I MET E. C. RIEGEL in New York in 1953, on a visit up from
Princeton where I was an undergraduate. "Uncle Ned",
as his intimates called him, was a friend of my grandfather, Spencer
Heath, and both were residents of Greenwich Village. Occasionally
they would meet at the apartment of Mr. Riegel's friends, Major
and Mrs. Ivan Firth. Here I met him, some months before his death.
He suffered from the effects of Parkinson's disease, which made
him appear older and more frail than his 74 years.
My grandfather regarded Mr. Riegel as a genius for his understanding
of the nature and functioning of money as a human and social institution.
It was clear, however, that this old man had not revolutionized
the world with his ideas and could not now do so. The idea formed
and grew in my mind that I should keep in touch with Mr. Riegel
and the Firths, who were not much younger than he, in order to
preserve his papers from being lost after his death. As to what
might be done with them, I had no idea at the time. An intuition
told me that they should be preserved.
When "Uncle Ned" died some months later, his papers
went to his friends, Ivan and Gladys Firth. I kept in touch with
the Firths through my grandfather for the next ten years. Then,
in 1963, in the same year that my grandfather died, Major Firth
died also. Gladys decided to move from her small apartment to
still smaller quarters; moreover, it had been Ivan and not she
who had understood and valued "Uncle Ned's" ideas. The
papers were at the point of being discarded. Here was the moment
I had foreseen. I paid Gladys Firth five hundred dollars for Mr.
Riegel's intellectual estate, and in moving from her apartment,
she did an excellent job of collecting together every scrap of
paper that related to him.
With the papers safely in my possession, there was no pressure
of time to look into them, and ten more years went by. With the
papers had come a small stock of soft-cover books, The New
Approach to Freedom, published by Mr. Riegel in 1949. I passed
some of these to friends. Within this circle was Harry Browne,
who was so much impressed with Mr. Riegel's explanation of the
free market that he caused some excerpts to be reprinted and circulated.
Years later, he mentioned it favorably in his best-selling book,
You Can Profit from a Monetary Crisis—and there
is where this story really begins.
As a result of its mention in Harry Browne's book, a flurry
of mail orders came in which threatened to put The New Approach
to Freedom out of print. I decided to reprint it, and this
seemed a good time to look into Mr. Riegel's papers to see if
there might be some other material that should be included in
the new printing. I began by sorting what correspondence had survived
and arranging it chronologically, and reading it. I became completely
absorbed. Toward the last years, there began to be mention in
his letters of a book-length manuscript, Flight from Inflation.
I tried to finish the correspondence in the orderly fashion I
had started out, but gave it up and plunged into the other papers
to see if the manuscript would be there. It was. I read it through
with mounting excitement, sometimes having to get up and walk
around to work off superfluous energy so that I could go on reading.
Except for the statistical data and illustrations, the book was
not in the least dated, Not only was it not hurt for having lain
undiscovered for twenty years, but in the light of world events,
its relevance was more immediate now than when it had been written.
I determined to bring it into print.
Could it be a commercial success? Perhaps not. How could
one promote a book that was more than twenty years old and written
by an unknown author who was no longer around to be interviewed
and do all of the endless things that go into a successful book
promotion? On the other hand, the sheer human interest and the
factual circumstances, together with the substance of the book,
might lend itself to a different kind of treatment. Here was a
man who had devoted his life idealistically to understanding money,
although he never had any of it nor any interest in acquiring
it—a man who had died, alone and old, in a cold-water flat in
New York City, working painfully to the end to complete a manuscript
which then lay unsuspected for more than twenty years until it
was timely for it to be discovered. An unmailed letter from the
last months discloses how he had worked painfully, trying to hit
the right keys of his old typewriter and unable to make corrections
because he could not control his shaking hands to make legible
pencil marks on the paper.
I began a light editing of the manuscript, then did more,
and then some more, as my interest in the subject matter grew
and deepened with a careful reading of his other writings. In
time, I engaged a talented friend, George Morton, to try his hand
at improving the structure. He took me at my word, re-organizing
the structure and cutting it drastically. It was excellent pruning.
I then grafted into the restructured manuscript new materials
—fresh expressions and amplifications of his ideas—drawn from
the rest of Mr. Riegel's papers consisting of a number of books
and more than 150 essays.
