Content Points remaining in this second half of the commentary:
 4 )  Current Gold production  and the total gold supply
 5 )  Some Notes on the Total Gold Supply
 6 )  An Estimate of Gold Coin Denominations which Might Be Required
 7 )  Clearing and the Requirement of a 100% Gold Cover
 8 )  Some Suggestions for a Rightful Currency Reform
 9 )  Further Remarks on Price Adaption to an Exclusive Currency
10 ) Unequal Distribution of Gold Currency Liquidity.
11 ) Gold Production and Inflation
12 ) Rigidity of an Exclusive Metallic Currency
13 ) What is the Meaning of a "Gold Price" Provided that Gold is no longer Outlawed as a Standard of Value?
14 ) A Gold Subsidy to American Miners?
 

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are increased - due to the often observed but more often ignored tendency of faliling rices to deter and only of fallen prices to attract purchasers, (See p. 285ff, The presently so prevailing internal price and wage fixing policy, other restrictions on internal trade, producti on and capital combined with the obstacles to international trede make matters much worse than they are inevitably under an exclusive currency system, The repeal of all such restrictions is repuired. (F.A. Harper makes this point very welf in "Jobs for All" (who want to work) Institute for Humane Studies, Inc, Box 727, Menlo Park 94025, California)  Only then could a system of monetary freedom work perfectly-  a n d  v i c e  v e r s a.

4) Current Gold Production and Currency Shortages
The current gold production cen hardly serve to relieve an acute currency shortage as it proceeds at a regulir'pace requires considerable time and investments for expans,on and amounts presently to almost 3¢ p,a. of the total stock of gold accumulated so far.

5) Some Notes on the Total Gold Supply
For a long period in history gold was so short suppLied that the total stock amounted in 1492 to only about 3.000 tons. What did this mean in terms of its availability as a currency metal? See the considerations on gold coin denominations on the next page. Since then about 73,000 tons were added to the total stock, giving a total of about 77 000 tons in 1965, The small gold supply up to the time of Columbus partly expLains why subsistence and barter economy, slavery and serfdom still existed, There was not sufficient money metal available to make a wider market and all desired exchange acts possible and to pay wages to relatively independent workers, Those living close to the subsistence level were often only too willing to buy their "social security" through serfdom or could with relative ease be turned into serfs when they owed some money. Price adaption did not go far enough to generally introduce a monetary economy. Even now, after a twentyfold increase in the gold supply and a much lesser increase of the population the total amounts onLy to a cube of about 44 ft. or about 1 ounce or approximately 1 gold sovereigns per head of the population. One third of this may be considered as lost, buried or fixed in jewelry etc. or industrially used up. This would leave us with about 3 sovereigns per head, equal distribution assumed. Judging by recent production figures up to one half of the total world stock may have been produced in the last 30 years since von Beckerath wrote the essays reprinted in P.P. 9-11. The per head amount of gold reckoned in Australian currency accordinq to the official purchase price of the government (there is no sales price to private buyers except to a few with a special permit) amounts to g 22,50 according to the black marketprice to about $ b4 Under free market conditions the purchasing power of gold would most likely be considerably less than the latter figure but let us, for simplicity's sake assume it to be 350. This amounts to much more than I thought it to be before making this simple estimate yet it is not impressive compared with the ready cash (in government paper money and coins) plus current cheque accounts per head of the Australian population. Coins and notes amount to about $ 76, cheque accounts to about$ 273, together about  350 per head. As these 350 find oxpression in the current price level the available gold per head would, if it were made the exclusive currency, permit only a price level 1/7th as high as the present. Then each of the new gold dollars would buy about 7 times as much as the paper dollar buys now - and would be about 7 times as hard to get. Von Beckerath mentions on p. 13 the turnover of 2 German institutions, the Federal State Railway and the State Mail- as being far in excess of 500.000 million Reichs-mark and asserts that not even the turnover of a single country Like Germany could beachieved through all the worldis gold. This seems a strong exaggeration - until onetransforms the present gold stock (possibly twice as high as when von Beckerath madethis estimate) into the old type Reichsmark It would amount to no more than approxi-mately 220,000 million RM, Nevertheless, things do not look quite as bleak for an ex-clusive qold currency for two reasons:  281
1.) These 220,000 million RH total gold supply may be turned over 50 times a year, allowing a yearly turnover of 11 000 000 million marks, that is 22 times the turnover of the mere two larae enterprises of a single country 2. The reduction of the general price level due to the introduction of gold as the exclusive means of payment would reduce the turnover of these 2 enterprises to 7100 (million RM reckoned in the new gold currency, thus allowing a total turnover of aboul 155 times their turnover. Furthermore the quantity of gold used as 100% cover for cheque and giro accounts (objectively this cover is not necessary at all) would be likely to lead to more than 50 turnovers a year, thus allowing a higher total turnover. On the other hand, the German State Railway and the monopoly Post Office are likely to have increased their turnover considerably, reckoned in stable currency units. For comparison: Total international trade in the mid-fifties and reckoned in parity prices as about US i 190,000 million or about 800.000 million DM and it constitutes naturally only a small fraction of the total turnover, including all internal transactions. When the above indicated turnover limits are reached further turnover would be possible through further lowering of the price level, but this is likely to bring about -under an exclusive currency system- deflationary developments for a considerable period of transition. According to the above estimates gold is neither as scarce as some think it is nor a abundant as others assert. I would like to be informed by my readers of any exact, comprehensive and more recent surveys of these relationships.

