“The Money Myth Exploded” was one of the first articles of Louis Even, and
remains one of the most popular to explain how money is created as a debt by
An explosion had blown their ship apart. Each one grasped the first bit of
wreckage that came to hand. And when it was over, there were five left, five
huddled on a raft which the waves carried along at their will. As for the other
victims of the disaster, there was no sign of them.
Hour after long hour their eyes searched the horizon. Would some passing ship
sight them? Would their make-shift raft finds its way to some friendly shore?
Suddenly a cry rang out: “Land! Look! Over there, in the direction the
waves are carrying us!”
And as the vague silhouette proved itself to be, in fact, the outline of a
shore, the figures on the raft danced with joy.
They were five. There was Frank, the carpenter, big and energetic. It was he
who had first cried, “Land!”.
Then Paul, a farmer. You can see him, front and left in the picture, on his
knees, one hand against the floor, the other gripping the mast of the raft.
Next is Jim, an animal breeder; he's the one in the striped pants, kneeling
and gazing in the direction of land.
Then there is Harry, an agriculturist, a little on the stout side, seated on
a trunk salvaged from the wreck.
And finally Tom, a prospector and a mineralogist; he is the merry fellow standing
in the rear of the picture with his hand on the carpenter's shoulder.
2. A providential island
To our five men, setting foot on land was like returning to life from the grave.
When they had dried and warmed themselves their first impulse was to explore
this little island on to which they had been cast, far from civilization.
A quick survey was sufficient to raise their spirit. The island was not a barren
rock. True enough, they were the only men on it at the moment. But judging from
the herds of semi-domesticated animals they encountered, there must have been
men here at some time before them. Jim, the animal breeder, was sure he could
completely domesticate them and put them to good service.
Paul found the island's soil, for the most part, to be quite suitable for cultivation.
Harry discovered some fruit trees which, if properly tended, would give good
Most important were the large stands of timber embracing many types of wood.
Frank, without too much difficulty, would be able to build houses for the little
As for Tom, the prospector, well, the rock formations of the island showed
signs of rich mineral deposits. Lacking the tools, Tom still felt his ingenuity
and initiative could produce metals from the ores.
So each could serve the common good with his special talent. All agreed to
call the place Salvation Island. All gave thanks to Providence for the reasonably
happy ending to what could have been stark tragedy.
Here are the men at work.
The carpenter builds houses and makes furniture. At first they find their food
where they can. But soon the fields are tilled and seeded, and the farmer has
As season followed season this island, this heritage of the five men, Salvation
Island, became richer and richer.
Its wealth was not that of gold or of paper bank notes, but one of true value;
a wealth of food and clothing and shelter, of all the things to meet human needs.
Each man worked at his own trade. Whatever surpluses he might have of his own
produce, he exchanged for the surplus products of the others.
Life wasn't always as smooth and complete as they could have wished it to be.
They lacked many of the things to which they had been accustomed in civilization.
But their lot could have been a great deal worse.
Besides, all had experienced the depression in Canada. They still remembered
the empty bellies side by side with stores crammed with food.
At least, on Salvation Island, they weren't forced to see the things they needed
rot before their eyes. Taxes were unknown here. Nor did they go in constant
fear of seizure by the bailiff. They worked hard but at least they could enjoy
the fruits of their toil.
So they developed the island, thanking God and hoping for the day of reunion
with their families, still in possession of life and health, those two greatest
4. A serious inconvenience
Our men often got together to talk over their affairs.
Under the simple economic system which had developed, one thing was beginning
to bother then more and more; they had no form of money. Barter, the direct
exchange of goods for goods, had its drawbacks. The products to be exchanged
were not always at hand when a trade was discussed. For example, wood delivered
to the farmer in winter could not be paid for in potatoes until six months later.
Sometimes one man might have an article of considerable size which he wished
to exchange for a number of smaller articles produced by different men at different
All this complicated business and laid a heavy burden on the memory. With a
monetary system, however, each one could sell his products to the others for
money. With this money he could buy from the others the things he wanted, when
he wished and when they were available.
It was agreed that a system of money would indeed be very convenient. But none
of them knew how to set up such a system. They knew how to produce true wealth
- goods. But how to produce money, the symbol of this wealth, was something
quite beyond them. They were ignorant of the origin of money, and needing it
they didn't know how to produce it. Certainly, many men of education would have
been in the same boat; all our governments were in that predicament during the
ten years prior to the war. The only thing the country lacked at that time was
money, and the governments apparently didn't know what to do to get it.
Arrival of a refugee
One evening, when our boys were sitting on the beach going over their problem
for the hundredth time, they suddenly saw approaching a small boat with a solitary
man at the oars.
