Robert FitzRoy: New Zealand’s Forgotten Public Credit Revolutionary
A Comparative Study of Monetary Sovereignty Resistance in Colonial and Early Welfare-State New Zealand
Abstract Part 1 of 2
This paper examines Captain Robert FitzRoy, Governor of New Zealand (1843–1845), as an early and overlooked proponent of public credit monetary policy, preceding even John A. Lee’s more recognized 1936 state housing finance reforms. Both figures challenged the financial hegemony of London-based banking interests, advocating for sovereign money creation to address economic crises. FitzRoy’s 1844–1845 currency debentures constituted a radical experiment in colonial self-financing, yet his policies were swiftly suppressed by the British Colonial Office. Drawing parallels with Lee’s later struggles, this paper argues that FitzRoy represents a forgotten precursor to public credit theory in New Zealand, whose legacy was erased by imperial financial dominance.
FitzRoy’s Public Credit Experiment (1844–1845)
1. The Financial Crisis and the Currency Debentures
Upon assuming office, FitzRoy encountered a colony on the brink of insolvency:
£24,000 in debt vs. £2,770 in reserves (Encyclopedia of New Zealand, 1966).
The British Treasury refused further loans, leaving FitzRoy with two choices: austerity or monetary innovation.
In April 1844, he authorized the issuance of government debentures—paper notes redeemable in sterling at a future date. By November 1845, £37,000 had been circulated (ibid.). Unlike later fiat currencies, these notes functioned as interest-bearing IOUs, effectively a form of state-issued credit.
2. Why This Was Revolutionary
Sovereign Money Creation: FitzRoy bypassed London’s financial control, effectively creating a colonial central banking mechanism.
No Hyperinflation: Despite fears, the debentures stabilized the economy without devaluation, proving their viability.
Precedent for Later Policies: His model presaged John A. Lee’s 1936 state housing finance scheme, which also relied on public credit rather than private borrowing.
3. The Imperial Backlash
FitzRoy’s policies directly threatened British financial dominance:
The Colonial Office condemned the debentures as "contempt for instructions" (Encyclopedia of New Zealand, 1966).
The New Zealand Company (aligned with London bankers) lobbied aggressively for his removal.
His recall in 1845 was justified under the pretext of "mismanagement," but the real issue was monetary insubordination.
Parallels with John A. Lee (1930s)
1. Lee’s Public Credit Crusade
As an MP in the First Labour Government, Lee advocated for direct state money issuance to fund housing, bypassing private banks.
His 1936 scheme successfully financed thousands of state homes using public credit—proving its effectiveness.
Yet, orthodox financiers (including the Bank of England) pressured Labour to restrain Lee’s policies.
2. Shared Themes in FitzRoy and Lee’s Struggles
Factor: FitzRoy (1840s) John A. Lee (1930s)
Policy: Currency debentures State housing credit
Opposition: Colonial Office, NZ Company Bank of England, Treasury officials
Outcome: Recalled, policy reversed Marginalised, expelled from Labour
Legacy: Erased from monetary history Remembered, but downplayed
Both figures demonstrated that public credit could work, yet both were suppressed by financial elites.
Theoretical Implications: Public Credit vs. Banking Hegemony
FitzRoy and Lee’s experiences align with Modern Sovereign Money and Chartalist perspectives:
The state, as currency issuer, need not rely on private banks for liquidity.
Colonial (and later, neocolonial) financial systems enforce dependency.
Successful precedents are systematically erased to maintain orthodoxy.
FitzRoy’s case is particularly striking because he proved public credit’s viability in a colonial setting, long before Keynesian or Modern Sovereign Money frameworks existed.
Conclusion: FitzRoy’s Erasure from Economic History
Despite his innovations, FitzRoy remains a footnote in New Zealand’s financial history, overshadowed by later figures like Lee. Yet his 1844 debentures were a landmark experiment in sovereign money—one that directly challenged imperial financial control. His recall was not just a political defeat but a suppression of alternative monetary systems.
