1938 – BIRTH OF HERMAN DALY, ECONOMIST, AUTHOR OF “STEADY STATE ECONOMICS”
“If our present banking system, in addition to fraudulent and corrupt, also seems ‘screwy’ to you, it should. Why should money, a public utility (serving the public as medium of exchange, store of value, and unit of account), be largely the by-product of private lending and borrowing?…Why should the public pay interest to the private banking sector to provide a medium of exchange that the government can provide at little or no cost? Why should seigniorage (profit to the issuer of fiat money) go largely to the private sector rather than entirely to the government (the commonwealth)?
Is there not a better away? Yes, there is. We need not go back to the gold standard. Keep fiat money, but move from fractional reserve banking to a system of 100% reserve requirement…Banks would no longer be able to live the alchemist’s dream by creating money out of nothing and lending it at interest.”
1995 – PAPERBACK PUBLICATION OF “THE CHICAGO PLAN & NEW DEAL BANKING REFORM” BY RONNIE PHILLIPS
This work presents a comprehensive history and evaluation of the role of the 100 percent reserve plan in the banking legislation of the New Deal reform era from its inception in 1933 to its re-emergence in the current financial reform debate in the US.
1864 – PASSAGE OF NATIONAL BANK ACT
This Act superseded the National Bank Act of 1863. Both Acts were pushed by bankers and their supporters to undercut Greenbacks. A system of nationally chartered, private/corporate banks was established and expanded. These new national banks were provided with virtually tax-free status and subsidized through purchasing of government bonds with discounted Greenbacks. These banks were permitted to then create “US Bank Notes” (debt-based money) which entered the money supply – to be used in payment of taxes and duties only. This system enriched banks and worked to wean the US away from Greenbacks (debt free money). The Act limited the issuance of Greenbacks to $300 million
1910 – BIRTH OF ROBERT B. ANDERSON, SECRETARY OF THE TREASURY UNDER PRESIDENT DWIGHT D. EISENHOWER
“When a bank makes a loan it simply adds to the borrowers’ deposit account in the bank by the amount of the loan. The money is not taken from anyone else’s deposit; it was not previously paid in to the bank by anyone. It’s new money, created by the bank for the use of the borrower.”
1883 – BIRTH OF JOHN MAYNARD KEYNES, ECONOMIST
“Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some…As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
2013 – STATEMENT BY POPE FRANCIS
“Man is not in charge today, money is in charge, money rules. God our Father did not give the task of caring for the earth to money, but to us, to men and women: we have this task! Instead, men and women are sacrificed to the idols of profit and consumption: it is the “culture of waste.”
1934 – CHICAGO PLAN INTRODUCED IN THE US CONGRESS
The “Chicago Plan” was a proposal developed by several prominent economists directed at President Roosevelt to end the Great Depression. The Plan was signed by 157 academic economists; another 40 approved it with reservations. Main features: 1. Only the government would create money. 2. The Plan separated the loan-making function, which can belong in private banks, from the money-creation function, which belongs in government. 3. The proposal recognized the distinction between money and credit. Senator Bronson Cutting (R, NM) introduced The Plan in Congress (S. 3744). In several respects, it was the precursor to the National Emergency Employment Act (HR 6550) introduced by Rep. Dennis Kucinich in 2010, and reintroduced as HR 2990 in 2011.
2013 – PUBLISHED ARTICLE, “THE WAY MONEY IS CREATED IS AT THE ROOT OF THE ENVIRONMENTAL AND ECONOMIC CRISIS” BY BRUCE NIXON
“Do you know how our money is created? Most people don’t…
97% of our money is created by commercial banks when they make loans, i.e. interest bearing debt…Only 3% is created in the form of notes and coins. Thus the profits of creating money go to the commercial banks rather than the public coffers…
The current way of creating money gives the big banks enormous power…It means that the commercial banks, not our government, control one of the key levers of our economy. So it is one of the ways we let big banks subvert democracy…
The way money is created is at the root of the environmental and economic crisis.
Firstly, it drives unsustainable growth and consumption. Corporations must produce and sell more to pay interest and repay loans. Easy credit encourages more and more unsustainable consumption.
Secondly, this way of creating money increases the cost of everything and fuels the nation’s escalating debt…
We are encouraged to worship great god growth (GDP) rather than the creation of wellbeing.
Meanwhile millions of people suffer unemployment and needless austerity through so-called “Neo-Liberal” policies which have never worked…
It does not have to be this way…
There is a growing realisation that fresh ideas are needed if these crises are to be avoided…
Under proposed monetary reforms, commercial banks would be prohibited from creating money. That would be the sole responsibility of national reserve banks: to provide the money supply required for national objectives, decided by democratically elected government. Meanwhile, commercial banks would continue to fulfill their proper role of providing both the traditional bank services that individuals and businesses require and investment services…
Ordinary people, so-called, know that something is wrong; it’s up to us to inform ourselves and demand radical reform. Otherwise governments will continue with fixes that won’t work rather than the radical change that is needed.”
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, Deb Jose 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, email firstname.lastname@example.org