AMERICAN MONETARY INSTITUTE
PO. Box 601, Valatie, NY, 12184
ami@taconic.net
A foundation dedicated to the study of monetary history, theory and reform.
Stephen Zarlenga director.
This paper has been incorporated into Chapters 14 thru 17 of The Lost Science of Money, and is no longer sold seperately. The book can be found in bookstores or can be ordered at a discount direct from the AMI.
(Click here to view the Lost Science of Money book details and order form)MONEY AND THE CONSTITUTIONAL CONVENTION
A two part paper. Part one examines the monetary background to the Constitutional Convention, including the major monetary experiments - both successes and failures - of the colonial period. The delegates had the colonys' hard won experience before them, as well as the writings of Locke and Franklin; yet they allowed themselves to be influenced by the untested theories of Adam Smith, and the exhortations of the clergyman John Witherspoon. How and why the Convention failed to clearly define the monetary power in the newly created United States of America.
While setting up the most advanced governing document of its day, separating and balancing powers, the delegates didn't consider the money question until 2/3 of the convention was over. They decided against rule from the top down, and kept authoritarianism at bay both politically and religiously; but by not understanding the nature of money as an institution of the law, rather than a piece of metal, the convention left open a back door for the money power to enter, and ultimately overwhelm the whole edifice.
Alexander Del Mar would write that they had sown the seeds of another revolution. Within a year of the first Congress convening, the power to control the nation's money supply was placed in the hands of a privately owned bank! 70 years later Congressman Benjamin F. Butler speaking on he money issue, would say: "We marvel that they saw so much, but they saw not all things."
Part two examines the aftermath of the Convention. The establishment of the private 1st Bank of the United States; the developing struggle between Thomas Jefferson and Hamilton over the monetary power; the moves of the Federalists to firm up the bank's establishment by promoting warfare.
The monetary views of Thomas Paine and his crippling attack on the Bank of England; its funding system (national debt) and its fomentation of warfare. The development of Jefferson's monetary views over time is examined chronologically in his letters. By 1813 he fully understood what had been overlooked at the Constitutional Convention. His attempts to resolve the problem are examined; taking down the 1st Bank of The U.S. and the issuance of U.S. Government notes for money.
The chaos of the state chartered banks is described, and Madison's attempts to organize a government bank. His inability to do so forces him to allow a 2nd private Bank of the U.S. The outrageous activities of this bank's early operation are described, as well as Jackson and Van Buren's successful effort in taking it down. Light is cast on the bank's influence on public opinion, through the bribery of newspaper editors, and even Daniel Webster. (part one and two, 12 pages each, footnoted; $12 per part, postpaid; students $6)