JanuaryAugust 20092009 http://www.poclad.org

A Call to Democratize Money Part I by Greg Coleridge

Since its inception, POCLAD has looked privileged few and their business But "monetary" policy is mysterious, at problems, issues and solutions a bit corporations were usurping the power of secret and confusing. We don't teach what differently than many others. When our sovereignty, of decision-making authority it is or its critical importance. We don't collective began a decade and a half ago, in one pivotal arena - with profoundly advocate and lobby for just and we activists were frustrated that undemocratic, unjust, and violent democratic changes. We don't organize conditions on all fronts were rapidly consequences. That arena was, and is, the social movements around it. We know so worsening despite heroic efforts by creation of money. little about it we don't even know the right citizens and social movements over time. questions to ask. We felt that "one at a time" campaigns The privatization or corporatization of waged against a particular environmental money is not simply one more single- Historical struggle over money creation threat, economic harm, or corporate "bad issue assault on the right of citizens to apple" were inadequate in the face of self-rule. Its profound impacts on Monetary historian Stephen Zarlenga, corporations with constitutional rights economic and ecological systems are as author of The Lost Science of Money, says permitting them to govern. consequential as those wrought by the story of money is also the story of corporate constitutional rights and power with secular authority of all Laws and constitutions needed changing. demand its separate understanding, societies defined mostly through their Corporations should not be considered analysis, and prescription. monetary and banking systems.1 Two "persons" under the law, a consequence of major, interrelated questions have the Santa Clara v Southern Pacific Huh! dominated the history of money: Supreme Court decision (1886) that 1. Should money have intrinsic value bestowed 14th Amendment equal This is the typical response when one (like gold or silver, or at least be backed protection rights on the corporate form raises the issue of "monetary" policy. by them) or should it be "fiat" - anything and eventually brought it 1st, 4th, 5th and An astonishing lack of awareness exists in that becomes money once declared by a other Bill of Rights protections. our nation as a whole, including among government to be legal tender? most social change activists, on questions 2. Should the creation of money be We believed that the issue of corporate of money and its creation. What is controlled by governments or by private personhood was one element of the money? What are its purposes? Where entities? struggle between public authority and does it come from? How does the volume private power, between democratic in circulation affect our economy? Should Ancient societies that first advanced decision-making on issues affecting it be publicly controlled or left to the "free beyond simple barter used grains, animals people's lives, communities, and the market?" How does its creation relate to and tools as currencies. Mediterranean natural world vs. decisions made by a few self-governance? societies between 1500 BC and 1000 BC privileged, propertied individuals and shifted from cattle to gold as currency. their business corporations. Many citizens and activists spend a great deal of time educating, advocating, Religious temples accumulated a large Self-rule and self-determination have been lobbying, and organizing on matters of proportion of gold over time from our beacons; the right to decide about our "fiscal" policy - how and where to spend donations, bequests and fees. It was the food and forests, about water quality and tax dollars. We devise all sorts of ways to Greek temples that first "monetized" gold energy supplies, about our elections, make our local, state, and federal budgets - issuing a fixed amount equivalent to one health care, education, DNA, airwaves, more sane and humane as we work to shift cow. Since they held the majority of the and foreign policy our democratic quest. funds from militarism and corporate gold supply, the temples created an instant subsidies to social and economic justice value for their new "money" by accepting Centuries before corporate "personhood" programs. it for their array of services (food, land, rights, even the US Constitution, a storage, etc.). Money became as much a source of power and control as a basis for religious sources included Popes who what puppet is placed upon the throne of economics.2 made loans until the Church enforced a England to rule the Empire on which the ban on usury and Jewish moneylenders. sun never sets. The man who controls The Chinese in the east and Greek city- The Knights Templar, formed in the 12th Britain's money supply controls the states in the west were the first to issue century during the first crusade, were a British Empire, and I control the British metal (gold and silver) coins as money. secretive high-powered group who money supply."8 Their value was determined by the state - eventually ran the depository of the separate from the metal's worth as a French treasury, made loans to the French Banks (then and now) amassed commodity. The Spartan leader, and English crowns, and became