This summer has me running in all directions, so I haven’t been able to post much. My apologies for that, however, as luck would have it, my sister Booie wanted to share some thoughts on Ron Paul’s Audit the Fed Bill recently passed by Congress….
When England tried to place the colonies under the monetary control of the Bank of England, many in America were strongly opposed. This was one of the factors leading to the Revolutionary War. Nevertheless, the First Bank of the United States was chartered in 1791, thanks to the machinations of Alexander Hamilton, in line with Northern mercantile interests. In exchange for support by the agrarian South for the bank, Hamilton agreed to ensure sufficient support to have the federal capitol moved from its temporary Northern location, New York, to a Southern location on the Potomac.
Happily, the First Bank’s charter expired in 1811 without being renewed. Sadly, “the next several years witnessed the proliferation of federally issued Treasury Notes…to finance the War of 1812” leading to runaway inflation. The Second Bank of the U.S. was chartered in 1816 in the hopes that it would end the inflation. Ron Paul has pointed out that this “aided and abetted ever more [monetary] expansion and the creation of a boom-bust cycle.”
Andrew Jackson denounced the central bank as an engine of corruption, referring to it as “The Great Whore of Babylon.” He felt that “the bank, by controlling the nation’s money supply, had great power over the economy, gave its wealthy owners a large return with very little risk, and was involved in corruption, such as bribing government officials.” This was a major political issue of the 1830s. Therefore, when he was president (1829-1837), he withdrew federal deposits from the Second Bank of the U.S. and it closed in 1836.
(An interesting side note and my favorite thing about the Jackson presidency is that he is the only president ever to eliminate the national debt. No wonder he’s on the $20 bill!)
So, history has shown that it’s possible to get rid of a central bank. And the passage of Ron Paul’s “Audit the Fed” bill (HR 459) in the House this week is very encouraging. Next stop, the Senate!