the President. Thus, he converted the United States from a federation of States to a consolidated empire. Moreover, he partnered the U.S. government with big business and bankers.
    The issue of secession reveals the hypocrisy of the Yankee. After the expiration of John Adam’s term, the New England States threaten secession several times. However, when the Southern States followed their example in 1861 and even used some of the same arguments that the New England States had used, their acts were treasonous.  Yet, the Yankee had called the Union “a league with hell” and denounced the Constitution as “a covenant with death.” Nevertheless, when the Yankee came to power in 1861 and the hell part of the league, the Southern States, decided to leave, the Yankee threw off his disguise. He launched a war of conquest in the name of defending the principles and symbols that he had bitterly denounced. (Of course, the real reason for the War was to destroy the South and Southerners and to transfer their wealth to the Yankee.)
    Contrary to the popular myth, then and now, that Southerners were traitors and guilty of treason, they were not. However, if Lincoln were right and the Southern States had not left the Union, then Northerners were guilty of treason. According to the Constitution, treason is levying war against the United States, which would include any one of them. If the Southern States had left the Union as the South claimed, then Southerners could have not been guilty of treason as they were no longer part of the United States. However, if they had not left the Union, then Lincoln and his fellow Northerners were guilty of treason for levying war against the United States by levying war against States within the Union.
    More of the Yankee’s hypocrisy is revealed during the War and Reconstruction. While mutilating the States, he declared them to be indestructible. Lincoln’s War was fought under the banner that the Union was indissoluble, yet the Yankee disbarred the Southern States from the Union. While claiming to be the only class to revere the Constitution, the Yankee shredded it. As he elevated himself as the only true champion of “the sacred principle of government by consent,” the Yankee reduced the Southerner States to conquered provinces where Southerners were denied the right to govern themselves.
    As the North won Lincoln’s War to pillage and enslave the South, to the Yankee fell the privilege of writing history. Mostly, his histories from the colonial era to today glorify the North and the Yankee and vilify the South and Southerners. Consequently, the Southerner is debased, and the Yankee is exalted.
    Moreover, the Yankee presents himself as a noble saint. He, and he alone, is the great egalitarian who has strove to elevate Blacks, and now all people of color and all perverts, to the level of equality with the vile White man — nay, to raise them even above the White man. Only the depraved racist Southerner thwarts this equality. Any Black possessing any ability of critical thinking knows that the Yankee lies. (Unfortunately, not only do most Blacks lack the ability to think critically, so do most Whites.) Blacks would soon discover that the Yankee wants to remake them in his, the Yankee’s, own image, just as he wants to remake Southerners in his, the Yankee’s, own image. The last thing that the Yankee wants is for the Black man to be his own man. Consequently, the Yankee has been a heavy promoter of the Marxist civil rights movement, the War on Poverty, and the welfare state. Such programs enslave Blacks to the government and prevent them from being their own man. (With his War and Reconstruction policies and programs, the Yankee showed his real love for Blacks. That about a quarter of the freed slaves died between 1862 and 1870 as a result of the Yankee’s War and Reconstruction did not matter to him as long as the South was utterly destroyed.)
    One of the many things that the court historians conceal is that the Confederacy fought against the Yankee who had denounced the Union and reviled the Constitution. Moreover, the Yankee believed his passion as his conscience and his freakish fancies as abiding principles. When the patriotic appeal for the Constitution and Union was made, the Yankee replied, “The Union as it is, and the Constitution as it ought to be.” No compact could bind the Yankee, nor could any obligation restrain him. While the Yankee dedicated himself to “equal rights,” he fervently declared, “We haven’t got any niggers, and we don’t mean that you should have any.” Resisting all pleas for peace, he proudly and savagely proclaimed, “The Union would be improved by a little bloodletting.” While claiming that he was fighting for a government of the people, by the people, and for the people, the Yankee denied Southerners of their government of, by, and for the people. Moreover, the Yankee inaugurated his reign of peace, Reconstruction, by instituting terrors more horrible than the terrors of the War. His peace overthrew the courts and constitutions of the Southern States and converted them to military satrapies as he disfranchised every Southerner who was not a scalawag. Furthermore, he made ownership of property by Southerners a crime. Worse, he placed suddenly freed slaves, who knew nothing about governance, in the governments and positions of authority. (Nevertheless, these newly freed slaves were merely puppets of the Yankee — just as are most Blacks today.) Furthermore, he instilled Blacks with the sinful doctrine of miscegenation. Thus, the Yankee genocides Blacks to genocide Southerners. To justify genocide via miscegenation, the Yankee brings forth a new Bible and a new God. Thus, the Yankee has replaced a constitutional federation of republican state with a consolidated, imperial, opulent, irresponsible, oligarchic empire controlled by the Yankee where liberties have become governmentally granted privileges instead of natural God-given rights. All these and more do the court historians conceal to protect the Yankee.
    Just as the Yankee used Blacks during Reconstruction to annihilate the South and Southerners, so today, the Yankee is again using Blacks to finish annihilating what little is left of the South and the few remaining Southerners. Blacks gained little from the First Reconstruction, so they will gain little from the Second Reconstruction. When their usefulness is over and the South no longer exists, the Yankee will suppress Blacks to the lowest rungs of society. (Most likely, he will use Third World immigrants from Latin America and Asia to suppress Blacks so that his, the Yankee’s, hands will not get dirty. Moreover, the Yankee cares not who fights his battles if he gets to record them.)
    Moreover, the Yankee considers himself free of any hate, bias, bigotry, and prejudice, which the Yankee claims to be the greatest of all evils, except the sin of being a Southerner, which is the greatest of all. As long as Blacks obey the will of their Yankee master in the war to annihilate the South and Southerners, they are free of hate, bias, bigotry, and prejudice. On the other hand, the Southerner can never be free of these sins until he ceases being a Southerner and becomes a Yankee.
    In his effort to destroy the South, the Yankee has worked Blacks into a frenzy over Confederate monuments. All visible remainders of the Confederacy must be eradicated. Next, come the burning and banning of all books and articles that do not present the South and Southerners as evil incarnated. Then comes the destruction of Thomas Jefferson, George Washington, and all the other founding fathers from the South, including the physical destruction of the Constitution (Lincoln destroyed it in principle, but not its words) and the Declaration of Independence except the clause “all men are created equal,” except Southerners, who are not even human. Also, everything in the South before the civil rights movement must go. (Does this mean burning down and burying most universities and colleges, including Black universities and colleges, in the South since they were built by slave owners and racists?)
    This frenzy to destroy Confederate monuments is typical Jacobinism, Marxism, and Communism. One of the first things that communists do when they gain control is to destroy the country’s history and culture. Its monuments and historical sites must be eradicated, and its books and art must be burned. This destruction is only the start. All that the Yankee through his Black puppets deems  Southern, must be eradicated, including the founding fathers and their work.
    To the Yankee mind, any writing or oration that fails to depict the Southerner as odious slime and the Yankee as an admirable saint deserves censorship and suppression. The truth must not be known.
    Southerners should not solely blame Blacks for the way they misbehave, for the Yankee is controlling and manipulating them. Moreover, the Yankee’s control and manipulation of Blacks far exceed that of any slaveholder, who frequently relied on slaves to oversee his slaves. Although the Yankee is responsible for the misbehavior of Blacks, nevertheless, Blacks should be held accountable for their actions. If they are as intelligent as the negrophiles claim, they are intelligent enough to realize that they are being prostituted. If they continue to allow themselves to be used, then they agree with their prostitution and should be held accountable. (Such willingness to prostitute themselves to the Yankee appears to support the racist notion that Blacks are intellectually inferior. The Yankee is counting on the truthfulness of this notion of Black inferiority to maintain his control of Blacks. They are truly his slaves.)
    Being crafty, the Yankee exhibits simulated zeal and sweetness with placid saintliness. Moreover, he always disguises his tyranny and greed with special claims to holiness. He is an intrusive meddler, who passionately seeks to control other people’s affairs. Claiming to be the apostle of liberty, he persecutes all who disagrees with him. While appointing himself as the champion of harmony and unity, he causes discord and strife everywhere he goes. Exalting himself as the defender of freedom of thought, he tries to suppress all whose thoughts differ from his. Presenting himself as the only true disciple of the living God, he long ago rejected and abandoned the true God. Opposing law and order, the Yankee seeks to abolish all law, human and divine, which does not meet his approval. By the virtue of his “superior tolerance,” he is a law unto himself and proceeds to make himself a law unto others. Only the Yankee has that inner divine light to guide him, so no appeal from the justice of his judgments or the righteousness of his decrees can occur. His conceit leads him to be the world’s self-appointed conscience. To this character, Blacks owe their allegiance!
    To the Yankee mind, the Yankee is God’s chosen, God’s representative and spokesman on earth, although he no longer recognizes God. Nevertheless, the Yankee’s calling is to remake mankind in his, the Yankee’s, image, for only the Yankee carries the divine spark. With his inner light, the divine spark, the Yankee transcends mere Christianity. It empowers the Yankee’s soul to ignore the Bible, which condemns most of his great works. Moreover, it empowers him to achieve his own salvation — usually by some great work, such as the acquisition of wealth, abolition of slavery (to punish the South), prohibition, equality for Blacks (especially in the South), socialism, communism, fascism, feminism, war on poverty, political correctness, annihilation of the South, etc. — of which the most important is the acquisition of wealth and annihilation of the South. With his great works, he believes that he will accomplish what Christ had failed to do. Always, he is ready to achieve his great goals with other people’s blood. Furthermore, of all mankind, only the Yankee has ever been regenerated. Moreover, being superior to everyone else, especially Southerners and Blacks, he is beyond reproach and cannot be judged by mere mortals. All who become like the Yankee will be saved.

