The Lost Science of Money
CHAPTER 11 Part 2
HATCHING THE BANK OF ENGLAND
Charles Montagu
1st Earl of Halifax
BANK OF ENGLAND
Sir William Paterson
Michael Godfrey
THEMES OF LOST SCIENCE OF MONEY BOOK
1.
Primary importance of the money power
2.
Nature of money purposely kept secret and confused
3.
How a society defines money determines who controls the society
4.
Battle over control of money has raged for millennia:
5.
The misuse of the monetary system causes tremendous misery and suffering
for the ordinary working people. Will Decker & Martin Dunn, February 2014
public vs private
PARTS OF PRESENTATION
1.
2.
3.
4.
5.
6.
7.
8.
9.
Science of Money Recovered – But for Private Gain and Corrupt Power
Cantillon’s 1759 Observations on the Wars
Ricardo Attacks the Bank’s Money Creation Power, 1816+
Warfare Expands the Debt
Ricardo Identifies the Bank’s War Motive
The South Sea Bubble in England
The Bank of England and the Irish Potato Famine, 1845
Gradual Development of the Bank
Separation of Money and State
PART 1
Science of Money Recovered – But for Private Gain and Corrupt Power
Science of Money Recovered – But for Private Gain and Corrupt Power
THE TRUE NATURE OF MONEY IN SOCIETY
MONEY IS A FIAT OF THE LAW: its value is found in the law, not in the material from which it is made.
MONEY IS CREATED BY THE GOVERNMENT, THAT IS TO SAY, BY THE PEOPLE, acceptable by the government for taxes and dues.
THE GOVERNMENT (PEOPLE) MUST CONTROL THE VOLUME OF MONEY TO ENSURE A STABLE PRICE. This is economic justice.
FOR MOST OF RECORDED HISTORY, MONEY WAS THE SUPREME PREROGATIVE OF THE GOVERNMENT. During the monarchy, it was issued by the
King’s mint.
BILL OF CREDIT
CONTINENTAL
GREENBACK
BRITISH BRADBURY
Science of Money Recovered – But for Private Gain and Corrupt Power
THE PROPOSAL: Bank of England
1. The £ 1, 200,000 private capital raised (gold and silver) was to be lent wholly to the
Government at 8%, the interest to be financed by levying a duty "upon the
Tunnage of ships and vessels“ (interest yearly = £ 100,000) .
2. In return for the loan, the Private Bank was to be granted a charter and the right to
issue £ 1,200,000 of banknotes, secured only on that loan. The bank notes would
circulate as money, redeemable in gold.
3. The private bank notes were not legal tender, but were
to be acceptable by the government for all payments due,
and of being paid out by the government for all state
expenses.
Science of Money Recovered – But for Private Gain and Corrupt Power
USURY: MONEY CREATED BY PRIVATE POWERS
The bank created paper money, but for private power and profit of a small
group. This is usury – a calculated misuse of the money system for private
gain.
“Its franchise permitted it to accept as ‘collateral’ the goods and services of
the British People against its paper loans and to charge interest thereon. All
this bounty was to cost them no more than paper ink and printing press.”
David Astle, Essay 2, Babylonian Woe.
Science of Money Recovered – But for Private Gain and Corrupt Power
PRIVATE MONEY CREATION
David Astle, Appendix, Babylonian Woe
“The Bank of England is where we first see clearly and boldly this phenomenon of private money creation sweeping
the all important Money Creative powers of the State, as it were, into the ashcan. For with the power to write money
“ad infinitum” as was the reality of it, it merely did what any counterfeiter would do if suddenly having been given
the sanction of Sovereign power for his previously criminal activities : it bought up the King, the State, Parliament,
the People, and all their labours : past, present or future. It did what it willed, and created such industry as it willed
in England itself… “
Christopher Hollis, The Two Nations, p. 33
“Now, if a corporation lends money at interest and without risk, then re-lends the repaid loan and
so on, never distributing more than a trifle of its profits either as wages or dividends, then, however
small its original capital, however moderate its rate of interest, it is but a simple proposition in
mathematics that in course of time it must necessarily become the possessor of the entire wealth of
the country.”
