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The banking system is one of the most centralized institutions of our economy and one of the major obstacles to strengthening regional economies and the communities within them. Yet centralized banking is only a recent development in the United States. The customs of borrowing and lending and money-printing grew up over generations in towns and rural communities to form what we now call our banking systems. These systems were small-scale, regional, and decentralized. Paper money was made standard, or national, in 1863 in order to raise funds for the fight against the Confederate States, but it was not until 1913 that a central system became formalized with the Federal Reserve Act.
Centralized banking and control of money called for large banks and wealthy investors who could assemble huge , unprecedented sums of money.
Systemic failures are bound to occur if local economic control of
banking customs and money supply is compromised by centralization and sacrificed to serve the heedless demands of growth.
This predicament calls for a reorganization of economic institutions so that they will be responsive to local and regional needs and conditions. These new institutions would decentralize the control of land, natural resources, industry, and financing to serve the people living in an area in an equitable way. We need to create an infrastructure that encourages local production for local needs. Community land trusts, worker-owned and
worker-managed businesses, non-profit local banks, and regional currencies are some of the tools for building strong regional economies.
Complementary Currency Resource Center: CC Library www.complementarycurrency.org/materials.php