They learned that he was the only survivor of a wreck. His name: Oliver.
Delighted to have a new companion, they provided him with the best that they
had, and they took him on an inspection tour of the colony.
“Even though we're lost and cut off from the rest of the world,”
they told him, “we haven't too much to complain about. The earth and the
forest are good to us. We lack only one thing — money. That would make
it easier for us to exchange our products.”
“Well, you can thank Providence,” replied Oliver, “because
I am a banker, and in no time at all, I'll set up a system of money guaranteed
to satisfy you. Then you'll have everything that people in civilization have.”
A banker!... A BANKER!... An angel coming down out of the clouds couldn't have
inspired more reverence and respect in our men. For, after all, are we not accustomed,
we people in civilization, to genuflect before bankers, those men who control
the lifeblood of finance?
6. Civilization's god
“Mr. Oliver, as our banker, your only occupation on this island will
be to look after our money; no manual labour.”
“I shall, like every other banker, carry out to complete satisfaction
my task of forging the community's prosperity.”
“Mr. Oliver, we're going to build you a house that will be in keeping
with your dignity as a banker. But in the meantime, do you mind if we lodge
you in the building that we use for our get-togethers?”
“That will suit me, my friends. But first of all, unload the boat. There's
paper and a printing press, complete with ink and type, and there's a little
barrel which I exhort you to treat with the greatest care.”
They unloaded everything. The small barrel aroused intense curiosity in our
“This barrel,” Oliver announced, “contains a treasure beyond
dreams. It is full of... gold!”
Full of gold! The five all but swooned. The god of civilization here on Salvation
Island! The yellow god, always hidden, yet terrible in its power, whose presence
or absence or slightest caprice could decide the very fate of all the civilized
“Gold! Mr. Oliver, you are indeed a great banker!”
“Oh august majesty! Oh honorable Oliver! Great high priest of the god,
gold! Accept our humble homage, and receive our oaths of fidelity!”
“Yes, my friends, gold enough for a continent. But gold is not for circulation.
Gold must be hidden. Gold is the soul of healthy money, and the soul is always
invisible. But I'll explain all that when you receive your first supply of money.”
The secret burial
Before they went their separate ways for the night, Oliver asked them one last
“How much money will you need to begin with in order to facilitate trading?”
They looked at one another, then deferentially towards the banker. After a
bit of calculation, and with the advice of the kindly financier, they decided
that $200 each would do.
The men parted, exchanging enthusiastic comments. And in spite of the late
hour, they spent most of the night lying awake, their imaginations excited by
the picture of gold. It was morning before they slept.
As for Oliver, he wasted not a moment. Fatigue was forgotten in the interests
of his future as a banker. By dawn's first light, he dug a pit into which he
rolled the barrel. He then filled it in, transplanting a small shrub to the
spot about which he carefully arranged sod. It was well hidden.
Then he went to work with his little press to turn out a thousand $1 bills.
Watching the clean new banknotes come from his press, the refugee turned banker
thought to himself:
“My! How simple it is to make money. All its value comes from the products
it will buy. Without produce, these bills are worthless. My five naive customers
don't realize that. They actually think that this new money derives its value
from gold! Their very ignorance makes me their master.”
And as evening drew on, the five came to Oliver — on the run.
8. Who owns the new money?
Five bundles of new banknotes were sitting on the table.
“Before distributing the money,” said the banker, “I
would like your attention.
“Now, the basis of all money is gold. And the gold stored away
in the vault of my bank is my gold. Consequently, the money is my money. Oh!
Don't look so discouraged. I'm going to lend you this money, and you're going
to use it as you see fit. However, you'll have to pay interest. Considering
that money is scarce here, I don't think 8% is unreasonable.”
“Oh, that's quite reasonable, Mr. Oliver.”
“One last point, my friends. Business is business, even between pals.
Before you get the money, each of you is going to sign a paper. By it you will
bind yourselves to pay both interest and capital under penalty of confiscation
of property by me. Oh! This is a mere formality. Your property is of no interest
to me. I'm satisfied with money. And I feel sure that I'll get my money, and
that you'll keep your property.”
“That makes sense, Mr. Oliver. We're going to work harder than ever in
order to pay you back.”
“That's the spirit. And any time you have a problem, you come and see
me. Your banker is your best friend. Now here's two hundred dollars for each
one of you.”
And our five brave fellows went away, their hands full of dollar bills, their
heads swimming with the ecstasy of having money.
A problem in arithmetic
And so Oliver's money went into circulation on the island. Trade, simplified
by money, doubled. Everybody was happy.
And the banker was always greeted with unfailing respect and gratitude.
