Rist on Mollien’s Ideas About Bank Notes

Rist on Mollien’s Ideas About Bank Notes

Thomas Allen

    In 1938, Charles Rist  (1874-1955) wrote History of Monetary and Credit Theory from John Law to the Present Day (translated by Jane Degras, New York: Augustus M. Kelly Publishers, 1966) in which he reviews Count Mollien’s ideas about bank notes. Rist was a French economist, who was of the Banking School as opposed to the Currency School. [Under the gold standard, banking philosophies generally fell into either the banking school or the currency school. The banking school “holds that as long as a bank maintains the convertibility of its bank notes into specie (gold), for which it should keep ‘adequate’ reserves, it is impossible for it to over issue its bank notes against sound commercial paper with fixed short term (90 days or less) maturities.”[1] Its position is also called the “Banking Principle” or “Principle of Fullerton.” To the banking school, bank notes are merely circulating credit instruments. Although they can be exchanged for gold, they are not intended to be warehouse receipts for gold. The currency school “maintains that all . . . changes in the nation’s quantity of money should correspond precisely with changes in the nation’s holdings of monetary metal. . . .”[2] Its position is also called the “currency doctrine.” To the currency school, bank notes are merely warehouse receipts and, therefore, should be backed 100 percent by specie. To the banking school, bank notes are claims for new merchandise offered for sale in the markets. Under the currency school, bank notes are claims for gold. Under the currency school philosophy, an elastic currency does not exist; under the banking school, it does.] My comments are in brackets. Referenced page numbers enclosed in parentheses are to Rist’s book.
    Nicolas François, Count Mollien (1758-1850) was a French financier. He worked in the Ministry of Finance from 1774 to 1791 and went to England in 1796 and studied the Bank of England. In 1799, he return to France and again entered the Ministry of Finance. Napoleon frequently consulted him and made him a councillor of state in 1804. In 1814, he retired from public service. Later, he was appointed to the Chamber of Peers. His major writing, which contains his views on money and banking, is Mémoires d'un Ministre du Trésor Public, published in four volumes between 1780 and 1815.
    When Mollien returned to France, he was determined to revamp the French credit system using the English system as his model (p. 92). Mollien wanted to protect the Bank of France from the government, which “was always short of money and anxious to subordinate everything to its political ends” (p. 93). Also, he wanted to protect the bank from its managers, “who were too easily tempted to use it in their own interests” (p. 93).
    Mollien argued that “[a] banking issue should only discount good commercial paper” (p. 93). With the strict enforcement of this restriction, the bank would “avoid the requests of a government always in search of treasury advances, and the cash facilities which the bank directors might ask for their personal affairs” (p. 93). Moreover, “the bank should avoid all speculative paper, all ‘friendly accommodation,’ all ‘fraudulent paper’ or ‘collusive securities’ which do not represent real commercial transactions, and the payment of which is not guaranteed by ‘the share in real money with which each consumer should directly or indirectly furnish it’” (p. 93). Furthermore, the bank should fervently avoid treasury advances of the government because they do not arise out of the ordinary requirements of trade and would return to the bank for repayment (p. 93). That is, bank notes issued to the government for treasury bills are in excess of that needed for commerce, and would, thus, return to the bank for gold. [Today’s governments and banks avoid this problem by making bank notes inconvertible.]
    The essence of Mollien’s concept of the bank note was merely substituting one currency instrument for another already in existence. His concept is correct. When a bank note is issued against good short-term, self-liquidating paper, the bank note is merely substituted for another form of currency. Thus, he held that “[i]f notes are issued against sound bills of exchange, they only substitute a more convenient paper, with all the characteristics of money, for maturities created in the course of trade” (p. 94). His “idea that the note is merely a substitute for commercial money spontaneously created in the course of trade is correct” (p. 94). [Commercial money is short-term {less than 91 days} self-liquidating {the consumer pays the bill with his purchase} real bill of exchange {a bill that represents goods in the process of being sold to the final consumer}. Some economists reject the notion that bills of exchange are money; most of these economists accept bank notes as money like gold coin.]
    However, Mollien believed in the quantity theory of money. If too many bank notes are issued, they declined in value (p. 94). [Presumably, he believed that this is true even if all bank notes are issued against real bills of exchange and gold coin.]
    One significant difference between the Bank of England and the Bank of France as envisioned by Mollien was that the Bank of England held its gold reserves primarily for payments abroad. The Bank of France held its gold reserves primarily to redeem its bank notes (p. 95).
    In addition to bills of exchange that the bank had converted to bank notes, the bank also needed to maintain a reserve of gold coins for the redemption of its notes when redemption is demanded. However, its notes need not and should not be 100 percent backed by gold. Mollien writes:

