For or Against Usury
Let’s see what people would use as a new medium of exchange absent government edict.
I’m unaware of any law authorizing or prohibiting banks from creating money the way they do right now. They just do it because it’s something they have always done.
How about we start holding the government accountable and put so much collective pressure on our elected represenatives that we force they to start passing laws to allow us to break free from this economic slavery that we are put under by the banking system.
We already have Congress and they are constantly under heavy pressure to spend and they always oblige.
But congress does not “spend” money right now. They either tax it away from people who had to borrow it, or borrow it from the banks themselves.
There is a world of difference between lend and spend. What we really need is for the congress to actually create and spend money into circulation.
Carl Veritas wrote:
In the early days the colony of Massachussetts did in fact print their own money to pay for things. I think they even flirted with the idea to do away with taxation and just print what they needed. Others followed suit and we had a mess.
Hi Carl, I think you are wrong and more importantly, history disputes your claim. Massachusetts scrip (and others including Pennsylvania) were hugely successful and a major reason for our war for independence. Benjamin Franklin printed much of the Pennsylvania scrip and the people flourished. There was always enough money available to conduct commerce and instead of taxes, script was spent into circulation to finance public projects. All without any government debt – thus no need for income taxes.
The colonies under script money (fiat), were vastly more prosperous than the ruling country. While England was under the heavy boot of the Bank of England, the colonies developed their own wealth based currency. Here is a reference:
“There was abundance in the Colonies, and peace was reigning on every border. It was difficult, and even impossible, to find a happier and more prosperous nation on all the surface of the globe. Comfort was prevailing in every home. The people, in general, kept the highest moral standards, and education was widely spread.” – Benjamin Franklin
When Benjamin Franklin went over to England to represent the interests of the Colonies, he saw a completely different situation: the working population of this country was gnawed by hunger and poverty. “The streets are covered with beggars and tramps,” he wrote. He asked his English friends how England, with all its wealth, could have so much poverty among its working classes.
His friends replied that England was a prey to a terrible condition: it had too many workers! The rich said they were already overburdened with taxes, and could not pay more to relieve the needs and poverty of this mass of workers. Several rich Englishmen of that time actually believed, along with Mathus, that wars and plague were necessary to rid the country from man-power surpluses.
Franklin’s friends then asked him how the American Colonies managed to collect enough money to support their poor houses, and how they could overcome this plague of pauperism. Franklin replied:
“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.”
Thanks To Free Money Issued By The Nation
His friends could not believe their ears, and even less understand this fact, since when the English poor houses and jails became too cluttered, England shipped these poor wretches and down-and- outs, like cattle, and discharged, on the quays of the Colonies, those who had survived the poverty, dirtiness and privations of the journey. At that time, England was throwing into jail those who could not pay their debts. They therefore asked Franklin how he could explain the remarkable prosperity of the New England Colonies. Franklin replied:
“That is simple. In the Colonies, we issue our own paper money. It is called ‘Colonial Scrip.’ We issue it in proper proportion to make the goods and pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one.”
The Bankers Impose Poverty
The information came to the knowledge of the English Bankers, and held their attention. They immediately took the necessary steps to have the British Parliament to pass a law that prohibited the Colonies from using their scrip money, and then ordered them to use only the gold and silver money that was provided in sufficient quantity by the English bankers. Then began in America the plague of debt-money, which has never since brought so many curses to the American people.
The first law was passed in 1751, and then completed by a more restrictive law in 1763. Franklin reported that one year after the implementation of this prohibition on Colonial money, the streets of the Colonies were filled with unemployment and beggars, just like in England, because there was not enough money to pay for the goods and work. The circulating medium of exchange had been reduced by half.
Franklin added that this was the original cause of the American Revolution – and not the tax on tea nor the Stamp Act, as it has been taught again and again in history books. The financiers always manage to have removed from school books all that can throw light on their own schemes, and damage the glow that protects their power.
Franklin, who was one of the chief architects of the American independence, wrote it clearly:
“The Colonies would gladly have borne the little tax on tea and other matters had it not been the poverty caused by the bad influence of the English bankers on the Parliament, which has caused in the Colonies hatred of England and the Revolutionary War.”