Copyright © 2017 by Thomas Coley Allen.

More Southern issues articles.

Tuesday, August 29, 2017

Poor on Huskisson

Poor on Huskisson
Thomas Allen

    In 1877, Henry Varnum Poor (1812-1905) wrote Money and Its Laws: Embracing a History of Monetary Theories, and a History of the Currency of the United States. He was a financial analyst and founder of a company that evolved into Standard & Poor’s. Poor was a proponent of the real bills doctrine and the classical gold-coin standard and, thus, the quality theory of money. He gave little credence to the quantity theory of money — especially if credit money, such as bank notes, were convertible on demand in species. Also, he contended that the value of money depends on and is derived from the value of the material of which it is made and with paper money, its representation of such value.
    In the latter part of his book, he discusses leading monetary theorists from Aristotle (350 B.C.) to David A. Wells (1875). Most of the economists whom he discussed were proponents of the quantity theory of money. We will look at his discussion on William Huskisson. My comments are in brackets. Referenced page numbers enclosed in parentheses are to Poor’s book.
    William Huskisson (1770-1830) was a British statesman, financier, and member of Parliament. He wrote “Question Concerning the Depreciation of Our Currency” (1810), which Poor reviews. Huskisson wrote his pamphlet during the Napoleonic wars when the English pound was not convertible into gold or silver. His and Poor’s comments reflect this condition.
    Huskisson states that in the popular sense, money is often considered to have only purely arbitrary and conventional value. Sometimes, it is defined as “the representation of all other commodities, and sometimes as the common measure of them” (p. 216). He concludes that these definitions are incomplete “because they are equally applicable to every description of currency, whether consisting of the precious metal, of paper, or of any other article” (p. 216). Huskisson continues, “It is of the essence of money to possess intrinsic value” (p. 216). Moreover, “The quality of representing commodities does not necessarily imply intrinsic value; because that quality may be given either by confidence or by authority. The quality of being a common measure does not necessarily imply intrinsic value” (p. 216). He adds, “Money, or a given quantity of gold or silver, is not only the common measure and common representative of all other commodities, but also the common and universal equivalent” (p. 216). Although paper currency has no intrinsic value, promissory notes in whatever form and from whatever source can represent value. “It does so, in as much as it is an undertaking to pay, in money, the sum for which it is issued” (p. 216) “The money, or coin of a country, is so much of its capital. Paper currency is no part of the capital of a country: it is so much circulating credit” (p. 216). Huskisson adds, “Whoever buys, gives, whoever sells, receives, such a quantity of pure gold or silver as is equivalent to the article bought or sold; or, if he gives or receives paper instead of money, he gives or receives that which is valuable only as it stipulates the payment of a given quantity of gold or silver” (pp. 216-217). Paper money remains at par with gold if it is convertible to gold coin. Both money (gold coin) and paper promissory money (bank notes) “are common measures and representatives of the value of all commodities. But money alone is the universal equivalent; paper currency is the representative of that money” (p. 217). He identifies two types of paper currency: “the one resting upon confidence, the other upon authority” (p. 217). Paper currency resting upon confidence is circulating credit. Bank notes are of this type of currency. Paper currency resting upon authority is paper money [government notes and bank notes made legal tender by the government] are of this type of currency (p. 217). [Huskisson was a Bullionist. That is, he believed that paper money ought to be a warehouse receipt for gold. For each dollar, pound, or franc of paper money in circulation, there ought to be a dollar, pound, or franc of gold stored in a vault to back that paper money.]
    Poor objects to Huskisson’s notion that confidence or authority can give quality to representing commodities. Poor remarks, “That a person believes that a note which he takes represents commodities does not make it the representative of them, any more than the belief of the Alchemists made the baser metals in combination the representatives of gold, into which they so long sought to convert them. If confidence would create values, the silliest dunce would be the Croesus of the race” (p. 217).
    Some people believe that if the government can declare the length of the foot or meter for measuring distance, it can declare that a bank note [or a government note] can measure value: “Intrinsic value is no more necessary in one case than in the other” (p. 217). To this belief, Poor replies that owners of land would not accept for their sales the instruments by which their acres are measured. To them, a surveyor’s chain is only worth its value as scrap metal. “When men buy and sell, they exchange, or intend to exchange, articles possessing equal values” (p. 217). [Actually, exchanges only take place when both parties perceive that they are receiving something of greater value to themselves than what they are giving up.]
    Poor continues citing Huskisson. According to Huskisson, if a country’s circulating currency consists exclusively of gold and if the quantity of gold in that country doubles while the quantity of gold and the demand for it remained the same in all other countries, then the value of gold in such country would fall. This loss of value would appear as a rise in the prices of all commodities. However, since gold is much cheaper in the country in which its quantity has increased, it would be bought and exported to other countries until its value is again equal in all parts of the world (p. 218). If a country’s circulating currency consists of both gold and paper and if a paper currency were doubled while the quantity gold remains the same, prices will rise. The value of gold as a commodity will rise in price and in the same proportion as other commodities; that is, its value compared with other commodities will remain the same. Such an increase in paper currency causes the exportation of gold coin because gold’s value as currency remains the same while its price in that currency has increased, i.e., the gold content of the coin is worth more than the denomination stamped on the coin. This exportation decreases the currency in circulation and thus supports the value of the currency remaining. Thus, “[a]n excess of paper has, in the first instance, the same effect upon prices as an excess of the precious metals, to the same amount, would have, in any particular country. But it does not admit of the same relief: it cannot right itself by exportation” (p. 218).
    Huskisson identifies two ways that the currency of a country can be depreciated:
        1. If its standard coin contain less of gold or silver than it is certified to contain. In that case, the paper, as representing the coin, is also depreciated, and precisely in the same degree as the coin.