6) An Estimate of Gold Coin Denominations which Might Be Required
Let us assume that gold would have been proclaimed the exclusive currency. To wha extent would it have to be coined out and wouLd the coins still be of an acceptabl size? The per head amount we will divide is as you remember 1 of one oz or 50 gold dollars We would then require something like the following denominations:....table omitted
Do you still think that gold coins could never become too small to be usab te? Murray N Rothbard himself (ibid p 32) mentions that - after many currency debasements the gold diner in the 13th, century and later the silver maravedi in the 15th century became too light for circulation, likewise the lack of sufficient weight and substance to put your fingers on would be the main defect of most of the above estimate gold coins. If such a system were ever practised you might have to hold your breat when collecting your salary - in order not to breathe in or blow away part of it an it might be advisable to transact all monetary exchange acts with the help of a micrscope. If one would insist on gold physically circulating then it might have to be rolle out into a thin film, comparable to the gold leaf used by siamese? writers. Such coins of film-thickness could be glued on cardboard and encased in plastic for protection. Admittedly this would make forging easier and discovery of forgeries more difficult. Another solution would be to use base metals for all but 10 or 20 dollar coins and have these base metal coins fully covered by gold-weight corresponding to their nominal value. Likewise gold deposit notes could be used for small denominations and it would then require a certain quantity of these notes to achieve redemption by 282 smallest gold coin.
       The most sensible approach, within the sphere of an exclusive metal currency, would be a parallel currency with silver for small denominations smaller than 10 or 20 dollars. Thus, an exclusive metal currency while perhaps difficult in some respects, seems at least to be technicaly feasible.

7) Clearing and the Requirement of a 100% Gold Cover account.
When A owes B $ 10 on a certain day and B owes A $ 10 on the same day, then both can clear or settle their accounts without any physical means of payment exchanged between them, even without either of them possessing any. At most both would have to write out a receipt for the other or simpler still they could swap their claim certificates and destroy them or better still, frame them in as permanent reminders with the by-line: 'Paid without using gold as means of payment'.
        When clearing is multilateral this possibility of gold-less payment of gold-values still remains. When a bank undertakes a wide multilateral clearing for its customers, using gold for account and as a standard of value, and when, furthermore, the bank itself is together with other banks, is a customer of an extensive clearing network, still no gold is required for payments. Even the balances temporarily remaining are in the long run cleared and in the meantime payed by "transfer" money,
Such a system becomes only dangerous when an unnecessary element is introduced: the authority for every member of the clearing process to demand not only clearing but cash payments instead, in one or the other rare metal. If he could demand instead only the payment of clearing-house certificates standardized and fractionized like money, then his withdrawal claim could not lead to monetary disturbances.
      It is quite a different matter when the right to demand money-metal payments is     directed to the very few instances where every possibility for clearing is exhausted. Still at least some of the debt remains, either because of incapacity, ack of initiative or bad will of the debtor or due to bankruptcy because of technological changes. On the other hand, in such cases further proceedings would mostly be fruitless, anyhow.
         When comparing the possibility of clearing with the demand for a 100% gold cover for allpaper claims, one has to remember that in principle and in fact all monetary exchanges amount to clearing of claims arising out of the sale of goods and or services.  Physicial means of exchance -of all kinds- do only facilitate this process - through standardization and fractionizing of claims and through the reduction of book-keeping to a minimum. They do not alter this process in principle. Mere paper certificates, issued and administered in a way that they remain acceptable at par in at least the local clearing process, are sufficient. Their nominal value need not be expressed and accompanied by a commodity of the same value. It introduces therefore a foreign and unnecessary element in the clearing process to demand the full backing with physical gold (as opposed to a gold standard merely used for accounting purposes) for every clearing transaction. Quite obviously, clearing, like barter, could not act inflationary. Instead of permitting clearing in all its forms to transact as many exchange acts as are possible and desired by freely trading individuals and associations, the gold cover requirement would limit exchanges to those which could have been paid in gold, though much less conveniently. All other traders who would not be in this fortunate position would be excluded from exchanging their goods and services unless they could manage to do it by barter.
             The main objection against the demand for an exclusive and 100% metallic currency or cover (even in its best form - gold and silver with a free exchange rate between them and combined in a parallel currency; Roland Vaubel defends this sort of thing also; see elsewhere on this site) is therefore a moral one: why should a man only be allowed to buy with precious metal or to sell against precious metal - if both he and the seller or purchaser, are satisfied with substitutes or need no money tokens at all because they make use of their natural right to clear their debts against their assets? Why should all people be compelled to use only a privileged system of payments, e.g. payment with gold coins gold certificates or 100% covered cheque accounts, when they could easily supply themselves with as stable substitutes? Compare the Human Rights draft in plan 110, points 31 to 34.) (I would be grateful for better formulations).
