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Benjamin Franklin’s Greatest Invention
Citizen Ben figured out how to make paper money as valuable as gold or silver coins—and got rich in the process. In September 1723, in the port of Boston,
www.historynet.com
Some history review of The Founders, the founding documents, and Benjamin Franklin’s greatest invention:
“On April 3, 1729, Franklin published a pamphlet with the falsely humble title A Modest Enquiry into the Nature and Necessity of a Paper Currency. It may be the least known of the great founding documents of the American experiment, but in it, he eviscerated his wealthy opponents. They had no real principle at stake, he wrote. Rather, they were greedy, relentlessly pursuing their own self-interest. The rich love currency crises because a lack of coins in circulation allows those who hold gold or silver to “practise Lending Money on Security for exorbitant Interest.” And, when times are tough, the wealthy can scoop up property at fire-sale prices. Without the trade that a robust money supply evokes, “the Common People in general will be impoverished, and consequently obliged to sell More Land for less Money than they will do at present.” Worse, Franklin predicted, when the land grab ends, those same purchasers will support expansion of the money supply, boosting the value of their new property.
Franklin argued that a well-run paper currency would ultimately benefit everyone: An adequate money supply lowers interest rates, encourages trade, creates more demand and raises the value of the colony’s products. He insisted that “labouring and Handicrafts Men (which are the chief Strength and Support of a People)” would move to Pennsylvania and those who were present would stay. Otherwise, skilled workers would seek “entertainment and Employment in other Places, where they can be better paid.”
Franklin simply made a pragmatic case: Paper money would solve the particular problem at hand. But what came next was his great revelation. How could paper currency ever be “real” money? Franklin’s answer was to recognize that money itself was simply a medium of exchange, a measure of value rather than its storehouse.”