MONETARY HISTORY CALENDAR September 24-30

1976 – DEATH OF PAUL DOUGLAS, ECONOMIST, US SENATOR, QUAKER
A prominent University of Chicago economist, Douglas was one of six economists who developed A Program for Monetary Reformin 1939. It was sent to President Roosevelt as a proposal to end the Great Depression. More than 230 economists from 150 universities approved it without reservations while an additional 40 supported it with some reservations.
In assessing the problem of the day, the PMR states, “If the purpose of money and credit were to discourage the exchange of goods and services, to destroy periodically the wealth produced, to frustrate and trip those who work and save, our present monetary system would seem a most effective instrument to that end.” It also stated monetary systems based on a gold standard “has had…disastrous results all over the world.”
The PMR called for government creation and maintenance in the quantity of money. “Our own monetary policy should…be directed toward avoiding inflation as well as deflation, and in attaining and maintaining as nearly as possible, full production and employment.” The plan also called for eliminating fractional reserve lending – the process of banks loaning ourt many more times the amount of money in their possession. Back in the 1930’s the reserved requirement was 5:1. Today it’s 9:1. Some of the major banks involved in the economic collapse of 2007 had ignored this law and were loaning out 50 times their reserves. The PMR called for a 100% reserve requirement – banks could only lend the amount of money they possessed.
The document goes on, “In early times the creation of money was the sole privilege of the kings or other sovereigns – namely the sovereign people, acting through their Government. This principle is firmly anchored in our Constitution and it is a perversion to transfer the privilege to private parties to use in their own real or presumed interest. The founders of the Republic did not expect the banks to create the money they lend.
Their plan to reduce the national debt was simply to have the government purchase government bonds with new US debt-free money.
The PMR was the outgrowth of an earlier similar proposal from many of the same economists, The Chicago Plan, which was introduced as federal legislation in 1934, as a means to end the Great Depression The Chicago Plan called for the issuance of debt-free U.S. money and the end of banks lending less that their assets as means to reduce public and private debt, eliminate bank runs, and gain control over money creation.
[NOTE: A new economic/mathematical analysis of the The Chicago Plan has just been published The Chicago Plan Revisited is a working paper by two International Monetary Fund economists, Jaromir Benes and Michael Kumhoff. It affirms virtually every assertion by its advocates in the 1930’s. The paper is at http://www.stanford.edu/~kumhof/chicago-imfwp.pdf ]

SEPTEMBER 26

1939 – DEATH OF ALFRED OWEN CROSIER, PROMINENT OHIO ATTORNEY AND AUTHOR
Crosier wrote widely against the power and influence held by Wall Street Bankers. Crozier wrote eight books, including The Magnet and U.S. Money vs. Corporation Currency,which warned the country of the replacement of the country’s currency by notes printed by private banking corporations. A wonderful display of political cartoons from his book, U.S. Money vs. Corporations Currency is at http://www.youtube.com/watch?v=q4qQ59w4ML4

1942 – STATEMENT OF REVERENT WILLIAM TEMPLE, ARCHBISHOP OF CANTERBURY, CALLING FOR THE NATIONALIZATION OF THE BANK OF ENGLAND
“The private issue of new credit should be regarded in the modern world in just the same way in which the private minting of money was regarded in earlier times. The banks should be limited in their lending power to the amount deposited by their clients, while the issue of newer credit should be the function of public authority. This is not in any way to censure the banks or bankers…But the system has become anomalous, and, so often happens when anomaly has persisted through a long period of time, the result is to make into the master what ought to be the servant.”
Temple’s advocacy for banks being “limited in their lending power to the amount deposited by their clients” was for the ending of “fractional reserve banking” – the common practice of financial institutions providing loans in amounts many times in excess of the actual amount held by them. This feature is one of the major components of HR 2990, The National Emergency Employment Defense Act.

