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- The Money Masters
- video transcript
- There was a time in this country when to ask someone for whom I worked was considered somewhat insulting, as it implied
- he was an incompetent, incapable of gainful self-employment.
- But now, property ownership (net wealth) is not a general feature of our society, as it was before the Civil War, and largely
- was still until the Great Depression. Rather, net debt and complete dependence on a precarious wage or salary at the will of
- others is the general condition.
- Since the exercise of freedom often includes using material objects such as books, food, clothing, shelter, arms, transport,
- etc., the choice and possession of which requires some wealth, we are forced to admit that the general condition of Americans
- is one of increasing dependence and limitations on our freedom.
- Since the turn of the century, there has occurred throughout the world a major increase in debt and a major decline in the
- freedom of individuals, and of states, to conduct their own affairs. To restore a condition of widespread, modest wealth is
- therefore essential to regaining and preserving our freedom.
- What's going on in America today? Why are we over our heads in debt? Why can't the politicians bring debt under control?
- Why are so many people - often both parents now - working at low-paying, dead-end jobs and still making do with less?
- What's the future of the American economy and way of life?
- Why does the government tell us inflation is low, when the buying power of our paychecks is declining at an alarming rate?
- Only a generation ago, bread was a quarter and you could get a new car for $1,995!
- Are we headed into an economic crash of unprecedented proportions - one which will make the crash of 1929 and the Great
- Depression which followed look like a Sunday school picnic? If so, can we prevent it? Or, will we simply arrive at the same
- point through more inflation-caused poverty, robbing Americans of their savings, fixed incomes and wages by imperceptible
- degrees - reducing their purchasing power. What can we do to protect our families?
- Some reliable experts say a crash is coming. They also say that there are simple, inexpensive things anyone can do to protect
- their families - to keep food on the table and a roof over our heads even in the worst of times. But to do that, we have to
- understand why a depression is coming, who's behind it, what they want, and how the perpetrators plan on protecting their
- families. Armed with this knowledge, any of us can ride out the coming storm.
- Larry Bates was a bank president for eleven years. As a member of the Tennessee House of Representatives, he chaired the
- committee on Banking and Commerce. He's also a former professor of economics and the author of the best-selling book The
- New Economic Disorder.
- "\ can tell you right now that there is going to be a crash of unprecedented proportions. A crash like we have never seen
- before in this country. The greatest shock of this decade is that more people are about to lose more money then at any time
- before in history, but the second greatest shock will be the incredible amount of money a relatively small group of people will
- make at the same time. You see, in periods of economic upheaval in periods of economic crisis, wealth is not destroyed, it is
- merely transferred."
- Banker and former Presidential candidate Charles Collins is a lawyer, has owned banks, and served as a bank director. He
- believes we'll never get out of debt because the Federal Reserve is in control of our money.
- "Right now, it's perpetuated by the Federal Reserve mal<ing us borrow the money from them, at interest, to pay the interest
- that's already accumulated. So we cannot get out of debt the way we're going now."
- Economist Henry Pasquet is a tenured instructor in economics. He agrees the end is near for the U.S. economy.
- "No, not when you are adding roughly a billion dollars a day. We just can't go on. We had less than 1 trillion dollars of
- national debt in 1980, now it's $5 trillion - 5 times greater in 15 years. It just doesn't take a genius to realize that this just
- can't go on forever."
- The problem is we have one of the worst monetary systems ever devised - a central bank that operates independently of our
- government, which, with other private banks, creates all of our money with a parallel amount of interest-bearing debt. That's
- why we can never get out of debt. And that's why a deep depression is a certainty, for most of our citizens, whether caused
- suddenly in a severe economic crash, or gradually through continued relentless inflation. The Fed is creating it to enrich its
- private stockholders, just like it deliberately created the Great Depression the 1930s.
- The Federal Reserve headquarters is in Washington, D.C. It sits on a very impressive address right on Constitution Avenue,
- right across from the Lincoln Memorial. But is it "Federal"? Is it really part of the United States government?
- Well, what we are about to show you is that there is nothing federal about the Fed Reserve, and there are no reserves. The
- name is a deception created back before the Fed Reserve Act was passed in 1913 to make Americans think that America's
- new central bank operates in the public interest.
- The truth is that the Fed is a private (or best, quasi-public) bank, owned by private National banks which are the
- stockholders, and run for their private profit.
- "That's exactly correct, the Fed is privately-owned, for-profit corporation which has no reserves, at least no reserve to back up
- the Federal Reserve to which are our common currency." - economist Henry Pasquet
- The Federal Reserve Act was railroaded through a carefully prepared Congressional Conference Committee scheduled during
- unlikely hours of 1:30 a.m. to 4:30 a Monday, December 22, 1913, when most members were sleeping, at which 20-40
- substantial differences in the House and Senate versions were supposedly described, deliberated, debated, reconciled and
- voted upon in a near miraculous 4V2 to 9 minutes per item, at that late hour. As author Anthony C. Sutton noted:
- "This miracle of speediness, never equaled before or after in the U.S. Congress, is ominously comparable to the rubber stamp
- lawmaking of the banana republics."
- At 4:30 a.m. a prepared report of this Committee was handed to the printers. Senator Bristow of Kansas, the Republican
- leader, stated on the Congressional Record that the Conference Committee had met without notifying them and that
- Republicans were not present, and were given no opportunity to either read or sign the Conference Committee report.
- The Conference report is normally read on the Senate floor. The Republicans did not even see the report. Some Senators
- stated on the floor of the Senate that they had no knowledge of the contents of the Bill. At 6:02 p.m., December 23rd, when
- many members had already left the Capitol for the Christmas holiday, the very same day the Bill was hurried through the
- House and Senate, President Woodrow Wilson signed the Federal Reserve Act of 1913 into law.
- The Act transferred control of the money supply of the United States from Congress to a private banking elite. It is not
- surprising that a bill granting a few national bankers a private money monopoly was passed in such a corrupted manner.
- As author Anthony C. Sutton noted:
- 'The Federal Reserve System is a legal private monopoly of the money supply operated for the benefit of the few under the
- guise of protecting and promoting the public intent."
- Heroic Nebraska Senator Hitchcock, the only Senate Democrat working against the bill, had proposed numerous amendments
- to the bill aimed at making the Federal Reserve System a government agency (i.e. placing control in the Department of the
- Treasury), rather than a private monopoly, but these were all tabled - so great was the power of the Money Changers over
- Congress by then.
- If there's still any doubt whether the Federal Reserve is a part of the U.S. government, check your local telephone book. It's
- not listed in the blue "government pages." It is correctly listed in the "business" white pages, right next to Federal Express,
- another private company. But more directly, U.S. Courts have ruled that the Fed is a special form of private corporation.
- Let's take a look at the Fed shareholders: according to researcher Eric Samuelson, as of November, 1997, the Federal Reserve
- Bank of New York (which completely dominates the other eleven branches through stock ownership, control, influence, having
- the only permanent voting seat on the Federal Open Market Committee and by handling all open market bond transactions),
- which has 19,752,655 shares outstanding, was majority-owned by two banks - Chase Manhattan bank (now merged with
- Chemical Bank) with 6,389,445 shares or 32.35%, and Citibank, N.A., with 4,051,851 shares or 20.51%. Together those two
- banks own 10,441,295 shares or 52.86%: majority control.
- While majority ownership conclusively demonstrates effective control, it is not critical to control, which is often exercised in
- large, publicly-traded corporations by blocks of as little as 25%, and even 2%, when the other owners hold smaller blocks.
- Why can't Congress do something about this dangerous concentration of power. Most members of Congress just don't
- understand the system, and the few who do are afraid to speak up. For example, initially a veteran Congressman asked us if
- he could be interviewed. However, both times our camera crew arrived at his office to do the interview, we were not able to
- film. The Congressman never appeared, and eventually got cold feet and withdrew.
- Fighting the bankers is a good way to see one's opponent get heavily funded in the next election. But a few others in
- Congress have been bolder over the years. Here are three quick examples.
- In 1923, Representative Charles A. Lindbergh, a Republican from Minnesota, the father of famed aviator, "Lucky" Lindy, put it
- this way,
- "The financial system ... has been turned over to the Federal Reserve Board. That board administers the finance system by
- authority of ... a purely profiteering group. The system is private, conducted for the sole purpose of obtaining the greatest
- possible profits from the use of other people's money."