But it would obviously be an exaggeration of caution to the point of absurdity to ask that the reserve of coin should be equal to the sum of the notes that a bank puts into circulation; if, in addition to the security for the bank-notes represented in the bills of exchange which the bank has discounted, it were to keep in its repositories a sum in coin equal to the notes, the bank's existence would be both impossible and useless, for it could only form this reserve by keeping in a state of stagnation at the very least the capital of its shareholders (p. 95).

He maintains, “The reserve of coin which a bank holds should therefore be measured against the number and the nature of the causes which can make repayments more frequent” (p. 95).
    Rist notes, “It did not occur to Mollien that the note is only a means of making the coin deposited beforehand in the bank circulate” (p. 96). Also, Mollien failed to consider the primary purpose of the gold reserve. "Whereas the gold reserve is the foundation on which the entire activity of the bank is created, Mollien considered it as a way of guaranteeing the convertibility of its notes” (p. 96).
    “Mollien considered notes useful because they economised the use of money” (p. 96). However, this idea conflicted with some of his other ideas. “He thought of the note as a substitute for bills held by the bank; but bills are an addition to metallic money; they are a commercial money spontaneously created to supplement the circulation of coin. In acting as a substitute for bills, notes play the same part as bills: they are an addition to, not a substitute for, the coin in circulation” (p. 96).
    Moreover, Mollien had difficulty in distinguishing between credit used as money and money itself. To him, bank notes were money like gold coin or inconvertible government notes. However, their issue was limited by the quantity of bills of exchange that they replaced (p. 96). [When a debt is paid with credit used as money, that credit money discharges the debt by passing it to another, the person or entity responsible or obligated for the credit money. The debt is not extinguished until the credit money is converted to something that is no one else obligation, such as gold or silver. Therefore, a bank note is credit money that discharges debt by passing it to the issuing bank. That debt is not extinguished until the bank retires the note by converting it to a commodity money like gold or silver.]

Endnotes
1. Percy L. Greaves, Jr., Understanding the Dollar Crisis (Belmont, Massachusetts: Western Islands, 1973), p. 8.

2. Ibid., p. 28.

Copyright © 2017 by Thomas Coley Allen.

