A computerized cashless society. George Morrow.

Our banks and financial institutions face two problems that are becoming more overwhelming with each passing day. First, they are drowning in paper. There is simply no practical way to cope with the amount of paper needed to record and verify the millions of personal and business transactions taking place every day of the year.

Second, when transactions are not only increasing in number but involving much larger amounts of money than ever before, essential control over those transactions is lacking. There are more and more instances of bad check passing and non-payment of bills.

Banks already have begun to cope with the first problem through electronic funds transfer, one aspect of which we see every day in the form of the automated bank teller machine. This use of the computer has contributed to alleviating the paper overload somewhat.

But as yet little has been done to solve this second problem--control.

Here, too, the solution lies in the computer. As almost all of us routinely use credit cards to make purchases, we have already made a radical departure from our traditional cash-oriented society. A logical extension of this trend should bring us a credit-card-size, dedicated computer that performs all personal financial transactions. Looking Ahead

This Card--and it can't be far off--will identify you, give you and the bank your personal audit trial, balance your checkbook when you plug it into a phone line, buy food, clothing and houses for you. It will pay your rent and your utility bills. You will no longer have any need at all for cash--ever.

To the individual, society and even government, this scheme has benefits aplenty.

First, let's take the individual. At the most basic level, you won't have to worry about recording checks. The Card records all transactions automatically. You won't have to worry about your money being lost in the mail or misapplied accidentally by the bank. Furthermore, because the bank can't take advantage of your money through "float" (the Card does everything in real time), you have more control over that money.

Suppose you want to buy a new car at night, but the machine shows your account doesn't have the money for a down payment. If the Card--which holds your full credit history--shows that you are a good credit risk, you can borrow money from an on-line loan company.

Futhermore, you can't be robbed. Once the Card has been reported stolen, its power to perform transactions will simply be de-programmed, making it useless to any thief.

Society as a whole will gain as well. Most muggers and thieves will be put out of business because there won't be any cash left to steal. Bad checks will become a thing of the past. For example, you can't use the Card to buy groceries without having the money in your account; the computer simply won't accept the transaction. in some cases the computer will require voice identification--as well as voice verification--to complete a transaction. The Punishment Fits the Crime

The nature of punishment for non-violent crimes will change dramatically. Today we hear horror stories of overcrowded prisons that are impossibly costly to maintain. Why incarcerate the non-violent criminal at all when we can program his Card to, say, keep him from using public transportation or from spending any money more than 10 miles from home, or simply from spending more than a certain amount in total--no matter how much he earns? After four speeding tickets, for example, the offender's Card would be remotely programmed to deny him the privilege of buying gasoline. (The same technique could be used to foil the thief who runs off with a car after making only the down payment.)

Even non-violent crimes, such as those tied to drinking, could be dealt with this way. The man who gets drunk and beats up his wife repeatedly, for example, could be denied the use of his Card to buy liquor.

This system would be a boon to the Federal government too. The illegal "underground economy" of cash-only deals will disappear when individuals can no longer stash money in a safe deposit box and avoid declaring it as income. I have a record collection, and I buy records from a dealer who charges me sales tax; I know he doesn't pass that sales tax on to the government. In a cashless society this could not happen. Furthermore, when all income taxes are automatically deducted from an individual's account, we will have eliminated both the crime of tax evasion and the expensive process of prosecuting tax evaders. Logical Conclusions

But wait. Collecting taxes via computer is only the first step--a seemingly harmless procedure as well as a cost-efficient one. But now the government--or one branch of it, the Internal Revenue Service--has complete control of the one and only tool it can use to oppress absolutely everybody: money.

What happens next? Suppose the government decides to eliminate welfare "abuses" by preventing welfare recipients from buying whisky or potato chips--anything but necessities?

Suppose the system is used to regulate the amount of candy that teenagers with pimples can buy? To prevent overweight people from buying high calorie foods? Or to keep anyone at all from buying marijuana?

At this point the computer will have become a device more insidious than anything ever dreamed of by George Orwell. Technology will have become a tool used to control social laws, to ensure what society has decided is "correct" social behavior.

The only criminals in this society will be the people we know as computer hackers--those who know how to get around the computer, to make the computer serve society's rebels.

These criminals will have to be far more inventive than their counterparts of the past. For the society pictured here will not deal gently with them.

There are those in our society who would embrace this environment--not bad or unworthy people, but those who prefer order and predictability to risk and adventure. They would choose the kind of control described above to even the smallest possibility of getting mugged on the way to the grocery store.

But the rest of us will fight to keep this prospect from becoming reality. After all, Orwell's 1984 did not come true; and it, like the scenario portrayed here, is merely a natural (though extreme) extension of current trends, not a wild fantasy without basis in fact.

Perhaps the realization of Orwell's predictions was prevented by the very fact that someone did foresee the extreme possibilities. If so, such foresight will serve us well again as we move toward the future.