Veronica Chapman

Dear Sir or Madam,

Under the Freedom of Information Act I would like an answer to the following question:

How, precisely, is money created?

For your information I have been given to understand that it is created by means of Promissory Notes. In more detail, when a human being signs a 'promise to pay' (known colloquially as an IOU), which can stand until the end of time. And that the human being's signature on that promise renders said promise lawful.

Can you please be so kind as to confirm or deny my understanding and, if necessary, correct my understanding?

Thank you.

Yours faithfully,

Veronica Chapman

Enquiries, CEU,

Dear Ms Chapman,

Thank you for your Freedom of Information request. I write to confirm receipt of your request and to let you know that it is receiving attention. If you have any enquiries regarding your request do not hesitate to contact us.

Darren Creamer
Correspondence and Enquiry Unit

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Dear Mr. Creamer,

Thank you for your acknowledgement.

Perhaps, when responding, you would be so kind as to take into account the 1969 Landmark Decision that occurred in Minnesota, which directly pertains to this subject & my question?

Here is a good summary of it:

You will (I'm sure) note that the judgement in the Jerome Daly case was that banks create money 'out of thin air'.

Yours sincerely, without ill-will, frivolity, or vexation,

Veronica: of the Chapman family

responses, FOI,

2 Attachments

Please find attached our response to your recent enquiry.

Paul Morran
Information Rights Unit

1 Horse Guards Road
London SW1A 2HQ

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Dear Mr. Morran,

Thank you for your reply.

Unfortunately while, on the one hand, being a very courteous and comprehensive response detailing what 'money' IS, and how it is USED, it does not answer my central question, which was "How it is CREATED?". (This, of course, implies "Who has the right to create it?", "Why don't they exercise that right in order to prevent Credit Crunches?", etc.)

Nevertheless your good self did include some very interesting information, such as:

"Modern ‘currency’ is known as ‘fiat money’: it is artificially created, has no value in itself and the basis for its use in exchange is typically a government edict."


"The link with gold was fully broken in 1931 and since that time there has been no asset into which holders have the right to convert Bank of England notes."

I thank you for this information. Mass genocides, suicides (all kinds of 'cides') have taken place on the basis of this 'thing' that 'has no value', so perhaps you can understand my concerns with this question?

However you are suggesting that such a question is not valid as an FoI request. Consequently are you prepared to continue with this discussion (you make that offer in your response), may I contact you directly, or who - exactly (in your opinion) would be able to answer my question?

As far as what 'money' IS, I suggest this definition:.

"Conveniently transferable Tokens of Credit"

A 'token' is something real (i.e. a coin, or banknote) than stands in place of something that cannot represent itself i.e. something imaginary, conceptual, e.g. 'credit'.

Perhaps you could confirm, deny or correct that definition (not, necessarily, as an FoI request, but in the same way as you original response, i.e. just out of courtesy)?

Yours sincerely with thanks,

Veronica: of the Chapman family

Veronica Chapman left an annotation ()

Well, what have we got here? Paul Morran has obviously put a lot of work into my question and answered it in a courteous way, but hasn't actually answered the central question. If it did, then I missed it.

But he did say (admit?) that 'money' has no value. And, of course, 'value' is a very subjective thing anyway. What may be valuable to me (and just what value I would place on that item) may be completely different to any value you may place on it. For example I might (do) buy lipsticks. Do you? No? Then the value of lipsticks to you is … what? Zilch, I suggest … unless you have occasion to buy one for your wife.

So what about other things like, Income Tax, Council Tax, TV Licences, Road Tax, and so on?

We are expected to 'pay something that has no value'?

Well, isn't that what Mr. Morran is saying?

In effect?

Well, I have lots of things that have very little, if any, value. Sheets of paper, for instance. They aren't printed like banknotes, in fact they are completely blank, but I could easily sign one. And then offer it to the Taxman.

Why not? That's what I'd like to know.

I mean, if a banknote has no value, then my A4 sheet of paper (which is larger) must be worth more in the amount of tree pulp alone. Surely?

Mustn't it?

Perhaps it is all the pretty printing on a banknote that makes it worth more than my A4 sheet + signature?

Or maybe because the banknote has a different signature? That of the Chief Cashier of the Bank of England?

Well, what happens when the Chief Cashier retires? When he can no longer offer his unfulfilled 'promise to pay'?

Me? I'm a human being. I've been that all my life. I'll be that all my life. My word (and my promises) are as good as anyone else's … aren't they?

Well, why not then?

Why is one human's word, and unfulfillable promise better than another's?

So my promise would stand as long as I lived … not just until I retired. That might be longer, or it might be shorter … but does that matter?

(Actually, being retired, it turns out to be longer in my, specific, case)

I'd like answers to these questions, because they have bothered me for a very large part of my life.

What IS money?

