Inside the Camp: Right-Wing Populism's War on Gold

Gary North

Remnant Review (August 21, 2010)

I have written Remnant Review ever since 1974. I have self-consciously targeted a remnant. Sometimes, I deal with a seemingly obscure topic or person. But there is always method in my madness. I want my readers to understand the logic behind events. This sometimes requires mastering basic ideas. When these ideas are bad ideas, and are also gaining popularity inside the camp of the ideologically faithful, I want to immunize my readers. More than this; I want to equip them, so that they can both recognize the threat and respond to it in an informed way.

Within the American conservative movement there has been a self-conscious group of anti-gold standard promoters who proclaim the wisdom of a monetary unit issued by the government. This monetary standard is to be pure fiat: neither gold nor silver.

The idea became prominent in the years after the Civil War. The movement was called Greenbackism, named in honor of United States Notes, the fiat paper money that had been issued by the U.S. government during the war. The government issued almost $450 million of these notes out of a total debt of $3 billion. Prices rose by 80%.

The Greenbackers even had a political party, the Greenback Party. It was a fringe party. It had ceased to exist by 1890. Greenbackers merged into the rural Populist movement in the 1890s. These were hard-core inflationists. They were opposed to the Eastern Establishment. They were opposed to all forms of banking. After the creation of the Federal Reserve System, they were opposed to it.

Under the cover of their hostility to the Federal Reserve, they have brought the message of what they call "sovereign money." This is pure fiat money issued by the Federal government. This is monetary planning by the government.

Today, their most prominent author is a lawyer, Ellen Brown. Her book, Web of Debt, is self-consciously modeled on the Populist critique of banks and the gold standard. Ellen Brown is a late-comer. In the 1930s, another woman led the movement, intellectually speaking: Gertrude Coogan. She called herself a capitalist. She was a hard-core fiat money inflationist. She set forth the case for sovereign money. Most of Ellen Brown's ideas were developed in detail by Miss Coogan during the Roosevelt Administration. Coogan's influence was still visible in far Right circles as late as 1965. Her books remain in print.

I have called these people false-flag infiltrators. //www.garynorth.com/public/4993.cfm I wrote my first critique of them in 1965. They parade as conservatives, but they are radicals. They are statists where it matters most: control over money.

For over 70 years, dozens of far Right groups groups have read and distributed a parade of Greenback books, by such authors as Wycliffe B. Vennard, H. S. Kenan, Congressman McFadden, Whitney Slocum, Major Douglas, Frederick Soddy, R. McNair Wilson, A. N. Field, Arthur Kitson, and the most famous one of all, Father Charles Coughlin. It would seem safe to classify Wright Patman, the Chairman of the House Banking Committee, as one of the Greenback neo-populists, as well as former Congressman Jerry Voorhis, who was defeated by Richard Nixon in 1946 in Nixon's first campaign.

Gertrude Coogan is representative. She was the "queen bee" of neo-Populism 70 years before Ellen Brown appeared on the scene. The movement is tied up in the old Populist hatred of the "International Banking Conspiracy." This frequently drifts into antisemitism, since the "International Jewish Banking Conspiracy" is always just around the corner. Roman Catholics (Coogan, Coughlin, Father Denis Fahey) are frequently prominent in the movement, although Protestant fundamentalists are just as numerous (but they are seldom the "intellectual" leaders). In addition, Anglo-Israelites are often Greenback supporters. See the books by C. F. Parker, Moses the Economist (1947) and J. Taylor Peddie, The Economic Mechanism of Scripture (1934).

In case after case, the advocates of Greenbackism try to make their economic system the only true "Christian" one. This is why I believe that it is mandatory to consider extensively the basic teachings of the movement with respect to monetary affairs, testing their claims in terms of the biblical prohibition on currency debasement (Isa. 1:22).

So many of Gertrude Coogan's ideas seem popular today that the reader owes it to himself to test his own ideas in terms of this report. If he is a Greenback advocate, at least he should be aware of the fact.

For serious students of monetary theory, it is important occasionally to read a critique of really bad monetary economics. Because this brand of economics is gaining popularity inside conservative circles today, it is doubly important that serious defenders of the free market be able to spot economic error.