Editing Mr. Riegel's work was an audacious task for one without
any formal training in economics. I was trained in social anthropology,
however, and had an appreciation for social systems and institutions.
As an anthropologist, Mr. Riegel's analysis of the institution
of money strikes me as elegant. Doubtless it will be debated whether
the subject of his analysis is properly called money. Whatever
the conclusion of that debate, however, there can be no doubt
that he has analyzed an important feature of advanced exchange
systems. I personally find with Mr. Riegel that money is the apt
word to describe this phenomenon, which represents the culmination
of a developmental sequence in the history of exchange. Those
things now commonly called money are prior steps in that progression.
I would regard the steps also as money, but money in its less
developed forms—primitive money. Mr. Riegel's concept differs
so strikingly from conventional ideas of money that it will be
painful reading and mental adjustment for some people. Yet that
may be one of the great and lasting values of this book—that
it provoked its readers to think fundamentally about a subject
that has long been taken for granted.
There is so much in Mr. Riegel's papers that did not find
its way into either The New Approach to Freedom or this
volume, that I should like to offer the reader in this Preface
some of the perspective I have personally gleaned from studying
the rest of his papers, perspective on Mr. Riegel as a person
as well as on the development of his thinking.
Mr. Riegel's sense and grasp of individualism was intuitive
and unerring. It was not a retreatist or ‘go-it-alone’
philosophy; he was fully aware that individualism flourishes best
in a rich social context. He had a balanced perspective on the
healthy interdependence of individuals and institutions—at least,
those institutions that are voluntary and nonpolitical. His unfailing
principle was that freedom of exchange is the foundation of all
freedoms. To enlarge exchange is to liberate the individual; to
circumscribe it is to enslave him. The crucial question for him,
therefore, was to discover which institutions have the effect
of freeing exchange and which have the effect of restricting and
narrowing it. His final conclusion would be that the single most
restraining influence on freedom of exchange is our presently
socialized monetary system.
On the way to that conclusion, however, he was to pass through
a number of steps. In the 1920's, he crusaded against restrictive
credit practices; a theme explored and developed in The Credit
Question, written in 1926, and in a provocative little essay,
"Infidelism In Business." In 1928, he incorporated The
Consumers Guild of America, which continued into the 1940's, when
it was succeeded by The Valun Institute for Monetary Research.
The purpose of the Consumers Guild was to simplify buying and
raise the dignity of the consumer, and it opposed anything that
would suspend or restrain the consumer's right of bargain. Through
the Guild, Mr. Riegel mounted virtually a one-man war to make
America safe for the consumer, producing four books in the first
two years: Barnum and Bunk: An Exposure of R. H. Macy &
Co.; The Yellow Book; The Three Laws of Vending; and Main
During the decade of the 1920's, Mr. Riegel had given his
attention to the man-in-the-street in his role as consumer. The
stock market crash and ensuing depression shifted his focus. He
now became concerned, on the one hand, with understanding the
causes of the crash and the depression, and on the other hand
with the practical question of promoting recovery—the need of
the common man to get on his feet again.
With respect to the causes of the crash and the events preceding
it, Mr. Riegel now resumed an investigation he had begun a few
years earlier into the freedom of choice of the average citizen
not only as consumer, but as investor and speculator. From this
investigation, he became acutely sensitive to the danger of the
invisible partnership between the business community and the various
levels of government. Specifically, he saw the trade association
movement, stripped of all pretense, as constituting virtual warfare
against competition. How did this relate to the problem of how
the normal investment motive of middle-class America became corrupted
into the excesses of Wall Street speculation? The answer he published
in a preliminary booklet in 1931, The Indictment of the Better
Business Bureau Conspiracy. While The Indictment,
like so much of Mr. Riegel's writing of this period, is badly
marred by polemics, one cannot help but admire his rejoinder to
one critic that the trouble with intolerance is that there isn't
enough of it for so much of what goes on in the world.
The Indictment was only a prelude to the extraordinary piece
he wrote the following year, The Camorra of Commerce.