       An exclusive gold currency and an exclusive parallel currency would still continue a part of the existing money monopoly (It must be conceded that it would end centralized mismanagement of currency affairs). All owners of gold would hold this monopoy collectively and would thus form a privileged class. Membership in this class would under normal circumstances strongly fluctuate. Nevertheless, this particular property would introduce a considerable class distinction and illustrate the old saying that only a man who can pay his way may be considered as being free. He are here concerned not only with one of the numerous minor injustices but with a restriction of that right to life. It amounts to such a restriction when people, who otherwise would fully support themselves through freely clearing their output against that of others, are permitted such clearing to no greater extent than they can achieve under the condition that they obtain gold in the first place in order to be licenced for further exchanges or clearing acts. lt is a particular form of senseless tyranny when people; before being allowed to clear with willing partners, have to market their goods or services on the rather limited gold market, have thus to struggle for the possession of a quantity of one of the scarcest elements, have to sell whatever they have to offer, possibly only at emergency or forced auction prices. When such an unnatural and unjust condilion prevails it becomes tragicomic to hear poets (who? Me?) and writers exclaim against the 'cursed hunger for gold', There is neither a justification nor a need for making participation in a market economy in monetary transactions or clearing exchanges, disficult, but every reason to make them as simple and unrestricted as possible.
         Each trader has the right to judge for himself (within the limits of his contractual obligations) what kind of monetary or clearing settlement would satisfy him. Whenever and as long as a free gold market would not supply him with sufficient exchange media he must remain free to resort to other money markets or to issue his own non-compulsory and non-fraudulent means of payment, either alone or in association with others. That voluntarily chosen substitutes for gold money have frequent ey onlya capacity for a local circulation at per is not only a disadvantage teut has decided advantages aLso as von Beckerath points out. Moreover, in some instances clearing by means of shopfoundation certificates is actually superior to a gold cover or gold currency. Compare e.g. pages 11,13,30/1 43, 89 95, 220 and 258.
       Again I feel urqed to siate that the above remarks ought in no way to be interpreted as an attack on the free issue, use and possession of gold coin and bullion or on honest gold certificates. They amount only to a protest against outlawing or ignoring the possibility of certain types of non-coercive paper money as good as gold or almost as good and occasionally even better than gold. Promoters of the 100% gold cover are only right in not trusting most or all governments to supply such a paper currency.
         What references to gold does a gold-less gold-clearing require?
No more than an agreement between the participants to use as a standard measure the value of a certain weight of gold on a free market. All other commodities can, under free market conditions be easily uriced with their equivalent in gold weight and the sellers would tend to do this in their own interest. Thus all claims arising out of all sales could easily be cleared by means of using this common denominator as a reference point. Not a single representative of this gold weight unit need be in the vaults of the clearing centre. Its availability on the free market and daily free market quotes - for all paper currencies - would suffice, if well publicized,to allow gold clearing and gold accounting of all means of payment which have no other commodity value than their printed paper has on the paper scrap market. To allow frequent free market comparisons between the value of various kinds of paper money and gold, as much gold as possibLe should circulate freely in coin form - instead of being wasted where it is least of all or not at all needed - in the bank vaults. Only free competition between various means of payment systems is likely to bring about this most favourable condition.

8 ) Some Suggestions for a Rightful Currency Reform
How could the change-over from an inflated paper currency to a gold for account currency take place? A number of different steps are to be taken:
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1) All leqal tender provisions are to be repealed, likewise
2) the note issue monopoly of the central bank.
3) The qovernment's note printing presses are to be stopped.
4) Sound State or municipal paper money (with tax foundation) and
5) various private means of payment without legal tender are freely issued.
6) All restrictions on the possession and transfer of gold and silver and
7) restrictions on free coinage are to be repealed.
8) Between the new private and the new State paper money, and both of these and gold on a free market,and all of these and the old State paper money,free exchange rates would develop. At these, before the old paper is withdrawn it could still circulate among those who are temporarily still willing to accept it in spite of its possibly rather inconvenient bulk and the reckoning difficulties.
9) There are now three main wavs to withdraw the old inflated paper money,
            a )The old type paper money is accepted in tax payments at the market rate or at the gold value established in the beninning (otherwise the State might still feel tempted to continue note printing) and destroyed after reflux. One might make a case for obliging the State to accept the old paper money at a higher rate should the market rate rise in case a large scale reflux has already taken placet The State's income at that time would consist primarily out of the issue of new tax-based (that is freely quoted paper money which only the department of taxation has to accept at its face value). To allow at least a limited circulation for this, certain taxes might have to be paid exclusively in this new currency (unless the taxpayer is willing to pay a smart money) The State's income would be considerably reduced while it would repay its debts. It might even be reduced to naught, But this is what usually happens when somebody or some organization has gone bankrupt, isn't it?
            b ) The remnant of the government's gold reserve is veld against the old paper money at the rate determined by the market. (Otherwise rationing would have tobe introduced or pro-rata sales as indicated under c).
            c) All State enterprises and possessions, including buildings, land, stocks forests railways, streets, canals, parks, power works etc. are put up for forced sate like the property of any private bankrupt deblor when all clearing possibilities are exhausted. It seems self-evident to me that no further payments to State creditors are to be made out of new State revenue. The gold value of all the government's real estate, stocks etc. is determined by free market offers- including internationaL ones. A Large number of rolatively small shares issued for each of them, corresponding to their old value. Then all existing creditors' claims against the government, including all pension claims and all still circulating State paper money of the old type are to be accepted in payment for these shares at least at their free market gold value. If necessary a comparison between these outstanding debts and the real assets of the State is to be made an a percentage to be determined at which rate all these creditors cen be satisfied. The government is not to be given a chance to make a profit at these sales by accepting its own paper money below its nominal value - until all inflated paper money is withdrawn and then to sell the remnant on the open market for sound currency, That would amount to a fraudulent treatment of its creditors. Should the governmentts possessions really exceed the nominal value of all its debts then other reprivatization steps would have to be considered.

