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By Major C. H. Douglas
The Ulster Hall, Belfast, 24th November 1936.
[EDITED]
I am speaking to you tonight on one of the mechanisms - an increasingly important mechanism - through the agency of which the members of the financial oligarchy under which we suffer impose their will upon us.It is important to understand this mechanism, at any rate in its broader aspects, but I should like to impress upon you at the outset that even an exact and extensive understanding of it can be regarded as having any practical use only if it acts as an incentive to recruiting you for organised action. It is the action that counts.
As someone said in regard to the international situation, "It is no use having the logic if you have not got the guns," and that is profoundly true in regard to the matter on which I am speaking to you tonight. It is no use realising that taxation is legalised robbery, is unnecessary, wasteful and tyrannical. If you stop at that, not only will you have to pay the taxes that you now have to pay, but, as Sir Josiah Stamp, one of the Directors of the Bank of England, suggested a short time ago, with that engaging candour which we are beginning to expect from the Bank of England, "While a few years ago no one would have believed it possible that a scale of taxation such as that at present existing could be imposed upon the British public without revolution, I have every hope that with skillful education and propaganda this scale can be very considerably raised."
For instance, the old and original tithe was a genuine and justifiable tax. It consisted of one tenth of the agricultural production of the taxed land, and this agricultural production so collected was handed over to the Church for the physical maintenance of the clergy and their dependants, it being assumed that the clergy were too busy with other matters to raise their own crops.
It may be recalled that the word 'clergy' is derived from clerk' and that it is to clerks that we owe (and pay) our taxes.
Now it is obvious that the physical meaning of this to those who paid the tithe was that they did a small amount of extra work or, alternatively, had a little less to eat themselves. There was nothing in such an arrangement which could, or did, result in a loss to the community on the one hand, or, on the other, make it impossible for the agriculturalist to live.
But now consider the fact of a money tax upon agricultural land, which is the form the tithe has now taken. It is imposed quite irrespective of the value of anything which is produced upon that land, and its effect is simply that of an overhead charge upon anything which is produced.
If a farmer owns the land he farms and has to pay tithe upon it, the tithe appears as a cost of production and increases the price that he must charge in order to live off his farm. If he cannot raise the price, which is generally the case, he makes a money loss, and ultimately ceases to farm, because he does not grow money, he grows produce, and money is demanded from him.
This is exactly what has happened in England, where three million acres of farming land have gone out of cultivation since the [First World] War. But the evil does not stop there. Since the farmer does not make a reasonable living, he does not keep his land in good order and he has no money to spend upon the products of other industries.
***
The absurdity of this argument, as apart from the other aspects of it, is evident if it is applied, say, to the question of the ability of a proportion of the population to buy Rolls-Royce cars. If one imagines all the purchasers of Rolls-Royce cars to be taxed so that they no longer can buy Rolls-Royce cars, it does not, of course, mean that the poorer portion of the population buys Rolls-Royce cars; it merely means that Rolls-Royce cars are not produced.
This would be a perfectly satisfactory state of affairs if the production system was lacking in some production which the freeing of men from making Rolls-Royce cars would enable them to produce.
We see exactly this state of affairs in wartime, when luxury production ceases, but in peacetime we know perfectly well that we have what is called an unemployment problem, that it to say, a surplus production problem, and that, under the existing financial system, the inability of anybody to buy Rolls-Royce cars would merely result in an increase in unemployment, and that the present financial system regards full employment as being the best method of keeping us in slavery to financiers.
All the preceding arguments lead up to, and are, in fact, dependent upon the proposition that the production of real wealth - that is to say, all things which money can buy - is entirely separate from the production of money with which to buy them, and that in taxing anyone but a banker we are merely increasing the value of the bankers' monopoly of money-making.
It is, fortunately, not nowadays necessary to develop this argument at any great length, since the facts are not in dispute in any reasonable circles. The Encyclopedia Britannica in its article on money, volume 15, states, "Banks lend by creating credit. They create the means of payment out of nothing"; or, as the Chairman of the Midland Bank put it, "The amount of money in circulation varies only with the action of the banks."
Since our civilisation is a money civilisation, and we none of us can carry on our daily pursuits without the possession of money, it is obvious, in the first place, that this situation places us ultimately at the disposal of the banks, and that increased taxation by lessening the amount of money at our disposal increases this hold that the banks have upon us.
The first point, therefore, on which to be clear, even without enquiring as to the destination of the money, is that the heavy taxation under which we suffer works directly to the advantage of the financial houses which control the banking system.
But if you will look at the back of your tax demands, you will find that the total amount received from income tax, sur-tax, and death duties, is approximately equal to the amount required to pay the interest on the National Debt, and that other forms of taxation supply the money for social services, to the extent that it is supplied.
