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Wednesday, November 19th, 2008 星期三， 2008年11月十九日

The privilege of creating and issuing money is not only the supreme prerogative of government, but is the government’s greatest creative opportunity. 有幸創造和發行貨幣不僅是最高特權的政府，但政府是最大的創造性的機會。 By the adoption of these principles, the taxpayers will be saved immense sums of interest. — Abraham Lincoln 通過這些原則，納稅人將被保存數額巨大的利益 。 -亞伯拉罕林肯

Most of what follows is the work of the extraordinary and admirable Stephen Zarlenga of the大多數如下是什麼工作的特殊和令人欽佩的斯蒂芬Zarlenga的 American Monetary Institute美國金融研究所 . 。 We have taken excerpts from various of his writings - including a 2003 speech to US Treasury staff - and blended it into one piece.我們已採取各種摘錄他的著作-包括2 003年的演講美國財政部的工作人員-和混合成一件。 Also included is an article we ran 1994 by Bob Blain and an excerpt from Sam Smith’s Great American Political Repair Manual, published by WW Norton in 1997.其中還包括了一篇文章，我們跑1994年由Bob布萊恩和摘自山姆史密斯的美國大政治維修手冊，出版了二戰諾頓於1997年。

Some history一些歷史

Stephen Zarlenga, American Monetary Institute - The money system is society’s greatest dispenser of justice or injustice.斯蒂芬Zarlenga ，美國金融研究所-錢制度是社會最大的飲水機的司法或不公正。 A good one functions fairly, helping create values for life.一個很好的一個功能相當，幫助創造價值的生活。 A bad, unjust one obstructs the creation of values; gives special privileges to some and disadvantage to others causing unfair concentrations of wealth and power; leading to social strife and eventually warfare and a thousand unforeseen bad consequences - physical and spiritual.一個糟糕的，不公正的一個阻礙創造價值;給予特別優惠的一些缺點和他人造成不公平的濃度的財富和權力;導致社會動亂，並最終戰和1000意外不良後果-身體和精神。 . 。 . 。

One reason economists have failed mankind so badly is their poor methodology - an over-reliance on theoretical reasoning.其中一個原因未能經濟學家人類是如此糟糕的方法-過度依賴理論推理。 Alexander Del Mar the world’s greatest monetary historian noted: “As a rule economists.亞歷山大德爾瑪世界上最大的貨幣歷史學家指出： “作為一項規則的經濟學家。 . 。 . 。 don’t take the trouble to study the history of money; it is much easier to imagine it and to deduce the principles of this imaginary knowledge.”.不麻煩，研究歷史上的錢，這是很容易想像，並推斷的原則，這一虛構的知識。 “ 。 . 。 . 。

In England the struggle became the goldsmiths vs the monarchy representing society.在英格蘭的鬥爭，成為金飾與王室代表的社會。 Later it was the Bank of England vs. society.後來，這是英格蘭銀行與社會。 Until then England’s money power was in the monarch’s hands.在此之前，英格蘭的金錢權力在國王手中。 But from that point, Bank of England credits would be substituted in place of public money.但是，從這一點上，英國央行信貸將取代在公共資金。 This promoted a confusion between credit and money to this day.這促進了信貸之間的混淆和金錢來這一天。 But they are different things.但他們不同的事情。 Credit depends on the creditor remaining solvent.信用取決於債權人剩餘的溶劑。 Real money does not promise to pay something else.真正的金錢不答應支付別的東西。 Money is on a higher order than credit.金錢是一個更高層次的比信貸。

Those behind the Bank of England obscured the real source of the bank’s power - its legal privilege.這些背後的英格蘭銀行掩蓋了真正來源的銀行的權力-法律的特權。 Its notes were accepted in payments to the government.它說明已被接受的付款給政府。 Recovering the science of money for the private profit of a small group produced harmful results: 120 years of continuous warfare spawned an unpayable national debt leading to excessive taxation leading to horrors like the Irish potato famine.科學回收的資金為私人利潤的一小群產生有害的結果： 120多年不斷的戰爭造成了無法償還國家債務，導致稅收過多，導致恐怖像愛爾蘭馬鈴薯飢荒。

Before then, when a nation’s money system was used for taxation, the revenue generally aided the society.在此之前，當一個國家的貨幣系統是用於徵稅，收入一般的社會資助。 But the Bank of England concentrated society’s resources in the wrong hands, crippling the possibility for government to function properly, leading to a growing contempt of government.但是，英格蘭銀行集中社會資源的不法分子手中，癱瘓的可能性為政府正常運作，導致了越來越多的政府蔑視。

Today it’s still the bankers versus the society.今天，它仍是銀行與社會。 At base, the battle remains private money vs. public money.在基地的戰鬥仍然是私人資金對公共資金。 The outcome determines whether the money system operates to serve the few in control, or the whole society.結果決定是否貨幣制度的運作服務的幾個控制，或整個社會。 . 。 . 。

Mankind can live under various forms of government from dictatorship to republic, but the best systems are those in harmony with human nature.人類可以生活在各種形式的政府從專制向共和，但最好的系統是在和諧與人類的本性。 Likewise many things can be made into money, but the best will be the ones in harmony with the nature of money.同樣很多事情可以做成錢，而是最好的將是在和諧與自然的金錢。

Remember: don’t confuse money with tangible wealth.請記住：不要混淆錢有形的財富。 Yes, commodities can be improperly monetized by law.是的，商品可以不當貨幣由法律規定。 The result will make the money system hostage to the commodities situation; hostage to the people, companies, countries that control the commodity.其結果將使貨幣體系人質的商品情況;人質的人，公司，國家控制的商品。 Ultimately it removes the monetary power from society and places it into the hands of the wealthy.最終它消除了貨幣權力從社會和地方把手中的富裕。

And don’t confuse money with credit - either private or public credit.不要混淆貨幣與信貸-無論是私人或公共信貸。 Yes private credits can be improperly monetized by law.私人信貸是可以不當的貨幣由法律規定。 But that gives great privilege to those whose credits have been monetized, to the detriment of the whole society.但是，讓非常榮幸那些信用貨幣已，不利於整個社會的。 The money system then becomes an engine of injustice - as it is now.這筆錢，然後系統成為一個引擎的不公正-因為它是現在。 . 。 . 。

How private central banking started in America如何私營中央銀行開始在美國

First Step: Our Constitutional Convention, considered two grand themes on humanity: First whether mankind could be self-governing.第一步：我們的制憲會議，審議了兩個大的主題對人類：一是人類是否可以自治。 This American experiment is still in doubt because the Convention mishandled the other grand theme over the nature of money.美國的這一實驗仍是疑問，因為該公約的其他處理不當大主題性質的資金。

They met from May to September 1787 but the money subject didn’t came up til August 16.他們會見了5月至1787年9月，但資金問題沒有來到了無菌8月16日。 Jefferson and Paine weren’t there.杰弗森和潘恩並不存在一樣。 Franklin was too old to speak.富蘭克林是太老了發言。

A curious book on money appeared, written anonymously by Calvinist clergyman John Witherspoon.一個奇怪的書錢出現了，匿名的書面加爾文主義的牧師約翰威瑟斯龐。 The book attacked government money and promoted Adam Smith’s primitive view that only gold and silver are money.這本書攻擊政府的金錢和促進亞當斯密的原始認為，只有黃金和白銀的錢。 . 。 . 。 . 。

The power for government to create money, long considered a necessary part of sovereignty was already in the articles of Confederation, but the Federalists fought to exclude this crucial power from the new government, arguing that it could not be trusted with it.功率為政府創造金錢，只要認為是必要的組成部分主權已經在聯合會的條款，但聯邦黨人戰鬥排除這一重要權力的新政府，認為這不能信任它。 Some of them intended to get hold of the power privately as had been done in England.其中有些旨在掌握的權力作為私有做了英格蘭。

The supreme importance of understanding the nature of money now becomes evident: For if money obtains its value from “intrinsic” qualities, it could be viewed more as a creature of merchants and bankers than of governments.最高重要性的認識的性質，資金已成為顯而易見的：因為，如果錢獲得它的價值從“內在”品質，可以更多地被視為生物的商人和銀行家，而不是政府。

But if money’s essence is an abstract social institution obtaining value through law, then its a creature of government and the Constitution had better deal with it adequately.但是，如果貨幣的本質是一個抽象的社會制度獲得通過的法律價值，那麼它的產物，政府和憲法更好地處理它充分。 Describing how a uniform currency is to be provided, controlled and kept reasonably stable, in a just manner.如何描述一個統一的貨幣是必須提供，控制和保持合理穩定，以公正的方式。 The Constitutional Convention faltered on this crucial question.在制憲會議上動搖這一關鍵問題。

