by David WestonProsperity, April 2001

Suppose for a moment that the private banking financiers in the 17th century had not been able to force the formation of the Bank of England, through Parliament.

Who would provide the means of exchange for our daily transactions? What would our currency notes look like? Whose name would appear on them?

The answer is simple — the very institution which currently authorises the creation of our legal tender, and authorises the protection of our notes and coins from counterfeiters. That institution is made up of people elected by the population at large, supposedly to work on our behalf, and in our interest. It is the national Parliament.

And so it would be Parliament, through the Treasury Department who, in the absence of the 17th century central bank, would provide the money for our daily transactions.

The currency notes would bear the name of the Treasury Department of the Parliament of Britain. They would look like our current notes, and be, legal tender.

To be legal tender it must fulfil at least two conditions. One, is that it is acceptable for the settlement of debts, and two, that it is acceptable for the payment of taxes.

If I owe you a debt, I can propose to settle it with the payment of chickens or pigs. Or I can proffer a cheque. By law, you can refuse the chickens and pigs and the cheque but, by law, you cannot refuse my offer to pay with legal tender — the notes and coins of the realm.

Of course, for convenience sake, we accept cheques, and perhaps occasionally, chickens or pigs! The point is that a cheque is only valid because it is a commitment to settle in the unit of account of the realm — in our case, the pound (originally of Troy weight of sterling quality silver).

The same rules apply for the payment of taxes. As it is Parliament which has passed the laws protecting the unit of account of the realm, and authorises the law enforcement agencies to jail those convicted of depreciating its value through forgery in its many forms, it is also Parliament which can pass laws designating Parliamentary currency as the unit of account of the realm.

The simplicity and clarity of this was highlighted in the February 2001 edition ofProsperity: "We insist that if the government can issue a security for any amount, then it can issue the same amount of money directly, without recourse to any banks.

Inventor Thomas Edison put it this way: "If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good.

"… It is absurd to say that our country can issue $30,000,000 in bonds and not $30,000,000 in currency. Both are promises to pay; but one fattens the usurer, and the other helps the people." (New York Times, 6th December 1921)

And let us remind ourselves that the Federal Reserve Bank in the USA is controlled by a mere 200 private shareholders. In whose interest do they decide?

In Britain, the supreme law-making body of the land, Parliament, can require the production of Treasury notes, instead of Bank of England notes, as the legal tender, with all the safeguards necessary. Civil servants, government contractors, health care administrators, would all be willing to accept either Treasury Bonds, printed in the usual five, ten, twenty and fifty pound denominations, or more likely, Treasury cheques representing Treasury money, for the settlement of their debts.

And there’s another advantage to this approach. Not a penny of interest would have to be paid on this currency by the taxpayer.

Further, the arbiter of controlling any interest rate could be decided by Parliament, on behalf of the citizens, and not, as is currently the practice by the Bank of England, on behalf of national and international speculators.

The determination of this issue is well summarised in a speech by Noam Chomsky, at Massey Hall in Toronto on 22 March, 1998: "Age-old questions … keep coming up throughout history, … constantly taking new forms …, reduce, basically, to two simple words — ‘Who decides?’

So, the ultimate question for us as citizens is: "Who decides? The private bankers or the public treasury?"

It’s time to vote off the Bank of England!

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Essential Further Reading:
PROSPERITY: Freedom from Debt Slavery
is a 4-page quarterly Journal which campaigns for publicly-created debt-free money.PROSPERITY is edited and published by Alistair McConnachie and a 4-issue subscription is available for £10 payable to PROSPERITY at 268 Bath Street, Glasgow, Scotland, UK, G2 4JR. Tel: 0141 332 2214; Fax: 0141 353 6900, Email: contactus AT ProsperityUK DOT com All back-issues are still available. The 40-page Report,Clarifying our Money Reform Proposals, launched at the 2006 Bromsgrove Conference, is available for £10 payable to PROSPERITY and is essential reading for beginners.

The Grip of Death: A study of modern money, debt slavery and destructive economics by Michael Rowbotham, [Jon Carpenter Publishing, 1998] and Goodbye America! Globalisation, debt and the dollar empire by Michael Rowbotham, [Jon Carpenter Publishing, 2000] and Creating New Money: A monetary reform for the information age by Joseph Huber and James Robertson [New Economics Foundation, 2000] are all available fromPROSPERITY.