This point of view of Franklin was confirmed by great statesmen of his era: John Adams, Jefferson, and several others. A remarkable English historian, John Twells, wrote, speaking of the money of the Colonies, the Colonial Scrip:
“It was the monetary system under which America’s Colonies flourished to such an extent that Edmund Burke was able to write about them: ‘Nothing in the history of the world resembles their progress. It was a sound and beneficial system, and its effects led to the happiness of the people.’ John Twells adds:
“In a bad hour, the British Parliament took away from America its representative money, forbade any further issue of bills of credit, these bills ceasing to be legal tender, and ordered that all taxes should be paid in coins. Consider now the consequences: this restriction of the medium of exchange paralyzed all the industrial energies of the people. Ruin took place in these once flourishing Colonies; most rigorous distress visited every family and every business, discontent became desperation, and reached a point, to use the words of Dr. Johnson, when human nature rises up and assets its rights.”
Another writer, Peter Cooper, expresses himself along the same lines. After having said how Franklin had explained to the London Parliament the cause of the prosperity of the Colonies, he wrote:
“After Franklin gave explanations on the true cause of the prosperity of the Colonies, the Parliament exacted laws forbidding the use of this money in the payment of taxes. This decision brought so many drawbacks and so much poverty to the people that it was the main cause of the Revolution. The suppression of the Colonial money was a much more important reason for the general uprising than the Tea and Stamp Act.”
Today, in America as well as in Europe, we are under the regime of the Scrip of the Bankers instead of the scrip of the nation. Hence the public debts, everlasting interest charges, taxes that plunder purchasing power, with the only result being a consolidation of the financial dictatorship.
There is only one cure for America’s ultimate financial collapse and that is for Congress to exercise Clause 30 of the “Federal” Reserve Act, buy the outstanding shares of stock, shut down this unconstitutional system and sell off their assets to reimburse the people of this nation for this unspeakable theft of their wealth. This is the first installment of postings on this issue, new ones will be put up as soon as manpower allows.
We have been continuously fighting the Bank of England since the revolutionary war. It is a sad state that we find ourselves being crushed by the same people who own the Bank of England today. They own the private Federal Reserve, the IMF and BIS – in fact they own almost all central banks.
The US Treasury directly issuing paper money is not new (Greenbacks). Legal Tender Act of 1862
Emergency Banking Act of 1933 confiscated American monetary gold and stored at Fort Knox (created for the purpose). The irritating American people keep redeeming FRN for gold and that had to stop. The astonishing fact is Congress passed the measure without reading it.
And you wanted the government to do what again?
goes, please no apologies. I love your post! heated debate is what made this country, not corporate/political conversation…that’s how corruption takes over.
That was a very magnanimous response. I also enjoy the heated debate and often feel like I learn a lot from those with whom I don’t initially agree.
DrKrbyLuv has it 100% correct, why borrow our own money @ interest from a private cartel?
Bring Back the GreenBack
Carl Veritas wrote:
The US Treasury directly issuing paper money is not new (Greenbacks)…And you wanted the government to do what again?
Yes, we need to bring back Abe’s greenbacks!
I have yet to hear one good reason why we as a nation borrow our money from a private banking cartel (with ruinous interest charges) when we hold the power to issue it ourselves for free? Either way, we back the money. Interest charges are unsustainable as the debt grows exponentially and government interest charges are the reason for income and employment taxes.
“The government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity. The financing of all public enterprise, and the conduct of the treasury will become matters of practical administration. Money will cease to be master and will then become servant of humanity.” – Abraham Lincoln
Greenback…United States Note.
Massachussetts Bay Colony Money:
In 1690, Massachussetts launched a military raid against the French colony in Quebec. She had done this before and, each time, had brought back sufficient plunder to more than pay for the expedition. This time, however, the foray was a dismal failure, and the men returned empty handed. When the soldiers demanded their pay, Massachussetts found its coffers empty. Disgruntled soldiers have a way of becoming unruly, so the officials scrambled for some way to raise funds. Additional taxes would have been extremely unpopular, so they decided simply to to print paper money. In order to convince the soldiers and the citizenry to accept it, the government made two solemn promises: (1) it would redeem the paper for gold or silver coin just as soon as there was sufficient tax revenue to do so, and (2) absolutely no additional paper notes would be issued. Both pledges were promptly broken. Only a few months later, it was announced that the original issue was insufficient to discharge the government’s debt, and a new issue almost six times greater was put into circulation. The currency wasn’t redeemed for nearly forty years, long after those who had made the pledge had faded from the scene.