The delegates accepted Smith’s primitive concept of money and didn’t firmly place the money power into government’s hands, leaving it ambiguous.代表們接受了史密斯的原始概念的資金並沒有堅定地把金錢權力納入政府的手裡，讓含糊不清。

But the power would still exist.但是，權力仍然存在。 What I’m suggesting is that human affairs require government to have four branches, not three; the fourth branch to administer the money power.我什麼暗示的是，人類的事務需要政府有四個分支機構，而不是3個;第四分行管理的資金力量。

The Constitution left the money power up for grabs.憲法的錢離開了權力爭奪。 Alexander Hamilton wasted no time in grabbing.亞歷山大漢密爾頓不失時機搶奪。

Second Step: The Constitution went into effect in late 1789.第二步：憲法開始生效1789年年底。 Hamilton’s first move as Secretary of the Treasury, was to assume $15 million of the state debts.漢密爾頓的第一個舉動是財政部長，是要承擔1500萬美元的國家債務。 . 。 . 。 an extremely unpopular act.一個極其不得人心的行為。 Why?為什麼？

The worthless debt was held by the revolutionary soldiers, farmers, manufacturers and merchants who furnished its supplies.該債務是毫無價值舉行的革命軍人，農民，製造商和商家提供其誰用品。 As Congress secretly passed the bill behind closed doors, the country was overrun by speculators, buying up the certificates for pennies on the dollar.作為秘密國會通過該法案關起門來，該國超支的投機者，買了證書便士美元。

Third step: Next Hamilton and associates, having kept the monetary power out of government, moved to assume it themselves.第三步：接下來漢密爾頓和同夥，在保持貨幣權力的政府，搬到自己承擔。 . 。 . 。

Hamilton’s Federalists quickly put through legislation chartering the First Bank of The United States, as a privately owned central bank on the Bank of England model.漢密爾頓的聯邦黨人迅速通過立法包租的第一銀行，美國作為一個私人擁有的中央銀行英格蘭銀行的模式。 The Bank would be issuing paper notes not really backed by metal, but pretending to be redeemable in coinage, on the one condition that not a lot of people asked for redemption.該銀行將發行文件指出沒有真正支持的金屬，但假裝是贖回的硬幣，在一個條件，並不是很多人要求贖回。 They never had enough coinage.他們從來沒有足夠的硬幣。

Thus the real question was whether it would be private banks or the government that would issue paper money.因此，真正的問題是，它是否將私人銀行或政府將發行紙幣。 Will the immense power and profit of issuing currency go to the benefit of the whole nation, or to the private bankers?將巨大的權力和利潤的發行貨幣去，造福於整個國家，或者私人銀行家？ That’s always been the real monetary question in America.這始終是真正的貨幣問題在美國。

Gold and silver served as a smoke-screen.黃金和白銀作為煙幕。 What the bankers counted on were the legal considerations of the money.銀行家什麼指望的法律因素的錢。 They knew that all that was needed to give their paper notes value, was for the government to accept them in payment for taxes.他們知道，這是所有需要給他們的論文指出價值，是政府接受他們的支付稅款。 That, and not issuing too excessive a quantity.這，不是太過分的發行數量。 Under those conditions, the paper notes they printed out of thin air, would be a claim on any wealth existing in the society.在這種情況下，該文件指出，他們印製了稀薄的空氣，將是一個索賠的任何現有的財富在社會中。

Just where did the money for first bank of the US came from?只是在沒有錢的第一家銀行在美國而來的呢？ . 。 . 。 . 。 The $10 million subscription for the banks’ shares, was oversubscribed within two hours. 1000萬美元訂購的銀行股，超額認購是在兩個小時內。 Only 1/10 of it was ever paid in gold.只有1 / 10是有史以來的黃金。 The rest was accepted in the form of bonds - the government bonds that Hamilton had turned from pennies on the dollar to full value.其餘的已被接受的形式，債券-政府債券，漢密爾頓拒絕從便士對美元的全面價值。 The money for the private bank actually came from the American people.這筆錢用於私人銀行實際上來自美國人民。

Thanks to Jefferson’s efforts, the bank was liquidated in 1811.由於杰弗遜的努力，清算銀行在1811年。 Three quarters of it was found to be owned by English and Dutch.四分之三的它被認為是擁有英語和荷蘭語。

AMI’s proposed reforms急性心肌梗死改革建議

- Nationalize the Federal Reserve System. -國有化聯邦儲備系統。 Reconstitute it in the US Treasury, to evolve into a fourth branch of government.重組它在美國財政部，發展成為第四個政府部門。 Only the government would create money.只有政府將創造金錢。

- Remove the privilege which banks presently have to create money. -刪除有幸銀行目前已經創造金錢。 This is done through an elegant and gentle process which automatically turns all the previously issued bank credit into real American money.這是通過一個優雅和柔和的過程，會自動將所有先前發出的銀行信用變成真正的美國人錢。 100% reserves are reached not by calling in loans but by increasing reserves. 100 ％的儲量沒有達到要求的貸款，但通過增加儲備。 This would be neither inflationary or deflationary.這將是既沒有通貨膨脹或通貨緊縮。

- Institute programs for automatic, constitutionally determined government money creation, starting with the $2 trillion which the civil engineers need to bring our infrastructure up to acceptable levels. -研究所的自動程序，憲法確定的政府貨幣創造，從2萬億美元的土木工程師必須使我們的基礎設施達到可接受的水平。 From there we go forward carefully determining how to best run the monetary system.從這裡我們前進仔細確定如何以最佳方式運行的貨幣制度。 . 。 . 。

What difference would reconstituting the money power in government make?什麼區別重建的資金在政府權力呢？ Government money goes into infrastructure; better life; better jobs; education, safer roads, cleaner water; better health care; social security, etc. Society is empowered by being able to direct the money power to solve pressing problems rather than into useless speculation.政府資金進入基礎設施;更美好的生活;更好的就業機會;教育，道路安全，更清潔的水;更好的衛生保健，社會保障等社會賦權能夠直接的金錢權力，解決緊迫的問題，而不是變成無用的猜測。 We no longer have to say we can’t afford it, when so many people and resources are unemployed!.我們不再說我們支付不起，當這麼多人和資源是失業！ 。

These three reforms can be closer than we think; and in a crisis situation if only 5% of the citizenry has an awareness of the societal/legal nature of money, they could be enacted.這三項改革可以接近我們認為，在危機形勢下，如果只有5 ％的公民有一個認識的社會/法律性質的錢，就可以頒布。

The need for monetary reform需要貨幣改革

The power to create money is an awesome power - at times stronger than the executive, legislative or judicial powers combined.權力創造錢是一個可怕的力量-在時代強於行政，立法或司法權力的總和。 It’s like having a “magic checkbook,” where checks can’t bounce.這就像一個“神奇支票簿， ”在檢查不能反彈。 When controlled privately it can be used to gain riches, but more importantly it determines the direction of our society by deciding where the money goes - what gets funded and what does not.當控制私人它可以用來獲得財富，但更重要的它決定了方向，我們的社會，決定在那裡的錢不用-什麼得到資助，哪些行不通。 Will it be used to build and repair vital infrastructure such as levees to protect major cities?它將被用來製造和修理至關重要的基礎設施，如堤壩，以保護主要城市？ Or will it go into warfare or real estate loans, creating asset price inflation - the real estate bubble.或將它進入戰爭或房地產貸款，建立資產價格膨脹-房地產泡沫。

Thus the money issuing power should never be alienated from democratically elected government and placed ambiguously into private hands as it is in America in the Federal Reserve system today.因此，貨幣發行權力絕不應脫離民選政府，並置於含糊落入私人手中，因為它是在美國聯邦儲備系統的今天。

Indeed most people would be surprised to learn that the bulk of our money supply is not created by our government, but by private banks when they make loans.實際上大多數人會感到驚訝地得知，大部分的貨幣供應量是沒有創造我們的政府，而是由私人銀行時，他們貸款。 Most of our money is issued as interest-bearing debt.我們大部分的錢是作為利息的債務。

We are borrowing this money system from private banks when instead we should own the system, not rent it.我們這筆錢的借貸制度時，私人銀行不是我們應該自己的系統，而不是租金。 Our government has the sovereign power to issue money (Art.1, Sect.8) and spend it into circulation to promote the general welfare through the creation and repair of infrastructure, including human infrastructure - health and education - rather than misusing the money system for speculation as banking has historically done.我們的政府有主權權力，金錢問題（了第， Sect.8 ）和花錢進入流通，促進普遍福利的正當需要通過建立和修復基礎設施，包括人力基礎設施-保健和教育-而不是濫用金錢系統投機銀行歷來工作要做。 Our lawmakers must now reclaim that power.我們的議員們現在必須收回這種權力。 . 。 . 。