No government is to be allowed in such cases to completely repudiate its paper money to keep as part of its plunder e g, the State owned enterprises, This ideal opportunity for a reprivatization ought to be used.

As obviously nobody can rightly be forced to continue business relationships with a debtor who went already bankrupt once and might again be guilty of mismanagement, the demand for voluntary Slate membership on an exterritorial basis and for the voluntary taxation this implies, follows automatically To subject everybody again to a government which had acted as a looter instead ot as a protector would be tyranny. 285
9 ) Further Remarks on Price Adaption to an Exclusive Currency
The price mechanism does not work quite as frictionless as some of its advocates believe it does - when it is  d i s t u r b e d  by one or two commodities (gold and silver), they alone being allowed to express price relationships and to pay for all prices so determined. The belief that prices would automatically and sufficiently adapt has been concisely put by Murray N. Rothbard ( ibid, p. 13 ):"it doesn't matter what the supply of money is. Any supply will do as welf as any other supply. The free market will simply adjust by changing the purchasing power, or effectiveness of its gold unit. The main error in this opinion is that a market which in this fashion is forced to reduce all prices is still to be considered as a free market. It must be conceded, however, that within certain limits this opinion is true, to wit, when provided that a minimum of gold is available and that there is sufficient time for the adaption to take place. Are these conditions always fulfilled? The gold quantity available at the time of Columbus would today not suffice to turn over the volume of today's trade, not even at greatly reduced prices. Even at the time of Columbus it was, combined with silver, not able to dispense with barter and subsistence economy everywhere to spread a monetary exchange economy generally. As we have seen in the above chapter on denominations gold cannot be subdivided without limits. Coins can become too small for circulation. Rothbard himself quotes two such instances on p. 32 of the same work. (That in these cases the too small size was due to coin debasements does not matter) Thus price adaption would find a physical limit Prices might be reduced to emergency sales prices and goods, because of a shortage of usable coins, might still remain unsold whereupon goods production is likely to b reduced tohards subsistence or towards the money supply which still permits turnovers. When such a physical limit is reached then even centuries are not a long enough time for the expected price adaption to be completed. Often, as experience showed, the time available for the necessary adaption is not centuries teut merely days or weeks. (Compare here the excellent description, in plan 191, of the currency famine of 1893) When the time factor psychological elements like hopes, expectations and estimates creep in and spoil the smoothness of the desired price adaption, Shopowners and wageearners take a considerable time before they recognize the need for price and wage reductions and overcome their hesitation only slowly, Their hesitation increases a currency shortage (the turnover based on not yet reduced prices requiring a disproportionally large share of the reduced money circulation) and may even leed to their oankruptcy or unemployment before they really know what happened to them. Almost like in many car accidents events move then as rapidly that proper counteraction cannot be taken in time to prevent disaster. To the extent that people notice what happens: " f a l l i n g" not " f a l l e n" prices and wages they will be inclined to sharpen the already existing currency famine by reducing their purchases and hiring of labour and keeping higher cash reserves- in the expectation of further price and wage falls. Admittedly even this tendency cannot go on without limits. It is, nevertheless, one of the major factors ignored by those who expect automatie price adaptions to any degree- under an exclusive currency system. The price adaption within this framework functions only within rather narrow limits, that is in cases when the price and wage charges are hardly noticed, It certainty does not work in the extreme cases when its smooth functioning is required most. One might draw a comparison here with the exclusive authority of present-day States to provide protection and security. States are helpless and can grant no security or protection against the vast threats of nuclear, biological and chemical warfare and are only partly effective against the continuous threat of criminal or terrorist or subversive activities. They seem to do their jobs only when the crime rate, the threat to security, is so small that it is hardly noticed by most. In other words when it is not required anyhow, it "functions", when it is needed most it reveals inhererent defects (Compare the index-entry "Prices, falling and low, rising and high").
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10 ) Unequal Distribution of Gold Currency Liquidity.
That ready cash has the tendency not to be equally distributed teut to flow instead,Pleast tem orarily, in larger quantities or with a higher rapidity in certain channels, has often been observed. Even ordinary workers can observe as a fact of life, that under the present system almost always some of them remain unemployed, without a cash income earned by free exchanges of their labour power, and this largely regardless of their capacity and willingness to do jobs that others would like to see done. Likewise, shopowners remain overstocked with goods which are needed by consumers, which are not over-produced or over-priced because the prospective customers cannot afford them, being restricted themselves in their earning capacity through lack of exchange media. In the international sphere similar observations can be made. Citizens of poor countries cannot afford to buy from the large stocks of developed countries because in the system of exclusive currency they do not find it easy to transform their labour power into purchasing power. The money which is available tends to go along other channels.
