because i am out of ideas and fixated on one key paragraph of my favorite and classic book, Fiat Money Inflation in France achamchen.com , namely
"Notwithstanding the fact that the paper currency issued was the direct obligation of the State, that much of it was interest bearing, and that all of it was secured upon the finest real estate in France, and that penalties in the way of fines, imprisonments and death were enacted from time to time to maintain its circulation at fixed values, there was a steady depreciation in value until it reached zero point and culminated in repudiation. The aggregate of the issues amounted to no less than the enormous and unthinkable sum of $9,500,000,000, and in the middle of 1797 when public repudiation took place, there was no less than $4,200,000,000 in face value of _assignats_ and_mandats_ outstanding; the loss, as always, falling mostly upon the poor and the ignorant."
Once again, a reference to Andrew Dickson White's Fiat Money Inflation in France, 1876. While there's a break in the market action, let's take note that the reviews of this work are not all positive. The issue is whether what is known as "fiat" currency is all cut from, so to speak, the same cloth: there's fiat issued by governments and there is fiat issued by private banks, such as the wholly, privately owned US Federal Reserve, working, even as it does, hand in glove, with the heads of US agencies and the executive branch. What follows is an excerpt from Stephen Zarlenga's The Lost Science of Money (American Monetary Institute Charitable Trust, 2002: www.monetary.org) p. 448, with reference to the experience with the Assignat currency issued by the French Revolutionary government—the one held up to such ridicule by your author, Mr. White:
"Within the year (1877), Stephen Dillaye (Assignats and Mandats, A True History, Including an Examination of Dr. Andrew Dickson White's "Paper Money In France," (Philadelphia: Henry Carey Baird & Co., 1877, p.8) had demolished White's effort to the point of embarrassment:
'The effort of his pamphlet is to overthrow our paper currency; to destroy confidence in our stability as a government; to question our honor as a nation, and our honesty as a people, by producing the history of French paper money, and showing by its failure and worthlessness, an example and illustration to convince us that because the French revolution failed in establishing a paper currency worthy of confidence, we must fail; that as they repudiated the obligations they created, the Government of the United States must repudiate the obligations it has created or may hereafter create. Mr. White's argument amounts to this or it amounts to nothing.'
Dillaye provided details on how English counterfeiting was a major factor in the Assignat's decline, as it had been against our own Continental Currency. We will quote him at length, since the reader will have great difficulty finding information on this elsewhere.
'It is true that adventurers in Belgium and priestly knaves in Switzerland commenced the business of forging the Assignats as early as October 1792 . . . It was found that Belgium was too open and too much in sympathy with revolutionary dogmas; and that Switzerland was too confined in its resources and communications for the . . .vast designs of the nobility and clergy. It is true that the business was kept up and increased there, but the great establishments for the systematized fraud found more scope and greater opportunities for uninterrupted work in London. . . England lent its aid, while its cabinet became the concealed agent for the propagation of the felony and the circulation of the nefarious outrage.'
Continuing: 'Seventeen manufacturing establishments were in full operation in London, with a force of four hundred men devoted to the production of false and forged Assignats. The success and extent of the labor may be judged by the quantity and value they represented. In the month of May 1795, it was found that there was in circulation from 12 billion to 15 billion francs of forged Assignats . . . The Assignats in circulation at this time . . . issued by the Revolutionary government were 7.86 billion francs, and not, as Mr. White has stated 45 billion francs . . . The value of the lands dedicated . . . as the basis for their redemption . . . was 15 billion francs . . .(pp.32-33)
As part of his proof, Dillaye cites legal proceedings in England where court disputes between those involved in counterfeiting brought the matter into the public record.
White's essay pretended that certain natural laws operated against government paper currency. Dillaye pointed out that:
'The Natural laws of finance, as Mr. White understands them, would have . . . strangled our [American] revolution in 1775, and kept us slaves to . . . kingly impudence,' and 'not a dollar has ever been lost by the paper credits of the United States since the adoption of the Constitution; but the losses, the ruin, the bankruptcies and the fatal failures which have resulted from banks making gold the basis are written in the history of every crisis for over three quarters of a century, and aggregate very many times the amount of the national debt . . . but who will attempt to estimate the amount of human misery and woe which this system of fraudulent specie basis has entailed in the American people?'
While White's essay continued to be reprinted by conservatives, into the 20th century (F.E.E. in 1959, and the Cato Institute in the 1980s), Dillaye's more accurate and more honest rebuttal has been ignored.
. . . Indeed, through the present day, The U.S. government has maintained a superior record of monetary activity, both in an absolute sense sense and in relation to the private issue of money, with only one primary failing—that is that the issuance of money has been allowed to remain in private hands for most of our history."
Thomas Jefferson:
"Put down the banks, and if this country could not be carried through the longest war against her most powerful enemy without ever knowing the want of a dollar, without dependence on the traitorous classes of her citizens, without bearing hard on the resources of the people, or loading the public with an indefinite burden of debt, I know nothing of my countrymen. Not by any novel project, not by an charlatanerie, but by ordinary and well-experienced means; by the total prohibition of all private paper at all times, by reasonable taxes in war aided by the necessary emissions of public paper of circulating size, this bottomed on special taxes, redeemable annually as this special tax comes in, and finally within a moderate period." --Thomas Jefferson to Albert Gallatin, 1815. ME 14:356
"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs." --Thomas Jefferson to Thomas Cooper, 1814. ME 14:61
"If the American people ever allow the banks to control the issuance of their currency...the banks and corporations that will grow up around them will deprive the people of all property, until their children wake up homeless on the continent their fathers conquered."--- Thomas Jefferson, letter to then Secretary of the Treasury, Albert Gallatin, 1802 |
