By Captain Henry Kerby MP
On the 22nd December, 1964, Captain Henry Kerby, MP, placed the following Motion before the House of Commons.
It was an “Early Day Motion” and so it was never debated and, consequently, does not appear in Hansard. It is, however, published in the Early Day Motion records and we have a copy of it here at Prosperity.
The House of Commons Public Information Office Factsheet on Early Day Motions states that an “Early Day Motion” is the “colloquial term for a notice of motion given by a Member for which no date has been fixed for debate” and where “in the vast majority of cases, there is absolutely no prospect of these motions ever being debated. Their modern existence is due to Members wishing to put on record their opinion on a subject and canvass support for it from fellow Members. They do this by inviting, actively or passively, other members to endorse the proposed motion.” However, even if 250-300 Members might endorse it, “the lack of prospect of the motion being debated remains much the same.”
Below we reprint the full text of Captain Kerby’s Early Day Motion, titled as below, and his comments — unpublished in the official record — follow.
THE EMISSION OF ALL THE MEANS OF EXCHANGE
That this House considers that the continued issue of all the means of exchange – be they coin, bank-notes or credit, largely passed on by cheques – by private firms as an interest-bearing debt against the public should cease forthwith; that the Sovereign power and duty of issuing money in all forms should be returned to the Crown, then to be put into circulation free of all debt and interest obligations, as a public service, not a private opportunity of profit and control for no tangible returns to the British people; and that the volume of money be controlled so as to maintain stable prices:
That the nationalization of the Bank of England did nothing to solve this problem as the bank only serves a subsidiary purpose and almost all money is still created out of nothing by mere book entry by private banks:
That the aims of those who want to assure private property and free enterprise, as well as those who want to protect the British people from unfair exploitation, would both be best served by restoring the power of issuing money to Her Majesty The Queen, in accordance with ancient tradition and law, as is also demanded by the American Constitution, which gives the right of issue solely to Congress, so as to assure the State and Nation the benefits of that emission and relieve them of the immense and growing burdens of a parasitical National and private debt; and to make certain that control passes to the taxed and is taken out of the hands of the present hidden and unlawful beneficiaries of taxation, much of the proceeds of which they collect as interest on all money and immense debts:
And therefore this House calls upon Her Majesty’s Government to introduce the required legislation, to assert the proper sovereignty of The Queen in Council in this most important of all sovereign functions, to assure unprecedented prosperity with true sovereignty and liberty.
Captain Kerby’s comments:
It is not generally understood that for many centuries, in Britain and in almost all other civilized countries, the power and duty of coinage, i.e. of the issue of money in all forms – coin, notes and book-entry credit passed on by cheque, etc. – was vested solely in the Crown or State. For this reason the tradition still persists of putting the Sovereign’s portrait on the coinage, though in fact since the end of the 17th century, the reign of William and Mary, by far the greatest part of all the effective means of exchange are issued by private bankers out of nothing by mere book entry, to be lent at interest to the State and to private borrowers. Thus real power passed from the State to the private bankers.
There is ample evidence from many independent sources to prove that most of the means of exchange in modern conditions originate with bankers. In America it is aptly called “fractional reserve banking,” meaning that if you have a pound in cash in the till you can issue ten or twenty times more in the form of “credit” on the books, which is mostly circulated by cheques.
Not a few Heads of Central Banks of Issue have stated the facts at public enquiries or in the press, including the chief of the Canadian Bank of Issue, also Mr. Marriner Eccles — at one time in parallel position in the U.S. Federal Reserve — and the late Mr. Reginald McKenna, former Chancellor of the Exchequer and Chairman of the Midland Bank. They and many others confirmed that it is the function of banks to create money out of nothing and lend it out.
The “Report of the (New Zealand) Royal Commission on Monetary, Banking and Credit Systems,” 1956, states in part; Para. 164: Creation of Money by the Trading Banks: “The fact that a large proportion of our money supply comes into existence as a result of the operations of the trading banks obviously disturbed many witnesses …”
This evidence is paralleled by that given in 1960 to the Radcliffe Committee in London. We quote from the evidence given by the Bank of England, Vol. 1, Memoranda of Evidence; p.9. 4. The Control of Bank Credit in the United Kingdom:
2. “Because an entry in the books of a bank has come to be generally acceptable in the place of cash it is possible for the banks to create the equivalent of cash (i.e. credit). Thus a bank may pay for a security purchased from a customer merely by making an entry in its books to the credit of that customer’s account: or it may make an advance by means of a similar entry. In either case, an increase in its deposits will occur.”
