My previous article discusses money and credit creation and the trillion dollars/year benefit of monetary reform. Here is the discussion of this topic from sourced historical quotes from many of our brightest minds, part 1 of 2 starting with Benjamin Franklin and ending with Thomas Edison (my personal favorite in his explanation to the New York Times in 1921).
Quotes on the history of creating and managing money:
“Experience, more prevalent than all the logic in the world, has fully convinced us all, that it (paper money issued directly by government) has been, and is now of the greatest advantages to the country.” – Benjamin Franklin, The American Weekly Mercury, March 27, 1729. http://www.historycarper.com/resources/twobf2/paper1.htm
“The utility of this currency became by time and experience so evident as never afterwards to be much disputed.” – Benjamin Franklin, The Autobiography of Benjamin Franklin, page 65: http://books.google.com/books?id=izkLAAAAIAAJ&pg=PA65&lpg=PA65&dq=The+utility+of+this+currency+became+by+time&source=web&ots=oXus0ZmYXu&sig=-iNLTJs_TxPJoRqkNBg8InIM2a0&hl=en&sa=X&oi=book_result&resnum=5&ct=result .
“All the perplexities, confusions, and distresses in America arise, not from defects in their constitution or confederation, not from a want of honor or virtue, so much as from downright ignorance of the nature of coin, credit, and circulation.” – John Adams, letter to Thomas Jefferson (1787-08-25), The Works of John Adams
“This institution (privately-owned central banks) is one of the most deadly hostility against the principles of our Constitution…suppose a series of untoward events should occur…an institution like this…in a critical moment might upset (overthrow) the government.” – Thomas Jefferson, December 1803 letter to Treasury Secretary, Albert Gallatin. http://www.yamaguchy.netfirms.com/7897401/jefferson/gallatin.html
“It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes.” – President Andrew Jackson in his veto message for the renewal of the privately-owned Bank of the United States, which would have continued their private monopoly of creating US money. July 10, 1832. http://avalon.law.yale.edu/19th_century/ajveto01.asp
“I have no hesitation to say if they can re-charter the bank (2nd Bank of the US – a privately-owned central bank) with this hydra of corruption they will rule the nation and its charter will be perpetual and its corrupting influence destroy the liberty of our country. When I came into this administration…I had a majority of 75. Since then it is now believed it (the bank) has bought over by loans, discounts, etc until…there were 2/3 for re-chartering it.” – President Andrew Jackson, April 7, 1833 letter to R. H. M. Cryer. Ralph Catterall, The 2nd Bank of the U.S., (Univ. of Chicago Press, 1902.
After President Jackson vetoed Congress’ re-charter the 2nd Bank of the US and paid-off the national debt, President Van Buren (elected 1836) was confident the goal of defending the US from a privately-owned central bank was won: “The practice of funding the public debt…has long been discontinued…A National Bank has become a completely ‘obsolete idea’ among us, as thoroughly condemned in public opinion as a national debt.” – Catterall, p. 431.
“Why then should we go into Wall Street, State Street, Chestnut Street, or any other street, begging for money? Their money (private bank’s) is not as secure as Government money…I am unwilling that this government should be left in the hands of any class of men, bankers or moneylenders, however respectable or patriotic they may be. The Government is much stronger than any of them.” – Congressman E. G. Spaulding, 1862 speech to Congress in favor of issuing Greenbacks to pay for the Civil War rather than government borrowing. E. G. Spaulding, A Resource of War, (repr. CN: Greenwood, 1971), p. 37.
Peter Cooper (1791-1883) was one of America’s leading inventors and businessmen. He designed and built the first US locomotive in 1830, the “Tom Thumb.” Cooper was the first to introduce anthracite coal into iron production in 1845, resulting in the US’ first wrought iron beams for construction. In 1854, Cooper was a founder in the telegraph company that created the first trans-Atlantic cable. He patented Jell-O. In 1859, he founded The Cooper Union for the Advancement of Science and Art, a university in New York City that grants full scholarships to the nation’s brightest students with express admittance to all regardless of race, religion or sex. Cooper learned about monetary policy from Albert Gallatin, US Secretary of the Treasury from 1801-1814. The following 14 paragraphs are the summation of his life-long experience of the benefits of monetary reform that he witnessed from Andrew Jackson ending the privately-owned 2nd Bank of the United States and promptly paying-off the national debt, the US government directly issuing Greenbacks to pay for the Civil War rather than borrow the money, and then the economic depression when that policy was rescinded in favor of the federal government again borrowing money, as we do today.
ADDRESS AT THE CONVENTION OF THE NATIONAL PARTY, CONVENED IN BOSTON, 4TH OF JUNE, 1879. http://yamaguchy.netfirms.com/7897401/cooper/cooper_index.html .