SEPTEMBER 29

1897 – BIRTH OF GRAHAM TOWERS, GOVERNOR OF THE CENTRAL BANK OF CANADA, 1934-1955
In testimony in 1939 before a Standing Committee on Banking and Commerce of the Canadian Parliament when asked whether banks create money, he stated: “That is right. That is what they are for… That is the Banking business, just in the same way that a steel plant makes steel…The manufacturing process consists of making a pen-and-ink or typewriter entry on a card in a book. That is all…Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money…As loans are debts, then under the present system all money is debt.”

2008 – U.S. STOCK MARKET CRASH
The Dow Jones plummeted by 778 points, its largest one-day drop in the history of the New York Stock Exchange. The crash was the result of the bursting of a massive housing “bubble” caused by financial institutions issuing money out of thin air many times in excess of their assets to finance many highly risky mortgages and other bizarre risky investments. The money issued for mortgages were loans, making the massive amount of new money issued (roughly 97% of all originating into our economy) as debt. The elimination on controls of the financial industry a decade earlier opened the door, but was not the root cause, of the crash that has come to be known as the Great Recession. The root cause of the 2008 crash, similar to all other bursts of financial bubbles before it, was the ability of banks to issue money out of thin air as debt (loans) many times in excess of their assets. The smaller the asset base, the greater the risk that banks will go bankrupt when their loans cannot be repaid or other investments go bad.

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NOTE: For those in Northeast Ohio, you are invited to a specialgathering “An Evening with the Federal Reserve,” Talk by Mark Sniderman, Executive V.P. of the Federal Reserve Bank of Cleveland
Tuesday, October 2, 6:30pm, Lakewood Public Library Auditorium, 15425 Detroit Ave. Lakewood

The twin goals of the Federal Reserve are price stability and full employment. How is the Fed doing in meeting these goals? What role does the Fed play in money creation? Did the Fed contribute to the 2008 financial collapse? How does the Fed work? Is the Fed a government agency? What are some of the critical economic issues that we should expect candidates to address during the 2012election season?
These are some of our questions. What are YOUR questions? Join us, and bring yourquestions.

FREE and open to the public. Let us know if you can attend
Register at http://www.meetup.com/Monetary-Literacy-Group/
Flyer at http://www.afsc.net/PDFFiles/FederalReserveBank.pdf

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Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and theplanet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com  For more information, visit http://www.afsc.net/economiccrisis.html  Previous calendar entries are posted at http://afsc.net/monetaryhistorycalendar.html

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MONETARY HISTORY CALENDAR September 17-23

SEPTEMBER 17

1787 – CONSTITUTION DAY
“The Congress shall have power to…coin money [and] regulate the power thereof” Section 8, US Constitution.” “Coin” is a verb used in this way, representing the power to issue money. We the People possess the constitutional authority to issue and circulate our own money. Instead, we have permitted banking corporations to “privatizing” the creation of money via loans (debt). This is both economic and political madness. 

SEPTEMBER 19

1881 — DEATH OF PRESIDENT JAMES GARFIELD (R, OHIO)
“Whosoever controls the volume of money in any country is absolute master of all industry and commerce…and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” A few weeks after making this statement, Garfield was shot. He died two months later.

SEPTEMBER 20

2008 – US TREASURY SUBMITS DRAFT LEGISLATION TO CONGRESS FOR AUTHORITY TO “PURCHASE TROUBLED ASSETS” (i.e. BAIL OUT BANKING CORPORATIONS)
U.S. Secretary of Treasury Hank Paulson, former Chair and CEO of Goldman Sachs banking corporation, submits on behalf of the Bush Administration legislation to bail out banking corporations that engaged in risky and bizarre mortgages and investments. The legislation, called the Troubled Asset Relief Program (TARP) was a whole 3-pages long. It requested a virtual $700 billion blank check for the Administration. Public outrage was fierce. Calls against the legislation to offices of some Senators and Representatives totaled 100 to 1 against it. The Administration was forced to pull the bill and substitute a new one later. The original TARP bill is at http://money.cnn.com/2008/09/20/news/economy/treasury_proposal/index.htm

SEPTEMBER 21

1950 –FEDERAL DEPOSIT INSURANCE LIMIT RAISED
The popular FDIC (Federal Deposit Insurance Corporation) limit is raised by Congress to $10,000. The FDIC insures commercial bank deposits against loss due to bankruptcy or default. It was created following the Great Depression when depositors lost their savings when banks collapsed due to speculative investments and/or depositor fears which led to a run on banks.

