Spencer Heath Archive

Item 172

Pencil by Heath on notepad paper.

March 7, 1946

 

 

Land-owners and the

VALUN PLAN

 

     Since property in real estate is property in its oldest and most fundamental form, security of possession through holding by contract and title instead of by expropriation and force being the foundation of all property, there is much reason to anticipate that the valun exchanges will eventually come to be organized and owned or directed in each community by its united or predominant real estate interests.

     Only about half the wealth of the nation is in movables. The proprietary authority, as a whole, now owns at least half of the national property and wealth and therefore receives about that proportion of the national income remaining after taxation. No other single interest stands to gain so much from the adoption of a free system of exchange. All its realty values depend upon the operation of the market, upon the free contracts by which its real estate is bought and sold and rented or leased. Without this peaceable process of sale and exchange, this market technique, there would be no security of possession and therefore none of person or property in any populated place. And were it not for a like process of exchange with respect to movable things there could be no production of wealth out of which any rental or purchase price for real estate could be paid.

     The ownership and administration of real estate, giving the same opportunity of peaceful possession on terms set by the market equally and impartially for all, is itself a community service of highest importance and to which all unimpaired value is due; for without this merchandizing of opportunities, sites and resources there would be no market in which a value could be realized or ascertained. Moreover, there is no kind of property in which prices and values change less rapidly or in a more stable and orderly manner than in the fixed properties that constitute real estate.

     Hence it is that a valun exchange system founded on the values of real estate by its owners pledging themselves to accept for the payments of rents and purchase prices the valuns issued and jointly backed by them would have probably the most secure and stable foundation on which any exchange unit could rest; for real estate is more widely desired and universally used than any other kind of wealth, far more than gold ever was.

     Furthermore, the providing of free exchange facilities in any community would itself raise the desirability of its occupancy and use and thus redound immediately to increase the income and value of all its real estate. This strengthens the backing of any value unit so based while providing a powerful motivation to the real estate interests to promulgate a unit upon the responsibility of themselves and of their properties so greatly to be enhanced. And once it became known that these soundly based units would be accepted in payment of rent it is not to be conceived that they would be undesired as payment for any other service or thing the free market can supply or afford.

     Moreover, as the valun system became more extended and complex, the public welfare becoming increasingly dependent upon it and upon its freedom from dishonesty or abuse of any kind, all its chief and subordinate officers would best be under the administrative supervision of the persons whose incomes and values would be most doubly prejudiced and imperiled by any practices or policies improper or unsound. Such persons, in preeminent degree, would be the real estate owners of any community in which a Valun System could responsibly serve.

     A valun system so founded and supervised would rest on property of the greatest stability held by owners of highest responsibility and who, moreover, could absorb all overhead and operating cost by reason of its being returned to them in their rising incomes and the enhancing values of the community as a whole. There are greater possibilities of services to the population of a community on the part of its enlightened real estate interest as a proprietary authority providing community services and welfare than all the other property owners combined — for the real estate owners alone have a community of property and of interest in which they can for the welfare of the whole population combine. They are in a strategic position to perform enormous and most vital community services and receive therefor in due course of business and trade the most stupendous public rewards.

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/Fragments on backs of two pages of the above, crossed out to indicate it was transcribed:/

 

When sufficiently organized, the bankers will announce to the public that they will accept valuns for goods or services in the regular course of their business and also guarantee to exchange them for an equal number of dollars (if desired) through the Founders’ Fund. This will allay any fear as to their validity or the propriety of accepting them without further persuasion or any extensive “educational” or promotional campaign. The system will thus become self-promoting through the self-demonstrating check form which is illustrated herewith.

     Although under the Valun System, as with the dollar, the vast preponderance of payments will be made by the transfer of credit through the employment of checks, there will also be a need and demand for a mode of value transfer more convenient for small, isolated or infrequent transactions and by persons who have not made any deposits and so have no credits to draw against in the Valun Exchange system.

     For such purposes it will be _______ for those who have valun credits in the Exchange to write checks to “cash” against and receive in exchange actual printed valuns themselves. The moment any one of these is used for a payment or purchase, it will become, in effect, a due bill, good at any time for merchandise and/or services or for dollars out of the Founders’ Fund maintained for that purpose in the Valun Exchange or in the custody of a Trustee Bank. (It is anticipated with the utmost confidence that with the declining dollar and using dollar prices few if any persons will for long desire to exchange valuns or valun credits for dollars. Such conversion will be for the purpose of paying taxes and meeting such other obligations as government may enforce or impose.) Those wishing to convert their depreciated dollar holdings into undepreciated valuns (undepreciated because, unlike dollars, they are all issued in exchange for goods and services) will, of course, find their dollars at a discount and receive fewer valuns. Valuns will not themselves be legal tender but will be convertible into legal tender at a premium depending on how far the dollar has declined from its initial valun parity. The valun, being always a receipt for goods and services, is not only exchangeable in dollars (for whatever they may be worth), but is always supported by the goods or services, or their market equivalent, for which it was given. It therefore stands in need of no governmental or artificial support. In fact, with the great upsurge of production sure to follow upon the unfreezing of the channels of exchange, increasing quantities of goods will be offered per valun, thus causing their purchasing power to rise. At the same time the national increase in production per man-hour under large quantity operations will increase the hourly rate of wages as well as their unit purchasing power. Even uninvested savings in valuns will tend to appreciate due to the rise of their unit purchasing power as mass production expands.

     Valuns will not conflict with dollars as legal tender. They will be used only for the measurement of voluntary obligations. Dollars will still function for the liquidation of compulsory ones. Legal judgments, where legal process is resorted to, will still be rendered in terms of the dollar equivalent of valuns. just as they are now

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/The following is evidently an earlier part of the same fragment, written on the backs of two pages of #172 and crossed out to indicate it was transcribed. March 1946?/

 

     ..authorized source for the issuance of units of account in the form of printed valuns requiring no endorsement and for the transfer from one to another of valun credits remaining unissued.

     As a special guaranty and to invite other than the founders of the Valun Exchange to accept valuns or valun checks in payment for goods and services, the Founders will agree not only to give goods and services for any valuns or valun checks presented to them, but that each of them shall deposit one United States Dollar for each valun issued to him or by his order or check, to any person whether a founder or not. These dollar deposits will be payable to anyone who, upon being paid in valuns, prefers to have dollars or who, having accepted a check in valuns may not wish to deposit it and thereby open an account in the Valun Exchange.

     In this manner the Valun Exchange will become not only a clearing house, in terms of valuns, for transactions among its Founders but also an agency for carrying the accounts of other persons who may wish to accept valuns and to pay them out for purchases and settlement of accounts. /This is a re-write for page B2/

     Valuns will be issued only by the Valun Exchange and only to its founding members (or their successors) in the predetermined amount. Each valun will evidence on its face the pledge of goods and services (or dollars) by the Founders, and in the hands

 

                                               /Breaks off/