Science of Money Recovered – But for Private Gain and Corrupt Power
STEPHEN ZARLENGA, LOST SCIENCE OF MONEY
The promoters of the Bank argued that the Bank would be founded upon a reserve that cannot fail but with
the Nation – the credit of the Nation.
BUT… the government could have created its own paper notes, based on the same security, and not paid any
interest on it to anyone!
BUT… unlike the Bank of Amsterdam, which was owned by the Government, the Bank of England was owned
and controlled by private individuals.
Science of Money Recovered – But for Private Gain and Corrupt Power
A PERMANENT NATIONAL DEBT
THOROLD ROGERS, THE FIRST NINE YEARS OF THE BANK OF ENGLAND
Science of Money Recovered – But for Private Gain and Corrupt Power
PERMANENT NATIONAL DEBT
“… WHO CAN THINK THAT POSTERITY WILL BE WILLING TO
PAY A TAX OF £ 110,000 PER ANNUM (ON THE ORIGINAL
LOAN) NOT FOR THE SUPPORT OF THEIR OWN
GOVERNMENT, FOR THE TIME BEING, BUT TO GO INTO THE
POCKETS OF PRIVATE MEN, STRANGERS AS WELL AS
NATIVES… “
WILLIAM LOWNDES
Science of Money Recovered – But for Private Gain and Corrupt Power
THE NATURE OF MONEY WAS HIDDEN.
THE SCIENCE OF MONEY WAS CONCEALED.
The bank owners obscured the true nature of money – while creating abstract
paper money, they put forward a backward commodity concept of money as gold
and silver
“Just as the people had been trained through the ages to think of money as
precious metal, and precious metal as money, so they could be trained to think of
paper money as representing… their gold, or their silver! ” David Astle, Essay 2,
Babylonian Woe.
PART 2
Cantillon’s 1759 Observations on the Wars
Cantillon’s 1759 Observations on the Wars
PHILIP CANTILLON, PHYSIOCRAT, d. 1754
quoting DR. JONATHAN SWIFT
“…hear the words of the late Dr. (Jonathan) Swift:
“ ‘ Most of the Nobility and Gentry who invited over the Prince of Orange… out
of regard to the necessity of the Kingdom, and the Safety of the People but
without intention of… making it a standing measure… soon after, a set of men
who had nothing to lose… to fasten wealthy people to the new Government
proposed those expedients of borrowing money at great premiums and
exorbitant interest. It was argued that the war could not last three campaigns
but while the war continuing and growing more expensive, taxes increased
and Funds (the debt) multiplied every day until they have arrived at the
astonishing height where we now behold them; and that which was at first a
corruption is at last grown necessary….
…there has been brought in such a complication of Knavery and Cozenage
(fraud, cheating) such a mystery of iniquity, and such a jargon of unintelligible
terms to involve it in, as were never known in any age or country of the
World… ’ “
DR. JONATHAN SWIFT
(1667-1745)
PART 3
Ricardo Attacks the Bank’s Money Creation Power, 1816+
Ricardo Attacks the Bank’s Money Creation Power, 1816+
PROPOSALS FOR A SECURE AND ECONOMIC CURRENCY, 1816
“That the Bank have the power of reducing the circulation to the
very narrowest limits will not be denied, even by those who
agree in opinion with the Directors, that they have not the power
of adding indefinitely to its quantity.
Though I am fully assured that it is both against the interest and
the wish of the Bank to exercise this power to the detriment of
the public, yet when I contemplate the evil consequences which
might ensue from a sudden and great reduction of the
circulation, as well as from a great addition to it, I cannot but
deprecate the facility with which the State has armed the Bank
with so formidable a prerogative.”
DAVID RICARDO
(1772-1823)
Ricardo Attacks the Bank’s Money Creation Power, 1816+
BANK ISSUED
PLAN FOR THE ESTABLISHMENT OF A NATIONAL BANK, 1824
“It is evident, therefore, that if the Government itself were to
be the sole issuer of paper money, instead of borrowing it of
the Bank, the only difference would be with respect to the
interest;—the Bank would no longer receive interest, and the
Government would no longer pay it: but all other classes in the
community would be exactly in the same position in which they
now stand.**
It is evident too, that there would be just as much money in
circulation; for it could make no difference, in that respect,
whether the sixteen millions of paper money now circulating in
London, were issued by Government, or by a banking
corporation.”
