Spencer Heath Archive

Item 1965

Fragment of pencil notes on Edwin C. Riegel’s VALUN plan, possibly written to assist Riegel with his plan (Original plan missing)

No date

     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