- One of the most outspoken critics in Congress of the Fed was the Chairman of the House Banking and Currency Committee
- during the Great Depression years, Louis T. McFadden (R-PA). He said in 1932:
- "We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board
- ... This evil institution has impoverished ... the people of the United States ... and has practically bankrupted our Government.
- It has done this through ... the corrupt practices of the moneyed vultures who control it."
- Senator Barry Goldwater was a frequent critic of the Fed:
- "Most Americans have no real understanding of the operation of the international moneylenders ... The accounts of the
- Federal Reserve System have never been audited. It operates outside the control of Congress and ... manipulates the credit of
- the United States"
- Does that power affect you?
- "The Fed really is more powerful than the federal government. It is more powerful than the President, Congress or the courts.
- Let me prove my case. The Fed determines what the average person's car payment and house payments are going to be and
- whether they have a job or not. And I submit to you - that is total control. The Fed is the largest single creditor of the U.S.
- government. What does Proverbs tell us? The borrower is servant to the lender." - Larry Bates
- What one has to understand is that from the day the Constitution was adopted right up to today, the folks who profit from
- privately owned central banks, like the Fed, or, as President Madison called them, the "Money Changers," have fought a
- running battle for control over who gets to issue America's money.
- Why is who issues the money so important? Think of money as just another commodity. If you have a monopoly on a
- commodity that everyone needs, everyone wants, and nobody has enough of, there are lots of ways to make a profit and also
- exert tremendous political influence.
- 2
- That's what this battle is all about. Throughout the history of the United States, the money power has gone back and forth
- between Congress and some sort of privately-owned central bank. The American people fought off four privately-owned
- central banks, before succumbing to the first stage of a fifth privately-owned central bank during a time of national weakness
- - the Civil War.
- The founding fathers knew the evils of a privately-owned central bank. First of all, they had seen how the privately-owned
- British central bank, the Bank of England, had run up the British national debt to such an extent that Parliament had been
- forced to place unfair taxes on the American colonies.
- I n fact, as we'll see later, Ben Franklin claimed that this was the real cause of the American Revolution. Most of the founding
- fathers realized the potential dangers of banking, and feared bankers' accumulation of wealth and power. Jefferson put it this
- way:
- "/ sincerely believe that banking institutions are more dangerous to our liberties than standing armies. Already they have
- raised up a money aristocracy that has set the government at defiance. The issuing power should be taken from the banks
- and restored to the people to whom it properly belongs. "
- That succinct statement of Jefferson is in fact, the solution to most of our economic problems today. James Madison, the main
- author of the Constitution, agreed. Interestingly, he called those behind the central bank scheme "Money Changers." Madison
- strongly criticized their actions:
- "History records that the Money Changers have used every form of abuse, intrigue, deceit, and violent means possible to
- maintain their control over governments by controlling money and its issuance."
- The battle over who gets to issue our money has been the pivotal issue through the history of the United States. Wars are
- fought over it. Depressions are caused to acquire it. Yet after World War I, this battle was rarely mentioned in newspapers or
- history books. Why?
- 1. MEDIA CONTROL
- By World War I, the Money Changers with their dominant wealth, had seized control of most of the nation's press.
- In a 1912 Senate Privileges and Elections Committee hearing, a letter was introduced to the Committee written by
- Representative Joseph Sibley (PA), a Rockefeller agent in Congress, to John D. Archbold, a Standard Oil employee of
- Rockefeller's, which read in part:
- "An efficient literary bureau is needed, not for a day or a crisis but a permanent healthy control of the Associated Press and
- kindred avenues. It will cost money but will be cheapest in the end."
- J ohn Swinton, the former Chief of Staff of the New York Times, called by his peers "the Dean of his profession," was asked in
- 1953 to give a toast before the New York Press Club. He responded with the following statement:
- "There is no such thing as an independent press in America, if we except that of little country towns. You know this and I
- know it. Not a man among you dares to utter his honest opinion. Were you to utter it, you know beforehand that it would
- never appear in print.
- I am paid one hundred and fifty dollars a week so that I may keep my honest opinion out of the newspaper for which I write.
- You too are paid similar salaries for similar services. Were I to permit that a single edition of my newspaper contained an
- honest opinion, my occupation - like Othello's - would be gone in less than twenty-four hours.
- The man who would be so foolish as to write his honest opinion would soon be on the streets in search of another job. It is the
- duty of a New York journalist to lie, to distort, to revile, to toady at the feet of Mammon, and to sell his country and his race
- for his daily bread, or what amounts to the same thing, his salary.
- We are the tools and the vassals of the rich behind the scenes. We are marionettes. These men pull the strings and we dance.
- Our time, our talents, our lives, our capacities are all the property of these men - we are intellectual prostitutes." (As quoted
- by T. St. J ohn Gaffney in Breaking The Silence, page 4.)
- That was the U.S. press in 1953. It is the mass media of America today.
- Press control, and later electronic media control (radio and TV), was seized in carefully planned steps, yielding the present
- situation in which all major mass media and the critically important major reporting services, which are the source of most
- news and upon which most news is based, are controlled by the Money Changers.
- Representative Callaway discussed some of this press control in the Congressional Record, Vol. 54, Feb. 9, 1917, p. 2947:
- "In March, 1915, the J. P. Morgan interests, the steel, shipbuilding, and powder interests, and their subsidiary organizations,
- got together 12 men high up in the newspaper world and employed them to select the most influential newspapers in the
- United States and sufficient number of them to control generally the policy of the daily press. They found it was only
- necessary to purchase the control of 25 of the greatest papers ...An agreement was reached; the policy of the papers was
- bought, to be paid for by the month; an editor was furnished for each paper to properly supervise and edit information
- regarding the questions of preparedness, militarism, financial policies, and other things of national and international nature
- considered vital to the interests of the purchasers."
- G. Edward Griffin quoting Ferdinand Lundberg adds this detail:
- "So far as can be learned, the Rockefellers have given up their old policy of owning newspapers and magazines outright,
- relying now upon the publications of all camps to serve their best interests in return for the vast volume of petroleum and
- allied advertising under Rockefeller control.
- After the J .P. Morgan bloc, the Rockefellers have the most advertising of any group to dispose of. And when advertising alone
- is not sufficient to insure the fealty of a newspaper, the Rockefeller companies have been known to make direct payments in
- return for a friendly editorial attitude. "
- A few years ago, three-quarters of the majority stockholders of ABC, CBS, NBC and CNN were banks, such as Chase
- Manhattan Corp., Citibank, JVIorgan Guaranty Trust and Bank of America; ten such corporations controlled 59 magazines
- (including Time and Newsweek) , 58 newspapers (including the New York Times, the Washington Post, the Wall Street
- Journal), and various motion picture companies, giving the major Wall Street banks virtually total ownership of the mass
- media, with few exceptions (such as the Disney Company's purchase of ABC).
- Only 50 cities in America now have more than one daily paper, and they are all owned by the same group. Only about 25% of
- the nation's 1,500 daily papers are independently owned. This concentration has been rapidly accelerating in recent years and
- ownership is nearly monolithic now, reflecting the identical control described above.
- Of course, much care is taken to fool the public with the appearance of competition by maintaining different corporate logos,
- anchorpersons and other trivia, projecting a sense of objectivity that belies the uniform underlying bank ownership and
- editorial control. This accounts for the total blackout on news coverage and investigative reporting of banker control of our
- country.
- Nevertheless, throughout U.S. history, the battle over who gets the power to issue our money has raged. In fact it has
- changed hands back and forth eight times since 1694, in five transition periods which may aptly be described as "Bank Wars"
- (or more precisely: Private Central Bank vs. American People Wars), yet this fact has virtually vanished from public view for
- over three generations behind a smoke screen emitted by Fed cheerleaders in the media.
- Until we stop talking about "deficits" and "government spending" and start talking about who creates and controls how much
- money we have, it's just a shell game - a complete and utter deception. It won't matter if we pass an iron-clad amendment to
- the Constitution mandating a balanced budget. Our situation is only going to get worse until we root out the cause at its
- source.
- Our leaders and politicians need to understand, those few who are not part of the problem, what is happening, and how, as
- well as what solutions exist. The government must take back the power to issue our money, without debt.
- Issuing our own debt-free money is not a radical solution. It's the same solution proposed at different points in U.S. history by
- men like Benjamin Franklin, Thomas J efferson, Andrew J ackson, Martin Van Buren, Abraham Lincoln, William J ennings Bryan,
- Henry Ford, Thomas Edison, numerous Congressmen and economists.
