Proposition America: Pay for What You Get and Get What You Pay For

Frank F. Bille

[A book self-published by the author, 1982 -- Part 2 of 3]

Income Taxes

The amended CONSTITUTION of the United States provides for a tax on income "from whatever source derived, " Both earned and unearned income are taxed equally together but on a rising scale. Thus income tax does take a rather large slice of the unearned income, channeling a part of the land rent into the public treasury. Income tax is beneficial when applied to unearned income but unjust and harmful when applied to earned income, i.e. wages and true interest.

Unfortunately, some very fine American Patriots have decided that income taxes are all bad and therefore should be abolished. They have not understood that such action would severely increase the economic imbalance unless land values were to be taxed MORE, which the "Patriots" do not like to consider.

But PROPOSITION AMERICA, sponsored by Christians, would put an end .to these INIQUITIES simply by CHANNELING THE LAND RENT as a GROUND DUTY to its rightful owner, the LOCAL PEOPLE, represented by the LOCAL GOVERNMENT.


Consider what JESUS CHRIST had to say about these matters:

"Woe unto you, scribes and Pharisees, hypocrites! for ye devour widows' houses, and for a pretence make long prayer: therefore ye shall receive the greatest damnation" (Matt. 23:14)

"Woe unto you, scribes and Pharisees, hypocrites ! for ye pay tithe of mint and anise and cummin, and have omitted the weightier matters of the law, judgment, mercy, and faith: these ought ye to have done, and not to leave the other undone. " (Matt. 23:23)

JUDGMENT (justice) must precede mercy, as also expressed by the famous American economist HENRY GEORGE:

"That justice is the highest quality in the moral hierarchy I do not say, but I say it is the first. That which is above Justice must be based on Justice, and include Justice, and be reached through Justice."


PROPOSITION AMERICA will establish a balanced economy. Pie #2 (see illustration) depicts this condition.

The Pie is cut in the same three portions: LAND RENT, WAGES and INTEREST, But the GROSS NATIONAL PRODUCT (GNP) represented by this Pie will be BIGGER than the unbalanced one because more wealth is produced in the healthy, balanced economy. There is more of everything, for everyone, because of the following facts:

1) NATURAL RESOURCES are available WITHOUT A PRICE but on GROUND DUTY terms, which means that the LAND RENT is paid to the COMMUNITY out of current production.

2) A great number of people have become PRODUCERS instead of being unproductive paper shufflers, government employees, loafers, welfare chiselers, and outright thieves. Instead of the present 2/3 unproductive labor force and 1/3 productive, the proportion is likely to revert to 1/3 unproductive and 2/3 productive as in our glorious past.

3) Abundant SAVINGS are available for INVESTMENT in CAPITAL, i.e. buildings, machinery, technology, automobiles, airplanes, tools, and all kinds of merchandise. ABUNDANT, because NO FUNDS are required for the acquisition of LAND.

4) There are NO TAXES to pay. No income tax, no sales tax, no tax on buildings, machines or inventory. Therefore, the BUYING POWER is greatly enlarged.

5) There is a powerful INCENTIVE for everybody to EXCEL in his chosen field of endeavor, for there is NO RESTRICTIONS on your ambitions. And on the other hand, there is no more free public lunches for anybody who tries to shirk. A man cannot any longer become rich by charging his fellow men for the right to exist, but everyone who has talent and energy and who produces goods or services of value to his fellow men can grow rich. If you are good at telling jokes you may charge people for listening, and the money is all yours. But you can't profitably invest the money in land. If you are rich you may collect paintings and sculptures, and put them in a mansion. That does not in any way infringe upon other people's equal rights. If you prefer to live a simple life and remain poor, that's also your right. In any case, you pay for what you get and get what you pay for. If you live in a remote country place your Ground Duty is low because the land value is low. If you own a downtown lot in a big city you pay a large amount of Ground Duty because the lot is extremely valuable. Whether the lot is vacant or developed, the Ground Duty is the same. You pay for the value which the people have bestowed on the lot. That is a POWERFUL ENOUGH INCENTIVE to put up a TAX FREE building.

The GROUND DUTY collected from the title-holders by the city or county will be an enormous amount. (Again, it is emphasized that there will be an EQUALIZATION of the LOSSES incurred when investments in land are wiped out because of the Ground Duty.)

Remember, any PROFIT you make after payment of Ground Duty is strictly your own. No taxes, and NO INSURANCE PREMIUMS! If your building burns down you are quickly reimbursed from the GROUND DUTY INSURANCE FUND. And if the city abruptly upgrades the ZONING, raising the Ground Duty beyond the capacity of your present building, the city will be obligated to buy your building at a pre-determined REDEMPTION PRICE, unless you are able to re-develop or sell your property yourself.

Therefore, ADVANCE CITY PLANNING becomes both necessary and feasible. NECESSARY because without farsighted planning the city would incur economic losses. FEASIBLE because the city will no longer have to pay BLACKMAIL PRICES for the right-of-way when new streets, freeways, schools, etc. are needed, or when it is time to redevelop the inner core of a decaying city. Planning 10-20 years ahead and notifying property owners of impending zone changes and Ground Duty hikes will allow the owners time to write off old buildings.

Looking at "the way the Pie is eaten" we see as first priority the paying of TITHE to the GREAT LANDLORD, GOD. Though it has first priority it is still a free will offering paid to the Lord by "the meek" who have received and accepted the Lord's conditional blessing and promise, that the meek shall inherit the earth (Matt. 5:5). Again we observe the universal and timeless principle of economic balance. The payment of Ground Duty to the community restores the American people's equal and inalienable BIRTHRIGHT or INHERITANCE upon which the Biblical law of tithing was predicated.

Notice that the Pie is divided according to WHAT IS LEFT for each of the three economic factors after just payment of what's due the two others, the PUBLIC being the just recipient of what's due to LAND.

Due to the ABSENCE of TAXES, UNION DUES and INSURANCE PREMIUMS, what's left for WAGES and INTEREST is more readily available for THE GOOD THINGS OF LIFE, Living expenses, Education, Luxuries, and SAVINGS.

EDUCATION is primarily the responsibility of PARENTS, secondarily it is the responsibility of the COMMUNITY. In keeping with true principles of FREEDOM, the State or Federal governments may issue guidelines as to the MINIMUM of education each child should receive, but the parents and the localities should pick up the tab and should also decide WHAT the children should learn above the minimum. The silly hassle over religion in education will stop if and when the city provides the land and the buildings, and the parents' associations provide for the books and the teachers. CHARACTER EDUCATION which teaches MORAL VALUES will certainly be re-instated and replace the atheistically promoted "Value Free Education" our children have to suffer.

SAVINGS AND INVESTMENTS arise from both wages and interest. The private sector alone will provide all funds for investment. Banks, as the chapter on the Medium Of Exchange will show, will be strictly mediators, not creators of money.

HOUSING will be in plentiful supply after a while. Since land will become available without a. price, since there will be no taxes on buildings or other improvements, and since money will be plentiful, the ensuing BUILDING BOOM will be limited only by the availability of workers and building materials. Decent housing will be within everybody's financial means.

Assessing the Ground Duty

Since LAND PRICES of today represent the CAPITALIZED expected LAND RENT we can deduct that the true land rent is equal to the amount of INTEREST which the same amount of money would earn if it were invested safely at the going rate of interest. Then we could ADD the amount annually paid as property tax on the land value, and that's what THEORETICALLY the Land Rent, or Ground Duty, should be for the FIRST YEAR after the reform has taken place. HOWEVER, due to the rampant SPECULATION in land which has taken place, and due to the erratic INTEREST RATES this method of assessing the Ground Duty can only provide a GUIDELINE. The true Land Rent assessment will come when the LAW OF SUPPLY AND DEMAND has had a chance to function under the natural conditions of truly FREE COMPETITION and FREE ENTERPRISE. Then the Land Rent will be the amount of money which a prudent person will be willing to pay annually for the EXCLUSIVE right to occupy and use a parcel of land, in COMPETITION with others. To arrive at, and maintain, this EQUITABLE FIGURE, a simple system of CHECKS AND BALANCES can be employed. If the land is UNDER-ASSESSED, owners of improved property will be extremely unwilling to sell unless an EXTRA amount is ADDED to the value of the improvements. Such a consideration would, in fact, constitute a CAPITALIZATION of that part of the Land Rent which the Ground Duty has failed to claim for the Public.

