Neglected Lectures From the Sixties and Seventies

Moral Foundations of Money

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels, & Sermons

Lesson: Moral Foundations of Money

Genre: Q&A

Track: 22

Dictation Name: RR258B4

Location/Venue:

Year: January 13, 1966

[Audience] {?} minister, but not unaffiliated with the ministry itself, being now engrossed in research and lecturing. He is an American writer and scholar, contributor to many theological and philosophical journals. He is the editor of the philosophical and historical study series in the International Library of Philosophy and Theology. He is also the author of Freud and Van Til in the Modern Thinkers Series of this library, and he also has books here that he has authored if any of you, if anybody is interested in these books may, stay afterwards if any of these subjects interest you, that’s just kind of a side note today, but he wrote, he doesn’t’ know I’m doing this, but I do want to mention some of them. I’ve read some of his books and they’re just excellent, and if any of you are interested in these titles, you might speak to him afterwards; The Messianic Character of American Education, This Independent Republic, The Nature of the American System, Intellectual Schizophrenia, and By What Standard?

I won’t take anymore time because I’d rather hear him talk, and so I’d like to give the floor to Reverend Rousas Rushdoony.

[Rushdoony] I’ll be speaking to you this afternoon on the Moral Foundations of Money. Early this summer, this last summer, at a home in Los Altos in California, I was talking to a very fine German American who had lived through the great German inflation after World War 1. The inflation was a fearful thing. Before it began, the total private indebtedness of the German people was 40 billion Marks, equivalent to 10 billion dollars. As the inflation proceeded, money became progressively worth less and less. As the gold and silver disappeared behind the money, and it increasingly became only fiat paper money. In the last days of the inflation, it took literally billions of Marks to send a letter. It took a suitcase full of money to buy a slice of bread, and finally, in November of 1923, the ten billion dollars worth of private debt in Germany could have been paid off with one American cent, because the penny was convertible to silver. My friend told me of the fact that starvation hit the cities. It was no longer possible to buy food because people were not ready to ship food into cities to get worthless paper for the food. Transportation ceased. The trains stopped running, and starvation hit the cities, and he said only those who had a pocket full of silver could buy what little food there was here and there to be bought, and he said, “I knew one millionaire who starved to death. His millions were in paper money, and they had become worthless. They could not buy him a loaf of bread. Money is important, and we need to be aware of what money is because today, our money is beginning to go down the drain, and we face a monetary crisis.

Last week, I was reading a very amusing and interesting little book. James Laver, an Englishman, writing on women’s dress in the jazz age, in the twenties, and in the course of his discussion, Laver called attention to four kinds of phenomena that appear in every crisis due to man’s religious and moral failure. He says you have a dance mania, you have inflated currency, feminism, and promiscuity. However, Laver left out one very important item in his list, because every time you have such a collapse, you have with it also a tremendous increase in gambling, and gambling becomes a religious passion with people, and people gamble not merely for entertainment, but because they need to, religiously.

Last year, there was an interesting documentary film on TV, narrated by Terry Thomas, and the name of it, on gambling, was Everybody’s Got a System, well worth seeing if you have an opportunity to see it some time, and it was simply a series of interviews with gamblers across the United States, in Canada, in England, and elsewhere. Why did they gamble? The answer, wherever they went, whether Las Vegas or London, was the same. Why not? Life’s a gamble, and they were very accurate in expressing their basic faith, because for them, not God and God’s law governed the universe, but chance. For them, chance is ultimate, and therefore, they gambled because they believed, although they knew what the odds were, that somehow chance would take over and given them a tremendous windfall, a jackpot. If you believe that chance is ultimate, you are going to believe like every gambler, that you can get something for nothing. Now that’s the essence of gambling, you’re going to get something for nothing.

Now, when you have an age which has departed from a religious faith, from faith in God, from the Christian faith, so that it no longer believes that the world is under God’s law, then that age is going to believe not in God, but in chance, and it’s going to believe that you can get something for nothing, and therefore, they are going to begin changing their world to conform to their faith, and so you create what can well be called, not merely The Great Society or the welfare state, but the gambler state. The state that believes that, by throwing money away you can hit the jackpot, that you can get something for nothing, the state that believes that if can create something out of nothing and whose monetary policy is based upon this faith.