- So, to sum the economic problem up: in 1913, Congress delegated to a privately owned central bank, deceptively named the
- Federal Reserve System, control over the quantity of America's money, virtually all of which is created in parallel with an
- equivalent quantity of debt.
- Though the Federal Reserve is now one of the two most powerful central banks in the world, it was not the first. So where did
- this idea come from? To really understand the magnitude of the problem, we have to travel back to Europe.
- 2. THE MONEY CHANGERS
- J ust who are these "Money Changers" J ames Madison spoke of above?
- The Bible tells us that two thousand years ago, J esus Christ drove the Money Changers from the Temple in J erusalem, twice.
- These were the only times J esus used physical violence. What were Money Changers doing in the Temple?
- When J ews came to J erusalem to pay their Temple tax, they could only pay it with a special coin, the half shekel of the
- sanctuary. This was a half-ounce of pure silver, about the size of a quarter.
- It was the only coin around at that time which was pure silver and of assured weight, without the image of a pagan Emperor.
- Therefore, to Jews the half-shekel was the coin acceptable to God. But these coins not plentiful. The Money Changers had
- cornered the market on them. Then, they raised the price of them - just like any other monopolized commodity - to whatever
- market would bear.
- In other words, the Money Changers making exorbitant profits because they held a virtual monopoly on money. The J ews had
- to pay whatever they demanded. To J esus injustice violated the sanctity of God's house.
- 3. ROMAN EMPIRE
- But the money changing scam did not originate in J esus' day. Two hundred years before Christ, Rome was having trouble with
- Money Changers.
- Two early Roman emperors had tried to diminish the power of the Money Changers by reforming usury laws and limiting land
- ownership to 500 acres. They both were assassinated. In 48 B.C., Julius Caesar took back the power to coin money from the
- Money Changers and minted coins for the benefit of all.
- With this new, plentiful supply of money, he built great public works projects. By making money plentiful, Caesar won the love
- common man. But the Money Changers hated him. Some believe this was an important factor in Caesar's assassination.
- One thing is for sure, with the death of Caesar came the demise of plentiful money in Rome. Taxes increased, as did
- corruption.
- Eventually, the Roman money supply was reduced by 90%. As a result, the common people lost their lands and homes - just
- as has happened and will happen again in America to the few who still own their own land or homes. With the demise of
- plentiful money and the loss of their property, the masses lost confidence in Roman government and refused to support it.
- Rome plunged into the gloom of the Dark Ages.
- 4. THE GOLDSMITHS OF MEDI EVAL ENGLAND
- "Sorrow is knowledge; they who know the most, must mourn the deepest o'er the fatal truth, the Tree of Knowledge is not
- that of Life. " - Byron
- The Chinese were the first to use paper money, l<nown as "Flying JVIoney, " (a l<ind of banl<er's draft) in 618-907 A.D. About
- 1000 A.D. private Chinese merchants in Sichuan province issued paper money l<nown as Jiao Zi. Due to fraud, the right to
- issue paper money was tal<en over by the Song dynasty in 1024, which then issued the first government paper money.
- About that same time, JVIoney Changers - those who exchange, create and manipulate the quantity of money - were active in
- medieval England. In fact, they were so active that acting together, they could manipulate the English economy. These were
- not bankers, per se. The Money Changers generally were the goldsmiths.
- They were the first bankers because they started keeping other people's gold for safekeeping in their safe rooms, or vaults.
- The first paper money in Western Europe was merely receipts for gold left at the goldsmiths, made from rag paper as the ditty
- goes:
- "Rags make paper; paper makes money; money makes banks; banks make loans; loans make beggars; beggars make rags."
- Paper money caught on because it was more convenient and safer to carry than a lot of heavy gold and silver coins. As a
- convenience, to avoid an unnecessary trip to the goldsmiths, depositors began endorsing these gold deposit receipts to
- others, by their signature.
- Over time, to simplify the process the receipts were made out "to the bearer," rather than to the individual depositor, making
- them readily transferable without the need for a signature. This, however, broke the tie to any identifiable deposit of gold.
- Eventually goldsmiths noticed that only a small fraction of the depositors or bearers ever came in and demanded their gold at
- any one time. Goldsmiths started cheating on the system.
- They began by secretly lending out some of the gold that had been entrusted to them for safekeeping, and keeping the
- interest earned on this lending.
- Then the goldsmiths discovered that they could print more money (i.e. paper gold deposit certificates) than they had gold and
- usually no one would be the wiser. Then, they could loan out this extra paper money and collect interest on it. This was the
- birth of fractional reserve lending - that is, loaning out more money than you have reserves on deposit. Obviously, it was
- fraud, often specifically outlawed, once understood.
- The goldsmiths began with relatively modest cheating, loaning out only two or three times in gold deposit certificates the
- amount of gold they actually had in their safe rooms. But they soon grew more confident, and greedier, loaning out four, five,
- even ten times more gold certificates than they had gold on deposit.
- So, for example, if $1,000 in gold were deposited with them, they could loan out about $10,000 in paper money and charge
- interest on it, and no one would discover the deception. By this means, goldsmiths gradually accumulated more and more
- wealth and used this wealth to accumulate more and more gold.
- It was this abuse of trust, a fraud, which, after being accepted as standard practice, evolved into modern deposit banking. It
- is still a fraud and an unjust and unreasonable delegation of a sovereign government function - money creation - to private
- banks.
- Today, this practice of loaning out more money than there are reserves is known as fractional reserve banking. In other
- words, banks have only a small fraction of the reserves on hand needed to honor their obligations. Should all their account
- holders come in and demand cash, the banks would run out before even three percent have been paid. That is why banks
- always live in dread fear of "bank runs." To banks, fractional reserve loans, "are a bright joy as brittle as glass accompanied
- by the haunting fear of a sudden break."
- This is the fundamental cause of the inherent instability in banking, stock markets and national economies.
- The banks in the United States are allowed to loan out at least ten times more money they actually have. That's why they do
- so on charging let's say 8% interest. It's not really 8% per year which is their interest income on money the government
- issues. It's 80%. That's why bank buildings are always the largest in town. Every bank is, de facto, a private mint (over
- 10,000 in the U.S.), issuing money as loans, for nothing, at no cost to them, except whatever interest they pay depositors.
- Rather than issue more gold certificates than they have gold, modern bankers simply make more loans than they have
- currency (cash). They do this by making book entries creating loans to borrowers out of thin air (or rather, ink).
- To give a modern example: A $10,000 bond purchase by the Fed on the open market results in a $10,000 deposit to the bond
- seller's bank account. Under a 10% (i.e. fractional) reserve requirement, the bank need keep only $1,000 in reserve, and may
- lend out $9,000. This $9,000 is ordinarily deposited by the borrower in either the same bank or in other banks, which then
- must keep 10% ($900) reserve, and may lend out the other $8,100. This $8,100 is in turn deposited in banks, which must
- keep 10% ($810) in reserve, and then may lend out $7,290, and so on.
- Carried to the theoretical limits, the initial $10,000 created by the Fed, is deposited in numerous banks in the banking system,
- which gives rise (in roughly 20 repeated stages) to expansion of $90,000 in new loans, in addition to the $10,000 in reserves.
- In other words, the banking system, collectively, multiplies the $10,000 created by the Fed by a factor of 10. However, less
- than 1% of the banks create over 75% of this money. In other words, a handful of the largest Wall Street banks create
- money, as loans, literally by the hundred billion, charging interest on these loans, leaving crumbs for the rest of the banks to
- create. But because those crumbs represent billions too, the lesser bankers rarely grumble. Rather, they too support this
- corrupt system, with rare exceptions.
- In actual practice, due to numerous exceptions to the 10% reserve requirement, the banking system multiplies the Fed's
- money creation by several magnitudes over 10 times (e.g. the Fed requires only 3% reserves on deposits under c. $50
- million, and no reserves on Eurodollars and non-personal time deposits).
- Thus the U.S. currency and bank reserve total of roughly $600 billion, supports a total debt structure in the U.S. of over $20
- trillion in debt - roughly $80,000 in debt for every American, man, woman and child, which includes the national debt, bank
- debt, credit card debt, home mortgages, etc.
- The Fed created only roughly 3% of this total, private banks created roughly 97% (including intra-government debt). All of
- this could and should have been created by the U.S. government, without the parallel creation of an equivalent quantity of
- interest-bearing debt, over the years and used to pay for government expenditures, thus reducing taxes accordingly.
