3 Short Stories: The Stranger, The Banker, & The People

The Stranger

In a small town in the middle of America times were tough. Nearly everyone was out of work and in debt. People had very little money, and not enough to prosper.

One day a stranger came into town and stopped at the lone hotel. He set a $100 bill on the counter and told the innkeeper he’d like to look at the rooms before deciding whether he wanted to stay. But, first, if the innkeeper didn’t mind, his journey had been long and he’d like a quick nap in the Inn’s lounge before checking out the rooms. The Inn was empty and the rooms were unlocked, so the innkeeper said, “Please, feel free. The lounge is ahead, the rooms are upstairs, and the stairs are at the back of the building. I have some business I must attend, and will be back shortly.”

The man went into the lounge and settled in for a nap. The innkeeper grabbed the $100 bill and ran with it to the restaurant next door to pay his tab. The restaurant owner ran with the $100 to the butcher and paid his overdue balance. The butcher took it and ran to the grocer to pay his bill. The grocer took it and ran to the town produce farmer to restock his shelves. The farmer took it and ran to the quilt shop to buy fabric for a quilt. The quilt store owner took it and ran to buy frame materials from the hardware store. The hardware store owner took the $100 to pay the prostitute he’d been seeing on credit. She took the bill and ran to pay off the innkeeper for her use of his rooms. She had just slapped the $100 bill back down on the counter paying off her debt, when the stranger arrived back at the desk.

He said he had decided he would not stay. Pulling some matches and a cigar out of his pocket, he lit the $100 bill and then his cigar, saying with a wink, “It’s just a gag gift from a friend.”

When the stranger left, the town settled back into its stagnant economy.

The Banker

In a small town in the middle of America times were tough. Nearly everyone was out of work and in debt. People had very little money, and not enough to prosper.

One day a fancy car pulling a glitzy trailer came into town. The car parked on Main Street. A man got out and walked up and down Main Street. He found an empty store front he liked and signed a lease. He spruced up the building with fresh paint, furnishings from his trailer, and an impressive big safe. A sign was painted on the window, “Banker’s Bank – We make loans so the community can prosper.” He held an open house to introduce himself and his loan program. Nearly everyone came.

The Banker explained that they could open accounts in his bank. He would keep their money safe for them and guarantee that all their money would be available whenever they needed it. The banker would provide valuable services – store their money safely, transfer it to others on their instructions, and keep an account for them.

Then the banker introduced his most important service – a service that could increase economic activity and bring prosperity to all. He would lend them money for a small interest fee. The money that they borrowed would be special money; it would be banker money. This banker money was his promise that it would be as good as ordinary money; it could be used interchangeably and he would guarantee they could always access the money they kept in their account. As long as they all agreed to honor his banker money for exchanges, it would make them all prosperous. The townspeople decided to use his banker money in addition to their own.

The townspeople brought in the little money that they had, opened accounts and deposited their own money. They took away check books or debit cards that let them use their money to buy from others in the community. And, most of the people took out loans, thinking with a little extra money, they could make more and pay the banker back the loan. They deposited their borrowed money in the bank too. All the loans were due in a year and a day.

The town prospered. There was more money for buying and selling. All the money circulated again and again. There was enough money so all the services or goods people could offer found buyers. Everyone was working and earning to capacity and living comfortably.

At the end of the year, the banker called in all the loans and the interest due. The amount of banker money in circulation matched the amount of the banker loans and the townspeople were able to pay back all of the banker money they had borrowed. But no banker money had been created to pay the interest. The interest had to be paid with the little ordinary money that the townspeople had before the banker arrived. After returning the banker money and paying the interest on their loans, the town had no more money at all. The banker packed up his belongings, his banker money, and the interest money. Then he left town.

When the banker left with all their money, the town settled back into its stagnant economy.

The People

In a small town in the middle of America times were tough. Nearly everyone was out of work and in debt. People had no money, and prosperity was just a broken dream.

But, they’d had two lessons in the nature of money: one from a stranger and one from a banker. They called a community meeting to discuss what they had learned. They now knew that the most important characteristic of money was the agreement of the community to use it for their transactions. And they knew that when there was the right amount of money moving around in the economy, they could all prosper. They decided if stranger money could bring a burst of prosperity, and if banker money could bring prosperity for a year, then, if they created their own money they could prosper indefinitely.

So they created town money and called it US money, because it brought prosperity “for all of us.”

The townspeople decided that it would take a base of 15,000 money units per person to have a prosperous economy and a healthy life for all. They created enough to distribute that amount to everyone in the community on the first day of the year. And they did. When people received their share, they spent it over the year. Some people got by on their allotment; that’s all they spent. But once they spent it, it circulated. Some people invested, produced, sold many goods and services, and acquired great wealth. Some paid for education and training and increased their earning potential. Everyone had enough to meet their basic needs. No one in the community went hungry and everyone had a roof over their head. Anxiety, stress, ill health and violence all went down. The community was healthier than it had ever been before.

The money circulated, just as the stranger’s money and the banker’s money had circulated. The 15,000 units that went to one person was used in dozens of exchanges over the year. The total economic activity was many times more than the money they had created. Every individual who had more money come in than their basic allotment of 15,000 units paid a simple 10% tax on that additional income at the end of the year. This was easy to do as the number of transactions was on average far more than the 15,000 units per person. This 10% tax was enough so that the town could turn around and reissue the basic income to all their citizens the next year. And, the cycle repeated.

The wheels of commerce were set in perpetual motion.

- The first story, the Stranger, has been around in various versions since the Great Depression. The Banker, and The People are by Virginia Hammon.