http://tspwiki.com/index.php?title=1690
Here are some one liners...
Massachusetts Issues Paper Money -- They need to pay the troops but they can't mint coins, so the issue an IOU. That IOU starts being used as money and inflation kicks in when the Treasurer realizes he can print all the money he wants... until it all comes apart.
Barclays Bank Begins -- I talk about the small-time origins of the bank and how it grew. It sounds a lot like how Bank of America got started.
John Locke Proves that the Mind is a Blank Slate! -- Locke overthrows the rationalist idea that reason is all one needs. I talk about William James' Pragmatism and Alcoholics Anonymous.
Massachusetts Issues Paper Money
New England has a real problem with their money supply: no coins equals no transactions. The colonies have been reduced to using Indian wampum and commodity trading, mostly in tobacco and animal furs. It is illegal to mint coins but the need was so great that a few years ago Massachusetts opened their own mint. The King finally shut it down but the money shortage has remained. There are no real banks in the colonies so they can't issue bank notes. Yet they must pay their soldiers as King William's War against France gets started. Massachusetts issues promissory notes to their soldiers backed by the full faith and credit of the Treasury of Massachusetts. (Stop laughing.) The soldiers can use these notes to pay their taxes so the colonists start using these notes like money. When the Treasurer realizes this, he prints off a lot more paper money. Merchants accept the bills at a discount. This is called "inflation". By 1716, the whole system will collapse and they will go back to coins and commodity trading. Like the definition of insanity, the Treasurer will try it again and again, expecting a different result. [1] [2]
My Take by Alex Shrugged
More is going on here than is apparent. Gershom's Law is at work... bad money pushes out the good. The good coins quickly disappeared under the mattress and were replaced by the increasingly worthless paper money. The Colonial governments were restricted in the ways they could issue money. Governments at this time would back their paper money by grants of land or they would impose the money on the populace, but England did not allow the Colonies to do this. That is why the Colonial governments had to engage in this legal fiction of an I.O.U.. The Colonies' money supply problems were helped by using Spanish pieces-of-eight but that didn't stop the Colonies from printing their paper money. By 1730 North Carolina was circulating 17 different types of money.
More is going on here than is apparent. Gershom's Law is at work... bad money pushes out the good. The good coins quickly disappeared under the mattress and were replaced by the increasingly worthless paper money. The Colonial governments were restricted in the ways they could issue money. Governments at this time would back their paper money by grants of land or they would impose the money on the populace, but England did not allow the Colonies to do this. That is why the Colonial governments had to engage in this legal fiction of an I.O.U.. The Colonies' money supply problems were helped by using Spanish pieces-of-eight but that didn't stop the Colonies from printing their paper money. By 1730 North Carolina was circulating 17 different types of money.
Barclays Bank Begins
Two goldsmiths open a bank on Lombard Street in London. The location is not a coincidence. A large population of Quakers live in the area and these goldsmiths are also Quakers. It was not unusual for goldsmiths to open a bank since they already have security measures in place for their work. Thus, providing security services for other people's precious coins is not much of a burden for them. In a few years, one of the banker's daughters will marry a fellow named James Barclay and he will become a partner in the firm. The growth of the bank will be due mostly to the clearing house services they provide to country banks outside of London. These country banks need an agent, someone they can trust to make the money transfers in London, and the religious aspect of the Quaker bankers make them a good choice. By 1776, the bank will be called "Barclay, Bevan and Bening" and by 1896 it will be known as "Barclays and Company." [3] [4] [5] [6]
My Take by Alex Shrugged
This reminds me of how the Bank of America came to be. In 1904, it used to be the Bank of Italy, but what it really should have been called was Amadeo's Safe and Saloon. Amadeo Giannini had experience as a banker but he couldn't talk anyone into backing a bank that catered to the small depositor. He knew that Italians were in the habit of saving their money so he rented out an old saloon and started taking deposits. He took in over $8,000 the first day. The Bank of Italy survived the Great San Francisco Earthquake and was able to make loans to rebuild the city. By 1928, it merged with the Bank of America. The point I'm making is that no one could do the same thing today. There are too many regulations designed to keep depositors safe, but those same regulations lock out the small competitors that used to exist not so long ago. [7] [8]
This reminds me of how the Bank of America came to be. In 1904, it used to be the Bank of Italy, but what it really should have been called was Amadeo's Safe and Saloon. Amadeo Giannini had experience as a banker but he couldn't talk anyone into backing a bank that catered to the small depositor. He knew that Italians were in the habit of saving their money so he rented out an old saloon and started taking deposits. He took in over $8,000 the first day. The Bank of Italy survived the Great San Francisco Earthquake and was able to make loans to rebuild the city. By 1928, it merged with the Bank of America. The point I'm making is that no one could do the same thing today. There are too many regulations designed to keep depositors safe, but those same regulations lock out the small competitors that used to exist not so long ago. [7] [8]
John Locke Proves that the Mind is a Blank Slate!
John Locke has been hanging out with too many politicians, lately, so he takes a break and sets out to DISPROVE the idea that the human mind is born with certain innate ideas. He believes that the mind is a blank slate, and over time the mind is filled with experiences and ideas. He publishes his "Essay Concerning Human Understanding" and it will become the basis for argument for years to come in philosophical circles and establish the philosophy of Empiricism, the idea that knowledge is based on rational thought, sensory experience, and experimentation. He doesn't get it all right but he is off to a rip roaring start. [9] [10] [11]
My Take by Alex Shrugged
The names of the various schools of thought are probably not important. The point is this. Reason alone is not enough, yet the old way of thinking depended on reason over experimentation. Locke was arguing for the discovery of knowledge based on the senses... essentially we know stuff because we have tried things out to see how they work. If Locke were a computer programmer, he would be called a hacker. The philosopher David Hume built on Locke's ideas and frankly it all sounds like William James' philosophy he called Pragmatism. William James is considered America's first psychologist. I don't think William James coined the term Pragmatism but he certainly made it popular. It is the basis for the pragmatic self-help group Alcoholics Anonymous. If it works, don't fix it. [12]
The names of the various schools of thought are probably not important. The point is this. Reason alone is not enough, yet the old way of thinking depended on reason over experimentation. Locke was arguing for the discovery of knowledge based on the senses... essentially we know stuff because we have tried things out to see how they work. If Locke were a computer programmer, he would be called a hacker. The philosopher David Hume built on Locke's ideas and frankly it all sounds like William James' philosophy he called Pragmatism. William James is considered America's first psychologist. I don't think William James coined the term Pragmatism but he certainly made it popular. It is the basis for the pragmatic self-help group Alcoholics Anonymous. If it works, don't fix it. [12]
This Year on Wikipedia
Year 1690, Wikipedia.
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