The Camorra is a responsibly documented expose of the
role of the Better Business Bureau, after 1922, in collusion with
the Investment Bankers Association and the New York Stock Exchange,
to protect the Bureau's members from competition. Prominent among
its members were Wall Street brokerage firms and companies listed
on the Exchange. The means of protection was selective enforcement
of the blue-sky laws, in which the Better Business Bureau played
a key role under President Hoover's "neighborhood enforcement"
As Mr. Riegel develops his indictment, it becomes increasingly
reasonable that this may, indeed, have contributed to the stock
market crash by eliminating alternative investment opportunities
for the average man and thereby channeling his investment funds
into speculative Wall Street issues that were, in effect, exempted
from the blue-sky laws. Nor did this conspiracy to harass small
enterprisers and discourage prospective entrants into business
facilitate recovery from the depression. Oddly, considering the
toughness and determination of its author, this book went no further
than galley proofs. On the cover of Indictment appears
this statement (slightly edited):
The usurpation of legislative, judicial, or police powers,
by private organizations, or the illegitimate influence upon
public officials exercising such powers, constitutes invasion
of the citizen-consumer's civil rights. Such invasion, whether
it springs from commercial, financial, professional or political
interests, will be fought by The Consumers Guild to the limit
of its powers.
Apparently it was in focusing on the problem of recovery
from the depression, together with his long-standing interest
in consumer credit, that Mr. Riegel first conceived his highly
original monetary ideas. Recovery depended upon the ability of
small businessmen to finance and readily exchange their products,
and this greatly depended, in turn, upon the facility of the monetary
system. Much of Mr. Riegel's attention in those depression years
was focused on the difficulties experienced by the small enterpriser
in obtaining commercial bank loans, and with the injustice of
charging interest for such so-called "loans" of newly
created money. His reasoning is made clear in the present volume,
so that space need not be taken here. Much of his writing in this
period grappled with what he called financism and the extent to
which small businesses were disadvantaged by the banking monopoly
over the power to authorize the issuance of new money. Suffice
it to say, Mr. Riegel believed that if the common man could exchange
his product freely—and be dealt with justly in financing his
enterprise—we would have more than a recovery from a depression;
we would enjoy cultural renaissance.
In the mid 1930's, Mr. Riegel wrote The Meaning of Money
and The Valun Discourses and Monographs. By now he had
conceived the basic outline of his concept of money, with its
implication that the single reform that could bring most leverage
into the service of individualism and freedom would be the separation
of money and state. His work thereafter, to the end of his life,
dealt with various ways of promoting that separation. In the depression
years, he pursued this goal through a comprehensive program of
reform which he called the Radical Right Movement. This embraced
three complementary programs, The Duocratic Institute of the World,
Americans of the Radical Right, and The Consumers Guild of America.
During these years, he also took particular exception to the New
Deal and to Roosevelt's actions which were leading to United States
involvement in the war. The Consumers Guild published a series
of four provocatively titled booklets in 1936 (Roosevelt
Revalued; Are You Better Off?; Brain Trussed; Franklinstein)
and two more in 1941 (Quarantine the Aggressor in the White
House; The Fifth Column in America).
By 1941, Mr. Riegel believed that the feature of the political
monetary system that posed the greatest single threat to human
freedom was its provision for deficit public spending. In Dollar
Doomsday, written in the fall of that year, he predicted that
the dollar would never again be stabilized and that the deficit
spending inaugurated a decade earlier would culminate in global
inflation. It is his lucid analysis of this threat that makes
Flight From Inflation timely today. From 1941 onward,
he vigorously pursued the inflation theme in his writings as the
most likely way of influencing monetary reform.
After World War II, and the publication in 1944 of his most
widely read book, Private Enterprise Money, Mr. Riegel
made the acquaintance of Major Ivan Firth and his wife, Gladys.
Major Firth was a friendly critic and deeply interested in the
money question. As friends and neighbors, he and Gladys were invaluable
to "Uncle Ned" in his last years.
It was at this time, also, that Mr. Riegel met Spencer Heath,
who became a friend and a source of inspiration to him. Prior
to their meeting, Mr. Riegel had conceived the ultimate social
ideal to be the separation of commerce and state into two "houses"
of democracy, one economic and the other political. The latter
would be limited and controlled by the former, which in its turn
would develop in a wholesome manner and continue so because of
its freedom from the pervasive effects of state-imposed controls.
This was Mr. Riegel's concept of duocracy, which he promulgated
in the 1930 's and later called bi-cameral democracy.