It does not require much assistance to see that just so long as the population will stand it - and Sir Josiah Stamp assures us that, with care, the population will stand much more of it - we shall go on paying an increasing amount of taxes, the major portion of which will go to increase the power of banking institutions and their grip upon the population.
If the stock and bonds which the banks, including the Bank of England, have appropriated in the last fifty years had been placed to the credit of the community, not only should we be free of taxation but we should be drawing a substantial dividend.
***
The general population is fundamentally in the position of wage earners, and the taxation upon them goes to pay the interest on these mortgage debentures.
The income tax authorities are in the position of accountants and debt collectors, acting in the interest of the debenture holders. We are, every one of us, in debt to these debenture holders, even though some of us may hold debentures, and the policy is to load us individually and collectively with debt so that we shall be the slaves of our debtors in perpetuity.
It is impossible to obtain money to pay off the debt, owing to the fact that our debtors are at the same time in sole control of the power of creating the money which is required to pay off the debt.
Taxation is not primarily an economic device, it is a tyrannical device. Once the meaning of this situation is grasped, it is not difficult to see the general principles by which not merely could taxation be eliminated, but in place of it every individual could be placed in a condition of economic freedom and security.
As I put the matter before the monetary commission in New Zealand, the essential power which the banks have acquired is the power of the monetization and the demonetization of real wealth. That is to say, the power of creating acceptable and accepted orders or demands on the producing system and of destroying them on recall; and the essence of their fraud upon civilisation is not in the magnificent technique of the system which they employ, or even in the charges which they make for the use of this money which they create, even though these charges, i.e. their interest rates, may be considered in many cases exorbitant.
The essence of the fraud is the claim that the money that they create is their own money, and the fraud differs in no respect in quality but only in its far greater magnitude, from the fraud of counterfeiting.
At the instigation of the banking system, barbarously severe penalties are imposed upon the counterfeiter of a ten-shilling note, but a peerage is conferred upon the counterfeiter by banking methods of sums running into hundreds of millions.
May I make this point clear beyond all doubt?
It is the claim to the ownership of money which is the core of the matter. Any person or any organization who can create practically at will sums of money equivalent to the price values of all the goods produced by the community is the virtual owner of those goods, and, therefore, the claim of the banking system to the ownership of the money which it creates is a claim to the ownership of the country.
***
I refer to the use of the taxation system as a method of inflicting punishment without trial and at the discretion of anonymous individuals. As an example of what I mean I might say that, since my own efforts to explain the nature of the taxation have come into some prominence, I have been consistently pestered by various assessments for income tax which require a great deal of time, expense, and trouble to dispose of.
Even if and when disposed of, they constitute a serious additional tax, since it is inevitable that skilled legal assistance be employed in connection with them and much data collected, and, of course, the cost of this is not reimbursed.
It should be incredible, if it did not happen to be true, that a system which allows a claim to be made on you, leaving the trouble and expense of proving that it is not justified upon the shoulders of the person assessed and that no redress for unsubstantiated claims is possible, would be tolerated; but that is exactly the position of the taxation system.
It is, of course, exactly the reverse of ordinary business procedure, where a claimant for services rendered can always be put in a position of proving his claim. The system employed traverses the fundamental principle of British justice, in that it forces you to give evidence against yourself.
During the [First World] War I had some contact with the more hidden side of politics, and I was informed that income tax was a favorite device for penalizing anyone unpopular with the authorities. The same sum in taxation could be raised far more cheaply and with infinitely less friction, by simple taxes, such as sales taxes, or other straightforward devices , even if it be granted, which of course is not the case, that the taxation was necessary.
The recent commission upon the simplification of income tax stated that many of its provisions were "frankly unintelligible to them and that only the skilled administration by the Inland Revenue officials had made them workable."
This is exactly what they are intended to be, thus leaving the power over the individual for taxation purposes in the hands of the bureaucracy.
Lord Hewart of Bury, the Lord Chief Justice, has done invaluable service in drawing attention to this particularly objectionable form of tyranny. But there will be no alleviation from it so long as political power is allowed to rest in the hands of the oligarchy which rules us at present.
I have devoted a good deal of my time and yours tonight in making and, I hope, making beyond any possibility of discussion, the point that, so far from being taxed for our membership of a potentially prosperous undertaking, we ought to be receiving dividends; and the reason that we are not receiving dividends is that so much of these dividends as they require are annexed by international finance, while the remainder are concealed in invisible reserves, so that by the lack of them we may be made servants of the banker, and that, by means of economic deprivation and taxation he may punish any rebellion against his rule.
But I would repeat a phrase which I quoted at the beginning of my address, "It is no use having the logic if you have not got the guns."