In the United States of America, the Constitution clearly provides in Art. I, Sec. 8, Clause 5, that only Congress shall have the power to coin (issue) money, regulate the value thereof and of foreign coin (rate of exchange). Yet obviously this constitutional provision has been completely ignored in practice almost since American independence. In the United Kingdom, too, the spirit of the old laws and traditions has been circumvented.
Yet this is no mere academic matter, but a question of supreme importance, affecting the Sovereignty and very existence of the State and country. It has been said that there should be no taxation without representation, yet private financiers can issue “imaginary” money out of nothing by mere book entry and lend it at interest, they acquire the profit of issue and of interest gratis, at the cost of the whole community. This is taxation in the fullest sense, accompanied not by the representation of the taxed, but by the complete power of the true tax collector, who is the ruler. The basic truth of no taxation without representation is turned upside down and inside out.
It follows that the power of Parliament in general, and especially with regard to Money is non-existent, and all true sovereignty is in the hands of those private individuals who issue all money and determine its value and distribution. If even the State borrows from them, having abandoned its own powers of coinage (emission) to private financiers, how can that State claim to be truly sovereign? The real basis of the power of the money-creators and money-lenders lies in the fact that few know the truth about this financial “hidden hand.”
Conservatives with knowledge and long historical memories will recall that the original Tories were Jacobites. Today this question does not apply to the Crown as Her Majesty enjoys the loyalty of all Her subjects. But the spirit of the old Jacobites expressed a sounder understanding of the functions of the Crown as fount of Sovereignty, to be exercised with Counsellors. In the context of that conception it was natural that the power of monetary emission should belong to the Sovereign, and long experience has shewn that that proposition was sound.
On the other hand the old Whigs were the proponents of “Dutch Finance,” of the issue of the means of exchange as an interest-bearing debt by private bankers, and of the domination of the State by High Finance, not the Sovereign in Council, the King and people. With the decline of Liberalism in Great Britain it might be thought that Socialist Labour is the heir of that tradition.
It is the claim of Socialist leaders that theirs is not the Party of the Big Money Men. The test is this: will Labour understand that the “nationalization” of the power of coinage (emission) is the supreme necessity? And not the confiscation of the fruits of many peoples’ labour and invention.
If the Socialist Party does not pass this test and continues to protect parasitical finance, if only by its silence, then it will lay itself open to an attack which it could never repulse, however long it may postpone the show-down.
Here, then, are some basic propositions which should be known to all, and which are behind the intentions of the Motion:
1. All the means of exchange, with the exception of a very small fraction (coin) are created in the books of private banks when they lend to the State and private borrowers. Conversely, when a loan or overdraft is repaid there is less money in circulation.
2. Even notes and coin come into circulation only in exchange for book entry purchases of Treasury Bills by banks, and thus are virtually issued by the bankers. [For a fuller description on how notes and coins come into circulation, see April 2000 Prosperity]
3. It follows that those who have the power to "create" out of nothing all the money in each country and the whole world and lend it as stated, have total power over all States, parties, firms, radio, press, individuals and so on. Therefore the powers of Parliament are largely ephemeral.
4. It is essential that the issue of money be as needed by the whole nation and hence free from private or political influence. Consequently it is essential that the Queen in Council should resume the power and duty of monetary emission. If new money is spent (not lent) into circulation, taxes could be reduced to a small fraction of their present and growing burden and the National Debt will gradually disappear.
5. Banks should only be able to lend moneys they have earned or borrowed. Their other functions would remain.
6. With the release from the debt and tax burden and with the issue of money in accordance with the needs of exchange, the country would experience unexampled and lasting prosperity, with no slumps and unemployment. Financial principles and policies would be open and broadly understood: instead of being Master, Money would become a public servant.