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Paul Becomes a Heretic

Paul Becomes a Heretic

Thomas Allen

    The following is a summary of Chapter II, “The Changes in the Eschatological Programme” of Section IV of The Formation of Christian Dogma: An Historical Study of its Problem by Martin Werner and translated by S.G.F. Brandon (New York: Harper & Brothers Publishers, 1957), pages 283–294. My comments are enclosed in brackets.
    For Paul, the final resurrection would occur in two stages. The first came with the return of Christ and his reign on earth. Next, came the final victory over the angels and spirit powers that had rebelled against God. At the end of the war came the destruction of the Angel of Death. Then, came the last and Final Resurrection.
    According to Paul, only the Christians, the saved, who had died before the Second Coming of Christ were resurrected with his Second Coming. The saved living at that time were “changed.” At the “end,” the dead who had not been resurrected would be raised. Thus, Paul reckoned the Final Judgment occurring in two stages. First, came the judgment of Christians when Christ returned. Last, came a general Final Judgment at the end of Christ’s rule when all the other dead were resurrected. In the Final Judgment, Christians would serve with Christ as judges.
    Paul believed, or at least strongly suggested, that the heavenly Christ would return in his lifetime or shortly afterward. This return would manifest itself as a predestinated number of Christ’s followers, i.e., those in fellowship with him, taking part in the glory of God’s Kingdom in a perfect world order. This world order would be spiritual in nature. Along with the advent of God’s Kingdom would be the final resurrection.
    As the Apostolic generation passed away without the return of Christ, the immediacy of the Second Coming began to fade. Because of this delay, the Church abandoned Paul’s doctrines of the Second Coming and the End Time.
    As a result of the delayed Second Coming and the rise of a new generation, the Church had no choice but to abandon Paul’s notion about the imminent return of Christ and his advice not to procreate. It also had to abandon Paul’s notion of election. (Paul held that when all the predestined elect had come to faith in Jesus in the last generation (Romans 11:25ff), then Christ would return.)
    Nevertheless, the idea of an Antichrist remained popular. The Antichrist was often related to heresy, as in 1 John 2:18ff. For example, Athanasius (293?-373) accused Arius (256?-336) of being the precursor of the Antichrist.
    After Paul’s death, the early Church still clung to Paul’s notion of two ages at the end of time. Thus, the Kingdom of God would fulfill the End Time by destroying the existing natural world and the creation of a new and perfect heaven and earth.
    However, with the passage of time, the Church began abandoning Paul’s view of the End Time as a spiritual new world and replacing it with an End Time as a cleansing of the natural world. For example, Methodius (d.c. 311) argued that if God destroyed the present natural world, He would admit that His first creation was defective. Thus, the future burning of the world should be understood as cleansing the world, i.e., a process of renewing, and not as destroying the world.  Eventually, the Church adopted the doctrine of the future resurrection of the natural physical body.
    Opposing this new doctrine of the Resurrection were the heretics, who relied heavily on the Bible in their opposition. Moreover, they argued “that the resurrection of the physical body to immortality was intrinsically impossible” (p. 287). Because the physical body was of earthly matter, it was mortal. Further, when the physical body died, it decomposed, and its elements returned to the earth. Some of these elements became part of another body. Consequently, a specific individual could never be reassembled with the original parts. Also, between birth and death, each individual body was constantly changing and, therefore, never really remained identical with itself. [Can the omnipotence of God overcome these problems?]
    The heretics’ strongest arguments came from the Scriptures. According to Psalm 1:5, “the ungodly would not generally be raised up, even for judgment” (p. 288). Likewise, Job 7:9-10 declared that the dead would not be raised