But now, let's see... Why does Tom, the prospector, look so grave as
he sits busily figuring with a pencil and paper? It is because Tom, like the
others, has signed an agreement to repay Oliver, in one year's time, the $200
plus $16 interest. But Tom has only a few dollars in his pocket, and the date
of payment is near.
For a long time he had wrestled with this problem from his own personal point
of view, without success. Finally, he looked at it from the angle of the little
community as a whole.
“Taking into consideration everyone on the island as a whole,”
he mused, “are we capable of meeting our obligations? Oliver turned out
a total of $1000. He's asking in return $1080. But even if we bring him every
dollar bill on the island, we'll still be $80 short. Nobody made the extra $80.
We turn out produce, not dollar bills. So Oliver can take over the entire island,
since all the inhabitants together can't pay him back the total amount of the
capital and the interest.
“Even if a few, without any thought for the others, were able to do so,
those others would fall. And the turn of the first spared would come eventually.
The banker will have everything. We'd better hold a meeting right away and decide
what to do about it.”
Tom, with his figures in his hand, had no difficulty in proving the situation.
All agreed that they had been duped by the kindly banker. They decided upon
a meeting at Oliver's.
10. The benevolent banker
Oliver guessed what was on their minds, but he put on his best front.
While he listened, the impetuous Frank stated the case for the group.
“How can we pay you $1080 when there is only $1000 on the entire
“That's the interest, my friends. Has not your rate of production
“Sure, but the money hasn't. And it's money you're asking for,
not our products. You are the only one who can make money. You've made only
$1000, and yet you ask $1080. That's an impossibility!”
“Now listen, fellows. Bankers, for the greater good of the community,
always adapt themselves to the conditions of the times. I'm going to require
only the interest. Only $80. You will go on holding the capital.”
“Bless you, Mr. Oliver! Are you going to cancel the $200 each of us owes
“Oh no! I'm sorry, but a banker never cancels a debt. You still owe me
all the money you borrowed. But you'll pay me, each year, only the interest.
If you meet the interest payments faithfully each year, I won't push you for
the capital. Maybe some won't be able to repay even the interest because of
the money changing hands among you. Well, organize yourselves like a nation.
Set up a system of money contributions, what we call taxes. Those who have more
money will be taxed more; the poor will pay less. See to it that you bring me,
in one lump sum, the total of the amount of interest, and I'll be satisfied.
And your little nation will thrive.”
So our boys left, somewhat pacified, but still dubious.
11. Oliver exults
Oliver is alone. He is deep in reflection. His thoughts run thus:
“Business is good. These boys are good workers, but stupid. Their ignorance
and naivety is my strength. They ask for money, and I give them the chains of
bondage. They give me flowers, and I pick their pockets.
“True enough, they could mutiny and throw me into the sea. But pshaw!
I have their signatures. They're honest. They'll honor their pledges. Honest,
hardworking people were put into this world to serve the Financiers.
“Oh great Mammon! I feel your banking genius coursing through my entire
being! Oh, illustrious master! How right you were when you said: `Give me control
of a nation's money, and I won't mind who makes its laws.' I am the master of
Salvation Island because I control its money.
“My soul is drunk with enthusiasm and ambition. I feel I could rule the
universe. What I, Oliver, have done here, I can do throughout the entire world.
Oh! If only I could get off this island! I know how I could govern the world
without wearing a crown.
“My supreme delight would be to instill my philosophy in the minds of
those who lead society: bankers, industrialists, politicians, reformers, teachers,
journalists — all would be my servants. The masses are content to live
in slavery when the elite from among them are constituted to be their overseers.”
12. The cost of living unbearable
Meanwhile, things went from bad to worse on Salvation Island. Production was
up, and bartering had dropped to a minimum. Oliver collected his interest regularly.
The others had to think of setting money aside for him. Thus, money tended to
clot instead of circulating freely.
Those who paid the most in taxes complained against those who paid less. They
raised the prices of their goods to compensate for this loss. The unfortunate
poor who paid no taxes lamented the high cost of living, and bought less.
If one took a salaried job with another, he was continually demanding increases
in salary in order to meet the mounting cost of living.
Morale was low. The joy went out of living. No one took an interest in his
work. Why should he? Produce sold poorly. When they would make a sale, they
had to pay taxes to Oliver. They went without things. It was a real crisis.
And they accused one another of wanting in charity, and of being the cause of
the high cost of living.
One day, Harry, sitting in his orchard, pondered over the situation. He finally
arrived at the conclusion that this “progress”, born of a refugee's
monetary system, had spoiled everything on the island. Unquestionably, all five
had their faults, but Oliver's system seemed to have been specifically designed
to bring out the worst in human nature.
