| Subject: | Re: [socialcredit] A brief outline of Social Credit | | Date: | Friday, March 2, 2007 07:44:55 (-0800) | | From: | william_b_ryan <william_b_ryan @.....com>
|
| In reply to: | Message 4511 (written by Joe Thomson) |
In regard to Vic's paragraph on "call loans," it is
perhaps a century out of date. From an Internet
source:
"A call loan may be 'called in'--declared due and
payable--by the lender at any time. Until 1913, call
loans were once the common form of bank financing for
agriculture and business. Also, recall that until
1913 there was no 'lender of last resort' to keep
banks liquid. If too many depositors demanded their
money back at once, banks would be forced to call in
loans, usually causing borrowers to default, often
causing their farms or businesses to fail, and not
necessarily raising enough cash to pay off the
depositors. The ensuing economic slowdown and
financial uncertainty would provoke more depositors to
try to withdraw funds from banks, forcing more banks
to call in loans, triggering more defaults and
business failures, dragging the economy into
recession."
http://www.terry.uga.edu/~rsteuer/courses/4000/rps2.doc
The date 1913 refers to the year the Federal Reserve
was established. By 1929 call loans were little used
outside the securities markets. Some say that they
played a major role in the stock market crash of that
year. This is the modern definition, the very first
definition that comes up in an Internet search:-
"Call loans
"What's the definition?
"Loans used to finance the purchase of securities, and
which may be terminated (called) at the discretion of
the borrower or the lender on demand."
http://www.investordictionary.com/definition/call+loans.aspx
----------------------------------------------
As to the National Monetary Authority and the monopoly
of credit, we already have national monetary
authorities in developed nations in the form of
central banks, with full capability to implement
social credit, if so willed. The modern central banks
are creatures of legislation, which may be modified
and changed. The problem is one of will, and that
follows from understanding, or lack thereof.
As to the monopoly of credit, I see it as, or what
used to be called a natural monopoly, because we
benefit to the extent it is a monopoly. The monopoly
derives mostly from the clearing function that
requires a great deal of coordination between banks,
regardless of independent ownership or management.
But the fact that it is a monopoly requires public
oversight and regulation so that those in control do
not abuse the power of the monopoly.
---------------------
Attached is a pdf of Vic's outline with the addition
of page numbering to facilitate our discussion.
Does anyone have any objections or comments to Vic's
text through line 259? I am referencing the
commentary on Social Credit philosophy and objectives.
At this point I have not noticed anything I find
particularly objectionable in that text. He seems to
veer considerably off track in details of finance
beginning with line 261.
--- Joe Thomson <thomsonhiyu@shaw.ca> wrote:
(From Vic's "Outline":-) "It must be remembered that
the banks have discretionary powers to call in loans
and overdrafts even before the goods they brought into
existence have been sold, and they sometimes exercise
this power with disastrous effects on the community."
(Joe asks:-) How much financing is still done this
way, where the loan is subject to 'call'? Would it be
substantially more or less than loans that are issued
for a definite term? Ones that could not be 'called'
so long as the terms of the loan agreement were being
adhered to?
In the case that one bank were to 'call' a loan, (of a
firm that was fundamentally financially sound, for
reasons known only unto the bank), could not that firm
generally secure another loan from another bank?
I have seen some evidence that this has been the case
here in Canada (one instance is recounted in the book
"The Acquisitors" by noted author Peter C Newman, in a
chapter on well-known (here, anyways) Vancouver
Island lumber entrepreneur H. S. Doman and Doman
Industries Ltd..
Where, early in his firm's life as a trucking and
milling company, the CIBC 'called' Doman's loan, even
though the firm was 'sound' and was always current on
its payments. He quickly got another loan from Royal
Bank of Canada, paid off CIBC, and went on to
undoubtedly make millions for the RBC over the next
three decades.)
(From Vic's piece:-) "The first step will be the
establishment of a National Credit Authority to take
complete control of the money system and put the
affairs of the nation on a proper accountancy basis.
This would restore money power to the people and do
away with the monopoly of credit by private
interests."
(Joe replies:-) I realize that this piece is intended
for the readers of the "Michael" Journal, and so the
way in which some things are phrased or inferred may
be designed not to alienate them from their present
perceptions of 'Social Credit'.
They are now the main SC group left in Canada. And
certainly closer to some of Douglas's ideas in what
they advocate than either of the two 'political party'
SC groups left here currently are. (The one here in
BC seeming to want to believe SC history began in
1949, and Douglas is a complete non-entity.).
It seems to me, anyways, from reading some of the
"Michael" publications I have, ones they used to
occasionally mail out across the Dominion, that they
focus considerably on the "evils" of interest. And a
desire to have the 'government' ''take complete
control of the money system". Only in ways in which I
believe C H Douglas would hardly have approved.
I really do not see why what is supposed to be a
'statistical agency' has to be made into what I think
could not help but being a 'political' one.
Correct me if I'm wrong, please, but isn't it a case
that the 'problem' is not 'debt' itself, but that
under the current arrangements 'debt' cannot be
totally liquidated? Why do we have to have an all
powerful NCA to correct that?
Now I recall asking Vic about this once before, quite
some time ago. What I've called before the "recurring
question", and where in Douglas could I find that he
specifically advocates having the 'government' "take
complete control of the money system." And as I
remember he replied that it was an area in which
Douglas wasn't too specific about details, but what
was advocated could be a 'method' which might be used.
And I suppose it could be. But I'm not yet convinced
there wouldn't be considerable disadvantages and
dangers in going that route. But i'm not closed
minded about it, so if anyone knows good reasons
'why', I'd sure like to hear them.
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