- MORAL ISSUES
- But does all of this mean that all interest or all banking should be illegal? No. I n the Middle Ages, Canon law, the law of the
- Catholic Church, forbade charging interest on loans. This concept followed the teachings of Aristotle as well as of Saint
- Thomas Aquinas.
- They taught that the purpose of money was to serve the members of society as a medium of exchange to facilitate the
- exchange of goods needed to lead a virtuous life. Interest, in their belief, hindered this purpose by putting an unnecessary
- and inequitable burden on the use of money. In other words, interest was contrary to reason and justice.
- Reflecting Church Law in the Middle Ages, all European nations forbade charging interest, except on productive loans (i.e. on
- loans generating a profit to be shared with the lenders as their "interest," as a partner, or "silent investor at risk," as we
- would say today), and made it a crime called usury.
- As commerce grew and therefore opportunities for investment arose in the late Middle Ages, it came to be that to loan money
- had a cost to the lender in lost gain given up, and in risks. So such "extrinsic" charges were allowed, as was profit-sharing on
- productive investments, but not interest per se as pure (or "intrinsic") gain from a loan.
- But all moralists, no matter what religion or what their position on usury, condemn fraud, oppression of the poor and injustice
- as dearly immoral. As we will see, fractional reserve lending is rooted in a fraud, results in widespread poverty, oppression of
- the poor, and reduces the value of everyone else's money. Ignorance of this technique has largely silenced moral
- condemnation of it.
- Unfortunately, a few schools of some religions, limit their condemnation of fraud, oppression and injustice to that conducted
- against their own people, only. This deplorable limitation, which arises out of an exclusiveness in justice and charity, is one of
- the causes of this banking problem. Other peoples inevitably come to be regarded as inferior or even subhuman.
- This inevitably results in a Weltanschauung or world view, according to which "peace" means the predominance of the
- "superior" peoples and the "superior" race - a gross form of crude materialism which is merely a concealed nationalism, even
- though it condemns the defensive nationalism it arouses in others. But the principal determinants of nationalism, in its last
- analysis, are merely psychological and variable, not any inherent "superiority."
- Men forget that the human species is one great human race with a common origin, a common end, and equality of rational
- nature, in which there are no special "higher races," as linguistics, genetics, anthropology and other sciences increasingly
- affirm.
- Even if there were superior races, surely they should be measured by excellence in virtue, not in cunning and deceit. But as it
- is, the differences in peoples should serve to enrich and embellish the human race by the sharing of their own peculiar gifts
- and by the reciprocal interchange of goods.
- To return to the goldsmiths: they also discovered that extra profits could be made by "rowing" the economy between easy
- money and tight money. When they made money easier to borrow, then the amount of money in circulation expanded. Money
- was plentiful. People took out more loans to expand their businesses. But then the goldsmiths would tighten the money
- supply. They would make loans more difficult to get.
- What would happen? J ust what happens today. A certain percentage of people could not repay their previous loans, and could
- not take out new loans to repay the old on. Therefore they went bankrupt, and had to sell their assets to the goldsmiths or at
- auction for pennies on the dollar.
- The same thing is still going on today, or today we call this rowing of the economy, up and down, the "Business Cycle," or
- more recently in the stock markets, "corrections."
- 5. TALLY STICKS
- King Henry I , son of William the Conqueror, ascended the English throne in 1100 A.D.
- At that time, long before the invention of the printing press, taxes were generally paid in kind - i.e. in goods, based on the
- productive capacity of the land under the care of the tax-paying serf or lesser noble. To record production, medieval European
- scribes used a crude accounting device - notches on sticks or "tallies" (from the Latin talea meaning "twig" "stake"). Tally
- sticks worked better than faulty memory or notches on barn doors, as were sometimes used.
- To prevent alteration or counterfeiting, the sticks were cut in half lengthwise, leaving one half of the notches on each piece,
- one of which was given to the taxpayer, which could compared for accuracy by reuniting the pieces. Henry adopted this
- method of tax record keeping in England.
- Over time, the role of tally sticks evolved and expanded. By the time of Henry 1 1 taxes were paid two times a year. The first
- payment, made at Eastertime, was evidenced by giving the taxpayer a tally stick notched to indicate partial payment
- received, with the same lengthwise split to record, for both parties, the payment made. These were presented at Michaelmas
- with the balance of taxes then due.
- It takes only a little imagination to arrive at the next step: tallies were issued by the government in advance of taxes being
- paid in order to raise finds in emergencies or financial straits. The recipients would accept such tallies for goods sold at a
- profit or for coin, at a discount, and then would use them later, at Easter or Michaelmas, for the payment of the taxes. Thus,
- tallies took on some of the same functions as coin - they served as money for the payment of taxes.
- After 1694 the government issued paper tallies" as paper evidence of debt (i.e. government borrowing) in anticipation of the
- collection of future taxes. Paper could be made easily negotiable, which made them the full equivalent of the paper bank note
- money issued by the Bank of England beginning in 1694. By 1697 tallies, bank notes and bank bills all began to circulate
- freely as interchangeable forms of money. Wooden stick tallies continued to be used until 1826. Doubtless, ways were found
- to make them circulate at discounts too, like the paper tallies.
- One particular Tally Stick was quite valuable. It represented £25,000. One of the original stockholders in the Bank of England
- purchased his original shares with such a stick. In other words, he bought shares in the world's richest and most powerful
- corporation, with a stick of wood.
- It's ironic that after its formation in 1694, the Bank of England attacked the Tally Stick system because it was money issued
- outside the control of the Money Changers.
- Why would people accept sticks of wood for money? That's a great question. Throughout history, people have traded anything
- they thought had value and used that for money. You see, the secret is that money is only what people agree on to use as
- money. What's our paper money today? It's really just paper.
- But here's the trick: King Henry ordered that Tally Sticks be used to evidence tax payments received by the government. This
- built in demand for tallies and eventually made them circulate and be accepted as money. And they worked well. In fact, no
- other money worked and for so long in the British Empire.
- In the 1500's, King Henry VIM relaxed the laws concerning usury and the Money Changers wasted no time reasserting
- themselves. They made their gold and silver money plentiful for a few decades.
- But when Oueen Mary took the throne and tightened the usury laws again, the Money Changers renewed the hoarding of gold
- and silver coin, forcing the economy to plummet.
- When Mary's half-sister, Oueen Elizabeth I, took the throne, she was determined to regain control over English money. Her
- solution was to issue gold and silver coins from the public treasury and thus take the control over the money supply away
- from the Money Changers.
- Although control over money was not the only cause of the English Revolution in 1642 - religious differences fueled the
- conflict - monetary policy played a major role. Financed by the Money Changers, Oliver Cromwell finally overthrew King
- Charles, purged Parliament, and put the King to death.
- The Money Changers were immediately allowed to consolidate their financial power. The result was that for the next fifty
- years the Money Changers plunged Great Britain into a series of costly wars. They took over a square mile of property in the
- center of London, known as The City. This semi-sovereign area today is still one of the two predominant financial centers of
- the world (with Wall Street). It is not under the jurisdiction of the London police, but has its own private force of 2,000 men.
- Conflicts with the Stuart kings led the Money Changers in England to combine with those in the Netherlands, which already
- had a central bank established by the Money Changers in Amsterdam in 1609, to finance the invasion of William of Orange,
- who overthrew the legitimate Stuarts in 1688. England was to trade masters: an unpopular King James II, for a hidden cabal
- of Money Changers pulling the strings of their usurper. King William III ("King Billy"), from behind the scenes.
- This symbiotic relationship between the Money Changers and the higher British aristocracy continues to this day. The Monarch
- has no real power, but serves as a useful shield for the Money Changers who rule The City, dominated by the banking House
- of Rothschild:
- "In theory still a real monarch, although in reality only a convenient puppet, to be used by the cabinet (The City) at pleasure
- to suit their awn ends; not able even to exercise the power of pardon that is a prerogative of a governor of an American state
- and of the President of the United States. "
- In 1934, (June 20), the New Britain Magazine of London cited a devastating assertion by former British Prime Minister David
- Lloyd George that, "Britain is the slave of an international financial bloc."
- It also quoted these words written by Lord Bryce:
- "Democracy has no more persistent and insidious foe than the money powers ..." and pointed out that "questions regarding
- the Bank of England, its conduct and its objects, be not allowed by the Speaker" (of the House of Commons).