On the other hand, if the land is being OVER-ASSESSED, the opposite takes place, and owners have a hard time selling except at a LOSS. Such conditions will be perpetually monitored and come to the attention of the ASSESSMENT COMMITTEE, a body of experts charged with the responsibility of PREVENTING CAPITALIZATION of Land Rent and PREVENTING unjust over-assessment. Remember, the role of all government is to execute JUSTICE by PREVENTING INJUSTICE.

In the just society it will be as easy to LOWER the Ground Duty as it is to RAISE it. In the UNJUST society of today it is IMPOSSIBLE for the victims of MAMMON to obtain a relief from the YOKE of having to pay your last penny just for the right to exist.

Unless it is clearly established that under-assessment is a fact, the assessors will not take action, and the owners will have the benefit of the doubt.

To prevent political FAVORITISM and CORRUPTION, assessment will be PUBLIC RECORD. A MAP showing all parcels, each with its Ground Duty assessment shown, will be available to all citizens, and the Assessment Committee will have to be subject to rules issued by the National Government.

Canons of Taxation

More than one hundred years ago, the then famous American economist HENRY GEORGE, a resident of San Francisco, wrote his monumental book PROGRESS AND POVERTY, in which he proposed essentially what PROPOSITION AMERICA is now repeating, namely the collection of the FULL LAND RENT for a PUBLIC REVENUE to completely replace all taxation of the products of human labor. His arguments for what then became known as the "single tax" have never been refuted, but they have been MISREPRESENTED and IGNORED.

Having stated his proposition, Henry George follows up with a chapter: "The Proposition tried by THE CANONS OF TAXATION:"

"The best tax by which public revenue can be raised is evidently that which will closest conform to the following conditions:

"First, that it bears as LIGHTLY AS POSSIBLE upon PRODUCTION,

"Second, that it be CERTAIN,

"Third, that it be EASILY AND CHEAPLY COLLECTED . . .

"Fourth, that it BEAR EQUALLY ..."

Henry George proceeds giving a clear, detailed PROOF, that his proposed tax on LAND VALUES ALONE fulfills all these four requirements. Yet, in spite of the overwhelming SCIENTIFIC evidence in favor of Henry George's proposal, the "Canon Of Taxation" which our political leaders have been following ever since has had as its first and almost hallowed requirement that it MUST NOT INFRINGE UPON PRIVILEGES.

PROPOSITION AMERICA'S arguments in favor of the GROUND DUTY follow, in many respects, entirely different lines of reasoning than did Henry George's proposal, but the CONCLUSIONS are exactly the same.

Can there be any doubt, after having read the preceding arguments, that PROPOSITION AMERICA does fulfill all the four requirements of THE CANONS OF TAXATION? The only difference is that in this book we do not call it a "tax" but a GROUND DUTY, because we are talking about what people OWE the government and not an arbitrarily and politically contrived tax.

The GROUND DUTY bears LIGHTLY UPON PRODUCTION. In fact, it is not derived from production at all.

The GROUND DUTY is EASILY AND CHEAPLY COLLECTED. It requires little paperwork and only a minimal amount of figuring.

The GROUND DUTY is CERTAIN. It is not the people paying it, it's THE LAND, and land cannot hide from the Ground Duty collector.


In fact, the MACHINERY for assessing and collecting the GROUND DUTY is already fully developed and ready in the County Assessor's Office. The assessors have plenty of trouble assessing BUILDINGS AND INVENTORIES fairly. The assessment of LAND is the least of their worries. The ASSESSORS not having to bother with improvements any more, and the COLLECTORS being able to collect many times more revenues from THE SAME ACCOUNTS already established, the COST EFFECTIVENESS of the two County offices will be enormously increased. Try to imagine the SAVINGS when ALL TAXING AGENCIES are shut down, including the IRS, the State bureaus of Equalization, the Customs, the Licensing Agencies, etc. etc.

When we eliminate TAXES we eliminate one of the chief causes of PRICE INFLATION. As Henry George says: "All taxes which add to prices are shifted from hand to hand, increasing as they go, until they ultimately rest upon consumers, who thus pay much more than is received by the government."

TAXES on LABOR and on labor PRODUCTS are inevitably ADDED to the price of the product, but GROUND DUTY, or land rent, CANNOT be added to the price of the product. A hamburger joint in Los Angeles pays a much higher RENT of its location than does a similar restaurant in suburban Azusa. Yet the PRICE of a hamburger is the same in both locations, and both include the same amount of TAXES in the price. The L. A. joint sells ten times as many hamburgers due to the LOCATION, and that's why the L. A. landlord is able to get MORE RENT than his counterpart in Azusa. If the L. A. hamburger vendor tried to add his rent to the price of his hamburgers he would soon regret it.

Henry George continues: "Our revenue laws as a body might well be entitled 'Acts to promote the corruption of public officials, to suppress honesty and encourage fraud, to set a premium upon perjury and on the subordination of perjury, and to divorce the idea of law from the idea of justice. " That was a hundred years ago. Can it be better said today?

There will be NO EXCEPTIONS from the DUTY to pay GROUND DUTY. Public buildings, Churches, and Non-Profit Organizations must all pay. Thereby, the true cost of government operations will be fully accounted for. If you feel sorry for the Churches, please remember that even now Churches must pay market price for land. Churches, like every other property owner, will receive a PARTIAL COMPENSATION for lost investment in land when the losses are EQUALIZED, see the chapter on Equalization.

Public Administration

In the healthy, balanced economy, governments are administrators of JUSTICE and administrators of the people's COMMON, INALIENABLE INHERITANCE.

When ECONOMIC BALANCE is established by directing the flow of LAND RENT to the public treasuries, the functions of government will have to change dramatically.

The LOCAL GOVERNMENTS (cities, counties) will control the revenues under the ever present, watchful eyes of the local population and the local FREE PRESS. The people will look out for their TRUE PROPERTY, the GROUND DUTY FUND. Any wasteful expenditure by the local government will be quickly discovered and regulated by the people's representatives.

Governments could be reorganized after the exemplary patterns set by successful American corporations. Government employees would then be subject to the same DISCIPLINE and the same conditions for employment found in well managed private business.

It will be the duty of governmental executives to provide the best possible PUBLIC SERVICE at the LOWEST possible COST, and to procure a DIVIDEND for the SHAREHOLDERS, the people.

Certain percentages of the Ground Duty should go to the STATE and NATIONAL GOVERNMENTS whose duties should be strictly defined and LIMITED to the task of EXECUTING JUSTICE BY PREVENTING INJUSTICE. That would reverse the flow of "Revenue Sharing. " All levels of government should be required to accumulate RESERVES and to operate WITHOUT DEFICITS. PUBLIC DEBT should be unthinkable.

Such simple, logical fiscal policy would make an end to the unbelievable irresponsibility and outright CORRUPTION in today's government finances. That sorry situation is due to the fact that the natural law of PROPERTY RIGHT is being completely IGNORED in public transactions. TAXATION of people's incomes and property is an act governed by the NEGATIVE ECONOMIC PRINCIPLE. It's LEGAL STEALING, and the DEMORALIZING EFFECT upon public servants is the NATURAL CONSEQUENCE thereof. Today, Federal GRANTS are solicited by local governments and by numerous PRESSURE GROUPS because "If we don't get the money someone else will!" What an insane practice!

