The Story Behind The Wonderful
Wizard of Oz
[a parable about populism, money
reform, and the 1890s Midwestern political movement led by William
Jennings Bryan ]
The Wonderful Wizard of Oz
The Wonderful Wizard of Oz was first published
in Chicago in 1900. Its author, L. Frank Baum, was the editor
of a South Dakota newspaper and a supporter of William Jennings
Bryan who stood three times, unsuccessfully, as a U.S. Presidential
candidate for the Democratic Party.
The particular concern of both Baum and
Bryan was the nature of the money supply then prevalent in the
United States, and in the Mid-Western States in particular.
In America during the 1890s, as in Britain,
there had been a severe depression. Many businesses had gone bankrupt,
farmers forced to sell up, factories closed and workers made unemployed.
True, some farms in the Mid-West were suffering from drought,
but most were still capable of growing food; the businesses and
factories were still capable of providing the things that people
needed; the workers still wanted to work to provide those things,
and people would still want the goods and services produced if
they had the money to buy them.
The money in the USA then, as now, was
entirely created by the private banking system. The pretence existed
then that money was based on gold. (Even now some people still
think that it is!) The major banks, based on the East and West
coasts, could vary the amount of money in circulation, lending
more to encourage commercial activity, then fore-closing on loans
to put people out of business, enabling the banks to acquire their
Baum and Bryan wanted money to be based
on silver, not gold, as silver was more readily available in the
Mid-West, where it was mined. Such a money supply could not be
manipulated by the banks. So the story of the Wizard of Oz starts
with a cyclone in the form of imagined electoral success for Bryan...
Dorothy, a sort of proverbial 'Everywoman',
lands on the Wicked Witch of the East (the East-coast bankers),
killing her, so freeing the Munchkins, the down-trodden poor,
but the Wicked Witch of the West (the West-coast bankers) remains
To deal with her and to get back to Kansas
(normality), the Good Witch of the North, representing the electorate
of the North (this is less than 40 years after the civil war),
tells Dorothy to seek out the Wizard of Oz ('oz' being short for
ounce, the means of weighing both gold and silver). She also gives
her a pair of silver slippers (as they were in the book - they
became ruby ones in the film). Only these silver slippers will
enable her to remain safe on the yellow-brick road, representing
the bankers' gold standard, as she heads towards the Emerald City,
representing Washington DC.
On her journey, Dorothy encounters a Scarecrow,
representing the farmers, who do not have the wit to understand
how they can end up losing their farms to the banks, even though
they work hard to grow the food to feed a hungry nation. If only
they could think it through!
Next, she encounters a Tin Woodsman, representing
the industrial workers, rusted as solid as the factories of the
1890s depression, and who have lost the sense of compassion and
co-operation to work together to help each other during hard times.
Also, a spell cast upon him by the Wicked Witch of the East meant
that every time he swung his axe, he chopped off a bit of himself
- he downsized!
Then the growing party encounters a Cowardly
Lion, representing the politicians. These have the power, through
the power of Congress and the Constitution, to confront the Wicked
Witches, representing the banks, but they lack the courage to
Dorothy is able to motivate these three
potent forces and leads them all towards the Emerald City, whence
'greenbacks' had once come, and an encounter with the omnipotent
and wonderful Wizard of Oz.
The Wizard of Oz is initially quite majestic
and apparently awesome, but he turns out to be a little man without
the power that people assume he possesses. He does, of course,
represent the President of the United States. With the Wizard's
illusion of power shattered, he is replaced by the Scarecrow who
would 'be another Lincoln'.
The Wicked Witch of the West, fearful
for her own power, then attempts to destroy Dorothy but is herself
dissolved in a bucket of water, as rain relieves the Mid-West
drought, saves the farmers' livelihoods and prevents repossession
by the banks.
The Good Witch of the South, representing
the Southern electorate, tells Dorothy that her silver slippers,
silver-based money, are so powerful that anything she wishes for
is possible, even without the help of the Wizard. Dorothy wishes
to go home. There all is now well, because the land has a stable
and abundant money supply.
Still a Pertinent Message
So ends this famous modern American 'fairy-tale'.
Its true message has been lost to the mists of time and the demands
of Hollywood, but its message is no less pertinent now than when
it was written.
William Jennings Bryan was neither the
first nor the last American politician to try to reform the US
money supply. In fact, two money reformers achieved the office
of President and attempted to put money reform into action, but
just like in the Oz story, the 'Most Powerful Man in the World'
was not as powerful as people believed.
In 1865, Abraham Lincoln introduced the
original 'greenbacks', which were paper money issued by the US
Government, largely to pay for the Federal war effort during the
civil war. It was 'fiat' money, money made legal tender by Act
of Congress. Unfortunately, Lincoln died suddenly a few weeks
later and his plans died with him.
In 1963, John F. Kennedy issued Executive
Order 11110 which would have removed the power of money creation
from all US private banks, including the privately-owned Federal
Reserve, and invested that power in the US Government. Unfortunately,
Kennedy died suddenly a few weeks later and his plans died with
The Problems of Debt
In the USA 100% of the money supply is
created by the private banks. In Britain the figure is over 97%.
In the rest of the world, the figure is estimated to be over 95%.
All this money is created as a debt. It is created when people
borrow money, as banks do not lend existing money; they just create
new money out of thin air to lend.
Money created as a debt by the banks bears
a charge of interest. This increases the amount of money that
the economy owes by an amount greater than the amount in existence.
This means that the economy is a saddled with a debt that can
never be paid off, merely passed around like a game of Pass-the-Parcel
in a Belfast pub. It is like a game of musical chairs, where someone
has to lose out.
Money does not have to be based on debt,
nor indeed does it have to be based on precious metals. Real wealth
is the goods and services that people create for each other. Money
is merely a means of exchange. It could be created by HM Treasury
and spent on providing public services, saving us all a modicum
of taxation, and then the economy would not have to be saddled
with large debts.