    The heretics also used the New Testament to argue against the resurrection of the physical natural body. Paul had declared that “the physical body was the seat of sin” (p. 288) and, thus, not worthy of resurrection. At the Final Resurrection, the saved would receive a supernatural body like the body of angels, and, in this way, enter into everlasting life. Restoration of the natural physical body merely meant continuing “the earthly-natural mode of existence in the eternity of the other world” (p. 288). Citing Romans 7:18, 24, 8:8, 1 Corinthians 15:44,50, and Galatians 5:7, the heretics condemned the thought of resurrecting the physical natural body.
    This attack against the resurrection of the physical body pushed the Church to defend its dogma more vigorously. The resurrected body would be an exact replica of the natural physical body when it was alive. [Does this mean that if an individual died as an infant, he would forever remain an infant? Likewise, does it mean that if an individual died of old age, he would always appear to be old-age?] Some Church Fathers, such as Tertullian (160?-230?), declared “that the resurrection of Jesus had been a reconstruction of his former natural physical body” (p. 289). (This assertion conflicted with Paul’s teachings in 2 Corinthians 5:16.)
    “Accordingly for Paul ‘resurrection’ meant, exclusively and fundamentally, precisely not restoration of the old, of what had been, but change into a new and supernatural form of being, because ‘resurrection’, as he saw it, appertained to those fundamental events, in which, since and by virtue of the Death and Resurrection of Jesus, the passing of the old and the advent of the new aeon were fulfilled” (p. 289). Paul’s idea of the End Time was a two-stage or two-age resurrection.
    However, the Church had abandoned Paul’s doctrine and had substituted a new doctrine. According to the Church’s new doctrine, the Resurrection resulted in “the exact restitution and conservation, at the End of the Days, of that which belonged to the old aeon” (p. 289).
    In response to Paul’s claim that the saved would attain a spiritual body, the Catholic theologians interpreted his claim “to mean that physical with which the Holy Spirit had united itself” (p. 290). However, the heretics replied by citing 1 Corinthians 15:50, where Paul declares, “Now this I say, brethren, that flesh and blood cannot inherit the kingdom of God; neither doth corruption inherit incorruption.”
    Another dispute arose over the fate of the saved dead before the Second Coming. Paul addressed this question in 2 Corinthians 5:1-4. He did not envision this intermediate state to last long, as he expected the Second Coming to occur in his lifetime or soon afterward. However, with the long delay of the Second Coming, the Church moved away from Paul’s teaching on this issue.
    This delay caused the Church to place more importance on the final destiny of the individual than on the ultimate fate of the present world. Using Jesus’ parable of the rich man and the poor Lazarus (Luke 16:19-21), the Catholic theologians developed the doctrine that the saved would enjoy some of the blessings that awaited them after the Resurrection. Thus, this new doctrine of the Church conflicted with Paul’s.
    Before this change in doctrine, the Final Judgment occurred after the Resurrection. With the new doctrine, a judgment had to occur directly after the individual died. Paul had taught that the saved would be resurrected and judged with the Second Coming — this was the First Judgment. Now, the Church’s doctrine of a judgment of the individual immediately after death replaced Paul’s doctrine of the First Judgment.
    Moreover, the Church’s new doctrine of the soul of the saved going to Paradise or Heaven immediately after death replaced the Hebrew concept of the soul with the pagan Greek concept. The Hebrews held that the soul was so united with the physical body that it had no conscious existence once the body died. On the other hand, the pagan Greeks held that the soul was independent of and trapped in the physical body. Once the body died, the soul was liberated and continued a conscious existence in another state.
    When the new doctrines of the Church were combined, the soul of a dead believer went to Heaven where it remained until the Resurrection. When the Resurrection occurred, the soul would be united with its resurrected natural physical body.
    By now, Paul was a heretic and his doctrines on the End Times and the Resurrection and the fate of the dead before these events were heresy. Although the Church never overtly declared him a heretic or his doctrines as heresy, it did so covertly by condemning as heretics those who used Paul’s doctrines in opposing the Catholic doctrines on these issues. However, the Church did destroy the truth to avoid overtly making Paul a heretic by asserting that its doctrines were consistent with Paul’s, although they were not.