2008 – FEDERAL RESERVE BOARD APPROVES APPLICATIONS OF INVESTMENT BANKING CORPORATIONS GOLDMAN SACHS AND MORGAN STANLEY TO BECOME BANK HOLDING COMPANIES

Prior to the Great Depression, banking corporations could engage in both both “commercial” (traditional loans to individuals and businesses) and “investment” (stock and other forms of speculative activities) activities. Overzealous speculation by banks using depositors money was one of the causes of the Depression. This led to the 1933 Glass Steagall Act, separating commercial from investment activities. This law was overturned in 1999, leading to a breach in the “firewall” keeping the two types of financial activities separate. This grant application allowed two of the largest investment banks on the planet to gegin engaging in commercial banking activities. 

SEPTEMBER 22

1956 — DEATH OF FREDERICK SODDY, NOBEL LAUREATE
“It was recognized in Athens and Sparta…centuries before the birth of Christ that one of the most vital prerogatives of the State was the right to issue money.”
On money: “To allow it to become a source of revenue to private issuers is to create first, a secret and illicit arm of the government and last, a rival power strong enough ultimately to overthrow all other forms of government.”

SEPTEMBER 23

1998 – TALK BY MICHAEL CHOSSUDOVSKY, PROFESSOR OF ECONOMICS
“Monetary policy is in the hands of private creditors who have the ability to freeze state budgets, paralyze the payments process, thwart the regular disbursement of wages to millions of workers and precipitate the collapse of production and social programs.”
———-

Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com  For more information, visit http://www.afsc.net/economiccrisis.html  Previous calendar entries are posted at http://afsc.net/monetaryhistorycalendar.html

MONETARY HISTORY CALENDAR September 10-16


SEPTEMBER 12

1857 —  STEAMSHIP CENTRAL AMERICA SINKS
The steamship had a million dollars in gold and silver onboard. It caused the Ohio Life and Trust Company to fail and sparked the Financial Panic of 1857 since money was backed by gold. Under such a metal-based money system, the less gold and silver, the fewer dollars in circulation. The fewer dollars, the less economic transactions occur, resulting in less production and more unemployment.

SEPTEMBER 13

1785  – PENNSYLVANIA REPEALS THE CHARTER OF THE BANK OF NORTH AMERICA
This was the nation’s first private commercial bank, chartered by Congress under the Articles of Confederation. The Articles gave Congress the power to “emit bills of credit” — to create money. By a single vote, Congress voted to transfer their authority to issue money to the Bank, thus, become a quasi central bank. The Pennsylvania legislature repealed the Bank’s charter, which was significant since it primarily operated in just three states. Why did Congress willingly give up their money power in the first place? The public argument was that the business of finance could not be ably conduced by a public body (Congress) — only by a small number of private financiers.

1873 – NATION’S BIGGEST BANK, JAY COOKE & COMPANY, BECOMES EFFECTIVELY INSOLVENT
Congress has passed the Coinage Act earlier in the year, which ended the minting of silver dollars. US money system was, thus, backed only by gold. The effect was similar to other instances in US history when money was backed by gold — a depression ensued, prices feel, unemployment increased and major banks failed as there wasn’t enough gold to back the money needed to fuel the growing economy. Jay Cooke & Company was the largest bank to fail due to this policy of gold-backed money.

SEPTEMBER 15

2008 –  LEHMAN BROTHER INC FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION

SEPTEMBER 16

2003 – STATEMENT MADE ON THIS DAY BY HENRY C.K. LIU, PROFESSOR OF ECONOMICS
The current monetary system is a cruel hoax.  There is virtually no “real” money in the system, only debts.  Except for coins, which are issued by the government and make up only about one-thousandth of the money supply, the entire U.S. money supply now consists of debt to private banks, for money they created with accounting entries on their books.

