Thursday, February 18, 2010

Money, and the American Revolution

We have been taught that the American Revolution against the British was fought over taxation without representation... like the Stamp Act (tea tax) and other related impositions. However, during my history searches for my family genealogy, something else has become clear: money and the banking system... which ties in with our current economic crisis.

In 1764 when Ben Franklin went to London, he found very high unemployment and poverty everywhere. He asked his English friends how England, with all its wealth, could have so much poverty among its working classes. His friends replied that England was a prey to a terrible condition: it had too many workers! The rich said they were already overburdened with taxes, and could not pay more to relieve the needs and poverty of this mass of workers. Being astounded, he was asked why that wasn't also true in the Colonies, and how we raised money for our "Poor Houses". Here's his reply:

“We have no poor houses in the Colonies; and if we had some, there would be nobody to put in them, since there is, in the Colonies, not a single unemployed person, neither beggars nor tramps.

In the Colonies, we issue our own paper money. It is called 'Colonial Scrip.' We issue it in proper proportion to make the goods pass easily from the producers to the consumers. In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one."

When the bankers of England understood what Franklin said, they immediately took the necessary steps to have the British Parliament to pass a law that prohibited the Colonies from using their scrip money, and ordered them to use only the gold and silver money that was provided in sufficient quantity by the English bankers but at outrageous interest rates.

Only a year later, Franklin said, the streets of the colonies were filled with unemployed beggars, just as they were in England. The money supply had suddenly been reduced by half, leaving insufficient funds to pay for the goods and services these workers could have provided. Then began in America the plague of debt-money, which has almost ever since brought so many curses to the American people.

Franklin maintained that it was
"the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War."

This, he said, was the real reason for the Revolution:
"the colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction."

Is this just ancient history?


The ability for America (and the individual states to create its own credit) has largely been lost to private bankers. The lion's share of new credit creation is done by private banks, so - instead of being able to itself create money without owing interest - the government owes unfathomable trillions in interest to private banks, most notably The Federal Reserve Bank, which name is printed on every bit of US paper money in your wallet.


  1. Bibliographic footnotes????

    Actually the majority of today's "credit creation" is done by the Feds, not private banks.

  2. Lynn, Technically it's true that the Feds are who creates credit, but in my opinion that's through the Fed Reserve, a private bank. The government owns no bank per se, hence cannot create credit.

    I generally don't add footnotes except for articles I am paid to write, but I do try to put in links to my source information for posts on my opinions. Don't know what happened to my notational source for Franklin's quotes but I thought I included it.

  3. Okay, I see where you're coming from....thanks for the comment back.


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