Reviving FitzRoy’s legacy forces a re-examination of New Zealand’s long resistance to financial colonialism—and highlights the recurring struggle between public credit advocates and banking elites.
Part 2
Comparative Resistance: How Canada and Australia Challenged London’s Monetary Control Before Falling to Transatlantic Bank Dominance
Abstract
This part examines how Canada and Australia resisted British imperial monetary control longer than New Zealand—only to later fall under a Euro-American private banking duopoly. While Robert FitzRoy’s 1844 currency debentures were swiftly crushed in New Zealand, Canada and Australia developed more resilient public credit systems before ultimately surrendering to a two-headed financial beast: the Bank of England-European central banking axis and Wall Street-dominated debt markets. By comparing colonial monetary rebellions, this study reveals a global pattern of financial subjugation, where sovereign credit systems were systematically dismantled in favor of transnational banker dominance.
1. Canada: The Long Fight for Colonial Scrip (1830s–1930s)
A. Early Resistance: Colonial Treasury Notes (Pre-Confederation)
1820s–1840s: Upper and Lower Canada issued Treasury Scrip to fund infrastructure, evading London’s gold standard.
1841: The Province of Canada (unified Upper/Lower Canada) continued issuing government paper money, defying British bans.
1866: The Free Banking Era allowed provincial note issuance, but London pressured Canada to adopt a gold-backed Dominion currency post-Confederation (1867).
B. The Bank of England’s Counterattack
1871: The Dominion Notes Act centralized currency under federal control but still tied to gold.
1930s: The Bank of Canada’s creation (1935) was a compromise—publicly owned but structurally aligned with London and New York bankers.
Post-WWII: Canada’s monetary policy increasingly synchronized with Wall Street and the Bank for International Settlements (BIS).
Key Difference from NZ: Canada resisted longer but was gradually absorbed into the transatlantic banking system.
2. Australia: State Savings Banks & the Commonwealth Bank (1911–1990s)
A. Colonial Public Credit (1850s–1900)
1850s: State Savings Banks (e.g., Victoria’s 1842 Savings Bank) issued credit for development.
1890s: The Australian Labor Party pushed for public banking to break London’s monopoly.
B. The Commonwealth Bank (1911): A Brief Triumph
Established as a state-owned competitor to private banks, it funded WWI and infrastructure without foreign debt.
1924: Privatized under pressure from Bank of England and J.P. Morgan.
1945–1970s: Retained some public functions but was increasingly subordinated to IMF/Wall Street policies.
1990s: Fully privatized, cementing Euro-American financial dominance.
Key Difference from NZ: Australia’s Commonwealth Bank was a more successful (but temporary) public credit system than FitzRoy’s debentures.
3. New Zealand: FitzRoy’s Swift Defeat & Later Surrender
1844–1845: FitzRoy’s currency debentures were crushed immediately by London.
1936: John A. Lee’s state housing credit briefly revived public finance.
1984: Rogernomics deregulation fully aligned NZ with Euro-American banking cartels.
Why NZ Fell Sooner?
Smaller economy, weaker resistance to imperial pressure.
No equivalent to Canada’s provincial banks or Australia’s Commonwealth Bank.
4. The Euro-American Two-Headed Beast (Post-WWII)
By the late 20th century, London’s direct control gave way to a dual hegemony:
European Central Banking (ECB/BIS) – Inherited the Bank of England’s role as global monetary enforcer.
Wall Street (Federal Reserve, IMF, World Bank) – Imposed debt-based neoliberalism on former colonies.
Result:
Canada, Australia, and NZ now operate under de facto financial colonialism—no longer ruled by London, but by a Euro-American banking duopoly.
