Creature From Jekyll Island by G. Edward

In the past, the banks have enjoyed a bountiful cash flow from interest on money created out of nothing. That will change. They will have to make a clear distinction between demand deposits and time deposits. Customers will be informed that, if they want the privilege of receiving their money back on demand, their deposit of coins or Treasury Certificates will be kept in the vault and not loaned to others. Therefore, it will not earn interest for the bank. If the bank cannot make money on the deposit, then it must charge the depositor a fee for safeguarding his money and for checking services. If the customer wants to earn interest on his deposit, then he will be informed that it will be invested or loaned out, in which case he cannot expect to get it back any time he wants. He will knowingly put his money into a time deposit with the agreement that a specified amount of time must pass before the investment matures.

The effect of this practice on banking will be enormous. Banks will have to pay higher interest rates to attract investment capital.

They will have to trim their overhead expenses and eliminate some of the plush. Profit margins will be tightened. Efficiency will improve. They used to offer "free" services which actually were paid out of interest earned on their customers' demand deposits.

Now they will charge for those services, such as checking and safe storage of deposits. Customers probably will grumble at first at having to pay for those things, and there will be no more free toasters.

Electronic transfer systems will probably become popular for their convenience, but they will be optional. Cash and check transactions will continue to play an important role. Government monitoring will be illegal. Although there will be fewer dollars in circulation than there were Federal Reserve Notes, the value of A REALISTIC SCENARIO

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each one will be correspondingly greater. Each person will end up with the same purchasing power he had before the conversion. For a short period, both the old and the new money will circulate together, and some people will have difficulty making the necessary calculations to determine their relative values. But that is a routine operation for people who live in Europe or for anyone who travels to a foreign country. There is no reason to think that Americans are too stupid to handle it.

SOME BAD NEWS AND SOME GOOD

We should not delude ourselves into thinking that this will be an easy transition. It will be a very difficult period, and people will have to get used to a whole new way of thinking and doing. The freeze on the current money supply may trigger panic in the stock market and the business community. Stock prices could tumble, causing paper fortunes to disappear back into the computers from which they came. Some businesses may fold for a lack of easy credit. Weak banks will be allowed to close rather than be bailed out with taxes. Unemployment may worsen for a while. Those who have been used to a free ride will now have to walk or push or pay their way. The masses on welfare will not give up their checks and food stamps quietly. The media will fan the flames of discontent.

The Cabal will be at every switch to derail the train.

This will be the moment of our greatest danger, the moment when the people could tire of their hard journey in the desert and lose interest in the promised land. This is the time when they may long for a return to captivity and head back to the slave pits of Pharaoh.

The important point, however, is that most of these problems would be temporary. They would be present only during the period of transition to a new money. As soon as free coinage is available at the Mint, and as soon as people see how much demand there is for silver and gold coins, there will be a steady stream of miners and jewelers who will add great new stores of precious metal to the nation's monetary stock. Foreigners undoubtedly will add to the inflow. Old silver and gold coins will also reappear in the market place. Very quickly, as the stores of precious metal respond to supply and demand, the quantity of money will

increase and its per-unit value will drop to its natural equilibrium.

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THE CREATURE FROM JEKYLL ISLAND