That the value of the shares of an investment trust is determined by the value of the underlying corporate shares is a matter of common knowledge. But it is not realized that the dollar, in terms of which these corporate shares are expressed, is itself a share certificate of participation in the general market of goods and services. It follows from this that every corporation is but an investment trust basing its stock on the underlying monetary stock.

Any corporation executive and stockholder knows that when a corporation declares a stock split, each outstanding share is proportionately diminished in value. But how many comprehend that when the dollar supply is increased without commensurate increase in the underlying capital of goods and services, that a stock split has been executed? As the dollar goes down, corporate stocks must go down in value regardless of their nominal quotation on the stock market.

The basic stock of the economy thus is the monetary stock. Any businessman who has the necessary bank credit, has the power to issue this basic stock. Therefore, when issued by a producer, the underlying capital for the monetary stock is maintained share for share, and parity is preserved. But when the monetary stock is issued by one who does not offer goods or services to the market, it constitutes a stock split, and each unit in circulation is proportionately reduced in power. Banks ordinarily do not qualify such an issuer among private borrowers. But the sky is the limit when the Government borrows and issues dollar splits.

17. To Floyd B. Odlum (October 11, 1946)

It is a pathetic commentary that many of our businessmen extol free enterprise and in the same breath uphold price control. Free enterprise means freedom to determine price. Thus a prohibition against the determination of price is a prohibition against free enterprise. Instead of defending their vital right of mutual agreement between buyer and seller, they undertake to operate in a straight-jacket and join in the aspersions cast upon those businessmen, known as "black-marketeers," who are the real defenders of free enterprise, upon the continuance of which all our liberties depend.