Ellen Brown • webofdebt.com • December 2, 2011
The recent interest in state-owned banks has provoked challenges on grounds that they violate state constitutional prohibitions against lending the credit of the state. The argument is not valid, for several reasons:
(1) The U.S. Supreme Court has already considered it and rejected it.
(2) A number of states have owned banks historically, and many states have infrastructure banks today, which are specifically authorized by 23 U.S. Code Section 610.
(3) The argument misconstrues the nature of banking. All states deposit their revenues and invest their capital in banks. This does not mean they are “lending the credit of the state.” The bank lends its own credit. If a state can put its revenues and invest its capital in Bank of America or Chase Bank, it can put them in a state-owned bank.
These arguments also apply to county-owned banks, city-owned banks and any other chartered banks owned by the people as public institutions.
Read the article here.
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