The Secret Of Oz Page #3

So in Rome we learned that with cheap government-issued money the Roman republic flourished, but under gold-money it perished. This controversy between cheap money and gold money continues throughout history and as we'll see it's symbolized in part by the yellow brick road.

Flash forward 7 centuries to 1100 A.D. in England, there were no banks like we think of them today. What served as banks were the goldsmiths, those who made their gold into gold coins.

Although most people didn't understand it, these goldsmiths controlled the economy of the nation and thereby even the politics, even in a monarchy. By acting in concert goldsmiths could either make money scarce or plentiful.

When they made their gold money plentiful the economy of the nation flourished, when they made their gold coins scarce a depression set in and they could buy up assets for pennies on the dollar.

Although most people didn't understand it, these goldsmiths controlled the economy of the nation and thereby even the politics, even in a monarchy. By acting in concert goldsmiths could either make money scarce or plentiful.

When they made their gold money plentiful the economy of the nation flourished, when they made their gold coins scarce a depression set in and they could buy up assets for pennies on the dollar.

About 1100 A.D. King Henry the 1st, the son of england's first Norman King William the Conquerer was loaned gold money: a series of costly wars had depleted the royal treasury.

So just as colonial Pennsylvania would do hundreds of years later, Henry created a unique form of government-issued money called tally-sticks.

Tally-sticks did not represent any quantity of gold or any other commodity, they were simply polly-sticks of wood, issued by the king, which he declared to be good for the payment of taxes. That made tally-sticks just as good as any other form of money.

Alright here we're in the Bank of England's museum with curator John Keyworth and I'm holding in my hands one of the oldest forms of british money - this is called the tally-stick - this is actually a very rare example of a tally-stick because it has the two halves of the tally-stick.

The idea with the tally-stick was that you got notches in a piece of wood - usually it was hazel - and these notches were of the prescribed size dimension, and if you look at this is one, you can see it's got thousand pound notches - so it's 6 notches times a thousand pounds each, is that the way it is? So that's a 6-thousands pounds tally-stick.

Alright here we're in the Bank of England's museum with curator John Keyworth and I'm holding in my hands one of the oldest forms of british money - this is called the tally-stick - this is actually a very rare example of a tally-stick because it has the two halves of the tally-stick.

The idea with the tally-stick was that you got notches in a piece of wood - usually it was hazel - and these notches were of the prescribed size dimension, and if you look at this is one, you can see it's got thousand pound notches - so it's 6 notches times a thousand pounds each, is that the way it is? So that's a 6-thousands pounds tally-stick.

This side is called the "stock", this was kept by the person who made the loan, or paid the money in, and this is the foil - so the foil would be spent into the existence, and the idea was that this splitting the stick down the middle was to prevent counterfeiting because of course a stick splits uniquely down the middle - because when the debt was repaid the two pieces were put together and if they didn't tally something wasn't right.

The longer half of a tally stick was called the "stock", the root word for stocks and bonds of stockholders. For centuries the supporters of gold-backed money had the tally-sticks as the unimportant form of "fiat money", one not backed by gold or silver, some authors even claim that tallys weren't a real money system because they were only used for very large transactions, but that's just not the case.

And was this the common size of tally sticks?

In the middle ages the averages size was reckoned to be the length from the man's tip of his thumb to the tip of his fourth finger - quite short - because if you think of it in terms of this, this is 6-thousands pounds - i mean - it's a huge huge some of money!

So the wider the space the larger the amount - there was a prescribed distance that was an inch - i think half an inch for hundreds and a portion of an inch for tens - and then it became little lines drawn across with a sword.

So it is clear that tally-sticks were used for smaller denominations too and worked well as an effective debt-free money system for 726 years.

Without the crushing weight of debt-based money England flourished into the greatest power on earth for many centuries.

After peak it has been estimated that 95% of English money was in the form of tally-sticks. Compare that to today where the only debt-free government-issued money is in the form of coins about 3% of the money supply of the money supply in the UK, and far less in the US.

After democratizing the power of the nation with tally-sticks King Henry then began decentralizing political power as well.

King Henry granted something called the "Charter of Liberties", voluntarily stating what his powers were under law. Before that, Kings had assumed unlimited power.

This was followed in 1215 by the Magna Carta, the basis of the US constitution.

A new class began to develop, the merchant class. Their trade routes grew and new towns sprung up along them.

These mercanteer class needed stability and so they supported the king, his strong central government and the rule of law.

In 1265 the first parliamentary elections were held, government by the people, in England, was born.

As money poured into the middle class, the small business persons of the day, futilism began to break down and the english renaissance was born.

By the 1600s serfdom in England was legally banned, humanity at least in England was finally set free.

Literature flourished, now there was money to support artistic endeavours like the plays of william shakespeare, the nation was at ease due to a debt-free money. Although life in the middle ages was certainly not easy by today's standards, once tally-sticks were killed and the nation became indebted to bankers, it got worse.

After 600 years the money changers were finally able to begin to re-assert their control over english money, when they convinced the parliament to create the Bank of England.

This put the Banking community back in control of manipulating the quantity of English money. Now England had to borrow its money supply from banks, and pay interest on it, instead of the government simply issuing its own money without such debt.

So in England we learned that simple sticks of wood broke the monopoly of gold money. These debt-free money lasted for 7 centuries and allowed a small isle of nations to rule the waves and freedom to root deeply in the new middle class.

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