Now, every time in history that you have had an interventionist, or a welfare state, or a socialist or a communist state, you have had money manipulation. Interventionism and socialism cannot exist without manipulating money. This is their gimmick. This is their instrument whereby they work their interventionism and their socialism. Now, as they develop their money manipulation, they justify it by a number of very noble, high-sounding purposes. One of these purposes is the more equitable distribution of purchasing power. A second is a relief of debtors. So many people are overwhelmed with debts, we’ve got to do something to help these debtors. Third, the stimulation of trade is given for the justification for money manipulation, and all of these things spell interventionism and ultimately, socialism.

Now, before we go any further in analyzing money manipulation, it is important to define money. What is money? Real money, not the paper money we have in our wallets, not the federal reserve notes nor the new sandwich coins, but real money. There are two common definitions of money, both of which are false. The first is that money is a medium of exchange, and the second is that money is a representation of wealth. Both of these, as we shall see, are, although very commonly used, even by many conservatives, both are very dangerously wrong. I think the best definition of money I have ever seen comes from a very important work written by a very great American in 1833; William Gouge: “Money is not, as was asserted by a late Secretary of the Treasury, merely the representation of property. Money of gold and silver is property, is wealth. A hundred dollars in silver can no more be considered as the representative of $100 worth of flour can be considered as the representative of $100 worth of iron. Each is the equivalent of the other, and each is real wealth, not a mere symbol or representative.”

Let’s analyze that for a moment. If money is not real wealth and if money is what they say it is, just a medium of exchange and a mere representation of a symbol of wealth, would you be ready to give up a home or land, or other forms of wealth that you possess for something that isn’t real wealth? Would you be ready to trade them for something that symbolizes wealth but really isn’t wealth, and today it may be worth something because people will accept it on your say-so, or the federal government say-so, but tomorrow may be worthless? Are you ready to trade a home for a picture of a home, for a mere symbol of a home? No. Money, to be real money, to function as money should, must be wealth itself, it must be wealth itself, it must be real wealth, true wealth and property, and such money is gold and silver money. It is wealth that is easily transferrable, easily divisible, easily transportable, an ideal form of wealth for monetary purposes.

Now, if you replace gold and silver with a mere symbol, a mere representation, what that representation, the paper money does is immediately to drive out the good money, because nobody wants to give real money in exchange for bad money. After all, the quarter that is made of silver, has twenty-three cents of silver in it. The sandwich coin, counting the labor, is worth two cents. Now what rightful thinking man, what sensible man is going to trade a good quarter for a worthless quarter? What immediately happens is that, people using their common sense, save, and the word hoard is just an unkind word for save. They begin to save their silver, and especially people who have any background in Europe, who migrated here from Europe, or whose parents did. They have a memory of what has happened under inflation and how the difference between starving and living has been a pocketful of silver, and so silver begins to disappear, and when you give worthless paper which can be cranked out in ever-increasing quantities by the federal government, two people in exchange for real wealth, then people, because they don’t want a mere symbol for real wealth, but they have to deal with the only money that’s available, inevitably are going to increase their prices, and so prices go up, forced up by the taxation which is a form of inflation and by the paper money, and so good money is driven out by bad money.

Now, anything but gold and silver is a form of counterfeit money, and there are, basically, three way of counterfeiting money. First, there can be a debasement or devaluation of the basic metallic unit of money. In other words, you can do what many a person who was a monarch or emperor in ancient times did. You can take your gold and silver money, and put more and more lead and other baser metals in it until you’ve robbed the people of their gold and silver. You can debase the silver and gold content in money until it disappears. We have that debasement now. Second, you can’t issue paper or token money beyond your gold and silver reserves. When a country begins to issue paper money, it says this paper money is a certificate for the gold and silver which we have stored, and it is potentially redeemable.