**Question: but without the increasing taxation to pay the interest
on the national debt, would not the working class be less oppressed?
GOVERNMENT ISSUED
PART 4
Warfare Expands the Debt
Warfare Expands the Debt
WAR WAS A CONSTANT STIMULUS TO THESE PROPOSALS
AND TO THE CREATION OF A PERMANENT PUBLIC DEBT
Second Anglo-Dutch War
(1665-1667)
Third Anglo-Dutch War
Franco-Dutch War
(1672-1674)
(1672-1678)
Nine Years’ War
(1688-1697)
(England/Scotland, Germany, Netherlands, Savoy, Spain, and
Sweden v France)
Williamite War In Ireland
(1688–91)
War of the Spanish Succession (1701-1714)
(Great Britain, Germany, Dutch Republic, Portugal, and Savoy v
France, Spain, Mantua, and the electorates of Bavaria and
Cologne)
Warfare Expands the Debt
TAXES UPON THE PEOPLE WERE NOT SUFFICIENT FOR WAGING WAR….
NEW CREDIT MONEY WAS NEEDED FOR WAR….
HISTORY OF THE BANK OF ENGLAND, Andreas Andreades, p 117-118
1701-1714, War of the Spanish Succession
“… in the first place the expenses of the war would have to be met,
and for this recourse must be had to a loan or to taxation, and in
particular to taxation, a method of raising money for which the
public always feels the strongest distaste; a distaste which was the
more natural when we remember the irksome character of the taxes
at that time, and that, thanks to the corruption of the officials who
collected them, only a small part of the money raised ever reached
the Exchequer.” (note 1)
(note 1) In Scotland, especially, throughout almost the whole of the
18th century, the cost of collecting the customs exceeded the
amount collected.
The Queen’s Regiment of Horse breaking
through on the right flank of the French-Bavarian army.
1706, War of the Spanish Succession
Warfare Expands the Debt
BANK OF ENGLAND and THE WAR OF THE SPANISH SUCCESSION, 1701-1714
The policy followed by the Bank was the same as the preceding war:
1. Support the Protestant dynasty
2. Give loans to the Government
3. Secure renewal and extension of its privileges
Anne (1665 – 1714), Protestant Stuart, became Queen of
England, Scotland, and Ireland in 1702. In 1707, under the Acts
of Union, two of her realms, the kingdoms of England and
Scotland, united as a single sovereign state, the Kingdom of
Great Britain.
Anne did more for the Bank than William III, her predecessor.
She avoided encouraging such rivals as the Land Banks.
Warfare Expands the Debt
BANK OF ENGLAND and THE WAR OF THE SPANISH SUCCESSION, 1701-1714
The Goldsmiths Attack, 1707
During the war, the private Goldsmith bankers tried
to ruin their great rival, just before the renewal of
its charter.
Sir Francis Childs, one of the largest goldsmiths,
refused to accept Bank notes.
Then they tried to break the bank, by redeeming for
coinage, £30,000 of its notes which they had
hoarded.
SIR FRANCIS CHILDS (c.1684-1740)
Child & Co (c.1580s), established in
London, is today a constituent of
The Royal Bank of Scotland.
Warfare Expands the Debt
BANK OF ENGLAND and THE WAR OF THE SPANISH SUCCESSION, 1701-1714
The Goldsmiths Attack, 1707
The Directors of the Bank, however, won. The
Directors made a 20% call on their shareholders.
In addition, sums were advanced from the Dukes
of Marlborough, Newcastle, and Somerset,
nobles, merchants, and the Queen.
The Directors also adopted a brilliantly simple
strategy: they refused to redeem the
goldsmiths’ Bank of England notes but
redeemed notes of their other customers.