          Similar observations are made during inflations and deflations. Some areas are less, others more severely hit by the monetary crisis. In times of predominant coin circulation it was often observed that far from the capital and the centres of commerce coins were relatively rare and this, in spite of lower prices which should have tended to attract more money payments (That distances and transport conditions were contributing factors is not denied).
      Any money shortage is unlikely to hit all economic spheres at the same time and equally hard. Producers and traders of non-essential or secondary or tertiary priority items are likely to suffer first and most. This tendency alone will often give the image of certain money channels.
       Aside from localized liquidity differences, there are those of certain spheres of the economy, regardless of locality. Well known are only the artificially created channels due to government planning and meddling in favour of this or that industry, for or against agriculture, the channels due to subsidies and compulsory, often penalizing taxation, etc. Furthermore, of course, the differences between the liquidity of well organized union members who have monopolized their job opportunities and that of less organized, less strongly placed workers, who are, collectively, the victims of the extortions of the monopoly unionists. The capital market does also reveal certain circulation channels - expanding industries with rising and other industries with falling share prices. Comparable channels exist for the ordinary money supply.
The more centralized and monopolized a currency becomes the greater these differences seem to be.
Thorough research on the subject has probably still to be done - or publicized. Every study of this kind should distinguish between liquidity problems under monetary despotism (and be it only one which does nothing else but make gold and silver the exclusive currency) and the liquidity situation under monetary freedom which would allow everybody to monetize his immediately available assets. Such research would possibly reveal that the fantastic growth of cities during some generations was largely (saying: "partly" instead would drive the point home much more moderately eh?) due to money supply channels concentrating there, thus facilitating the sale of goods and labour, making product and skill honing much easier and more adaptable.
Prof Galbraith seems to have done at least one service to economic science by stressing the fact of different money supplies for two different spheres: the compulsory and the voluntary sector of an economy which he likes to call the public and the private sector because of the semantic implications, How he could possibly arrive at the conclusion that the public sector is starved by the private sector (such is a popular version, I did not bother reading this apologist for State intervention) as if the public sector would be the productive and the private sector would have taxing powers against it, is a riddle to me. Every fact I have noticed so far -apart from protectionist policies- points in the direction of the public sector being overfed at the expense of a private sector which often is almost starved or regulated into a large degree of inactivity or unused capacity. (John's idea of a penetrant and pertinent P word line) Compare e.g. house building in Fran-287ce and Sweden, Nevertheless, I appreciate Galbraith's well publicized opinion because he stresses that the money distribution in these two economic spheres is unequal, it does not matter here which of the two is short and why this has come about. His assertion should help to stimulate some fundamental thinking on the subject of liquidity distribution under a centralized and monopolized or exclusive currency system and might even lead some to study the alternative: monetary freedom.
       Under monetary freedom all economic spheres short supplied with money could create their own means of payment and clearing. If money channels do exist, yet a perfect enough price adaption does not occur, then the victims of this system of payments have the right to resort to self-help. They will not be satisfied with a declaration of central Banking or 100% gold cover advocates that according to these theories their "legitimate" requirements would already be supplied. I would like to know more about this subject. Can you help?

11 ) Gold Production and Inflation
In a recent defence of gold for monetary purposes (Theodore Macklin's "Gold - Key to Confidence" published and distributed together with much other relevant matter by:"Economists", 'National Committee on Monetary Policy', 79 Madison Ave., New York, N Y10016, - a booklet containing many facts and thoughts I found very instructive but which also contains some errors) it was said on p. 68 1964 saw world production of 1580 tons. This is a figure 1.775 times as great as for the era before Columbus. Confronted by such facts the Keynes propaganda is obviously untrue. Compare this with the 3.825 tons produced before 1492 znd the 73.3115 tons produced from then on until 1965, giving us a total of 77.170 tons - as noted by the above mentioned author, You will then see that the annual production amounts to an automatic increase of the monetary volume by more than 2% per annum, This is an increase which Keynes would not have considered as quite high enough but as already very welcome according to his monetary manipulation and slow inflation theory for exclusive paper money. One cannot always expect population and production increases to be in balance with the gold production. Indeed, the same author points out in an interesting table on D9 that since 1600 world population grew only by 755? while the gold stock grew by 9?727. Alas, in this table the author failed to include estimates of the extension of the monetary economy and of the turnover per head. On "confidence" see the index. The 1965 gold production amounted according to p, 31 of Macklin's booklet to 2,77,1; of the total gold stock. If gold were ever made the exclusive currency then many defenders of Keynes' theories would consider this annual increase of the money supply as already sufficient to "guaranty" a "groith rate" of 2 to 3% If, furthermore there were a free gold market and no low pegged prices for newly produced gold then the annual increase of the total stock might amount to 5 or even 6% Do the defenders of a 100% gold currency still not recognize the shadow of Keynes on the golden wall? They think they are fighting Keynes' policies by their currency reforms Instead, they would merely replace one "growth policy" by another one, admittedly, one less influenced by the human factor. If gold were used merely as a standerd of value end (sorry from here on down there may be a few more ends instead of ands) not as the exclusive currency then this increase would hardly matter. Cash transactions in gold coin, relatively rare compared with the turnover brought about by various paper means of payment, would simply tend to become slightly more frequent,

12 ) Rigidity of an Exclusive Metallic Currency
An exclusive metallic currency ( which probably never existed during the last few centuries in any of the more civilized countries ) would probably - in spite of the above mentioned deflationary and inflationary dangers inherent in it - be one of the most rigid means of payment, This would render such a currency ideal as a competing means of payment which at he same time serves as the standerd of value for almost all other (288)commodities (by preference) but would render it unsuitable as an exclusive means of the attempt of 100% gold cover. Any proposal to stop government meddling with currencies and value measurements is to be welcomed for scrutiny but any method applied for this purpose should not at the same time stifle or render difficult free voluntary exchange acts between private people. The aim can be achieved by repealing the money monopoly & the legal tender laws.