2008 – FEDERAL RESERVE BAILS OUT AMERICAN INTERNATIONAL GROUP (AIG)
AIG was the largest insurance corporation, which had speculated in risky home mortgages. The Fed issued AIG $85 billion in credit in September 2008 to meet their financial obligations

[CORRECTION: The September 7 listing last week for J.P. Morgan was incorrect. The date listed was the birth of J.P. Morgan Jr. The description of the role of the Panic of 1907 was that or his father, J.P. Morgan, Sr.]
 
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Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com  For more information, visit http://www.afsc.net/economiccrisis.html 

Citizens Flexing Their Democratic Muscles in Ohio

Citizens in Many Communities Affirming Their Right to Decide and Challenging Corporate Rights

The problem has been clearly described. Several strategies have been agreed to. The struggle is now on.

An evolution in awareness and action is taking place against corporate power in Ohio. The same is true elsewhere.

Citizens in several Ohio communities are focusing beyond individual corporate abuses to the issue of never-intended corporate rights.

While the impetus for the grassroots education and action has been individual corporate harms — such as the explosion of corporate money in elections or gas drilling (fracking) in neighborhoods by out-of-state corporations – the grassroots reaction is to challenge the collective constitutional rights that all corporations have possessed for more than a century.

Two complementary challenges are being used by activists who see corporate abuses as more than simply the harming of their land, the poisoning of their water, or the domination of the public airwaves with political attack ads by a few out-of-control corporate entities. The fundamental problem increasingly being realized is the basic threat posed by corporations to citizen self-governance – the profound right that citizens in a democracy possess to decide policies, practices and prescriptions in their own communities, state and nation. This issue transcends geographic region, political party, ethnicity, gender, race, religion or age.

The first challenge is promoted by the Move to Amend campaign, the national coalition of dozens of organizations formed on the same day the U.S. Supreme Court ruled in the Citizens United vs. FEC, granting corporations greater First Amendment free speech “rights” to spend money in elections.  Move to Amend launched a campaign to amend the U.S. Constitution to declare that only human beings, not corporations, possess inalienable constitutional rights and, therefore can be regulated; and that money is not equivalent to speech and, therefore, political contributions and spending can be regulated.

More than 150 communities have passed council resolutions or citizen initiatives calling on their elected representatives to pass a constitutional amendment to reserve Citizens United, abolish “corporate personhood,” and/or end “money as speech.” More than 100 other communities are in the process. Here in Ohio, the communities of Athens, Oberlin, Cleveland Heights, and Barberton are among those communities that have passed council resolutions. Similar efforts are underway in Cincinnati, Toledo, Columbus, Akron, and Summit County. Citizens in several other communities, including Dayton, Lakewood, Shaker Heights, and others, have begun organizing for similar purposes.

Additionally, pro-democracy citizen activists in Defiance and Brecksville launched citizen initiative campaigns to place an ordinance on their respective ballots containing the Move to Amend language. Both collected more than enough signatures. The Defiance initiative, however, missed the deadline to turn in petitions based on incorrect information supplied by their Board of Elections. The Brecksville initiative received a sufficient number of signatures. It was contested, however, by the City of Brecksville. The Cuyahoga County Board of Elections split in their decision on whether to place the initiative on the ballot. The issue will likely end up before the Ohio Supreme Court.

Meanwhile, the Mayor and Council in the Village of Newburgh Heights voted unanimously in August to place the language of the Move to Amend campaign on their ballot this November for voter consideration. The Cuyahoga County Board of Elections lumped this initiative together with the Brecksville citizen initiative in their 2 to 2 ruling. Citizen activists in both communities are confident the court ruling will go their way. Regardless of the outcome, however, the strategy to address fundamental governing “rights” of corporations and money from a wealthy few are finally being seen as credible and necessary.

The second challenge to challenging corporate “rights” involves the passage of local laws or ordinances that directly challenges U.S. Constitutional rights. This strategy, promoted by the Community Environmental Legal Defense Fund (CELDF) out of Pennsylvania, encourages home rule communities to enact local laws uplifting the rights of citizens to protect their “health, safety, and welfare” which takes precedent over any right corporations may possess. The current vehicle promoted by CELDF is a community “Bills of Rights.”