        2. If the standard coin being of full weight, and the paper which represents that standard coin, and is, or purports to be, exchangeable for it, is not exchangeable, at the same time, for so large a quantity of gold or silver as is contained in the coin which it represents. In that case, the coin, though undiminished in value, must, as part of the currency, partake of the depreciation of the whole (p. 218).
    Poor remarks that if the currency of a country consists of gold coin and paper and if the two were equal in value, then the paper must be symbolic. Contrary to Huskisson assumption, a doubling of the currency would not be inflationary.  Poor writes:
Prices would, in reference to money, remain unchanged. So long as gold and paper possessed the same value, an increase, or, rather, an inflation, of the currency, would not inflate or increase the price of gold bullion, — gold as merchandise, — while it might increase the value of all other kinds of merchandise, for the very good reason that gold cannot rise in value in reference to itself; that is, a sovereign after the inflation would purchase the same amount of bullion as before” (p. 219).
    Moreover, Poor remarks, “So long as coin would purchase no more than an equal nominal amount of paper, gold would have no more tendency to go abroad than before such increase. Indeed, its tendency would be inward to provide adequate reserves for the increase of paper” (p. 219).
    He continues, “If adequate provision, either in merchandise or coin, were not made for its [paper currency’s] redemption, it [paper currency] would become depreciated: it would not be exchangeable for an equal quantity of gold, nor would it command an equal amount of merchandise with gold, no matter whether it rested upon confidence or authority” (p. 219). Moreover, he adds, “The value of gold would not be influenced in any degree by the amount or value of the paper outstanding” (p. 219).
    According to Poor, if paper currency rests on authority and was issued in large amounts, “it would, in great measure, drive the coin previously in circulation out of the country. But this fact would not tend, in any degree, to raise the value of the currency ‘resting on authority’” (p. 220). Furthermore, contrary to Huskisson’s assertion, “[t]he exportation of coin would tend to reduce the value of such currency, instead of raising it, by rendering it all the more difficult to resume, from the impoverishment of the people, which would be measured by the amount of gold — capital — that had been drawn from them” (p. 220). [Also, the government has no power to create value on which the currency must rest except to declare the monetary unit to be a specific weight of a commodity, such as gold or silver, to which paper currency is convertible on demand. Many proponents of fiat paper money do believe that government fiat can actually give value to that which has no value.]
    According to Poor, Huskisson believes that paper currency resisting on confidence or authority is equal to gold as a measure of value. A decline in the value of paper currency brings down equally the value of gold, “for the reason that one competent measure of value must be equal in potency or effect to any other competent measure” (p. 220). However, the opposite is true. Poor writes “that the paper money of the country, though declared to have a value equal to that of an equal nominal amount of gold, did not possess such value; that the values of the two, though equally supported by authority, had no necessary relation the one to the other; and that their wide divergence was well calculated to excite the most profound alarm” (p. 220).
    Poor concludes,
He [Huskisson] could not go into the market to make any purchase, without having thrust into his hand two scales of prices, — one in paper, the other in gold; yet, in the face of all this, he was so tied to tradition as to assert that money resting upon authority — the assignats of France and the Revolutionary Currency of the United States — was as competent a measure of values as gold and silver (pp. 220-221).
    [Many fiat money reformers believe that the Continental and assignat failed because the government did not follow the right scheme in issuing them. Also, the flaws of today’s paper monetary system, including its electronic equivalent, result from following the doctrines of Keynes and Friedman instead of the scheme that the fiat money reformers promote, who disagree with each other on the proper scheme. Examples of these schemes are:
    – the Social Credit scheme, which requires the government to give the people enough money to  fill the gap between national income and gross domestic product (GDP);
    – the American Monetary Institute’s scheme, which has the government creating and issuing government notes directly without banks {v. “Analysis of the American Institute’s American Monetary Act” by Thomas Allen};
    – Richard Cook’s scheme, which is a combination of the Social Credit scheme and the American Monetary Institute’s scheme {v. “Analysis of Richard Cook’s Monetary Reforms as Presented in We Hold These Truths” by Thomas Allen};
    – the Money Reform Act scheme, which promotes the government issuing government notes and an end to banks converting loans to money {v. “Analysis of the Monetary Reform Act” by Thomas Allen};
    – Arnold Leese’s scheme, which is a fascist monetary scheme {v. “Analysis of Money No Mystery” by Thomas Allen};
    – Byron Dale’s scheme, which has the government printing and spending government notes to finance the construction and maintenance of roads {v. “Analysis of Byron Dale’s Monetary Reforms as Presented in Bashed by the Bankers by Thomas Allen};
    – Charles Norburn’s scheme, which has the government creating and spending government notes into circulation and an end to issuing interest-bearing government securities {v. “Analysis of Charles Norburn’s Monetary Reforms as Presented in Honest Money” by Thomas Allen};
    – the Foundation to Restore and Educated Electorate scheme, which is similar to Norburn’s scheme {v. “Comparison of Three Monetary Systems” by Thomas Allen};
    – Gertrude Coogan’s scheme, which has a trusteeship answerable to Congress issuing government notes to match productiveness and to maintain stable general prices {v. Reconstruction of America’s Monetary and Banking System: A Return to Constitutional Money by Thomas Allen, pp. 232-233};
    – Silas Adams’ scheme, which has the government owning most of the country by buying all bonds, promissory notes, and other debt securities and corporate stock and other securities with government notes {v. Reconstruction of America’s Monetary and Banking System: A Return to Constitutional Money by Thomas Allen, pp. 233-235};
    – K.S. Kenan’s scheme, which reduces the Federal Reserve mostly to a clearing house for banks and makes the Department of the Treasury responsible for issuing the country’s currency and replacing all interest-bearing U.S. securities with non-interest-bearing government notes {v. Reconstruction of America’s Monetary and Banking System: A Return to Constitutional Money by Thomas Allen, pp. 235-238}.
For fiat money reformers, the problem is not fiat money itself; the problem is how the fiat money system is administrated.]