- 6. THE BANK OF ENGLAND
- By the end of the 1600s, England was in financial ruin. Fifty years of more or less continuous wars with France and sometimes
- the Netherlands had exhausted her.
- Frantic government officials met with the Money Changers to beg for the loans necessary to pursue their political purpose. The
- price was high - a government-sanctioned, privately-owned central which could issue money created out nothing, as loans.
- It was to be the modern world's first privately-owned, national central bank in a powerful country, the Bank of England,
- though earlier deposit banks had existed in Venice (1361), in Amsterdam (1609), and Sweden (1661) which issued the first
- bank notes in Europe that same year - 1661. Although it was deceptively called the Bank of England to make the general
- population think it was part of the government, it was not. Like any other private corporation, the Bank of England sold shares
- to get started.
- The investors, whose names were never revealed, were supposed to put up one and a quarter million (British pounds) in gold
- coin to buy their shares in the Bank. But only £750,000 pounds was ever received.
- Despite that, the Bank of England was duly chartered in 1694, and started out in the business of loaning out several times the
- money it supposedly had in reserves, all at interest.
- In exchange, the new bank would loan British politicians as much as they wanted. The debt was secured by direct taxation of
- the British people.
- So, legalization of the Bank of England mounted to nothing less than legalized counterfeiting of a national currency for private
- gain. Unfortunately, nearly every nation now has a privately controlled central bank, the local Money Changers using the Bank
- of England as the basic model.
- Such is the power of these central banks that they soon take total control over a nation's economy. It soon amounts to
- nothing but a plutocracy - rule by the rich, and the bankers soon come to be the dominant super-rich class. It is like putting
- control of the army in the hands of the mafia. The danger of tyranny is extreme. Yes, we need a central monetary authority -
- but one owned and controlled by the government, not by bankers for their private profit.
- Sir William Pitt, speaking to the House of Lords in 1770 stated:
- "There is something behind the throne greater than the liing himself."
- This reference to the Money Changers behind the Bank of England gave birth to the expression "the power behind the
- throne."
- In 1844, Benjamin Disraeli, in a veiled allusion to this same power wrote:
- "The world is governed by very different personages from what is imagined by those who are not behind the scenes."
- On November 21, 1933, President Franklin D. Roosevelt, in a letter to a confidant, wrote:
- "The real truth of the matter is, as you and I know, that a fmancial element in the large centers has owned government ever
- since the days of Andrew J ackson. . ."
- [Note: Besides FDR's main point, this amounts to high praise for President Jackson, as we will see.]
- The central bank scam is really a hidden tax, but one that benefits private banks more than the government. The government
- sells bonds to pay for things for which the government does not have the political wisdom or will to raise taxes to pay. But
- about 10% of the bonds are purchased with money the central bank creates out of nothing. The government then spends this
- new money. Once deposited, private banks use these new deposits to create ten times as much in new fractional reserve
- loans. This provides the economy with the additional money needed to purchase the other 90% of the new bonds, without
- drying up capital markets and forcing up interest rates.
- By borrowing the money (i.e. selling new bonds), the government spreads the inflationary effects out over the term of the
- bonds. Thus there is little to no immediate inflation.
- More money in circulation makes your money worth less. The politicians get as much money as they want, and the people pay
- for it in inflation, which erodes the purchasing power of their savings, fixed income and wages. The perverse beauty of the
- plan is that not one person in a thousand can figure it out because it's deliberately hidden behind complex-sounding
- economics gibberish. The full effects of the inflation are only experienced much later - too late to stop.
- With the formation of the Bank of England, the nation was soon awash in money. Prices throughout the country doubled.
- Massive loans were granted for just about any wild scheme. One venture proposed draining the Red Sea to recover gold
- supposedly lost when the Egyptian army drowned pursuing Moses and the Israelites.
- By 1698, just four years later, government debt had grown from the initial 1-1/4 million pounds to 16 million. Naturally, taxes
- were increased and then increased again to pay for all this.
- With the British money supply firmly in their grip, the British economy began a wild roller coaster series of booms and
- depressions exactly the sort of thing a central bank claims it is designed to prevent, as Eddie George, Governor of the Bank of
- England, stated:
- "There are two things which are intrinsic not just to the Bank of England, but to central banking generally. The first is an
- involvement in the formation of monetary policy with the specific objective of achieving monetary stability."
- 7. THE Rl SE OF THE ROTHSCHI LDS
- This is Frankfort, Germany. Fifty years after the Bank of England opened its doors, a goldsmith named Amschel Moses Bauer
- opened a coin shop - a counting house - in 1743, and over the door he placed sign depicting a Roman eagle on a red shield.
- The shop became known as the Red Shield firm, or in German Rothschild.
- When his son, Meyer Amschel Bauer, inherited the business, he decided to change name to Rothschild.
- Meyer Rothschild soon learned that loan money to governments and kings was more profitable than loaning to private
- individuals. Not only were the loans bigger, but they were secured by the nation's taxes.
- Meyer Rothschild had five sons. He trained them all in the secret techniques of money creation and manipulation, then sent
- them to the major capitals of Europe to open branch offices of the family banking business. He directed that one son in each
- generation was to rule the family business; women were excluded.
- His first son, Amschel, stayed in Frankfort to mind the hometown bank. His second son, Salomon was sent to Vienna. His third
- sob, Nathan was clearly the most clever. He was sent to London at age 21 in 1798, a hundred years after the founding of the
- Bank of England. His fourth son, Karl, went to Naples. His fifth son, J akob (J ames), went to Paris.
- "There is evidence that when the five brothers spread out to the five provinces of the financial empire of Europe, they had
- some secret help for the accumulation of these enormous sums ... that they were the treasurers of this first Comintern .. But
- others say, and I think with better reason, that the Rothschilds were not the treasurers, but the chiefs ..." - C.G. Rakovsky
- In 1785, Meyer moved his entire family to a larger house, a five story dwelling he shared with the Schiff family. This house
- was known the "Green Shield" house. The Rothschilds and the Schiffs would play a central role in the rest of European
- financial history, and in that the United States and the world. The Schiffs' grandson moved to New York and helped fund the
- Bolshevik coup d'etat in 1917 in Russia.
- The Rothschilds broke into dealings with European royalty in Wilhelmshohe, the palace of the wealthiest man in Germany - in
- fact, the wealthiest monarch in all of Europe - Prince William of Hesse-Cassel.
- At first, the Rothschilds were only helping William speculate in precious coins. But when Napoleon chased Prince William into
- exile, William sent £550,000 (a gigantic sum at that time, equivalent to many millions of current U.S. dollars) to Nathan
- Rothschild in London with instructions from him to buy Consola - British government bonds also called government stock. But
- 8
- Rothschild used the money for his own purposes. With Napoleon on the loose, the opportunities for highly profitable wartime
- investments were nearly limitless.
- William returned to Wllhelmshohe, sometime prior to the Battle of Waterloo in 1815. He summoned the Rothschilds and
- demanded his money back.
- The Rothschilds returned William's money, with the 8% interest the British Consols would have paid him had the investment
- actually been made. But the Rothschilds kept all the vast wartime profits they had made using Wilhelm's money-shady
- practice in any century.
- Partly by such practices, Nathan Rothschild was able to later brag that in the seventeen years he had been in England, he had
- increased his original £20,000 stake given to him by his father by 2,500 times (=£50,000,000), a truly vast sum at that time,
- comparable to billions of current U.S. dollars in purchasing power.
- As early as 1817, the director of the Prussian Treasury, on a visit to London, wrote that Nathan Rothschild had "... incredible
- influence upon all financial affairs here in London. It is widely stated ... that he entirely regulates the rate of exchange in the
- City. His power as a banker is enormous. "
- Austrian Prince Metternich's secretary wrote of the Rothschilds as early as 1818 that: "... they are the richest people in
- Europe. "
- By cooperating within the family, using fractional reserve banking techniques, the Rothschilds' banks soon grew unbelievably
- wealthy. By the mid- 1800s, they dominated all European banking, and were certainly the wealthiest family in the world. A
- large part of the profligate nobility of Europe became deeply indebted to them.
- In virtue of their presence in five nations as bankers, they were effectively autonomous - an entity independent from the
- nations in which they operated. If one nation's policies were displeasing to them or their interests, they could simply do no
- further lending there, or lend to those nations or groups opposed to such policies. Only they knew where their gold and other
- reserves were located, thus shielding them from government seizure, penalty, pressure or taxation, as well as effectively
- making any national investigation or audit meaningless. Only they knew the extent (or paucity) of their fractional reserves,
- scattered in five nations - a tremendous advantage over purely national banks engaging in fractional reserve banking too.
