Chapter 9 — The Monetary Defect


The situation amounts to this inconceivable thing: all the money in circulation comes only from the banks. Even coins and paper money come into circulation only if they are released by the banks.

But the banks put money into circulation only by lending it out at interest. This means that all money in circulation comes from the banks and must be returned to the banks some day, swelled with interest.

The banks remain the owners of the money. We are only the tenants, the borrowers. If some manage to hang on to their money for a long time and even permanently, other people are made incapable of fulfilling their commitments.

A multiplicity of personal and corporate bankruptcies, mortgages upon mortgages, and the continuous growth of the public debt, are the natural fruits of such a system.

Charging interest on money at birth, as it comes into existence, is illegitimate and absurd, antisocial, and contrary to good arithmetic. The monetary defect is therefore as much a technical defect as a social defect.

As our country grows, in production as well as in population, more money is a must. But it is impossible to get new money without contracting a debt, which collectively cannot be paid.

So we are left with the alternatives of either stopping growth or going into debt; of either plunging into mass unemployment or of having an unrepayable debt. And it is precisely this dilemma that is being debated in every country.

Aristotle, and later, Saint Thomas Aquinas, wrote that money does not produce offspring, does not breed more money. But the bankers bring money into existence, provided only that it breeds more money. Since neither governments nor the public create money, no one creates the offspring (the interest) claimed by the banker. Even legalized, this form of issue remains vicious and insulting.

Decline and degradation

This way of creating our country's money, by putting governments and individuals in debt, establishes a real dictatorship over governments and individuals alike.

The sovereign government has become a signatory of debts owed to a small group of profiteers. A minister, who represents all of the population of the country, signs unrepayable debts. The banker, who represents a few shareholders who thirst after profits, manufactures our country's money.

This is one striking aspect of the degeneration of power, of which Pope Pius XI spoke: governments have surrendered their noble functions, and have become the servants of private interests.

The Government, instead of guiding Canada, has become a mere tax collector, and the biggest item in government expenditures is precisely debt servicing: payment of the interest on the public debt.

Furthermore, legislation consists mainly in taxing the citizens, and erecting, everywhere, restrictions to freedom.

There are laws to make sure that the money creators are repaid. There are none to prevent human beings from dying in dire poverty.

Tight money develops a mentality of wolves in individuals. In front of plenty, everyone tries to get the too scarce symbols of the goods that give a right to a share in this plenty. Hence, frantic competition, patronage, denunciations, the tyranny of the “boss”, domestic strife, etc.

A handful of people preys on the others; the great mass of the people groan; many founder in the most degrading poverty.

Sick people remain without care, children are poorly or insufficiently nourished, talents go undeveloped, youths can neither find jobs nor start homes and families, farmers lose their farms, industrialists go bankrupt, families struggle with difficulties — all this without any other cause than the lack of money.

The banker's pen imposes privations on the public and servitude on the governments.



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