|Subject:||[socialcredit] More on McKenna|
|Date:||Friday, September 21, 2007 08:54:36 (-0700)|
|From:||william_b_ryan <william_b_ryan @.....com>
This is excerpted from chapter 9 of *Brief for the
Prosecution." I've attached the full text of that
chapter in PDF. By the way, does anyone know who
claims the copyright to this book?
The Chamberlain family, of sound British stock and
stable middle-class history, rose to considerable but
not outstanding wealth largely through their
connection with the Birmingham firm of Guest, Keen &
Nettlefold, the early manufacturers of the wood-screw
known as "self-driving," i.e., not requiring a hole to
be bored for it.
Later, amongst other interests, they acquired control
of the small joint-stock bank, the Birmingham &
Midland, which, by amalgamation and expansion became
the largest Joint Stock Bank in the world, the present
Midland Bank. Even here their influence is probably
more sentimental than financial.
Prior to 1914-1918 the Chairman of the Bank, Sir
Edward Holden, was known to hold very "advanced" views
on the actual nature of the business carried on by
banks, and its bearing on national policy. The common
idea that a bank is merely a custodian of its clients'
money, which it re-lends at interest to safe
borrowers, was not taken seriously by him, although it
is incorrect to attribute to Sir Edward the
enunciation of the explosive theorem that "Banks
create the means of payment out of nothing"
(Encyclopedia Britannica) which was explicitly stated
by H. D. Macleod in his Theory and Practice of
Banking, at least twenty-five years earlier.
But the history of the Midland Bank during the
Armistice years is marked by several features unique
to it amongst the "Big Five" banks to whom the
numerous smaller banks had in the main been
affiliated. The first of these was the series of
Annual Addresses by Sir Edward Holden's successor, Mr.
Reginald McKenna, a politician rather than a banker,
of which perhaps the most significant was that
containing the famous statement, "The amount of money
in circulation varies only with the policy of the
banks. . . . Every loan creates a deposit, and the
repayment of a loan destroys a deposit . . . the
purchase of a security by a bank creates a deposit,
the sale of a security . . . destroys a deposit."
It is unlikely that these Addresses were actually
written by Mr. McKenna himself, and some grounds exist
for the belief that he did not understand them, but
there is little doubt that they were part of a
considered and immensely important policy operating
through the Bank as an organisation.
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[MIME component not shown: chapter9.pdf (application/pdf)