“I think, that the neglect of our several administrations to make laws, that shall properly regulate the currency, both in volume and value, has been a greater cause of demoralization, want and misery among the mass of the people, than all other causes combined.
The American people have a right to demand of their Government a substantial reason for having taken from them their money, used by them for years as the currency of the country without cost to the Government. Our present Secretary of the Treasury declared in the Senate that “every citizen of the United States had conformed his business to the clause of the law regulating the currency of the country.”
I believe it will be impossible for our Government to show a good reason for having taken from the people their circulating notes, possessing (as the late Secretary McCulloch stated at the banquet, given by the New York Chamber of Commerce) “all the legal attributes of money.” The Secretary at the same time said, that, “In the very year, in which the war was closed, the reduction of the debt was commenced, and the reduction has been steadily continued, to the amazement of foreign nations.”
This debt, so called, was also “the credit of a great nation, cut up into small pieces and circulated as money;” as was well said by Secretary Chase. What shall we think of the administration of a Government, expressly designed, “by the people and for the people,” that should turn their circulating credit and their real money, into a debt which stops that circulation, vital as it is to the trade and prosperity of this people, and makes it a burden of bonds and taxes on their industry?
It will be equally impossible to show a good reason for having taken from the people their fractional currency, which was costing the Government nothing, and supplying its place with a more inconvenient currency, at the cost of thirty-two millions of dollars, added to the National debt.
The amount, already paid by the people as interest on the National debt, apart from any payments on account of the principal, is already one thousand, two hundred and twenty-four millions of dollars.
I have long been compelled to believe, that all that is now or ever has been required to secure permanently, is a safe deposit for all the unoccupied moneys of the country, and an ever strengthening bond of National union, as well as the best currency, that our country or the world ever saw, will be for the Government to do now, what should have been done at the close of the civil war,—and at the close of the war of Revolution against England—namely, to make the people’s money, found in circulation at the close of the war the sole money of the country, and the unflactuating measure of all values, receivable for all forms of taxes, duties and debts, and interconvertible with the interest-bearing bonds of the Government, which should bear an equitable but low rate of interest.
…How can we, as a Republican and a free people, control the Financial Institutions and the policy of this Government in the interest and prosperity of the whole people?
It is evident, that some fatal errors have been committed, some where, by which want, ruin and distress have been introduced, where before was prosperity, abundance and full employment for the enterprise and industry of this nation.
Individuals may suffer from extravagance, over-trading or over-production; but how can a whole nation have its joy and prosperity turned into mourning, but by the fatal errors of its ruling classes, which make the laws, and can thus mete out injustice and dry up the resources of a nation by rapacity and greed of gain, instead of diffusing happiness, education and freedom among the people.
Misgovernment and the faults of the ruling class have always proved in history the trouble and sorrow of nations. All the responsibility of a nation’s happiness, which may depend on a people’s laws and administration, must rest upon those, who are, for the time, the law making and administrative class.
Though the influences, that are now working against the rights of labor and the true interests of a Republican Government, are insidious and concealed under plausible reasons, yet the danger to our free institutions, now, is no less than in the inception of the rebellion, that shook our Republic to its centre. It is only another oligarchy, another enslaving power, that is asserting itself against the interest of the whole people. There is fast forming in this country an aristocracy of wealth—the worst form of aristocracy, that can curse the prosperity of any country. For such an aristocracy has no country—“absenteeism,” living abroad, while they draw their income from the country, is one of its common characteristics. Such an aristocracy is without soul and without patriotism. Let us save our country from this, its most potent, and, as I hope, its last enemy. I beseech you, fellow-citizens, to consider well what the crisis of the country demands of you, not losing sight of the fact, that there are great wrongs which must be righted in the administration of the finances of this country for the last twelve years. Old issues of North and South are, in a great measure, passing away, but there is no section of our common country, that needs so much the reviving influence of an abundant and a sound currency, as the South. The Southern people have the finest natural resources, that our country affords; every facility for manufacture—the material, labor and water-power indefinite. They need only money, wisely distributed among its working and enterprising population, for their work and their enterprise, which may draw out the money, and put it to the best use. It was well said, lately, by one of the Southern statesmen, that the “Government had impoverished, discomfited, and crushed the South more by its financial policy, since peace was declared, than by its arms during the whole war of Rebellion! ”
If the people can look for no relief from the present Congress and Administration—if those, who now sway the financial interests of the country cannot see their great opportunity—then new men must be chosen by the people, whom they can trust to make laws, and execute measures, that “shall secure the blessings of liberty to themselves and their posterity.”