Infiltration

Conservatives should be aware of the fact that their organizations are constantly subject to subversion by anti-conservative forces. This is a fact of life. Sadly, many conservatives are not aware of the fact that it is as easy, perhaps easier, for the opposition to paralyze conservative action by means of fallacious ideas. Subversion need not always be personal; it can often be intellectual. The tendency of conservatives to personalize their enemies makes intellectual subversion even more likely. All that needs to be done is to import the alien ideas through ostensibly conservative individuals. Unless the ideas are recognized for what they are, and not just in terms of who is advocating them, the take-over will be complete, without a shot being fired or a subversive elected.

In our day, the economist who has become the symbol of liberal ideology is John Maynard Keynes, and rightly so. The influence of Keynesian ideas has been most profound, especially in the universities. This is well known by most informed conservatives. His system of economics is at odds with the idea of monetary stability. The ironic thing is that the very policies recommended by Keynes---the same rationalizations for the increase of State controls on the economy---are dear to the hearts of many supposedly anti-Keynesians. Not having read Keynes thoroughly, and having digested the ideas of any serious economist, unsuspecting conservatives are frequently misled into advocating crude, but nonetheless dangerous, Keynesian-type economic policies. If this should become widespread, then the whole conservative movement could be easily sidetracked and turned into its opposite.

For decades, there have been several small, almost underground publishing houses in America that are remarkably consistent in their support of inflationary monetary theories, yet they supply most of the conservative book stores. One of them was the Forum Publishing Company in Boston, now defunct, but the more important one is Omni Publications. It distributes the Forum books, along with tracts from the Sound Money Press.

These various studies, which can best be termed Greenbackism, are a composite of many elements. They resemble the old Populist agrarian reform movement of the 19th century, with the same cry for easy money and the same attacks against the "moneyed interests." In addition, a bit of Roman Catholic Scholastic economics is added, most notably Aquinas's doctrine of the "just price" and the "just wage." All of these books are nationalistic in outlook, put forth in the name of enlightened patriotism. An exception might be Frederick Soddy's books, but his disciple, Gertrude Coogan, more than makes up for this lack, with her advocacy of "National Money" and "Abraham Lincoln Money." Soddy's books are closer to the old tracts of the Technocracy movement, with the idea of energy exchange very prominent, while Coogan's recommendations are closer to those made famous by Lord Keynes. There is one common characteristic of all the books published by these little companies: none of their writers is a professionally trained economist. Because of this, they are unable to see the long run implications of what they are saying.

Their books are occasionally valuable for the historical information which they contain, although much of this information is not properly documented, and for this reason is not of direct value to the person who wishes to continue his study. Still, it cannot be denied that the authors have uncovered some interesting pieces of historical information, factual material seldom found in other contemporary literature.

The danger which faces the conservative movement is that many people will be misled into believing that the accuracy of the historical material must testify to the accuracy of the economic framework in which that material is presented. Courage in publishing controversial historical studies does not guarantee the soundness of economic outlooks of books. In short, just because these books are at times conservative from the historical point of view, conservatives must not be deceived into believing that their economic recommendations are equally conservative.

In my attempt to demonstrate the validity of my charge of "creeping Keynesianism" within the Greenback, neo-Populist movement, I have selected Gertrude Coogan's books as primary documentation. She is the only one of these writers who apparently has had any formal economic training, holding a master's degree in commerce from Northwestern University. While formal training hardly guarantees an individual's grasp of economics, nor lack of it necessarily consigns a person to the economists' limbo, certainly formal training is a sign that the individual is serious enough to be listened to, at the least. So we shall listen to Miss Coogan at length. It must be pointed out, however, that Miss Coogan's work, both academically and professionally, has not been along theoretical lines, primarily, but along statistical lines. This, of course, also holds true for another of the Greenbackers' favorites, Alexander Del Mar.

I have left out the footnotes for easier reading. At some point, I will publish this as a book chapter. I will provide the footnotes. I have not faked any of the quotations. I could not fake anything this far off the wall!