Public Welfare Service

Because we Americans are moved with compassion we cannot ignore the plight of the unemployed, the poor, the sick, the homeless, the widows and the fatherless, and we give and give as best we can. But our means are sorely limited because of our enormous burdens of mortgage payments, taxes and insurance premiums, not to speak of the inflation. So the answer is PUBLIC WELFARE, and we feel relieved that the government will do what we ourselves would but cannot do.

But public welfare has gone completely OUT OF HAND, and there are more poor and dependent people in America than ever before. The more the government is doing for people, the poorer do they become. It is strange how the reason for this has escaped the wise men in Washington. It's very simple. When all these billions of welfare dollars are poured out all over the country, people's BUYING POWER is increased, and the EFFECTIVE DEMAND for LAND, with or without buildings, is increased to match the increased buying power. The result is that the LAND MONOPOLY can and DOES INCREASE the RANSOM which people must pay for the right to exist. Up goes the rent and up goes the price of land, and the poor are no better off as the PRICE INFLATION of all merchandise is a secondary but inevitable consequence.

But we TAXPAYERS are poorer. The money we would have invested in CAPITAL flowed, via the poor, to the Land Monopoly.

The government of the healthy, balanced economy need not concern itself with public welfare, for every able-bodied person can take care of himself, and the families, perhaps with the aid of charitable organizations, can easily support their sick, their under-privileged and their otherwise handicapped members. City welfare service should be the last resort. That's also more in keeping with the Biblical idea of CHARITY. "Public Charity" isn't.

The Ground Duty Insurance Fund

Under the reign of MAMMON the individuals are subject to severe LOSSES due to natural or man-made disasters over which they have no control, such as fire, floods, earthquakes, acts of criminals, etc. To protect themselves and their families against such financial calamities, the citizens POOL their resources in INSURANCE COMPANIES. But many RISKS are NOT covered at all because many people cannot afford the high INSURANCE PREMIUMS.

In the healthy, balanced economy, the function of providing such a COLLECTIVE SECURITY is carried out by the GROUND DUTY INSURANCE FUND administered by the LOCAL GOVERNMENTS. Collective Security is NATURAL and JUST and in keeping with the commandment "Thou Shalt Love Thy Neighbor As Thyself. " We are "Our Brothers' Keepers."

Some critics may oppose this idea of collective security as a form of "socialism. " Perhaps at this point a definition of Socialism is in order.

SOCIALISM is, by definition, a DENIAL OF PROPERTY RIGHT, as people are thereby FORCED to give up a part of their true, private property, their WAGES, in order to create a collective fund. At the same time, their TRUE COLLECTIVE PROPERTY, the Land Rent, is diverted to the land owners, which is also a denial of true property right. No wonder that socialism and Land Monopoly are getting along so well with each other and that some of the most affluent people are pushing socialistic schemes all the time.

But the GROUND DUTY INSURANCE is the paying of truly collective expenses out of truly collectively OWNED funds. There is no violation of property rights, there is no stint of socialism.

Under GROUND DUTY INSURANCE all citizens are AUTOMATICALLY covered against ALL LOSSES not due to any fault of their own, and there is NO PREMIUM to pay. The GROUND DUTY IS THE PREMIUM.

The administration of CLAIMS is the only function necessary. There will be NO AGENTS, NO ADVERTISING, NO POLICIES, NO COMMISSIONS to pay, but there will be a HUGE SAVING of costs.

Quickly upon proof of damage, the victim is compensated for his loss. If a person is responsible for the damage, that person will be required to make RESTITUTION to the Ground Duty Insurance Fund, by forced labor if necessary. Let the CRIMINALS, not the victims, bear the economic burdens of criminal acts. The offender has violated the Law of Liberty and therefore loses his own liberty, and he will not be eligible to receive any GROUND DUTY DIVIDEND till he has repaid in full.

The Ground Duty Dividend

Eventually, when these reforms have reached their full fruition and governments have become efficient public corporations well managed on sound profit-making principles, and when the people have realized the BLESSINGS of adhering to the POSITIVE ECONOMIC PRINCIPLE, then the Ground Duty will begin to yield a SURPLUS, which can be paid back to the SHAREHOLDERS, that is, the people, as a DIVIDEND. Or it can be accumulated in interest-bearing funds from which OLD AGE PENSION can be disbursed.

However, the citizens themselves will be able to accumulate their SAVINGS and provide for their own retirement funds.


If you were around in 1940 and at that time in history you had asked a scientist, or anybody else for that matter: "Is it feasible for man to set his foot upon the MOON?" you would have received an affirmative answer from HOW MANY ?

In 1941, when the Japanese attacked Pearl Harbor, did anybody ask: "Is it feasible to win the war?" No, there was no question about it, and we had NO CHOICE, so we did it.

Today we are faced with a greater danger than war. We are faced with the danger of a self-inflicted, sneaking, cancer-like sickness of the American economy which will eventually, perhaps soon, destroy US as a nation. Unless the American Nation faces REALITY by CHOICE and DELIBERATELY stops SERVING MAMMON, we will become WEAK to the point where our enemies can dictate US the terms upon which THEY will permit US to exist on this earth.

That's what the Romans did to the Jews; that's what the Bolsheviks did to the Russian people and the Communists to the Chinese; that's exactly what Hitler's Nazis intended to do to all of Europe.

Moral and economic WEAKNESS tempts the Barbarians; Moral and economic STRENGTH deters them. Please study Henry George's masterful work of 1879: PROGRESS AND POVERTY (565 pages of beautifully written, unassailable logic), from which I quote (page 487):

"Every civilization that has been overwhelmed by barbarians has really perished from internal decay. " . . .

"Whence shall come the new barbarians? Go through the squalid quarters of great cities, and you may see, even now, their gathering hordes ! How shall learning perish? Men will cease to read, and books will kindle fires and be turned into cartridges !"

Already in his own time, Henry George earned the nickname "The Prophet From San Francisco. " He didn't claim any divine revelation, anything he said was based on logic, and his predictions are amply verified today.

Well, nobody forced US to reach for the Moon. We did it BY CHOICE because we wanted to be NUMBER ONE. And there was a strong element of FAITH in the choice.

We still want to be the LEADING NATION whose example is worth following. If the CRIME RATE in America is a bad example we want to change that. Would it not be a good beginning if LEGAL CRIMES were stopped? Then we could also expect a decline in murders, rapes, burglaries and arson, for undoubtedly many crimes are the result of bad economic conditions.

We tend to blame the Communists, the Fellow Travelers, the Atheists, the Politicians, or even the sunspots, for the world's ills. That's utterly FRUITLESS, for we cannot change their minds. But we can assert the mighty POWER which we do possess, the power to CHANGE our OWN MINDS. We have the power to make the right CHOICES if we seek THE TRUTH first. Jesus Christ said: "Ye shall know the truth, and the truth shall MAKE YOU FREE. " There is NO OTHER WAY !

So if PROPOSITION AMERICA is based on truth, exert your Free Agency, and your Faith, and your Power to make it feasible. Can you think of any nobler aspiration?


In the foregoing dissertation we have dealt with the distribution of wealth without considering the MEDIUM whereby all this wealth is being distributed: MONEY.

To have a healthy, balanced economy we must have a healthy, balanced monetary system. WE DON'T !

First of all, we must understand and know what money is, essentially. Lack of such understanding has caused the MONEY MONOPOLY to rise up and RULE THE WORLD to the detriment of the people.

Many different monetary theories are offered, and the confusion a-bout money makes people think it must be a very difficult subject which only the professional economists understand. So we the people had better stay out of it!

NOT SO! The true definition of money is so simple any High School Senior can grasp it with ease. But it does not suit the MONEY MONOPOLY, therefore it is not taught in school.