  13 ) What is the Meaning of a "Gold Price" Provided that Gold is no longer Outlawed as a Standard of Value?
Henry Meulen's concept of a gold standard is elaborated in his monumental work "Free Banking" and in numerous articles in his periodical "The Individualist", ( "Free Banking" is still available from the author: 31 Parkside Gardens London S,W,- 19 or from Karlis Paucitis the editor of "Free Star" and publisher of "George Boardman STEPS TO FREEDOM" 6113 Sandy St., Laurel, Maryland, for 1' 4,50,) I do intend to review his fine of thought at length but could not do him justice here in a few lines. I would like to mention a single objection I share with von Beckerath against his theory concerning the monetary use of gold, He opposes a "fixed price for gold" and proposes redemption of notes by various weights of gold, according to the "price of gold" on the market, This would in reality reduce gold from the position of the standard metal to one commodity among others and render the abstract banknote unit the ideal standard of value for gold and all other commodities. Under a gold currency it would not make sense to speak of a "price of gold. Whenever gold is the general standard of value all goods and services would be priced out in gold weight units. This would be still true when it is camouflaged by the selection of different gold quantities and different national names for these. Even private banknotes and State paper money could then be "Priced" in these gold weight units. In such a situation it is misleading to speak of a "gold price". A weight unit cannot be measured by itself. One cannol measure a meter by a meter or a gallon by a gallon, What Meulen and others using the term "gold price' possibly mean is the exchange rate of various paper currencies against the gold standard unit, the purchasing power of gold toward other means of exchange. It seems therefore proper to speak -under a gold standard- only of a price of the various types of money expressed in terms of the standerd gold unit. If one sticks with the gold standard concept then every item has a gold price -but gold by definition- none. Gold is weighed in weight units but not priced in gold terms. Under a gold standard a paper money subject to a free market rate may either stand at par, above or below its nominal gold value, The "price" of gold economists would consider -its equivalent in terms of goods, services or other exchange media- should for the sake of clarity rather be called the purchasing power of gold. Murray N Rothbard has expressed himself so welf on this subject (ibid pp, 4, 6, 7, 11, 12) that I feel tempted to quote him:"Like all commodities gold has its ''price" in terms of other goods- which is determined by the interaction of its total supply, or stock, and the total demand by people to buy and hold it." "On the free market, then, the various names that units may have are simply  d e f i n i t i o n s  o f  u n i t s  o f  w e i g h t. When we were 'on the gold standard' before 1933, people liked to say that the 'price of gold' was 'fixed at 20 dollars per ounce of gold 'But this was a dangerously misleading way of looking at our money. Actually, 'the dollar' was d e f i n e d  as the  n a m e f o r  (approximately) 1/20th of an ounce of gold. It was therefore misleading to talk about 'exchange rates' of one country' s currency for another. The 'pound sterling' did not really 'exchange' for 5 'dollars'. (Actually, the pound sterling was exchanged for 87, but we are using 85 for greater convenience of calculation) The dollar was defined as 1/20 of a gold ounce, and the pound sterling was, at that time defined as the name for 1/4 of a gold ounce, When a pound sterling is exchanged' for 5 'dollars', then 1/4 of a gold ounce simply traded for 5/20 of a gold ounce. Clearly, such exchanges and such a welter of names, were confusing and misleading. How they arose is shown below 289 in the chapter on government meddling with money. In a purely free market gold would simply be exchanged directly as grams, grains, or ounces, and such confusing names as dollars, francs, etc "would be superfluous,"
      "As we have said, money, or gold, is the common denominator of all prices. But what of money itself? Does it have a 'price?' Since a price is simply an exchange ratio it clearly does. But, in this case the 'price of money' is an  a r r a y  of the infinite number of exchange ratios for all the various goods on the market. Thus, suppose that a TV set costs 3 gold ounces, an auto 60 ounces, a loaf of bread 1/100 of an ounce, and an hour of Mr. Jones legal services 1 ounce. The 'price of money' will then be an array of alternative exchanges. 1 ounce of gold will be 'worth': either of a TV set, 1/60 of an auto 100 loaves of bread or 1 hour of Jones' legal service. And so on down the line. The price of money, then is the 'purchasing power' of the monetary unit - in this case, of the gold ounce. It tells what that ounce can purchase in exchange, just as the money-price of a TV set tells how much money a TV set can bring in exchange."

