Written in 1940 by Louis Even
The gold standard had been abolished in England in the first days of World War I in 1914. According to the Financiers a tight-money policy is a good thing in ordinary times, to keep mankind from living but when money is needed to kill, the means are found for that.
The first world war being over, the gold masters demanded the return of the idol's reign (the gold standard). It was necessary to return to scarce money, to a drastic decrease of money in circulation.
This was the work of Montagu Norman, who became governor of the Bank of England in 1919. He immediately started a deflation policy.
The result was that as early as 1923, there were three million unemployed workers in England, ten times more than in 1920. Then after that, there was a 40% salary decrease, poverty, discontentment; ferments of revolutions and 30,000 suicides. During these four years, the London bankers imposed heavier blows on England than the Germans did during the four years of World War I.
The same anti-humane policy was taking place on the European continent, with similar economic ruin and financial contortions in Germany, France, Italy, Spain and Russia.
During that time, Austria astonished its foreign visitors with its prosperity and the contentment of the population.
After the war, reconstruction was necessary in Austria, as in all the other countries. But the Austrian Government had its own way of financing the reconstruction. Instead of borrowing from the banks and repaying them with taxes, the Government issued money directly to the merchants, provided that the latter reduce the selling prices accordingly.
It was a compensation to the merchants for a price decrease to the consumers. It was to directly finance consumption by a compensated discount, as advocated by the Social Credit technique.
As a result, a remarkable development in industry and commerce took place, with virtually no unemployment in Austria. The workers of Vienna lived in model homes. Taxes had been reduced to a minimum. There was an abundance of products at low prices.
Here is what Colonel Repington wrote in his book "After the War" during this period:
"New machinery is being employed, and on the farms, price stock is being bought and farm buildings are being improved. From Upper and Lower Austria, Styria, and the Tyrol, it is all the same story of new developments, and what is really going on is an endeavor to make the new Austria less dependent on its neighbors, and less forced to buy abroad in markets made fearfully dear by the exchange."
What did the money masters of London and Paris do in the presence of such remarkable results? Do you think that they said: "It is wonderful! Let us do the same thing in England and in France!"
No way! They exclaimed: "This is not allowed! A vanquished nation that treats itself to such a comfort, when victorious nations wallow in poverty and are starving! This must immediately be stopped!"
And the money masters cracked down harder on Austria. They required the payment of the war indemnities and the balance of the budget.
We know that, after all, the indemnities can be paid only in kind, by the exportation of products to the creditors. Now, the victorious nations did not want to accept Austria's products, since such importation would have increased unemployment for their nationals. It was therefore impossible to supply the required reparations.
Austria was finally obliged to put its case before the League of Nations. The finance committee of this institution, made up of orthodox members of the same calibre of its chairman, Sir Arthur Selter, recommended an international loan to Austria to enable it to pay its reparations. The creditor countries, instead of financing their own citizens, provided Austria with the money that Austria refunded to them in interest!
But in return for this favor, Austria was forced to open its national finances to inspection and supervision. It was obliged to establish a central bank after a model approved of the governors of the central banks of England and France.
Austria did not have the strength to resist the pressure. It was the beginning of a policy of deflation with its trail of privations and sufferings.