- It was precisely their international character that gave them unique advantages over national banks and governments, and
- that was precisely what rulers and national parliaments should have prohibited, but did not. This remains true of international
- or multi-national banks to this very day, and is the driving force of globalization - the push for one-world government.
- The Rothschilds provided huge loans to establish monopolies in various industries, thereby guaranteeing the borrowers' ability
- to repay the loans by raising prices without fear of price competition, while increasing the Rothschild's economic and political
- power.
- They financed Cecil Rhodes, making it possible for him to establish a monopoly over the gold fields of South Africa and the
- deBeers over diamonds. In America, they financed the monopolization of railroads.
- The National City Bank of Cleveland, which was identified in Congressional hearings as one of three Rothschild banks in the
- United States, provided J ohn D. Rockefeller with the money to begin his monopolization of the oil refinery business, resulting
- in Standard Oil.
- Jacob Schiff, who had been born in the Rothschild "Green Shield" house in Frankfort and who was then the principal
- Rothschild agent in the U.S., advised Rockefeller and developed the infamous rebate deal Rockefeller secretly demanded from
- railroads shipping competitors' oil.
- These same railroads were already monopolized by Rothschild control through agents and allies J. P. Morgan and Kuhn, Loeb &
- Company (Schiff was on the Board) which together controlled 95% of all U.S. railroad mileage.
- By 1850, James Rothschild, the heir of the French branch of the family, was said to be worth 600 million French francs - 150
- million more than all the other bankers in France put together. James had been established in Paris in 1812 with a capital of
- $200,000 by Mayer Amschel. At the time of his death in 1868, 56 years later, his annual income was $40,000,000. No fortune
- in America at that time equaled even one year's income of J ames. Referring to J ames Rothschild, the poet Heinrich Heine
- said: "Money is the god of our times, and Rothschild is his prophet."
- James built his fabulous mansion, called Femeres, 19 miles northeast of Paris. Wilhelm I, on first seeing it exclaimed, "Kings
- couldn't afford this. It could only belong to a Rothschild." Another 19 century French commentator put it this way;
- "There is but one power in Europe and that is Rothschild."
- There is no evidence that their predominant standing in European or world finance has changed, to the contrary, as their
- wealth has increased they have simply increased their "passion for anonymity." Their vast holdings rarely bear their name.
- Author Frederic Morton wrote of them that they had "conquered the world more thoroughly, more cunningly, and much more
- lastingly than all the Caesars before..."
- Now let's take a look at the results the Bank of England produced on the British economy, and how that later was the root
- cause of the American Revolution.
- 8. THE AMERI CAN REVOLUTI ON
- By the mid-1700s, the British Empire was approaching its height of power around the world. Britain had fought four wars in
- Europe since the creation of its privately-owned central bank, the Bank of England. The cost had had been high. To finance
- these wars, the British Parliament, rather than issuing its own debt-free currency, had borrowed heavily from the Bank.
- By the mid- 1700s, the government's debt was £140,000,000 - a staggering sum for those days. Consequently, the British
- government embarked on a program of trying to raise revenues from its American colonies in order to make the interest
- payments to the Bank.
- But in America, it was a different story. The scourge of a privately-owned central bank had not yet landed in America, though
- the Bank of England exerted its baneful influence over the American colonies after 1694.
- Four years earlier, in 1690 the Massachusetts Bay colony printed its own paper money - the first in America. This was
- followed in 1703 by South Carolina and then by other colonies. In the mid-1700s, pre-Revolutionary America was still
- relatively poor. There was a severe shortage of precious metal coins to trade for goods, so the early colonists were
- increasingly forced to experiment with printing their own home-grown paper money. Some of these experiments were
- successful. Tobacco was used as money in some colonies with success.
- In 1720 every colonial Royal Governor was instructed to curtail the issue of colonial money. This was largely unsuccessful. In
- 1742 the British Resumption Act required that taxes and other debts be paid in gold. This caused a depression in the colonies
- - property was seized on foreclosure by the rich for one-tenth its value.
- Benjamin Franklin was a big supporter of the colonies printing their own money. I n 1757, Franklin was sent to London to fight
- for colonial paper money. He ended up staying for the next 18 years - nearly until the start of the American Revolution.
- During this period, ignoring Parliament, more American colonies began to issue their own money.
- Called Colonial Scrip, the endeavor was successful, with notable exceptions. It provided a reliable medium of exchange, and it
- also helped to provide a feeling of unity between the colonies. Remember, most Colonial Scrip was just paper money - debt-
- free money - printed in the public interest and not really backed by gold or silver coin. In other words, it was a fiat currency.
- Officials of the Bank of England asked Franklin how he would account for the new-found prosperity of the colonies. Without
- hesitation he replied:
- "That is simple. In the colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to the
- demands of trade and industry to make the products pass easily from the producers to the consumers... In this manner,
- creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one."
- This was just common sense to Franklin, but you can imagine the impact it had at the Bank of England. America had learned
- the secret of money, and that genie had to be returned to its bottle as soon as possible.
- [1st American Central Bank War (1764-1776); Bank of England; 12 years duration]
- As a result. Parliament hurriedly passed the Currency Act of 1764. This prohibited colonial officials from issuing their own
- money and ordered them to pay all future taxes in gold or silver coins. In other words, it forced the colonies on a gold and
- silver standard. This initiated the first intense phase of the first "Bank War" in America, which ended in defeat for the Money
- Changers beginning with the Declaration of I ndependence, and concluded by the subsequent peace Treaty of Paris 1783.
- For those who believe that a gold standard is the answer for America's current monetary problems, look what happened to
- America after the Currency Act of 1764 was passed. Writing in his autobiography, Franklin said:
- "In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that
- the streets of the Colonies were filled with unemployed."
- Franklin claims that this was even the basic cause for the American Revolution. As Franklin put it in his autobiography:
- "The Colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the
- Colonies their money, which created unemployment and dissatisfaction."
- In 1774, Parliament passed the Stamp Act which required that a stamp be placed on ever instrument of commerce indicating
- payment of tax in gold, which threatened the colonial paper money again. Less than two weeks later, the Massachusetts
- Committee of Safety passed a resolution directing the issuance of more colonial currency and honoring the currency of other
- colonies.
- On J une 10 and J une 22, 1775, the "Congress of the Colonies" resolved to issue million in paper money based on the credit
- and faith of the "United Colonies." This flew in the face of the Bank of England and Parliament. It constituted an act of
- defiance, a refusal to accept a monetary system unjust to the people of the colonies.
- "Thus the bills of credit [i.e. paper money] which historians with ignorance or prejudice have belittled as instruments of
- reckless financial policy, were really the standards of the Revolution. They were more than this: they were the Revolution
- itself." - Alexander Del Mar, historian
- By the time the first shots were fired in Concord and Lexington, Massachusetts on April 19, 1775, the colonies had been
- drained of gold and silver coin by British taxation. As result, the Continental government had no choice but to print its own
- paper money to finance the war.
- At the start of the Revolution, the U.S. (colonial) money supply stood at $12 million. By the end of the war, it was nearly $500
- million. This was partly a result of massive British counterfeiting. As a result, the currency was virtually worthless. Shoes sold
- for $5,000 a pair. George Washington lamented, "A wagon load of money will scarcely purchase a wagon of provisions."
- Earlier, Colonial scrip had worked because just enough was issued to facilitate trade and counterfeiting was minimal. Today,
- those who support a gold-backed currency point to this period during the Revolution to demonstrate the evils of a fiat
- currency. But remember, the currency had worked so well twenty years earlier during times of peace that the of England had
- Parliament outlaw it, and during the war the British deliberately sought to undermine it by counterfeiting it in England and
- shipping it "by the bale" to the colonies.
- [2nd American Central Bank War (1781-1785); Bank of North America; 4 years]
- 9. THE BANK OF NORTH AMERI CA
- Towards the end of the Revolution, the Continental Congress, meeting at Independence Hall in Philadelphia, grew desperate
- for money. In 1781, they allowed Robert Morris, their Financial Superintendent, to open a privately-owned central bank in
- hopes that would help. Incidentally, Morris was a wealthy man who had grown wealthier during the Revolution by trading in
- war materials.
