MONETARY HISTORY CALENDAR: October 13 - 19
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Greg Coleridge
Oct 13, 2019, 8:58:22 AM10/13/19
to The American Monetary Institute
MONETARY HISTORY CALENDAR
October 13 - 19
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OCTOBER 13
1879 – DEATH OF HENRY CAREY, CHIEF ECONOMIC ADVISOR TO PRESIDENT ABRAHAM LINCOLN
Carey was a proponent in the Lincoln Administration of issuing debt-free US money, Greenbacks. “The ‘greenback’ has fallen on the country as the dew falls, bringing with it good to all and doing injury to none.”
https://quod.lib.umich.edu/m/moa/aeu5158.0001.001/154?rgn=full+text;view=image;q1=greenback
OCTOBER 14
1644 – BIRTH OF WILLIAM PENN, EARLY QUAKER, FOUNDER OF THE PROVINCE OF PENNSYLVANIA – THE ENGLISH NORTH AMERICAN COLONY (FUTURE COMMONWEALTH OF PENNSYLVANIA)
Penn’s colony becomes one of the first to issue its own currency in 1723 as a means to become more economically independent from the British crown. The money backed by peoples' land assets, not by gold or silver. Benjamin Franklin, who in 1731 secured the contract to print Pennsylvania’s money, noted that after the colonial legislature first issued paper money, economic conditions in the colony improved – as measured by internal trade, employment, new construction and number of inhabitants.
2008 – US TAXPAYERS BAILS OUT NINE US BANKS
US injects $250 billion of $700 billion available in public money from the Emergency Economic Stabilization Act into the US banking system. The US takes an equity position in banks that choose to participate in the program in exchange for certain restrictions such as executive compensation. Nine banks agreed to participate in the program: 1) Bank of America, 2) JPMorgan Chase, 3) Wells Fargo, 4) Citigroup, 5) Merrill Lynch, 6) Goldman Sachs, 7) Morgan Stanley, 8) Bank of New York Mellon and 9) State Street.
OCTOBER 15
1908 – BIRTH OF JOHN KENNETH GALBRAITH, U.S. ECONOMIST
“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”
Source: ‘Money: Whence it came, where it went’ (1975)
1982 – U.S. CONGRESS PASSES GARN - ST. GERMAIN DEPOSITORY INSTITUTIONS ACT
The act deregulated savings and loan associations and allowed banks to provide adjustable rate mortgage loans. Many believe it contributed to the savings and loan crisis of the late 1980s.
2007 – PUBLICATION OF "LYCURGUS: LAWGIVER OF SPARTA" BY LLOYD DULHAIME
Lycurgus was a monetary reformer and leader of the military city-state of Sparta around 700 BC. He banned gold or silver money, replacing it, instead, with money made of iron dipped in vinegar to make it brittle and useless as iron. Lycurgus understood the nature of money -- not as a source of wealth (which can be gold, silver, land, diamonds, etc.) but rather anything affirmed by government as currency to exchange for good and services of a society. It's value was not as a commodity. http://www.duhaime.org/LawMuseum/LawArticle-189/700-BC--Lycurgus-Lawgiver-of-Sparta.aspx
OCTOBER 16
1962 - BIRTH OF MICHAEL KUMHOF, GERMAN ECONOMIST AND CO-AUTHOR OF “THE CHICAGO PLAN REVISITED,”
From the paper:
"At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy."
OCTOBER 17
1785 – FIRST GATHERING OF DELEGATES OF THE COMMONWEALTH OF VIRGINIA
Private bank notes are barred from circulation following the passage of a law by the General Assembly of the Commonwealth of Virginia. It was unlawful "for any person to offer in payment a private bank bill or note for money."
2014 – TALK BY YVES MERSCH, MEMBER OF THE EXECUTIVE BOARD OF THE EUROPEAN CENTRAL BANK AT CORPORATE CREDIT CONFERENCE ON MONETARY POLICY AND ECONOMIC INEQUALITY
"More generally, inequality is of interest to central banking discussions because monetary policy itself has distributional consequences which in turn influence the monetary transmission mechanism…For example, by boosting – first – aggregate demand and – second – employment, monetary easing could reduce economic disparities; at the same time, if low interest rates boost the prices of financial assets while punishing savings deposits, they could lead to widening inequality.
Note: US monetary policy has produced the later – which has contributed to the substantial widening of inequality.