Now the first thing that was done to us, we were told we could not redeem our money, and when the Silver Certificates were removed, and they are virtually all gone now, it meant that we no longer had any redeemable money. We cannot take our paper money and exchange it for paper or silver. We’ve not been able to do it for gold since 33, and since 64, we cannot redeem our money in silver. It is irredeemable for us. We have to take it. The federal government requires us to take it, but it cannot put a gun in the ribs of foreigners and require them to take it, and so, it has to redeem with gold in dealing with foreign countries, and of course, this is our increasing crisis.

Foreigners are increasing draining the gold in Fort Knox. All of the gold in Fort Knox is already held by foreigners. They hold dollars which they’ve gained through trade, or through foreign loans or through their investments, and they have a claim on every bar of gold and then some, quite a bit more. In fact, this was the reason for the crisis with De Galle. De Galle was a man who, like any man when he realizes a bank is going to fail, wanted to be first in line to get his money out of the bank, his gold, and so every effort has been exerted to prevent De Galle from doing what was common sense on his part, to pull out every dollar in gold that he has a claim against in the U.S. Treasury. Thus, the second means of counterfeiting money is by issuing paper or token money beyond your actual gold and silver reserves.

The third means of inflation, or of debasement of money, or counterfeiting money is the creation of new bank credits on the basis of an increasing public debt. Now every time you borrow money, we are inflating the currency. Every time the federal government goes into debt, as it does every year now a days, it inflates the currency. It prints in order to meet its obligations, or rather the Federal Reserve Board prints. If the deficit is ten billion, ten billion in paper money and gives it to the federal government, in exchange for ten billion in bonds, so that those bonds, of course, are interest-bearing, and it would take the ten billion in paper to retire them the next day, plus interest.

We have reached the point, in fact we reached it many years ago, where there would be no money in the United States today if there were no debt, because our money no longer wealth, it is debt. Look in your wallet. Your money is federal reserve notes. Those federal reserve notes are really a promise to pay. The represent a debt, a bond, against the federal treasury, an interest-bearing bond, so every day they circulate, they require their face value plus interest to retire them, and we have reached a point where if there were no debt, there would be no money. In other words, money has ceased to be wealth, it has become debt, and in the course of this, we have also debased not only money, but the language. It’s an interesting fact that the word credit once meant the ability to be trustworthy, and now it means the ability to borrow money, which is a very different thing.

Money manipulation and inflation becomes possible in a country with two facts. One, a desire to falsify the true economic picture of the country, and to embark on a welfare program to please the people, to gain votes, and second, it involves a larcenous purpose. Inflation, counterfeit money in any form, succeeds when the federal government, or whatever government it may be, and the people both have larceny in their hearts, because it does involve larceny. It is the gambler state trying to create something out of nothing but knowing that meanwhile, it is living off of the provident. It is taxing them. It is taking their savings out of the banks when they deposit them there, and turning over to the bank, bonds in their place, and more printing press money.

Of course many Americans like inflation. Recently, in Northern California, one man, a working man, claimed that inflation was wonderful. He was all for it, and certainly, he was profiting by it. How? Well, he’d bought a very fine house about ten, twelve years ago, and it was worth now, in view of the development of his area and the continuing inflation, almost twice as much as it had been then, and his payments were only $80 a month, which was nothing because when he bought the house, he was making $300, and now he was making close to $700. So, he was much better off. Inflation was a wonderful thing. He didn’t like it when he was told, of course, in the process, you have been stealing from the man who sold you the house, because he sold it to you for good money and you are repaying him in money that’s worth much less, in cheap money, and also how do you know that you aren’t going to be the sucker also in the long run? Because whenever inflation begins, it first of all helps people who are debtors and they are all for it, because they can pay off good debts with bad money, but the gambler state is a cannibalistic state.

Ultimately, it destroys, of course, first of all the middle class, the thrifty, hard-working, backbone of the nation. Then, it destroys the lower class. Moreover, when you have inflation, you have a tremendous concentration of power in the central government, and whenever you have a concentration of power, power allies itself not with weakness but with power, so that you have a concentration of big government, big business, big agriculture, and big labor, and the working man wakes up one day and he finds that his labor bosses are closer to the central government and to big business than they are to him. They’re all together working federal contracts and federal legislation for their welfare, not for the welfare for the middle classes certainly and less and less for the welfare of the lower classes, and then because the gambler state is a cannibalistic state, it begins to eat up its partners until finally, it destroys itself. It is cannibalistic.