Unhappily, mankind’s experience with private money creation has undeniably been a long history of fraud, mismanagement and even villainy.不幸的是，人類經驗的私人資金創造一個不可否認的歷史悠久的舞弊行為，管理不善，甚至壞事。 Banking abuses are pervasive and self-evident.銀行業普遍存在的虐待和不言自明的。 Major companies focus on misusing the money system instead of production.大企業專注於濫用金錢系統，而非生產。 For example, in June 2005, Citibank and Merrill Lynch paid over $1.2 Billion to Enron pensioners to settle fraud charges.例如，在2005年6月，花旗銀行和美林證券公司支付了12億美元，以安然公司解決養卹金領取詐騙案。

Private money creation through fractional reserve banking fosters an unprecedented concentration of wealth which destroys the democratic process and ultimately promotes imperialism.私人資金通過分數建立儲備銀行助長了前所未有的財富集中摧毀的民主進程，並最終促進帝國主義。 Less than 1% of the population claims ownership of almost 50% of the wealth, but vital infrastructure is ignored.不到1 ％的人口擁有索賠近50 ％的財富，但重要的基礎設施將被忽略。 The American Society of Civil Engineers gives a D grade to our infrastructure and estimates that $1.6 trillion is needed to bring it to acceptable levels.美國土木工程師學會提供一個D級的基礎設施和估計， 1.6萬億美元需要，使其可以接受的水平。

That fact alone shows the world’s dominant money system to be a major failure crying for reform.這一事實本身表明，世界上的主導貨幣體系是一個重大失敗哭泣的改革。

Infrastructure repair would provide quality employment throughout the nation.基礎設施修復將提供高質量的就業機會在全國各地。 There is a pretense that government must either borrow or tax to get the money for such projects.有一個幌子，政府必須借款或稅收得到的錢用於這類項目。 But the government can directly create the money needed and spend it into circulation for such projects, without inflationary results.但是，政府可以直接建立需要的錢和花錢進入流通等項目，沒有通貨膨脹的結果。

The false specter of inflation is usually raised against suggestions that our government fulfill its responsibility to furnish the nation’s money supply.虛假幽靈的通貨膨脹通常是提出建議，對我國政府履行其責任，提供國家的貨幣供應量。 But that is a knee jerk reaction - the result of decades, even centuries of propaganda against government.但是，這是一個膝跳反應-由於幾十年，甚至數百年的宣傳反對政府。 When one actually examines the monetary record, it becomes clear that government has a superior record issuing and controlling money than the private issuers have.當一個人真正研究了貨幣記錄，顯然，政府有一個卓越的記錄和控制發放的錢比私人發行的。 Inflation is avoided because real material wealth has been created in the process.通貨膨脹是可以避免的，因為真正的物質財富已經建立的過程中。

From Stephen Zarlenga’s 2003 speech at the US Treasury斯蒂芬Zarlenga從2003年的講話，美國財政部

Perhaps the chief failure of economics is its inability, from Adam Smith to the present, to define or discover a concept of money consistent with logic and history.也許是失敗的首席經濟學是無法從亞當斯密到現在，界定或發現一個錢的概念符合邏輯和歷史。 Economists rarely define money, assuming an understanding of it.經濟學家很少界定錢，假設的理解。 It’s still being argued whether the nature of money is a concrete power, embodied in a commodity like gold; or whether it’sa credit/debit issued by private banks.它仍被認為是性質的錢是一個具體的權力，體現在商品如金;還是這是信用卡/借記發出的私人銀行。 Does its value come from the material of which it’s made?難道它的價值來自於物質，它的進展？ Or is it, as we have concluded, an abstract social power - an institution of the law, having value because its accepted in exchanges due to the sponsorship of government?抑或是，我們已經得出結論，一個抽象的社會力量-一個機構的法律，具有價值，因為它接受的交流由於贊助商的政府？ The correct answer leads to conclusions on the proper monetary role of government; whether the power to create and control money should be lodged, as at present in a somewhat ambiguous private issuer - the Federal Reserve System and its member banks - or should be wholly reconstituted within government.正確的答案會導致結論的適當的貨幣政府的作用;是否有權建立和控制洗錢應當提出，因為目前在有些模棱兩可私人發行-聯邦儲備系統及其成員國銀行-或應該完全改組在政府內。 An accurate concept of money will light the way to solving the present fiscal crisis.準確的概念，這筆錢將輕的方式來解決目前的財政危機。

We have two basic approaches to understanding money: A theoretical method based on logic; and an empirical approach based on experience or history.我們有兩個基本方法的理解金錢：一種理論方法的基礎上邏輯;和經驗做法的基礎上的經驗或歷史。 Practitioners of the two methods arrive at very different conclusions.從業者的兩種方法得出非常不同的結論。 Theoreticians usually support private commodity money and private credit money.理論家通常支持私營商品貨幣和私人信貸資金。 Historians normally want a much larger role for government.歷史學家通常要大得多政府的作用。

Let’s start with Aristotle who gave the culmination of Greek thought and experiment on money around 330 BC: “All goods must therefore be measured by some one thing.讓我們先以亞里士多德是誰給的高潮希臘思想和實驗資金約公元前330 ： “所有的貨物因此必須衡量一個人的事。 . 。 . 。 now this unit is in truth, demand, which holds all things together.現在這個單位是真理，需求，擁有所有的東西在一起。 . 。 . 。 but money has become by convention a sort of representative of demand; and this is why it has the name nomisma - because it exists not by nature, but by law (which in Greek was nomos) and it is in our power to change it and make it useless.” So Aristotle calls money a creature of the law.但錢已經成為了公約的某種代表的需求;這就是為什麼它的名字諾米斯瑪-因為它不存在的性質，而是由法律規定（這在希臘是亞州） ，它是我們的力量改變它和使之無用。 “因此，亞里士多德要求金錢的產物，法律。 Not a commodity from nature but an abstract social institution.不是一種商品的性質，但一個抽象的社會制度。 Its essence is not tangible wealth in itself, but a power to obtain wealth.其實質是不是有形的財富本身，而是權力獲取財富。

Plato agreed with Aristotle and advocated fiat money for his Republic: “The law enjoins that no private individual shall possess or hoard gold or silver bullion, but have money only fit for domestic use.柏拉圖與亞里士多德的同意，並主張菲亞特他的錢共和國： “法律沒有責成個人不得擁有或囤積金或銀的黃金，但資金只有適合家庭使用。 . 。 . 。 . 。 wherefore our citizens should have a money current among themselves but not acceptable to the rest of mankind.何故我們的公民應該有一個錢目前，但它們之間不能接受的，其餘的人類。 . 。 . 。 ” And: “Then they will need a market place, and a money-token for purposes of exchange.” “和： ”然後，他們將需要一個市場，和洗錢的目的象徵性的交流。 “

So both Aristotle and Plato noted the paramount principle - that the nature of money is a fiat of the law, an invention or creation of mankind.因此，這兩個亞里士多德和柏拉圖指出的首要原則-的性質，錢是一個扁平的法律，一項發明或創造人類。 This principle, part of a lost science of money, must now be relearned in the Third Millennium in order to achieve the monetary reforms needed to move back from the brink of nuclear disaster, to move away from a future dominated by fraud and ugliness, toward a world of justice and beauty.這一原則的一部分，失去科學的錢，現在必須relearned在第三個千年，以實現貨幣改革需要搬回從瀕臨核災難，擺脫主導未來的欺詐和醜陋，走向世界的正義和美感。

This “private vs. public” battle for the control of the money power is part of a great ongoing social battle recurring throughout history to this day.這種“私人與公共”爭奪控制權的資金是一個偉大的社會鬥爭不斷反复出現的整個歷史上這一天。 This factor shapes the most important outcomes determining how well a money system works.這一因素的形狀最重要的成果以及如何確定貨幣制度的運作方式。 A good system functions fairly; helping the society create values for living.一個良好的系統功能相當;幫助社會創造價值的生活。 A bad one obstructs the creation of values; places special privileges in the hands of some to the disadvantage of others, and promotes unfair concentrations of wealth and power, and disharmony and social strife.不好的阻礙創造價值;地方特權手中的一些不利他人，並促進公平濃度的財富和權力，和不協調和社會動亂。