He was troubled, however, with political democracy, which seemed
to him to harbor internal contradictions. Spencer Heath resolved
this, with his suggestion that the free market, unfettered, might
in the natural course of its development bring a purely contractual,
business administration to the tasks that, for want of any alternative,
are now assigned to the state. Hence the state did not have to
be any part of an ultimate social ideal. The present volume, therefore,
entertains the possibility that the state will wither away as
evolving commerce brings its functions increasingly and then wholly
within the framework of voluntary exchange.
Through all of Mr. Riegel's writings, one theme stands out,
and that is the ideal of democracy and faith in the common man.
While, as a social reformer, his driving motivation was to advance
the lot of the common man, his deep conviction of the dignity
and worth of the individual forbade charity; it forbade, in fact,
everything but justice—and justice, he insisted upon with
a consuming passion. He had an intuitive, sure sense of justice.
He knew the feel of it. He had a certain conviction that all the
common man requires is honesty and straight dealing from his fellows
and within his social institutions.
Mr. Riegel's advocacy of pure capitalism was based on the
conviction that the only way of obtaining justice for the common
man was to completely free exchange. He exposed all big business/government
alliances as conspiratorial against the common man. But he did
not criticize the profit motive or oppose bigness as such; he
opposed only the unfairness of enleaguing with government to disadvantage
the public. To him it seemed demonstrable that the root of socialism
in the United States lay not in anything so exotic as Marxist
ideology, but in the efforts of American businessmen to escape
competition. He traced the massive build-up of government in this
century directly to businessmen seeking unfair trading advantage.
He saw the league of big business, government, and finance as
tending to bring about an aristocracy in America, a privileged
class that was diametrically at odds with his ideals of democracy
The image of Edwin Clarence Riegel that emerges from his
papers and letters and from an interview with Kathryn Barnes,
of Indianapolis, a distant cousin and the only remaining family
link, is inspiring in many ways. He was born in Cannelton, Indiana,
in 1879, during his father's term as treasurer of Perry County,
but his home was in Tell City, a predominantly Swiss-German settlement.
The family name was Zuckriegel. His grandfather, an army officer,
had refugeed from Innsbruck at about the time of Carl Schurz.
His mother, Kathryn Dusch, was an accomplished musician. For some
years she was principal of The Bailey Company School of Music,
the largest conservatory in Cleveland. Later, with the help of
her husband, Peter Zuckriegel, she opened her own school of music
Edwin left home about 1894 and went to New York City. His
only brother, Oscar, a few years his senior, was a successful
salesman in the clothing industry. The two brothers differed radically
in temperament, Oscar looking for success—and finding it—in
rather conventional and material terms, Edwin in the pursuit of
an all-compelling, ideal vision of social justice for the common
man. Some letters which Oscar saved show a brotherly love tempered
with rivalry in which Edwin, against well-intentioned pressure
from Oscar, resolutely defended his own unconventional life. In
one of these letters, Edwin wrote his brother:
I don't want a job, I want no boss; I will be free and independent.
I am working for certain ideas and ideals and Hell itself will
not swerve me from them. I may shift from one course to another,
I shall employ whatever strategy seems best to me, but I shall
face in one direction.
Certainly as a libertarian in New York City in the 1930's
and 1940's, Mr. Riegel was a lonely man philosophically. He held
no academic degrees or distinctions that I have been able to discover.
At speaking engagements, he introduced himself as a "non-academic
student of money and credit."
Mr. Riegel never enjoyed a regular income. He was no stranger
to walking about Manhattan for want of bus or subway fare. His
life of dedication did not permit conventional habits. When he
needed funds to live in his Spartan fashion, or to pay his constant
printing and publishing bills, he would apply for a sales position
at the most fashionable department store, where he was invariably
well received because of his distinguished personal bearing.
A vignette sheds further light on Mr. Riegel's character.
He did not care for his middle name, but let himself be known
as E. C. Riegel. Among his effects, I have his Social Security
card. The card evokes in the imagination the scene that must have
taken place when he applied for it and the Social Security clerk
instructed him to write out his full name. He refused, and Social
Security insisted. The card, as issued, carries the rest of the
story: his full name appears as "Edwin Controversy Riegel."
