The Real History of Money Island

by Michael Flürscheim (1896)

Five years have gone since “Rent, Interest and Wages” was handed to the publisher (Wm. Reeves, 185, Fleet Street, London). The third edition has lately come out; and the rapid sale of the book indicates the undiminished interest of the public. These five years have furnished additional proofs for my “crisis” theory—my explanation of commercial depressions—as the prediction which I based on this theory has been verified. I had predicted that, far from improving, the crisis was bound to get worse from year to year—unless a great war interrupted it for a short time—because the source of the crisis, which I claim to have discovered, admits of no other development. The satisfaction of having been the first to make a great scientific discovery has not had upon me the effect which unfortunately is often produced in such cases. When men have spent many years of their life in working out a problem from a single special point of view, a mental failing is apt to be developed, which I call “reformers’ hypnotisation.” It is like the well-known effect produced on a cock made to look steadily at a chalk line on a table: its fixed attention hypnotises it completely. A hypnotised person can be made to see only certain objects or persons and to become blind to all others. People permanently so hypnotised we call “cranks,” perhaps because their mental processes have come to resemble the working of a crank, which, no matter how diligently turned, always comes back to the same point. The distinctive feature of a crank is that he never modifies his views. He never sees—certainly never acknowledges—that he has been in any point mistaken.

I own to having myself once belonged to that honorable fraternity. 1 don’t use the adjective “honorable” in a sarcastic sense, for I quite agree with Prince Bismark in preferring a man with one idea to the majority, who have none at all. But this little book shows that I have left the cranks, for it gives the proof of my seriously transgressing the fundamental law of that fraternity: the law of believing in their own infallibility.

In “Rent, Interest and Wages” I have traced the cause of social misery to private landownership, directly through the monopolisation of the fountain of all life and work, indirectly through seeing in Rent the mother of Interest. I do not intend to go back on this theory. In fact the seven years which have gone round since I first published it have strengthened my conviction of its truth. But I have made a new discovery by infringing the law of the code Napoléon which forbids the search after paternity. After having found in Rent the mother of Interest, I have searched and found its father. This father is Money, or rather, to be more explicit, our present monopoly currency. (Whether gold, silver, or paper forms the basis of this currency, the underlying principle of “monopoly” is the same.) I had failed to find out the miscreant before, because I always considered him below my notice, imagining that after land nationalisation the money question would right itself, and I certainly never thought him capable of any partnership in the begetting of Demon Interest

As I have freely confessed my guilt so far, I want also to make a free confession of how and when the light dawned on me for the first time. It was a result of the work I had undertaken in the reorganisation of the famous Topolobampo Colony in Mexico. Or rather the intended reorganisation, for I did not succeed. I had been urgently invited by both the contending factions to come over to settle their quarrel, and with infinite pains I worked out drafts of by-laws and contracts. These were accepted by the representatives of both parties, only to be broken, however, as soon as made, by the founder of the colony, Albert Kimsey Owen. His contracts with the Mexican Government were such that without his co-operation peaceful work appeared impossible for years to come, and there was no chance of obtaining this co-operation except on terms I could not accept or advise others to accept.

This work—fruitless though it proved for its immediate purpose—brought me face to face with alt those questions which the law-maker of a common-wealth has to deal with. It is an old experience that things look a little different from the benches of the opposition and from the woolsack. Both the land and money questions had to be considered. Of course the foundation of our constitution was common ownership of land, a very important thing in the distant future, but very unimportant in the present, when land was worth almost nothing and could be had at that price everywhere around us. On the other hand the colonists were willing to pay 12 per cent. for money, or even more; for you could have had a hundred hard workers as partners, who were quite ready to give you half of the proceeds, if you only furnished the money they needed. And so the money problem loomed in the foreground, and looked quite different from what it had looked at my desk at home. The results of my studies of this important question, which I had neglected before, are given in these pages. In the course of these studies I became acquainted with a number of writings the conclusions of which tended in the s«me direction as mine, but had been reached by the authors in an entirely different way. I had approached the social field through the gates of the land problem; they had passed through the money door. As I had been hypnotised by land, so they had been by money. The natural consequence was that they were just as blind to the land question as I had been to the money question. Some even went so far as to proclaim Rent the child of Legal Tender Money, The worst of it was that even in the very field which they had explored, and in spite of the correct practical conclusions they had come to as regards the remedy, the fabric of their logic often was of the flimsiest nature. The mere words “Legal Tender” were as a red rag to a bull. It blinded them to such a degree that they even distorted the history of money so as to suit their notions.

The direct origin of this book was the desire of a friend to have me write a preface to a little American pamphlet entitled “Ten Men of Money Island,” by S. F. Norton, of which over 500,000 copies seem to have been sold in America, and which he wanted to have reprinted for England.[1] I set about this task, but I soon found it would not do. I had noted ten points, of more or less importance in which this ”Primer of Finance” was as far from the truth as those whose errors it tried to expose. I certainly could not write a preface in which I demolished half of what the book contained. Of course I gave it up, but the idea of presenting this question in such a popular form struck me as very good, and I decided to try whether I could not bring out my own ideas in a similar way. The result is this little work, for which I beg my reader’s indulgence. I do so especially for the style and grammar. A foreigner may be ever so conversant with the noble language in which Shakespeare wrote, yet he can hardly ever acquire in it the ease and fluency of an Englishman. If my first attempt had not been so well received I would certainly not have ventured to repeat it.

Lugano, Switzerland;
January, 1896.

[1] It has since been published by Mr. Reeves, 185, Fleet Street.

Read the book as pdf: Money Island