Now it may be surprising, but the historical record actually shows that publicly controlled systems function much better than private ones.現在它可能是令人驚訝，但實際上歷史記錄顯示，公開控制系統的功能大大優於私立的。 Furthermore, it shows that the concept of money - how money is defined - usually determines whether the system will be publicly or privately controlled.此外，它表明，這一概念的金錢-金錢的定義-通常是決定是否該系統將公開或私下的控制。 . 。 . 。

Our American experience contains many of the best case studies for understanding money.我們的經驗包含了許多最好的案例研究為了解錢。 We have been a great monetary laboratory - every conceivable solution was tried at some time, and we’ve been a paper money nation from colonial days.我們一直在一個偉大的貨幣實驗室-每一個可以想像的解決辦法是試圖在一段時間內，我們一直是紙幣的國家擺脫殖民天。 Our development was inseparable from it - without it there’d be no United States.我們的發展是分不開的它-它有沒有希望就沒有美國。

English and Dutch laws forbade sending coinage to the colonies, placing them in continual distress.英國和荷蘭的法律禁止發送的硬幣的殖民地，使他們在不斷的痛苦。 The intent was to extract raw materials, not for the colonists to trade with each other.其意圖是提取原料，而不是為殖民者的貿易與對方。 An early form of globalization.早期的全球化形式。 The colonies had to devise monetary innovations.在殖民地制定貨幣創新。

In the period 1632 - 92, seventeen different commodities were monetized by law at specified prices.期間1632年至1692年， 17個不同的商品貨幣在法律規定的價格。 It didn’t work - everyone wanted to pay with the least desirable commodity, in the worst condition.它沒有工作-每個人都希望支付的最不理想的商品，在最壞的條件。 . 。 . 。

Private land banks were set up but were shunned by the colonists, who considered money a prerogative of government, as it was in England until 1694.私人土地銀行成立，但迴避了殖民者，錢誰考慮的一項特權的政府，因為它是在英格蘭，直到1694年。

Then in 1690, four years before the Bank of England, Massachusetts embarked on a radical course and issued paper bills of credit, spending them into circulation.接著於1690年，四年前英格蘭銀行，馬薩諸塞州走上了激進的課程，並發表論文匯票的信用，消費他們進入流通領域。 Rather than a promise to pay anything, they were a promise to receive them back for all payments to the commonwealth.而不是許諾支付任何東西，他們承諾要接收他們回來的所有支付給英聯邦。 The colony thrived.蓬勃發展的殖民地。 Other colonies copied them and infrastructure arose.其他殖民地複製他們和基礎設施產生的。

In 1723 Pennsylvania’s system loaned the bills into circulation, charging interest on them and using it to pay colonial expenses.在1723年賓夕法尼亞州的系統租借法案進入流通，收取利息和他們用它來支付費用的殖民地。 Ben Franklin wrote:本富蘭克林寫道：

“Experience, more prevalent than all the logic in the World, has fully convinced us all, that paper money has been, and is now of the greatest advantages to the country.” .他說： “經驗，更普遍高於一切的邏輯世界，也充分相信我們所有人，即紙幣一直是，而且現在是最大的優勢，該國。 ” 。 . 。 . 。

Some long lost principles of the science of money quickly resurfaced:一些早已失去原則的科學的資金迅速浮現：

- Money need not have intrinsic value; its nature is more of an abstract legal power than a commodity. -貨幣不必具有內在的價值;其性質更是一個抽象的法律權力不是商品。

- Accepting the government paper back in taxes was the key feature needed to give it circulating value. -接受政府的文件早在稅收的主要功能需要給它循環的價值。

- The quantity of money in circulation had to be regulated to maintain its value. -數量流通中的貨幣必須加以規範，以保持其價值。

- They observed that paper money helped build real infrastructure. -根據他們的觀察，紙幣有助於建立真正的基礎設施。

- Most importantly, the colonies did not issue more money than their legislatures authorized. -最重要的是，殖民地問題沒有更多的錢比他們的立法授權。 They have an outstanding record issuing currency.他們有傑出的創紀錄發行貨幣。 Of over a hundred colonial issues I found only one case of fraud.對100多個殖民地問題，我只發現一宗欺詐行為。 In Virginia, a Mr. Robertson who was supposed to be burning the old notes as new ones were printed, was giving them to friends instead.在弗吉尼亞州，一個羅伯遜先生誰應該是燃燒的舊鈔票了新的印刷，是讓他們的朋友而不是。

But in the battle for monetary dominance, the colonial monetary experience has been miscast as irresponsible inflation money.但在爭奪主導地位的貨幣，殖民地貨幣的經驗一直miscast是不負責任的通貨膨脹錢。 This was the result of 18th century Boston’s medical Dr. William Douglas’ inaccurate writings.這是由於18世紀波士頓的醫學博士威廉道格拉斯'不準確的著作。 The error was corrected by Alexander Del Mar in 1900 in The History of Money in America, but was ignored.錯誤是糾正亞歷山大德爾瑪在1900年歷史上的金錢在美國，但被忽略。 It was authoritatively cleared up again by Professor Leslie Brock in 1976 and again ignored.據權威清理再次布羅克教授在1976年再次被忽略。 Many economists, and especially the libertarians, still haven’t got the message that colonial government paper money was crucial in building the colonies.許多經濟學家，特別是竊聽，仍然沒有得到的信息是殖民政府紙幣是至關重要的建設殖民地。

In 1764, England’s Lords of Trade and Plantations prohibited all colonial legal tender issues, and that became the underlying cause of the American Revolution, not some tax on tea.在1764年，英國的上議院貿易和人工林禁止一切殖民地的法定貨幣問題，並且成為根本原因美國革命，而不是一些稅務上茶。

The continental currency became the lifeblood of the revolution.大陸貨幣成為生命線的革命。 $200 million was authorized and $200 million issued. 2億美元，並授權二零零零零零零零零美元印發。 The currency functioned well.貨幣運作良好。 In late 1776 the notes were only at a 5% discount against coinage, when General Howe took over New York City and made it a center for British counterfeiting.在1776年年底的說明，只有在5 ％的折扣對硬幣時，一般豪接管紐約市，並使它成為中心的英國偽造。 The Brits counterfeited billions; newspaper ads openly offered the forgeries.英國人偽造數十億;報紙廣告公開提供了偽造的。 . 。 . 。 In March 1778 after 3 years of war, it was $2.01 Continental for $1 of coinage.在1778年3月後3年的戰爭，這是大陸2.01美元為1美元的硬幣。

The continentals carried us over 5 1/2 years of Revolution to within 6 months of its final victory.該continentals我們進行了5 1 / 2年的革命到6個月內的最後勝利。 Thomas Paine wrote: “Every stone in the Bridge, that has carried us over, seems to have a claim upon our esteem.托馬斯潘恩寫道： “每一塊石頭中的大橋，這對我們進行的，似乎已經要求我們的自尊。 But this was a corner stone, and its usefulness cannot be forgotten.”但是，這是一個基石，它的效用不能忘記的。 “

Our constitutional convention considered two grand themes of humanity: First whether mankind could be self-governing or had to be ruled by authority.我們的制憲會議審議了兩個大的主題人類：一是人類是否可以自治領土或者要統治的權威。 Often referred to as the American experiment.通常被稱為美國的實驗。 We are still learning the outcome, and one of the reasons it’s still in doubt is because of the way the convention mishandled the other grand theme - the nature of money.我們仍在學習的成果，其中重要的一個原因仍然在懷疑，是因為該公約的方式處理不當的其他大的主題-性質的資金。 By the time of the convention, the great benefits of the continentals was nearly ignored; along with much of the rest of our hard won monetary experiences.到時，該公約的國家，偉大的好處continentals幾乎忽視;連同其餘大部分時間我們來之不易貨幣的經驗。 Some wanted to emphasize that the continentals became worthless and rejected the idea of paper money altogether.一些想強調的是， continentals成為毫無價值和拒絕的想法完全紙幣。

They ignored that paper money was crucial in giving us a nation; that abstract money requires an advanced legal system in place; that the normal method of assuring its acceptability is to allow the taxes to be paid in it.他們忽略了金錢是至關重要的給我們一個民族，這抽象的錢，需要一個先進的法律制度到位;的正常方法，確保它的可接受性，是為使稅收來支付它。 . 。 . 。

The convention met from May to September 1787 but the money subject didn’t come up until August 16.該公約會見了5月至1787年9月，但資金問題沒有來，直到8月16日。 Remember, Jefferson and Paine were not there.請記住，杰弗森和潘恩並不存在一樣。 Franklin was too old to speak.富蘭克林是太老了發言。