Most of the other colonies were quick to learn the magic of the printing press, and the history that followed is a classic example of cause and effect: Governments artificially expanded the money supply trough the issuance of fiat currency. This was followed by legal tender laws to force its acceptance. Next came the disappearance of gold or silver coins which went, instead, into private hoards or to foreign traders who insisted on the real thing for their wares. Many of the colonies repudiated their previous money by issuing new bills valued at multiples of the old. Then came political discontent and civil obedience.
And at the end of each cycle there was rampant inflation and economic chaos.
In 1703, South Carolina declared that its money was “a good payment and tender in law” and then added that, should anyone refuse to honor it as such, they would be fined an amount equal to “double the value of the bills so refused:. By 1716, the penalty had been increased to “treble the value”.
Benjamin Franklin was an ardent proponent of fiat money during those years and used his great influence to sell the idea to the public. We can get some idea of the ferment of the times by noting that, in 1736, writing in his Pennsylvania Gazette. Franklin apologized for its irregular publication, and explained that the printer was “with the Press, labouring for the publick Good, to make Money more plentiful”.
The printing of money was apparently a major, time-consuming operation.
In 1737, Massachussetts devalued its fiat currency by 66% offering one dollar of new currency for three of the old. The promise was made that. after five years, the new money would be fully redeemed in silver or gold. The promise was not kept.
By the late 1750s, Connecticut had price inflated by 800%
The Carolinas had inflated 900%
Rhode Island 2300%
Naturally, these inflations all had to come to an end and, when they did, they turned into equally massive deflations and depressions. It has been shown that, even in colonial times, the classic boom and busts which modern economists are fond of blaming on an “unbridled free market” actually were direct manifestations of the expansion and contraction of fiat money which no longer was governed by the laws of supply and demand.
During the war (civil war) the purchasing power of greenbacks fell by 138% Prices more than doubled while wages rose by less than half. Confederate notes increased in volume by 214% per year, while the volume of all money, including bank notes and checkbook money, rose by over 300% per year. In addition to the confederate notes, each of the Southern states issued each own fiat money, and by the end of the war,, the total of all notes was about a billion dollars.
Within the four year period, prices shot up by 9,100%
After Appomattox, of course, Confederate notes and bonds alike were totally worthless.
As usual, the average citizen did not understand that the newly created money represented a hidden tax which he would soon have to pay in the form of higher prices. Americans not only paid the tax but applauded Congress for creating it.
Perhaps a new and improved monetary central planner will have an even greater success. As long as he means well, right?
Some questions …
Hi goes, thanks for the great questions. I’ll try to answer with some opinions.
Thank you for a fantastic response. Although I am still not as convinced as you are that this would work, I am a closer to believing it could (or at least be part of the solution) than I was 6 months ago. What I do like is that even if it does not work, at least the system would be for the peoples benefit and controled by representatives of the people. The current system seems wrong to me on many levels.
Sometimes I am left wondering if there is a solution to the money system problem. Could it just be too complex of a problem, with at goals that are at times contradictory ( means of exchange vs. store of value )? I wonder if expecting money to be a true store of value may be asking too much for anything but short periods of time. After all money is just another commodity and commodity prices fluctuate due to supply and demand all the time. The buggy whip factory might have been in demand and worth a lot in 1880 but worth almost nothing in 1910. Is it wrong to expect money to hold its value over long periods of time? Or maybe Gresham’s law will eventually kill off any good monetary system.
I just am not sure and thinking about it sometimes makes my head want to explode!
What a long an interesting post. There is one thing that you left out though. How all of those currencies went in and out of circulation. If what your posting said is true, about deflating the currency, that would mean that is only possible if those currencies where loaned into circulation. What is even more interesting is how none of those borrowers ever honored their promise to pay gold/silver.
Can a promose to pay ever truely be money?
Can I the lender’s promise to pay you something I don’t have in exchange for your promise to pay me back ever work as a monetary system?