[Bill] The Bank of Japan is contemplating purchasing and
> writing off the inventory of "non-performing loans"
> held by the commercial banks to reinvigorate their
> economy.
[WALLY: What could be a more convincing vindication of Douglas's
position that the operation of the price-system under the orthodox
financial debt system is increasingly non- self-liquidating? The
Japanese had been known to have "pirated" Douglas's works during the
1930's. They have a practical need to heed his words; if they had the
Christian philosophical basis and "drive" for policy-making the
implemention of Social Credit measures should come with ease. Without
this, they merely want to "adjust" the system without fundamentally
altering it.]
Several years ago, when the BC and US West Coast lumber industies were competing to sell lumber into Japan, a marketing expert from one of the oldest US trans-Pacific trading companies outlined some of the problems exporters faced. One of those problems was the existance of nine times as much 'private money' in the form of promissory notes in circulation inside Japan than there was Bank of Japan currency notes. These IOUs, (he never revealed whether or not they bore interest), circulated from business to business inside Japan, and made entry of foreign goods through any means other than a few very large Japanese trading companies, which had their own subsidiary Banks attached, all but impossible. Apparently, if any business along the chain that accepted these notes failed, the conception was that there were enough others that had endorsed them to cover them. So they were accepted internally just like the official currency. But not any good for foreign firms trying to short circuit established Japanese trading practices which at that ime involved a myriad of middlemen. Now what, if any, bearing Douglas may have had on that, I've no idea. But we do know that the Japanese took a great interest in his proposals, as they later did in the statistical analysis proposals of W. Edwards Demming. Whose ideas were also largely ignored for a long time by American business, seemingly at their peril.
Wally, how does Social Credit deal with 'interest'? I know it is not a call for 'debt-free money' as so many authors, and even various groups identifying themselves as Social Crediters, often say. But I can't quite see Bill's argument in its entirety yet either. Sure the interest is the bank's profit, but did not Douglas believe that bank profit should be restricted to something like a fee on turnover, or for their administration of the loan? The interest, if there is to be interest aside from those fees, would return to the National Credit Authority for distribution within the community, would it not? What determines the rate of interest? This is an area that I, and I think many others on here, have great difficulty with. Can you give us an explanation that'll set us straight, please.
[WALLY: To say that our economic problems stem from the banks issuing
loans and wanting more paid back than they loan because of added
interest is so facile for those determined upon simple answers and
prescriptions. It is not Social Credit. The A+B Theorem deals
comprehensively, among other considerations, with rates of flows of
price generation, embracing ALL external payments by industry, and
income, including ALL internal payments of industry. This involves the
capitalizaton of industry which is directly related to the replacement
of labor--and understanding the issues involved requires considerable
unavoidable study which no honest person could possibly say is "easy."
If civilization is to survive, I believe we have no alterative to make
the required effort to comprehend things first as the they rreally are
and, secondly, as they might more desirably be.]
>
Joe
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