How America created its own money in 1750

Benjamin Franklin tells what made New England prosperous -

In 1750, the American colonies were more prosperous than the home
country of England. How did this happen?

Before the Declaration of Independence (1776) and the war that
followed, the colonized part of what is today the United States of
America was a Crown possession of England. It was called New England,
and was made up of 13 colonies, which became the original states of the
great Republic.

In 1750, this New England was very prosperous. Benjamin Franklin wrote:
"There was abundance in the Colonies, and peace reigned on every
border. It was difficult, even impossible, to find a happier and more
prosperous nation on all the surface of the globe. Comfort prevailed in
every home. The people, in general, kept the highest moral standards,
and education was widely spread."

When Franklin went over to England to represent the interests of the
Colonies, he saw a completely different situation; the working
population of the home country was gnawed by hunger and plagued by
inescapable poverty. "The streets are covered with beggars and tramps,"
he wrote. 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 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
great mass of workers. Several rich Englishmen of that time actually
believed what economist Thomas Malthus later wrote, that wars and
epidemic disease were necessary to rid the country from "manpower
surpluses."

People in London asked Franklin how the American Colonies managed to
collect enough money to support their poorhouses, and how they could
overcome this plague of unemployment and pauperism.

Franklin replied; "We have no poorhouses in the Colonies, and if we had
some, there would be no one to put in them, since in the Colonies there
is not a single unemployed person, not a beggar nor a tramp."

His friends could not believe their ears, or understand how this could
be. They knew when the English poorhouses and jails became too
cluttered, England shipped the wretched inmates like cattle, to be
dumped on the quays of the Colonies if they survived the filth and
privations of the sea voyage. (In those days English debtors went to
jail if they could not pay their debts, and few escaped, since in jail
they could not earn money.)

Franklin's acquaintances, in view of all this, asked him how he could
explain the remarkable prosperity of the New England Colonies.

Franklin told them: "Why, that is simple! In the Colonies, we issue our
own paper money. It's called 'Colonial Scrip.' We issue it to pay the
government's approved expenses and charities. We make sure it's issued
in proper proportion to make the goods pass easily from the producers
to the consumers. In other words, we make sure there is always adequate
money in circulation for the needs of the economy.

"In this manner, by creating ourselves our own paper money, we control
its purchasing power, and we have no interest to pay, to anyone. You
see, a legitimate government can both spend and lend money into
circulation, while banks can only lend significant amounts of their
promissory bank notes, for they can neither give away nor spend but a
tiny fraction of the money the people need. Thus, when your bankers
here in England place money in circulation, there is always a debt
principal to be returned and usury to be paid. The result is that you
have always too little credit in circulation to give the workers full
employment. You do not have too many workers, you have too little money
in circulation, and that which circulates, all bears the endless burden
of unpayable debt and usury."

Franklin should not have been so free with his advice, which soon came
to the attention of the powerful English Bankers. They quickly used
their influence to have the British Parliament pass a law that
prohibited the Colonies from using their Colonial Scrip money. The new
law ordered them to use only credit redeemable in gold and silver coins
that were provided in insufficient quantity by the banks of England.
And so began in America the plague of debt-based money, which has ever
since brought as many hardships to the American people, as it has to
Europeans.

The first law regulating Colonial money was passed by the British
Parliament 1751, then expanded by a more restrictive law in 1763.

(continued below)



[edit on 18-5-2008 by ianr5741]

Franklin reported that only one year after implementation of the
prohibition on Colonial Scrip, the streets of the Colonies were filled
with unemployed and beggars, just like those he had seen in England,
because there was not enough money to pay for their goods and work. The
English Banker's new laws had reduced the circulating medium by half.

Franklin added "The Colonies would gladly have borne the little tax on tea
and other matters had it not been for the poverty created by the bad
influence of the English Bankers on the Parliament, which has caused in
the Colonies hatred of England and the Revolutionary War."

Other great statesmen of that era, including Thomas Jefferson, John
Adams, and George Jackson confirmed this point of view held by
Franklin; and later by Andrew Jackson and Martin Van Buren. Abraham
Lincoln and John Kennedy both issued sovereign money, James Garfield
tried, and all three died in office.

A remarkably honest English historian, John Twells, speaking of the
money of the Colonies, their Colonial Scrip, wrote: "It was the
monetary system under which America's Colonies flourished to such an
extent that Edmund Burke was able to write about them: 'Nothing in the
history of the world resembles their progress. It was a sound and
beneficial system, and its effects led to the happiness of the people.'
"

John Twells added: "In a bad hour, the British Parliament took away
from America its own scrip money, forbade any further issue of such
bills of credit, these bills ceasing to be legal tender, and ordered
that all taxes should be paid in British coins. Consider now the
consequences: this restriction of the medium of exchange paralyzed all
the industrial energies of the people. Ruin took place in these once
flourishing Colonies; most rigorous distress visited every family and
every business, discontent became desperation, and reached a point, to
use the words of Dr. Johnson, when human nature rises up and asserts
its rights."

Another historical writer, Peter Cooper, expressed himself along the
same lines. After saying how Franklin had explained to members of
Parliament the reason for the prosperity of the Colonies, Cooper wrote:
"After Franklin gave explanations on the true cause of the prosperity
of the Colonies, the Parliament enacted laws forbidding the use of this
money in the payment of taxes. This decree, clearly in the interest of
the British bankers who stood behind the Crown, brought so many
drawbacks and so much poverty to the people that it was the main cause
of the Revolution. The supression of the Colonial money was a much more
important reason for the general uprising than the Tea and Stamp Acts."

Today, in America as well as in Europe, we are under the regime of the
Scrip of the Bankers instead of the scrip of the sovereign nations.
Hence the enormous public debts, everlasting interest (usury) charges,
taxes that plunder purchasing power and rob the production of the
people, with the result being more and more consolidation of the
financial dictatorship.