Copyright © 2016 by Thomas Coley Allen.

More money articles.

Monday, August 21, 2017

Diversity American Style

Diversity American Style
Thomas Allen

    Welcome to the new America, the land of diversity. It is the land of inclusion, tolerance, love, and equality for all races, religions, cultures, and perversions — except for Confederates, Southerners, Whites, and real Christians — the deplorables. In the name of inclusion, all races, religions, cultures, and perversions must be included — except for Confederates, Southerners, Whites, and real Christians — the deplorables, who must be excluded. In the name of tolerance, all races, religions, cultures, and perversions must be tolerated — except for Confederates, Southerners, Whites, and real Christians — the deplorables, who cannot be tolerated. In the name of love, all races, religions, cultures, and perversions must be loved — except for Confederates, Southerners, Whites, and real Christians — the deplorables, who must be hated. In the name of equality, all races, religions, cultures, and perversions are equal — except for Confederates, Southerners, Whites, and real Christians — the deplorables, who are inferior. In the name of diversity, the deplorables must be hated and excluded. Moreover, they cannot be tolerated and are inferior. For that reason, all that is Confederate, Southern, White, and real Christianity must be destroyed.
    We are witnessing this destruction today. Americans do not have to go to the Middle East to witness the Taliban and ISIS in action. Their kindred are trying to destroy Confederate monuments and everything else with which they disagree. Like the Taliban and ISIS, they want to destroy everything that they find repugnant. Just as the Taliban and ISIS display hatred for everything that is not Islamic, so their kindred in American display hatred for everything that is Confederate, Southern, White, and real Christian.
    As the Taliban and ISIS have no room in their hearts for inclusion, tolerance, or love for anything that is not Islamic, so their kindred in America have no room in their hearts for inclusion, tolerance, or love for anything resembling the Confederacy or even the South, Whites, and real Christianity. Such is diversity American style.
    What would one expect from a country and society that has dethroned the central figure of Christianity and Western Civilization, Jesus Christ, and has replaced him with a new deity? This new deity to whom all Americans must bow before and worship is a Marxist who left a trail of destruction and blood as he fornicated across the country: Martin Luther King.
    Proof! People may blaspheme Jesus with immunity. Furthermore, they will often receive support and accolades from governments and the old media and often receive indifference from the new media. However, to tell the truth about King brings condemnation and ostracization from nearly all spectrums of society — from right to left. Moreover, those who fail to worship King are universally vilified as racists.
    Thus, diversity American style can include, tolerate, and love all races, religions, cultures, and perversions except for Confederates, Southerners, Whites, and real Christians — the deplorables. All that is Confederate, Southern, White, and real Christian must be eradicated.

