A privately-issued currency circulating side-by-side and in competition with U.S. dollars? No fantasy, such a currency existed for over a year and a half—from June 1972 to January 1974—in Exeter, NH. Called the Constant, the experimental currency was the creation of Dr. Ralph Borsodi, an 88-year-old free market economist. As tested in Exeter, the Constant was "indexed," i.e., automatically related in value to the Consumer Price Index, so as to keep pace with inflation. Constants were issued by Arbitrage International, a nonprofit corporation set up by Borsodi. The dollars invested in Constants by Exeter citizens were in turn invested by AI in high-yield government securities. Both savings and checking accounts were offered, and 180 of the 8900 townspeople opened accounts. Two local banks and a number of local merchants cooperated with the experiment, and the Exeter police even accepted Constants in payment of traffic tickets.

Evaluation of the 20-month experiment is mixed. Many observers consider it largely successful, despite the small number of participants, because the Constants did indeed circulate and did provide limited protection from inflation. Dr. William Hosek of the University of New Hampshire thinks the experiment proved that a new currency could be accepted and made to work. Moreover, the experiment passed inspection by the Secret Service (which agreed that it did not constitute counterfeiting). However, a dimmer view was taken by the Securities and Exchange Commission, which hinted that the interest-bearing checking accounts resembled securities. On the advice of AI's counsel, following the SEC's visit the experiment was ended.

Borsodi, however, is not finished. Thoroughly opposed to government control of the money supply, Borsodi is advocating the creation of an independent, international, private banking organization to be set up in Luxembourg, where other governments couldn't intervene. The organization would issue a new version of the Constant, based on (and backed by) a "market basket" of 30 of the world's system, preferring instead a whole set of valuable, tangible commodities.) The privately-issued Constants would circulate side-by-side with the world's fiat currencies, in competition with them. At least so long as inflation remains an ever-present factor, such a currency would be hard to beat.

• "The Exeter Affair," Richard J. Stinson, FINANCIAL WORLD, April 17, 1974, p. 28."
• "Paying with Constants Instead of Dollars, BUSINESS WEEK, May 4, 1974, p. 29.


Ever since the Federal Government first announced its plan to force auto manufacturers to install air bags in all cars, knowledgeable critics have opposed the idea (see "Is 'Inflation' Good For You?" by Brock Yates, REASON, March 1971). With the air bag deadline drawing closer, a new voice has been added to the chorus: that of John P. Stapp. Dr. Stapp is the human factors researcher who set the world's land speed record of 632 mi/h on a rocket sled in 1954. During the past 20 years he has acquired an international reputation on crash safety; each year the nation's leading auto safety researchers convene for the annual Stapp Car Crash Conference.

Dr. Stapp has critically evaluated the proposed air bag systems, and thinks they are a bad deal. Specifically, he points out five dangerous drawbacks of the devices:
• They may fail to inflate when needed,
• They may inflate when not needed, leading the driver to lose control, thereby causing an accident,
• They operate in a one-shot mode, deflating less than a half second after inflating, offering no protection against secondary impacts,
• The impact of their split-second inflation can break an occupant's neck if he or she is out of position,
• They offer no protection against side impacts.

All of these deficiencies are absent with the seat belt/shoulder harness systems now available on all cars. A 1967 study of 29,000 crashes showed that in the 8,992 accidents in which the occupants were using seat belts and shoulder harnesses, injuries were limited to minor scratches, even at speeds up to 65 mi/h.

The "problem" with seat belts and shoulder harnesses is that their use is voluntary. Since the safety bureaucrats ignore the moral argument that people have the right to take risks with their own safety and don't need Big Brother protecting them, perhaps Stapp's very practical message will get through.

• "Speed Record Holder Critical of Air Bags," Marvin Miles, LOS ANGELES TIMES, May 19, 1974.