Now there are some people who call themselves conservative whose answer to the federal reserve system is that we ought to have a debt-free money, and they say, “Well, your federal reserve notes are debt-free money, they’re printing press money. Why can’t we just eliminate the Federal Reserve which is bad,” and we can agree with them on that, it is halfway to socialism, socialism of money, “and just have the Treasury issue paper money?” Well, that’s going from the fire pan into the fire, from 50% socialism to 100% socialism.

Yesterday, I picked up one such statement by a man who believes himself to be a conservative, who said, “We demand the abolition of special privileges, and therefore the way to do this is to have paper money and print all we need of it, whenever we need it.” Now every person who believes in paper money is a socialist whether they know it or not, and they are not for the people. They are for the central government, because they are giving the power to counterfeit money to the central government and denying it to the people. After all, if the federal government could have pure printing press money without incurring debt, and it’s bad enough when they can have it with debt, then there would be no restraint upon them, and they would be in a tremendous position of power to buy up anything and everything with printing press money.

Meanwhile, we, with money, would have to go and borrow it at interest. Wouldn’t this be special privilege for the state? And it’s every interesting that, of course, this kind of fiat money thinking, funny money thinking, is exactly what the communists, the Marxists believe. The Greenback Party presents itself as a conservative group. The Constitutional Party presents itself as a conservative group, and they talk about so-called constitutional money, they don’t mean that. Constitutional money is gold and silver money, but when they talk about this kind of money, they are talking the same language exactly as Lenin and as Karl Marx.

Moreover, any time you depart from hard money, gold and silver, you have taken the first long, big step into the planned society. All money manipulation is a form of planning. It is a form of planning to live without work, without honest activity. It is planning to live by gambling, by getting something for nothing. It is planning for larceny, and for avoiding the economic laws with their laws and effect.

Now, the excuse for planning is precisely that which any true constitutionalist and conservatives gives: planning for the adjustment of supply and demand, for the creation of incentives to produce, and to produce usefully, and to have good standards for production. Now, these are the things the planners say are their goals, but in a free economy, the price mechanism, profit and loss, does all your planning in a matter of hours without having a man do the planning, and central planning is a return to primitivism. The more developed a civilization becomes, the more you have specialization and decentralization, do you not? The bigger an industry becomes, in order to survive, the more it must decentralize, and the more it must specialize in every department, and so, when you return to central planning, or to centralization of power, as interventionism and socialism does, you’re restoring everything to the tribal level, and so you destroy steadily your civilization, and it ends up in collapse.

But, when you have the free market economy, you do have planning. The free market, the free society, is a planned society, but its planning is the planning of millions upon millions of producers. Every businessman is a planner. If he didn’t plan, he’d be out of business. He plans in terms of producing the best product for the least money, of the highest quality because he’s out of business if he doesn’t product quality at a low price.

Now, when you have millions upon millions of individual planners, you’re going to have some plans that fail. What happens? Well, this and that individual businessman’s planning, having been faulty, he is out of business, but the society, as a whole continues to function. If you have one central planner, first you destroy the test of any planning, supply and demand, profit and loss, so that you ensure infallibly and inevitable that there will be a failure, to this will be a failure that will take everybody down the drain, the whole society. The free market, therefore, is the only wisely planned society, and the foundation of all central planning is money manipulation. There could be no intervention in business, nor any socialism, without money manipulation. This is the cornerstone.

Now, central planning says two things. First, that personal planning is no longer necessary and second, that it will assure security for all. So that, and of course, this is by stealing. So that it moves not in terms of economic law, but in terms of political and welfare considerations. Economically, socialism, as it offers social security in every form, is economically unsound. In fact, not only all socialism, but the Social Security Administration itself is economically very easily understandable by examining the chain letter scheme. It’s the same principle. In the chain letter scheme, if you send so many dollars to so many people on the top of the list, supposedly, you are going to get so many dollars as everyone continues the chain. Now, assuming that everyone in a chain letter scheme abided by the request, and sent out the dollars, and wrote the letters and the chain wasn’t broken, it still would break down in a hurry, because after so many letters were sent out, there isn’t enough money in the world to make the chain letter scheme work, and the same is true of social security and of socialism. Social security is going to break down. People of my generation, I don’t believe, will ever collect a penny out of it. Just as in the chain letter scheme, those who are in on it at the beginning can cash in on it. So in any form of socialism, those who are in on the scheme at the beginning are the only ones who really cash in on it. Central planning requires larceny. It is larcenous. All money manipulation is larceny, and instead of producing what it claims to do, it claims to be full of love for mankind and it wants to help everybody go into a world of plenty, it produces hunger. [

