Let our Federal banking system also become the servant of the public welfare, and let its energy be devoted to breaking the strangle-hold of predatory finance on our industry. Let the government issue all money, and use it for the transfer of industry from private into public hands. Do we want to socialize our railroads, our coal mines, our telegraphs and telephones? Do we want to buy them, in order to avoid the wastes of civil war and insurrection? We have agreed that we do; and here we have the way of doing it. If the bankers can create, out of our willingness to trust them, billions upon billions of imaginary money, then so can we, the people of the United States, create money out of our willingness to trust ourselves. And do not let anybody fool you for a single second by talking about "fiat money" and "inflation of the currency." If you are paying twice as much for everything as you did before the war, you are paying it because the bankers have doubled the amount of money in circulation—for that reason and that alone. That double money the bankers own; the only question now to be decided is, who is to own the double money that will be created tomorrow?
Make note of the fact that it costs nothing to start a public bank. If you want to put the steel trust out of business by competition, you have several hundred thousand dollars worth of rolling mills and ore land to buy; but the banks can be put out of business by nothing but a law. The material parts of a bank, the white marble columns and bronze railings and mahogany trimmings, are as nothing compared with the inner soul of a bank, its control of the life-blood of your business and mine; and this we can have for the taking. We can keep our own "credit"; instead of sending it to Wall Street, where speculators use it to bleed us white, we can set it to building up our own community, under the direction of officials whom we select. Also, we can have our gigantic national bank, controlling all our thirty-three billions of dollars of deposits, and likewise the hundreds of billions of credit built upon them.
The first time you suggest this plan to a banker or business man, you will be told that increase of money by the government does not benefit labor or the general consumer; "inflation of the currency" causes prices to go up correspondingly. To this I will furnish an effective reply: that at the same time the government issues new money, the government will also fix prices; and then watch the face of your banker or business man! If he is a man who can really think, and is not just repeating like a parrot the formulas he has learned from others, he will perceive that the combination of currency inflation and price-fixing would catch him as the two parts of a nut-cracker catch a nut; and he will know that you can take the meat out of him any time you please. He may argue that it is not fair; but point out to him that it is exactly what the big banks and the trusts have been doing to us right along—increasing the amount of money in circulation, and at the same time raising the prices we pay for goods, and so taking out the meat from us nuts!
We have agreed that we do not mean to be unfair either to the banker or the manufacturer; we are simply going to stop their being unfair to us. We are going to convince them that their power to catch us in a nut-cracker is forever at an end. We allow them six per cent on their investments, and guarantee them this by turning over to them some of our new money—that is, government bonds. When we have thoroughly convinced them that they can't get any more, they will take these bonds and quit; and thus simply, without violence or destruction of property, we shall slide from our present system of commercial cannibalism into the new co-operative commonwealth.
We have had "cheap money" campaigns in the United States many times, and as this book is written, it becomes evident that we are to have another. Henry Ford is advocating the idea, and so is Thomas A. Edison. The present writer would like to make plain that in supporting such a program, he does it for one purpose, and one only—the taking over of the industries by the community. The creation of state credit for that purpose is the next step in the progress of human society; whereas the creation of state credit for the continuance of the profit system is a piece of futility amounting to imbecility. This distinction is fundamental, and is the test by which to judge the usefulness of any new program, and the intelligence of those who advocate it.
CHAPTER LXX
THE CONTROL OF INDUSTRY
(Discusses various programs for the change from industrial autocracy to industrial democracy.)
The program of the railway workers for the democratic management of their industry is embodied in the Plumb plan. You may learn about it by addressing the weekly paper of the railway brotherhoods, which is called "Labor," and is published in Washington, D. C. It appears that our transportation industry can be at once socialized, because of a clause in the constitution which gives the national government power over "roads and communications." Through decades of mismanagement under the system of private greed, the railroads have been brought to such a financial condition that they will be forced into nationalization, whenever we stop them from dipping their fingers into the public treasury.
Under the Plumb plan the government is to purchase the roads from their present owners, paying with government bonds. The management is to be under the control of a board consisting in part of representatives of the government, and in part of the workers—this being a combination of the methods of Socialism and Syndicalism. The same program can be applied constitutionally to telegraphs and telephones, to interstate trolley systems, express companies, oil pipe lines, and all other means of interstate communication and distribution.
The Plumb plan also deals with coal and steel and other great industries. These could not be nationalized without a constitutional amendment, but it appears that in the majority of the constitutions of the states are provisions that all corporate charters are held subject to the power of the legislature to amend, modify, or revoke the same. That gives us a right to take over these corporations through state action. The only preliminary is to elect state administrations which will represent us, instead of representing the corporations. Also, most state constitutions contain the provision that "no corporation shall issue its stocks or bonds, except for money, labor, or property actually received." The word "labor" gives the opening wedge for the Plumb plan. The state can purchase these industries, giving bonds in exchange, and can issue to the workers labor stock, which stock will carry part control of the industry.