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(Michael wrote:-) If you used it to purchase new
stock issue, it would not be any different than if you used your earnings for
the same thing; and per Swanwick #2 you are not going to do either, because
production is not going to be financed that way any more.
(Joe replies:-) This leads me to ask
how do you envision production being financed? Suppose I decide
to expand production in my mill and opt to sell treasury stock, perhaps
to one or more people who might want to join me and take an active
role in the business, rather than the firm borrowing the funds needed. Are
you saying that such a potential investor could not use his 'savings' directly
to invest, but would have to seek a 'bank loan' instead? If this
were the case, are we not back to another examination of Douglas's 'pound
for pound' letter to Denis Byrne? Beyond that, are we not imbuing the
'banks' with an increase in their 'monopoly' powers if we
interpret Swanwick # 2 in a 'micro-economic' manner? The
decision on whether to grant 'new credit' on an 'individual' basis is still
going to be made by the bank as a practical matter, (remember, Douglas called
the administration of the banks 'admirable' ~ and if deciding who is likely to
be able to repay a loan or not is not 'administration', I hope you or someone
else can tell me what is.) If the banks decide that 'new credits' are, in
THEIR opinion, not warranted on a particular 'individual' basis, and we
interpret Swanwick # 2 'microeconomically' and the would-be private investor is
forbidden to use his 'savings' directly at HIS discretion, have we not just
further enhanced the 'monopoly of credit'? |
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