Copyright © 2019 by Thomas Coley Allen.

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Libertarians and Corporations

Libertarians and Corporations

Thomas Allen

Most libertarians seem to place great value on artificial collectives, such as associations and corporations (except municipal corporations), and little value on natural collectives, such as biological races and ethnicities. One thing that most libertarians ignore or fail to realize is that corporations are artificial entities created by governments; therefore, they are agents of governments.
Many libertarians seem not to disapprove of private corporations spying on their “customers.” (Are the real customers, the users of the ostensible services or the recipients of the information?) After all, they are private companies. Being private companies, they will never harm any of their users by suppressing the users’ inalienable liberties.
Likewise, many libertarians seem to condone, if not approve of, private corporations collecting an inordinate amount of information on people and profiting from that information. Yet, libertarians would scream in protest if the government were collecting half this amount of information. However, few would protest if corporations collect the information and then turn it over to the government.
Also, many libertarians seem to have no concern about corporations conspiring to defame and destroy people’s reputations and livelihoods or censoring and ostracize them. After all, these corporations are private companies, and private corporations can do no evil except overtly collaborating with a government.
All libertarians object to the social credit system that the Chinese government is imposing. However, few seem to object to the social credit system being imposed in the United States because private corporations are implementing it instead of the government. Besides, private corporations only act in the best interest of their users (customers?) — even if it means closing bank accounts and denying credit to a customer because of his politics.
Likewise, few libertarians seem to object to corporations applying in the United States, the European Union’s directives to stifle free speech. Thus, they let the European Union decided what speech will be allowed in the United State. Where are the libertarians objecting to such collaboration between governments and corporations?
Furthermore, few libertarians utter any protest against the ever-growing number of corporations promoting through advertisements and by other means antilibertarian, anti-White, anti-American, statist, miscegenational agendas. After all, corporations are just like ordinary people, except that they have governmentally granted privileges that ordinary people do not have, and, therefore, should enjoy the right to say whatever they want to say.
To all of this, the typical libertarian retort is that no one has to do business with these corporations, which is true. However, these corporations have a virtual monopoly in technology, communications, and services needed to function in today’s world. One cannot forgo being a “customer” of these companies unless he is willing to live a 1950s or earlier lifestyle.
The primary difference between liberals and libertarians on these issues is that liberals object to private corporation doing these acts, but not to the government doing them. (Actually, liberals are not really objecting to corporations undertaking these actions because the leaders of these corporations are political comrades of the liberals and their worst actions are directed toward conservatives and libertarians.) Contrariwise, libertarians object to the government doing them, but not to private corporations doing them.
Corporations allow two or more individuals to associate together and gain privileges that do not belong to them as an individual, such as the potential to live eternally and limited liability, i.e., the only liability of the owners is their shares in the corporation, while the other property of its owners is placed out of reach. Because of its special governmentally granted privileges, one would think that libertarians would lead the charge to condemn corporations instead of leading the charge to defend them.
Although corporations are manmade, they are treated as a natural person. Yet, they have no soul and are without ethics or morality. Nevertheless, they can pretend to act ethically or morally for financial gain, but they rarely act ethically or morally because such action is ethical or moral per se. Moreover, like sociopaths, corporations cannot sympathize or empathize. However, they can feign such emotions when it is financially beneficial.
To this condemnation of corporations, libertarians reply that humans run corporations, which is true. However, being soulless creatures without any moral or ethical identity, they do serve to absorb the personal responsibility of moral and ethical human beings. Corporations shield shareholders (the ostensible owners) from the morality and ethics of exploiting workers in foreign countries and other immoral and unethical acts, even criminal acts. (This claim of exploitation is made by Frank Chodorov, a libertarian, who unlike most libertarian held corporations, especially international corporations, in low esteem.) Moreover, the directors cannot be charged individually for criminal acts of the corporation because they act in a collective capacity. Collectives have no moral or ethical responsibility. Thus, a corporation absolves shareholders, directors, and usually those who run the corporation (CEOs, presidents, vice presidents, etc.) from culpability, while they commit all sorts of immoral, unethical, and criminal acts in the name of the corporation.
Today, corporations are essential to imperialism and oppression. In this respect, the Soviet Union was the ultimate corporation where the state corporation owned and controlled everything.
In 1840, Condy Raguet wrote the following about corporations in his book A Treatise On Currency & Banking: “[U]nfortunately experience has given too much reason to fear, that the moral sense of corporations cannot be relied upon for the protection of the public.” Unfortunately, what Raguet wrote about corporations in 1840 is still true today. Also, unfortunately, most libertarians refuse to acknowledge this well-known fact. (Many consider Raguet to be the greatest antebellum American political economist.)
Nevertheless, many corporations are concerned with providing their entrepreneurs, investors, managers, and workers with a decent return by providing their customers excellent products and services without spying on them or pushing the globalist agenda. However, the above flaws do apply to most, if not all, multinational corporations. Unfortunately, all the flaws described above are inherent in all corporations.

Copyright © 2019 by Thomas Coley Allen.