Harry decided to demonstrate this to his friends and to unite them for action.
He started with Jim, who was not hard to convince. “I'm no genius,”
he said, “but for a long time now there's been a bad smell about this
One by one they came to the same conclusion, and they ended up by deciding
to have another conference with Oliver.
13. Enslaved by
A veritable tempest burst about the ears of the banker.
“Money's scarce on the island, fellow, because you take it away from
us! We pay you and pay you, and still we owe you as much as at the beginning.
We work our heads off! We've the finest land possible, and yet we're worse off
than before the day of your arrival. Debts! Debts! Up to our necks in debts!”
“Oh! Now boys, be reasonable! Your affairs are booming, and it's thanks
to me. A good banking system is a country's best asset. But if it is to work
beneficially, you must have faith in the banker. Come to me as you would to
a father... Is it more money that you want? Very well. My barrel of gold is
good for many thousands of dollars more. See, I'm going to mortgage your latest
acquisitions, and lend you another thousand dollars right now.”
“So! Now our debt goes up to $2000! We are going to have twice as much
interest to pay for the rest of our lives!”
“Well, yes — but I'll lend you more whenever the value of your
property increases. And you'll never pay anything but the interest. You'll lump
all your debts into one — what we call a consolidated debt. And you can
add to the debt, year after year.”
“And raise the taxes, year after year?”
“Obviously. But your revenues also increase every year.”
“So then, the more the country develops each year because of our labor,
the more the public debt increases!”
“Why, of course! Just as in your country – or in any other part
of the civilized world for that matter. The degree of a country's civilization
is always gauged by the size of its debt to the bankers.”
14. The wolf devours the lambs
“And that's a healthy monetary system, Mr. Oliver?”
“Gentlemen, all sound money is based on gold, and it comes from the banks
in the form of debts. The national debt is a good thing. It keeps men from becoming
too satisfied. It subjugates governments to the supreme and ultimate wisdom,
that which is incarnate in bankers. As a banker, I am the torch of civilization
here on your little island. I will dictate your politics and regulate your standard
“Mr. Oliver, we're simply uneducated folks, but we don't want that kind
of civilization here. We'll not borrow another cent off of you. Sound money
or not, we don't want any further transactions with you.”
“Gentlemen, I deeply regret this very ill-advised decision of yours.
But if you break with me, remember, I have your signatures. Repay me everything
at once — capital and interest.”
“But that's impossible, sir. Even if we give you all the money on the
island, we still won't be square with you.”
“I can't help that. Did you or did you not sign? Yes? Very well.
“By virtue of the sanctity of contracts, I hereby seize your mortgaged
property which was what you agreed to at the time you were so happy to have
my help. If you don't want to serve willingly the supreme authority of money,
then you'll obey by force. You'll continue to exploit the island, but in my
interests and under my conditions. Now, get out! You'll get your orders from
15. Control of
Oliver knew that whoever controlled the nation's money, controlled the nation.
But he knew also that to maintain that control, it was necessary to keep the
people in a state of ignorance, and to distract them by a variety of means.
Oliver had observed that of the five islanders, two were conservatives and
three were liberals. That much had evolved from their evening conversations,
especially after they had fallen into slavery. And between the conservatives
and those who were liberals, there was a constant friction.
On occasions, Harry, the most neutral of the five, considering that all had
the same needs and aspirations, had suggested the union of the people to put
pressure on the authorities. Such a union, Oliver could not tolerate; it would
mean the end of his rule. No dictator, financial or otherwise, could stand before
a people united and educated.
Consequently, Oliver set himself to foment, as much as possible, political
strife between them.
The refugee put his press to work, turning out two weekly newspapers, “The
Sun”, for the Liberals, and “The Star”, for the Conservatives.
The general tenor of “The Sun” was: “If you are no longer
master, it is because of those traitorous Conservatives who have sold out to
That of “The Star”: “The ruinous state of business and the
national debt can be traced directly to the political responsibility of those
16. A priceless bit of floatsam
One day, Tom, the prospector, found on a small beach, hidden by tall grass
at one end of the island, a lifeboat, empty except for a trunk in good condition
lying in the bottom of it.
He opened the trunk. Among the articles within, a sort of album caught his
eye: “The First Year of Social Credit”. Between the covers he found
the first of a Social Credit publication.
Curious, Tom sat down and began to read the volume. His interest grew; his
face lit up.
“Well, just look at this!” he cried out loud. “This is something
we should have known a long time ago.”
