Appendix D — Words of Thomas Edison
is absurd to say that our country
Why should the Government
pay interest to a private banking system for the use of its own money,
that it could issue itself without interest? This is exactly what the
Social Crediters of the “Michael” Journal demand, when they urge the
Federal Government to take back its power to issue the money for our
country. Two famous Americans, industrialist Henry Ford (pioneer of the
U.S. car industry) and inventor Thomas A. Edison (who, despite having
attended school for only three months, managed to patent more than 1,000
inventions), also agreed with that proposal. What helped Ford and
Edison, two great friends, to reach this conclusion is that they
reasoned like engineers, who consider only facts and the physical laws
of nature, contrary to most economists, who deal with arbitrary notions
that many times do not fit with facts.
Ford and Edison were
inspecting in 1928 the Muscle Shoals water power plant, built on the
Tennessee River. They were interviewed by The New York Times”, which
reported these interviews in its issues of December 4 and 6, 1921. These
interviews are reproduced in abbreviated form below, and the lessons
they teach are just as valid today. (The information is taken from the
May-June, 1998 issue of “The Social Crediter”, 16 Forth Street,
Edinburgh, EH1 3LH, Scotland.)
the control of the Bankers, there would be no wars
the operation of this plant,” Ford said, “many great things are
possible, greater power production than this country has yet known...
The one big thing which I see in Muscle Shoals is an opportunity to
eliminate war from the world.”
Ford was asked how this was possible.
this way,” he replied. “It is very simple when you analyze it. The
cause of all wars is gold. We shall demonstrate to the world through
Muscle Shoals, first the practicability, second the desirability of
displacing gold as the basis of currency and substituting in its place
the world's imperishable natural wealth...
essential evil of gold, in its relation to war, is the fact that it can
be controlled. Break the control and you stop war. The only way to break
the control of these international bankers, the way to end their
exploitation of humanity forever, is to smash gold as a basis for the
currency of the world...”
what have you to substitute?” he was asked.
just where Muscle Shoals comes in,” said Mr. Ford: “see what a
spectacle we have. Army engineers say it will take $40,000,000 to
complete the big dam. But Congress is economical just now and not in a
mood to raise the money by taxation. The customary alternative is
thirty-year bonds at 4 per cent. The United States, the greatest Government in the world, wishing
$40,000,000 to complete a great public benefit is forced to go to the
money sellers to buy its own money. At the end of thirty years the
Government not only gas to pay back the $40,000,000 but it has to pay
120 per cent interest, literally has to pay $88,000,000 for the use of
$40,000,000 for thirty years... Think of it. Could anything be more
childish, more unbusinesslike!
I see a way by which our Government can get this great work completed
without paying a nickel to the money sellers. It is as sound as granite,
and there is but one thing hard about it. It is so simple and easy that,
maybe, home folks can’t see it.
Government needs $40,000,000. That is 2,000,000 twenty-dollar bills. Let
the Government issue those bills and with them pay every expense
connected with the completion of the dam. The dam completed we can set
the whole works running, and in a shorter time than you would suppose,
the entire $40,000,000 issued can be retired out of the earnings of the
suppose the contractor would be unwilling to accept that kind of
currency in payment?” he was asked.
is not that kind of suppose in the situation at all,” said Mr. Ford,
smiling. “He would take Government
the currency is issued by the nation, $30 million for financing Muscle
Shoals, it will be the proper thing to do. Once the currency method is
tried in raising money for public improvements, the country will never
go back to the bond method...
here is (Henry) Ford proposing to finance Muscle Shoals by an issue of
currency (instead of bonds). Very well, let us suppose for a moment that
Congress follows his proposal. Personally, I don't think that Congress
has imagination enough to do it, but let us suppose that it does. The
required sum is authorized — say $30 million. The bills (money) are
issued directly by the Government, as all money ought to be.
the workmen are paid off, they receive these United States bills. Except
that perhaps the bills may have the engraving of a water dam instead of
a railroad train and a ship, as some of the Federal Reserve notes have,
they will be the same as any other currency put out by the Government;
that is, they will be money.
will be based on the public wealth already in Muscle Shoals; they will
be retired by the earnings and power of the dam. That is, the people of
the United States will have all that they put into Muscle Shoals and all
that they can take out for centuries... the endless wealth-making power
of the Tennessee River... with no tax and no increase in the national
— “But suppose Congress doesn't see it, what
then?” Edison was asked.
Congress must fall back on the old way of doing business. It must
authorize an issue of bonds. That is, it must go out to the money
brokers and borrow enough of our own national currency to complete great
national resources, and we must pay interest to the money brokers for
the use of our own money.
is to say, under the old way, any time we wish to add to the national
wealth, we are compelled to add to the national debt.
that is what Henry Ford wants to prevent. He thinks it is stupid, and so
do I, that for the loan of $30 million of their own money, the people of
the United States should be compelled to pay $66 million — that is
what it amounts to with interest. People who will not turn a shovel full
of dirt nor contribute to a pound of material, will collect more money
from the United States than will the people who supply the material and
do the work.
is the terrible thing about interest. In all our great bond issues, the
interest is always greater than the principal. All of our great public
works cost more than twice the actual cost on that account. But here is
“If our nation can issue a dollar bond, it can issue
a dollar bill. The element that makes the bond good, makes the bill good
also. The difference between the bond and the bill is that the bond lets
the money brokers collect twice the amount of the bond and an additional
20 percent, whereas the currency pays nobody but those who contribute
directly to Muscle Shoals in some useful way...
“It is absurd to say that
our country can issue $30 million in bonds and not $30 million in
currency. Both are promises to pay, but one fattens the usurers and the
other helps the people. If the currency issued by the Government was no
good, then the bonds would be no good either. It is a terrible situation
when the Government, to increase the national wealth, must go into debt
and submit to ruinous interest charges at the hands of men who control
the fictitious value of gold.”