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The Puritan Yankee

The Puritan Yankee

Thomas Allen

The following description of the Puritan Yankee, which is a redundant tautology and superfluous supererogation, has been extracted from Forgotten Conservatives in American History by Brion McClanahan and Clyde N. Wilson, who extracted their description from several authors, but primarily from James Fenimore Cooper. (Cooper was a New Yorker, who deplored Puritan Yankees because they were ruining New York. They destroyed New York decades before they destroyed the South.) Page numbers enclosed in parentheses are to the book referenced above. In the quoted material, I have changed some verbs from past tense to present tense. My comments are enclosed in brackets.
New Englanders and the regions where their descendants settled [New York and along the Great Lakes and later the West Coast] are more Puritan and less classical than the rest of the country. Additionally, they emphasize “profitable economic activity and community supervision of public morals” (p. 18). [Hence, Hillary Clinton's, who is a Puritan Yankee, “it takes a village to raise a child.” Today, Puritans scrupulously supervise public morals to ensure that people speak and act in a politically correct way. If anyone fails to be politically correct, these modern-day Puritans vehemently attack him, not only verbally, but also physically.]
According to James A. Bayard, the Yankee school system [public school system] was the cause of the political turmoil of the 1860s and 1870s. [Puritan Yankees created the public school system, i.e., government schools, which explains why the public school system is so dysfunctional and why it indoctrinates instead of educates.] Bayard remarks, “‘It [the Yankee school system] may stimulate the brain but it ignores man’s moral nature and produces discontent with their condition among the masses. God help the country in which the masses are merely stimulated and trained to act in combinations which are always, sooner or later, controlled by demagogues’” (p. 48). [This explains why, with rare exception, demagogues, instead of statesmen, have governed the country since 1860.]
For the Yankee, democracy is a matter of power and appetite instead of a matter of liberty under the law. It means “that people have a right to whatever they happened to want, the law and private rights be damned” (p. 53).
Moreover, the Yankee has “a liberal supply of Puritanical notions” (p. 54). He has a native shrewdness with an evasive manner. Also, he gives the impression of “a sneaking propensity that renders him habitually hypocritical” (p. 54).
Furthermore, the Yankee admires plutocrats, especially the nouveau riche, and always defers to money. Money is “the only source of human distinction” (p. 54) that the Yankee can clearly understand. [In this respect, the libertarian is hardly distinguishable from the Yankee.]
Yankees are hardworking and entrepreneurial and often manage to gain “control (often clandestinely) of many of the essential business of the community (p. 54). [Thus, once they reach a critical mass in a community, they proceed to ruin it by remaking it in their own image.]
Also, Yankees are “pushy social climbers, insisting that their betters treat them as equals, but refusing to grant the same to those who are less successful and prosperous” (p. 54). They presume “an intimate friendship with mere acquaintances” (p. 54).
“The Yankees value education so much so that they often presume to more learning than they really have and expose themselves as pretentious pseudo-intellectuals” (p. 54). As a result, the Yankee established the public school system in the United States. Nevertheless, this school system offers an education that is superficial and substitutes learning for common sense. [Many holders of Ph.D. seem void of common sense.] Moreover, it fails to “produce the really educated men needed for leadership” (p. 55).
Additionally, the Yankee values and craves “respectability more than independence” (p. 55). He has the capacity to “organize to get things done and bring about change, whether other people wanted it or not” (p. 55). [The US government, which the Puritan Yankees have controlled since 1861, is notorious for bringing about change, especially if people do not want it, while ignoring what the people really want.]
About the Yankee, Cooper declares, “‘A Yankee is never satisfied unless he is making changes. One half of his time, he is altering the pronunciation of his own names, and the other half he is altering ours’” (p. 57). He adds, “‘I doubt if all this craving for change has not more of selfishness in it than either of expediency or philosophy’” (p. 57).
Yankee newcomers regard themselves more righteous than the natives among whom they settle. Therefore, the Puritan Yankee newcomers believe that they are entitled to change the ways of the natives and to appropriate their property (pp. 57-58) [as happened in the South during Reconstruction].
Inevitably, the Yankee quarrels with all above him. In his self-righteousness, the Yankee “‘throws a beautiful halo of morality and religion, never even prevaricating in the hottest discussion, unless with the unction of a saint’” — as Cooper writes. [Most often, today, that saint is His Divine Highness Saint Martin Luther King, Junior. Next to him is the most Marxist Democrat at the moment. Lincoln is another one of these precious saints, but his halo is beginning to tarnish among the younger Marxists.]
Out of the Puritan Yankee came “Anti-Masonry, Mormonism, prohibition, vegetarianism, Seventh Day Adventism, socialism, and feminism” (p. 58). Also, out of the Puritan Yankee came abolitionism and John Brown terrorism (p. 58). [To this list, neoconservatism needs to be added.]
Above all the Yankee, who is of Puritan stock, is a self-righteous, hypocritical reformer and crusader, who is forever seeking change for change-sake (pp. 144, 179).
Ever since 1860, the Puritan Yankee has controlled the United States. Since then, the United States have always been undergoing “perpetual crusades for the reform and reconstruction of society that diminish American liberty and independence to this day” (p. 55). If anyone objects to the Yankee’s righteous crusade [such as spreading democracy throughout the world], he is a bad person. For the Yankees, it is “a normal means of proceeding in their Puritan heritage . . . to justify themselves by portraying those who opposed them as bad people with evil motives” (p. 58). [Puritan Yankees are like locusts swarming across the land, devouring everything in their path, and leaving nothing behind but utter devastation. Thus, they remake the world in their own image.]
Fortunately, not all Northerners are Yankees. Many are decent, hardworking, honest people (p. 183). [Unfortunately, Yankees have infested the South, for example, the Bushes.]

Copyright © 2019 by Thomas Coley Allen.

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