Conveniently transferable Tokens of Credit.

How is it created?

By means of a signature. A signature that authorises it.

The only remaining question is: Whose signature?

And I think you will find that, embedded in Paul's response, is the answer. The signature on an IOU. An IOU that has no value.

Well, I can write IOUs that have no value, as well as anyone. If not, I'd really like to know why, and I hope Paul will be kind enough to tell me.

Veronica Chapman left an annotation ()

I wonder, actually, if the fact that 'money has no value' is printed on the front page of every book of Accounting & Economics?

If not, why not?

It seems to be quite an essential thing to know, in order to completely understand the rest of the book.

In other words: "This book is about nothing at all ... well, nothing of value"

Well, it seems important to me, anyway.

Veronica Chapman left an annotation ()

I mean, what's the fighting all about, then?

What is 'a Credit Crunch'?

What is 'a price' anyway?

What is 'interest aka usury', anyway?

What is 'a mortgage'? 'A bank loan'?

What is 'a bailout'?

What DO the numbers on a Computer Accounting Database actually mean?

What IS the fighting all about?

What is ANY of it about?

Are we all living in an ILLUSION? In a DREAM WORLD? (I've had better dreams than this dream world. Much better ones)

responses, FOI,

Ms Chapman

I think my reply did touch on how money is created; I am sorry you did not feel it adequately addressed your concerns. I certainly have the impression that it said nothing you did not already know better!

I doubt that I am competent to engage in the dialogue you suggest, and you may appreciate that policy colleagues closer to the issues have a lot on their plates.

However, it would help us to help you if you could frame your concerns in terms of recorded information that you would expect us to hold and which would illuminate those issues.

Paul Morran
Information Rights Unit

1 Horse Guards Road
London SW1A 2HQ

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Dear Mr. Morran,

Thank you for your latest response.

Yes, within your answer, you did allude to the fact that my suggestion - contained within my original question - may have some merit. Can we put it like that?

I understand your situation as you have explained. It. I assume that the reason you have responded in the way you have up till now is due to the fact that my question is neither unreasonable nor frivolous. (You might have even considered it to be 'interesting'?)

Recorded information. OK, I can ask questions in that vein,. For example: Authorisation must be necessary in order to create 'money', so I could ask for records of who authorised how much, during such and such a period? And who or what was the recipient?

Would these be suitable FoI questions to pose to your organisation? If that's the case, I'll consider this question answered, and start up new ones requesting specific recorded information.

You must, surely, appreciate that while - as you suggest - I might have some ideas in these matters, I do not pretend to know (and could not be expected to know) the details of just, precisely, which records you keep and for what purpose. So perhaps you could help me in that respect? Such recordings as may apply to the subject matter of this request? This request with which you are now familiar?

Sincerely and thank you for your help,

Veronica: of the Chapman family

responses, FOI,

Ms Chapman

My previous response referred to monetary policy as one of the Bank of England's core purposes.

In order to pursue your concerns, our advice would in fact be to refer to the articles the Bank of England publish which give more substantive coverage of this area. Their start page for the topic is here -

You might be particularly interested in two articles which appeared in the Quarterly Bulletins 2007Q3. The first is "Proposals to modify the measurement of broad money in the United Kingdom: a user consultation" which as a section on the The concept of money. The second is entitled "Interpreting movements in broad money" and has a section on What is money and how it it created?. They can be accessed from the following web link -

If those references don't directly address your concerns, they might enable you to pursue an FOI request with the Bank of England. I should probably have made clear before now that the Bank is a distinct public authority under the Freedom of Information Act. The email address is [email address].

I hope that is helpful.

Paul Morran
Information Rights Unit

1 Horse Guards Road
London SW1A 2HQ

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Veronica Chapman

Dear Mr Morran,

Thank you for all your help. I will study the links you have provided, however the first is actually entitled "Monetary Policy" ... and 'policy' is not, of course, 'law'. 'Policy' is not even 'Government edict'. (It's what they'd LIKE to do ... if they could i.e. get away with it ... by means of the Mushroom Technique)

I thought I asked a simple question and, although you provided me with some very useful information (and I cannot thank you enough for that!), I can't see why a simple - even one word or sentence - answer is not possible. I mean, it went through the phase of 'tally-sticks'. I mean how hard is it to describe a notched piece of wood? Or a coloured bead? Or a feather? (Various historic 'currencies', as I'm sure you know. For example "How are feathers created?". Answer "Birds grow them, and people pick them up")

And, furthermore, I think I offered you the answer within my question, did I not? Consequently a simple "Yes" or "No" would surely have sufficed.

However, you did not say "No". And time has, today, run out on my question. That being the case I will close this FoI, trouble you no more, and assume (I think now with lawful excuse) that the answer was actually "Yes".

Yours sincerely,

Veronica Chapman

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