Money is a MEDIUM OF EXCHANGE. That is not a definition of money, it is a statement of its function. Money is also thought of as being a "Standard of Value" which it ought to be but isn't. A "Standard" is, first of all, "The ideal to which the wise and the honorable can repair, " or a norm set by what is eternally equitable and just. Second, we may speak of a "Standard Unit" which is an unchangeable unit of measurement such as the pound, the meter or the kilogram. Obviously, money is not a "Standard of Value", for it is neither just nor unchangeable.

VALUE means desirability. There is no such thing as "Intrinsic value" of gold and silver, or anything else outside of MAN, for value is inherent in man, not in the metals or in any kind of money. Nothing can have any VALUE until MAN desires it, i. e. places a value on it.

Somebody has said that "money is the most majestically simple device ever invented by man for making life easier and more worth while." As a medium of exchange, money makes it possible for everybody to exchange anything with everybody else against anything else.

All TRADE is basically an EXCHANGE of articles or services or of privileges. The original and most basic form of exchange is BARTER, in which articles of equal MARKET VALUE (the average of human desirability) are exchanged, when both parties reach an agreement. Both are BUYERS and both are SELLERS.

The process of exchange was improved when one party as SELLER gave CREDIT to the other, as BUYER, and received a PROMISE from him that he would deliver certain articles of wealth at a certain future TIME. Perhaps the buyer would agree to deliver an EXTRA quantity to COMPENSATE the seller for the inconvenience, risk and loss involved in WAITING for the FULFILLMENT of the PROMISE. That extra quantity constituted the seller's rightful INTEREST. The buyer would be willing to pay this interest because he was given the advantage of a DELAY in payment of his DEBT to the seller.

The buyer's WORD OF HONOR was civilization's first MEDIUM OF EXCHANGE. His HONESTY was its STANDARD OF VALUE. That kind of CREDIT MONEY was good only between trusted friends.

But by introducing a TOKEN, or EVIDENCE of the CREDIT GIVEN and the PROMISE RECEIVED, and by attaching a CERTAIN VALUE to the token, for instance equal to one bushel of wheat, mankind had invented that most majestically simple device, MONEY.

Now the EVIDENCE of the credit given and the promise received could be passed from hand to hand in payment of all kinds of goods the value of which could be expressed in terms of bushels of wheat or other commodities. That was a mighty convenience.

In understanding the nature of money it is necessary to realize the fact that the person who first issued and spent the TOKEN and received its value in goods or services, would NEVER have to deliver anything himself in exchange as long as the token kept CIRCULATING among other people. He only departed with the MATERIAL which was imprinted with the EVIDENCE of a credit given and a promise received. Yet, the value of this MONEY was derived from the EXPECTATION that eventually he would REDEEM it by actually delivering that which the token said he would.

It was necessary that the tokens could not easily be COUNTERFEITED, and it was also necessary that they had a uniform size, weight and appearance in order to make them acceptable by everybody without a question. GOLD and SILVER were the metals which fulfilled all these requirements. Gold and silver COINS became the universally accepted EVIDENCE of the CREDIT GIVEN and the PROMISE RECEIVED. As they circulated they were media of exchange and were considered standard units of value. However, it was NOT the metal itself, it was NOT the token that had the value. The PROMISE attached to the token had all the value, which MAN placed on it. This fact was not understood. It was ASSUMED that gold and silver had an INTRINSIC VALUE. In other words, the metal of the coin was given a value equivalent to the PROMISE evidenced by it. The coins became self-fulfilling promises. So when PAPER MONEY was first introduced, the dollar bills issued were originally CERTIFICATES of gold or silver deposited in banks, redeemable on demand. It was thought that only gold and silver was "real money, " and that paper money therefore must have a "backing" of precious metal. But now that there is NO SUCH BACKING for the paper dollars, that theory has evaporated, and no new official theory is offered. So the American people are NOT told what money really is, for that would not suit the MONEY MONOPOLY.

The VALUE of all money is provided by the SELLERS of goods and services who are HOLDERS of money. THEY have only received a token or EVIDENCE of the CREDIT they have given and the PROMISE they have received. When they SPEND the money their credit is ended and the promise is fulfilled, but then SOMEBODY ELSE has given the credit and received the promise evidenced by the money.

This ENDLESSLY CIRCULATING CREDIT evidenced by money is given INTEREST FREE by all the SELLERS who hold the money. Money does NOT earn interest. INTEREST is the WAGES earned by CAPITAL, and money is NOT capital but only the MEDIUM which facilitates the exchanges.



When applying the POSITIVE ECONOMIC PRINCIPLE to the subject of money we must first answer one pertinent question:


This question is of utmost importance because HE who CREATES a dollar bill creates an evidence of a credit given and a promise received.

NO INDIVIDUAL alone has given the CREDIT evidenced by money. It is the ENDLESS SUCCESSION of people who are giving their INTEREST-FREE CREDIT to an endless succession of people who have agreed to successively fulfill the PROMISE evidenced by the generally accepted token, money.

WHO are this endless succession of people?

THE NATION, of course.

It is SELF-EVIDENT that THE NATION is the rightful OWNER of the money AT THE POINT OF ISSUE, because all the individual money-holders have GIVEN their interest-free CREDIT to the NATION.

It is equally self-evident that the individuals become the true owners of the money in the course of exchange, as itis spent by the government.

It is SELF-EVIDENT that ONLY the NATION can have the right to ISSUE AND OWN ANY CIRCULATING MEDIUM, in whatever form it may have.

In keeping with the POSITIVE ECONOMIC PRINCIPLE, the NATION has entrusted, in fact GIVEN, the national GOVERNMENT the RIGHT to ISSUE AND OWN money. In return, the government has an obligation to SAFEGUARD the nation's money through it's power to secure Justice by preventing Injustice. In this way, the people and the people's government TOGETHER earn the VALUE of the money issued. The government, with its SERVICE, pays for what it gets. The people GIVES the interest-free CREDIT, which the government MONETIZES.

The JUSTICE, or ECONOMIC BALANCE, maintained by the people and secured by government, is the FOUNDATION of money.

JUSTICE is the only true and practicable STANDARD OF VALUE.

Since it is the PROMISE that has ALL THE VALUE of the money, it does not matter what MATERIAL is used for the EVIDENCE. It can be gold or silver, copper, nickel, paper, plastic or WHATEVER IS SUITABLE. But an INDISPENSIBLE REQUIREMENT for the material is that it CANNOT BE COUNTERFEITED.

Since high quality paper and plastic are so much cheaper than metal, and since printing techniques are available which can prevent successful counterfeiting, it no longer makes sense to use precious metals.

Another important requirement for a balanced monetary system governed by the POSITIVE ECONOMIC PRINCIPLE is that money is issued and put into circulation in amounts regulated by the NUMBER OF PEOPLE who make up the endless succession, in other words the national CENSUS. The VALUE of the PROMISE evidenced by the money is INHERENT in the people. Therefore, the more people, the more money must be created to maintain the CONSTANT VALUE of the DOLLAR. Only then can it be said that the dollar is a STANDARD UNIT OF VALUE because each dollar will then constantly represent the same amount of HUMAN EXERTION. The VALUE of a dollar is equivalent to the amount of human exertion it will buy in the market place. Human exertion is the STANDARD UNIT OF VALUE expressed in a dollar bill.

The foregoing is a description of what OUGHT TO BE the PRINCIPLE governing our national monetary system. This ideal system is characterized by MONETIZATION of the INTEREST-FREE CREDIT given by ALL THE MONEY-HOLDERS TOGETHER. It is true to the POSITIVE ECONOMIC PRINCIPLE, the God-given principle of Justice and Blessings. It is a NATURAL SYSTEM.

