This is part five of an eleven part paper written by Carl Herman.
Benjamin Franklin (1706-1790) was a Founding Father of the United States and one of the most accomplished inventors and brilliant minds in human history. Among his achievements was contributing to the discovery of how to fund a government without taxes and its successful implementation in the colony of Pennsylvania.
“There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricate, more difficult to acquire in any Degree of Perfection than This, and therefore none more generally neglected. Hence it is, that we every Day find Men in Conversation contending warmly on some Point in Politicks, which, altho’ it may nearly concern them both, neither of them understand any more than they do each other.
Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.” – Benjamin Franklin, A Modest Enquiry into the Nature and Necessity of Paper Currency, 1729.
Although Aristotle clearly wrote that money is a function of law  and not of commodity value, many people were confused how to manage the creation of money. The American colonies had almost no gold or silver, so were driven to fiat currency by necessity. The colony of Pennsylvania would lend money to land owners at 5% interest. The money would provide the essential government service to facilitate trade. Because only the principal was leant, the government could create and spend the interest on public goods and services without taxing their citizens. For an encyclopedic summary:here and here.
The result was stable prices and economic prosperity without direct taxation.
Contemporary economist, Adam Smith, in The Wealth of Nations:
“The government of Pennsylvania, without amassing any [gold or silver], invented a method of lending, not money indeed, but what is equivalent to money to its subjects. [It advanced] to private people at interest, upon [land as collateral], paper bills of credit…made transferable from hand to hand like bank notes, and declared by act of assembly to be legal tender in all payments…[the system] went a considerable way toward defraying the annual expense…of that…government [low taxes]. [Pennsylvania’s] paper currency…is said never to have sunk below the value of gold and silver which was current in the colony before the…issue of paper money.”
In agreement are famed Princeton economist Richard Lester in his book, Monetary Experiments: Early American and Recent Scandinavian, and Stanford’s Hoover Institute’s Senior Fellow Alvin Rabushkain his paper, Representation without taxation. This prosperity continued until the British government ended the colonies’ power to issue its own currency through the Currency Act of 1764. Peter Cooper, born one year after Franklin’s death and colleague of Jefferson’s Secretary of the Treasury Albert Gallatin, wrote:
“After Franklin had explained…to the British Government as the real cause of prosperity, they immediately passed laws, forbidding the payment of taxes in that money. This produced such great inconvenience and misery to the people, that it was the principal cause of the Revolution. A far greater reason for a general uprising, than the Tea and Stamp Act, was the taking away of the paper money.”
From Franklin’s memoirs: “The difficulties for want of cash were accordingly very great, the chief part of the trade being carried on by the extremely inconvenient method of barter; when in 1723 paper-money was first made there, which gave new life to business, promoted greatly the settlement of new lands (by lending small sums to beginners at easy interest, to be repaid on installments) whereby the province has so greatly increased in inhabitants, that the export from hence thither is now more than tenfold what it then was; and by their trade with foreign colonies, they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this country. New York and New Jersey have also increased greatly during the same period, with the use of paper-money; so that it does not appear to be of the ruinous nature ascribed to it.”
“Experience, more prevalent than all the logic in the world, has fully convinced us all, that it (paper money issued directly by government) has been, and is now of the greatest advantages to the country.” – Benjamin Franklin, The American Weekly Mercury, March 27, 1729.
“The utility of this currency became by time and experience so evident as never afterwards to be much disputed.” – Benjamin Franklin, The Autobiography of Benjamin Franklin, page 65.
William Jennings Bryan (1860-1925) was an attorney, one of the nation’s most popular public speakers, and the Democratic Party’s choice for President in three elections: 1896, 1900, and 1908. He served as Secretary of State in the Wilson administration; he resigned in protest to Wilson’s support of the Allies in WW I which he saw as leading to US involvement in a war where national security was not threatened:
Bryan’s political populism centered on American monetary policy. He supported an expansion of the money supply in response to a national depression in the 1890’s by rejecting the gold standard, a limitation on currency based on a fractional reserve of gold holdings. We discussed Peter Cooper’s presidential ambition with the Greenback Party, who campaigned for “greenbacks” to be created directly by the federal government for public projects and jobs. This policy compromised into the “free silver” movement to include silver with gold as a legal fractional backing for money. His powerful stand for monetary reform is clearly expressed in his “Cross of Gold” speech in accepting the Democratic Party nomination for President in 1896, quoted below (click here to listen to Bryan’s reading of the speech 25 years later).
The Wizard of Oz (oz. for ounces of silver), was a political allegory of this history, with Bryan portrayed as the lion with a loud roar but no power. Author Frank Baum, hopeful for the wisdom of monetary reform becoming the nation’s monetary policy, wrote that the lion eventually beheaded the great spider, representing the overreaching financial monopolies of Wall Street. Ellen Brown’s Web of Debt walks readers through the details of the history and Oz allegories, in one of the most-read books on monetary reform (I highly recommend it to understand this trillion dollar issue). Bill Still’s The Secret of Oz is an excellent documentary.
Bryan’s brilliant and concise statement for monetary reform:
“We say in our platform that we believe that the right to coin and issue money is a function of government. We believe it. We believe that it is a part of sovereignty, and can no more with safety be delegated to private individuals than we could afford to delegate to private individuals the power to make penal statutes or levy taxes…Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank, and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of government, and that the banks ought to go out of the governing business… When we have restored the money of the Constitution, all other reform will be possible, but until this is done there is no other reform that can be accomplished.”
– William Jennings Bryan, Cross of Gold Speech, 1896.
- Monetary and credit reform: full-employment, end of debt slavery
- Thomas Edison, Thomas Jefferson on monetary reform
- President Andrew Jackson, Peter Cooper on monetary reform
- NYC Mayor John Hylan, House Banking Committee Chairs on monetary reform
- Benjamin Franklin, William Jennings Bryan on monetary reform
- Charles Lindbergh Sr., 86% of Great Depression economists on monetary reform
- What should the average citizen know about US War Crimes?
- What should the average citizen know about US war history?
- What is the leverage point for Occupy’s victory?
- What does monetary and credit freedom look like?
- My personal history of the 1% choosing to kill a million children each month
Monetary and credit reform is a policy objective to end transfer of trillions of the “99%’’s wealth to an oligarchic “1%.” The US banking collusion only and always co-exists within a larger oligarchy with government for legal protection, and media for public propaganda. This paper presents histories in monetary reform and US government crimes in war suppressed by today’s US corporate media’s history texts and news journalism. When the oligarchy’s voice is professionally exposed as obviously and egregiously lying in omission and commission in claims of central importance of the past and present, government and corporate media loses credibility in an “emperor has no clothes” transformation. Refutation of the oligarchy’s voice with objective and independently verifiable facts, especially in light of current War Crimes and Constitutional destruction, supports our policy goal for monetary and credit reform because the public will seek alternative voices to build a brighter future. To support our goal of upgraded economic policies, we should be open to synergy with ecological and resource-based economic models, and network with Occupy.