Lawful Money Explained

Lawful Money Explained was first published in 1939. It is still in print. A subtitle has been added: How to Win Back Your America. The reader can judge from her statement of "first principles" just how accurate her practical recommendations are likely to be. Her opening statement in Lawful Money Explained is correct historically, and Miss Coogan is warned that "all she says may be held against her": "Those who would destroy freedom know the surest and quickest method is first to pervert and then manipulate the money system" (Lecture No. l the book has no page numbering, so I can only list the number of the particular lecture).

What, then, is money?

Owning money is legal evidence that the owner has given up something, goods (property) or services ( work ) and has not yet claimed an equivalent amount of the goods and services of others. . . . Money is a legal demand claim on all goods for sale (No. 3).

Here is her first important error. She begins with a totally fallacious definition of money and money's legal prerogatives. First of all, the owner of the money may not have given up anything at all. He may have found the money, or perhaps he inherited it; someone may once have worked for it, but the present owner need not concern himself with that fact, nor does any prospective seller. Second, money is not a legal demand claim on all goods offered for sale. Drunks are frequently refused service in bars, in spite of the fact that they hold money as a "demand claim." The sellers have some discretion in the matter of sales, and any economic system which calls itself capitalistic must see to it that the rights of the sellers must be preserved. It cannot begin with the idea of money as a legal "demand claim on all goods for sale."

If Coogan's definition of money is incorrect, then what is money? In this report, the primary authority in the question of money will be Ludwig von Mises, whose book, The Theory of Money and Credit, has been a standard free enterprise text since it was first published in 1912. I rely on it, not because he was infallible, but because his ideas seem most logical and most consistent with the facts of money, especially in those times in which Miss Coogan has gone astray.

Mises on Money

In Mises's view, money is a commodity, an economic good, which historically has been used as a medium of exchange. Originally, any object which presently circulates as a medium of exchange had another use, usually artistic or ornamental or even religious. Occasionally, as in the case of salt, it may even have keen a consumption good. But the main point is that the particular good was once valued for some service other than its exchangeability. Mises has said specifically that "no good can be employed for the function of a medium of exchange which at the very beginning of its use for this purpose did not have exchange value on account of other employments."

Because certain goods had definite properties durability, easy divisibility, portability, and especially scarcity---properties which other goods lacked to the same degree, they became easier to exchange than other goods. The more that people realized how easy it was to exchange these certain goods usually gold, silver, and precious gems the more these goods became desired purely as exchange media rather than as ornaments. This type of exchange media is known as "commodity money." Its chief mark of distinction is that it, unlike all other goods, is not valued for its ultimate use in consumption, but primarily as an exchange device which many people trust and similarly value. These goods can also be used for" ornament or industry, as they were originally, but then they are no longer money.

Money, then, is not a legal demand claim to all goods, nor a storehouse qf labor, but merely a useful commodity that is usually, but not necessarily always, accepted by others in exchange for consumption or production goods. Money is merely the most marketable good available, due to the special physical properties it has and to the historically developed acceptance of it as a medium of exchange. This is really quite simple.

Paper money derives its value from the fact that it originally represented certain quantities of the money commodities, normally gold and silver. A paper bill was originally a demand claim, not to all goods offered for sale, but a claim on a specific weight and fineness of a specific money metal. Very simply, it was an IOU for specie (money metal). These paper claims operated in exactly the same way as do the metals they represented, for the owner of the paper knew that he could present the paper claim to the Treasury or to a bank or to a warehouse and receive the stated quantity of metal. If for some reason the metal should lose its popularity as a medium of exchange, then the paper IOU notes would also lose popularity, for the notes are only representatives of the metal. That is the "mystery" of paper money. The bills are demand claims on past goods (goods being stored somewhere), and not, as Miss Coogan argues, to future goods (goods to be offered for sale by some seller). The paper is valued because the metal it represents is valued. The owner of the bill owns the metal; if someone else wants to own some metal, he may decide to trade something he owns for the bill. The arrangement is strictly voluntary.

Coogan vs. the Precious Metals

How does Miss Coogan view gold and silver? She sees them as commodities which are the same as any other goods, but which bear the seal of the national government.