But OUR monetary system is not like that. It is governed by the NEGATIVE ECONOMIC PRINCIPLE.

The MONEY MONOPOLY has managed to keep the world in a state of TOTAL CONFUSION about monetary theory. This super-monopoly has somehow persuaded our lawmakers to LEGALIZE the crime against humanity which is characterized by the process of MONETIZATION OF FICTITIOUS DEBTS.

Whether these colossal LEGAL CRIMES are done intentionally I do not know. In the spirit of Abraham Lincoln, with charity toward all and with malice to none I do not accuse any individual or groups. It seems that the OPPORTUNITY to monopolize both LAND and MONEY presented itself because and when WE THE PEOPLE as well as OUR LEADERS, political leaders and religious leaders, were IGNORANT of our true. God-given RIGHTS and failed to apply our God-given brains. Unless this GENERAL IGNORANCE is replaced with true KNOWLEDGE, the words of the Prophet HOSEA may soon come true:

"I have written to him the great things of my law, but they were counted as a strange thing. (Hosea 8:12)

"My people are destroyed for lack of knowledge: because thou hast rejected knowledge, I will also reject thee, that thou shalt be no priest to me: seeing thou hast forgotten the law of thy God, I will also forget thy children. " (Hosea 4:6)

The CONSTITUTION clearly states that "Congress shall have the power to COIN MONEY and REGULATE THE VALUE THEREOF. " (article 1, section 8). "Money" is NOT DEFINED in the Constitution, and gold and silver alone were considered "real money. " The authors of the Constitution as well as OUR elected representatives in Congress were, and are, unmindful of the fact that GOVERNMENT ALONE has the right and the DUTY to ORIGINATE AND OWN all the money, ALL the evidences of the interest-free credit given in trust by all the people.

Perhaps by DEFAULT rather than by design, the BANKS were given the right and privilege of ORIGINATING AND OWNING the Nation's money.

It was thought that the "Gold Backing" provided by banks justified their incredible privilege of CREATING money.

Originally, our dollar bills were CERTIFICATES "redeemable" in gold or silver. Now even that flimsy pretense has vanished, and it ought to be evident to anyone that the VALUE of the dollar is equal to the amount of HUMAN EXERTION which the dollar will buy. Which is LESS and LESS.

FEDERAL RESERVE NOTES are issued and OWNED by the banking system, but it's interesting to note that the TREASURY OF THE UNITED STATES has RETAINED the privilege of issuing and owning all the small change; the COINS -- of gold, silver, copper, nickel, iron, etc.

In other words, the CREATION of all the kinds of money which use more or less EXPENSIVE MATERIALS and which produces little or no PROFIT to the Mint is reserved for the people's government.

But the issuance of paper money and BANK CREDIT, which generates BILLIONS of dollars in PROFITS, is the privilege of the banking system. Somebody else will have to explain the reason WHY Congress is still allowing this vitally important and tremendously profitable function to be ABANDONED BY CONGRESS and GIVEN AWAY practically without compensation. I cannot, it's beyond all reason.

Our paper dollars are FEDERAL RESERVE NOTES, which essentially means that the privately owned Federal Reserve Banks OWE the corresponding amount of dollars to the government, INTEREST-FREE AND FOREVER (if a note is accidentally destroyed, the owner takes the loss and the FED owes that much less, "forever.")

The Federal Reserve Notes are put into circulation AS LOANS against INTEREST. There can be NO paper money in circulation unless somebody has BORROWED it from the banks at interest.

The FED itself is not obligated to pay interest to the government on the Federal Reserve Notes. HOWEVER, after payment of dividends to the stockholders and the setting aside of reserves, the remainder of the Federal Reserve Banks' net earning is paid to the U.S. Treasury as "Interest on Federal Reserve Notes. "That is an acknowledgement of the fact that the notes constitute a DEBT OWED to the Treasury by the FED. A strange arrangement, indeed! An "interest" which is not computed as a certain percentage per annum of the money owed is a misnomer and should be called something else. It is a KICKBACK.

If computed as a percentage of the notes in circulation, this "interest" was for the first 40 years of the FED's existence LESS THAN one percent per annum. In recent years the percentage has risen sharply due to the sharp INCREASE in the FED's earnings combined with a DECREASE of notes in circulation relative to the volume of BANK CREDIT.

In 1950 it was 0. 842%. In 1979 it was about 8%, or $9 billion.

That kickback is the only revenue earned by the taxpayers who, as money-holders have GIVEN their interest-free CREDIT to their government. Compared with the nearly 100 billion dollars which the government has to pay in interest on the Federal Debt, this "interest" is insignificant.

The bulk of the banking system's earnings arises from the banks' incredible privilege of CREATING BANK CREDIT, which is a form of credit NOT evidenced by dollar bills. The nation's money supply consists of less than 10% currency (coin and Federal Reserve Notes), and more than 90% BANK CREDIT, which is invisible money that exists only as entries on depositors' balance sheet.

BANK CREDIT money is created every time someone signs an interest-bearing note of indebtedness and hands it to a bank. Instantly, his bank account is credited with the amount, and he begins drawing checks on it. These checks become circulating media as they are deposited in other banks. All banks must re-deposit in the FED about 20% of their depositors' money. The rest, or about 80%, they are free to LEND out, and they can continue making loans until their loans are about four times their deposits in the FED. If then the FED wants to further increase the money supply, the FED will start BUYING SECURITIES (evidences of citizens' indebtedness) in the OPEN MARKET and pay with Federal Reserve Bank CHECKS, which are checks drawn on NO DEPOSITS at all. These "High Power" checks, when deposited in banks, INCREASE by a factor of four the banks' ability to lend more money. This astonishing feat of creating money out of nothing, by the stroke of a pen, continues indefinitely as long as people are able and willing to go into DEBT and put up their property as "collateral", or security.

That is "fractional reserve banking" or, more accurately, MONETIZATION OF FICTITIOUS DEBT The banks deliver nothing but we the people must pay them interest for the use of our own money, and if we fail to pay off the loans we may lose our homes and businesses or whatever is pledged as collateral.

The DEBT is FICTITIOUS because the BANK CREDIT is fictitious. There CANNOT be a TRUE DEBT except there be a TRUE CREDIT. One cannot exist without the other. You borrow nothing, you owe nothing.

The Federal Government is the biggest BORROWER of FICTITIOUS CREDIT MONEY. As of now (1982) the Federal Fictitious Debt is about to reach the TRILLION DOLLAR MARK, and the annual "interest" we as taxpayers must pay is approaching one hundred BILLION dollars.

Add to this the debts owed by State and local governments, and all the debts owed by business, industry and the people, and you will arrive at a figure completely beyond comprehension. Our combined DEBTS EXCEED OUR COMBINED WEALTH!

It is IMPOSSIBLE to pay the interest on this debt without BORROWING MORE MONEY !

BORROWING from the banks INCREASES the MONEY SUPPLY, and PAYING OFF debts DECREASES the money supply. There can be NO MONEY in. circulation unless WE and THE GOVERNMENT keep borrowing from the banks. If we pay off more than we borrow there is a shortage of money, causing RECESSIONS and DEPRESSIONS. In order to avoid these calamities, the government keeps borrowing MORE AND MORE. So INFLATION of the money supply and rising prices of everything is the PRICE we have to pay for keeping the economy going.

That's what it costs US to be the SERVANTS OF MAMMON!

Due to the INHERENT "ECONOMIC IMBALANCE we must have either INFLATION or DEPRESSION, and recently we have had both INFLATION and RECESSION at the same time. The economic imbalance is rapidly worsening. A COLLAPSE of our monetary system is a distinct possibility.

Money is to the nation what blood is to the human body. Without its CIRCULATING MEDIUM, its LIFEBLOOD, the nation would die.