Copyright © 2017 by Thomas Coley Allen.

More articles on social issues and Southern issues.

Saturday, August 12, 2017

One Thing Your Pastor Will Not Tell You

One Thing Your Pastor Will Not Tell You
Thomas Allen

    In the March/April 2016 issue of Grace in Focus, Phil Congdon had an article titled “10 Things Your Minister Will Never Tell You (If He Believes the Bible!)” He identifies these ten things:
    1. Creation is a myth;
    2. Our purpose is not to glorify God;
    3. The Bible is full of errors;
    5. We are saved by works;
    6. The role of women (he is referring to teaching current social norms that are destroying society is the correct role for women instead of teaching wives to submit to their husbands and women not to teach men or to have authority roles over men, which the Bible teaches);
    7. People are born gay;
    8. Other religions lead to God;
    9. No eternal hell (see comment below);
    10. Jesus made mistakes.
He explains why a Biblical pastor will never tell his congregations any of these things.
    Mr. Congdon omits one item from his list of things nearly all ministers will never tell his congregation if he believes the Bible. That is interracial marriage and mating are acceptable to God. This item is so politically taboo that I would be surprised that even Mr. Congdon would ever teach the Biblical condemnation of miscegenation.
    From Genesis to Revelation, the Bible condemns interracial marriages and mating. Here are some of the verses that condemn or at least argue against miscegenation: Genesis 6:1-7, Genesis 24:1-4, Genesis 26:34-35, Genesis 28:1-2, 6-7, Genesis chap. 34, Exodus 11:7, Exodus 33:16, Exodus 34:10-16, Leviticus 19:19, Leviticus 20:26, Leviticus 21:14, Numbers chap. 23, 24, and 25, Deuteronomy 7:1-4, Deuteronomy 23:2, Joshua 23:12-13, Judges 3:5-8, 1 King 8:53, 1 King 11:1-8, 1 King 16: 30, 31, 1 King 21:25, Ezra chap. 9 and 10, Nehemiah 8:1-18, 9:1-3, Nehemiah 10:28-31, Nehemiah 13:1-3, 23-31, Psalm 106:28-35, Isaiah 2:1-9 (esp. v. 6), Jeremiah 2:19-25, 29, Ezekiel 16:15-39, Ezekiel 44:6-23, Hosea 5:3-7, Hosea 6:7-10, Hosea 10:1-10, 1 Corinthians 3:16-17, 1 Corinthians 6:18, 1 Corinthians 10:1-11 (esp. v. 8), Hebrews 12:12-17, Hebrews 13:4, 2 Peter 2:9-16, Jude 3-11, Revelations 2:12-14, Revelations 2:18-23, Revelations 5:9, 7:9, 11:9, 13:7, 14:6, 17:15, 21:24, 22:2. Deuteronomy 23:2 summarizes this whole issue: “No half-bred may be admitted to the assembly of the Yahweh; not even his descendants to the tenth generation may be admitted to the Assembly of Yahweh” (The New Jerusalem Bible).
    Extremely rare is a pastor who does not believe the Bible who will teach that interracial marriage and mating are wrong. Almost as rare is a pastor who does believe the Bible teaching that interracial marriage and mating are wrong.

Comment to item 9.
    Although Mr. Congdon does not state in his article whether unsaved people are punished (tormented) forever in hell, other writers for Grace in Focus do. Yet, all the writers for Grace in Focus teach that one achieves eternal life by believing in Jesus for eternal life. According to John 6:47 (“. . . He that believeth on me hath everlasting life”), those who believe in Jesus, the saved, receive eternal life. If the saved believe in Jesus for eternal life, in whom or what does the unsaved believe for eternal life if they are punished (tormented) forever in hell?
    If man’s consciousness, soul, spirit, essences, or whatever is naturally immortal such that it can endure eternal punishment (torment), then Jesus is misleading us with his claim in John 6:47 that belief in him is the source of eternal life. If man’s consciousness or whatever is immortal, then he has eternal life whether or not he believes in Jesus. Consciousness or whatever has to be eternal if an unsaved person is to be punished (tormented) forever. Thus, death is not the cessation of life, but a metamorphosis from one form to another. Faith in Jesus does not determine whether one has eternal life or not, as man, being immortal, naturally has eternal life. It merely determines where he will spend that eternal life. If Jesus meant that, why did he not say so? His statement suggests that those who do not believe in him are not immortal and do not have eternal life. Only those who believe in him become immortal by that faith.

Copyright © 2016 by Thomas Coley Allen.

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Thursday, August 3, 2017

Should the Silver Standard Accompany the Gold Standard?

