Banking on Never-Ending Power and Rights by Greg Coleridge It is well that the people of the nation do profits, despite such products and rates, transparency of financial records, not understand our banking and monetary instruments being responsible for the 2008 personal liability of directors for any debt, system, for if they did, I believe there financial implosion. directors having to reside in the county would be a revolution before tomorrow where the bank was chartered, and a morning. - Henry Ford This “financialization” of our economy prohibition of the bank to engaging in the increases profits and wealth of the buying or selling of any goods, wares, Banking and other financial corporations finance, insurance and real estate (FIRE) merchandise or commodities. (hereafter referred to simply as banking sector and makes our nation more corporations) are unlike any other subset economically dependent on that sector to Public officials and courts often failed to of corporate entities. Their uniqueness has drive economic growth. Increased profits, renew or actually revoked charters of to do with their one-of-a-kind “product” -- wealth and economic dependency have banking and insurance corporations that money. also increased their political power and violated the terms of its charters. This influence -- guaranteeing further profits, happened frequently at the state level. The fact that individuals (poor to rich), wealth and dependency. A vicious cycle businesses (small to big) and governments increasing both the financial and political The wording from this decision of an (local to national) all require money to power of banking corporations rages on Ohio Supreme Court case represented function means banking corporations with no end in sight. public sentiment toward banks: occupy prominent places in our national “…[A] banking institution is a public economic and democratic spaces. Given Controlling the power of institution, appointed for public purposes the increasing omnipotence of money in banking corporations – never legitimately created for private determining who gets elected, what purposes… its operations are subject to political voices get heard, when laws get Banking corporations didn’t use to have the control of that public, who may, from passed, where programs get funded and so much power. time to time, as the public good may how regulations are enacted and require, enlarge, restrain, limit, modify its implemented, understanding the role of powers and duties, and, at pleasure, POCLAD’s research on the connections 1 banking corporations in the creation and between the legal and social movement dispense with its benefits.” circulation of our nation’s money and in history of our nation and individual states their lock-down control of our “monetary over many years revealed the strident In repealing the charter of the German system” is essential to (re)gain political efforts of those committed to self- Bank of Wooster, the Ohio legislature and economic self-governance. governance to control banking stated: corporations. “It shall be the duty of the court of The political influence of banking common pleas... or any judge of the corporations has increased over the last Charters (i.e. licenses to do business) of supreme court...to restrain said bank, its several decades as the economy has banking and insurance corporations officers, agents and servants or assignees, shifted from producing real goods and enacted by state legislatures early in our from exercising any corporate rights, services to creating, packaging, buying nation’s history were rigid to ensure these privileges, and franchises whatever...and and/or selling ever more diverse, complex, entities didn’t become powerful. Charters force the bank commissioners to close the risky and outlandish loans, insurances and were considered democratic tools. While bank and deliver full possession of the other financial “products.” Money from all early corporate charters spelled out banking house, keys, books, papers, lands, banks that formerly were loaned to specific conditions, bank charters were the tenements, goods, chattels, moneys, companies that produced needed property and effects of said bank, of every most limiting. 2 consumer products remain heavily kind and description whatever...” invested in options, futures and other Examples of bank charter conditions financial “instruments” (i.e. money included a short duration permitting the Violators of the charter’s terms “[S]hall invested in money) that yield greater bank to conduct business, low interest be deemed guilty of a crime, and, upon conviction, thereof, shall be imprisoned in to be created. No more, in fact, was people. Coxey's Army proposed two bills. the penitentiary and kept at hard labor, not issued. The first, a "Good Roads Bill”, would less than one, nor more than ten year.” 3 help farmers through $500 million issued Colonial scrips, Continentals and by the federal government in legal tender There was strong opposition to the Greenbacks weren’t examples of “specie” notes, or Greenbacks, to construct rural formation and continuation of each of the money (paper money backed by gold or roads. The second, a noninterest-bearing first two privately operated central banks silver) but “fiat” money – money declared bonds bill, would empower state and local of the United States – the Bank of the by those governments to be legal and governments to issue noninterest-bearing United States (1791-1811) and Second accepted for certain payments. They were bonds to be used to borrow legal tender Bank of the United States (1816-1836). money created by public governments to notes from the federal treasury. This Both were chartered for limited durations be spent into circulation to serve as a money would be used to build urban and purposes. Both charters weren’t medium of exchange, a store of value and libraries, schools, utility plants and renewed due to economic and political all the other purposes that money serves. marketplaces. Millions of jobs would have fears. These forms of money were not borrowed. been created -- debt-free. No principle or interest had to be repaid. “I sincerely believe…that banking They were debt-free currencies. For the Banks protect their corporate establishments are more dangerous than most part, they were also inflation-free. asses(ts)…and expand their standing armies,” 4 said Thomas Jefferson There was no economic or political who opposed renewing the charter of the dependence by governments to power first Bank of the US. President Andrew commercial banking corporations. Jackson was the major force behind the Banking corporations hated Greenbacks. non-renewal of the Second Bank of the Greenbacks are the only instance that US’s charter. "The bold effort the present Article 1, Sec 8 of the Constitution has The National Bank Act of 1863 and 1864 (central) bank had made to control the actually been implemented. At no other were pushed by bankers and their government ... are but premonitions of the time in US history has public money been supporters to undercut Greenbacks. A fate that await the American people, created by the federal government in this system of nationally chartered, should they be deluded into a perpetuation way. private/corporate banks was established of this institution or the establishment of and expanded. These new national banks another like it," 5 he said. What Congress failed to do, however, were provided with virtually tax-free social movements continued to advocate status and subsidized through purchasing for. of government bonds with discounted Issuing public money Greenbacks. These banks were permitted “Locofocos,” members of the radical wing to then create “US Bank Notes” (debt- Ironically, the ultimate democratic power based money) which entered the money over banking corporations has rarely been of the Democratic Party, were political firebrands in the first half of the 19th supply – to be used in payment of taxes used – the Constitutional power as defined and duties only. This system enriched in Article 1, Section 8 authorizing century. They were opposed to state banks, monopolies, paper money, tariffs, banks and worked to wean the US away Congress, “[t]o coin Money.” The word from Greenbacks. The Act limited the “coin” is a verb, meaning the power to and financial policies that were undemocratic and conducive to special issuance of Greenbacks to $300 million issue or create our nation’s currency. privilege. Wall Street banks preferred "hard money" Most, if not every, pre-revolutionary (i.e. gold) or specie money (paper money American colony issued their own The Populists who feared the economic and political power of railroads and banks backed by gold), since the major banks colonial paper scrip, beginning with controlled most of the nation's gold. Ohio Massachusetts in 1690. Commenting on followed them. The national Populist Party in their 1892 Omaha Platform Senator John Sherman (so close was he to this currency form, Benjamin Franklin the First National Bank of New York that said, "Experience, more prevalent than all declared: “We demand a national currency, safe, sound, and flexible, issued the bank was dubbed "Fort Sherman") was the logic in the world, has fully convinced the major advocate of the Specie us all that paper money has been, and is by the general government only, a full legal tender for all debts, public and Resumption Act, passed in 1875. The Act now, of the greatest advantage to the legislated the U.S. Treasury to resume the country." 6 private, and that without the use of banking corporations.” 7 issuance of legal tender notes backed only by gold (Greenbacks were backed by the “Continentals” were a colonial-wide Jacob Coxey, a businessman from faith and credit of the US government). currency issued by the revolutionary The Act also took steps to reduce the Continental Congress. They were used to Massillon, Ohio organized a 500-strong “Coxey’s Army” march from Massillon, amount of Greenbacks in circulation -- a pay soldiers.