Saturday, August 9, 2008


(Week 2 - Saturday Aug 9)

I can imagine that the line of thought presented over the course of this last week concerning the American experience with money, how it led to the Revolution, and how its lessons are applicable to the problems of the today (particularly those that have to do with the funding of public works), may seem to the reader unfamiliar, to say the least. To bring a greater sense of reality to the discussion, I would reach for the words of prominent voices from our nation's past.

Senator Robert Owen, banker, first chairman of the Senate Committee on Banking and Currency, and widely respected authority on money, explained that when the Rothschild-controlled Bank of England heard of the situation in the Colonies:

"They saw that here was a nation that was ready to be exploited; here was a nation that had been setting up an example that they could issue their own money in place of the money coming through the banks. So the Rothschild Bank caused a bill to be introduced in the English Parliament which provided that no colony of England could issue their own money. They had to use English money. Consequently the Colonies were compelled to discard their script and mortgage themselves to the Bank of England in order to get money. For the first time in the history of the United States our money began to be based on debt."

"Benjamin Franklin stated that in 1 year from that date the streets of the Colonies were filled with unemployed."

Alexander Del Mar (1836-1926), who is considered by many to be the preeminent monetary historian of the 19th century, stated the crux of the matter with great force:

"Lexington and Concord were trivial acts of resistance which chiefly concerned those who took part in them and which might have been forgiven; but the creation and circulation of bills of credit by revolutionary assemblies in Massachusetts and Philadelphia, were the acts of a whole people and coming as they did upon the heels of the strenuous efforts made by the Crown to suppress paper money in America, they constituted acts of defiance so contemptuous and insulting to the Crown that forgiveness was thereafter impossible. After these acts there was but one course for the Crown to pursue and that was, if possible, to suppress and punish these acts of rebellion. There was but one course for the Colonies; to stand by their monetary system. Thus the bills of credit of this era, which ignorance and prejudice have attempted to belittle into the mere instruments of a reckless financial policy, were really the standards of the revolution. They were more than this: they were the Revolution itself."

Finally, perhaps no one stated the matter more prophetically than Thomas Jefferson:

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property, until their children will wake up homeless on the continent their fathers conquered."

I leave the reader with a riddle to ponder: "Why is this quintessentially American debate so conspicuously missing from the public discourse now?"

This rounds out the set of six columns for the week. They were initiated by a first-anniversary looking back at the Minneapolis bridge collapse (and levee failures at New Orleans) to discern why we as a society have somehow not been able to follow through on our widely asserted resolve to never again let the funding of critical public infrastructure lapse. This seeded a discourse that unfolded around the themes of public works, public issuance of money, and the American Revolution.

I will try to pick up on a different line of approach to contemporary preoccupations about money for Monday's column, as the events in the news over the weekend may suggest. The reader is invited to present his or her own burning question(s) and concern(s) to prompt the process.

Thank you for your attentive interest.

Richard Kotlarz

The complete set of columns from this series is posted at the following websites.