SeanEdwards
07-06-2007, 02:30 PM
http://www.pbs.org/opb/historydetectives/investigations/502_continentalcurrency.html
This was a very interesting episode of the History Detectives show. A single note of currency, apparently printed in 1776 under the authority of a fledgling American government is scrutizined. During the analysis of this particular piece of currency, facts about the abuse of the fiat currency system are revealed.
Here's a part of the show's transcript that I found particularly interesting. The comments speak directly to Ron Paul's position on monetary policy:
Gwen: Glenn has no doubt we have a genuine American bill.
Glenn: You've got the real deal.
Gwen: Paulette and Brooke are going to be thrilled. But I still need to get to the bottom of a couple of things.
Exactly who was putting up the money for the Revolution and why are the colonists dealing in Spanish milled
dollars? Robert Hogue is an expert on North American currency and the Revolutionary economy. He puts the
answer to one of my questions quite literally on the table.
Robert: Here are so called Spanish milled dollars.
Gwen: Robert explains the Spanish dollars were made in a milling machine. They were widely accepted as
universal currency in the 18th century, because Spain controlled the world's supply of silver. Our bill says
whoever has it is entitled to six dollars of Spanish silver. So, there were six dollars to back this note?
Robert: That's right.
Gwen: Who gave the government these Spanish milled dollars?
Robert: No one. Think of it as an official IOU, a promise to pay in the future in good money.
Gwen: Well, were people paid back in good money?
Robert: No. Unfortunately, they were not. They never really made good on this.
Gwen: The shocking truth about our bill, there was no Spanish silver backing the rebel money.
Gwen: Well, how did currency have value then?
Robert: It really had value only as a matter of faith. But then, all money is really a matter of faith, in a way.
Gwen: All Ben Franklin and the Congress had was a dollar and a dream. In truth, an awful lot of paper dollars
and a very big dream. His presses kept printing these beautiful bills, with nothing to back them.
Robert: Here we can see all of the issues of currency put out by the Continental Congress.
5
Gwen: I see. So starting with 3 million, our 4 million, 5 million. Suddenly 25, 75…95 million dollars. How much
money did Congress issue altogether?
Robert: Altogether, approximately 241 million.
Gwen: And, of course, the more currency the rebels printed, the less it was worth.
Gwen: 241 million and still nothing to back it?
Robert: Right.
Gwen: No wonder this money devalued. So how much would our six dollars have bought?
Robert: If we take a look at contemporary prices… at the beginning of the war that amount would have been a
month's pay for a private soldier in the Continental Army. But by the end of the war, it would not have been
enough to buy even a pound of butter.
Gwen: Oh! The falling value of the dollar was sparking potential civil unrest. Then Robert shows me a
surprising quote from Ben Franklin. He secretly believed the falling value of the dollar helped the Revolution. In
theory, the less it was worth, the less Congress would owe.
Robert: "This currency, as we manage it, is a wonderful machine. It performs its office when we issue it. And
when we are obliged to issue an excessive quantity, it pays itself off by depreciation."
Gwen: I've stumbled on a much bigger story than I'd thought. Franklin and the Congress continued to print
dollars, knowing they will become virtually worthless to the citizens who use them. The more I think about this
six dollar bill, the more amazed I am at the sheer moxie of the ideas behind it. Here is a fledgling American
government so convinced of its own virtue, so sure of its success that it's willing to deceive its citizens by
issuing money that has no value
This was a very interesting episode of the History Detectives show. A single note of currency, apparently printed in 1776 under the authority of a fledgling American government is scrutizined. During the analysis of this particular piece of currency, facts about the abuse of the fiat currency system are revealed.
Here's a part of the show's transcript that I found particularly interesting. The comments speak directly to Ron Paul's position on monetary policy:
Gwen: Glenn has no doubt we have a genuine American bill.
Glenn: You've got the real deal.
Gwen: Paulette and Brooke are going to be thrilled. But I still need to get to the bottom of a couple of things.
Exactly who was putting up the money for the Revolution and why are the colonists dealing in Spanish milled
dollars? Robert Hogue is an expert on North American currency and the Revolutionary economy. He puts the
answer to one of my questions quite literally on the table.
Robert: Here are so called Spanish milled dollars.
Gwen: Robert explains the Spanish dollars were made in a milling machine. They were widely accepted as
universal currency in the 18th century, because Spain controlled the world's supply of silver. Our bill says
whoever has it is entitled to six dollars of Spanish silver. So, there were six dollars to back this note?
Robert: That's right.
Gwen: Who gave the government these Spanish milled dollars?
Robert: No one. Think of it as an official IOU, a promise to pay in the future in good money.
Gwen: Well, were people paid back in good money?
Robert: No. Unfortunately, they were not. They never really made good on this.
Gwen: The shocking truth about our bill, there was no Spanish silver backing the rebel money.
Gwen: Well, how did currency have value then?
Robert: It really had value only as a matter of faith. But then, all money is really a matter of faith, in a way.
Gwen: All Ben Franklin and the Congress had was a dollar and a dream. In truth, an awful lot of paper dollars
and a very big dream. His presses kept printing these beautiful bills, with nothing to back them.
Robert: Here we can see all of the issues of currency put out by the Continental Congress.
5
Gwen: I see. So starting with 3 million, our 4 million, 5 million. Suddenly 25, 75…95 million dollars. How much
money did Congress issue altogether?
Robert: Altogether, approximately 241 million.
Gwen: And, of course, the more currency the rebels printed, the less it was worth.
Gwen: 241 million and still nothing to back it?
Robert: Right.
Gwen: No wonder this money devalued. So how much would our six dollars have bought?
Robert: If we take a look at contemporary prices… at the beginning of the war that amount would have been a
month's pay for a private soldier in the Continental Army. But by the end of the war, it would not have been
enough to buy even a pound of butter.
Gwen: Oh! The falling value of the dollar was sparking potential civil unrest. Then Robert shows me a
surprising quote from Ben Franklin. He secretly believed the falling value of the dollar helped the Revolution. In
theory, the less it was worth, the less Congress would owe.
Robert: "This currency, as we manage it, is a wonderful machine. It performs its office when we issue it. And
when we are obliged to issue an excessive quantity, it pays itself off by depreciation."
Gwen: I've stumbled on a much bigger story than I'd thought. Franklin and the Congress continued to print
dollars, knowing they will become virtually worthless to the citizens who use them. The more I think about this
six dollar bill, the more amazed I am at the sheer moxie of the ideas behind it. Here is a fledgling American
government so convinced of its own virtue, so sure of its success that it's willing to deceive its citizens by
issuing money that has no value