One of my latest subscribers, Mr Milton M, Shapiro, 451 Converse Ave, Claremont, Calif 91711, wrote me a short note staling:"Yes you may list me among your 'monetary reformers' - I would classify mvself as essentially a '100% gold standard' man along the lines outlined by Prof M Rothbard in l,8, Yeager,ed,: In Search of a Monetary Constitution, involving no fixed value in gold. By the way, I teach Economics, including Money and Banking, at the local Cal-Poly College of California State. This note was apparently written in a hurry and I would like to have explained the half-sentence: "involving no fixed values in gold". Would he oppose for instance the readiness of a note issuer to accept his own notes in accordance with their text as the equivalent to one ounce of gold each, as if he were actually paid with one ounce of gold instead? Or would he only oppose e.g, official gold values for national currencies in international transactions? This minor disagreement or misunderstanding, like the one with Mr. Meulen discussed above, shows again how insufficient our language still is for communication purposes.
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This seems to be as good a place as any other one to mention some more monetary freedom advocates of whom I heard in the meantime ( Compare notes pp 266 291/2, )Mr; i Mrs, Brian d. Monahan, Route Two Box 121 Mundelein, Illinois 60b60, U,S,A, Mr, Monahan stated that Dr, F.A. Harper, President of the Institute for Humane Studies, Box 127 Menlo Park 94025, Calif" U,S.A,, would likerlise favour monetary freedom, Mr. Cliff Ellis, 6/ 119 Riversdale Rd,, Hawthorn 3122 Victoria, Australia. Robert E Sagehorn, editor and publisher of WESTERN WORLD REVIEW (the summer 1967 issue is largely dedicated to monetary freedom), P.0. Box 2711' Culver City, California, (This person is still befriended with Zube, though out of all the people he corresponded with to the point of filling his whole house with files full of them, suprisingly few seem to remain in touch; and as a matter of fact Sagehorn seems to be a permanent recluse and virtually unapproachable)  Charles A, Wiles, 1009 Balfour! Midland, Michigan, U,S,A" editor of "HAIL".
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14) A Gold Subsidy to American Miners?
I was recently somewhat disappointed when I found Mr, Walter E, Spahr editor of Monetary Notes 8, published by the Economistst National Committee on Monetary Policy", 79 Madison Ave, New York, N,Y, 10016, "recommending a gold mine subsidy instead of another devaluation of our standard dollar". Should the fiction of the gold cover of the U,S, Dollar be preserved, the lie that 35 $ are still worth 1 ounce of gold in spite of the government not being prepared to sell you or me a single ounce of gold at this price? Watch this, not often does one catch John coining rhymes:
Or should the present gold-painted paper dollar ratifier be left to its fate,
to its proper evaluation on a free gold market in terms of gold- weight?
How much gold could U,S, $ 35 buy in a free market for gold and various means of payment?
      The fear of the concept of 'devaluation' seems in this case unfounded as here devaluation might mean nothing but a reduction of the official purchase price- which over 290 values the inflated paper dollar to its free market price rockoned in gold weight, and leaving it there. As has been printed out in plan 175 only devaluations below the savings market rate are objectionable.
On the other hand, according to the principles of monetary freedom one could rightly demand that at least the issuer who has inflated the dollar, the tees Government, becompelled to accept its own promises at their face value no matter how- low their market rate may be. While the legal tender provisions and the money monopoly ought to be repealed - last not least to prevent any money shortage which might otherwise result, the U.S. Government like any bankrupt debtor, ought to be held responsible with its whole property, must as far as possible fully redeem all its paper Promises at their face value, or, when this face value exceeds the total property, then it must redeem all claims according to a pro-rata system At X 35 per ounce or at the pro rata price the remaining gold stock and all government property would then be rapidly transferred again into private hands. The paper dollars which have thus streamed back ought
to be destroyed. To use them again would be another fraud. Taxes ought to be fixed in their present equivalent in gold weight, in a short term, limited reform of the old paper dollars ought to be accepted in their payment as if each 35 of them were really worth -as the government asserted so far- 1 ounce of gold. (This, surely, would be one of the most radical tax reductions ever.) Legal tender would remain - against the government and against nobody else, The large reduction of government income due to this reform would force it to reduce or cut out expenditures How to equalize the value of new private or public paper money issues to that of Gold according to free market principles - is the subject of Beckerath's and Dr. Zander's articles.

IV WOULD MONETARY FREEDOM LEAD TO A RISE OR A FALL IN PRICES?
One basic argument of those objecting against full monetary freedom is - a misinterpretation of the quantity theory which finds e.g expression in the above discussed expectation or automatic price adaptions to the quantity of gold available for monetary purposes.
Mr. M. N. Rothbard (ibid, p 13) puts this opinion very clearly when
he says that a new money only raises prices - i.e., dilutes its own purchasing power."
U. v. Beckerath' on the contrary, expects in balance and in the long run a
general reduction of prices through new issues. He states that only emergency sales and forced auction prices will be abolished and replaced by free market prices - in  most in stances He expects prices to fall for some of the following reasons (the listing is probably not yet complete):
a) The issue of goods warrants reduces sales costs - as they invariably return to the issuer in payment for his goods or services.
b) As all desired exchanges. Will then become possible (none will fail to take place merely for lack of exchange media) turnover will increase and permit savings and rationalizations which would reduce prices. (Coup p 83)
c) International payments would become easy, Trade would automatically and obviously be balanced in a free and multilateral exchange using purchasing certificates The resulting increased turnover and division of Labour would again make for reduced prices in the average. (Wider markets would lead to the increase of some prices)
d) Stable value reckoning will attract additional investments and would thus lead to increased production and lower prices.
e) Short-term credit could then be offered almost interest-free, at the cost of administration Savings would no longer be required for it. This would lastly lead to the repeal of interest ceilings - which indirectly hold production down and prices up (though a lowering of prices may have been intended by the legislators)
f) Monetary freedom would lead to full employment (to the extent desired) and fully productive employment. This would be a strong factor in reducing prices.
g) Maximizing exchange by making all desired exchanges possible and easy would indirectly lead to a rapid increase of savings which, invested, would bring about lower prices. (This is, by the way, the rapid private enterprise and self-help way.
