Banks were first given legal authority to create credit out of nothing by the English Parliament, at a time when it consisted of rich men voted in by other rich men. The only legislation necessary was to make bankers’ promises legally enforceable regardless of whether they had assets to back up their promises (the Promissory Notes Act of 1704 was the key piece of legislation). The motives of MP’s have never been doubted: as individuals they wanted to get richer, and as a government they wanted to borrow for war. Since then, the banking system has been effectively a private finance company for governments and capitalists, funded by the labours of their citizens. (This is the description provided by the eminently respectable historian of English law, William Holdsworth, 1871-1944).
Posted on: Wed, 17 Dec 2014 06:47:54 +0000
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