If the Common Authority swept away the regulations, gold would immediately sink to the rank of a commodity. No one would accept the gold but those who needed it for use as a commodity. No one would be obliged to accept gold in payment of debts and contracts. . . . Gold could then be used only to barter. Gold would no longer be money (No. 3)!

That is precisely the point! Gold is used for barter in the strict sense of the word. Gold is used in trade, in exchange. It is indirect exchange, however; a man trades in order to obtain gold, not because he can eat the gold, but because he can trade it for a consumption good at a later date. And in a free market no one is obliged to accept gold in payment, as Coogan implies. It is only because governments have declared gold to be legal tender that people are coerced into accepting it. But for all practical purposes, it is a law added after the fact. People already accepted gold and silver voluntarily. The State merely confirmed what was already the case. The danger came only when the State began to mint the coins, and later began to debase them, that the legal tender laws had to be applied. People were then coerced by the State to accept debased currency at its old, pre-debasement, rate. But the State originally only confirmed what society had determined, that certain goods are more marketable than others, and are therefore used as media of exchange---money.

Coogan then makes this statement: "Because barter is so rude and inexact, any one can see its logical outcome. It is economic slavery" (No. 3). I can see no logic here at all. Only on the assumption that upon the withdrawal of the government stamp, gold would lose its character as a medium of exchange, could such chaos, such "slavery," take place. But the gold was used as an exchange item before the State stamped it (as in the gold rush days in California when bags of gold dust served as money). Why should gold suddenly revert to its old value as a mere ornamental or industrial good? There is, obviously, no answer. Gold is used as money because people voluntarily choose to use it, not because the State originally stamped it. To say that it is money because the State stamps it is a complete reversal of the truth. The State only certifies that the coins are truly the weight and fineness that they claim to be. This may aid certain coins, the stamped ones, in gaining public acceptance, but it is hardly the sole reason why the coins are accepted as money, as exchange goods.

Coogan's erroneous assumption that gold and silver coins are used as money only because the State stamps them then leads her to her next false conclusion. She can then argue that the reason otherwise cheap paper has value as money is because the State also stamps the paper. The bills are not "as good as gold" because they are legal IOU notes for gold; they are as good as gold because both gold and paper are said to be money by the State. Paper can be money because "it is the declaration by the Common Authority 'This is Money' that makes it money." For this reason, she concludes, the State must monopolize the coinage, or even better, monopolize the printing of money. In short, the State has become God, creating money by fiat, endowing its citizens with all the wealth that money can buy, merely by stamping an otherwise worthless bill with some official State ink. With a mystical power she never bothers to explain, the State is able to create money. How the State has been endowed with this mysterious power she never says. Yet somehow it is there. Apparently magic is the basis of her economic explanations; it is certain that logical analysis plays little part.

She has admitted that money manipulation is the chief cause of economic slavery, yet she would turn the power of money manipulation and money creation over to the State, to be used only by the State, as a legal monopoly! She has exceedingly great confidence in the reliability of the State bureaucracy, one tenet of faith which is not generally recognized as part of a conservative credo.

Why a State monopoly? Because if gold mines could alter the supply of money, if "gold were declared to be money and any private entity who owned gold could, at will, order it imprinted with the Sovereign Seal and thus declared to be money," then private persons could control the supply of money. "What legitimate right have a privileged few to alter the total volume of U. S. money either up or down?" This third lecture is really a confused piece of logic.

In the first place, gold does not have to be declared to be money. It is already money, by usage and private custom alone. Secondly, the Sovereign Seal is not needed to make it money. Third, gold miners do add money to the nation's supply, for all the gold not going for industry and ornament will wind up in the money supply. Finally, there is nothing morally or economically wrong with gold miners being permitted to sell a produced good on the open market if they so desire. If no one wants the gold, then he does not have to buy any, that is, he need not part with any of his own goods to obtain the, gold. The question of the State seal is wholly superfluous; the seal only certifies that the coin really is of the weight and fineness that its bearer declares it to be.

Money, it must seem clear by now, is a highly marketable good only because individual acting citizens find it useful to them in trade. The question of money, therefore, is intimately linked to the problem of value. So far, we have seen value presented as a subjective, personal decision of individual men and wo'men. What is Miss Coogan's view on the subject?