Supporter of the Bank
The Duke of Marlborough
at the Battle of Blenheim, 1704;
an original shareholder in Bank
Warfare Expands the Debt
BANK OF ENGLAND and THE WAR OF THE SPANISH SUCCESSION, 1701-1714
The Act of 1709 – Renewal of the Bank’s Charter
In 1708 the Government was again in financial difficulties. The receipts
from the taxes hardly covered half the expenditure. An agreement
with the Bank was reached:
• Interest on original £1.2 million pound loan reduced from 8% to 6%.
• The Bank advanced a fresh loan of £400,000 at 6%.
• The Bank advanced a loan of £1.8 million, by buying the
Government’s Exchequer bills on security of the house duties, at 6%
for interest and repayment of principal.
• The extension of the Bank’s privileges for 21 years.
• Permission to double its existing capital of £2.2 million. The entire
subscription (£2.2 million) was filled on Feb. 22, 1709, between 9
o’clock and mid-day!
• The issuance of bank notes by a corporation exceeding 6 people was
prohibited. This created a monopoly for the Bank.
Supporter of the Bank
John Holles, 1st Duke of Newcastle
-upon-Tyne (1662-1711) was
Lord Keeper of the Privy Seal 1707-1711
Warfare Expands the Debt
BANK OF ENGLAND and THE WAR OF THE SPANISH SUCCESSION, 1701-1714
The Act of 1709 – Renewal of the Bank’s Charter
After the Act of 1709, the total capital (outstanding loans and cash)
of the Bank was £6.6 million:
Original loan
£ 2.2 million
Double of capital (cash)
2.2 million
Fresh loan
.4 million
Exchequer Bills (non-permanent loan) 1.8 million
Total capital:
£ 6.6 million
NOTE: The Bank’s monopoly of issue was only limited by the
formal order not to issue notes to an amount exceeding its capital.
Supporter of the Bank
Charles Seymour, 6th Duke of Somerset
(1662-1748) deserted James II to bear arms for
William of Orange in the Revolution of 1688
Warfare Expands the Debt
Henry Dunning Macleod, THEORY AND PRACTICE OF BANKING, 5th Ed., orig. 1855
The Bank’s Power of Note Issue is Criticized
“If for every debt the Government incurs, an equal amount of money
is to be created, why here we have the philosopher's stone at once.
What is the long sought El Dorado compared to this? Even there the
gold required to be picked up, and fashioned into coin. Besides,
people in this country would have to go round the globe in search of
it.
But let us coolly consider the principle involved in this plan of issuing
notes upon the security of the public debts.
Stated in simple language, it is this: That the way to CREATE money is
for the Government to BORROW Money. That is to say A lends B
money on mortgage, and on the security of the mortgage, A is
allowed to create an equal amount of money to what he has already
lent! !
Granting that to a small extent this may be done without any practical
mischief, yet, as a general principle, what can be more palpably
absurd ?
The Alchymist
In Search of the Philosophers' Stone
Warfare Expands the Debt
THE BANK ACCUMULATED POWER OVER THE PEOPLE
THE BANK’S MAIN PROTECTION:
ITS COMPLEXITY KEPT PEOPLE
FROM UNDERSTANDING THE
TRUE SOURCE OF ITS POWER –
THE MONEY CREATION PROCESS
Warfare Expands the Debt
1713 – Last Year of the War
• 1713 - The Bank made another loan to the
Government, and secured the continuation of its
charter until 1743.
• 1714 – Queen Anne died and the Hanoverian dynasty
was now established on the English throne
• 1716 – new agreement with Bank – in return for
redemption of the previous debts and for further
advances at 5 percent. This Act also exempted the
Bank from the usury laws.
GEORGE I OF GREAT BRITAIN
Warfare Expands the Debt
18TH CENTURY INCREASE IN THE NATIONAL DEBT
ENGLAND’S NATIONAL DEBT (in millions of £)
war period
cost of the war
accrued national debt
1688-1697 (Nine Year’s War)
32.6 million
14.5
1702-1713 (War of Spanish Succession)
50.7
21.5
1739-1748 (War of Austrian Succession)
43.7
29.2
1756-1763 (Seven Years’ War)
82.6
59.6
1776-1785 (U.S. War for Independence)
97.6
117.3
1793-1815 (The Napoleonic Wars)
831.5
504.9
PART 5
Ricardo Identifies the Bank’s War Motive
Ricardo Identifies the Bank’s War Motive
RICARDO, PROPOSALS FOR A SECURE AND ECONOMIC CURRENCY, 1816
It must, I think, be allowed, that the war, which has pressed heavily
on most of the classes of the community, has been attended with
unlooked-for benefits to the Bank; and that in proportion to the
increase of the public burdens and difficulties have been the gains
of that body.
