MONETARY HISTORY CALENDAR August 10 – 16

lincolngback

AUGUST 10

1863 – BIRTH 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 served to warn 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, US Money vs. Corporations Currency is at http://www.youtube.com/watch?v=q4qQ59w4ML4

1868 – BIRTH OF PAUL WARBURG, US BANKER
Warburg guided the operations of the National Citizens League, an organization formed in 1911 with $5 million in contributions from the big New York banks (including those owned by Rockefeller and J.P Morgan) to establish an “educational fund.”  The fund financed respected university professors to endorse the concept of creating a private central bank, which became the Federal Reserve Bank, created by the 1913 Federal Reserve Act.

1929 – THE FEDERAL RESERVE BEGINS TO TIGHTEN THE MONEY SUPPLY – LEADS TO GREAT DEPRESSION
The Federal Reserve sharply raises the interest rate it charges local banks to borrow money (called the “discount rate”). At the same time, it begins to sell its government securities (remember, the Fed is not part of the federal government, despite its name, but rather a largely private entity controlled by 12 reserve banks which are controlled by banks). These actions were the seeds, which led to the Great Depression – as limited money in circulation prevents business and commercial transactions from occurring.

1930- BIRTH OF GEORGE GOODMAN, AUTHOR, “THE MONEY GAME”
“[T]hose who live by numbers can also perish by them, and it is a terrifying thing to have an adding machine write an epitaph, either way.”

AUGUST 11

1943 – BIRTH OF NICOLAUS TIDEMAN, PROFESSOR OF ECONOMICS, VIRGINIA TECH AND FORMER SENIOR ECONOMIST FOR THE PRESIDENT’S COUNCIL OF ECONOMIC ADVISORS
“Money is what people make sure they have when they want to buy things.  Something works as money when people expect others to accept it as payment.  Sometimes money is a valuable commodity, such as gold, wampum, or packs of cigarettes.  More often, especially these days, money consists of pieces of paper.
The pieces of paper that serve as money have sometimes been issued by governments and sometimes by banks…What gives paper money its value to the general public is the expectation that a party with whom many will have occasion to trade will accept the paper as the basis for crediting the person who presents it.  The crediting can take the form of payment of taxes, payment of loans, payment of religious obligations, or, as with paper money issued by banks and some paper money issued by governments, the crediting can take the form of obliging the issuer to exchange the paper for some specified thing of value…
In those cases in which the crediting takes the form of obliging the issuer to exchange the paper for a specified thing of value, the paper money can be described as the record of a promise to pay a debt on demand, and if that is the only form of money, then an expansion of the money supply requires an expansion of debt.  But other forms of paper money are not debt.  In particular, a paper money that consists of fiat currency issued by a government, good for the payment of taxes but not otherwise guaranteed to be convertible is not debt.”

AUGUST 12

1933 – PUBLISHED REPORT, “CLOSED BANKS AND BANKING REFORM” BY CQ RESEARCHER
“The many bank failures occurring in the United States during 1930, 1931, and 1932, culminating in the closing of all banks on March 6. 1933, and the failure of many to reopen at the termination of the banking holiday caused widespread concern as to the fundamental soundness of the dual banking system and of American banking methods in general. Provision for certain radical changes in banking practice was made by the Glass-Steagall act, passed at the close of the special session of the 73rd Congress. It was generally felt, however, that a more thoroughgoing reform of the whole system was needed. In this connection, the movement toward unification of the state and federal banking systems, with possible federalization of all banks, appears to have been gaining headway. While the views of the administration on the question have not been made known, it is thought likely that the President will recommend enactment of new banking legislation by Congress at the regular session in January, 1934.”
[NOTE: A reform not made was one that was suggested by hundreds of economists of the day — to democratize money creation via what was called “The Chicago Plan,” specifically for the government to create money as an asset (not as debt which is what banks do) and 100% reserve requirement of banks (i.e. banks could only lend money that they actually possessed).

AUGUST 13

1946 – BIRTH OF JANET YELLEN, CHAIR OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
• (2005, speech in San Francisco) – Yellen argued against deflating the housing bubble because – “arguments against trying to deflate a bubble outweigh those in favor of it” and predicted that the housing bubble “could be large enough to feel like a good-sized bump in the road, but the economy would likely be able to absorb the shock”.
• (2010, Financial Crisis Inquiry Commission hearing) “For my own part, I did not see and did not appreciate what the risks were with securitization, the credit ratings agencies, the shadow banking system, the S.I.V.’s — I didn’t see any of that coming until it happened.”
So, what is Ms. Yellen and her colleagues at the Fed today not seeing and won’t “until it happens?”

AUGUST 14

1989 –DEATH OF ROBERT B. ANDERSON, SECRETARY OF TREASURY UNDER PRESIDENT 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.”

AUGUST 15

1769 – BIRTH OF NAPOLEON BONAPARTE
“When a government is dependent upon banks for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financers are without patriotism and without decency; their sole object is gain.”

1971 – PRESIDENT NIXON CLOSES “GOLD WINDOW”
Richard Nixon issues Executive Order 11615 freezing wages and prices. Foreign-held paper dollars are no longer converted for gold, thereby nullifying in an important aspect the Bretton Woods Agreement.

AUGUST 16

PUBLICATION OF “WHY STATES GOING INTO THE BANKING BUSINESS WOULD BE A DISTRACTION, NOT A SOLUTION TO THEIR FISCAL PROBLEMS”, BY JAMIE WALTON
“You don’t solve a problem with more of the problem.
This scheme for states to go into the banking business would only ‘serve to protect’ the status quo.  The ‘proposal’ completely fails to confront the main problem identified by all serious monetary reforms: ‘fractional reserve’ banking.  Instead, it actually endorses and sanctions this vicious and destructive process, by suggesting that State governments engage in it…”
http://www.monetary.org/american-money-scene-5-august-16-2009/2009/08

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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, 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 monetarycalendar@yahoo.com

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