In recent months numerous women have won increased recognition of their right to practice what is known as the "world's oldest profession" free of harassment by the state. In March District of Columbia Superior Court Judge David L. Norman began dismissing the cases of prostitutes brought before him, on the grounds that police had illegally discriminated against them by arresting them while ignoring their male customers. Norman noted that all 550 persons arrested on prostitution charges in 1973 were women, and asserted, "The Constitution does not warrant this result. If this were a racial case, not a court in this country would deny these motions to dismiss." Norman's ruling is consistent with a 1972 decision, now on appeal, that declared the District's entire prostitution statute unconstitutional. Louisiana's prostitution laws were found unconstitutional on similar grounds in February. District Judge John Covington ruled that because the laws punish only women, they illegally discriminate, and exploit women.

Although Nevada has no state law against prostitution, several of its large counties have enacted such laws, based on state vagrancy statutes. In March, however, a district judge in Clark County (Las Vegas) ruled that county's antiprostitution ordinance unconstitutional, clearing 39 women of the offense of "soliciting to engage in acts of prostitution." The ordinance called for a mandatory six-month jail term for a second offense, but defense counsel successfully pointed out that this conflicted with the state vagrancy law, which does not define or establish a penalty for the offense.

Outside the courtroom, prostitutes are standing up for their rights in other ways. Beverly Harrell, madam of the Cottontail Ranch in Lida Junction, Nevada, is running for the state legislature on a women's rights platform. Ms. Harrell's establishment was recently ordered off Federal land after it was written up in Jack Anderson's column. (The ranch's five mobile homes were towed 2000 feet up the highway in order to comply.)

Meanwhile, in San Francisco, former prostitute Margo St. James has organized a prostitutes' trade association called COYOTE (Call Off Your Old Tired Ethics) to agitate for decriminalization of prostitution. Ms. St. James calls the group a "loose women's organization," and members wear buttons bearing the symbol of a grinning coyote. But despite the air of levity, the members are quite serious about their objective of abolishing the laws against the sex business. At the first prostitutes' convention in late June, Jean Powell of the Prostitutes of New York (PONY) explained that COYOTE and PONY are strongly against legalization of prostitution, since this "would enable the government to put rules and regulations on prostitution. We want it decriminalized, so no one has the right to tell consenting adults what to do." Some 500 persons attended the convention—some indication of the growing support for rolling back yet another government intervention in the marketplace.

• "Prostitution Charges Dismissed, Judge Says Arrests Illegal," CRIME CONTROL DIGEST, March 25, 1974.
• News note, Ibid., Feb. 18, 1974.
• "Call Girls Win Decision," news release, Libertarian Party of Nevada, March 1974.
• "Patron Rides Along as Bordello Is Moved," UPI (Lida Junction, NV), June 19, 1974.
• "Militant Prostitutes to Convene with Female Lawyers, Scholars," AP (San Francisco), June 14, 1974.
• "Hookers at S.F. Convention; This Time It Was Their Own," Kathy Burke, LOS ANGELES TIMES, July 1, 1974.


Like fire protection, emergency ambulance service is often considered to be the kind of business best provided by government—or if not by government, by a private company on exclusive contract to local government, paid for by tax money. Why taxes? Because supposedly, if everyone were not forced to contribute, only a few would pay, with the rest becoming "free riders" who would still demand the service in time of emergency.

To prove that "it ain't necessarily so," one need look no further than the Acadiana region of Louisiana's Gulf Coast. Serving this largely-rural area of some 480,000 residents is the Acadian Ambulance Service, Inc. (AASI)—a prime example of how the market can solve the "free rider problem." Although providing service to everyone who calls, Acadian derives the bulk of its revenues from subscribers. The $15 per year subscription provides member families with free emergency transportation and reduced rates on emergency transfers. Nonmember customers are billed for the service at published rates, although it is company policy not to even raise questions of payment until after an emergency patient has been safely delivered to the hospital.

