—Says Mr. Loftus, urging money reforms
" SUCH men as Disraeli, Gladstone, Abraham Lincoln, Woodrow Wilson, and Pope Pius XI cannot be ignored as if they were currency cranks," says Mr. P. C. Loftus in a brochure entitled Morley and National Reconstruction, the latest pamphlet from the Economic Reform Club and Institute.
Mr. Loftus then marshals the quotations from these men of wisdom which support the main thesis of the pamphlet.
REFORM OF MONEY Here are Mr. Loftusht main points: " When considering national reconstruction after the war it is essential that we place in a position of primary importance the reform of our monetary mechanism and of the present financial system.
" It was this financial system, conducted on orthodox lines under the control of the Bank of England, which was largely responsible for the fevered twenty years of social discord at home and international discord abroad which formed the interregnum between the two world wars.
" At the end of the previous war in 1919 our national prestige stood higher, our standard of living was better and we were in actual fact richer than we had ever been in our history. We had more skilled mechanics, artisans, shipbuilders and technicians than ever before. We had splendidly equipped factories of all types, many of them new. The world was clamouring for manufactured goods of all kinds and the primary producers had satisfactory prices and were therefore able and Willing to buy. The agricultural land of Britain was more fertile and better cultivated than it had been for fifty years past.
RICH INDEED " We were rich indeed, but the financial experts told us we were poor and for twenty bitter years we laboured to make the actual facts fit the financial theories. We pulled down factories and destroyed much valuable plant and machinery, and closed down shipbuilding yards, forcing many of our skilled mechanics and artisans to emigrate to the Dominions and America.
" By our financial policy which had the effect of halving the prices of primary products we lowered the incomes of primary producers throughout the world by over 50 per cent., thus destroying the purchasing power of customers for our manufactured goods in Asia, America and Africa.
" We cannot allow finance to wreck post-war Britain this nine 'and indeed we shall be forced to snake financial theory conform to the actual facts. With our devastated cities daily before our eyes crying out fur immediate rebuilding, ice shall be obliged to enter upon vast schemes of reconstittetiOn. giving employment to millions in the building, iron, coal, cement, timber, pottery and other trades: arid this we must do withatit piling up an intolerable load of debt."
BITTER ABOUT THE BANK Then stating that ignorance by the general public of money, its creation and functions, was the reason why a general demand for reform was not made, Mr. Loftus makes the analysis of the present banking system which throws into the high light its criminal antisocial anomalies. He is particularly and reasonably bitter about the Bank of England —that secret Government within the Government.
Not everybody knows, for instance, that any individual may call at Somerset House and on payment of a shilling he may inspect the shareholder's register of any public company, arid he may thus ascertain, for instance, the names of the shareholders in any of the great Joint Stock Banks or Insurance Companies. But he is not allowed to inspect the iist of shareholders of the Bank of England, if indeed a list is kept at Somerset House Moreover, a Member of Parliament is entitled to put down questions ort the Order Paper of the Rouse of Conanorts on almost every conceivable subject, but he is not allowed 10 put down any question asking for information as to the names of the shareholders of the Bank of England..
"DEMURRAGE " ON IDLE MONEY Then Mr. Loftus sums up his suggested reforms, and " demurrage " on currency deposits (which ought to be running) at banks is among the most interesting.
Says Mr. Loftus:— " We recognise that our great Joint Stock Banks are directed and controlled by men I of the highest ability and integrity, so that the British banks are to-day the model for the banking systems of the world.
" We condemn the system as evil, not the men who work the system in as conscientious a manner as is possible.
" We believe that under a reformed sys tern, where Joint Stock Banks would act. as agents of government money not as creators of private money, they would have under their present skilled and conscientious management and present ownership, as important and as profitable' functions as they now perform.
CHARGE INTEREST ON DEPOSITS " The system would be different. It might well be that instead of paying interest on deposits, they would charge interest instead. Money is, or should be, the mechanism for transferring goods and services. In a period of bad trade and falling prices and rising unemployment, it would appear as paradoxical to pay interest on deposits (i.e. on the hoarding of money) as it would now appear to pay individuals to hold up railway trucks and thus prevent them fulfilling their proper function in a time of national emergency when there is an urgent demand for trucks. Demurrage charges on idle money would appear to be as equitable and logical as those now imposed on idle railway waggons. " But while the Joint Stock Banks should remain under private ownership, it would, of course, be necessary for the Bank of England to be owned and controlled by the State. It may be objected that this is Socialism. In reply it may be pointed out that certain public services, such as the Port of London, have been taken out of the hands of private control with the approval of all parties. Yet the policy of the Port of London Authority does not affect every home in the land as does the policy of the Bank of England."