An important book was written some few years ago by E. Parmilee Prentice, Hunger and History, and Prentice, studying all the famines of history, said that famines have four causes: 1) prevention of cultivation or destruction of crops; 2) defective agriculture caused by communistic control of land; 3) government interference by regulation or taxation; and 4) currency restrictions including debasing the coin. In other words, socialism, intervention produces all the famines virtually of all human history. It claims to produce plenty. Instead, it produces famine.

In 1936, Tilden, in his book, A World in Debt, as he surveyed the kind of world that was developing, declared primarily public debt is a device intended to beguile the taxpayer into thinking he is getting something for nothing. In other words, the gambler’s mentality, the gambler state, and he continued, “A nation lacking saving individuals would have no surplus. Without a surplus, there would be no creditors. Without creditors, there would be nobody for government and private debtors to plunder. In order for anyone to be prodigal, someone must be thrifty.” It’s the thrifty, the middle classes who are plundered, who are robbed, who are taxed to death, whose savings are reduced to worthless money, who are robbed progressively to make possible the larceny of interventionism and socialism. Socialism is parasitic.

Now, whenever you have a parasite, the parasite lives only as long as the host body lives. When the host body dies, the parasite dies. If the oak tree di3es, the mistletoes on it die. Now, for some generations, the socialist countries of the world have been parasitic one on another, and increasingly, on one body; the United States, and in particular, on the middle classes of the United States. When they destroy this healthy body on which they are now feeding, they will not only destroy it, but themselves. The whole thing will go down in collapse, in utter ruin, and there will be a world collapse such as the world has never seen when American free enterprise is gutted. Meanwhile, politicians go ahead very blindly.

In the January, 1966 issue of Nations Business, house majority leader, Carl Albert was asked, “Mr. Albert, do you see any signs of inflation today?” and our good brother democrat, Mr. Albert, answered, “Well, I hope not. I think our real dollars have remained pretty stable. I think one of the concerns that the president had in the aluminum and copper matters was that this might point to inflationary trends, if the companies went through with what they suggested they might do. I am not an economist (that’s the understatement of the year). I really don’t want to try to give a definitive answer on the subject.”

Now, when you begin with money manipulation, the next step is controls, controls leading finally to socialism and to the end. President Johnson’s action with respect to copper and aluminum, was controls. In effect, to impose a controlled price. The controls will increase. The federal government is saying “There must be no control on our spending, on our ability to inflate, but if you want to live with the reality of inflation and adjust your prices accordingly, we’re not going to let you. That would be inflationary,” and the sad fact is that there is no real resistance from industry or from the people. All of them are really in on the same game. They don’t like it when it hurts them, but they are all out trying to get rich in terms of counterfeit money and government contracts.

I began by quoting William Gouge, and I shall conclude by quoting him. William Gouge, writing in 1833, said that when the United States went on paper money, it would have a great deal of seeming prosperity and a tremendous boom for awhile, although it would hurt the countryside for the towns, and the towns for the cities, and the cities would boom on credit, not on real wealth but on credit, and everything would seem to be marvelous for a time, and then it would all crumble. “So long, therefore, as there are any persons wanting capital, we may expect that there will not be wanting applicants for the power to create capital. The evil will be cured by itself as a natural disease is ended in terminating in death.”

The present order is doomed. We have passed the point of no return. The wise will, therefore prepare for the order which must follow, an order I believe will be one of liberty and, meanwhile, they will prepare for survival.