Economic Value

"Value," she writes, "is not intrinsic to commodities and services" (No. 3). This is correct; there is no "value substance" residing in a material good. Yet we know that some things are valuable, so from whence does this value stem? Here Coogan offers a most befuddled attempt to explain value, one of the most confused explanations in all of economic literature. It is completely meaningless: "There is no source of value any more than there is a source of distance." But if value is neither inherent in commodities nor derived from somewhere else, how can it exist? She does not even see the contradiction, let alone. try to answer it. "Value can be measured only by comparison. Comparison cannot be between two or more objects, but must be between two or more Values.'" This is sheer gibberish.

She thinks that by capitalizing the word she has somehow unlocked some mystical door to truth. But the question immediately arises, how can we measure these Values (capitalized) if we cannot find how can we measure these Values (capitalized) if we cannot find them? They are not in the goods, they are not from some source, and we cannot measure the goods or compare the goods themselves. Then what is value, why is it, where is it, hbw is it found in order to measure it? No answers from Miss Coogan, just this statement: "the only unit of measure of value is the whole sum of the circulating money. . . ." This is equivalent, using her own illustration, to the statement that the only measure of distance is the sum total of all yardsticks. The question of value is the most fundamental question in economic science, yet she dismisses it with this meaningless verbosity. In doing so, she declares to the world that she has no economic theory, that as far as she is concerned, economic theory is not a matter of importance.

Value stems from the fact that individual men have varying individual needs, and they are able to satisfy some of these needs through the employment of certain means. Bohm-Bawerk writes that the value of goods, therefore, "is determined by that gain in a subject's well-being which is dependent on his power of disposal over these goods . . . the difference between the degree of well-being attainable with and the degree attainable without the goods to be valued."

Value is subjectively determined by acting, calculating, economizing man, according to his own personal desires and needs. Because value is subjective, "Acts of valuation are not susceptible of any kind of measurement." We can only say that "subjective valuation, which is the pivot of all economic activity, only arranges commodities in order of their significance; it does not measure that significance." The only things that are measurable are prices, the exchange ratios between commodities, and these exchange ratios are not founded upon any inherent value of the commodities themselves, but instead they "are based upon the value-scales of individuals dealing in the market."

This means that the State is not the creator of economic value. Second, it means that money cannot measure values, because all values are subjectively determined, psychological entities. Value is based on the desires of individual men who have individual talents and individual callings. All we can say is that if an exchange takes place between two men, the first giving up commodity A to receive commodity B, and the other giving up commodity B to obtain commodity A, the first man desires commodity B more than he does commodity A, and the reverse is true of the second man. We cannot say how much one man values a good over another, but only that he values it enough to make the exchange. Thus, Coogan's statement that "it is the total number of coins (denominations) which measures value" (No. 5) is totally false. It is as impossible to measure the subjective, psychological entity "value" as it is to measure the subjective, psychological entity "friendship." We can say that we like one person more than we like another, but the difference in that preference cannot be quantitatively determined.

Coogan, quite obviously, does not see things this way: "In a country whose Constitution guarantees freedom of enterprise, if the money system is allowed to function properly, coinage prices are due to the numerical relation between all things offered for sale and the totaf money" (No. 3). For this reason, she concludes, "The total volume (numbers of money) should always be proportional to all wealth on sale" (No. 3). This is an important statement, and it will be discussed in detail later. Mises recognizes this line of reasoning for what it is, the basic fallacy of all socialism:

The error in this argument is to be found in its regarding the utility of money from the point of view of the community instead of from the individual. . . . If we start with valuations from the point of view of society as a whole, we tacitly assume the existence of a socialized economic organization in which there is no cxchangc and in which the only valuations are those of the responsible official body. . . . But in such a society there would be no room at all for money. Under such conditions, a common medium of exchange would have no utility and consequently no value either. It is therefore illegitimate to adopt the point of view of the community as a whole when dealing with the value of money. All consideration of the value of money must obviously presuppose a state of society in which exchange takes place and must take as its starting point individuals acting as independent economic agents within such a society, that is to say, individuals engaged in valuing things.

