Ayn Rand Quotes
Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it.
Rand, Ayn. Atlas Shrugged. Random House, 1957.
The same argument can be made against the modern paper money supply. What Jefferson and most of the founding fathers, with the exception of Alexander Hamilton. did not realize was that the major stability of any kind of money was not only the silver or gold that backed it but the political and legal stability of the nation and the size of its productive economy. Where Jefferson was right however is that all these banknotes at the time were issued by local private banks. The Government had no responsibility for paper money and had no knowledge of how much paper money any bank issues and whether or not they had any silver to back it up. Banks didn’t trust other bank’s notes and would only redeem them at a discount. A $10 note from a South Carolina bank might only be worth $7 in New York and $6 in Boston. The early American monetary system was a mess.
At the time, a bank note—paper money issued be a private bank—was not backed by any gold or silver and was not insured bym the government. A bank could print as much as they wanted, so it was always worth less as the further you were from the particular issuing bank, the less you could get your bank note, because no one knew whether or not the issuing bank would redeem the note or even be in existence. So every private bank note had diminished value for the public. However, carrying gold and silver around and making change for precious metals was difficult and often impractical. So people used banknotes. The same thing happens with credit cards today. The merchant has to pay a fee to the credit card company and the bank and therefore charges us more for whatever we buy. But most consumers and merchants are willing to pay the difference to obtain the convenience of the credit card,
What Franklin Delano Roosevelt began, President Nixon would in 1971 complete by removing America from the gold standard entirely and ending fixed rates of exchange. There have been those in government who did not understand the modern economics of money and who believed that currency had to have a fixed rate of exchange for gold or silver otherwise it was worthless. Roosevelt had to deal with them as did Nixon later. Even into the 21st century when it had been amply demonstrated that the best currency in the world was the United States dollar precisely because it was backed up by the full faith and credit of the United States Government, there were those who complain that United States money is not sound currency and argue for the return of the gold standard.
When the Muslims dominated most of Spain, under Sharia (Koranic Law), Christians and Jews had to pay a special tax. Also, for many years the Christian areas had to provide 100 virgins a year for the Moorish harems. When the Christians occupied most of Spain in the “reconquest,” they required the few Muslim enclaves left to pay an annual tribute to avoid major war. In 1476 Granada ceased paying the tribute. War followed and in 1492 the Christians reconquered Grenada.
Most of the Founding Fathers would be scandalized by the banking and finance system we have in modern times. There is not a single bank in the nation that would meet Adams’ criteria for not being a “cheat.” See {615649} for a similar view and {630666} for another quote by Adams regarding banks. Interestingly, Adams was a very conservative politician and generally supported the establishment, but banks at that time were not thought of as part of the establishment. They had a somewhat unwholesome reputation at best.
This was a very astute prediction. At the time, the United States gold mining production was second only to South Africa and American currency was based on the gold standard which seemed to all to be permanent. Half a century later, the U. S went off the gold standard.
Ayn Rand was a Russian-American writer and philosopher. She is known for her two best-selling novels, The Fountainhead and Atlas Shrugged, and for developing a philosophical system she named Objectivism. Born and educated in Russia, she moved to the United States in 1926. She had a play produced on Broadway in 1935 and 1936. After two early novels that were initially unsuccessful, she achieved fame with her 1943 novel, The Fountainhead. In 1957, Rand published her best-known work, the novel Atlas Shrugged. Afterward, she turned to non-fiction to promote her philosophy, publishing her own periodicals and releasing several collections of essays until her death in 1982.