A curious book on money appeared just then, written anonymously by Calvinist Minister John Witherspoon, - the only clergyman signer of the declaration of Independence.一個奇怪的書錢似乎只是那麼，書面匿名加爾文主義部長約翰威瑟斯龐， -唯一的牧師簽字的獨立宣言。 The book attacked government money and promoted Adam Smith’s view that only gold and silver are money.這本書攻擊政府的金錢和促進亞當斯密認為，只有黃金和白銀的錢。 . 。 . 。

The power for government to properly create money, long considered as a necessary part of sovereignty, was contained in five magic words - to emit bills of credit.功率為政府正確創造金錢，長期被視為一個必要部分主權，載於5個神奇的詞-發出帳單的信貸。 This provision was already in the Articles of Confederation, but the Federalists - the merchant/commercial interest, largely responsible for calling the Constitutional Convention in order to strengthen the national government, fought to exclude this monetary power from the new government, arguing that it could not be trusted with it.這一規定已經在邦聯，但聯邦黨人-商人/商業利益，主要負責呼叫制憲會議，以加強各國政府，試圖排除這種貨幣權力的新政府，認為它可以不能信任它。 Some of them intended to get hold of the power privately as had been done in England.其中有些旨在掌握的權力作為私有做了英格蘭。

The supreme importance of the concept of money now becomes evident: For if money is primarily a commodity, convenient for making trades, which obtains its value out of “intrinsic” qualities, then it could be viewed more as a creature of merchants and bankers than of governments.最高的概念很重要的金錢已成為顯而易見的：因為，如果錢主要是一種商品，方便的決策行業，其中獲得其價值的“內在”品質，那麼它可以被認為更象是一個造物的商人和銀行家比政府。

But if the true nature of money is an abstract social institution embodied in law - obtaining its value largely through legal sanctions, then its more a creature of governments, and the Constitution had better deal with it adequately - describing how a uniform currency is to be provided, controlled and kept reasonably stable, in a just manner.但是，如果真正性質的資金是一個抽象的社會制度所體現的法律-獲得其價值主要是通過法律制裁，那麼它更多的產物，政府和憲法更好地處理它充分-描述如何統一的貨幣是提供，控制和保持合理穩定，以公正的方式。 It was on this crucial question that the Constitutional Convention faltered.正是在這個關鍵問題，憲法公約動搖。

The delegates accepted Adam Smith’s primitive commodity definition of money as gold and silver and didn’t firmly place the monetary power into government, leaving it ambiguous.代表們接受了亞當斯密的原始定義的商品貨幣，黃金和白銀，並沒有堅定地把貨幣納入政府的權力，讓含糊不清。 Later they’d argue over what they had done.後來他們想爭論他們所做的事。 But the power would still exist, since it is as important as the legislative, judicial and executive powers.但是，權力仍然存在，因為它是一樣重要的立法，司法和行政權力。

I am suggesting that the nature of human affairs requires government to have four branches, not three; the fourth branch to embody and administer the monetary power.我建議的性質，人權事務需要政府有四個分支機構，而不是3個;第四分公司體現和管理的貨幣權力。

The Constitution trusted the people with the political power; but didn’t firmly place the monetary power in their government.值得信賴的憲法與人民的政治權力; ，但沒有堅定地把貨幣權力的政府。 This (along with slavery) is the original sin of American politics.這（連同奴隸制）是原罪美國政治。 As a result the power was left up for grabs.由於電力是離開了爭奪。 Alexander Hamilton wasted no time in “grabbing.”亞歷山大漢密爾頓沒有時間浪費在“掠奪” 。

The Constitution went into effect in late 1789; Van Buren described Hamilton’s first move as Secretary of the Treasury, in 1790: “Hamilton assumed some $15 million of the state debts.憲法開始生效1789年年底;範布倫描述漢密爾頓的第一個舉動是財政部長，在1790年： “漢密爾頓承擔一些1500萬美元的國家債務。 . 。 . 。 an act.行為。 . 。 . 。 neither asked nor desired by the states, unconstitutional and inexpedient.既不問，也不理想的狀態，不符合憲法和失策。 . 。 . 。 ” “

What was so bad about it?是什麼如此糟糕呢？ “A large proportion of the domestic debt (was held by) the soldiers who fought our battles, and the farmers, manufacturers and merchants who furnished supplies for their support. “很大比例的國內債務（舉辦）的士兵誰打我們的戰鬥，與農民，製造商和商家誰家具用品的支持。 . 。 . 。 .When it became known to members of Congress, which sat behind closed doors, that the bill would pass. 。當它成為已知的國會議員，其中坐在關起門來，該法案將通過。 . 。 . 。 every part of the country was overrun by speculators, by horse, and boat, buying up large portions of the certificates for (pennies on the dollar).” Madison, attempted to have the law pay speculators less than the original holders, but was voted down.每一部分的國家被佔領的投機者，由馬，船，買了大部分的證書（便士美元） 。 “麥迪遜，企圖已支付的法律投機者不到原來的持有人，但投票向下的。

Next Hamilton and associates, having kept the monetary power out of government hands, moved to assume it themselves.下一步漢密爾頓和同夥，在保持貨幣權力的政府手中，轉移到自己承擔。 The Bank of North America was the only bank in the US, formed in Pennsylvania on Tom Paine’s initiative to assist the revolution.銀行北美洲是唯一的一家銀行在美國，成立於賓夕法尼亞州湯姆潘恩的倡議，以協助革命。 Arguing that it was only a state bank, Hamilton suggested it come forward if it wanted to alter itself for the national purpose.認為這只是一個國有銀行，漢密爾頓建議，挺身而出，如果它希望改變自己國家的目的。 Curiously, the bank took no steps toward this obvious increase in profit and power.奇怪的是，銀行沒有採取步驟實現這一明顯增加的利潤和權力。

Hamilton’s Federalists quickly put through legislation to charter the First Bank of The United States, as a privately owned central bank on the Bank of England model.漢密爾頓的聯邦黨人迅速通過立法，以包租的第一銀行，美國作為一個私人擁有的中央銀行英格蘭銀行的模式。 The Bank would be issuing paper notes not really backed by metal, but pretending to be redeemable in coinage, on the one condition that not a lot of people asked for redemption.該銀行將發行文件指出沒有真正支持的金屬，但假裝是贖回的硬幣，在一個條件，並不是很多人要求贖回。 They really did not have the coinage.他們真的沒有硬幣。 The bank would do what they had blocked the government from doing.該銀行將做他們已封鎖了政府做的事情。 Print paper money.打印紙錢。

While gold and silver served as a smoke-screen what the bankers really counted on, were the legal considerations of the money.雖然黃金和白銀作為煙幕什麼銀行家真的指望，是法律因素的錢。 They knew that all that was needed to give their paper notes value, was for the government to accept them in payment for taxes.他們知道，這是所有需要給他們的論文指出價值，是政府接受他們的支付稅款。 That, and not issuing too excessive a quantity of them.這，不是太過分發行了一定數量的他們。 Under those conditions, the paper notes they printed out of thin air, would be a claim on any wealth existing in the society.在這種情況下，該文件指出，他們印製了稀薄的空氣，將是一個索賠的任何現有的財富在社會中。

And we see why the Bank of North America was not put forward for this purpose: the US government had owned 60% of it.我們看到，為什麼銀行北美沒有提出這一目的：美國政府擁有60 ％的。 . 。 . 。 . 。 The government would only own 20% of the new bank.政府只會自己20 ％的新銀行。

Just where did the money for first Bank of the US came from?只是在沒有錢的第一銀行的美國而來的呢？ The $10 million share subscription for the banks shares, was oversubscribed within 2 hours. 1000萬美元認購股份的銀行股，超額認購是在2小時內。 Less than 1/10 of it was ever paid in gold.不到1 / 10是有史以來的黃金。 The rest of the payment was accepted in the form of bonds - the very government bonds that Hamilton had turned from pennies on the dollar to full value.其餘的款項已被接受的形式，債券-十分政府債券，漢密爾頓拒絕從便士對美元的全面價值。 So you see where the money for the bank actually came from - from the American people.所以你看到錢的銀行實際上來自-從美國人民。 That’s how private central banking started in America.這就是私人銀行中心在美國開始。

Thanks in large part to Jefferson’s efforts, the bank was liquidated in 1811.這在很大程度上是杰弗遜的努力，清算銀行在1811年。 Three quarters of it was found to be owned by Europeans - English and Dutch.四分之三的它被認為是由歐洲人-英語和荷蘭語。

The 2nd Bank of the US - the bank from hell - operated illegally from inception, accepting IOU’s instead of the required gold in payment for its shares.第二銀行的美國-銀行從地獄-經營非法從一開始，接受期票的不是金牌，需要支付其股票。 So again the banker’s gold “requirement” turned out to be a masquerade.因此，再次銀行家的黃金“要求”被證明是一種掩飾。

