Does The Constitution Call For A Public Banking System?

"The Bank of Canada is the nation's central bank. We are not a commercial bank and do not offer banking services to the public. Rather, we have responsibilities for Canada's monetary policy, bank notes, financial system, funds management. Our principal role, as defined in the Bank of Canada Act, is "to promote the economic and financial welfare of Canada."

The Bank was founded in 1934 as a privately owned corporation. In 1938, it became a Crown corporation belonging to the federal government. Since that time, the Minister of Finance has held the entire share capital issued by the Bank. Ultimately, the Bank is owned by the people of Canada. "

and the FED must be ended. Restore the issuing of money to the people by having a government that is for the people and by the people. Restore the constitution. Then the people will be in charge of issuing money through their elected representatives in the senate and congress.

Congress should print only as much money as there is gold to back it up. Otherwise the nation builds debt and the dollar is devalued. Congress needs to make regulations that the state banks must follow to avoid this current situation. Banks cannot be allowed to issue or create money, as the FED has been doing. Only the government can PRINT money. Ron Paul suggests governments live within their means and not overspend or over print money.

Thomas Jefferson
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power (printing of money) should be taken from the banks and restored to the people (their elected government), to whom it properly belongs."

What if banks lended all the deposits on hand? The money supply would really explode. Requiring a limit on what can be lent is actually better.

If all fractional reserve was outlawed and banks could only lend their money and not depositor money then say good bye to interest earning accounts. In this type of system you would have to pay a fee to store your money at the bank. There would be no incentive to save with bank deposits.

The current system limits the amount of money (bank money and deposits) that can be lent by requiring a minimum reserve of cash. This is better than no limits. But to be pure about no fractional reserve banking then there would be not many banks and less savings. Might as well put it in a mattress.

Why would the states or the federal government need to control banks? If we had honest money the banks would just be warehouses like any other business and they would be regulated by their customers either using them or not. Lending strictly from their reserves and making money through additional services. In transactions between each other (banks) in the transfer of gold would check each other for honesty. Fractional Reserve lending is fraudulent and open to the worst forms of abuse. Decentralized banking is what was intended, fractional reserve is the opposite. It inevitably forms "pyramids".

"The credit expansion boom is built on the sands of banknotes and deposits. It must collapse.", www.mises.org

There's no record of him saying that. Someone made it up and it's been going around on the internet.

Jefferson was not a banking socialist.

In what way is the Federal Reserve private? In no substantial way. Why would Congress setting the interest rates be any better than the Board of Governors setting the interest rates? A truly private banking industry, interest rates would be set by neither, but rather the market.

whether it is in banks, medical, finance, military hardware, aeronautics etc. As companies consolidate their need to be subsidized and there power to control government usurps the people. Plain and Simple if we do anything in the next 4 years we should file suit against the FTC for not protecting the People from this.

"All great truths begin as blasphemies."

He is not railing against private banks, he is railing against "the role" of private banks.

Private banks should not control the value of the national currency.

I suppose a state bank would be constitutional, but as someone who lives in a state where the governor behaves essentially like a mob boss, I wouldn't want that. It does say to the states or to the people.

See, if people don't want to be beholding to banks, simply keep your money under the matress. This is a bad idea when the fed is inflating the money, not such a bad idea if the money is linked to gold.

It should be up to you if you want to risk your money on a fractional reserve lending scheme.

That would be a "no". Quite the opposite!

http://brits4ronpaul.blog...

http://lpuk.blogspot.com/

http://northwestlibertari...

I believe the vision was that citizens could take their gold and silver to the government minting office and have it made into coins whose face value accurately displayed the value of the metal contained. That would aid the coin's acceptance by showing that the metal had been weighed and certified by a qualified authority. To have a five dollar gold piece today, you would need either a microscope or an alloy. The mint certified alloys would be readily accepted in a coin big enough to handle, rather than by the owner, who would have a lot to gain by cheating.

The money was to have been owned and circulated by the people. Banks were places for people to store their money, for a fee, since having large quanitities of gold in one's home is begging for a robbery. Of course, banks evolved into lending using other people's gold for collateral, then the fractional stuff started. Like a well designed Ponzi, it worked great - for a while.

Pat

BOHICA!!

Authorizing the congress to coin money isn't the same as authorizing them to operate a bank.

-jcr

either.

In fact, a free banking system allows for banks to issue whatever fractional reserve they want.

I think ideally, we have a slightly constrained version of free banking. The goverment issues a fixed amount of commodity-backed currency which serves as legal tender for government expenses. All other commerce is allowed to be transacted freely, although liquidation, bankruptcy, and tort may be settled in legal tender.

Interstate banks would be subject to rules set by congress, which should ideally define minimum standards of transparency, disclosure, and establish fraud rules. Intrastate banks would be subject only to state law.

Free fractional reserve lending allows for the money supply to naturally expand and contract in response to sudden shifts in the economy, dampening fluctuations in the economy: As spending overheats, and there's less money to go around, interest rates rise. As people are saving too much and not spending enough, interest rates drop. This compensation doesn't exist in enforced full-reserve banking, which is somewhat antithetical to a libertarian spirit anyways.

But the important thing is that free fractional reserve lending ought to settle around the social level of comfort with lending; so over long periods of time there is no net inflation through expansion of the money supply.

they may coin a one or ten oz gold or silver and stamp whatever face value at it for all I care.

banks don't "issue money".
They just hold it in their vaults for their customers, for fees.
Loans would be made between agreeing private parties, by contract, which could include banks that loan out their own funds, and not fractional-reserve loans based on their customers' deposits.

And a sound money system is what the founders described.