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would be safer for all concerned if he
j ust issued a clay tablet receipt for
the amount of worth that the gold
represented. The clay was easier to
carry.
lt
bore the imprint of the high
priest 's own signet ring a nd would be
accepted as if it were gold by alllocal
businessmen.
So Rude's convinced customer
took hi s clay receipt (which repre–
sented gold ,
w~ich
represented
wealth) to the boat builder and had
ten barges built. The boat builder
accepted the receipt, gave itto a lum–
ber suppl ier and in addition went to
Rude a nd requested a loan, for ex–
pansion of hi s operation, of a n equa l
amount (also indicated by a clay tab–
let receipt) and put his business
tn
hock for security.
Nimrud's Pound Gained
To make a long story short, Baal
Nimrud found that within the year
he was able to lend the same bar of
gold ten times. Let 's say it was a
ten-pound ba r. At the end of the year
Rude was sti ll in possession of the
origina l gold bar itself. Jn addition he
owned one farm a nda half interest in
a caravansa ry (two of his debtors
didn ' t make it). In addition to that,
he had been paid eighty pounds of
gold by the eight debtors who suc–
cecded with the help of the loan, plus
of course the twenty-four pounds of
gold in interest.
Rude's ten pounds had gained him
one hundred four-not bad! Of
course the original ten-pound bar
was not really his-it was only left
thcre for safekeeping by a mercha nt
from Ur, but he hadn ' t called for it in
the course of the year. And if that
merchant ever did call for his bar,
Rude figured he could talk him into
taking a clay recei pt for it, leaving
the actual bar in safekeeping
(?)
in
the temple!
The ten ten-pound ba rs (plus a
littl e ) th a t Rude now ac tu a ll y
owned were not worth just ten times
the original bar he had specula ted
with - to Rude they were worth
much
more! He had a lready learned
by obscrvat ion that only about one
out of ten of the people who had
money in the temple for safekeeping
ever actually requested to havc their
gold back at any one time. This
12
meant he could use nine-tenths of
the money at a ny one time any way
he wanted.
And now that the idea of accepting
clay receipts was catching on, there
was no way to tell how far he could
bluff his way. As long as the people
had confidence in thc clay receipts,
he could continue to amass great
wealth at very little actua l risk or ex–
penditure.
Good f o r the Economy
Rude even ta lked himself into think–
ing he was performing a real public
service in the process of gathering all
the real wealth of the people into bis
own coffers. There were more jobs.
Every type of s hop and industry had
been given a shot in the a rm . There
was bustling activity everywhere.
Rude began to see that he could
cont rol the entire economy. If his sys–
tem began to destroy itself because
people couldn't any longer sustain
the exorbitant interest rate of 30 per–
cent, he could postpone the ultimate
day of reckoning by lowering the
rate, say to 20.
Baal Nimrud realized, of course,
that sooner or la ter the economy
would collapse. In order to pay thei r
debts, the society as a whole would
become sellers, and there would un–
fortunately be no buyers. They would
storm the temple in angry protest
when the word leaked out that tbe
clay receipts couldn ' t
be
redeemed
for gold; that they weren't wortb tbe
mud they were written on. Th e
people would lose their confidence,
their faith in him (or hi s sons or
grandsons), in the clay money, in the
temple. But if he exercised just a
little caution he could make it work
during
his
lifetimc- and that is what
counted to him!
History shows plainly what did
happen. Not just to Nimrud 's econo–
my, but to all thosc who followed in
hi s footsteps. Usua lly the economy
collapsed in 100 to 150 years. The
economy slipped from gold-backed to
silver-backed to lead-backed money.
Wha tever metal was the backing was
hoarded until there was not enough
of it available to conduct the econo–
my (tight money). So a cheaper ,
more available metal or medium of
exchange (easy money) would be
substituted, etc., etc., until ultimate
colla pse.
Babylon went this way. Assyria,
the Greeks in their time, and the
Romans a ll trod the same road.
Numberless other economies: ditto.
The key to the downfall was the
exorbitant (though exhilarating at
the time) interest rate.
Confidence
According to the Federal Reserve
Bank: "Money
is
the confidence
people have that they will be able to
exchange such money for
real
goods
a nd servi ces whenever they choose to
do so." This is why money becomes a
god to ma ny people- money be–
comes tha t in which they have their
trust, their confidence. l t's rea lly
very simple:
Money is confidence.
This is why the words "trust" and
"fideli ty" are often used as part of
the very names of banks!
Money is what people mutually
agree it is ata given time.
If
they all
agree that it is gold, then money is
gold! Gold is certainly the dominant
money ido! in the pages of history.
Many is the man, or whole society of
men, who has striven greedily and
died for the sa ke of gold! But thc gold
is not to blame. J ust as much suffer–
ing has gone on in the process of thc
greedy getting of stones and bones,
silver and lead. lt doesn't make much
difference whcther you call it " Fed–
eral Reserve Note" or "rusty nails"
(which have been used for exchange
purposes) - whether you term it
"Special Drawing Rights" (the "pa–
per gold" currently being used to set–
tle intcrna tiona l debts) or whether
you agree to sett le for elephant tails
as they readily did in the past in
Portuguese West Africa.
As long as the people you do busi–
ness with agree to accept your "mon–
ey," it doesn't matter wha t it is. And
equally importan!, when the people
you trade with no longer have confi–
dence in your medium of exchange,
you can become a "rich" bankrupt.
Confidence is the important key!
T hcre a re two schools of thought
a t the extremes of money theory. One
feels that only a solid (which word
comes from a Latin coin,
so/idus)
gold-backed monetary
sy~tem
can
bring stabi lity to the financia! world.
The
PLAIN TRUTH September 1979