I will close my remarks by a quotation from a speech of Daniel Webster. He declared that “The producing cause of all prosperity is labor, labor, labor. The Government was made to protect this industry, and to give it both encouragement and security. To this very end, with this precise object in view, power was given to Congress over the currency and over the money of the country.”
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“The bankers will favor a course of special legislation to increase their power…They will never cease to ask for more, …so long as there is more that can be wrung from the toiling masses of the American People…The struggle with this money power has been going on from the beginning of the history of this country.” – Peter Cooper, famous American inventor in his letter to President Hayes, June 1, 1877. http://query.nytimes.com/mem/archive-free/pdf?res=9806E1D7123FE63BBC4153DFB066838C669FDE
“We say in our platform that we believe that the right to coin and issue money is a function of government. We believe it. We believe that it is a part of sovereignty, and can no more with safety be delegated to private individuals than we could afford to delegate to private individuals the power to make penal statutes or levy taxes…Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank, and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of government, and that the banks ought to go out of the governing business… When we have restored the money of the Constitution, all other reform will be possible, but until this is done there is no other reform that can be accomplished."
– William Jennings Bryan, Cross of Gold Speech, 1896. http://en.wikisource.org/wiki/Cross_of_Gold_Speech .
The following 16 paragraphs are the observations of Charles Lindbergh Sr., member of the House of Representatives from 1907-1917 (R-MN), concerning how the financial elite formed their privately-owned Federal Reserve banking system. Lindbergh called the owners of the Fed as among “The Money Trust.” This is from his 1917 book Why is Your Country at War?, that alleges the Money Trust’s interest to encourage war for their higher profits. http://books.google.com/books?id=qzAWAAAAYAAJ, page 156 (all italics from the original text)
“…I shall now quote the main important parts of my speech of July 5, 1916—in the Congressional Record of that date:
"No matter what individual professions and party claims may be to the contrary, it is apparent to anyone who has been a Member of Congress, and to anyone else who examines, that the will of the people in regard to legislation is seldom consulted. The price of leadership here is exactly the opposite of carrying out, in good faith, the will of those we are elected to serve.
Wholesale deception of the voters has been, and is now, the means used most successfully to secure office and remain in public life.
…Every one here knows that these things are true. But the public gets no information from the press about it, but anyone who dares to uncover the system and expose the schemes for deceiving the public finds that a certain part of the press will attack him and call him a radical and obstructionist, and excoriate him in every way possible. If to tell the truth about things makes one a radical, then radicals ought to be at a premium. But they have not been so far politically.
…There is a sinister influence at work in our country, which, if it is not checked, intends to completely undermine the original purpose of the formation of our Government—change it from the purposes of a democracy, and instead make it of a monarchical and plutocratic system, and to bring all the world into one control and one system, which for purposes of deception of the plain people, they would call a "world’s democracy," but which in fact it is their plan to make the rule of the wealth grabbers, maintained by simple organization of themselves and disorganization of the masses pitting the masses against each other. It would be the privilege of a few to rule in splendor, and the fate of the many to spend their lives in unrequited toil and that hopeless condition of servitude which millions came here to escape from. The few now desire to cut off every possible avenue of escape from industrial slavery for the masses.
…The plain truth is that neither of these great parties, as at present led and manipulated by an 'invisible government' is fit to manage the destinies of a great people. Their rules of regulation must be changed before they will be, and it is doubtful if their rules will be materially changed. If they shall be, it will be because the voters themselves force it.
…Early in my service here I observed that there was some power outside the Government itself which was insidiously, but none the less effectively dictating the course of legislation in reference to finance, currency and the creation and control of credit throughout the country; that it was in a position to dictate and did dictate to an extent almost unlimited, to whom credit should be extended and from whom it should be withheld, and that it largely controlled the political action and influence of most of the banking and other corporations of the country. I saw that such a power of control existed here in Congress.
I introduced a resolution setting forth the facts, naming this insidious and well nigh invincible power, the Money Trust, source of all the trusts and calling for an investigation of its activities. The "big business" press, ridiculed the resolution and especially the idea that the Money Trust had an existence. (The facts about this appears elsewhere in this volume. See Index: Money Trust.) In this case the Committee reported out my resolution under a different name, and in order to prevent me from serving on the committee to be appointed, the resolution was referred to the Banking and Currency Committee which was composed almost entirely of bankers and lawyers for some of the banks. By keeping me off the committee I could not cross examine the witnesses.
The committee, nevertheless, had to report that there was a Money Trust and that its activities were as I had stated, and that its existence and the power it yielded were a menace to the institutions of the country, but took no action to deprive it of its power.
