Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
[c] Since the colonists were thus forced to pay in silver or gold, anyone lacking in those metals had to borrow money, at<br />
interest, from the British banking system, which was regulated by the Central Bank of England. This resulted in a large<br />
contraction in the Colonies money supply, causing widespread unemployment and poverty.<br />
In the words of English Historian John Twells:<br />
“In a bad hour, the British Parliament took away from America its representative money, forbade any further issue of bills<br />
of credit, these bills ceasing to be legal tender, and ordered that all taxes should be paid in coins. Consider now the consequences:<br />
this restriction of the medium of exchange paralyzed all the industrial energies of the people. Ruin took place<br />
in these once flourishing Colonies; most rigorous distress visited every family and every business, discontent became<br />
desperation, and reached a point, to use the words of Dr. Johnson, when human nature rises up and assets its rights.” 1<br />
(5) “In the words of Peter Cooper, former vice president of the NY board of Currency.:<br />
“After Franklin had explained…to the British Government as the real cause of prosperity, they immediately<br />
passed laws, forbidding the payment of taxes in that money. This produced such great inconvenience and misery<br />
to the people, that it was the principal cause of the Revolution.” ”<br />
SOURCE:<br />
Peter Cooper: “Ideas for a Science of Good Government”. New York, Trow’s Printing,1883 p.221 2<br />
(6) “In 1783 America won its independence from England. However, its battle against the Central Bank concept<br />
and the corrupt, power hungry mentality associated with it... had just begun.<br />
So what is a central bank? A central bank is an institution that issues and regulates the currency of an entire nation.<br />
[a] Based on historical precedent, the typical powers inherent in central banking practice include the control<br />
of interest rates and the expansion and contraction of the money supply itself. [b] ”<br />
[a] Central Bank Defined: “The generic name given to a country’s primary monetary authority, such as the Federal Reserve<br />
System in the U.S. [It] usually has [the] responsibility for issuing currency, administering monetary policy, holding<br />
member banks’ deposits, and facilitating the nation’s banking industry.” 3<br />
[b] While there are variations among Central Bank models between countries, certain functions are in common. Monetary<br />
regulation within the US Federal Reserve System essentially consists of three actions:<br />
[1]“Open Market Operations”: These operations consist of the Fed buying and selling previously issued U.S.<br />
government securities, or IOUs of the federal government. The Fed adds extra credit to the banking system when<br />
it buys Treasury securities from the dealers, and drains credit when it sells to the dealers. 4<br />
This is a means of controlling the money supply/controls for inflation.<br />
[2] “Reserve Requirements”: Reserve requirements are the percentages of certain types of deposits that banks<br />
must keep on hand in their own vaults or on deposit at a Federal Reserve Bank. The Fed has the authority to set<br />
reserve requirements on checking accounts and certain types of savings accounts. 5<br />
This isn’t changed often, but functions as a means of controlling lending/hence controlling the money supply.<br />
[3] “Discount Window Lending”: The Discount Rate is the interest rate that the Fed charges banks for short-term<br />
loans. Increases in the discount rate generally reflect the Federal Reserve’s concern over inflationary pressures,<br />
while decreases often reflect a concern over economic weakness. 6<br />
This manipulation of Interest Rates is also a means for controlling the money supply.<br />
1 Quoted by Congressman Charles Binderup in 1941: “ How America created its own money in 1750: How Benjamin Franklin<br />
Made New England Prosperous,” Reprinted in “Unrobing the Ghosts of Wall Street.<br />
2 http://books.google.com/books?id=qm4aAAAAYAAJ&pg=PA208&lpg=PA208&dq=The+Cause+and+Cure+of+National+and+I<br />
ndividual+Distress+PETER+COOPER&source=bl&ots=lmD4NmHk44&sig=vnqGrlvAAuNmqSyFXiokizHwrsw&hl=en&ei=g-flS_-IMIH-8-<br />
Aay6t2CDA&sa=X&oi=book_result&ct=result&resnum=2&ved=0CBsQ6AEwAQ#v=snippet&q=Revolution&f=false<br />
3 http://www.investorwords.com/801/Central_Bank.html<br />
4 http://www.ny.frb.org/education/fed/tools.html#discount<br />
5 http://www.ny.frb.org/education/fed/tools.html#discount<br />
6 http://www.ny.frb.org/education/fed/tools.html#discount