- 10
- Called the Bank of North America, the new bank was closely modeled after the Bank of England. It was allowed to practice (or
- rather, it was not prohibited from) fractional reserve banking - that is, it could lend out money it didn't have, then charge
- interest on it. If you or I were to do that, we would be charged with fraud, a felony. Few understood this practice at the time,
- which was, of course, concealed from the public and politicians as much as possible. Further, the bank was given a monopoly
- on issuing bank notes, acceptable in payment of taxes.
- The Bank's charter called for private investors to put up $400,000 worth of initial capital. But when Morris was unable to raise
- the money, he brazenly used his political influence to have gold deposited in the bank which had been loaned to America by
- France. He then loaned this money to himself and his friends to reinvest in shares of the bank. The second American Bank
- War was on.
- Soon, the dangers became clear. The value of American currency continued to plummet, so, four years later, in 1785, the
- Bank's charter was not renewed, effectively ending the threat of the Bank's power. Thus the second American Bank War
- quickly ended in defeat for the Money Changers.
- The leader of the successful effort to kill the Bank, a patriot named William Findley, of Pennsylvania, explained the problem
- this way: "This institution, having no principle but that of avarice, will never be varied in its object ... to engross all the
- wealth, power and influence of the state."
- Plutocracy, once established, will corrupt the legislature so that laws will be made in its favor, and the administration of
- justice, to favor the rich.
- The men behind the Bank of North America - Alexander Hamilton, Robert Moms, and the Bank's President, Thomas Willing -
- did not give up.
- Only six years later, Hamilton - then Secretary of the Treasury - and his mentor, Morris, rammed a new privately-owned
- central bank through the new Congress.
- Called the First Bank of the United States, Thomas Willing again served as the Bank's President. The players were the same,
- only the name of the Bank was changed.
- 10. THE CONSTITUTIONAL CONVENTION
- In 1787, colonial leaders assembled in Philadelphia to replace the ailing Articles of Confederation. As we saw earlier, both
- Thomas Jefferson and James Madison were unalterably opposed to a privately-owned central bank. They had seen the
- problems caused by the Bank of England. They wanted nothing of it. As Jefferson later put it:
- "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the
- banks and the corporations which grow up around them will deprive the people of all property until their children wake up
- homeless on the continent their fathers conquered."
- During the debate over the future monetary system, another one of the founding fathers. Governor Morris, headed the
- committee that wrote the final draft of the Constitution. Morris knew the motivations of the bankers well.
- Along with his old boss, Robert Morris, Governor Morris and Alexander Hamilton were the ones who had presented the original
- plan for the Bank of North America to the Continental Congress in the last year of the Revolution.
- In a letter he wrote to James Madison on J uly 2, 1787, Governor Morris revealed what was really going on:
- 'The rich will strive to establish their dominion and enslave the rest. They always did. They always will. ... They will have the
- same effect here as elsewhere, if we do not, by [the power of] government, keep them in their proper spheres."
- Despite the defection of Gouvenor Morris from the ranks of the Bank, Hamilton, Robert Morris, Thomas Willing, and their
- European backers were not about to give up.
- They convinced the bulk of the delegates to the Constitution Convention not to give Congress the power to issue paper
- money. Most of the delegates were still reeling from the wild inflation of the paper currency during the Revolution. They had
- forgotten how well Colonial Scrip had worked before the War. But the Bank of England had not. The Money Changers could
- not stand to have America printing her own money again.
- Many believed the Tenth Amendment, which reserved powers to the States which were not delegated to the federal
- government by the Constitution, made the issuance of paper money by the federal government unconstitutional, since the
- power to issue paper money was not specifically delegated to the federal government in the Constitution. The Constitution is
- silent on this point. However, the Constitution specifically forbade the individual States to "emit bills of credit" (paper money).
- Most of the framers intended the Constitution's silence to keep the new federal government from having the power to
- authorize money creation. Indeed, the journal of Convention for August 16 reads as follows:
- "It was moved and seconded to strike out words 'and emit bills of credit,' and the motion. ..passed in the affirmative."
- But Hamilton and his banker friends saw this silence as an opportunity of keeping the government out of paper money
- creation which they hoped to monopolize privately. So both bankers and anti-banking delegates, for opposing motives,
- supported leaving any federal government authority for paper money creation out of the Constitution, by a four to one
- margin. This ambiguity left the door open for the Money Changers, just as they had planned.
- Of course, paper money was not itself the main problem, fractional reserve lending was the greater problem since it multiplied
- any inflation caused by excessive paper currency issuance by several times. But this was not understood by many, whereas
- the evils of excessive paper currency issuance were.
- In their belief that prohibiting paper currency was a good end the framers were well advised. Prohibiting all paper currency
- would have severely limited the fractional reserve banking then practiced, since the use of checks was minimal and would,
- arguably, have been prohibited as well. But bank loans, created as book entries, were not addressed, and so were not
- prohibited.
- 11
- As it happened, the federal and state governments were widely regarded as prohibited from paper money creation, whereas
- private banks were not - it being argued that this power, by not being specifically prohibited, was reserved to the people
- (including legal persons, such as incorporated banks).
- The contrary argument was that bank corporations were instruments or agencies of the states which incorporated them and
- so were prohibited from "emitting bills of credit" as were the states themselves. This argument was ignored by the bankers,
- who proceeded to issue paper bank notes based on fractional reserves, and it lost all force once the U.S. Supreme Court ruled
- that even the federal government could charter a bank (the 1st BUS) which could issue paper money.
- In the end, only the states were prohibited from issuing paper money, not the federal government, and neither private banks
- nor even municipalities were prohibited from issuing paper money (as happened in c. 400 cities during the Great Depression).
- Another error not often understood concerns the authority given the federal government "to coin money" and "to regulate the
- value thereof." Regulating the value of money (that is to say its purchasing power, or value relative to other things) has
- nothing to do with quality or content (e.g. so many grains of gold or copper, etc,), but has to do with its quantity - the supply
- of money. It is quantity that determines its value, and never has Congress legislated any total quantity of money in the U.S.
- Legislating a total money supply (including currency, checks and all bank deposits) would, in fact, regulate the value
- (purchasing power) of each dollar. Legislating the rate of growth of the money supply would then determine its future value.
- Congress has never done either, though it clearly has the constitutional authority to do so. It has left this function to the Fed
- and the 10,000+ banks which create our money supply.
- [3rd American Central Bank War (1791- 1811); 1st BUS; 20 years duration]
- 11. FIRST BANK OF THE UNITED STATES
- In 1790, less than three years after the Constitution had been signed, the Money Changers struck again. The newly-appointed
- first Secretary of the Treasury, Alexander Hamilton proposed a bill to the Congress calling for a new privately-owned central
- bank. Coincidentally, that was the very year that Meyer Rothschild made his pronouncement from his flagship bank in
- Frankfort: "Let me issue and control a nation's money and I care not who writes its laws."
- Alexander Hamilton was a tool of the international bankers. He wanted to create another private central bank, the Bank of the
- United States, and did so. He convinced Washington to sign the bill over Washington's reservations and over Jefferson's and
- Madison's opposition.
- To win over Washington, Hamilton developed the "implied powers" argument used so often since to eviscerate the
- Constitution. J efferson correctly predicted the dire consequences of opening such a Pandora's box which would allow judges to
- "imply" whatever they wished.
- Interestingly, one of Hamilton's first jobs after graduating from law school in 1782 was as an aide to Robert Morris, the head
- of the Bank of North America. I n fact, the year before, Hamilton had written Morris a letter, saying: "A national debt, if it is
- not excessive, will be to us a national blessing," A blessing to whom?
- After a year of intense debate, in 1791, Congress passed Hamilton's bank bill and gave it a 20-year charter. The new bank
- was to be called the First Bank of the United States, or BUS. Thus the third American Bank War began.
- "Never was a great historic event followed by a more feeble sequel. A nation arises to claim for itself liberty and sovereignty.
- It gains both of these by immense sacrifice of blood and treasure. Then, when victory is gained and secure, it hands the
- nation 's credit - that is to say a national treasure - over to private individuals, to do as they please with." - Alexander Del
- Mar, historian
- The first Bank of the United States was headquartered in Philadelphia. The Bank was even given authority to print currency
- and make loans, based on fractional reserves, even though 80% of its stock would be held by private investors. The other
- 20% would be purchased by the U.S. Government, but the reason was not to give the government a piece of the action, it
- was to provide the initial capital for the other 80% owners.
