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.
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 The Pennsylvania legislature repealed the Bank’s charter, which was significant since it primarily operated in just three states.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.
2008 – LEHMAN BROTHER INC FILES FOR CHAPTER 11 BANKRUPTCY PROTECTION
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.]
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.
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