Should the Silver Standard Accompany the Gold Standard?
Thomas Allen

    Several important reasons exist to have the silver standard accompanying the gold standard. However, the old bimetallic standard with a legally fixed ratio or exchange rate between the two metals should not exist. The markets should determine the exchange rate between the two.
    A silver standard easily accomplishes what gold cannot. Precious metal coins should be in a convent denomination sufficiently small enough to pay the daily wage of a common labor or migrant field worker with one or more coins.
    The daily wage of a common laborer is less than a pennyweight of gold. Two pennyweights is about the practical limit of the minimum size of a gold coin. A two-pennyweight coin is about the size of a dime.
    Silver coins can easily fill this void. In silver, a day’s wage for a common laborer would be a little more than 20 pennyweights (one ounce) of silver.
    A common laborer should be paid in true, full-bodied, full-weight, money, and not in token coins or credit money, which is what he would receive under the gold standard. He should be able to carry true, full-bodied money in his pocket and have true money to spend if he so desires, and not just token coins or credit money. A silver standard provides him this service.
    Another advantage of having both standards is that one metal, silver, provides convent coins for small value. The other, gold, provides coins for large value. The tendency would be to price cheap items in silver and expensive items in gold. Sliver coins are likely to circulate more than gold coins.
    Historically, silver has been better suited for trade (buying and selling of goods and services), and gold, for commerce (large-scale exchanges of goods). Silver seems more suited for industrial and agricultural areas, and gold, for the commercial and financial arenas. However, the markets should determine which products and services are priced in terms of silver and which in terms of gold. To allow coins of both metals to circulate freely gives the people the advantage inherent in both metals.
    If only gold were money, then token and paper money would be needed to buy most items. Most common items are priced below two pennyweights of gold. Gold coins could not be used to buy these items individually, or if used, the change would not be in gold coins. However, if silver were money, silver coins (as silver money and not as subsidiary coins for gold) could be used to buy most of these items. Some items would be priced below two pennyweights of silver, and token coins would be needed to buy then individually.
    Perhaps the most important reason for having both the gold and silver standards is that together they make replacing commodity money with fiat money more difficult. When the silver standard accompanies the gold standard, it protects the gold standard from deteriorating into fiat currency. “Gold must be priced in something other than gold, otherwise every sale of gold would have to end up as exchange of amounts of gold. . . .”[1] To maintain an honest monetary system, this something has to be a monetary metal in its own right. Silver is the most appropriate commodity money for this purpose. When both metals are money, each metal in the form of bullion can be priced in terms of the other metal. Otherwise, under a monometallic standard, the monetary metal in bullion form is priced in paper notes or token coins, which introduces a fiat unit of accounts. The gold and silver standard is much more effective at protecting the integrity of the money than either standard alone.
    A historical example of a dual monetary system occurred in the United States between 1862 and 1879. During this era both U.S. note (greenback) dollars and gold dollars circulated as money. Both were used for purchases and wages. Because U.S. notes were not redeemable in gold, no fixed exchange rate existed between fiat U.S. notes and gold coins. However, in most of the United States, U.S. notes were used for the payment of debt because they had legal tender status and were less valuable than gold.
    Moreover, many third world countries operate with a dual monetary system. Many use the U.S. dollar and a local currency; sometimes a relatively strong regional currency is also used. They function with little difficulty going between currencies even without modern technology. Also, stores along the U.S.-Mexican border accept both Mexican pesos and U.S. dollars. With today’s technology, conversion between gold and silver should be without difficulty. If an item were priced in silver, it could easily be bought with gold and vice versa.
    To ensure that both full-weight silver and gold coins circulate and that one does not become subsidiary to the other, the government needs to undertake several actions. First, it should levy some taxes, fees, and fines in silver and others in gold. Furthermore, it should not accept the payment of gold for taxes, fees, and fines levied in silver and vice-versa. Also, it should not fix, either formally or informally, a ratio between gold and silver or even give the appearance of setting such a ratio.

1. J.N. Tlaga, “Gold Standard = Fiat in Disguise,” Jan. 19, 2002, http://, Aug. 8, 2007.

Copyright © 2011 by Thomas Coley Allen.

