Spencer Heath Archive

Item 2911

Carbon of letter from E.C. Riegel to the editor of the New York Times

August 19, 1949

 

 

Editor Times:—

Your editorial, “The Ordeal of Britain,” lists five suggestions emanating from various Marshall Plan nations.

 All are based upon the assumption that political measures can relieve monetary troubles, whereas money is purely an instrumentality and product of private trade to which all political influence is anathema.

 The composite credit of private competitive traders, based, as it is upon actual exchange of goods and services, forms the only substance of money; government issues into the money supply are but dilutions. Money, like mathematics, is a universal concept and cannot be nationalized or legislated. The different national money units are merely various dilutions of the same substance, or, in other words, they are the same qualitatively but differ quantitatively in the proportion of substance to dilution. It is more correct to say that there is money in each unit rather than that each unit is money.

 Official rates and blocking devices are but cofferdams against the free evaluating process of competitive trade which inevitably reveals the degree of government dilution of the various national units. Therefore, to prevent this evaluation, the governments must restrain trade and to restrain trade is to restrain production, the end result of the managed money policy. The whole theory of valuing or devaluing a money unit by government fiat is an absurdity as the power of a unit is upped or lowered solely by the process of free exchange. Governments can merely interfere with the process.

 The so-called dollar shortage is due to the cofferdams that politicians have built around their units in their fear to reveal the extent of their debasement through dilutions of the true money supply by false government issues. The only measures that govern­ments can take to relieve the stress is to withdraw all measures of money management and let the problem be dissolved in free exchange. Political expedience prevents this.

 The present program is to pour dippers of dollars into the various cofferdams and thus we are sabotaging the least diluted unit which will have to suffer progressive dilution as a consequence, pointing to a grand collapse of all national money units and the end of polyglot money. The 2nd Renaissance will spring from a universal, non-political money unit as the 1^st sprang from the nationalistic development of money. Humanity will find union only in money union.

 

                                              E.C. Riegel