Benjamin Franklin Quotes
The only consolation under the evil is, that the public debt is proportionately diminished by the depreciation; and this by a kind of imperceptible tax, every one having paid a part of it in the fall of value that took place between the receiving and paying such sums as passed through his hands… This effect of paper currency is not understood this side the water (Europe). And indeed the whole is a mystery even to the politicians, how we have been able to continue a war four years without money, and how we could pay with paper, that had no previously fixed fund appropriated specially to redeem it. This currency, as we manage it, is a wonderful machine. It performs its office when we issue it; it pays and clothes troops, and provides victuals and ammunition.
Benjamin Franklin, 1706-1790, Governor of Pennsylvania, Member of the Continental Congress & the Constitutional Convention, Governor of Pennsylvania, President of the Pennsylvania Assembly, U.S. Minister to France, Postmaster General of the American Colonies, Describing the evil of the Continental Congress issuing paper money, Letter, April 1779
Sourced by: Eigen's Political and Historical Quotations
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,
The assumption was that money would always be backed by gold or silver. In effect, raising or allaying the money was to change the amount of gold or silver that a particular denomination of money would be able to be exchanged for. This is one of the interesting proofs that these processes did nothing economically—for if they could, no one would want the money. This has always been a weakness or a strength—depending on one’s political point of view—of a gold standard.
Specie is a word for paper money. Such political artifices were well known in More’s time, and yet still exist in many countries.
During the Civil War, the U. S. Government printed paper money (specie) for the first time. 20 years afterward, the paper money was still controversial.
The very act of printing money created a debt—at the time and until the Nixon Administration which went off the gold standard—the government owed the gold or silver and the spicie—the printed money—was a promissory note.
Benjamin Franklin FRS FRSA FRSE was one of the Founding Fathers of the United States. A polymath, he was a leading writer, printer, political philosopher, politician, Freemason, postmaster, scientist, inventor, humorist, civic activist, statesman, and diplomat. As a scientist, he was a major figure in the American Enlightenment and the history of physics for his discoveries and theories regarding electricity. As an inventor, he is known for the lightning rod, bifocals, and the Franklin stove, among other inventions. He founded many civic organizations, including the Library Company, Philadelphia's first fire department, and the University of Pennsylvania.