Socialist Economics, Capitalist Rhetoric

Coogan says that she is a capitalist, yet her discussion of money tacitly assumes, as Mises says, "the existence of a socialized economic organization," for her outlook is holistic, collectivistic, and not in terms of the individual citizen. She will not admit that value arises from the valuations of individual men and women. Value is some mystical, undefinable thing that is measurable only by the total money supply. Thus does she progress, step by step, to the basic outlook of all socialist economics. The State is to have a monopoly on the control of that measuring device. She has made the final concession to the socialist monetary theory, and introduces a recommendation which, if established, would introduce the possibility of the most vicious kind of statist economic tyranny. Viewing society from this communal perspective, she discovers an interesting "fact." This is the relation between the social quantity of money and the total demand for goods: "More money increases the eflective demand, and less money decreases the eflective demand for goods" (No. 4). This is a very brief, terse summary of this more technical statement:

There will be a determinate amount of increase in the quantity of effective demand which, after taking everything into account, will correspond to, and be in equilibrium with, the increase in the quantity of money.

This more elaborate phrasing is found on page 299 of the American edition of Lord Keynes's The General Theory of Employment, Interest, and Money, published by Harcourt, Brace & World, 1936. The idea behind his statement, and the idea behind Coogan's, is the same: let the government inflate the currency in order to keep demand increasing and to keep production stimulated. Henry Hazlitt refutes the idea quite nicely in hIS excellent book, The Failure of the "New Economics." The interested reader can avail himself of Hazlitt's scholarship, relieving me of the necessity of going over his rather lengthy rebuttal. The basic criticism is, briefly, that the new money misdirects investment and production from the most publicly beneficial pursuits. Counterfeit money produces "counterfeit industries," and these can be profitably sustained only through the continuation of monetary inflation.

We now come to Coogan's conception of "Lawful Money":

Lawful money is created at the order and direction of the Congress of the U.S.A., and PAID into use; not a private corporation's promise-to-pay money. It is money created and paid out by the only authority in the United States that actually can create money (No. 7).

Money did not, therefore, come into use through the voluntary trading of free men with each other, but only at the beck and call of the new God, the creative State. The State now has the power of creation, once reserved only to an almighty God. Previously, a free citizen had been permitted to store his goods, whether metals, bricks, furniture, or any other goods, and to receive a receipt for these goods. He may have had to pay storage costs, of course, but it was hk right to do so if he chose to. Now, however, the State is to forbid him to store money metals and to receive receipts for the stored goods. He can no longer voluntarily transfer that receipt to someone else in exchange for something he desires more than the ownership of the metals. He has lost one of the basic freedoms of men, the right to own, store, and exchange property. The "miracle" of lawful money, so-called, is the denial of the right of private property. Naturally, it is advocated in the name of freedom, as are most totalitarian schemes.

This, unfortunately for the free society, is only the beginning. Congress, she writes has a goal to accomplish with this state created money, the goal of full employment. "Congress has the power and mandate to create, and provide at all times a volume of money sufficient to maintain full, employment, production and trade" (No. 9). Those familiar with the Keynesian system will recognize this goal, as well as the means to this goal, as being one of his most famous economic doctrines. In fact, he ended The General Theory in a plea for the idea of full employment directed by state monetary and fiscal controls. It is an idea which Henry Hazlitt disposes of very easily. Hazlitt demonstrates that full employment must come through the free market's arrangements of prices prices which are to be lowered until all goods are purchased and wages lowered until all men are employed who desire employment. Coogan never even mentions this function of the price mechanism, ignoring it as a possible solution to the unemployment problem. Once again, Coogan has fallen into line with the trend of the "New Economics" of John Maynard Keynes and his disciples.

Consider the implications, politically, of this economic reasoning: "Lawful money should be a non-interest bearing non-repayable debt owed by the nation as a whole to those individuals who hold any money. As long as a nation is a going concern, that debt relationship should be maintained" (No. 9). The hostility of fiat money's advocates toward central banking is not that it adds to the money supply, but that it allows individuals to get rich by loaning the government fiat money. In fact, Greenbackers hate this means of monetary inflation precisely because it is not inflationary enough! As Voorhis writes, "So long as the money supply of America is tied to our debt, the fear of debt will always operate to prevent eflective action being taken against unemployment."