so tremendous power, in part by literally Lycurgus, was the first to issue fiat money economically powerful that their charter creating money out of thin air as debt - in the 8th century BC. It was made of was dissolved and members arrested on crediting on their books loans provided iron discs without any intrinsic value. orders of King Philip of France.6 well in excess of the amount in their Other Greek city-states and Rome's early vaults. The standard ratio was 10:1, but leaders (using bronze) followed suit. Banks arose first in Catalonian Spain and sometimes far greater. This "fractional Aristotle declared, "...Money exists not by Genoa around 1200 AD. Catalonian reserve banking" scheme meant that for nature but by law."3 banking law kept moneylenders on a short every unit of gold (today it's paper cash) leash: "No moneychanger who may fail, in their possession, they could loan out 10 For more than 1200 years, "coining gold and none who has recently failed or in times or more in paper checks. When the was regarded as the exclusive prerogative times past failed, shall again keep a bank principle, plus interest, was returned, that of the supreme sovereign" by the Roman or hold any office under the Crown... amount became the new floor. The Empire. "Infringements upon this power... Until he shall have satisfied all demands, scheme enriched banks and bankers at the were met with death or warfare."4 he shall be detailed on a diet of bread and expense of people... and nations, creating 4Creating money was not simply creating water." Punishment for bankruptcy was what Ellen Hodgson Brown calls a "web tokens of exchange but was a sign of clear-cut. "They shall be beheaded and of debt." It also usurped sovereignty. "In ultimate sovereignty. their property shall be sold for the many ways this was a monetary power satisfaction of their creditors by the greater than the King's control over the Venice stamped leather and used it for Court."7 mint. This bank money was a more true money in the 12th century to pay soldiers. fiat money form and further removed After the Caesars fell in 1204, local rulers Venetian banks were started to provide from crude barter than the "precious throughout Europe began minting their loans to the government following its metal" coins. But the bankers were own money. That process became most involvement in three Crusades. Large usurping a power that derives from and centralized in England by the Crown and banks, connected to particular families, belongs to society, and using it for affirmed by the courts. The Mixt Moneys arose in Italy, Germany, and Holland. A personal benefit."9 legal case in 1604 concluded: "The few public banks were formed, most sovereign, or those licensed by him, has notably in Amsterdam, where all profits The other source of financial power was the authority to create the money of his belonged to the city, sending an unspoken basing money creation (whether publicly dominions, and it is treason for any other message to private interests to focus on or privately issued) on gold. Whoever to do so." Coinage was minted, as was a commerce and industry and not money- held gold held power. If only so much kind of fiat money by Charles II in 1667 changing. money could be issued based on the to pay for state expenses, including the amount of gold in their possession, there Dutch War. The Bank of England, chartered in 1694, were insufficient funds available to despite its name, sought to concentrate facilitate trade and commerce. Recessions Most of the history of money creation is private financial power into few hands. Its and depressions may, and did result, unknown. Political economist and creation followed intense pressure from especially when banking corporations historian Alexander Del Mar affirms, "Of financial interests and the British East hoarded gold or silver. all the elements of political economy, India Company, passage of the Free money is the chiefest; of all the Coinage Act of 1666 overturning royal The US Story: Revolution through Civil institutions of money, the right to create it sovereignty over money, nullification of War is the most important; yet not a word the Mixt Money case, and contrived concerning this once sacred right by the commercial disasters and foreign wars (a The US has been a monetary laboratory state is to be found in any of the similar rationale in countless other since the beginning. economists."5 nations) that forced the state to seek private funds. Opposition to the bank The American colonies were a utopian Private interests controlling money and its came from those inside and outside of experiment with individual colonies creation have been numerous, diverse, and government who felt it would become the issuing and exchanging paper money powerful throughout history. In addition bank of the state but not controlled by it. since English pounds were in short to the aforementioned Greek temples, Nathan Rothschild declared, "I care not supply. Colonial money, initiated by Massachusetts, wasn't backed by gold or them will deprive the people of all the Bureau of Mines and Western silver, only by the "full faith and credit" of property, until their children will wake up territorial governments; facilitate Land the government - fiat money. Benjamin homeless on the continent their fathers Grant Colleges; support scientific research Franklin, considered