Creation and Destruction of Wealth in Modern Economy (I)

In this article we will confine ourselves to bringing only some authoritative evidence that declares and confirms the transfer of money power from the seat of sovereignty to the banking structure by the credit financial systems associated with Western states since the modern era. It is a reality that the powers established under its protection no longer care to recognize, but it is convenient that we bring it to the fore because its ignorance is widespread.

First, we look at the first Governor of the Bank of Canada, Graham F. Would like to collect some revealing evidence of Towers. This organization was created by bank of canada act of July 1934, probably with the immediate aim of preventing healthy economic action by a future government social debtor, which was expected to seize power in the province of Alberta – as it actually happened – for the next year. To know the working and activities of the Bank, Standing Committee on Banking and Commerce The House of Commons of the Canadian Parliament invited Mr Towers to testify before it. Sessions of the Committee lasted between March and June 1939, collecting its minutes in 25 phasics or notebooks covering over 850 pages, and from page 238 we are going to extract the following paragraphs:

,ask, Now, if the government went to the bank with $1,000,000 in bonds, would the amount people hold as deposits increase by a million dollars? answer [de Graham F. Towers], Assuming that there was no other change in the position of the bank at that time, yes.

,P, In other words, when $1,000,000 worth of bonds are presented to the bank, is $1 million worth of new money or the equivalent created? R, Again, assuming that your other investments or loans haven’t eroded.

,P, I mean right now, this time.- R, Yes.

,P, Is it true that a million dollars of new money has been created? R, That’s right. Of course, governments should not always go to the banks in this regard; They should sell their bonds to investors.

,P, Yes, is the same now true when municipalities or provinces go to a bank? R, or an individual borrower.

,P, Or when a private person goes to the bank.- R, Yes.

,P, The reason I’m asking this question is: I was discussing this matter with a banker who had twenty years of experience with banks, and I said, “Suppose I borrow $100 from a bank in Western Canada. And want to buy wheat worth $100?” For spring planting, what would I do? He said, “Well, you do it this way: A guy from Eastern Canada has an income of $20 a week and he spends $15 and puts $5 in the bank, and let’s say twenty other people too. doing the same: the bank who gives the deposit in the bank $100, and, since the bank [del Canadá Oriental] There is $100 in deposit, bankers can lend me a deposit in Western Canada to put my wheat germ. Is this the correct statement? R, I think it is rather complicated.

,P, It is rather complicated. However, I would like you to answer the same objectively as my first question. Is this a true statement? R.– I think this is completely true in the eyes of the person managing the branch [de banco], Looking at the banking system as a whole, this is not the proper way to look at it.

,P, What is proper form? Is this fair form: that when I borrow $100 from a bank as a private citizen, the bank makes an accounting entry and the amount deposited in that bank increases by $100, the total deposit in that bank In? R, Yes”.

(will continue)

Felix Maria Martin Antoniano

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