For developing an underdeveloped country. first, ordinary exchanges must be made easy and profitable. This will lead to increased production and savings. Thesavings, freely invested, and without drawbacks through depressions, will again lead tostill higher turnovers, these to ... etc.)
 h) On p 21 Yen Beckerath points out how the order-system (which is closely related and partly identical with monetary freedom) would reduce sales costs. J. Zube,ed.

The floating voluntary society, freedom through international mobility, libertarian ventureson the high seas, and new developments in boats and floating structures are among thetopics in O C E A N  F R E E D O M. Six issues:  1 US. I N N O V A T O R discusseschallenging concepts for the adventurer in reason Articles have included: Sell theRoads, Postmen Against the State, lndividualism on the Left.
Banking in a Free Economy, The Depression of 1929 One-year subscription: ~ 2 U.S.
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Post paid, Order from Preform, Box 2116, Ocean Park 90405 USA, or send equivalent inAustralian funds cjo Peace Plans.
The federal government (or more precisely, those who control it) is indeed operatingwhat is not unlike a vast legalized counterfeiting ring. In one important respect, however,government inflation is far more vicious than run_of-the-mill counterfeiting: the State islegally empowered to compel the victim to accept the counterfeit notes as legal tender,Moreover, the victim is legally forbidden from attempting to protect himself by owning gold.As is always the case, the State imposes itself by legalized physical compulsion.
      What monetary reform should be urged, then that is consistent with the principles of afree society? The l e a s t (stressed by the editor of P.P,) that should be sought isareturn to the gold standard with removal of all restrictions on private use and ownership ofgold. Ideally reform should go sti it further: the State should be divested of its coercive monopoly over the issuance of currency, If, for example, the American Express Company chose to issue its traveler checks as currency and chose to back that currency with goldheld in its own vaults, it should not be hindered by law from doing so, nor shouldindividuals be prevented from using such currency if they so desired. Would such a freemarket in money lead to hopeless confusion among hundreds of competing currencies. Not at all; the international standard would be gold, and an ounce of gold is an ounce of gold whether in New York or California or China or Timbuktu. "Nor would a free market in money lead to general economic chaos. On the contrary, the free market leads to stability - it is intervention by the State that has led and is leading today to economic disaster" - Quoted from p. 226 of Richard W. Grant's "the Incredible Bread Machine" - a Study of Capitalism, Freedom and the State, 286up  4 DO, publ. by R A.Bray, available from Sandra Jeffries, P.O Box, 14031, E. Portland Sta Ore 9t214 U.S.A Mr. Grant does not discuss a gold for account standard of private notes without a goldcover. Nevertheless, his book is a very valuable contribution in almost all other respects.
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'The kind of Government I would like to see would not deny any businessman or party.the right to sell and buy "paper" (IOU's chits, bills debentures, etc.' etc.) in any orderly ways oftheir own choosing. provided that tracing in such paper. is not "disorderly" ways of conducting it is a matter for businesspeople as business eople, rather than for economists aseconomists or politicians as politicians. C,C.A Ellis, address above, in a letter, 11/8/67. He is author of Business, Governmentand All of Us" The Social Sciences Movement (Australia) 59 Metung St, Baleyn E. 8, Victoria, Australia, 1966. Review in one of the future issues. '
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292 How old is the suppression of free enterprise in the supply of exchange media? Herbert Franke in "Geld und Wirtschaft in China unter der Mongolenherrschaft"  (Money and Economy in China under the Rule of the Mongols), Harrassowitz, Leipzig, 1949, quotes on p. 105 an instruction or regulation of the central government, issued in September, 1314 AD.: Recently the owners of brothels, wine-houses, cafes and baths have repeatedly produced token money out of bamboo or wood tablets or paper and have brought them into circulation with a discount against paper money. This infriniqes the currency law. These certificates were only accepted in the issuing store for wine and could not generally circulate in the streets and markets. It has therefore been decided that all these superfluous bamboo and wood tablets or tickets are prohibited" Franke continues: "The regulation of 1294 runs similarly. Because of the shortage of ow Daper money denominations in Kiang-nan the population had issued purchasing certificates for tea, flour, bamboo and wine and circulated them. Even then officers and private citizens were prohibited to accept such certificates or to pass them on. Judge for yourself. If these certificates would have been superfluous,would they have been issued and accepted? I believe that the currency shortage must have been great enough to induce people to accept all localized certificates at less than par. Probably the state-money was in danger of being competed out of existence locally and so force was resorted to under the same kind of pretenses and excuses which e g. the BBC used to get legislation passed against British "pirate' radio stations run by free enterprises. Compare the Legislation on p. 55/6 and the jurisdiction on p. 755/6,._ _ _ _ _ _ _ _ _ _ _ _