the "father of paper occupied.13 When the bank charter was and the reorganization of the Judicial money" and responsible in part for the not renewed, it was discovered that system.17 The $400 million issued, if economic success of Quaker-led foreigners, mostly English and Dutch, borrowed from private banks, would have Pennsylvania, commented: "The riches of owned 72% of the bank's shares. Jefferson cost the government $4 billion in interest. a country are to be valued by the quantity called for creating a publicly owned It also provided government the authority of labor its inhabitants are able to national bank that could issue its own to decide where money would be spent purchase and not by the quantity of gold money. rather than pleading with corporate banks and silver they possess.10 The colonies for loans. remained free of British bankers with their Nathan Rothschild reportedly threatened =+=+=+=+=+= gold and interest, allowing their in 1811, "Either the application for Part II will complete the US historical governments to be financed without renewal of the Charter is granted, or the story from the Populist era, through taxing the public. They both lent and United States will find itself in a most creation of the Federal Reserve, and US spent money into circulation for essential disastrous war."14 The next year, 1812, the depression to the present time of bank services, which prevented inflation.11 US was at war with England, leading to bailouts, US indebtedness, and financial more debt and inflation - the consequence control of the state. It will also address King George outlawed colonial money in of virtually all wars when money is specific means to "democratize" money 1751. With only British money in borrowed from private banks. This led to and, by doing so, "democratize" circulation, the economy and people the charter of the Second Bank of the governance and address the massive suffered. Franklin and others claimed this United States, another corporate central economic and environmental problems we was the real reason for the Revolution. bank - shifting the power to create money, face. Finally, it will speak to the need The first act of the Continental Congress once more, into private hands. (and steps required) for a national was to issue its own paper scrip, the movement to democratize money. Continental - IOUs to be redeemed for Andrew Jackson supported public creation 12 coinage later. The revolutionaries won of money: "If Congress has the right their war against the major superpower of under the Constitution to issue paper the day financed by their own money and money, it was given them to be used by Notes without taxing the population. The themselves, not to be delegated to 1 Zarlenga, Stephen, The Lost Science of 15 inflation associated with the Continental individuals or to corporations." He Money: The Mythology of Money-The was due in large part to British economic vetoed a bill to re-charter Second National Story of Power, American Monetary warfare of flooding the colonies with Bank, 80% of which was privately owned, Institute, New York: Valatie Press, 2002 16 massive amounts of counterfeit calling it "...a den of vipers and thieves." 2 Zarlenga, p. 16-19. Continentals. The bank president threatened economic 3 Zarlenga, p. 9. ruin if the bank wasn't re-chartered, then 4 Zarlenga, p. 83. The US Constitution gave Congress the followed through by sharply contracting 5 Zarlenga, p. 270. power to "coin money, regulate the value the money supply and stopping the 6 Zarlenga, pp 146-9. thereof..." Congress has from the start issuance of loans (sound familiar?) 7 Zarlenga, p. 159. abdicated its responsibility. causing financial panic and a deep 8 Brown, Ellen Hodgson, Web of Debt: depression. Jackson paid off the national The Shocking Truth About Our Money Two years after the Constitution's debt in 1835 to zero, the last time this has System And How We Can Break Free, ratification, Alexander Hamilton and his happened. Baton Rouge: Third Millennium Press, financial backers successfully pushed 2008, p.63 through a bill to create a national bank as The Legal Tender Acts passed under 9 Zarlenga, p. 162. the way to pay off the Continental IOUs. Lincoln created the nation's only truly 10 Brown, p. 36. Jefferson and others resisted, fearing that democratic fiat money, the Greenback. It 11 Brown, pp. 35-7. the private central banking corporation was government issued and controlled, 12 Brown, p. 43. operating behind closed doors and driven not connected to banks (which US and 13 Brown, p. 74. by motives of profit would serve the European bankers detested) nor tied to 14 Brown, p. 75 interest of its stockholders instead of the gold or silver. Greenbacks not only 15 Brown, p. 78. government and people who were in debt. financed the Civil War (against the British 16 Brown p. 78. financed south), but avoided impending 17 Brown, p. 82. Jefferson said, "If the American people bankruptcy and provided direct funding ever allow the banks to control the and cheap credit which helped build the Coleridge is a member of the POCLAD issuance of their currency... the banks and continental railroad and steel industry; collective and Director of the Northeast Ohio corporations that will grow up around establish the Department of Agriculture, American Friends Service Committee

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