[Introducer] Reverend Rushdoony, it’s been a marvelous experience to have you here today. I’m sure we all understanding a little bit more about what the monetary system is doing to our country. I wonder if you would privilege us with a ten minute question and answer period?

[Rushdoony] I would thoroughly enjoy it.

[Introducer] If anyone has any questions, we would like have you to ask them of Reverend Rushdoony, on the subject we had him talk about.

[Audience] I would like to ask one. When we were taken off the gold standard in 1933, it was made illegal to possess gold and use it as a means of exchange.

[Rushdoony] Yes.

[Audience] Now, could they, even if people hoarded silver, or hoarded their coins, couldn’t the government eventually say it’s illegal to have this silver?

[Rushdoony] Yes, a good question, a very thoughtful one. The government can say eventually that it’s illegal to have the silver, but it’s between you and the government as to whether you’re going to say you have it. Second, they have already, in the last congress, introduced such a bill. Senator Bible{?} of Nevada did so. However, you have 9 million organized coin collectors in the United States and they really pressured congress, and the matter died in committee. I have no doubt they will try and reintroduce it, but the fact remains there is no reason why you cannot collect it. Moreover, it is important to realize that you can also collect many silver coins that are out of circulation such as old coins, silver dollars, you can buy the ordinary run-of-the-mill silver dollars for a dollar and a quarter at coin shops.

[Audience] Two fifty now.

[Rushdoony] And, well, you have to shop around, but I know where you can get them for a dollar and a quarter. Then you can also buy gold coins. Very quickly, it will be impossible, but if you hurry now to a coin shop, you can. Now, you can get one of the most beautiful coins the United States ever produced was the Eagle, the $20 gold piece of 1909 and 1911. I prefer the 1909 one. The Eagle has a tremendous reputation the world over. Why? Because the American $20 piece was not merely a dollar. It was an exact ounce of gold, and there is no better money than money that comes by measure, an objective standard. Now, that’s an interesting fact, you see? The controlled price for gold now is a little better than $35 an ounce, so the $20 gold piece is worth over $35 now. On the free market, it might be worth up to $70 or $105, or more. You can buy the $20 gold piece from $48-55. That’s gold, and if the price of gold should drop ten years from now after this is all over, it’s still worth $20, and the $20 with such a deflation would be worth far more than the $50 you put into it, is worth now. This is a good investment, and a lot of conservatives are buying gold, and lot of left-wingers are buying gold coins, too. In fact, the sad state of affairs is that more left-wingers I find are sometimes doing this than conservatives, because while they may proclaim one theory, they still are insuring themselves in case they are wrong. Another thing, it is legal also. You see, you can have coins as a collector, so you might as well become a coin collector. You can have gold and silver. Second, you can have raw gold, as long as it is not refined, and in Northern California, every conservative and a lot of liberals, well, not every conservative. Some of them are too old, but a large number of conservatives head for the hills for their vacation and pan for gold, and the result is that some days they’ll only get $2-3 of gold. Some days, they may hit $100, and as long as they store it as dust, it’s legal, and last year after the floods, of course, which washed down a lot of gold-bearing ledges, and gravel, the hills were black with people panning for gold, and storing it, so you had conservatives up and down the state, the northern part of the state out panning for gold, and a lot who aren’t conservatives, in fact. When I was up there, my barber would spend his vacation in the Sierras panning for gold, my mailman did the same thing. Just about everyone around there was doing it, and there is fabulous amount of gold hoarded in the state of California.

[Audience] {?} country, since the fall and all the other {?}of the world leaning upon us. In the twenties, or twenty-nine when we {?} the Depression, {?}

[Rushdoony] Because the inflation then was just a mild thing compared to what it is now. It was a government-created inflation, by government debts. It was the outcome of the debts and credit expansion of World War 1, but it was a very minor kind of inflation and expansion compared to what we have now.

[Audience] But when we think of it as being so great, {?} now, it would be . . .

[Rushdoony] Yes. Oh, that would be nothing compared to what will happen. We can have a depression again. I doubt it. A depression will come, strictly speaking. . . Well, we would have a depression tomorrow if the government balanced its budget.

[Audience] Would that save us?