In spite of all this, the MONEY MONOPOLY continues its course. The Federal Reserve System controls the INTEREST RATE and tries to use this power to "cool down the economy" on the theory that high interest rates will slow down the inflation. It does, but it KILLS PRODUCTIVE INVESTMENTS and has little effect on UNPRODUCTIVE INVESTMENTS in LAND because the high UNEARNED INCOME from land ownership is still able to pay the high interest rates. As pointed out before, the MONEY MONOPOLY is actually appropriating a large slice of the nation's LAND RENT under the name of "interest."

The young WINSTON CHURCHILL once said, in a speech in Parliament: "The Land Monopoly is not the only monopoly, but it is the mother of all other monopolies."

The MONEY MONOPOLY is an offspring of the Mother Monopoly, and LAND RENT is, like mother's milk, flowing from the LAND MONOPOLY to the MONEY MONOPOLY under the fictitious name of INTEREST. So much, indeed, that the Money Monopoly has become the Lord and Master. It is the SUPERIOR MONOPOLY.

DO AWAY with the Land Monopoly, and the Money Monopoly will be sharply CURTAILED. Do away with them both, and we will have Heaven on Earth.

To verify the statements made above, let the MONEY MONOPOLY speak for itself:

The House Banking and Currency Committee, on September 30, 1941, held a hearing in which the chairman of the Federal Reserve Board, Mr. Marriner S. Eccles, testified.

Congressman Patman: "Mr. Eccles, how did you get the money to buy these two billions of government securities ?"

Chairman Eccles: "We created it."

Patman: "Out of what?"

Eccles: "Out of the right to issue credit money."

The President of the Bank of England, Sir Josiah Stamp, once said: "Banking was conceived in iniquity and born in sin … Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. .. . Take this great power away from them and all great fortunes like mine will disappear (he was said to be the second richest man in Great Britain), and they ought to disappear, for then this would be a better and happier world to live in ... But, if you want to continue to be the slaves of the bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit."

The Federal Reserve Board's official publication THE FEDERAL RESERVE SYSTEM, PURPOSES AND FUNCTIONS should be read in connection with this book. It is a study in arrogance which does explain the workings of the banking system but seeks to mislead the reader by failing to define money correctly and by giving the impression that the FED and the banking system are designed and operated for the benefit of the nation.

For readers who do not have the opportunity to study that official publication we shall quote passages from the April, 1954, edition (Our comments in parenthesis.)

Page 4: "The principal function of the Federal Reserve System is to regulate the flow of credit and money." (If all the money were possessed by the individuals at all times and not borrowed from the banks, we the people would regulate the flow of our own money and credit, and who says we don't qualify?)

Page 5: "Money is most meaningful defined in terms of the functions it performs. Its three main functions are (1) a means of payment; (2) a store of purchasing power; and (3) a standard of value. In the United States, circulating paper money and coins of all kinds and the demand deposits held by banks perform all of these functions. " (A "definition" which states only the functions and not the essentials is no definition. How can money be a "standard of value," or "a store of purchasing power" when its total volume is, on purpose, made elastic, and its value therefore uncertain? The term "value" is not defined.)

Page 14: "Banks ... are required by law to hold as reserves an amount of uninvested funds equal to a designated portion of their deposits ..." (so they can legally lend out only a certain portion of my deposits, on which I, myself, can draw checks at the same time.)

Page 16: "When a member bank receives a demand deposit of $100, in currency or in the form of a check on another bank, it must deposit $20 with a Federal Reserve Bank as required reserves against the deposit and is free to lend or invest the remaining $80. If there is an adequate demand for loans from customers or a supply of suitable securities in the market, the bank will lend or invest practically all of the $80. It will retain a little of the $80 inasmuch as it needs some cash in its till to meet day-to-day needs of customers for cash. " (It is explained that this ratio of 20% reserves is used in this sample for simplicity; in reality, the reserve requirements vary and are usually lower than 20%. If the banks were required to have 100% reserves in currency, only the depositors could draw checks on their own money, and would that be an unreasonable requirement? Note that only when there is an adequate demand and adequate security is offered the banks, that is, when people are willing to go into debt, can banks create money so that we can have a circulating medium of exchange.)

Page 17: "Now let us assume that the Federal Reserve believes that additional loans are desirable to meet the credit needs of the country and that its actions add 10 billion dollars to the member banks' reserves in a manner that also increases the banks' deposits by the same amount . . . (that's what happens when the FED buys government bonds and other securities and the borrowers deposit the proceeds in commercial banks, ) . . . The member bank would have a higher ratio of reserves to deposits than is required by law. Therefore it could make additional loans and investments. . . . the bank has ... 8 billion of reserves above requirements, or excess reserves. ... on the basis of the 8 billion dollars of excess reserves the member bank can add 40 billion to its loans and investments. . . . The calculation . . . shows what a powerful . . . instrument reserve banking can be. It can provide the basis for an increase in the money supply not merely by the amount that it adds to the bank's reserves, but by about five times that amount. (And these rates are arbitrarily set by the Board of Governors, not by the Congress, and can be changed as they see fit. )

Page 19: "Consider the course of events in case there is too much money and it is decided (the Money Monopoly decides) that the amount should be diminished. Suppose that Federal Reserve action (by selling bonds and securities in the open market, absorbing excess buying power) reduces the ... reserves the member bank had ... by 5 billion, at the same time lowering deposits by an equal amount. . . . The member bank would be deficient in reserves to the extent of 4 billion dollars. The bank would have to call loans or sell investments, and thus absorb deposits to the extent of five times its deficiency in reserves, that is by 20 billion dollars. . . . Once more we see the powerful impact of reserve banking, this time in the direction of contraction. (To "call loans" and "sell investments" means to deny further credit to customers who may be building up business with this credit, and whose success depends on the availability of further credit. To call loans means hard times and perhaps bankruptcy to some businessmen. It means that funds for the aquisition of land and for construction of buildings are "drying up, " and it means unemployment .for the workers who are thus prohibited from working on the natural opportunities which God has provided free. This is the "powerful impact" of reserve banking. )

Page 20: "The all-important fact brought out by this discussion is that the Federal Reserve, by adding to or extinguishing the member banks' reserves, can influence it to increase or decrease its loans and its demand deposits by several times the amount added or extinguished. It is because of this fact that Federal Reserve dollars are often called "high powered" dollars as compared with ordinary deposit dollars." (This is a blank confession of the total dictatorship which the FED has over our medium of exchange. The interest-free credit which all we money-holders are extending to the nation and which we have entrusted to our government, this credit which constitutes THE CREDIT OF THE UNITED STATES has been given away by our elected representatives in Congress to a syndicate of private banks hiding behind the name of "Federal, " a syndicate over which the Congress has no control whatsoever, a syndicate which does not allow the General Accounting Office to audit its books except under pressure.)

Page 26: "Sometimes it is said that, since the banking system can lend several times as much as it obtains in reserves, individual banks create money by the stroke of the pen, but as the preceding description indicates, this is not correct. An individual bank can lend or invest only on the basis of money provided by its stockholders, its depositors, or its borrowing, and the maximum it can lend or invest is the excess over what it must hold as reserves. Only the Federal Reserve has the power to create or extinguish the money which serves as the reserves of the banks. New reserve money, after it leaves the hands of the first bank acquiring it, continues to expand into deposit money as it passes from bank to bank until deposits stand in some established multiple relation to the additional reserve funds." (The preceding description of the banks' function does not "indicate" that they don't create money by the stroke of a pen. It PROVES that they DO! The poor soul who was commissioned to write this double-talk must have been in pains, so he came up with the suggestive and timid "indicates" instead of the absolute and positive verb "proves." A proof, not an indication, is what is called for in response to the accusation that banks create money. The editor is counting on our gullibility. His plain statement that the maximum a bank can lend is the excess (of our deposits) over what it must hold as reserves is the same as saying that the bank makes several lending dollars out of one deposit dollar, by the stroke of a pen. He is contradicting himself within one paragraph.)

