MONETARY HISTORY CALENDAR May 13-19

MAY 15

1915 – BIRTH OF PAUL SAMUELSON, ECONOMIST (FIRST AMERICAN TO WIN THE NOBEL PRIZE FOR ECONOMICS)
“Few understand that all our money arises out of debt and IOU operations. The banking system as a whole can do what each small bank cannot do: it can expand its loans and investments many times the new reserves of cash created for it, even though each small bank is lending out only a fraction of its deposits.” Economics, An Introductory Analysis by Professor Paul A. Samuelson. (Best selling college economics textbook of all time, c1948.)

1931 – “QUADRAGESSIMO ANNO” LETTER ISSUED BY POPE PIUS XI
The Pope discusses the ethical implications of economic and social order in this letter, warning of the dangers of unrestrained capitalism.
“Economic dictatorship is being most forcibly excercised by the few who hold the money and completely control it, control credit and the lending of money.  Hence they regulate the flow of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul of economics that no one can breathe against their will.”

MAY 16

1876 – SECOND GREENBACK NATIONAL CONVENTION OPENS IN INDIANAPOLIS
May 16–18, 1876 — Academy of Music, Indianapolis, Indiana. There were 239 delegates present from 17 states. Peter Cooper was nominated for President of the Greenback Party (calling for the creation of debt-free national money) with 352 votes to 119 for three other contenders.

1912 – PUJO COMMITTEE HEARINGS BEGIN
A special subcommittee of the House Banking and Currency Committee began hearings under its Chairman, Arsene P. Pujo. Its purpose was to investigate the powers of the nation’s “money trust.” Its final report, issued in 1913, concluded that the power over the nation’s money and credit was concentrated in a small group of Wall Street bankers. The report created a climate for reform. Unfortunately one of the reform advocated for was the misnamed Federal Reserve Act, which provided the appearance that finances would become a public function.

MAY 17

1787 – LAUNCH OF SHAYS’ REBELLION
A revolt of farmers in Western Massachusetts, spread to other states, fueled by the rise of personal and public taxes and debt and the collapse of any legitimate federal currency.

1901 – FINANCIAL PANIC
The first stock market crash in the US was caused by large investors speculating on railroad stocks. Thousands of small investors were ruined.

1930 – BANK OF INTERNATIONAL SETTLEMENTS ESTABLISHED
This is the central bank of all central banks, established as an international financial institution to “foster international monetary and financial cooperation.” Its headquarters are in Basel, Switzerland. The BIS serves to strengthen the international private banking system, not national economies. The BIS advocates the establishment of a global currency, building on the International Monetary Fund “Special Drawing Rights” – a quasi currency which has a value based on a basket of 4 major currencies (the dollar, euro, pound and yen).

2002 – TALK BY WILLIAM HUMMEL, AUTHOR, MONETARY RESEARCHER
“Banks are not ordinary intermediaries, like non-banks, they also borrow, but they do not lend the deposits they acquire. They lend by crediting the borrowers account with a new deposit… The accounts of other depositors remain intact and their deposits fully available for withdrawal.  Thus a bank loan increases the total of bank deposits, which means an increase in the money supply.”

MAY 18

1846 – STATE OF IOWA ADOPTS CONSTITUTION – PROHIBITION OF PRIVATE BANKS
Article IX of the original constitution of the State of Iowa prohibited banking by individuals or corporations. Preceeding statehood, the Territorial legislature passed an act in 1838 banning the issue of bank bills or notes by individuals or firms with a penalty of $1000 for each offense. From the History of Banking in Iowa, Howard Preston, 1922

1951 – DEATH OF JACOB COXEY
Jacob Coxey, a businessman from Massillon, Ohio organized a 500-strong “Coxey’s Army” march from Massillon (beginning on March 25, 1894) to Washington, D.C. (ending April 30) to promote federal intervention for job creation. The primary demand of this “petition in boots” was unique — the direct printing and issuance of $500 million by the Federal Treasury to employ 4 million people. Coxey’s Army proposed two bills. The first, a “Good Roads Bill”, would help farmers through $500 million issued by the federal government in legal tender notes, or greenbacks, to construct rural roads. The second, a noninterest-bearing bonds bill, would empower state and local governments to issue noninterest-bearing bonds to be used to borrow legal tender notes from the federal treasury. This money would be used to build urban libraries, schools, utility plants and marketplaces. Millions of jobs would have been created — debt-free.

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