More than a decade ago The New York Sun unleashed a series of editorials marking the collapse of the value of the dollar as measured in gold and proposing to rename the greenback to personalize the blame. One such editorial was headlined "The Pelosi." Another was "The Greenspan." It was followed by "The Bernanke," a classic of the genre.
The series of editorials trailed off as subsequent stewards of our currency — thank Janet Yellen, Secretary Mnuchin, Speaker Ryan, President Trump, or anyone else who deserves the credit — mostly avoided the weak-dollar error.
The recent announcement by Facebook of a newly formed subsidiary to produce a “digital wallet” for Libra, a new digital currency, had me thinking, though, that it may be time to update the series, with “The Zuckerberg.”...........To Read More...
My Take - Interesting article, but in the 19th century banks used to issue their own currency here in the U.S. In fact , however, there were problems with that system which caused the Panic of 1907 causing banks to fail. This led to the creation of the Federal Reserve in 1913.
somehow, I don't really believe there's going to be much confidence with parallel systems of currency, although I've read those who claim banks in Scotland and Hong Kong print their own money.
In the early 19th century Mormons created their own bank and currency headquartered in Kirtland, Ohio.
"The issuance of Mormon currency began shortly after the founding of the Church of Jesus Christ of Latter Day Saints in 1830. In 1836 many Mormons had resettled to Kirtland, Ohio from the east coast. There they had decided to start a bank. This was a time when hundreds of banks, both legitimate and not, had sprung up. The number of banks increased with the demand for credit throughout the US. After gathering the plates and printing a significant sum of banknotes the Kirtland Safety Society Bank applied for a charter from the state of Ohio. However, Ohio denied their charter due to lack of capital."
"This did not stop the Mormons as they came up with an interesting plan. They eventually modified the notes by changing the bank title to “Kirtland Safety Society Anti-Banking Co.” as well as blocking out the titles “Cashier” and “President” and replacing them with “Secretary” and “Treasurer.” This was an attempt to differentiate the institution from a bank as it had no legal charter to operate. Only a small amount of notes were changed and it was only done to the $1, $2 and $3 banknotes, not the higher denominations. Some of these notes were signed by Joseph Smith Jr., the founder of Mormonism and the LDS movement. However, many of these were done by scribes and it is impossible to determine which notes carry a genuine signature. The notes were virtually worthless outside of Kirtland and were often traded at 12.5 cents on the dollar. Eventually the bank collapsed and many of the Mormon inhabitants left the city."The potential for forgery ran high with these currencies, and there was no backing for a bank that was failing due to bad investments. The Panic of 1907 was kept from getting worse because J.P. Morgan pumped a lot of his own money into the system to shore it up, and encouraged other banks to do the same. But it was clear the potential for private currency to impact the economy negatively was very real then, and I think that hasn't changed.
The real question is this: Can we trust the private banks or internet moguls to handle the currency better than the federal government? History seems to answer this in the negative.
One more point. You might find the story of J. S. G. Boggs interesting.
No comments:
Post a Comment