Saturday, June 15, 2013
Jun 15 (1752) Ben Franklin proves lightening is electricity; Gives advice on building wealth "Many a little makes a mickle"
On this day in 1752, Benjamin Franklin is traditionally thought to have proved that lightening is electricity while flying a kite in a thunderstorm (though the exact date cannot be confirmed).
Franklin was not only a scientist, philosopher, musician, statesmen, and founder of the University of Pennsylvania, he was also an early proponent of fiat currency (paper money that is not backed by silver or gold).
Franklin understood that a reliance on silver and gold left the colonies dependent on the Europeans, who had greater access to the precious metals. A lack of ready supply also left the provinces vulnerable to currency shortages, which restricted the domestic economy.
Pennsylvania first issued paper money in 1723 (the same year the 17 year-old Franklin moved to Philadelphia). It was backed by land assets and future taxes owed rather than gold and silver. Franklin observed that with paper currency, domestic trade increased, along with employment, construction, and population.
To further encourage the use of paper money, he wrote a treatise on the topic in 1729, entitled "A Modest Enquiry into the Nature and Necessity of Paper Currency."
Franklin also wrote on the subject of building personal wealth. In his classic Poor Richard's Almanac, he advised not to waste time, to avoid debt, and to watch the little things.
"What maintains one vice would bring up two children. You may think, perhaps, that a little tea, or a little punch now and then, diet a little more costly, clothes a little finer, and a little entertainment, can be no great matter; but remember, Many a little makes a mickle. Beware of little expenses; A small leak will sink a great ship."
Federal Reserve of Philadelphia paper on Benjamin Franklin and the paper money economy