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Tuesday, July 25, 2017

Poor on Stewart

Poor on Stewart
Thomas Allen

    In 1877, Henry Varnum Poor (1812-1905) wrote Money and Its Laws: Embracing a History of Monetary Theories, and a History of the Currency of the United States. He was a financial analyst and founder of a company that evolved into Standard & Poor’s. Poor was a proponent of the real bills doctrine and the classical gold-coin standard and, thus, the quality theory of money. He gave little credence to the quantity theory of money — especially if credit money, such as bank notes, were convertible on demand in species. Also, he contended that the value of money depends on and is derived from the value of the material of which it is made and with paper money, its representation of such value.
    In the latter part of his book, he discusses leading monetary theorists from Aristotle (350 B.C.) to David A. Wells (1875). Most of the economists whom he discussed were proponents of the quantity theory of money. We will look at his discussion on Dugald Stewart. My comments are in brackets. Referenced page numbers enclosed in parentheses are to Poor’s book.
    Dugald Stewart (1753-1828) was a Scottish philosopher and mathematician, who popularizing the Scottish Enlightenment. He was a professor of moral philosophy at the University of Edinburgh. Among his writings are Elements of the Philosophy of the Human Mind (in three volumes, 1792, 1814, and 1827), Outlines of Moral Philosophy (1793), and The Philosophy of the Active and Moral Powers (1828). Poor reviews Stewart’s monetary philosophy as presented in his Lectures on Political Economy.
    Poor writes, “Stewart was an ardent admirer of [Adam] Smith, and assumed to reduce to precise and logical terms what his great master only more generally outlined”  (p. 171). Nevertheless, Stewart objected to Smith’s belief that the value of gold and silver depended largely on “their beauty, utility in the arts, and scarcity; that such qualities, among others still more important, fitted them to serve as money” (p. 171). For Stewart, the intrinsic value of gold and silver in a coin is “merely accidental circumstances.” Stewart asserts, “When gold is converted into coin, its possessor never thinks of any thing but its exchangeable value” (p. 171). If the intrinsic value of gold and silver are annihilated, i.e., their conversion to flatware, jewelry, etc., they could still function as money as they did when they had intrinsic value. Money is merely a ticket or counter. “It is general consent alone which distinguishes them [gold and silver], when employed as money, from any thing else which circulates in a country; from the paper money, for instance, which circulates in Scotland and England.” (p. 172). If a country were isolated from the rest of the world, gold or silver coin as a medium of exchange would have no advantage over paper currency. Also, whether the circulation medium consists of gold or paper would make no difference on the national wealth. Moreover, according to Stewart, whether gold or silver was abundant or scant would not matter. “The only utility which is essential to gold and silver as media of exchange is their peculiar adaptation (divisibility, durability, &c.) to this purpose” (p. 172). [For the most part, fiat money proponents agree with Stewart’s monetary theory.]
    Poor replies that like Smith, Stewart errs in his assumption “that money was an invention, — an arrangement entered into from a sense of its necessity” (p. 172). Stewart also errs in his conclusion “that value is not a necessary attribute of money” (p. 173). [Poor is correct: Money was not an invention. It evolved over time from spontaneous market operations. Only after money came into being did governments get involved.]
    However, Stewart’s idea of money is a logical derivation from Smith’s idea. From the premises laid down by Smith, Stewart concluded that “value is no attribute of money.” Poor remarks, “the real value of money must equal its nominal value, or, in case of symbols, the values of what they represent must equal their nominal value in coin, or value is no attribute of money whatever” (p. 173). [Today’s fiat paper money is based on Stewart’s premise that value is no attribute of money. That is, the quality of money is irrelevant. Force is the only thing behind, or backing, today’s fiat paper money.]
    Stewart states, “We never think when we receive the precious metals as money, of their value in the arts” (p. 173). To which Poor replies, “But were they not first taken, and chiefly, for their value in the arts? and if we do not now consciously go through the same mental process that was gone through when they were first taken, is it not that such consciousness is concealed from us by habit, not that it does not exist” (p. 173)? People practice many things without conscious thought about how such practice came into being. Acting this way “is no proof that the mind is not engaged in one case as in the other” (p. 173). Poor notes:
Stewart, however, wholly misstated the fact that gold and silver are taken without any consciousness of their value in the arts. As a rule, we do not raise the inquiry; we assume from experience that coins are what they purport to be: but let it be noised abroad that debased coins of a particular denomination are in circulation, then every one of the kind, good or bad, will be subjected to the closest scrutiny, and, if taken at all, will only be taken at its value in the arts, measured by the amount of pure metal it contains (pp. 173-174).
    Stewart claims that if all gold and silver mines were exhausted, all the gold and silver in existence would be converted to money. Poor disagrees. First, he doubts the possibility of exhausting of all mines. If gold and silver were to disappear, civilization would disappear with them. However, if all mines were exhausted, Poor doubts that all gold and silver would be converted to money. Poor writes:
As it [gold] gradually disappeared from loss and attrition, commerce and trade, and with these, civilization and wealth, would gradually die out. As these disappeared, gold and silver would gradually flow back into the arts, and almost wholly in time; for, as there would be no trade, money would not be wanted. It is a fact of universal observation, that gold and silver possessed by the savage races are not used as money, but almost wholly in the arts (p. 174).
    To Stewart’s belief that “gold and silver, as a medium of exchange, would possess no value over the most worthless of substances” (p. 175), Poor replies:
This absurdity is repeated by every subsequent writer upon the subject of money. Suppose England to be the world, what then? Would all sense of beauty, of utility or value be lost to its people? Suppose, as Stewart assumes, England isolated, a Yorkshire grazier should take with him to London a lot of beeves; and upon their sale should be offered a leather medal, with curious hieroglyphics stamped upon it, in payment. The seller at first might consider the offer as a good joke; but, on finding the purchaser in earnest, he would believe himself to be dealing with a madman, and would take good care to get his beeves into his possession again, and to rid himself of such a dangerous customer. To be logical, Stewart must assume that, were England isolated from all the world, its people would have a sense of neither use nor beauty; in other words, that they would be lower in the scale than any race or tribe ever yet discovered. If the precious metals have no intrinsic value, then the Scythian was correct in assuming money to be useful only for the purpose of assisting in numeration and arithmetic. It is for this reason that Stewart held their value to be disadvantageous, in complicating thereby the theory of money. If value be not an attribute of money, he was quite right in eliminating from it all idea of such quality (p. 175).
[The fiat paper monetary system that has now taken over the world supports Stewart’s notion of money better than it does Poor’s. However, Poor’s notion is much closer to the truth than Stewart’s. Because of believing Stewart, the world is now on the edge of a monetary crisis the likes of which the world has never before witnessed. Civilization is on the verge of collapsing into an economic abyss from which it may never recover, such as that which happened when the dying Roman civilization collapsed into the Dark Age — only this time the collapse may be worse. Only a return to a commodity monetary standard, such as the gold standard, where money has real value in non-monetary uses and can extinguish debt because it is no one else’s obligation, can save it.]