His correspondence reveals, often entertainingly, a personal
trait not unrelated to the above. That is that he never permitted
himself to be put down or brushed aside. The occasional official
of a corporation or university or government bureau who attempted
it invariably had occasion for second thoughts. Mr. Riegel tolerated
no hypocrisy or personal evasion of responsibility in such situations.
He was adept at picking up the “put down" and turning
it aside or handing it back to its source, and he would do so
urbanely, without losing sight of his guiding ideals and objectives.
In a June wedding ceremony in 1905, Edwin married Blanche
Ellis Beach. It seems fitting with his life that, despite the
conventions of the time, the dissolution of their marriage seven
years later was a civilized one and they remained friends. Edwin's
life was too ascetic, too devoted, and too idealistic, for a conventional
marriage relationship. It would have been a rare partner who could
have shared such a single-minded life. Throughout Mr. Riegel's
papers and correspondence, the reader glimpses his integrity,
his uncompromising individualism, his gentleness, his toughness,
and his resilience. It has been a rare privilege to have known
him through the editing of this book.
Spencer Heath MacCallum
San Pedro, California
August 1, 1978
Notes on the Editing of this
Since editing always involves some revisions to an author's
work, and since a reader may therefore wonder to what extent he
is reading the editor rather than the author—especially where
the editing was done after the author's death—it is only good
manners and scholarship to give some explanation of the nature
and extent of the liberties the editors took with the manuscript.
In editing throughout, the emphasis was on pruning and on
rearranging, so that the actual words as they appeared would be
Mr. Riegel's even when the organization was not. Rearranging frequently
entailed splicing in phrases, sentences, paragraphs and whole
sections from his writings elsewhere. By carefully pruning, arranging,
and splicing, it was seldom necessary to write even brief connectives
of our own. Some stylistic editing was done, however, partly to
moderate what would otherwise come across as polemical and distract
from the ideas. For example, Mr. Riegel was fond of the word "perversion"
in connection with government, as in “government perverting
the money supply," or "the perversive effects of inflation."
In the course of editing, these examples became “government
diluting the money supply,” and "the destructive effects
of inflation." Also, where Mr. Riegel used money as an adjective,
a usage Webster does not recognize, we changed it to monetary.
Thus "money system" became "monetary system "
throughout. We also followed the precedent set by Mr. Riegel in
The New Approach to Freedom but not adhered to in this
text of substituting the term “personal enterprise"
for “private enterprise."
The reason for this is explained in Mr. Riegel's words from
a brief essay, "Labor Money:”
The term private enterprise has come to be thought
of as applying to employers and excluding employees. This is
a misconception, but because of the prevalence of this idea,
we shall use the term personal enterprise. Corporations
and partnerships are assemblies of individuals, but the activating
force in all economic affairs is personal. There is no incentive
other than personal. We are all personal enterprisers and we
are all capitalists, because each of us is equipped with the
tools of production even if we have only education and experience.
Updating of statistics and illustrations was not attempted,
since it in no way affects the central thesis. Moreover, it would
have been unfair to Mr. Riegel, since if he were writing today,
undoubtedly he would in many cases employ different figures and
different illustrations as being more appropriate to the changed
It should also be noted that the "Selected Correspondence"
has been subjected to editing along with the rest of the text.
In a very few cases, material was added from other places to strengthen
a point Mr. Riegel was making in a letter. Hence his letters are
to be considered as a literary device to present different facets
of his thought in his own words, and may not be taken in every
case as historical documents evidencing what was said on a certain
date to a certain person. Some brief selections from elsewhere
in his unpublished writings are also included in this section
and are identified as "Random."
The major deletions from the manuscript include a chapter
on "The Index Dollar," an idea which Mr. Riegel had
advocated for some time as a way of mitigating the full force
of the inflationary storm, a chapter on "Currency Reprint,"
in which he proposed a defensive maneuver against the possibility
of communist governments in the Cold War undermining the United
States economy by engaging in wholesale counterfeiting of dollars
abroad, and a chapter entitled "socionomy," exploring
a voluntary, contractual approach to financing community services
as an alternative to taxation.
Beyond these points, the reader may be reasonably assured
that he or she is reading the authentic E. C. Riegel. Mr. Riegel's
original papers contain much of interest and value that did not
find its way between these covers. The Heather Foundation, Box
180, Tonopah, Nevada, 89049, maintains these papers available
to the public and invites their use.
Spencer Heath MacCallum