The restriction on the cash payments of the Bank, which was the
effect of the war, has enabled them to raise the amount of their
notes in circulation from 12 millions to 28 millions…
The war, too, has raised the unredeemed public debt, of which the
Bank have the management, from 220 to 830 millions; and,
notwithstanding the reduced rate of charge, they will receive for
the management of the debt alone, in the present year, 277,000l.,
whereas, in 1792, their whole receipt on account of the debt was
99,800l.
It is to the war that the Bank are also indebted for the increase in
the amount of public deposits. In 1792 these deposits were
probably less than 4 millions. In and since 1806 we know that they
have generally exceeded 11 millions.
NAPOLEONIC WARS
(1803–1815)
PART 6
The South Sea Bubble in England
The South Sea Bubble in England
MANIPULATION OF THE MONEY SYSTEM BRINGS SPECULATION
USURY = MISUSE OF THE MONEY SYSTEM = ‘CAPITALISM’
arose in Holland and crossed the English Channel to London
Usury nurtures financial speculation and manipulation,
and the accompanying neglect of the Real Economy.
Usury concentrates wealth to a small group of wealthy parasitic financiers,
taxing the common people, not the wealthy.
SOUTH SEA STOCK HAWKER
TULIP MANIA
The South Sea Bubble in England
THE FINANCIAL SYSTEM AND
ITS SPECULATION ORIGINATED
WITH THE 17TH CENTURY DUTCH
Followed by Haarlem weavers who
have abandoned their looms, blown by
the wind and flying a flag emblazoned
with tulips, Flora, goddess of flowers,
her arms laden with tulips, rides to
destruction to the sea along with
tipplers, money changers and the
two-faced goddess Fortuna.
DUTCH TULIP MANIA
Wagon of Fools by Hendrik Gerritsz Pot, 1637
The South Sea Bubble in England
MANIPULATION OF THE MONEY SYSTEM BRINGS SPECULATION
THOROLD ROGERS, THE FIRST NINE YEARS OF THE BANK OF ENGLAND
… in 1602, the Dutch East India Company issued shares, that
were made tradeable on the Amsterdam Stock Exchange. This
invention enhanced the ability of joint-stock companies to
attract capital from investors as they now easily could dispose
of their shares.
The South Sea Bubble in England
1711 - The South Sea Company was formed by Robert Harley as a Tory competitor for the Whig Bank of England.
The company was promised a monopoly of all trade to the Spanish colonies in South America
in exchange for debt buyout and consolidating the national debt raised by the War of Spanish Succession (1701-1714).
The proliferation of taxes by 1710 could not be increased without endangering the economic life of the nation.
The South Sea Bubble in England
The South Sea Company originated in a government loan
From its own capital cash, the company provided the money due to the army and navy, as well as for other parts of
the unfunded (‘floating’) debt. The government provided: (1) 6% interest on the security of various duties, and
(2) the monopoly of trading in the South Seas (Pacific Ocean lands).
The Treasury interest payment would be dividends to the SSC stockholders, along with the trading profits. However,
the company never realised any significant profit from this monopoly.
The South Sea Bubble in England
CULMINATION OF FINANCIAL INNOVATION: SWAP DEBT FOR EQUITY
The founders of the company would persuade those
holding the debt/annuities to exchange them for shares in
the SSC. This was called ‘subscribing the debt into the
stock of the company’. The government creditors became
company shareholders.
The SSC now would be a major holder of government
debt. Company dividends would come from the
government’s interest payments and company trading
profits.
The exchange of government debt for stock was to occur
in five separate lots. The first two of these, totaling £2.75
million from about 200 large investors, had already been
arranged before the company's charter was issued on 10
September 1711. The government itself exchanged £0.75
million of its own debt held by different departments.
