1857 — STEAMSHIP ‘CENTRAL AMERICA’ HIT BY HURRICANE, SINKS
In the second day of a hurricane, the ship sprang a huge leak. It sank the next day, drowning over 400 passengers and crew. 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.
2013 – TALK BY ADAIR TURNER, SENIOR FELLOW, INSTITUTE FOR NEW ECONOMIC THINKING, “CREDIT, MONEY AND LEVERAGE”
“Banks create credit, money and purchasing power. That fact is fundamental to macro-economic dynamics in any economy with a complex banking (or shadow banking) system: and fundamental to both the 2007 – 2008 financial crisis and the depth of the post crisis recession.”
1880 – BIRTH OF H. L. MENCKEN, AMERICAN JOURNALIST
“The whole aim of practical politics is to keep the populace in a continual state of alarm (and hence clamorous to be led to safety) by menacing them with an endless series of hobgoblins, all of them imaginary.”
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 The Pennsylvania legislature repealed the Bank’s charter, which was significant since it primarily operated in just three states.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 had 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 fell, unemployment increased and major banks failed since 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.
1321 – DEATH OF DANTE, ITALIAN SCHOLAR AND POET, AUTHOR OF “THE DIVINE COMEDY”
The first portion of the epic poem, The Divine Comedy is called “Inferno,” which contains these words on usury:
“Once more go back a little to the point,”
I said, “where you state usury offends
The divine goodness, and untie the knot.”
“Philosophy, to one who understands,
Points out — and on more than one occasion —
How nature gathers her entire course
“From divine intellect and divine art.
And if you pore over your Physics closely,
You’ll find, not many pages from the start,
“That, when possible, your art follows nature
As a pupil does his master; in effect,
Your art is like the grandchild of our God.
“From art and nature, if you will recall
The opening of Genesis, man is meant
To earn his way and further humankind.
“But still the usurer takes another way:
He scorns nature and her follower, art,
Because he puts his hope in something else.”
“Dante puts the usurers in the lowest sub-circle of the seventh circle of hell, with others whose sins are regarded as doing violence against nature and nature’s God; many people have noted that usurers are placed deeper into hell than violent murderers, violent suicides, blasphemers, and sodomites. Dante regards usurers as perverting art, i.e., productive skill, by means of which we are supposed to produce and create and thereby imitate the goodness of God. Usury is the anti-art: it produces nothing substantial; being just a set of multiplication games with money, and therefore does not really contribute anything to ‘earning one’s way and furthering humankind’. It merely gives the illusion of doing so, and is therefore a sort of mockery of both human reason and divine providence — indeed, a sort of universal violence against neighbor, God, and one’s own reason, an extraordinarily efficient form of violence by which you do the most damage with the least effort.”
2012 – STATEMENT BY DONALD TRUMP, US BUSINESSMAN AND CURRENT REPUBLICAN PARTY PRESIDENTIAL CANDIDATE, ON THE FEDERAL RESERVE’S QUANTITATIVE EASING PROGRAM
“People like me will benefit from this.”
2008 – LEHMAN BROTHER INC FILES FOR CHAPTER 11 BANKRUPTCY PROTECTIONS
Lehman was heavily involved in the subprime housing market. They borrowed substantially against their assets (leveraged) — 30 times the amount of their actual equities. Investment banks like Lehman were not under the same leverage limits as commercial banks, which invited greater risks. The $600 billion filing remains the largest bankruptcy filing in U.S. history.
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
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 “privatize” the creation of money via loans (debt). This is both economic and political madness.
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