AASI has grown rapidly in the past several years. The company was formed to fill a vacuum created when several smaller companies and funeral homes discontinued ambulance service, due to the increasing costs of meeting tough new Federal standards. AASI's sophisticated radio network and professional paramedics meet or exceed all applicable standards. The company has grown from 2 ambulances and 8 employees to 24 ambulances and 100 employees. It serves 74,000 member families in the 6000 square mile Acadian region, and averages some 58 calls for service each day.

In order to maintain its high standards, AASI will not extend its service to a new parish (county) until each of the parish's major hospitals agrees to purchase and install an emergency radio that will tie into the statewide hospital communications network. The company also sets a membership quota which will generate enough revenue to provide the proper amount of trained personnel and equipment. Each ambulance carries two people, at least one of whom is a fully-trained paramedic; all are radio-equipped and meet Federal EMS and DOT standards. The company operates an Emergency Medical Dispatch Center in Lafayette, connected by toll-free telephone lines to the nine participating parishes. Data on an emergency are broadcast by radio to the closest ambulance, which is on its way within a minute of receipt of the call. Once the pickup is made, the patient's vital signs and other data are radioed to the appropriate hospital, which can prepare for the patient's arrival and advise the paramedic en-route.

Emergency medical systems of this type are being actively promoted by the Federal Government, via an extensive new subsidy program. Yet few cities or counties have gotten together the doctors, hospitals, ambulance operators, and assorted bureaucrats to create such a system, despite the lure of "free" Federal money.

All of which makes AASI's achievement all the more impressive: the entire operation has been put together without a cent of Federal assistance and is turning a handy profit.

• "Acadiana Emergency Medical Radio Net Serves Gulf Coast," COMMUNICATIONS NEWS, June 1974, p. 24.


The Consolidated Rail Corporation (Conrail), the Federal Government's plan to "save" the bankrupt Penn Central and seven other northeastern railroads, may never get off the ground. A three-judge Federal panel ruled late in June that the government has no right to force the railroads' continued operation at a loss to creditors while the plan is implemented over a two-year period. The judges then enjoined the government's United States Railroad Association (the erstwhile organizer of the new system) from certifying a final rail system. But they stopped short of ruling unconstitutional a section of the Regional Reorganization Act that would force creditors to accept stock in Conrail, on grounds that Congress has not yet established the details of the stock plan. The court action was in response to a suit brought by creditors of the New Haven Railroad, including 16 insurance companies and banks.

Later that week a federal judge struck yet another blow at the plan, by ruling that the Penn Central and Lehigh Valley Railroads should not join Conrail, because the Rail Reorganization Act "does not provide a process which would be fair and equitable to the estate of the debtor [s]." Judge John P. Fullam's ruling was consistent with that of the trustees of both lines, who have voted not to participate in Conrail unless forced to do so by the courts. Trustees of the Jersey Central, Erie Lackawanna, and Boston and Main have voted likewise. Thus, the Federal Government's ambitious follow-up to Amtrak may be derailed before it even gets rolling.

• "Railroads Fight Own Rescue," BUSINESS WEEK, April 20, 1974, p. 118.
• "Court Rules Against Railroad System Plan," UPI (Philadelphia), June 26, 1974.
• "Penn Central Can't Join New U.S. Rail System, Judge Rules," AP (Philadelphia), June 27, 1974.


• Press Freedom. Florida's right to reply law, which forced newspapers to give candidates equal time, has been ruled unconstitutional by a unanimous Supreme Court. The decision was cheered by editors and publishers around the country. Also joining the cheering were a number of television officials, who see parallels between right to reply laws and the FCC's Fairness Doctrine. Richard Salant, president of CBS News stated that he wanted to read the full language of the Court's decision, "because it seems to us that the same principle should apply to broadcasting." Salant's views echoed by several weeks those of CBS chairman William Paley, who called on government to eliminate the Fairness Doctrine and "immunize news and public affairs broadcasting from any form of governmental oversight or supervision whatsoever." (Sources: "Florida Right to Reply Law Voided by Supreme Court," AP (Washington), June 25, 1974; "Paley Calls for End of Fairness Doctrine," AP (Syracuse), June 6, 1974.)