Page 20: "... the major factor increasing or decreasing the money supply is the loans and investments of commercial banks. It should be noted, however, that currency withdrawals from banks reduce bank reserves dollar for dollar and that such withdrawals affect the expansion potential of a given volume of new reserves." (That's exactly why our circulating media should be evidenced by 100% currency, that is paper money and coins to the full extent of the people's needs, and not by elastic bank credit which only exists to the extent we go into debt. If we all used UNITED STATES NOTES instead of checking account and credit cards we would be the true owners of our money at all times, and there could be no expansion or contraction of the money supply. The interest we paid for loans would be TRUE INTEREST payments between ourselves and not fictitious interest (usury) to the banks. Banks hate currency and love checks and credit cards. When people lose confidence in banks as they did in the early days of the great depression, they take out their deposits in the form of currency, causing a "panic" in the banking system because they take away the banks' reserves and force the banks to CALL LOANS by five times as much as the currency withdrawn. A 100% currency reserve requirement would severely curtail the earning powers of banks but might increase ours a bit besides making us more secure against losing our homes by foreclosure.)

These facts about the banking system are so little known that even our Congressmen, who should know, repeatedly express themselves in ways which strongly indicate that they either honestly don't know or, if they do know, they are being intimidated and pressured and bribed to hold their peace.

The burden of usurious interest which the Federal taxpayers had to pay was in 1971 about seventeen billion dollars. In 1982 we will have to shell out about one hundred billion dollars interest on a trillion-dollar national debt. In spite of the administration's frantic efforts to cut the budget we will have record deficits. It is simply IMPOSSIBLE to balance the budget while paying this astronomical amount in interest, and the national debt is bound to grow explosively. Unless this madness is stopped soon our monetary system will inevitably break down.

In contrast please visualize the blessings we would have enjoyed if our Congressmen had fulfilled their self-evident duty and exerted their perfect right to monetize and spend the nation's interest-free credit which is given to the nation by all the money-holders combined. Our money would then be controlled by none other than the individual money-holders themselves. There would have been NO NATIONAL DEBT other than the never-to-be-paid, interest-free debt evidenced by the nation's money supply. There would be less State and local public debt, and all debts, public and private would be true debts equalled by true private claims, that is, a TRUE CREDIT given. There would be MONETARY BALANCE. The POSITIVE ECONOMIC PRINCIPLE would be in force as far as our money were concerned.


Monopolies exist only because We the People allow them to exist and because we are misinformed, brainwashed and regimented by the powers which rule the world.

Our ignorance of -- and our disobedience to the LAW OF LIBERTY cause us to lose our liberty, our prosperity and our peace due to an increasing ECONOMIC IMBALANCE, a condition which can be observed in its most advanced stages in the Soviet Union, China, India, Indo China, Africa, Latin America and, to a lesser degree, in democratically governed countries where the people were able to alleviate some of the economic imbalance by artificial, social-democratic means. It is a universal MALADY, and only the UNITED STATES OF AMERICA is still in a condition under which it is POSSIBLE to reverse the trend. It is possible here because we are basically a CHRISTIAN NATION. Christians should be able to UNITE in a political ACTION PROGRAM because NONE of the many denominations has any rivalry against any other over the observance of the LAW OF LIBERTY. They have ALL forgotten it. But I am talking about INDIVIDUAL CHRISTIANS, not necessarily their leaders.

Because people are being OPPRESSED they UNITE AND FIGHT for the cause they think is the right one. SOCIAL PHILOSOPHERS such as KARL MARX offered them an explanation: "All the trouble is caused by the bourgeois idea of property right, away with property rights!" That's what SOCIALISM AND COMMUNISM are all about: DENIAL OF PROPERTY RIGHTS, and DENIAL OF INDIVIDUAL FREEDOM.

There is no place for Socialism in the KINGDOM OF GOD, for His Kingdom is governed by the divine concept of Property Right.

Instead of providing justice for the poor, Socialism perpetuates the injustice by setting up its own monopolies. The Land- and Money Monopolists are actively promoting socialistic schemes in order to enhance their own profits, powers and influence. They control the governments. The scheme was perfected by the Fabian Socialists, of which Bernard Shaw and John Maynard Keynes were the best known and most influential members. It's very simple:

As the Land- and Money Monopolies proceed in robbing the people of the fruits of their labors and reducing them to the minimum level of existence, they are actually killing the "Goose that lays the Golden Eggs." It is important to the monopolists that the victims of oppression be kept alive and able to work and procreate. It is also important that the unearned gains from land holdings and from monetization of fictitious debt be reserved for the monopolists. So the Fabian-Keynesian socialistic scheme is to convince the masses that TAXATION of their well earned property is for their own good. Thereby, all the hard working people are compelled to give up their surplus, however small, to share their poverty with all those who are being made jobless, poor, destitute and DEMORALIZED by the oppression of MAMMON -- and whether they deserve it or not.

To avoid taxes on unearned income the monopolists seek to downgrade the Property Tax and the Income Tax and substitute taxes which do not bear heavily on unearned income, such as Sales Tax, Excise Tax, Import Duties, License Tax, etc.

Here in America we can expect soon to be inundated with propaganda for a new Federal Sales Tax, the so-called "Value Added Tax" (VAT), which now for many years has been practiced in Europe and is hated like the devil (but his people love it). VAT is an all-encompassing Sales Tax applied to all stages of production and distribution. It is a bureaucratic nightmare which requires a staggering amount of paperwork. When the lustre of "Reaganomics" wears off, VAT may be put on US as an emergency measure to reduce the bothersome deficit.

Let us briefly trace the workings of the monopolies through the economy, keeping in mind the FALLACIES on which the two monopolies are founded. The first fallacy is the idea that land is the property of men, that it can be bought and sold like merchandise, and that there is no distinction between property in land and property in man-made things. The second fallacy is the idea, or lack of idea, which seeks to justify the monetization of fictitious debts by banks, ignoring the fact that the value of money is provided by all the money-holders in common.

It is also important that we keep in mind certain facts pertaining to economics.

The first, most beautiful and spiritually uplifting economic fact is that the GREAT LANDLORD, GOD, has provided for all our material needs, not just adequately but in SUPER-ABUNDANCE. His economic laws, if heeded, would assure every living person a plentiful supply of food, clothing, energy, shelter and luxuries according to the person's own diligence.

We talk about OVERPOPULATION as if the Lord mindlessly puts more people on Earth than can be provided for. The fact is that, if properly utilized, the earth can comfortably support several times the present population. Henry George writes in PROGRESS AND POVERTY (page 558):

"It is difficult to reconcile the idea of human immortality with the idea that nature wastes men by constantly bringing them into being where there is no room for them. It is impossible to reconcile the idea of an intelligent and beneficent Creator with the belief that the wretchedness and degradation which are the lot of such a large proportion of human kind result from his enactments."


But if the earth's deposits of fossil fuels (oil, gas, coal) were utilized for the benefit of the people rather than the monopolies there would still be plenty of these energy sources available at reasonable prices.

The STRATEGY of the monopolists is to create SHORTAGES where the Lord God has provided abundance.

When people have enough of material things, most of us tend to live in peace and are willing to SHARE. But if there is a shortage we tend to HOARD that commodity, making it even more scarce and expensive, and the LOSERS become upset. The peace is disturbed.

Since the Lord knew we would eventually run out of fossil fuels He gave us knowledge of the unlimited energy sources, Solar Energy, and Nuclear Fission and Fusion.

We have an inexhaustible supply of WATER in the Ocean. With unlimited energy at our disposal we can convert unlimited volumes of sea water to fresh water and pump it inland to irrigate our deserts and barren hillsides, and produce unlimited quantities of food, fiber and wood for an unlimited number of people, at the same time stimulating natural rainfall. That is, IF the monopolies will allow us.