The South Sea Bubble in England
1720 – SOUTH SEA COMPANY INSPIRED BY JOHN LAW IN FRANCE
The SSC trading profits had not materialized. ‘Inspired’ by John Law’s success in France, the SSC directors decided
to concentrate on financial operations.
The directors of SSC watched John Law's remarkable success: in 1719, Law’s Mississippi Company bought out the
entire national debt of France and acquired many privileges from the government. The MC’s share price went from
300 livres in May to 18,000 livres by December!
The SSC directors decided to concentrate
on financial operations.
“But the rulers too were partly responsible for the misfortunes
which followed. The crisis originated, if Smollett is to be believed,
from the King’s recommendation to the Commons (Nov 1719)
to consider the “proper means for lessening the national debt.”
Andreas Andreades, HISTORY OF THE BANK OF ENGLAND, p 129
JOHN LAW 1671 - 1729
The South Sea Bubble in England
JANUARY – APRIL, 1720
SSC AND BANK OF ENGLAND FIGHT TO TAKE OVER CONSOLIDATED DEBT OF COUNTRY
SSC WINS
The scheme to lighten the burden of the national debt by
reducing all the public debts into one:
• The SSC would use its capital to buy all the public debt of the
government (£ 31 million), in return for interest of 5% until
1727 and 4% after that date. In return, the SSC would give the
government £ 7 ½ million.
• Adopted by government.
• Accepted only after prolonged and violent debates in
Parliament (and bribery totaling £ 1.3 million in form of low
priced SSC shares promised to officials).
Principal opponent
of debt consolidation
scheme
The South Sea Bubble in England
THE BUBBLE BEGINS – AND ENDS
PRICE OF SSC SHARES (IN £)
LAW PASSED, 1720
310
AFTER SUCCESS OF
FIRST SUBSCRIPTION
500
JUNE, 1720
890
END OF JUNE, 1720
2,000
AUG 24, 1720 – FOURTH &
FINAL SUBSCRIPTION
(TOTALLY FILLED IN 3 HRS) 1,000
SEPT 28, 1720
190
The South Sea Bubble in England
FEVERISH SPECULATION WARPS MENTALITY OF PEOPLE
The same thing happened in Change Alley in London as had happened in the
Rue Quincampoix in Paris; nobles and citizens, merchants and country squires,
judges and bishops, women belonging to all classes of society, crowded together
there.
The South Sea Bubble in England
Although women had been investing in
the stock market since its inception, the
years leading up to the South Sea Bubble
saw a sharp rise in the number of women
passionately involved in buying and selling
stocks. The sheet music shown here
satirizes the influence of stock trading on
women from all classes of society. The
text has been attributed to Anne Finch, a
successful poet and friend of Jonathan
Swift and Alexander Pope.
The South Sea Bubble in England
HOW TO MAINTAIN THE ARTIFICAL PRICE LEVELS?
PROMISES OF PROFITS OF 50%
ACQUISITION OF DISTANT AND INVALUABLE MARKETS
MINES AND HIDDEN TREASURES DISCOVERED
STOCK JOBBING PLAYING CARDS
The South Sea Bubble in England
ARTIFICIAL RISE IN SHARE PRICE PRODUCED:
1. ARTIFICIAL INCREASE OF WEALTH
2. IMMENSE RISE IN GENERAL PRICES
PEOPLE WITH MODERATE INCOMES WERE FORCED EITHER TO SPECULATE
OR LIVE IN POVERTY
PART 7
The Bank of England and the Irish Potato Famine, 1845
The Bank of England and the Irish Potato Famine, 1845
THE IMPROVERISHMENT OF THE POPULATION NOT ONLY CAME FROM FINANCIAL SPECULATION
BUT WAS BUILT INTO THE VICIOUS SYSTEM OF GIVING THE
PREROGATIVE OF PUBLIC MONEY CREATION TO PRIVATE PARTIES
IRISH FAMINE SHIP, 1845
The Bank of England and the Irish Potato Famine, 1845
WHAT CAUSED THE IRISH POTATOE FAMINE?