[Rushdoony] If we went into a depression, it might save us, but you see, Americans have had experiences with depressions and they are afraid of them, and no politician will risk it. Therefore, there isn’t any attempt to balance the budget because they know that a balanced budget would mean so great a cutback in government expenditures that it would throw millions out of work. Our prosperity is government finance, debt finance, prosperity, inflation money, prosperity. So, they aren’t going to risk it. Neither the democrats certainly, nor the republicans are ready to risk a depression.

Then there is another alternative that is devaluing the dollar much more rapidly than it is being devalued by saying, “Well, we’re going to raise the price of gold and make our gold worth twice as much as it is,” but again, this is a risky thing and only congress can do it, so it’s not likely to be done. Then, you can have increasing printing press money with a runaway inflation, such as they had in Germany. This is possible. Or, as this runaway situation begins, you can have total controls, but it will end up in the same place, however. Collapse, and I think the total controls are the most likely. It’ll be a rough period for a time, rougher than anything we can imagine, but I believe it will break the back of worldwide socialism totally. Therefore, I believe we have to live with a recognition that we are going to have to pay the piper, and begin thinking in terms of what’s coming after? We’re going to build for freedom, for a real constitutional America again, and I believe we’re going to have it, but it’s going to depend on a lot of hard and dedicated work on our parts, a continuing witness, because we’re not going to be heard too well now when they’re living well on borrowed money, but they’re going to listen when the thing begins to fall apart.

[Audience] What is your estimate of time {?}

[Rushdoony] Well, I think in ten years it will come and gone{?} perhaps, I don’t know. They are extremely clever in their planning and in delaying consequences, so it could take longer. Howard Kershner, some years ago, in his book, God, Gold and Government, made the interesting observation that throughout history, no state had ever lasted more than forty-years off the gold standard. Now, we have been off of it thirty-one years. That would mean we have eleven years to go. Maybe they will be a little more clever this time, and stretch it out a little longer. I, myself, don’t think so, although it’s possible, but it’s going to end, it’s going to be very rough for a few years, and then I believe we shall live to see a free American such as we have not seen in our lifetime.

[Audience] It’ll mean us starting over from the beginning for everybody though, I mean, what we have now in the banks or property, or this sort of this will just be wiped out.

[Rushdoony] Right. I think it’s . . .

[Audience] Well, lost its value during this depression time.

[Rushdoony] No, land will be safe if it’s debt-free, but I think the observation of Dr. Hans Senholz, how many of you heard him by the way, when he spoke in Los Angeles this spring, in June? He was up here and I had the privilege of introducing him since I knew him. He said the worst form of savings today is in money, paper money. It’s going to be worthless, and so he said there is an increasing flight from money, and there is. People are trying to get everything as a substitute, and this is why land prices are going up so sensationally, especially farm properties, for survival reasons and for investment reasons.

[Audience] Do tell Kershner’s little story in the book you just referred to about the little boy who heard the clock striking on the stairs.

[Rushdoony] I’ve forgotten the story.

[Audience] He was creeping down the stairs one morning and the clock began to strike, and it was broken and it just continued to strike. So he rushed into his daddy’s room and he said, “It has never been this late before.”

[Rushdoony] Yes. Well, Stockbridge of Barron’s magazine reported years ago, thirty years or so ago, an interesting story from the German inflation of the banker friend of his in New York who was in Germany, I believe in twenty-one, or twenty-two, and he could see the signs pointing to what was coming, and he was chatting with the waiter in this very fine restaurant, and he was a very intelligent and ambitious young man, and he asked him what his ambition in life was, and he said, “Well, I like this kind of business and I hope someday I can own a restaurant,” and so the banker from New York handed the waiter a $20 gold piece and he said, “Hang onto this, and wait until the time when this $20 gold piece will buy you a restaurant, because it will in a very few years.” Well, about four years later, in about 25, I believe, the banker returned and went to the same restaurant and the same waiter came forward to wait on him, and he looked up at him and recognized him when the waiter greeted him, and he said, “Well, I see you didn’t take my advice. You’re still a waiter,” and the man beamed. He said, “Oh no, I took your advice, I saw you coming so I’m waiting on you. I own the place. I bought it with that $20 gold piece.”

End of tape.