    Poor asks if Stewart is correct in that money as such has no value, then what harm can come from debasing coins? When a coin is debased, the denomination remains the same. However, the precious metal content of the coin is reduced. [Historically, when precious-metal coins were debased, prices quickly rose to adjust to the precious metal content of the debased coin. Even the death penalty could not deter this price adjustment.] Poor remarks, “If the sole use of money, as asserted by Stewart, be to assist in numeration and arithmetic, then the different denominations of coin have only the force of numerals; and a piece of leather upon which is imprinted the word ‘dollar’ is in its proper essence the same thing as a piece of gold upon which the same word is impressed” (p. 176). He continues,
Hume was more logical and consistent. Agreeing with Stewart that the only value of money, as such, was to assist in numeration and arithmetic, he took the ground that the currency should be debased, as the means of eliminating value from it; naively remarking, that such debasement should be effected in such a sly way that the people should not discover the swindle. Of the two, Hume is to be preferred. The admission that the debasement was a swindle had the merit, at least, of putting the people on their guard (p. 176).
    Stewart writes that money provides a “scale of value” instead of a “standard of value,” which is the term that Smith uses. Thus, Stewart is more accurate than Smith about his concept of money. Poor notes, “It would be a contradiction in terms to call that a standard of value which had no value. A thing may be a scale, without being a standard. A yardstick is a scale for measuring distance or extension, but not the standard of distance or extension” (p. 177).
    Poor asks, “If all value is to be abstracted from money, then of what advantage are the qualities of divisibility and fusibility, in the materials composing it” (p. 177)? These are two of the qualities that Stewart claims make gold useful as money (p. 176). Moreover, Poor continues, “Why not have the denominations which are fitted to express ‘every conceivable variation, of value’ all of the same size and fineness? A bank-note for a thousand dollars has precisely the same size and quality of material as a note for one dollar. The only difference is in their inscriptions” (p. 177).
    Continuing his comment on Stewart’s claim that divisibility and fusibility were qualities that fitted gold and silver for money, Poor writes, “According to Stewart’s theory, the qualities which fit gold and silver for money — divisibility and fusibility — are of the least importance; for pieces of similar size may be made by their inscriptions to express ‘every conceivable variation of value’” (p. 177).
    Stewart claims that a scale of value renders “the ideas of value much more precise and definite than they otherwise would have been” (p. 177). Poor asks, “But how can ideas of relative value be made more precise by comparing them with a scale from which all value is abstracted? How can nothing be made to be the measure of the value of something” (p. 177)? [A great question. As far as I know, no one has satisfactorily explained how something of no value and does not represent something of value can measure value.] Continuing with an example, Poor writes, “A definite idea is conveyed in the statement that a gold dollar measures the value of a bushel of corn; but what idea can be formed of the value of the corn from a statement that its value is that expressed upon a worthless piece of leather or paper” (p. 177)? [With today’s fiat paper money, value is “measured” with worthless pieces of paper. Perhaps trying to measure something with nothing explains, at least in part, the devastating economic crisis looming before the world.]
    Stewart also suggests that “the quantity of money required by a community was in ratio to the rapidity of its circulation” [i.e., the velocity of money or the velocity of circulation] (p. 178). [The concept of the velocity of money is an important component of the quantity theory of money.] To which Poor replies, “This suggestion, which naturally resulted from the assumption that money is not capital, but a scale of valuation, or an aid in enumeration and arithmetic, has become an axiom among all modern Economists” (p. 178). [Today, nearly all economists continue to agree with Stewart on this issue.] Commenting on the event that Stewart used to deduce his conclusion on the rapidity of circulation, Poor writes:
The result of these transactions was, that in the course of seven weeks the garrison had been paid 49,000 florins, the sutlers had sold supplies to the amount of 49,000 florins, and the commandant or government owed them 49,000 florins: so that in the end the latter had converted their supplies into money, and had in hand 7,000 florins, and a debt against the government or commandant for 49,000 florins. From all this Stewart deduces a law, — that the amount of currency required is in ratio to its activity. Suppose the garrison had required a certain amount of forage lying twenty miles off; and that, having but one horse, ten days were required for its transportation. With ten horses, the same work might have been done in a single day. Would Stewart from this fact have attempted to prove that one horse could do the work of ten? We wonder he did not fortify his argument by the following syllogism: ‘ten horses can do so much work in one day; one horse can do the same work in ten days; therefore one horse can do the work of ten horses (p. 179).
    Stewart states “that the quantity of money and notes in circulation must bear but a small proportion to the value of the goods to be bought and sold, and that this proportion must vary according to the quickness with which the money circulates or shifts from one hand to another” (p. 179). To this claim, Poor replies, “If the proportion of money to the goods to be bought and sold be small, then the amount of goods bought and sold will be small. Stewart has only shown that, with a small amount of money, seven weeks were required to effect exchanges which might, with an adequate amount, have been made in one” (p. 179).
    Continuing his comments on the rapidity of the circulation of money, Poor writes:
If money be capital, or the representative of capital, and if when it is exchanged it is exchanged for other kinds of capital, then there can be no greater activity in money than in other kinds of capital; and there can be no relation whatever between its activity and quantity. There would be just as much sense in saying that the quantity of wheat necessary for the consumption of a community was in ratio to the rapidity of its movement: that is, if the rapidity of its motion be made twice as great, one-half the ordinary quantity will suffice. . . . [Stewart] overlooked the fact, that, when money was used as the measure of value or the scale of valuation, the thing, the scale itself, passed from the party using it to the party whose goods had been purchased and measured by it. . . . With Stewart . . . money is an entity, possessed of volition and will, flying about the country eager to do some good deed; an active and lively piece doing twice the work of a dull, phlegmatic one. But money cannot move unless something else moves, no matter how eager it may be for work. Its eagerness must find its complement in some other kind of property; so that if volition, will, and activity be predicated of one, volition, will, and activity must be predicated of the other. Money has no attribute of activity different from that possessed by all other kinds of merchandise. The use of one involves the use of the other; the employment of one involves the employment of the other (pp. 180-181).
    Poor concludes his review of Stewart with this comment:
One of the great evils resulting from the reputation of such a man as Dugald Stewart is, that every word that he uttered, which was recorded by himself or by others, is carefully gathered up and put into his ‘works.’ In the case of Stewart, these are swelled to eleven ponderous volumes, full of propositions of the correctness of not one of which the reader can have the least assurance. Had his ‘literary executor,’ instead of carefully raking up, burned three quarters of all he left, he would have rid the world of a vast mass of rubbish, and the painstaking student of a great deal of the most irksome toil. It may be set down as a maxim, that a person who assumes to write authoritatively upon every subject will write well upon none. Life is not long enough for one man to know every thing, or to construct an universal science (p. 182).

Copyright © 2016 by Thomas Coley Allen.

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