Coogan says that the man who owns currency is owed a debt by the nation at large. This does not mean that he has a claim on some money metals by the State's treasury as backing for the paper. It means that he is owed all those goods that are for sale and which he can pay for. I suppose that the idea of perpetual debt means that someone always owns the bills, and therefore everyone always owes someone any goods he offers for sale. Whatever it means, this much is clear, "the nation as a whole," owes the bearer of a State Treasury note all the goods the note will buy. Thus, if a private owner should decide to sell a good, but refuse to sell it to the bearer of a bill, the potential buyer should be able to demand and receive that article as a debt owed to him. It is a legal debt relationship. If the seller should refuse to make the sale, it would be the legal right of the "offended" buyer to demand federal marshals or troops to enforce his claim, for these are the representatives of "the nation as a whole." The nation must protect the buyer's rights against the evil seller who is refusing to pay off a legal debt. The seller is at the mercy of the buyer once he offers the good for sale. Coogan advances this concept of money in the name of "freedom" and "legality." She has not given much thought to the implications of her economic pronouncements.

In her theoretical discussion of money, Coogan has failed to heed the clear warning which Professor Mises gave to all economists in 1912.

Economic discussion about money must be based solely on economic considerations and may take legal considerations into account only in so far as they are significant from the economic point of view also. Such discussion consequently must proceed from a concept of money based, not on legal definitions and discriminations, but on the economic nature of things.

Coogan's "lawful money" idea has led her into advocating a money controlled and managed by law, that is, by the lawmakers the State bureaucracy. Thus, she can argue:

Rightfully, only the seal or stamp of authority and not any substance constitutes Money. The fiat meaning "so be it!---"This is Money" on any substance, and on the power to determine the total volume in existence and the foreign exchange ratios is the Sovereign Power (No. 12).

There was once a time when the words "sovereign power" were only capitalized when referring to the Deity; now it refers to the new God of the State, the bureaucracy of the State's money creators.

Mises outlines the limitations of State powers in the matter of money, and it is one of the clearest statements that one might desire:

. . . all that the law can do is to regulate the issue of the coins and that it is beyond the power of the State to insure in addition that they shall actually become money, that is, that they shall actually be employed as a common medium of exchange. . . . It can also take various steps with the object of encouraging the actual employment of these qualified commodities as the common media of exchange. But these commodities can never become money just because the State commands it; money can be created only by the usage of those who take part in commercial transactions.

This does not mean that Mises advocates State controls on the issuing of money and metals, but only that this is as far as a State can go in terms of creating money. It is for individual men, as acting, exchanging persons, to "create" money. This "creation" is not by fiat---not by voice acclamation as God created the world, but merely by personal preference and use. This is a far cry from the fiat creation of money by the State as propounded by Coogan.

Conclusion

What, then, can be said for the book, Lawful Money Explained? First, it is statist in outlook, collectivistic in its view of the functioning of money, and certainly not a representative of anything resembling a free market approach to the money question. Second, the book is Keynesian in many of its monetary recommendations. It is a crude, simplistic form of Keynesianism, but still as dangerous as the more "orthodox" Keynesianism. Third, because the author provides no clear theory of value, the book cannot be called an economic treatise at all.

At best, Miss Coogan is a chronicler, a gatherer of data, in short, a statistician. With no theory of value, she can propose no theory of price. Without a theory of price it is impossible to understand supply and demand, and it is equally impossible to explain money and its functions. The book has no consistent economic theory of any kind holding it together. It is a hodgepodge of fallacious reasoning, inaccurate definitions, and socialistic panaceas. Except for her explanation of the fractional reserve banking system and the fraud involved in it, Coogan has offered nothing of any value whatsoever. Her book is non-economics, useless at best, and highly dangerous at worst. Nothing could be further from the truth than to regard this book as a statement of a conservative case for honest money.

I plan to show that what is true of Lawful Money Explained is equally true of Ellen Brown's Web of Debt. I am going to start a new department devoted to Brown's errors. But, for now, knowing what is wrong in Coogan's Populist inflationism will have to suffice.