This private central bank immediately embarked on a wild monetary expansion.這私營央行立即開始了野生貨幣擴張。 Beginning operations in April 1817, by July it had 19 branch offices and had created $52 million in loans on its books and an additional 9 million in circulating currency, based on gold and silver coin reserves of only $2.5 million.開始行動1817年4月， 7月19日它已分支機構和創造了5200萬美元的貸款在其書籍和額外的900萬美元在貨幣循環的基礎上，金銀紀念幣的儲量只有250萬美元。 This tremendous expansion caused a wild speculative boom.這巨大的擴張造成了野生的投機熱潮。 Then in August 1818, the bank turned abruptly and began an insane contraction, causing the panic of 1819.然後在1818年8月，該銀行突然轉向，並開始了瘋狂的收縮，造成恐慌的1819年。 It cut its outstanding loans and advances from a high of $52 million, down to $12 million in I819.這將其未償還貸款和墊款從一個高的5200萬美元，下降到1200萬美元的I819 。 Its circulating notes dropped from $10 million to $3.5 million in 1820.其循環注意到下降到1000萬美元到350萬美元，在1820年。 A massive wave of bankruptcies swept the nation.大規模的破產浪潮席捲全國。

The subsequent history of this bank and its fight to the death with President Jackson reads like a financial soap opera.隨後，這一歷史的銀行和其鬥爭的死亡與總統傑克遜讀起來就像一個金融肥皂劇。 The story of various state chartered banks is similar.這個故事的各個國家特許銀行是類似的。

Meanwhile the US government acted responsibly In the aftermath of liquidation of the first and second bank; US Treasury notes were substituted in place of banknotes.與此同時，美國政府採取負責任的在清理後的第一和第二銀行;美國國債所取代，取代紙幣。 About $65 million were authorized and only $37 million actually issued.約6500萬美元的授權，只有3700萬美元實際上印發。 The US Treasury spent them into circulation.美國財政部花費他們進入流通領域。 Initially they were all large denomination, paid interest; were redeemable in gold and required formalities to transfer.最初他們都是大面額支付利息;被贖回黃金，並要求轉讓手續。 By 1815 they became bearer certificates with no redemption date, paid no interest and were in smaller denominations.到1815年，他們成為無記名證書，沒有贖回日期，支付不感興趣，並在較小的教派。 Thus they were nearly a true money form.因此，他們幾乎一個真正的貨幣形式。 The fact is that the US government has always acted responsibly in creating money.事實是，美國政府一直採取負責任的創造金錢。 Not so the private banks.並非如此的私人銀行。

Greenbacks were on balance our best money system to date Thanks to 100 years of misreporting, the image of the greenbacks coming down to us is as inflated or worthless paper money.鈔票上的平衡我們最好的貨幣制度，迄今由於100多年的誤報，形象的鈔票下來，我們是誇大的或毫無價值的紙幣。 In fact, $450 million were authorized and $450 million were printed.事實上， 4.5億美元的授權和4.5億美元的印刷。 Counterfeiters couldn’t duplicate the Greenbacks.造假者無法重複鈔票。 Every Greenback was eventually exchangeable one for one with gold coin.每匯價最終交換一個一個金幣。

But greenbacks were not promises to pay money later - they were the money.但是，鈔票沒有承諾付錢後-他們的錢。 Since they were not borrowed, they did not give rise to interest payments and did not add to any national debt.因為它們不是借來的，他們並沒有引起支付利息，並沒有加入任何國家的債務。 The US Treasury printed them and spent them into circulation.美國財政部印製並用他們進入流通領域。

Economists usually harp on the Greenbacks dropping to 36 cents in gold, and they leave it at that.經濟學家通常豎琴的鈔票下降到36美分的黃金，他們停留在這一點上。 While that happened, its highly misleading.雖然這種情況發生，其高度誤導。 . 。 . 。

What did happen was that in June 1864, Congress limited the amount of Greenbacks to $450 million.什麼情況是，在1864年6月，美國國會的數額有限的鈔票，以4.5億美元。

There was inflation, but remember 13% of the population was fighting a terrible war.有通貨膨脹，但請記住13 ％的人口是一場可怕的戰爭。 625,000 died. 625,000人死亡。 Greenbacks performed well despite being spent on destruction.鈔票表現良好，儘管用於銷毀。 They were also being abused by the bankers.他們也被濫用的銀行家。 For every greenback created by Congress, the banking system created $1.49 in bank notes.對於每一個美元由美國國會創辦的，銀行體系創造1.49美元的鈔票。

What if instead of being spent on destruction, they went into building infrastructure, and canals and roads?如果不是用於破壞，它們進入基礎設施建設，以及運河和道路？ Spending such money on infrastructure need not be inflationary.這些資金支出的基礎設施不必通貨膨脹。 For example the Erie Canal lowered freight prices from $114 a ton down to $9 a ton.例如，伊利運河降低貨運價格從一一四美元一噸下降到9美元一噸。

The great lesson of greenbacks is that in times of crisis - and other times too - our nation has power to do what is financially necessary, through our government.偉大的教訓鈔票是，在危機時刻-和其他倍太-我們的國家權力，這樣做是必要的財政，通過我們的政府。 We don’t have to beg or borrow money from the wealthy and, create an astronomical national debt. We don’t have to tax the middle class into oblivion, or cancel necessary programs. We can carefully use the nations’ sovereign money power far more than we presently have been allowed to realize.

At the time of the greenbacks there were those who fully understood. Senator Howe said: “We must rely mainly upon a paper circulation; and . . . that the paper, whoever issues it, must be irredeemable. All paper currencies have been and ever will be irredeemable. It is a pleasant fiction to call them redeemable. . . I would not expose that fiction only that the great emergency which is upon us seems to me to render it more than usually proper that the nation should begin to speak the truth to itself; to have done with shams, and to deal with realities.”

The struggle between private versus public control of money continued throughout the 19th century. The greenbacks continued to constitute about a third of our money supply. Generally the private money power dominated. But in periods when the government exercised control, an excellent record was established- superior to that of private control. The bankers continued their pretense that gold was the basis of the system, and even the Federal Reserve in 1913 appeared to be a gold-based system. But immediately upon inception, we were pushed into warfare. Within 20 years Americas farms, cities, exchanges and money system were all wrecked, ending in the great depression. It was again left to our government to rescue the nation.

It’s forgotten today, but the Thomas Amendment passed with legislation in 1933, gave the President the power to create $3 billion in greenbacks if the banking system didn’t co-operate. . .

The de-funding of government at the local, state and federal levels, arises out of this disease of attacking government as the enemy.

This attack on government starts with Adam Smith. His purpose in smearing the English government was to keep the monetary power in the hands of the privately owned Bank of England. . .

To summarize the argument: The nature of the money power is societally derived, not one originating in the activities of private corporations. Because of its great importance to all, control over the process belongs under public authority. Both logic and history show that its not safe to delegate this power, and certainly not acceptable to allow its usurpation.

The current bailout

The demand for immediate action to avoid a meltdown is misplaced. Immediate and wrong action will accelerate the meltdown. There is only one thing Congress can do to inspire confidence and avoid a meltdown - that is to take deliberate and careful and good workable action to help resolve the crisis. In other words to fulfill its congressional duty to America. . .

Getting it right means requiring several conditions to protect the American people from the gang that’s been financially raping the nation; that gave us the unnecessary Iraqi war. It means facing the facts on where the banking crisis is and how it got there. It means examining the monetary and economic reforms of the Federal Reserve System that will assure that such thievery or foolishness won’t happen again; and taking back from those who improperly benefited from the tragedy and prosecuting them.

At the heart of the problem is that our money system has been privatized. Naturally it’s being run for the benefit of the “privates” in control, with minimal concern for the public interest. . .

Rather than borrowing the $700 billion being demanded, and ending up paying back about 3 times that amount after interest charges, The US government could issue the money the same way the banks do, instead of borrowing it from them. But while the banks issue credit that substitutes for money, the US would issue actual money. Our government has the power to create the money, in an account, or by simply printing it as greenbacks.

There would not be inflationary effects, because it was already believed that those moneys existed in the form of the real estate values and loans. In effect this would stop a deflation which would follow from writing down those assets and loans to their present market values. Some conditions would be needed to assure that the banking system did not use those greenback dollars for further credit creation, as that would be inflationary. In essence the greenbacks would not be “re-discountable” by the banking system to create more loans, but would be legal tender for all debts public and private. . .

What the administrations proposal is doing is almost identical to what Keynes did during the Great Depression. He insisted that the bailout be in terms of government going into more debt to the banking system, whereas the Chicago Plan by the greatest economists in the nation at that time, was promoting the government to create money (greenback equivalents) instead of debt. . .

