WRITING to Thomas Jefferson in 1787, John Adams said, "All the perplexities, confusion and distress in America arise from downright ignorance of the nature of coin, credit and circulation." Downright ignorance is the proper term, and it still abides with us. It applies to our academies, our counting houses, our legislatures, and the man in the street. We do not know what money is, what its virtues or vices spring from, what are the natural laws governing it, nor its influence in determining the trend of a people toward democracy or dictatorship.

Two forces are now pressing for its solution. One is the increasing specialization of labor, which requires man to make more exchanges in ratio as he reduces his self-sufficiency. In other words, the more man reduces his part in the production of the whole product, the more exchanges are necessary and hence the greater use of money. The other force making the solution of the money problem imperative is the growth of dictatorship and the contraction of democracy in ratio as governments exert the money issuing power.

Herbert Spencer, writing in Social Statics, said:

That laws interfering with currency cannot be enacted without the reversal of state duty, is obvious; for either to forbid the issue, or enforce the receipt of certain notes or coin in return for other things, is to infringe the right of exchange—is to prevent men making exchanges which they otherwise would have made, or is to oblige them to make exchanges which otherwise they would not have made.

And further:

So constantly have currency and government been associated, so universal has been the control exercised by the law givers over monetary systems, so completely have men come to regard this control as a matter of course, that scarcely anyone seems to inquire what would result if it were abolished. Perhaps in no case is the necessity of state superintendence so generally assumed, and in no case will the denial of that necessity cause such surprise.

In Spencer's day, the specialization of labor and the need of free monetary exchanges had not been so highly developed as in our day. His challenge to government money power therefore passed unnoticed. But we must heed it now. Let us dare to question the propriety of government money power—and let us speculate on "what would result if it were abolished.”

Another Englishman, Arthur Kitson, writing in 1894 in A Scientific Solution of the Money Question, said:

To the average man, a currency that has not the authority or stamp of government is inconceivable; and yet there is no good reason why communities should not create and control their own currency without the aid or intervention of governments, just as they incur debts or liabilities without such aid or intervention.

Is it true that, in the language of Spencer, "to forbid the issue, or enforce the receipt of certain notes or coin is to infringe the right of exchange?" And is it further true that, in the words of Kitson, "there is no good reason why communities should not create and control their own currency?"

Freedom of exchange is now so imperative, and centralization of political power so threatening, that it behooves us to inquire whether our economic and political ills and the threat to peace are not due to misplacement of money power in the state—and whether and how that power might better be exercised by the people for progress, prosperity and peace.