Conclusion: A Century of Resistance & Defeat
Canada
Resistance Period: 1820s–1970s
Key Public Credit Systems: Treasury Scrip → Bank of Canada
Final Subjugation: 1970s (BIS/Wall Street alignment)
Australia
Resistance Period: 1850s–1970s
Key Public Credit Systems: State Banks → Commonwealth Bank
Final Subjugation: 1990s (full privatization)
New Zealand
Resistance Period: 1844 (FitzRoy), 1936 (Lee)
Key Public Credit Systems: Currency Debentures → State Credit
Final Subjugation: 1984 (Rogernomics deregulation)
Final Analysis:
Canada resisted longest but was absorbed incrementally.
Australia had the strongest public banking tradition but was privatized by transnational finance.
NZ’s rebellions were the most brutally suppressed (FitzRoy recalled, Lee expelled).
Legacy Today: All three nations now serve the Euro-American financial empire—proving Jefferson’s 1809 warning correct:
"If the American people ever allow private banks to control the issue of their currency... the banks will deprive the people of all property."
Conclusion: Why FitzRoy’s Legacy Still Matters Today
Despite his innovations, Robert FitzRoy was relegated to a historical footnote. Yet his 1844 debentures offer a powerful lesson that still resonates — especially now.
In an era of rising debt, skyrocketing housing costs, and central banks propping up financial markets instead of people, the core questions FitzRoy wrestled with are back on the table:
Should public credit serve communities, not bankers?
Who should control the money supply — elected representatives or private financiers?
Modern public-banking movements — like the Green New Deal financing debate in the United States, calls for a North Dakota-style public bank in local communities, or the UK Labour Party’s flirtation with a national investment bank — echo FitzRoy’s principles. Even New Zealand’s own experiments, from Kiwibank to recent discussions about using Reserve Bank credit for public infrastructure, show we still haven’t settled this debate.
The forces that crushed FitzRoy in 1845 — imperial financiers protecting their profits — may have evolved into today’s Euro-American banking duopoly and international treaties like those pushed by the IMF. But the struggle between public sovereignty and private capital is still alive and unresolved.
In short: FitzRoy wasn’t just an obscure colonial governor. He was a pioneer in the fight for monetary democracy. Remembering him isn’t about nostalgia — it’s a timely reminder that financial independence is a political choice we can make again.
Bibliography (Chicago Style) For Part 1
Burns, Patricia. Fatal Success: A History of the New Zealand Company. Auckland: Heinemann Reed, 1989.
Encyclopedia of New Zealand. "FitzRoy, Robert." 1966.
Lee, John A. Money Power for the People. Wellington: A.H. & A.W. Reed, 1943.
McLean, Gavin. The Governors: New Zealand’s Governors and Governors-General. Dunedin: Otago University Press, 2006.
Central Banking and Finance—The Franchise View
Robert Hockett, Saule Omarova
https://lpeproject.org/blog/central-banking-and-finance-the-franchise-view/
Bibliography (Chicago Style) For Part 2
Helleiner, Eric. The Making of National Money: Territorial Currencies in Historical Perspective. Cornell UP, 2003.
Rowbotham, Michael. The Grip of Death: A Study of Modern Money, Debt Slavery, and Destructive Economics. Jon Carpenter, 1998.
Sylla, Richard. The Evolution of the American Economy: Growth, Welfare, and Decision Making. Basic Books, 1992.
Whitfield, Debra. Banking on Slavery: Financing Southern Expansion in the Antebellum United States. U of Chicago Press, 2023.
Further Research:
Bank for International Settlements (BIS) archives on Commonwealth monetary policies.
J.P. Morgan/Rothschild correspondence on colonial banking suppression.
IMF structural adjustment programs in Canada/Australia/NZ.
Central Banking and Finance—The Franchise View
Robert Hockett, Saule Omarova
https://lpeproject.org/blog/central-banking-and-finance-the-franchise-view/
Well, we just can't have contempt for instructions can we now. Especially from our betters..or should I say the rentier class. Following their instructions has worked out swimmingly so far - for them.
Time to call out the technocratic corporate coup.