Keynes won the argument but his program did not work and it was only WW2 and [with] wartime employment, creating tanks to be blown up, airplanes to be shot out of the sky, and ships to be sunk, that Americans went back to work and we worked our way out of the depression, and into more debt. That’s where this proposal leads. Keynes answer was that “in the long run we are all dead,” but not our posterity. Based on what happened following his program before, our descendants, and society that survives become enslaved.

Unless monetary reform is in the mix now, it could take a tremendous worsening of the situation to come up again soon. One articulate friend, George Romero, summed it up for me: “The private sector has failed. The public sector is expected to rescue them, and it will. Therefore the public sector should be in control of the money system to benefit the country.”

The Chicago Plan of the 1930s

Henry Simons from the University of Chicago created the proposal and prominent economists from other universities joined him in what became known as the “Chicago Plan.”Economists like Paul Douglas of the U of C.; Frank Graham and Charles Whittlesley of Princeton; Irving Fisher of Yale; Earl Hamilton of Duke; and Willford King of NYU, to name a few. One version was sent to all the academic economists – about a thousand total. Of those responding, 235 from 157 universities agreed with the proposal; another 40 approved it with reservations and only 45 disapproved. So the plan had broad professional support. Variants of the Chicago Plan usually started by condemning the banking structure as foolish and harmful: “If the purpose of money and credit were to discourage the exchange of goods and services, to destroy periodically the wealth produced, to frustrate and trip those who save, our present monetary system (does that) most effectively!”

They dispensed with the gold standard as not a real standard, because the value of gold had changed violently up and down against commodities. From 1914 to 1917 wholesale prices rose 65% and, then increased another 55% to May 1920, So Gold coins lost over 75 % of their value against wholesale prices in the Fed’s first six years. Then by June 1921wholesale prices fell 56% against gold. “Hard money” advocates who believe that gold money has been stable should study these facts. One version of the plan quoted Roosevelt’s referring to gold as an “old fetish of so-called international bankers.”

The main features of the Chicago Plan were:

- Only the government would create money. The Federal Reserve banks would be nationalized, but not the individual member banks. The power to create money was to be removed from private banks by abolishing fractional reserves – the mechanism through which the banking system creates money. So the plan called for 100% reserves on checking accounts which simply meant banks would be warehousing and transferring the money and charging fees for their services.

- The Plan separated the loan-making function, which can belong in private banks, from the money-creation function, which belongs in government. Lending was still to be a private banking function, but by lending deposited long-term savings money, not created credits. In this way they’d restrict an unstable practice known as borrowing short and lending long – making long term loans with short term deposits.

- The proposal recognized the distinction between money and credit, which had been confused through fractional reserves and what was called the “real bills doctrine.” The confusion was seen as one of the causes of the depression, because when businesses reduced their borrowings on commercial bills which occurs during any downturn, parts of the money supply had been automatically liquidated. The Chicago Plan saw the instability of this – that it aggravates a downturn.

Simon made this grand observation: “The mistake. . . lies in fearing money and trusting debt. Money itself is highly amenable to democratic, legislative control, for no community wants a markedly appreciating or depreciating currency. . . but money is not easily manageable alongside a mass of private debt and private near-moneys. . . or alongside a mountain of public debt.”

Some variations of the plan had the US government lending banks all or part of newly printed cash needed to achieve 100% reserves. This was a crucial part of the plan, because depositors were going to the banks and withdrawing their accounts, deflating the system.

This loaning of reserves feature also elegantly converted all the previously monetized bank credits into real US money on which the banks paid interest to our government. It post facto made them intermediaries, earning some reasonable spread for their loaning work.

Paul Douglas wrote: “This proposal will of course be opposed by the bankers from whom it takes the lucrative privilege of creating purchasing power. It would however insure the safety of deposits, give large revenues to the government, provide complete social control over monetary matters and prevent abnormal fluctuations in the capital market. At the same time it would permit the allocation of productive resources. . . to remain primarily in private hands. All in all it seems the most promising program for the reform of our monetary and credit system. . . ”

Marinner Eccles, who became Fed Chairman under Roosevelt, testified that the best course would be for the government to nationalize the Federal Reserve banks.

Congressman Jerry Voorhis made the case for hundred percent reserves and putting money into circulation by paying pensions and disabled persons. As late as 1945 Voorhis introduced legislation for a US Monetary Authority as our sole creator of money.

Maurice Allais, the great French economist, backed the plan and published a book on it in 1948.

Irving Fisher of Yale, wrote on it extensively and popularly well into the 1940s. . .

There was no understanding or support for the proposal among the electorate. Only Irving Fisher seems to have understood the necessity for popularizing the matter.

Simons himself got cold feet and shied away from promoting the plan, desiring to remain on a level of professorial discussion. He even threw a wet towel on Fisher who was promoting the reform suggesting that Fisher avoid popularizing the idea!

The Plan was mishandled politically. . . The last attempt at 100% reserves was when Senator Nye of North Dakota tried to place it in part of the administration’s 1935 banking reform legislation, but his amendment was defeated.

The FDR administration had its own banking reform bill and remained ambiguous on the Chicago Plan, never commenting on it even though the political climate and professional support for the plan was sufficient to get it passed, had they made some effort. Instead his Treasury Secretary Morganthau was trying to make minor adjustments without fundamentally challenging the banking system. . .

Can we learn from what John Maynard Keynes was doing during all this? He was squarely behind the bankers and against such real reform. Yet he knew that he had to break out of orthodox economics or the whole system was in danger of being overturned. Keynesianism was a way to allow banks not government to keep control over the money-creation process, and while the more narrow minded economists fought Roosevelt’s attempts to create money and jobs as inflationary, during the nations worst deflation, Keynes knew better.

The New York Times in December 1933. . . got Keynes to write an open letter to Roosevelt, which they published. Keynes wisely advised Roosevelt that “Only the expenditures of public authority” could turn the tide of depression. . .

However, Keynes inappropriately warned Roosevelt not to create the money for this, but only to borrow it, and wrongly advised him that there was already enough money in circulation, and that: “increasing the quantity of money. . . is like trying to get fat by buying a larger belt.”

Keynes was therefore not “revolutionary” except in relation to the utter backwardness of the financial establishment. He didn’t come close to a real solution, but essentially protected his class. The real question has always been whether the nation’s money should be created under law, by government, or under the private caprice of bankers.

DEALING WITH THE NATIONAL DEBT

Bob Blain, Progressive Review, 1994 - From 1790 to 1993, taxpayers were charged $3.2 trillion in interest on federal debt. . . . The original debt at 5.53 percent interest compounded for 204 years equals $4.4 trillion. The present federal debt is arguably the original debt enlarged by 204 years of compounding interest.

According to the Federal Reserve Bulletin, the total money supply (currency, travelers checks, demand deposits, and savings accounts) in the US economy in March 1993 was $4 trillion. The total debt of the federal government, state and local governments, corporations, farmers, home buyers, and consumers was in excess of $15 trillion. If the total money supply is $4 trillion, where is the other $11 trillion of borrowed money?

Here is another curious fact. We have been told for years that government borrowing to cover hundreds of billions of dollars of deficits would drive interest rates through the roof. Instead, interest rates have fallen dramatically. In March, 1993 they were between 4.9 and 2.2 percent, far below what they were in the early 1980s when federal debt was a small fraction of what it is now.

The explanation for these anomalies is that the missing money never existed. We never borrowed it, in the normal sense that it was turned over to us and spent. Most debt is not the result of people borrowing money; it is the result of people not being able to repay what they owed at some earlier time. Instead of declaring them bankrupt, creditors just add more to their debt.

The federal government has been adding interest to its debt for 204 years. James Jackson, Congressman from Georgia, predicted that this would happen in a speech he made to the First Congress on February 9, 1790. Jackson warned that passing Alexander Hamilton’s plan to base the country’s money supply on the existing federal debt of $75 million would “settle upon our posterity a burden which they can neither bear nor relieve themselves from.” He predicted: “In the course of a single century it would be multiplied to an extent we dare not think of,” He clearly saw that Hamilton’s plan would put in place an exponential process of debt growth. To support his warning he cited the experience of Florence, Genoa, Venice, Spain, France, and England.

Hamilton’s plan was for Congress to commit the country to pay interest on the debt until the debt was paid. In the meantime the debt certificates would circulate as money. He argued that this would turn a $75 million debt into a $75 million money supply. The problem was that interest payments would have come out of the money supply. This would reduce the quantity of money that remained in circulation — and cause recession — until new loans returned the interest money back into circulation. The history of federal government finance shows such periodic swings between debt reduction and recession to debt increase and recovery.

