BY HUGH TURLEY —
In February 2007, before the economic collapse, I wrote about Hyattsville’s connection to the popular fairy tale The Wonderful Wizard of Oz. Written in 1900, L. Frank Baum’s story can be seen as a monetary allegory about a march on Washington in 1894 led by Ohio businessman Jacob Coxey.
The scarecrow (the farmer), the tin man (the industrial worker), and the lion (populist politician William Jennings Bryan) journeyed to the Emerald City (Washington). Among other things, the protesters wanted Congress to take the power to create money through credit away from private bankers and return it to the government, as Thomas Jefferson and other founding fathers intended.
When police drove the group from Washington – reportedly for stepping on the grass at the U.S. Capitol – they fled to Hyattsville, taking refuge at St. Jerome Church before heading home.
A second, larger march occurred in 1914. Five years later, the nation’s first and only state-owned bank was established: The Bank of North Dakota. it was created by the state legislature in 1919 to ensure that money generated from loan interest stayed on Main Street instead of going to Wall Street.
For over 90 years the bank has served the people of North Dakota, and the model seems to be working. In 2010, when other banks needed government bailouts, the BND reported its best year ever, with a 19 percent return on investment.
Perhaps it’s time to try that model here. A Bank of Hyattsville would be run by the City of Hyattsville and own the city’s assets. The engine driving the bank would be tax revenues and fees collected by the city and deposited into the bank.
The City of Hyattsville will pay an estimated $380,000 in interest during the current fiscal year, which ends on June 30. This kind of taxpayer expense could be eliminated if the city becomes the bank that issues the credit.
When city funds are deposited into private banks, Wall Street bankers loan money as they please to suit their own purposes. Having access to credit would enable the city to have its own mini Federal Reserve.
A city-owned bank would not pay state and federal taxes. Taxpayers would be liable for losses.
Hyattsville could offer loans to students, small businesses and homeowners, earning additional revenue from the interest. Dividends from a profitable Bank of Hyattsville would boost revenue for the city and lower the taxes for the citizens.
A Hyattsville Visa or Mastercard would allow citizens to make purchases anywhere in the world, with interest benefiting the city. The Hyattsville credit card could offer rewards points redeemable at local merchants.
Private banks could continue to operate in the city. The Hyattsville public bank could form partnerships with private banks to share risk or buy down an interest rate to help spur economic development.
The Public Banking Institute (PBI), a nonprofit organization that advocates for creating state and local publicly owned banks, has more information at its website, publicbankinginstitute.org.
For more background on the Wizard of Oz as allegory, our money system, and public banking, see PBI president Ellen Hodgson Brown’s book Web of Debt.