1791 – CREATION OF THE FIRST BANK OF THE UNITED STATES
The federal government issued a 20-year charter (very unusual at the time since most corporate charters, or licenses, were issued by states) to create the first national private bank. The bank’s paper money was accepted for taxes. Eighty percent of its shares were privately owned — among these 75% were foreign owned (mostly by the English and Dutch). The bank was modeled on the Bank of England. It’s main proponent, Alexander Hamilton, argued in support: “Suppose that the necessity existed…for obtaining a loan; that a number of individuals came forward and said, we are willing to accommodate the government with this money (which we have or can raise) but in order to do this it is indispensable that we should be incorporated as a bank…and we are obliged on that account to make it a consideration or condition of the loan.” In other words, Hamilton was saying the private/corporate bank would be more than happy to give the government loans if the government grants the private/corporate bank the power to create money! Jefferson, Madison and others opposed it. Jefferson said, “This institution (the Bank of England) is one of the most deadly hostility against the principles of our Constitution…suppose an emergency should occur…an institution like this…in a critical moment might overthrow the government.” The bank had an enormous impact on the economy early on. Within 2 months of its creation, it flooded the market with loans and banknotes and then suddenly called in many of its loans. The result was the first US securities market crash — what became known as the “Panic of 1792” – the first of many panics, recessions and depressions due to the private/corporate control of our money system.
1862 – LEGAL TENDER ACT PASSED
A bill authorizing the issuance of $150 million non interest-bearing United States notes (called at that time “Greenbacks”). Congress would later grant $300 million more in US notes. This was interest free US money. The administration of Republican President Abraham Lincoln wanted to avoid the nation going into debt borrowing money from private/corporate bankers to pay for the Civil War. Greenbacks were not bonds or notes or any other promises to pay “money” at some future time. They were money. Since they were not borrowed, they didn’t add to the national debt. What later made them inflationary was they were used to pay for war – which didn’t produce or add anything productive to the economy to offset the added money supply. The bill contained an “Exception Clause”, which stated that Greenbacks could not be used to pay the interest on the national debt, or to pay taxes, excises or import duties.
1863 – NATIONAL BANKING ACT PASSED
It provided for the national chartering of banks by the federal government. This replaced state charters – many of which contained much more rigid and democratic provisions. The Act in numerous ways standardized banking across the country. The act established National Banking Associations, the office of the Comptroller of the Currency and a system of national chartered banks with control over all of them coming from Washington. The new banks were given virtually tax-free status. In doing so, it entrenched what some have called “structural fraud” of the banking system – creating money out of thin air and charting interest on it.
1913 – CONCLUSION OF PUJO COMMITTEE HEARINGS IN CONGRESS
A committee of Congress, headed by House Banking and Currency Committee Chair Arsene Pujo, investigated the Wall Street banking “Money Trust from 1912-1913. The Committee’s report identified a financial network of Wall Street bankers connected by 341 interlocking directorships held in 112 corporations valued at more than $22 billion connected to the Morgan and Rockefeller empires, which exerted identifiable control over the US monetary system and economy.
Paradoxically, the report resulted in the push for a Federal Reserve Act, which, of course, legitimized and shielded control of the money system and economy by the financial elites.
1844 – DEATH OF NICHOLAS BIDDLE, PRESIDENT OF SECOND NATIONAL BANK
Biddle threatened to cause a depression if President Andrew Jackson did not re-charter the Bank. The privately owned Second Bank was chartered in 1816. President Jackson did not sign the bill to renew the charter. “This worthy President thinks that … he is to have his way with the Bank. He is mistaken…[opposition] can only be broken by the actual conviction of exiting distress in the community… Our only safety is in pursuing a steady course of firm restriction [of the money supply] – and I have no doubt that such a course will ultimately lead to restoration of the currency and the re-charter of the Bank.” The result of the contraction of the money supply was a financial panic followed by a deep depression. (Edward Kaplan, The Bank of the United States and the American Economy)
1867 – BIRTH OF IRVING FISHER, MATHEMATICAL ECONOMIST
“If two parties instead of being a bank and an individual, were an individual and an individual, they could not inflate the circulating medium by loan transaction; for the simple reason that the lender could not lend what he didn’t have as banks can do … Only commercial banks and trust companies can lend money that they manufacture by lending it.” 100% Money (1935)
2015 – ONLINE PUBLICATION OF “ENDING HOMELESSNESS SAVE MONEY; MONETARY REFORM AND PUBLIC BANKS SHOULD FUND THIS NOW” BY CARL HERMAN
“Given that all 50+ professional studies conclude we save money by ending homelessness, all US communities should enact policies to do so.