The Irish famine was not caused by a failure of the country’s food supply.
Only the potato crop failed.
1,029,000 people out of the total population of 8 million died of starvation
or under-nourishment in Ireland during the famine.
During 1845, the following food was exported from Ireland:
1. 779,000 quarters of wheat and wheat-flour
2. 93,000 quarters of barley
3. 2,353,000 quarters of oats
enough to feed for 12 months every person in Ireland who died of
starvation, nearly four times over.
The Bank of England and the Irish Potato Famine, 1845
WHAT CAUSED THE IRISH POTATO FAMINE?
THESE EXPORTS OF FOOD FROM IRELAND HAD NO IMPORTS TO BALANCE THEM.
THEY WENT OUT, TO SOME EXTENT, TO PAY THE RENTS TO ABSENTEE LANDLORDS…..
BUT, MAINLY, TO PAY THE INTEREST ON THE MORTGAGES IN ENGLISH-BANK-MANUFACTURED MONEY,
WHICH THE IRISH LANDLORDS, LIKE THE ENGLISH LANDLORDS, HAD RAISED TO PAY THE TAXATION
REQUIRED TO MEET THE INTEREST ON THE Napoleonic War Debt.
PART 8
Gradual Development of the Bank
Gradual Development of the Bank
BANK
THE BANK ACCUMULATED POWER SLOWLY
For many years, its notes circulated only in London.
Act of 1697 – no other bank should be allowed by Act of Parliament; but it did not forbid the formation of other joint-stock
companies, nor of any banking company
1698 – clause enacted permitting Treasury to accept Bank’s notes for taxes
Act of 1708 – a clause forbid another corporation like the Bank of England or a partnership exceeding 6 persons “to borrow, owe, or
take up any sum or sums of money on their bills or notes, payable at demand, or at any less time than six months from the
borrowing thereof”
Act of 1709 – Bank made new loan to government; charter renewed for 21 years with right to double its capital and note issue
1713 – Bank made new loan to government; charter continued to 1743
1833 – Bank of England notes are made legal tender
1844 – given monopoly on the printing of new bank notes. The Act exempted demand deposits from the legal requirement of a
100-percent reserve which it did demand for the issuance of paper money
Gradual Development of the Bank
THE BANK’S SLOW GROWTH IN PRIVILEGES
INDICATES ITS POWER WAS KEPT WITHIN A SMALL CIRCLE
J. Keith Horsefield, BRITISH MONETARY EXPERIMENTS 1650-1710, 1960
“A favorite accusation was that the Bank had fallen into the hands of a close
ring of related families which put their interests above those of the
commercial world generally.”
OCTOBER, 2010
PART 9
Separation of Money and State
Separation of Money and State
THE ENGLISH SEPARATION OF MONETARY POWER FROM THE NATION WAS REPEATED IN ENGLISH-SPEAKING COUNTRIES.
1. IN STRUGGLES WITH LEGISLATURES, THE BANKERS UNDERSTOOD THE ISSUES & ITS BENEFITS –
REPRESENTATIVES OF THE PEOPLE WOULD NOT UNDERSTAND THE COMPLEXITIES
2. REWARDS OF INTRIGUES, BRIBES AND ASSASSINATIONS WERE LARGE, IMMEDIATE, & SELF-FINANCING
3. TAKING ACTION AGAINST THE INJUSTICE BROUGHT IMMEDIATE PERSONAL SACRIFICES
4. THE PEOPLE OCCASIONALLY UNDERSTOOD THE ISSUE – NEVER IN THE 20TH CENTURY:
The horrors of war and ever increasing taxation ground the people down,
reducing their ability to consider political and social questions.
Financial control of mass communications, starting with pulpit and newspapers, then
radio, movies, tv, to say nothing of the universities, would keep the money question OUT OF SIGHT.
The financial power must expend huge amounts of energy and money for centuries to keep
this fraudulent system hidden from the public.
Q&A
WILL DECKER’S CONCLUSION:
THE CONTROL OF MONEY -- WITHOUT CONTROL FROM THE PUBLIC -- LEADS TO
CORRUPTION … USURPATION … SLAVERY.