Page 23 - Michael Journal 2020 March

u distributed for use to the community (as consumers). partly to substitution of machinery for human and
It is the duty of those commissioned to teach wage-paid employment, and partly through the cap-
and to rule, whether in church or in state, not only ital equipment becoming excessive and lying idle
to formulate sound practical principles for the guid- (through lack of consumers’ incomes which would
ance of men in their social, political, and economic purchase its ultimate products).
relations, but also to study the actual conditions pre- The true remedy
vailing in those relations, so as to be able rightly to Governments attempt to remedy these situa-
apply the principles to the facts, for the elimination tions through various palliatives, through public
of abuses and the amelioration of conditions.
works, or direct aid to the most destitute.
Society has been robbed of its credit And, the governments can get the money ne-
The banking system alone has and exercises, de cessary for these remedies only by two ways:
facto, the power to create and cancel money. a) through taxes, taken on the already insuffi-
The value, validity and purchasing power of this cient incomes of the consumers;
money rests ultimately, not on gold, but on the na- b) through loans from the banks: new money
tional credit i.e., the community’s potential rate of created by the banks, but which must be repaid with
real wealth production compared with consumption. interest.
Therefore, the community should not be forced The failure of these remedies is obvious. They
to pay a perpetual money levy to private creators will leave consumers with a bigger debt and less
and issuers of money on its creation and issue. The purchasing power.
community is forced to pay such a levy, and this To solve the problem, it is clear that govern-
in money which not the community, but only the ments must:
bankers, can create.
a) take back their prerogative, and exercise
This payment of interest by the community to themselves, the control over the volume of money
the banking system for money newly created (and required for the population;
costless), is on a wholly different footing from inter-
est charged on already circulating money by individ- b) base the money supply on the productive
uals who have earned and saved this money, and capacity of the country;
invested it in (or lent it to) industry. c) issue new money, no longer as an interest-
Consequences bearing debt to the bankers, but debt-free; and

The consequences of this failure of money to d) give a national dividend to each citizen.
discharge its essential function are disastrous and At the same time, in order to automatically pre-
cumulative: vent any inflation or deflation of prices, and to main-
a) cut-throat competition to recover proportion- tain a perfect and constant balance between prices
ately the greatest sum in prices in return for the least and purchasing power, prices must be subjected to
volume of goods sold; a national discount, set in accordance with the sta-
tistics of production and consumption. This discount
b) a steady stream of bankruptcies (of the weak- will be calculated to fill the gap between prices and
er and less ruthless producers) as an inevitable re- collective purchasing power. v
sult of the mathematical impossibility of recovering Father Peter Coffey
for the banks more money than exists in the com-
munity;
c) the replacement of competitiveness by mon- Toronto bi-monthly meetings
opolies and price increases;
d) the growing accumulation of an unsaleable April 5, June 7, August 2
surplus in each capitalist country; From 2 to 4 p.m.
e) the forced export of this surplus and conse- John Paul II Polish Cultural Centre
quent struggle for foreign markets, ending in inter-
national economic and military conflicts; Maximilian Kolbe Catholic Church
f) the development of the banking policy of fi- Basement Level, Room 2
nancing capital equipment to provide consumers 4300 Cawthra Road
with money to purchase some of the otherwise un- Mississauga, ON
saleable surplus of consumers’ goods; and
g) the gradual breakdown of this device, owing Free parking

24 MICHAEL March/April 2020 www.michaeljournal.org