“Money gets its value, not from gold, but from the products which that
“Simply put, money should be a sort of accountancy, credits passing from
one account to another according to purchases and sales. The sum total of money
will depend upon the sum total of production.
“Each time production increases, there is a corresponding increase in
the amount of money. Never at any time should interest be paid on new money.
Progress is marked, not by an increase in the public debt, but by the issuance
of an equal dividend to each individual... Prices are adjusted to the general
purchasing power by a coefficient of prices. Social Credit...”
But Tom could no longer contain himself. He got up and set off at a run, the
book in his hands, to share this glorious discovery with his four comrades.
17. Money —
So Tom became the teacher. He taught the others what he had learned from that
God-sent Social Credit publication.
“This,” he said, “is what we can do without waiting for a
banker and his keg of gold, nor without underwriting a debt.
“I open an account in the name of each one of you. In the right hand
column are the credits which increase your account; to the left are the debits
which subtract from your account.
“Each wants $200 to begin with. Very well. We write $200 to the credit
of each. Each immediately has $200.
“Frank buys some goods from Paul for $10. I deduct $10 from Frank, leaving
him $190. I add $10 to Paul, and he now has $210.
“Jim buys from Paul to the amount of $8. I deduct from Jim $8, leaving
him $192. Paul now has $218.
“Paul buys wood from Frank for $15. I deduct $15 from Paul, leaving $203.
I add $15 to Frank's account, and it goes back to $205.
“And so we continue; from one account to another, in the same fashion
that paper banknotes go from one man's pocket to another's.
“If someone needs money to expand production, we issue him the necessary
amount of new credit. Once he has sold his products, he repays the sum to the
credit fund. The same with public works; paid for by new credits.
“Likewise, each one's account is periodically increased, but without
taking credits from anyone, in order that all may benefit from the progress
society makes. That's the national dividend. In this fashion, money becomes
an instrument of service.”
18. The banker's despair
Everyone understood. The members of this little community became Social Crediters.
The following day, Oliver, the banker, received a letter signed by the five:
“Dear sir! Without the slightest necessity you have plunged us into debt
and exploited us. We don't need you anymore to run our money system. From now
on, we'll have all the money we need without gold, debts, nor thieves. We are
establishing, at once, the system of Social Credit on the island. The national
dividend is going to replace the national debt.
“If you insist on being repaid, we can repay you all the money you gave
us. But not a cent more. You cannot lay claim to that which you have not made.”
Oliver was in despair. His empire was crumbling. His dreams shattered. What
could he do? Arguments would be futile. The five were now Social Crediters:
money and credit were now not more mysterious to them than they were to Oliver.
“Oh!” said Oliver. “These men have been won to Social Credit!
Their doctrine will spread far more quickly than mine. Should I beg forgiveness?
Become one of them? I, a financier and a banker? Never! Rather, I shall try
and put as much distance between them and me as I can!”
19. The fraud
To protect themselves against any future claim by Oliver, our five men decided
to make him sign a document attesting that he again possessed all he had when
he first arrived on the island.
An inventory was taken; the boat, the oars, the little press, and the famous
barrel of gold.
Oliver had to reveal where he had hidden the gold. Our boys hoisted it from
the hole with considerably less respect than the day they had unloaded it from
the boat. Social Credit had taught them to despise gold.
The prospector, who was helping to lift the barrel, found it surprisingly light
for gold. If the barrel was full, he told the others, there was something in
it besides gold.
The impetuous Frank didn't waste a moment; a blow of the axe, and the contents
of the barrel was exposed.
Gold? Not so much as a grain of it! Just rocks — plain, worthless rocks!
Our men couldn't get over the shock.
“Don't tell us that he could bamboozle us to this extent!”
“Were we such muttonheads as to go into raptures over the mere mention
“Did we mortgage all of our possessions for a few pieces of paper based
on a few pounds of rocks? It's a robbery, compounded with lies!”
“To think that we sulked and almost hated one another all because of
such a fraud! That devil!”
Furious, Frank raised his axe. In great haste, the banker has already taken
flight towards the forest.
20. Farewell to Salvation Island
After the opening of the barrel, and the revelation of his duplicity, nothing
further was heard of Oliver.
Shortly after, a ship, crusing off the normal navigation route, noticed signs
of life on this uncharted island, and cast anchor a short distance offshore.
The men learned that the ship was en route to America. So they decided to take
with them what they could carry, and return to the United States.
Above all, they made sure to take back with them the album, “The First
Year of Social Credit”, which had proven to be their salvation from the
hands of the financier, Oliver, and which had illumined their minds with an
All five solemnly promised to get in touch with the management of this paper,
once back in America, and to become devoted and zealous apostles of the Cause
of Social Credit in their country.