The Creature From Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin

Author:G. Edward Griffin
Language: eng
Format: mobi, epub, azw3, pdf
Tags: Business, Capitalists and Financiers, Banks and Banking, Economic Policy, Monetary Policy, Money & Monetary Policy, Political Science, Biography & Autobiography, Public Policy, Banks & Banking, Business & Economics, Federal Reserve Banks
ISBN: 9780912986456
Publisher: American Media
Published: 2010-11-30T22:38:50+00:00

Chapter Fifteen

THE LOST

TREASURE MAP

The bitter experience of the American colonies

with fiat money; the resolve of the founding

fathers to prohibit the new nation from resorting

to paper money without backing; the drafting of

the Constitution to that end; the creation of a true

American dollar; the prosperity that followed.

In the golden days of radio, on the Edgar Bergen Show, the

ventriloquist would ask his dummy, Mortimer Snerd, "How can

you be so stupid?" And the answer was always the same. After a

moment of deep thought on the part of Mortimer, he would drawl

his reply, "Well, it ain't easy!"

When we look at the monetary chaos around us today—the

evaporating value of the dollar and the collapsing financial institu-

tions—we are compelled to ask: How did we get into this fix? And,

unfortunately, Mortimer's response would be quite appropriate.

To find out how we got to where we are, it will be necessary to

know where we started, and a good place to begin that inquiry is

with the Constitution of the United States. Article I, Sections 8 and

10 say:

Congress shall have the power —

To borrow money ... to coin money, regulate the value thereof,

and of foreign coin, and fix the standard of weights and measures;...

[and] to provide for the punishment of counterfeiting....

No state shall ... coin money; emit bills of credit; [or] make

anything but gold and silver coin a tender in payment of debts.

The delegates were precise in their use of these words.

Congress was given the power to "coin money," not to print it.

Thomas M. Cooley's Principles of Constitutional Law explains that

'to coin money is to stamp pieces of metal for use as a medium of

exchange in commerce according to fixed standards of value."

• -

310 THE CREATURE FROM JEKYLL ISLAND

What was prohibited was to "emit bills of credit" which, according

to the speeches and writings of those who drafted the document,

meant the printing of paper IOUs which were intended to be

circulated as money—in other words, the printing of fiat money

not backed by gold or silver.

At first, it would seem that nothing could be more clear. Yet,

these two simple clauses have become the basis for literally

thousands of pages of conflicting interpretation. The crux of the

problem is that, while the Constitution clearly prohibits the states

from issuing fiat money, it does not specifically prevent the federal

government from doing so. That was truly an unfortunate over-

sight on the part of the document's framers, but they probably

never dreamed in their wildest nightmares that their descendants

"could be so stupid" as to not understand their intent.

Furthermore, "it ain't easy" to miss their intent. All one has to

do is look at the monetary history that led up to the Constitutional

Convention and to read the published letters and debates of the

men who affixed their signatures to that founding document.

As one reads through the debates on the floor of the conven-

tion, one is struck by the passion that these delegates held on the

subject of money. Every one of them could remember from his

personal experience the utter chaos in the colonies caused by the

issuance of fiat money. They spoke out against it in no uncertain

terms,

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