OCTOBER 18
1790 - BIRTH OF EDWARD KELLOGG, BUSINESSMAN AND ECONOMIST. HIS IDEAS INFLUENCED THE POLICIES OF THE POPULIST AND GREENBACK PARTIES
"Legal value belongs to anything which represents actual value, or capital. Its existence depends upon actual value. The worth of things of legal value depends upon their capability to be exchanged for things of actual value." Since money is our monetary system is created as debt, the "legal value" of money includes both the principal debt and interest -- which exceeds the "actual value" of a nation's real wealth or claims on collateral at any point in time. The only means to close this gap and cover interest payments is to create additional collateral (goods and services) via economic growth. Of course, this additional debt-based money used to pay the previous interest has its own interest. Thus the downward debt cycle never ends until it collapses."
1931 – DEATH OF THOMAS EDISON, U.S. INVENTOR
This is one of the best statements ever on the ease and legitimacy of the government creating its own money.
“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good... If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency… instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?”
OCTOBER 19
1987 – U.S. STOCK MARKET CRASH
Known as Black Monday, stock markets around the world crashed. The Dow Jones average dropped by 508 points. It was the largest one-day percentage decline in Dow Jones history.
2004 – QUOTE BY ALAN GREENSPAN, CHAIRMAN OF THE FEDERAL RESERVE
His comments on subprime lending…
"Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities."
Lenders began lending to those who they knew would be unable to pay back mortgages. They engaged in riskier and riskier loans. The entire system eventually collapsed. US taxpayers bailed these lending financial corporations out. Homeowners who were duped into signing contracts with hidden fees and adjustable rate mortgage loans received little federal assistance.
-----------------------
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 monetary...@yahoo.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/
October 13 - 19
-----------------------
OCTOBER 13
1879 – DEATH OF HENRY CAREY, CHIEF ECONOMIC ADVISOR TO PRESIDENT ABRAHAM LINCOLN
Carey was a proponent in the Lincoln Administration of issuing debt-free US money, Greenbacks. “The ‘greenback’ has fallen on the country as the dew falls, bringing with it good to all and doing injury to none.”
https://quod.lib.umich.edu/m/moa/aeu5158.0001.001/154?rgn=full+text;view=image;q1=greenback
OCTOBER 14
1644 – BIRTH OF WILLIAM PENN, EARLY QUAKER, FOUNDER OF THE PROVINCE OF PENNSYLVANIA – THE ENGLISH NORTH AMERICAN COLONY (FUTURE COMMONWEALTH OF PENNSYLVANIA)
Penn’s colony becomes one of the first to issue its own currency in 1723 as a means to become more economically independent from the British crown. The money backed by peoples' land assets, not by gold or silver. Benjamin Franklin, who in 1731 secured the contract to print Pennsylvania’s money, noted that after the colonial legislature first issued paper money, economic conditions in the colony improved – as measured by internal trade, employment, new construction and number of inhabitants.
2008 – US TAXPAYERS BAILS OUT NINE US BANKS
US injects $250 billion of $700 billion available in public money from the Emergency Economic Stabilization Act into the US banking system. The US takes an equity position in banks that choose to participate in the program in exchange for certain restrictions such as executive compensation. Nine banks agreed to participate in the program: 1) Bank of America, 2) JPMorgan Chase, 3) Wells Fargo, 4) Citigroup, 5) Merrill Lynch, 6) Goldman Sachs, 7) Morgan Stanley, 8) Bank of New York Mellon and 9) State Street.
OCTOBER 15
1908 – BIRTH OF JOHN KENNETH GALBRAITH, U.S. ECONOMIST
“The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent.”
Source: ‘Money: Whence it came, where it went’ (1975)
1982 – U.S. CONGRESS PASSES GARN - ST. GERMAIN DEPOSITORY INSTITUTIONS ACT
The act deregulated savings and loan associations and allowed banks to provide adjustable rate mortgage loans. Many believe it contributed to the savings and loan crisis of the late 1980s.
