| Subject: | Re: [socialcredit] A brief outline of Social Credit | | Date: | Friday, March 2, 2007 08:42:04 (-0500) | | From: | Joe Thomson <thomsonhiyu @....ca>
|
| In reply to: | Message 4512 (written by william_b_ryan) |
While I do not have the particular issue at hand, one of the trade magazines
we used to receive, "Forest Industries", (now no longer published ~ I
believe the article appeared in the 1980s), once had an extensive article
on business financing.
"Call loans" were mentioned as still being used, and the attraction was
that their interest rate was lower. The article didn't mention what
percentage of bank financing of forest products concerns was still done this
way. But I would suspect that it was small, since it stressed that an
'interest rate' saving should NOT be the MAIN consideration in securing
business financing. And this was in the era of the double digit interest
rates.
In his autobiography "This Is My Life", former US southwest banker Jim
McCrary mentions that the establishment of the Federal Deposit Insurance
Corporation in the 1930's was, along with the Federal Reserve, one of the
greatest stabilising factors in banking. He makes particular note that if
the FDIC had been in place at the onset of the Depression, it's effects
would never have become so ruinous to so many.
Joe
----- Original Message -----
From: <william_b_ryan@yahoo.com>
To: <socialcredit@elistas.com>
Sent: Friday, March 02, 2007 10:44 AM
Subject: Re: [socialcredit] A brief outline of Social Credit
> 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 perhaps a century out of date.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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