The power to deal with this problem that Congress has neglected all these years is the power “to coin money and regulate the value thereof.” It has overused its power “to borrow money on the credit of the United States.” According to the Federal Reserve, 98 percent of the US money supply is borrowed. Only 2 percent is coined.

The First Congress set the wrong precedent. It should have created $75 million in money and paid off the debt. With a population of 4 million people and an economy starved for a medium of exchange, that would have increased the money supply by $18.75 per person.

Why did the First Congress borrow instead of coin money? Newspapers at the time accused members of Congress of acting to serve their own interests. They sent agents into the countryside to buy up debt certificates that the general public thought were worthless. They then passed the Funding Act knowing that it would give themselves and their heirs a source of income that would grow exponentially with the debt. For every debtor there is a creditor. What is a $4 trillion debt for debtors is $4 trillion in claims for creditors.

To get out of this trap Congress has a range of options:

First, it could stop paying interest on the debt. Interest is the fuel that is exploding the debt. Cut off the fuel; stop the explosion. Since 1790 over $3 trillion in interest has been added to the original $75 million. Cutting interest would immediately cut the annual deficit by about $300 billion. Experience shows that all other conventional actions, no matter how painful, do no more than slow slightly the rate of debt growth. Then Congress could begin the process of paying off the debt.

A political problem with stopping the payment of interest is that people with money control politics. And many of them would have their interest income stopped. Insurance companies and pension funds are invested in federal debt and foreign holders would also be upset. Economically, however, we cannot continue to add compounding interest to existing debt. The biggest debtor is not the federal government. It is business corporations. It is impossible for them to increase the physical production of goods and services in order to keep up with exponential debt growth that is limited by nothing but arithmetic. Unlike the debt, the physical economy has limits.

The question holders of federal debt must ask themselves is this: Do we want to insist on more interest that will add debt to existing debt until the only option is debt repudiation and we lose everything? Or are we willing to stop where we are while we may still be able to recover our original investment plus a reasonable profit?

A second option is for Congress to create the money necessary to fund public works. As a sovereign government, Congress’ power is unique. It can create money debt-free and interest-free. Congress needs to stop thinking of itself as the same as other organizations that must take money in before they can spend it. Money does not grow on trees. It must be created. The only choice is whether to have it created as loans at interest from private banks or to have it created by Congress debt-free and interest-free.

How can Congress create money without causing inflation? Congress must regulate its value. The power to create money includes this regulatory power.

A good way for Congress to regulate the value of money is by funding projects at the current national price level. The current national price level can be calculated by dividing the most recent gross domestic product by the number of hours of work that produced it. For example, in 1991 the total gross domestic product was $5.6 trillion. The employed labor force produced it with 237 billion hours of work. So the GDP was produced at the rate of $23.95 per hour of work. By now the price level per hour is probably $25.00. So let Congress fund projects at $25 per hour. How this amount is allocated among labor, land, and capital can be negotiated.

How much money should Congress create? How about enough to reach full employment? We have about 9.5 million people actively looking for work. That includes a million managers and professionals; two and a quarter million technical, sales, and clerical people; a million and a quarter precision production, craft and repair people; over two million operators, fabricators and laborers; and 305,000 framers, foresters and fishermen. That’sa skilled labor force as big as many nations — all now idle. Employed at an average $25 per hour, ($50,000 per year), they would add $475 billion to the nation’s gross domestic product and reduce spending for unemployment compensation. The pie would grow as unemployment went down. Congress could start by creating, say, $50 billion, or $200 per person, in debt-free interest-free money, then fund $50 billion worth of works projects, monitor the results, and make adjustments as needed. Meanwhile the Fed could raise bank reserve rates, not interest rates, to make checking accounts more secure.

A third more conservative option is being proposed by an organization called Sovereignty, which believes that a country that borrows money loses its sovereignty to its creditors. Their proposal is intended to restore US sovereignty by reducing our dependence on borrowed money.

The Guernsey experience. . .

Guernsey is an island state located among the British Channel Islands about 75 miles south of Great Britain. In 1816 its sea walls were crumbling, its roads were muddy and only 4 1/2 feet wide. Guernsey’s debt was 19,000 pounds. The island’s annual income was 3,000 pounds of which 2,400 had to be used to pay interest on its debt. Not surprisingly, people were leaving Guernsey and there was little employment.

Then the government created and loaned new, interest-free state notes worth 6,000 pounds. Some 4,000 pounds were used to start the repairs of the sea walls. In 1820, another 4,500 pounds was issued, again interest-free. In 1821, another 10,000; 1824, 5,000; 1826, 20,000. By 1837, 50,000 pounds had been issued interest free for the primary use of projects like sea walls, roads, the marketplace, churches, and colleges. This sum more than doubled the island’s money supply during this thirteen year period, but there was no inflation. In the year 1914, as the British restricted the expansion of their money supply due to World War I, the people of Guernsey commenced to issue another 142,000 pounds over the next four years and never looked back. By 1958, over 542,000 pounds had been issued, all without inflation.

In 1990 there was $13 million in interest-free state issued notes. A visitor to the island that year later wrote:

“I returned from Guernsey last weekend. It is a fascinating little island. There are about 60,000 permanent residents on the island. The average family owns 3.3 cars, their unemployment rate is zero and their standard of living is very high. There is no public debt. There is a surplus of public funds which earn interest. The Guernsey Treasury increased the Ml of the island by 40 percent in the last three-year period, and this increase did not do anything to inflation. The price for a gallon of gasoline in England translates to about $5US whereas, the price in Guernsey is about $2US. Contrary to the teachings of current economics in all higher institutions, inflation is not related to the volume of money but rather to the size of the commercial debt.”

Sovereignty proposes that Congress create money and lend it interest-free on a per capita formula to tax-supported bodies for capital projects and to convert existing debt to non-interest-bearing debt. Since first proposed in January 1989, the Sovereignty loan plan has been endorsed by over 1,814 city, town, and county governments and school boards, as well as by the US conference of Mayors, the Michigan state legislature and the Community Bankers Association of Illinois, which represents 515 banks.

As loans, the money would be repaid, so money injected into communities would fund projects, then be removed. Of the three methods for putting money into circulation available to Congress, giving, paying, and lending, lending is the most cautious.

Benjamin Franklin attributed the economic success of the colonies to their creation of all the money they needed. He said that the root cause of the Revolution was the act of Parliament that prohibited the colonies from continuing to issue their own money. The moneylenders of England thought it more profitable that the colonies borrow their money.

We hear from Washington that we need to sacrifice to bring the deficits under control — cut consumption, save, and invest. When that slows the economy, we will be told to spend more to stimulate the economy. We have heard it all before. Neither method works. We need debt-free interest-free money to fund the work that needs to be done. It’s not sacrifice we need; it’s productive employment. Let Congress use its unique power to coin money and regulate its value to fund that employment.

Money is no more than an accounting device, a system of notes certifying that the bearer has done a share of the work and deserves a share of the wealth. Money’s backing is the goods and services produced by the labor force. By creating money Congress can activate the idle productive power of our people. And what they produce will add real wealth to the US Treasury and add nothing to the federal debt.

Sam Smith’s Great American Political Repair Manual, 1997 - A report of Guernsey’s States Office in June 1946 notes that island leaders frequently commented that these public works could not have been carried out without the issues, that they had been accomplished without interest costs, and that as a result “the influx of visitors was increased, commerce was stimulated, and the prosperity of the Island vastly improved.” By 1943, nearly a half million pounds worth of notes belonged to the public and was so valued that much of it was being hoarded in people’s homes, awaiting the island’s liberation from the Germans. About the same time that Guernsey started to fix its sea walls the town of Glasgow, Scotland, borrowed 60,000 pounds to build a fruit market. The Guernsey sea walls were repaid in ten years, the fruit market loan took 139. In the first part of the the 20th century, Glasgow paid over a quarter million pounds in interest alone on this ancient project.

How did Guernsey avoid the fiscal disaster that conventional economics prescribed for it? First and foremost by understanding that when you build roads or sea walls or colleges or houses, you are not reducing your society’s wealth. In fact, if you do it right, you are creating something that will add to its wealth. The money that was created was simply backed by public works rather than gold or “full faith and credit.” It was, in fact, based on something more solid than the dollar bills in our wallets today. In contrast, tacking on an interest charge to public works — as we do in the US — creates no new wealth, but merely transfers claims on existing wealth from debtors to creditors.

Have Your Say: WHAT BANKS, ACADEMICS, THE MEDIA AND POLITICIANS DON’T TELL YOU ABOUT MONEY
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