C.H. Douglas Out of Print ...... Mondo Politico
Social Credit, by
Major Clifford Hugh Douglas

Part II: The Mechanism of the Classical Ideal



IN a remarkable document which received some publicity some years ago, under the title of "The Protocols of the Learned Elders of Zion," a Machiavellian scheme for the enslavement of the world was outlined. The authenticity of this document is a matter of little importance; what is interesting about it, is the fidelity with which the methods by which such enslavement might be brought about can be seen reflected in the facts of everyday experience.

It was explained in that treatise that the financial system was the agency most suitable for such a purpose; the inculcation of a false democracy was recommended; vindictive penalties for infringements of laws were advised; the Great War and the methods by which it might be brought about were predicted at least twenty years before the event; the imposition of grinding taxation, more especially directed against Real Estate owners, was specifically explained as essential to the furtherance of the scheme. The methods by which the spurious democratic machinery and the journalistic organs of "Public" opinion could be enlisted on the side of such taxation, and an antagonism between the interests of the town and the interests of the country could be created, were explained with an accuracy of detail which can only be described as Satanic.

It is quite possible that this document is inductive rather than deductive in origin, that is to say, that some person of great but perverted talents, with a sufficient grasp of the existing social mechanism, saw and exploited the automatic results of it. If that be the case, the world owes a debt of gratitude to that mysterious author. He was substantially accurate in his generalised facts, and the inductive prophecies from them are moving rapidly towards fulfilment.

Making all due allowances for the defects in it which are only too obvious, the Anglo-Saxon character probably remains the greatest bulwark against tyranny that exists in the world to-day. That is a thesis on which a large number of volumes have been written, and it does not seem necessary to expand it further. But if it be granted, it will be agreed that any attempt, either conscious or unconscious, to establish an effective hegemony over the whole of the world would be likely to concentrate on such methods as would paralyse the Anglo-Saxon.

Now, the British population, men, women, and children, are at the present time (1933) taxed to the figure of sixteen pounds seven shillings per head (or about sixty-five pounds per family), which is nearly three times the taxation per head of any other country in the world. Large estates are subject to succession and legacy duties which make it impossible for them to remain in private hands, and force them into the market in which they are acquired by corporations having access to the methods of creating financial credit. These two forms of taxation are concurrent, i.e. the enormous Capital Levy imposed by Succession and Legacy Duties, so far from reducing general taxation, has been accompanied by a steady rise in such taxation. In the United States the estimated value of all real and personal property (1923) is two hundred thousand million dollars. The bonded debt, public and private, payable in gold is one hundred and twenty thousand million dollars, and it is estimated that the total time for interest and taxation to reach such proportions as will require the whole equity value of the United States to be mortgaged to meet it, is about twenty years. It is perhaps hardly necessary to mention that the bonded debt of the United States is held by very much the same class of financial organisation as that which is the chief owner of the bonded debt of Great Britain. The banks and financial houses are our creditors; and Capital Levies in reduction of debt are merely levies for the benefit of these institutions and enhance the attractions of the country paying them, as debt-contractors.

The portion of this taxation which is represented by interest on public debts, created more or less in the manner outlined in the previous chapter, is onerous in proportion as its destination is centralised. It is easy enough to see that it would not matter very much if the Debt of Great Britain were ten times what it is, even though the service or payment of that Debt were made on "orthodox" principles if the ownership of the Debt was uniformly distributed over the tax-paying population. Sixty-five pounds per annum per family would be collected in taxes, and (disregarding the cost of administration) the sixty-five pounds per annum would be distributed as dividends. The operation would, in fact, be meaningless, from which observation we may deduce the interesting fact that present-day finance and taxation is merely an ingenious system for concentrating financial power. No proposal to redistribute the National Debt has ever received the slightest encouragement from Socialist leaders.

Now at first sight this would appear to lend colour to the simple Labour-Socialist idea that many men are poor, because a few are rich. Post hoc, ergo propter hoc. But once again, the matter is not quite so simple. It is perfectly true that a few men do become very rich by this process, and very many more have hopes of riches; that is how their co-operation is secured. But it is also equally true that their collective riches, in visible form, would represent a very small sum if equally distributed amongst the general population. The main tendency of the process is to concentrate the control of credit in a potential form in great organisations, and notably in the hands of the great banks and insurance companies.

It is well worthy of notice that the proposal for a Capital Levy, which was one of the main planks in the programme of the British Labour-Socialist Party, was for a levy on individuals, not on corporations or businesses.

Apart from any more subtle explanation, even great banks hesitate to distribute their true profits for fear of attracting too much attention. It is an interesting and symbolical fact that every corner site, whether in town or village, sooner or later, falls into the hands of a bank. Comer sites are potential key positions. It may be stressing the theory a little too far, to use it as an explanation of the fact that a recently built bank in Cleveland, U.S.A., has been designed with bomb-proof walls, and has machine-guns mounted at each comer of it. A polite intimation that his overdraft must be reduced, is a more effective argument to the average man than a threat by a machine-gun. But the idea is no doubt not dissimilar.

An organisation can only grow powerful at the expense of those involved in it, just as a tree can only grow at the expense of its soil. Corner sites, granite and marble buildings, to name only two of the more tangible signs of growth in the banking organisation, represent undistributed profits. Undistributed profits are simply cancelled credits; they are "savings" by an institution. They are credits transformed from a visible form represented by deposits, into a potential form such as, for instance, the security for loans or mortgages. Every credit cancelled in this way, whatever form the cancellation may take, simply represents so much purchasing-power destroyed without the destruction to an equivalent amount in book price values, and the effect of it is that its equivalent amount in goods-values cannot be bought in one and the same credit area. It will be seen, therefore, that this concentration of securities in the hands of large organisations is a matter of much greater importance, than if even the same concentration took place in the hands of individuals who, in one way or another, disbursed the large sums thus received, since the disbursements would, in the nature of things, be spread over a very wide field of activity. But a functional organisation like a bank is only interested in consolidating the power and importance of banking, and uses the credit power that it obtains with the single aim of fostering this result. That is why we are building branch banks and other industrial buildings, instead of houses, and why such houses as are built are mostly cheap and nasty. There is not much granite and marble about the average post-war bungalow or cottage.

But however that may be, one result of the process is indisputable. It still further restricts the money and purchasing-power at the disposal of individuals, and concentrates this money power in financial institutions. If the process is allowed to proceed without interruption, and it remains true that the possession of money is the only claim to the necessaries of life, then it is not difficult to see that within a short space of time, that condition of universal slavery to which the writer of "The Protocols of Zion" looked forward with such exultation, will be an accomplished fact.

The concentration of control over business firms, which is the accompaniment of the increasing dependence of the business world upon banking accommodation, is paralleled by the rapid elimination of a class of any considerable dimensions which can maintain its customary standard of life without commercial employment. Both commercial employer and commercial employed are therefore coming under an invisible control which is not subject to any criticism of its actions in respect to the giving or withholding of this "employment" without which civilised existence is becoming impossible. The obsolete system of chattel slavery had the vital defect that the slave could not fail to be conscious of his slavery, and consequently required guarding. But the more insidious subjection with which we are threatened, promises a condition of affairs in which servitude will only be granted as a privilege, and starvation following on degradation will be the alternative.