Bankers, Butchers & Congress
(Written October, 2009)
There's no mistaking it. It's right there in Article 1, Section 8 of the U.S. Constitution - "Congress shall have the power to. . . . fix the Standard of Weights and Measures." If weights and measures weren't firmly fixed and strictly enforced life would be chaos, wouldn't it? Imagine the problem we'd have with a butcher with a heavy thumb. Consumers would have to carry their own cumbersome balance scales to be sure that the pound of hamburger they bought actually weighed 16 ounces, avoirdupois.
Accurate weights and measures are so important to general commerce that firms like Fairbanks-Morse make a worldwide business of supplying weighing machines people trust. That scale we stand on at the doctor's office is a direct descendant of a device Thaddeus Fairbanks built in St. Johnsbury, Vermont in 1830. It was far easier to use than the old balance scale where the object to be weighed was placed on one pan and a series of precise weights were added to the opposite pan until the two pans came into balance.
But enforcing the number of ounces in a pound and inches in a foot wasn't the only regulatory job Congress was given. The clause in Article 1, Section 8 also empowered Congress to create money and "...regulate the value thereof, and of Foreign Coin...."
Everyone knew that Congress could not "regulate" the value of the dollar by declaring what it would buy. The Roman emperor Diocletian proved in the third century that government can't dictate prices. Schemes like that always fail. The Founders understood the marketplace regulated prices and all the government could do is guarantee the weight and fineness of the dollar, itself. They declared the dollar to be a coin containing 371.25 grains of pure silver. They based it on the Spanish milled dollar, which had faithfully served as a basic unit of money in the United States along with other foreign coins, particularly from Britain, prior to 1792.
So, despite some squabbles about the relationship of silver and gold money in the 19th century, the dollar prospered. It gained eleven percent in purchasing power in a little more than a century. But after Congress handed most of its responsibility for money to a cartel of bankers on December 23rd, 1913, the dollar has dwindled in purchasing power to about five cents. What a Christmas present to the banks! Way to go, Congress!
Today we know the butcher's scale will give us an honest weight of hamburger, but we haven't a clue what the substance of our purchasing medium....the dollar....is, nor what it will be in the future. Congress backed away from its constitutional mandate concerning money and we've watched the once mighty dollar evaporate. It is now so untrustworthy foreign central bankers are dumping it in favor of yen, euros, and other currencies. World War 2 veterans must be thinking, "Holy mackerel! The world likes Japanese yen and European euros better than American DOLLARS?"
Don't they teach fundamental economics in school? Fourth graders could easily understand how a medium of exchange was invented ages ago when the barter economy ruled. Surely they've heard the stories of the fishing specialist trading some of his catch for other necessities such as shelter and raiment. Someone must have told them the miller kept a portion of the flour he made from the wheat the farmer brought him and traded it for food and shoes. Finally, society settled on certain relatively rare things that would be trusted as a store of their value, and serve as reliable media for exchanges.
We are still exchanging goods and services for goods and services, but this barter mechanism was made easier with the ancient invention of the medium of exchange. This medium has been gold and silver for ages, although other assets worked, too. Animals, cigarettes, even cubes of indigo and lead bullets.
New England natives used wampum, cylindrical bits of shell carefully strung into strings. The black and purple wampum had greater value than the more common white variety. Anyone owning a string of wampum knows this form of money still holds its purchasing power after four centuries and more.
If wampum could hold value for several centuries why didn't the dollar have a longer run? Since the Federal Reserve was created nearly a century go the dollar has lost more than 95 percent of its value! It may well descend to zero in value if something isn't done to halt the slide.
There's not much chance of shaming Congress into returning to the honest money system ordained by the Constitution. This body is shameless. By handing over its responsibility to the bankers members of Congress can shrug in the face of monetary disaster and say, "Those people at the Federal Reserve are experts at all this. They know what to do."
If the Fed knows how to get the monetary cart out of the ditch why doesn't it do it? Facing a similar disaster in England Queen Elizabeth inquired of officials in Parliament - "Didn't anyone see this coming?"
With so many money experts in the world it's astonishing to witness this calamity they have allowed to happen. And not one of them has yet suggested the only solution that will work - - a return to the U.S. Constitution and a well supervised system of honest money that is as unwavering in its measurement as the number of ounces in a pound of hamburger.
"Honest money." It has a nice ring to it. Badger your Congressman about the concept. Better that we go back to it with his help rather than have to boot him from office and round up someone to take his place. .
October 12, 2009
Click here for:
The Battle for Honest Money
Coping with Deflation
From Riches to Rags
Fiddler's Broken Wrist
Chances of Gold Confiscation
Look Out Below!
Voting for Maggie
Poobahs of Positivism
A Wistful Vista
An Unknown Road
Blood In the Streets
How To Buy Gold
Just Plain Stealing?
A thing to fear
Unstuffing a Lifetime
FDR & History
The Chicken Little Convention
And Lead us not into temptation
The Legislature and Embryos
Ac-cent-tchu-ate the Positive
What Fools, We Mortals
My Immigrant Relative
The Eloquent Pogo
Unionize School Children
Hucksterism Gone Wild
Unmanageable Religious Violence