Given that all communities have problems with funding public programs, even those that save money in the long-term like infrastructure and education, we should also enact monetary reform…”
2012 – SEMIANNUAL TESTIMONY OF FEDERAL RESERVE CHAIRMAN BEN BERNANKE BEFORE COMMITTEE ON FINANCIAL SERVICES OF THE U.S. HOUSE OF REPRESENTATIVES
“The recovery of the U.S. economy continues, but the pace of expansion has been uneven and modest by historical standards…
“The members of the Board and the presidents of the Federal Reserve Banks recently projected that economic activity in 2012 will expand at or somewhat above the pace registered in the second half of last year.
“The [Federal Open Market] Committee modified its policies regarding the Federal Reserve’s holdings of securities…The Committee reviews the size and composition of its securities holdings regularly and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in the context of price stability.”
[Note: The Fed certainly did “adjust” their holdings of securities (i.e. government debt, as in Treasury bonds, bills and notes) in response to the economy’s uneven recovery. A few months after this testimony, the Fed launched a third round of Quantitative Easing (QE) — creating and spending $40 billion per month to purchase toxic mortgage backed securities and added tens of billions more to purchase U.S. Treasury securities. This propped up Wall Street balance sheets, but did little to help Main Street or the side and back streets of our country — since the decision of how this money “created out of thin air” was being spent was decided by an entity (the Fed) largely beholden to banking corporations. If, instead, the money was created by a public agency and publicly decided how it was to be spent, then there would be public accountability — with the greater likelihood that the funds would benefit the public.]
1781 – RATIFICATION OF ARTICLES OF CONFEDERATION, THE FIRST US CONSTITUTION
“The Articles of Confederation and Perpetual Union” of the thirteen States was ratified and in force on this date. The Articles was the first Constitution of the United States, preceding our current constitution by several years. The Articles granted the Federal Government the authority to issue money and determine its value if nine states agreed.
1810 – BIRTH OF POPE LEO XIII
“On the one hand there is the party which holds the power because it holds the wealth, which has in its grasp all labor and all trade, which manipulates for its own benefit and its own purposes all the sources of supply, and which is powerfully represented in the councils of State itself. On the other side there is the needy and powerless multitude, sore and suffering. Rapacious usury, which, although more than once condemned by the Church, is nevertheless under a different form but with the same guilt, still practiced by avaricious and grasping men…so that a small number of very rich men have been able to lay upon the masses of the poor a yoke little better than slavery itself.” — Pope Leo XIII statement on usury, 1891
1876 — US SILVER COMMISSION (TO STUDY THE CRIME OF 73) REPORT RELEASED ON WHAT CAUSED THE 1873 DEPRESSION
The Commission concluded that the depression was caused by a reduction of the money supply. They compared the 1873 Depression to the deflation of the Roman era. “The disaster of the Dark Ages was caused by decreasing money and falling prices… Without money, civilization could not have had a beginning, and with a diminishing supply, it must languish and unless relieved, finally perish. Falling prices and misery and destitution are inseparable companions. It is universally conceded that falling prices result from the contraction of the money volume.” The Report suggested that the Dark Ages ended when paper money was issued, “It is suggestive coincidence that the first glimmer of light only came with the invention of bills of exchange and paper substitutes…”
1863 – LEGAL TENDER ACT PASSED
Congress authorizes the Government to print no more than $150,000 million Greenbacks to pay for the Civil War. This was interest-free and debt-free money. The Lincoln Administration did not want to borrow money from corporate banks to pay for the war.
1865 – NATIONAL CURRENCY ACT AMENDED BY CONGRESS
The act amended the National Currency Act of 1864. State banks were no longer permitted to issue bank notes (currency).
1884 – JULLIARD V. GREENMAN (110 U.S. 421) SUPREME COURT DECISION
US Supreme Court ruling upholding the legality of US Government issued money (Greenbacks) created following the Legal Tender Acts of 1862 and 1863. The Court ruled that the government possessed the authority under the Constitution to issue a national currency and that that currency could be used to pay debts.
2003 – WARREN BUFFET, SECOND RICHEST PERSON ON EARTH, IN HIS ANNUAL LETTER TO BERKSHIRE HATHWAY SHAREHOLDERS
“Derivatives are financial weapons of mass destruction.”
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 the original 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. It is currently updated by Greg Coleridge. Please forward this to others and encourage them to subscribe. To subscribe/unsubscribe or to comment on any entry, email email@example.com
To see the calendar year-to-date, go to https://monetarycalendar.wordpress.com/
A second historical calendar, the REAL Democracy History Calendar, in many ways complements this calendar. For information, go to https://realdemocracyhistorycalendar.wordpress.com/about/