With LIBERTY to utilize all the natural resources without having to pay a BLACKMAIL PRICE, any nation on Earth would grow and prosper as more human energy would be spent producing and less energy wasted.

The second important economic FACT is what is called "the Law of Human Progress", which states, simply:


In other words, "You jump the fence where the fence is lowest, " and you get rich, not by choosing the hardest way of doing things but the easiest. All our marvelous technological progress happened because we were looking for better, easier, more economical ways of doing things and because WE HAD LIBERTY TO DO SO.

When we have liberty and are assured of the fruits of our efforts we tend to become inventive, productive and prosperous. If we do riot have this liberty and security we tend to become dull, unproductive and poor.

The first settlers in America were poor people who had fled from the oppressive economic and religious conditions prevailing in Europe. Some of them, coming off the good ship Mayflower, were very idealistic and thought that by having everything in common they would have the ideal society. They set up a socialistic community ("From everybody according to his ability, to everybody according to his needs"). That was a dismal failure, and they almost starved to death. Unwittingly, they had negated the Lord's most precious gift to mankind, man's FREE AGENCY, and annulled the Lord's sacred law of Property Rights.

So they reinstated Private, Free Enterprise, and from that time on they prospered. They had not understood that all they needed was liberty and justice. In the old country they had been oppressed by the Land Monopoly, by religionists and by governments. But in America there was NO RENT and NO TAXES to pay, and they were free to worship Almighty God according to the dictates of their own conscience. They had LIBERTY.

However, the significance of these facts was not fully comprehended, and when the United States' CONSTITUTION was enacted it lacked the clauses which would have prevented the present economic chaos. The Constitution does neither define "Property Rights" nor "Money". An attempt to formulate these definitions would have led to the POSITIVE ECONOMIC PRINCIPLE, and apparently the Founding Fathers were not prepared to be that "radical".

As the population increases, the LAND acquires a MARKET VALUE, especially in and around cities. In order to pay off the former owner, the buyer makes a LOAN, and the money comes, directly or indirectly, from banks which create the money in the form of bank credit. The already existing money supply is, of course, utilized first, but the snowballing demands of the Land Monopoly requires a snowballing INCREASE in the money supply.

The owner of the land pays interest, and in doing so he is actually surrendering a large part of his unearned income, the LAND RENT, to the banks. The abnormally high interest rates prevailing in 1981 were possible only as long as the profits from monopoly investments were extremely high. The "interest" paid to banks is largely made by charging people for the right to exist, and people who are investing in mortgages are to some extent investing in the Land Monopoly.

Here is where the "Conventional Wisdom" fails. It is assumed that PRICE INFLATION can be dampened by high interest rates and that, simultaneously, business investment and employment can be stimulated by income tax cuts. But no distinction is made between PRODUCTIVE investment (buildings, machinery, etc. ) and UNPRODUCTIVE investment (land, gold). Now, as long as people have enough resources to pay the exorbitant land prices, the usurious interest rates, the taxes and the insurance premiums, they will keep paying because they have NO CHOICE but less and less money is available for productive purposes, and productive industry cannot very well pay those usurious rates anyway. So the productive private sector is compelled to operate on accumulated reserves, at low profit rates, and expansion plans are cancelled. Bankruptcies are the order of the day.

The TAX CUTS do provide means to invest more money. The most profitable investment appears to be REAL ESTATE, so the tax savings as well as the huge monopoly profits are primarily invested in real estate, boosting the land prices and the rents still further. So the tax cuts may do more harm than good under these circumstances.

Eventually, governments will find themselves unable to provide the enormously increased SOCIAL SERVICES. There is only one "known" REMEDY for this situation: borrow more fictitious money against more fictitious public debt. The INFLATION goes into the TWO DIGITS again and perhaps into the HIGH TWO or even THREE DIGITS. That means that our monetary system is BREAKING DOWN; that eventually the dollar may become WORTHLESS. Riots and chaos cause the administration of LAW AND ORDER to BREAK DOWN, and DICTATORIAL POWERS take over the government. THAT is the likely development unless the powers of the monopolies are broken.

The Mark of the Beast
(Revelation 13:16-17)

Most likely, the Federal Reserve Notes will be replaced with a paperless, electronic monetary system. You will be assigned a number indelibly imprinted on your hand and on your forehead, and a scanner will electronically convey your earnings and the amounts of your purchases to your account. Perhaps you can in this way obtain a small a-mount of coin and paper money for petty purchases. Governments will automatically remove from your account any amount they say you owe them. The Super-Monopolists will be in control, and Government of the People, by the People, for the People, will be no more.

We need not elaborate on the HORRORS which are likely to come. The prophets have foretold them, and there is an abundant statistical evidence of the approaching danger.

The Lord God Almighty did not cause this to happen to US, but He knew it would, and He provided an ESCAPE (Rev. 13:8).

We THE PEOPLE permitted the ECONOMIC IMBALANCE to happen. We the People can exert our constitutional rights and STOP the MADNESS.

How many people will benefit from an ELIMINATION of FALSE CAPITAL (Mammon), and from the establishment of TRUE CAPITALISM (Liberty and Justice for All)?

WE ALL would benefit immensely, for the Kingdom of God is the ideal towards which we would be striving. Those RICH MEN who are also WISE know very well they cannot take it with them. In pursuing the ways of RIGHTEOUSNESS instead of the ways of MAMMON they might secure for themselves Treasures in Heaven, which is the wisest thing anybody can do for himself. And would you not RATHER live in a fairly modest home surrounded by a peaceful community of people who all have what they need, who are well employed, and where the community's affairs are financed and governed by themselves - rather than live in a palace inside a guarded, electric fence, surrounded by ghettos full of property-less, half starving, unemployed masses?

Henry George made another true prediction a hundred years ago:

"The truth that I have tried to make clear will not find easy acceptance. If that could be, it would have been accepted long ago. If that could be, it would never have been obscured. But it will find friends -those who will toil for it, suffer for it, if need be, die for it. This is the power of Truth." (Progress and Poverty page 555)

THE POWER OF TRUTH will eventually prevail, sometimes against overwhelming odds. So in spite of opposition, slander and ridicule let us not be dismayed but set up the GOALS towards which we, as WISE MEN, ought to be striving. And remember the old saying: "All that is required for the forces of evil to triumph is that good men do nothing!"

ALL THAT IS REQUIRED of US to save this American Republic from destruction is FAITH, DETERMINATION and OBEDIANCE to the will of God. Then the GREAT LANDLORD, GOD, will provide us with the MEANS with which to carry out into practice the POWERFUL IDEA WHOSE TIME HAS COME. May I quote the prophet NEPHI of the Book of Mormon: "I will go and do the things which the Lord hath commanded, for I know that the Lord giveth no commandments unto the children of men, save he shall prepare a way for them that they may accomplish the thing which he commandeth them." (1 Nephi 3:7)

If the NECESSARY REFORMS proposed in PROPOSITION AMERICA seem to be of staggering proportions it is due to the fact that our transgressions against the economic laws of God are of staggering proportions.

No matter how much or how little can be accomplished in the face of overwhelming political opposition, it is still expedient to make ourselves a BLUEPRINT of the PROCEDURE for staging a modern JUBILEE (the Biblical Year of Liberation from bondage) in accordance with the POSITIVE ECONOMIC PRINCIPLE, pleasing to the GREAT LANDLORD, God and ushering in a new era of PEACE AND PLENTY.

The following is what occurs to me at this time as THE FIRST OUTLINE, or SKETCH, for such a plan. Take it for what it is: a feeble glimpse of some distant object shrouded in smog, details obscured, yet standing out like the skyline of a big city.

Part 3 * Return to Part 1