1913 – US HOUSE OF REPRESENTATIVES PASSES FEDERAL RESERVE ACT
The effort to create a privately controlled (but promoted as publicly controlled and accountable) central bank moved one step closer to reality with passage by the House. Debate now turned to the Senate.
1812 – DEATH OF MAYER AMSCHEL ROTHSCHILD, FOUNDER OF THE FAMILY FINANCIAL DYNASTY
An attributed quote: “Permit me to issue and control the money of a nation, and I care not who makes its laws.”
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.
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 Congress 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
2013 – STATEMENT ON CNBC BY BILLIONAIRE STANLEY DRUKENMILLER ON THE FEDERAL RESERVE
The Federal Reserve isn’t just inflating markets but is shifting a massive amount of wealth from the middle class and poor to the rich, according to billionaire hedge fund manager Stanley Druckenmiller.
In an interview on “Squawk Box,” the founder of Duquesne Capital said the Fed’s policy of quantitative easing was inflating stocks and other assets held by wealthy investors like him. But the price of making the rich richer will be paid by future generations.
“This is fantastic for every rich person,” he said Thursday, a day after the Fed’s stunning decision to delay tightening its monetary policy. “This is the biggest redistribution of wealth from the middle class and the poor to the rich ever.”
“Who owns assets—the rich, the billionaires. You think Warren Buffett hates this stuff? You think I hate this stuff? I had a very good day yesterday.”
Druckenmiller, whose net worth is estimated at more than $2 billion, said that the implication of the Fed’s policy is that the rich will spend their wealth and create jobs—essentially betting on “trickle-down economics.”
“I mean, maybe this trickle-down monetary policy that gives money to billionaires and hopefully we go spend it is going to work,” he said. “But it hasn’t worked for five years.”
1954 – BIRTH OF LLOYD BLANKFELD, CEO AND CHAIRMAN OF GOLDMAN SACHS
“I am merely a banker doing God’s work.”
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 “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 begin engaging in commercial banking activities.
2011 – NATIONAL EMERGENCY EMPLOYMENT DEFENSE (NEED) ACT REINTRODUCED IN CONGRESS BY US REPRESENTATIVE DENNIS KUCINICH (HR 2990)
The bill would shift the private Federal Reserve System to the US Treasury Department, end fractional reserve lending by banking corporations (which permits them to lend out many more times the amount of their deposits) and authorizes the US government (in accordance with Art 1, Sec 8 of the US Constitution) to print US money to repair our nation’s physical and human infrastructure. Money issued in this way by the US government is debt-free and inflation-free vs the financial industry which currently issues the vast majority of our nation’s money as debt. No longer would banking corporations have the license to create our nation’s money. That would become a public function.
2014 – FEAST OF ST. MATTHEW
Matthew 6:12, “And forgive us our debts, as we forgive our debtors” Born in Palestine sometime in the 1st century, St. Matthew was one of Jesus’s 12 apostles and also one of the four Evangelists, according to the Bible. Matthew authored the first Gospel of the Bible’s New Testament, now known as the Gospel of Matthew. Prior to preaching, he worked as a tax collector in Capernaum. Matthew is the patron saint of tax collectors and accountants. The Feast of St. Matthew is annually celebrated on September 21.
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.”
1973 – HENRY KISSINGER SWORN IN AS 56TH US SECRETARY OF STATE
William Engdahl asserts in his introduction to Gods of Money that then-Secretary of State Henry Kissinger, a protégé of the powerful Rockefeller corporate empire, stated: “If you control the oil, you control entire nations; if you control the food, you control the people; if you control the money, you control the entire world.”
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.”
1976 – DEATH OF PAUL DOUGLAS, ECONOMIST, US SENATOR, QUAKER
A prominent University of Chicago economist, Douglas was one of several economists who developed A Program for Monetary Reform in 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 multiple the 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 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 ]
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