2007 – PUBLICATION OF "LYCURGUS: LAWGIVER OF SPARTA" BY LLOYD DULHAIME
Lycurgus was a monetary reformer and leader of the military city-state of Sparta around 700 BC. He banned gold or silver money, replacing it, instead, with money made of iron dipped in vinegar to make it brittle and useless as iron. Lycurgus understood the nature of money -- not as a source of wealth (which can be gold, silver, land, diamonds, etc.) but rather anything affirmed by government as currency to exchange for good and services of a society. It's value was not as a commodity. http://www.duhaime.org/LawMuseum/LawArticle-189/700-BC--Lycurgus-Lawgiver-of-Sparta.aspx
OCTOBER 16
1962 - BIRTH OF MICHAEL KUMHOF, GERMAN ECONOMIST AND CO-AUTHOR OF “THE CHICAGO PLAN REVISITED,”
From the paper:
"At the height of the Great Depression a number of leading U.S. economists advanced a proposal for monetary reform that became known as the Chicago Plan. It envisaged the separation of the monetary and credit functions of the banking system, by requiring 100% reserve backing for deposits. Irving Fisher (1936) claimed the following advantages for this plan: (1) Much better control of a major source of business cycle fluctuations, sudden increases and contractions of bank credit and of the supply of bank-created money. (2) Complete elimination of bank runs. (3) Dramatic reduction of the (net) public debt. (4) Dramatic reduction of private debt, as money creation no longer requires simultaneous debt creation. We study these claims by embedding a comprehensive and carefully calibrated model of the banking system in a DSGE model of the U.S. economy. We find support for all four of Fisher's claims. Furthermore, output gains approach 10 percent, and steady state inflation can drop to zero without posing problems for the conduct of monetary policy."
OCTOBER 17
1785 – FIRST GATHERING OF DELEGATES OF THE COMMONWEALTH OF VIRGINIA
Private bank notes are barred from circulation following the passage of a law by the General Assembly of the Commonwealth of Virginia. It was unlawful "for any person to offer in payment a private bank bill or note for money."
2014 – TALK BY YVES MERSCH, MEMBER OF THE EXECUTIVE BOARD OF THE EUROPEAN CENTRAL BANK AT CORPORATE CREDIT CONFERENCE ON MONETARY POLICY AND ECONOMIC INEQUALITY
"More generally, inequality is of interest to central banking discussions because monetary policy itself has distributional consequences which in turn influence the monetary transmission mechanism…For example, by boosting – first – aggregate demand and – second – employment, monetary easing could reduce economic disparities; at the same time, if low interest rates boost the prices of financial assets while punishing savings deposits, they could lead to widening inequality.
Note: US monetary policy has produced the later – which has contributed to the substantial widening of inequality.
OCTOBER 18
1790 - BIRTH OF EDWARD KELLOGG, BUSINESSMAN AND ECONOMIST. HIS IDEAS INFLUENCED THE POLICIES OF THE POPULIST AND GREENBACK PARTIES
"Legal value belongs to anything which represents actual value, or capital. Its existence depends upon actual value. The worth of things of legal value depends upon their capability to be exchanged for things of actual value." Since money is our monetary system is created as debt, the "legal value" of money includes both the principal debt and interest -- which exceeds the "actual value" of a nation's real wealth or claims on collateral at any point in time. The only means to close this gap and cover interest payments is to create additional collateral (goods and services) via economic growth. Of course, this additional debt-based money used to pay the previous interest has its own interest. Thus the downward debt cycle never ends until it collapses."
1931 – DEATH OF THOMAS EDISON, U.S. INVENTOR
This is one of the best statements ever on the ease and legitimacy of the government creating its own money.
“If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good... If the Government issues bonds, the brokers will sell them. The bonds will be negotiable; they will be considered as gilt edged paper. Why? Because the government is behind them, but who is behind the Government? The people. Therefore it is the people who constitute the basis of Government credit. Why then cannot the people have the benefit of their own gilt-edged credit by receiving non-interest bearing currency… instead of the bankers receiving the benefit of the people’s credit in interest-bearing bonds?”
OCTOBER 19
1987 – U.S. STOCK MARKET CRASH
Known as Black Monday, stock markets around the world crashed. The Dow Jones average dropped by 508 points. It was the largest one-day percentage decline in Dow Jones history.
2004 – QUOTE BY ALAN GREENSPAN, CHAIRMAN OF THE FEDERAL RESERVE
His comments on subprime lending…
"Improvements in lending practices driven by information technology have enabled lenders to reach out to households with previously unrecognized borrowing capacities."
Lenders began lending to those who they knew would be unable to pay back mortgages. They engaged in riskier and riskier loans. The entire system eventually collapsed. US taxpayers bailed these lending financial corporations out. Homeowners who were duped into signing contracts with hidden fees and adjustable rate mortgage loans received little federal assistance.
-----------------------
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 monetary...@yahoo.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/
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