America's Money Machine

The Great Investigation 57
aspect of banking except the history of the note issue privilege. By contrast,
as we have noted, the Commission's report dealt almost entirely
with banking operations to the neglect of the theory or the history of
money.
The Commission's attitude toward this subject is evident from the
seventeen points. Point 1. states: "We have no provision for the concentration
of the cash reserves of the banks and for their mobilization and
use wherever needed in time of trouble."
From this it is apparent that the Commission accepted assumptions
which it should have been its prime duty to question and analyze. Probably
no question is more germane to the theory of individual (that is,
personal) sovereignty and ofrepresentative government exercising delegated
powers, than that of where the reserves of a nation are to be kept.
To deprive an individual of his liquid reserves and to concentrate them
in the hands ofa central bureaucracy is, ofcourse, the ultimate negation
ofindividual liberty and responsible citizenship, and the substitute therefor
of autocratic and irresponsible government. We shall have more to
say about this as we go along, but the cleavage in political and economic
philosophy should be clear at the outset: human liberty is co-extensive
with the right ofproperty. The simplestan.dmost usable and marketable
form of property consists of apiece of intrinsic money-a coin of good
metal. When, by whatever means, the individual is deprived ofthe possession
of that piece of metal-that intrinsic substance of worth-whether
by the subtle sophistries of "mobilization of reserves" or other phrase,
we witness the first steps on the road to serfdom and submission to an
all-powerful state.
The second item in the Commission's summary states that "antiquated
Federal and State laws restrict the use of bank reserves and prohibit the
lending power of banks at times when, in the presence of unusual demands,
reserves should be freely used and credit liberally extended to all
deserving customers."
In this statement the Commission neglected to. consider the function
ofmoney. For when the proposition is stripped to its-bones it means that
regardless of the condition of business, the individual, or the economy,
the individual.should always be able to convert his property into money.
(For"the moment, ofcourse, the proposition limits itself to notes ofhand
represented by property in the course of movement from hand to hand;
but the theory is the same.) The logical meaning ofthis is that the quantity
ofmoney should always be potentially or actually co-extensive with property-at
least with movable property in the course of trade. (Later it would mean