Let me emphasize what I mean in this connection, because I have been accused of advocating rebellion against the State. Nothing of the kind. What I am telling you is that either you are the State and you can change what you do not like, or else the State is your enemy: and that all the powers of the State derive from you and have been usurped from you to the extent that they have been separated from you.
I am confident, with a confidence that nothing will shake, first of all, that a genuine democracy of policy is the fundamental basis of association, and that no association which disagrees with this idea can continue. Therefore, the first requisite is to get into your consciousness as a living, driving, motive force that this is your country and that the conditions in it are your responsibility, and that Government officials are your servants and not your masters, and that the sooner that they are told it in unmistakable terms the better it will be for you and the better it will be for them.
At the present time we live in a false and completely ineffective so-called democracy, really an oligarchy of the worst possible kind. Not only is an open and genuine dictatorship preferable to an oligarchy masquerading as a democracy, but it is a sure and certain outcome of it.
I do not believe that the people of these islands will tolerate an open dictatorship, but, unless you take action, an open dictatorship will be tried.
Once having got it into your minds that yours is the real power if you wish to exercise it, the mechanism existing at the present time, with very slight modifications, is easily sufficient to make your power effective if you will bear certain fundamental considerations in mind.
Don't imagine that a question of democracy has anything to do with leadership. Democracy and leadership are a contradiction in terms. There is more room for leadership in the world than ever there was, but your leaders should be your servants not your masters.
Don't waste your time looking round for someone who is going to do the job for you, you won't find him. If you won't do it yourselves, it is not going to be done.
Take your present Members of Parliament just as you find them and disabuse them of the idea that they are heaven-sent geniuses, whom you have elected to run the country for you. They don't run the country anyway, but you let them think they do. Your Members of Parliament are elected to represent the common will, not the uncommon intelligence. The proper place for intelligence is in the ranks of the technicians who should be the servants of the common will.
With the common will goes the common power, that is to say, the Army, the Navy, the Air Force, the police, and the other sanctions of the Crown. It isn't necessary and it is obviously utterly impracticable for you to organize an army, navy and air force to fight the State. The State has them already, and the State is your State.
Make it perfectly clear that you are going to have it used for your purposes and not for the purposes of the oligarchy.
In this connection, perhaps I may emphasize the absurdity of talking about systems, as if systems could be run without men. Deep down below questions of finance the fundamental issue which is at stake in civilization at the present time is that of personal responsibility. You cannot fight a system, you can only fight the people who put a system into operation. You cannot fight robbery, you can only fight robbers. You cannot fight malaria, you can only destroy mosquitoes.
One of the most pestilential features of our present civilization is the idea that if someone is paid by an organization to do an injustice, the responsibility for the injustice lies upon the organization and not upon him.
Make no mistake about it, there is no justification for such a theory in the working of the universe. If you put your finger in the fire at the orders of the company which employs you, it is you who will be burnt, not the company. When a Government department inflicts some limitations of your liberty upon you, it is not the Government department which is doing it, it is some individual, and he does not inflict it upon an abstraction called 'The Public', he inflicts it upon John Smith and Mrs Brown.
You will never get effective action in connection with matters of the description that we are discussing tonight if you allow those who put the system into operation to disclaim responsibility for their particular share in it while benefiting by their aid to the so-called system. If tax collectors had to add out of their own pockets ten percent of the money they collect, we should all have much smaller assessments.
The restoration of the conception of the responsibility of the individual for his acts, whether or not those acts are done under the orders of someone else is, in my opinion, essential to a better and more stable world, and I would particularly commend to your attention the habit of identifying actions with men rather than with systems. You will, in fact, be assisting those men to recognize their responsibility, which it is obvious is far from being the case at the present time.
It would be an impertinence for me to comment on local politics, and I have no intention whatever of so doing. But I would emphasize the immense advantage possessed by small and comparatively mobile communities in obtaining control over their own policy, and urge you to resist any suggestion which would diminish that advantage.
It is the settled policy of international finance to diminish local sovereignty, and it should be your policy to increase it.
In conclusion, perhaps you will allow me to express my opinion that in this matter it is now a fight to the finish.
Within the next few years you will either become subjects of a servile State, exceeding in powers anything known in history, quite possibly well-fed and even secure - just as many slaves were well-fed and secure in the days of chattel slavery and resented their freedom - or you will, but only by means of the greatest struggle in history, have achieved all these things, together with freedom - freedom of speech, freedom of action, immense leisure , immense opportunity.
No one is going to get these things for you. You must choose whether you want them, and if you decide that you do, you must take action without a moment's delay.
The full text of this and other articles by C. H. Douglas can be found at ALOR
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