Planned Redistribution Of Wealth
• A Banker Who Believes In God
New Money for New Men. By S. S. Metz. (Macmillan, 8s, 6d.) THIS is a book that ought to create no small stir, though it is much more likely to be received with a conspiracy of silence.
Its author, we are told, is a successful banker of thirty-five years' varied experience in England and America. An unusual kind of banker, perhaps, who is able to see the wood as well as the trees; he not only knows the Money-system in all its details, but he grasps the Money-problem as a whole, and perceives its relation to the rest of life. What is more, he is a banker with a practical belief in God-one who can speak quite naturally about Our Lord's teaching and God's Will in the same breath as about disequilibrium of international payments, or reserves in liquid form.
Naturally, I do not feel competent to pass
judgment on most of his statements, but in things that I do know about he writes with accuracy and awareness, so I have no difficulty in accepting his version of the facts of his own profession. He always avoids obscurity, though not always dullness, and no fairy provided him with the literary gift of compression.
What, then, has he got to say? Well, about the present Money-system (with which the first two sections are concerned) this book in its own language confirms all that the severest critics of Finance have ever said. It describes in fullest detail-I wish I had space for it here-the ways in which the Bank of England expands and contracts the total volume of money and credit at will.
The Bank still dominates • the Treasury, and in spite of all reassurances to the contrary still follows its old cherished policy of deflation; consequently, the deposit banks, unable to find in the reserves of the banking-system a sufficient base for necessary credits to industry, are forced into that selling of securities which (says Mr. Metz) brings down the price-level, sends up rates of interest, and causes the inevitable " trade-cycle," depression, unemployment, and all the rest of the miserably familiar story.
The author goes art to analyse what he terms the " disruptive"influences which are always at • work in the money-stream, diverting "commodity-money " from circulation and turning it into mere " financial-money " invested in permanent capital goods or lying idle in banks. Hence again unemployment, poverty, and all the other symptoms of maldistribution of wealth.
Several chapters are concerned with tracing what actually happens to surplus income, undistributed profits, and financial reserves of every kind,.and what it alt boils down to is that some people have far too much savings and profits to play about with.
It is in the last section of his book that Mr. Metz offers his suggestions for reform --or rather, elaborates the detailed blueprints for his " New Order " of societyand he evidently enjoys this constructive labour immensely. At first sight his New Order makes little appeal to a Catholic sociologist. The perspective, emphasis and terminology in which it is described are all those of Mr. Metz's own environment, and the most prominent word is Planning.
" Good Lord, is this all he has to say?" I thought at first, hut reading on 1 decided that such a view was altogether too hasty. The author may talk like a mere Planner, but the driving urge of his Christian faith and charity is there, and it guides him every time towards what is true and just and human and wise.
Now sum up in few words this New Order visioned by a banker who desires only God's Will?
Beginning with finance: he would buy out the shareholders of the Bank of England and make it the responsible servant of the community. To be exact, it would belong to the National Estates Board, a new body formed to administer all capital assets which may come into possession of the nation. The money-andel-edit reserve will be based on the community's power to produce, and the " sinister rule of gold " will be abrogated except in so far as gold will be used to help balance international payments. Banks will no more be allowed to pay interest on deposits, the banker's function will be to provide a sufficiency of short-term selfliquidating loans for industry. A responsible Banking Board would co-ordinate the who system of finance.
In the New Order (says Mr. Metz) all surplus incomes and profits, if not put into some private enterprise by the owners, must be " marshalled into channels that will keep the circulation going and so help
the common good. The " marshalling" will be done by a drastic " National Investment Trust," which will absorb all idle savings (paying interest at 3 per cent.) and be responsible for providing all producercredit for capital expenditure of the non-self-liquidating kind. Small enterprises will be encouraged as much as large ones. No other public investments will be available except houses and land, and those only through the " National Mortgage Institute," a subsidiary to the aforementioned Investment Trust.
Industry would be organised into vocational groups or associations (mentioned rather vaguely) and there would be a supreme Economic Council• (representing other interests besides industry) to do the planning, and a central Board of Enterprise, representative of all industry, to carry the plans out. Detailed proposals also deal with ending unemployment by financing consumption, wage-minimums, profit-sharing, abolition of child labour, vocational education and guidance which would provide equal chance in life for all, and such matters.
But most important of all, there would be a drastic law controlling Inheritance, under which nothing could be left by will except income up to 15,000 a year, or land up to that income-value, or. house-property with land attached, but not more than one house to each beneficiary. All other property of the deceased, and notably the assets (other than land or houses) from which the bequeathed income may be derived, will pass into the ownership of the National Estates Board, so that
" ultimately all assets, except such houses, land and investments as are owned by the living generation, will be vested in the National Estates."
This may remind some people of Russia, and others of Mr. Belloc; the fact is that Mr. Metz is thinking neither about Communists or Distributists, but simply of doing the Will of God; and he is trying to work out-like Napoleon-a Practical plan for the necessary redistributing of wealth to each generation of families.
" Planned Redistribution," in fact, might be a fair title for the extremely complex and complete system advocated in this book. Events nowadays move quicker than printers and publishers, and I find myself wondering how much exactly of Mr. Metz's programme has been already put into action by Mussolini, Hitler, Lenin and Co. Quite a lot, I fancy, on the financial side. But, of course, they have thrown out the baby with the bathwater, and Mr. Metz is all in favour of saving the baby and giving him a chance in life.
As a test of realistic sanity in economic writers, I always look to see where they expect the population of England to get enough food from. Mr. Metz evidently thinks that by collective marketing and barter our Government will always be able to exchange our marruactures for 64)161 imports of foed.. I hope he is right, but I can't help wondering if the people abroad will always want our machinery and motor cars. However, I hasten to say that Mr. Metz is alive to the need for English foodproduction and proposes to encourage it by direct subsidy to English farmers.
I should add that the book gives full consideration to the financial relations between one country and another; the author puts no emphasis on control of the exchange but much on the balancing of external payments, in other words on the equalising of imports and exports by tradeagreements all round.
There are many interesting side-issues in this book; for instance, a passage in which Mr. Metz, himself of Jewish origin, gives his opinion about the influence of Jews in finance. (His opinion will give little satis
faction • to the sensation-seeking, fanatical kind of Catholic.) But in conclusion, I want to recommend this truly remarkable book to the close attention of Catholic economic " experts," especially to those whoefor 'years have belittled monetary ie.form without ever facing the real case for
It is a difficult book, with a view-point and a vocabulary all quite different from anything any of us are accustomed to. I believe its effect will not reach the general reader until its repetitions and technicalities have been slimmed down by somebody into a readable book of 100 pages or so. But in my own mind there is no doubt that in this book, by a Jewish-Christian banker who puts God first, we have the strictly financial application of those great social encyclicals which I expect Mr. Metz has never heard of but which sound the same trumpet call: for a New Order of society based on the Common Good and the Will of God.