Throughout the summer, citizen activists in Broadview Heights organized an initiative petition affirming the rights of their citizens to pure water, clean air, peaceful enjoyment of home, natural communities, sustainable energy future, and self-government. They declare that people are sovereign and that their rights supersede the rights of corporations. (Go here for a complete description).

The Brecksville citizen activists secured a sufficient number of valid signatures to place their initiative on the ballot. The Bill of Rights is a clear challenge to the notion that corporations have constitutional rights. If passed, it will likely be challenged in court – which will call into question the fundamental issue of who/what has more rights – human beings or corporations (which are creations of the people and the state and, as such, could not exist if not for the state).

While the Move to Amend and CELDF strategies are different, they should be seen as complementary and not competitive. Each has its own unique advantages. In a society that offers consumers 200 (if not 2000) different types of underarm deodorant or shades of blue paint, providing citizens more than one different strategy to take on the fundamental problem of never intended corporate rule and governance seems healthy and necessary.

Citizens are ever more flexing their democratic muscles in sweeping ways — well beyond addressing a single corporate harm, a single corporate abuse or a single corporation.

Challenging corporate rights, be it through the Move to Amend or CELDF approach, is, indeed, the right choice.

MONETARY HISTORY CALENDAR September 3-9

SEPTEMBER 3

2012 – LABOR DAY
The enactment of the National Emergency Employment Defense (NEED) Act, HR 2990, would create 7 million jobs. The jobs would be to repair our nation’s infrastructure. The national debt would not need to be raised. Taxes would not need to be imposed. Funding from any other public program would not have to be shifted. Public creation and circulation of U.S. money is all that would be required. Just as the colonists did when fighting the British. Just as President Lincoln did during the 1860. Just as economists proposed under the “Chicago Plan” during the 1930’s to President Roosevelt to move the nation out of the Great Depression. For more information on the NEED Act, go to http://www.monetary.org 

SEPTEMBER 6

1943- DEATH OF RICHARD MCKENNA, FORMER PRESIDENT, MIDLANDS BANK OF ENGLAND
“I am afraid that the ordinary citizen will not like to be told that the banks can and do create and destroy money.  And they who control the credit of a nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people.”  (From a 1924 speech)

SEPTEMBER 8

1999 – DEATH OF HERBERT STEIN, FORMER CHAIRMAN OF PRESIDENT’S COUNCIL OF ECONOMIC ADVISORS
“If something cannot go on forever, it will stop.”
[Sounds like our current debt-based money system – an unsustainable system which can only continue if more debt is issued, which happens by banks when they issue loans and purchase treasury bonds, bills and notes]

SEPTEMBER 9

1828 – BIRTH OF LEO TOLSTOY, RUSSIAN WRITER AND SOCIAL REFORMER
“Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal, there is no human relation between master and slave. “

1890 – BIRTH OF MARRINER S. ECCLES, FORMER CHAIRMAN AND GOVERNOR OF THE FEDERAL RESERVE SYSTEM
“That is what our money system is. If there were no debts in our money system, there wouldn’t be any money.
—————-

Why this calendar? Many people have questions about the root causes of our economic problems. Some questions involve money, banks and debt. How is money created? Why do banks control its quantity? How has the money system been used to liberate (not often) and oppress (most often) us? And how can the money system be “democratized” to rebuild our economy and society, create jobs and reduce debt?
Our goal is to inform, intrigue and inspire through bite size weekly postings listing important events and quotes from prominent individuals (both past and present) on money, banking and how the money system can help people and the planet. We hope the sharing of bits of buried history will illuminate monetary and banking issues and empower you with others to create real economic and political justice.
This calendar is a project of the Northeast Ohio American Friends Service Committee. Adele Looney, Phyllis Titus, Donna Schall, Leah Davis, Alice Francini and Greg Coleridge helped in its development.
Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, contact monetarycalendar@yahoo.com
  For more information, visit http://www.afsc.net/economiccrisis.html