Woodrow Wilson, however, took notice of the proceedings and of the existence of the Money Trust.
This was before he became president. He promised to exercise his influence if elected, to curb its power and influence. But I have no hesitation in saying that this promise has not been kept, but on the contrary the principal result of financial legislation during this administration has been to legalize and more firmly entrench the Money Trust in its control of business, credit and politics of this vast country than ever before, and in order to conceal that fact the Money Trust has bought the services of many prominent financial writers for the purpose of running articles in the press praising the Federal Reserve system which in less than six years the people will rise in rebellion against because of its intolerable and unjust burden (Editor’s note: Lindbergh was off by seven years. It took 13 years from this speech for the Money Trust to simultaneously call-in loans in October 1929, crash the Stock Market, and begin the Great Depression).
Profiting from my observation of the Money Trust inquiry by a committee nearly all the members of which were interested in limiting its activities as much as possible, I introduced a resolution declaring it should be the policy of the House Membership that no banker or any one who was financially interested in a bank should be a member of the banking and currency committee.
I also introduced a resolution calling on Members to declare the extent of their affiliations with banks, if they had any.
Neither of these resolutions came out of the Committee on Rules to which they were referred, so we must take it for granted that a majority of the Rules Committee believe that it is right for bankers to frame legislation for Congress to pass for the bankers personal benefit, as all financial legislation shows has been done. Personally I do not believe that a banker should be on that Committee, any more than that if some one sued a judge that he, the sued judge, should sit as the presiding judge to decide his own lawsuit.
My Democratic friends, you have the vain hope that special privilege, having obtained enormous benefits at your hands, is going to be grateful for the past favors that you have showered upon it and assist you in retaining control of the Government. They will furnish you campaign funds, as they do to both the dominant parties, but it makes little difference to them which of you have the power as long as it remains with either under present conditions. You are to learn, having done all you could for it, that you are no longer necessary to its business, except that now that you have passed the most important laws that it wanted, you are forced to follow it up, and are stopped from complaining through your portion of the press and on the stump or from entering any protest whatever when the time comes that your eyes will be open to the oppression the plain people are surely destined to suffer because of your falsely so-called "beneficial legislation."
You have missed the opportunity of your lifetime; one not likely to ever come to you again. The time will come when no Democrat who boasts of the achievements of this administration will be considered worthy to hold any public office. You have gone "cross-roads" with some of the most vital principles laid down by the great Thomas Jefferson. You may boast of him as a great Democrat, but none of you who have been active in fastening some of the hardships of this administration upon the people can boast of yourselves.”
The following seven paragraphs is Thomas Edison discussing the views for monetary reform that Henry Ford and Edison share. He’s referencing how the US government should directly create the money to build a hydroelectric dam at Muscle Shoals, Alabama, as reported from the NY Times article, “Ford sees wealth in Muscle Shoals” of Dec. 6, 1921. http://query.nytimes.com/mem/archive-free/pdf?_r=1&res=9C04E0D7103EEE3ABC4E53DFB467838A639EDE :
"That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt. Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 -- that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost.
But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 per cent, whereas the currency pays nobody but those who directly contribute to Muscle Shoals in some useful way.
... if the Government issues currency, it provides itself with enough money to increase the national wealth at Muscles Shoals without disturbing the business of the rest of the country. And in doing this it increases its income without adding a penny to its debt.
It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one promise fattens the usurer, and the other helps the people. If the currency issued by the Government were no good, then the bonds issued would be no good either. It is a terrible situation when the Government, to increase the national wealth, must go into debt and submit to ruinous interest charges at the hands of men who control the fictitious values of gold.
Look at it another way. If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency on Muscle Shoals, instead of the bankers receiving the benefit of the people's credit in interest-bearing bonds?
Certainly there is a complete set of misleading slogans kept on hand for just such outbreaks of common sense among the people. The people are so ignorant of what they think are the intricacies of the money system that they are easily impressed by big words. There would be new shrieks of ‘fiat money,’ and ‘paper money’ and ‘green-backism,’ and all the rest of it – the same old cries with which the people have been shouted down from the beginning.
But maybe we have passed beyond the time when the thoughtful 2 per cent – you know, I gather from my questionnaire that only 2 per cent of the people think,” and Mr. Edison smiled broadly. “Maybe they can’t shout down American thinkers any longer. The only dynamite that works in this country is the dynamite of a sound idea. I think we are getting a sound idea on the money question. The people have an instinct which tells them that something is wrong, and that the wrong somehow centers in money. They have an instinct, also, which tells them when a proposal is made in their interests or against them.”
LA County Nonpartisan Examiner
LA County Nonpartisan Examiner
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