- As with the old bank of North America and the Bank of England before that, the stockholders never paid the full amount for
- their shares. The U.S. government put up their initial $2,000,000 in cash, then the Bank through the old magic of fractional
- reserve lending, made loans to its charter investors so they could come up with the remaining $8,000,000 in capital needed
- for this risk-free investment.
- Like the Bank of England, the name of the Bank of the United States was deliberately chosen to hide the fact that it was
- privately controlled. And like the Bank of England, the names of the investors in the Bank were never revealed.
- "Under the surface, the Rothschilds long had a powerful influence in dictating American financial laws. The law records show
- that they were the power in the old Bank of the United States" - Myers, History of the Great American Fortunes.
- The Bank was promoted to Congress as a way to bring stability to the banking system and to eliminate inflation. So what
- happened? Over the first five years, the U.S. government borrowed $8.2 million from the Bank of the United States. In that
- period, prices rose by 72%.
- Jefferson, as the new Secretary of State, watched the borrowing with sadness and frustration, unable to stop it.
- "/ wish it were possible to obtain a single amendment to our Constitution - taking from the federal government the power of
- borrowing. "
- President Adams denounced the issuance of private bank notes as a fraud upon the public. He was supported in this view by
- all conservative opinion of his time. Why continue to farm out to private banks, for nothing, a prerogative of government?
- Millions of Americans feel the same way today. They watch in helpless frustration as the Federal government borrows the
- American taxpayer into oblivion; borrowing from private banks and the rich the money the government has the authority and
- duty to issue itself, without debt.
- 12
- So, although it was called the First Bank of the U.S., it was not the first attempt at a privately-owned central bank in this
- country. As with the first two, the Bank of England and the Bank of North America, the government put up the cash to get this
- private bank going, then the bankers loaned that money to each other to buy the remaining stock in the bank.
- It was a scam, plain and simple. And they wouldn't be able to get away with it for long, but first we have to travel back to
- Europe to see how a single man was able to manipulate the entire British economy by obtaining the first news of Napoleon's
- final defeat.
- 12. NAPOLEON'S Rl SE TO POWER
- Here in Paris, the Bank of France was organized in 1800 just like the Bank of England. But Napoleon decided France had to
- break free of debt and he never trusted the Bank of France, even when he put some of his own relatives on the governing
- Board.
- He declared that when a government is dependent upon bankers for money, the bankers, not the leaders of the government
- are in control:
- "The hand that gives is above the hand that taices. Money has no motherland; financiers are without patriotism and without
- decency: their sole object is gain."
- He clearly saw the dangers, but did not see the proper safeguards or solution. Back in America, unexpected help was about to
- arrive.
- In 1800, Thomas Jefferson narrowly defeated John Adams to become the third President of the United States. By 1803,
- Jefferson and Napoleon had struck a deal. The U.S. would give Napoleon $3,000,000 in gold in exchange for a huge chunk of
- territory west of the Mississippi River - the Louisiana Purchase.
- With that three million dollars. Napoleon quickly forged an army and set off across Europe, conquering everything in his path.
- But England and the Bank of England quickly rose to oppose him. They financed every nation in his path, reaping the
- enormous profits of war. Prussia, Austria, and finally Russia all went heavily into debt in a futile attempt to stop Napoleon.
- Four years later, with the main French Army in Russia, 30-year-old Nathan Rothschild - the head of the London office of the
- Rothschild family - personally took charge a bold plan to smuggle a much-needed shipment of gold right through France to
- finance an attack by the Duke of Wellington from Spain. Nathan later bragged at a dinner party in London that it was the best
- business he ever done. He made money on each step the shipment. Little did he know that would do much better business in
- the near future.
- Wellington's attacks from the south, and other defeats, eventually forced Napoleon to abdicate, and Louis XVIII was crowned
- King. Napoleon was exiled to Elba, a tiny island off the coast of Italy, supposedly exiled from France forever. While Napoleon
- was in a on Elba, temporarily defeated by England with the financial help of the Rothschilds - America was trying to break
- free of its central bank as well.
- 13. DEATH OF THE Fl RST BANK/ THE WAR OF 1812
- In 1811, a bill was put before Congress to renew the charter of the Bank of the United States. The debate grew very heated
- and the legislature of both Pennsylvania and Virginia passed resolutions asking Congress to kill the Bank.
- The press corps of the day attacked the Bank openly, calling it "a great swindle," a "vulture," a "viper," and a "cobra." Oh, to
- have an independent press once again in America.
- A Congressman named P.B. Porter attacked the bank from the floor of Congress, prophetically warned that if the bank's
- charter were renewed. Congress,
- "will have planted in the bosom of this Constitution a viper, which one day or another will sting the liberties of this country to
- the heart."
- Prospects didn't look good for the Bank. Some writers have claimed that Nathan Rothschild warned that the United States
- would find itself involved in a most disastrous war if the Bank's charter were not renewed.
- But it wasn't enough. When the smoke had cleared, the renewal bill was defeated by a single vote in the House and was
- deadlocked in the Senate. By now, America's fourth President, James Madison, was in the White House. Remember, Madison
- was a staunch opponent of the Bank. His Vice President, George Clinton, broke a tie in the Senate and sent the Bank, the
- second privately-owned central bank based in America, into oblivion. Thus, the third American Bank War, lasting twenty
- years, ended in defeat for the Money Changers.
- Within 5 months, as Rothschild was said to have predicated, England attacked the U.S. and the War of 1812 was on. But the
- British were still busy fighting Napoleon, and so the war of 1812 vended in a draw in 1814.
- It is interesting to note that during this war, the Treasury printed some government paper money, not bearing interest, to
- fund the war effort. This was not repeated until the Civil War.
- Though the Money Changers were temporarily down, they were far from out. It would take them only another two years to
- bring a fourth private central bank back - bigger and stronger than before.
- 14. WATERLOO
- But now let's return for a moment to Napoleon. This episode aptly demonstrates the cunning of the Rothschild family in
- gaining control of the British stock market after Waterloo.
- In 1815, a year after the end of the War of 1812 in America, Napoleon escaped his exile and returned to Paris. French troops
- were sent out to capture him, but such was his charisma that the soldiers rallied around their old leader and hailed him as
- their Emperor once again. Napoleon returned to Paris a hero. King Louis fled into exile and Napoleon again ascended to the
- French throne - this time without a shot being fired.
- 13
- In March of 1815 Napoleon equipped an army which Britain's Duke of Wellington defeated less than 90 days later at Waterloo.
- He borrowed 5 million pounds to rearm from the Ouvard banking house in Paris. Nevertheless, from about this point on, it
- was not unusual for privately-controlled central banks to finance both sides in a war.
- Why would a central bank finance opposing sides in a war? Because war is the biggest debt-generator of them all. A nation
- will borrow any amount for victory. The ultimate looser is loaned just enough to hold out the vain hope of victory, and the
- ultimate winner is given enough to win. Besides, such loans are usually conditioned upon the guarantee that the victor will
- honor the debts of the vanquished. Only the bankers cannot lose.
- Waterloo is a battlefield about 200 miles northeast of Paris, in what today is Belgium. There, Napoleon suffered his final
- defeat, but not before thousands of French and English men gave their lives on a steamy summer day in J une of 1815.
- On June 18, 1815, 74,000 French troops met 67,000 troops from Britain, and other European nations. The outcome was
- certainly in doubt. In fact, had Napoleon attacked a few hours earlier, he would probably have won the battle. But no matter
- who won or lost, back in London, Nathan Rothschild planned to use the opportunity to try to seize control over the British
- stock and bond market. Following is the account the Rothschilds hotly dispute:
- Rothschild stationed a trusted agent, a man named Rothworth, on the north side of the battlefield - closer to the English
- Channel.
- Once the battle had been decided, Rothworth took off for the Channel. He delivered the news to Nathan Rothschild a full 24
- hours before Wellington's own courier. Rothschild hurried to the Stock Market and took up his usual position in front of an
- ancient pillar.
- All eyes were on him. The Rothschilds had a legendary communication network. If Wellington had been defeated and
- Napoleon were loose on the Continent again, Britain's financial situation would become grave indeed. Rothschild looked
- saddened. He stood there motionless, eyes downcast. Then suddenly, he began selling. Other nervous investors saw that
- Rothschild was selling. It could only mean one thing. Napoleon must have won. Wellington was defeated. The market
- plummeted. Soon, everyone was selling their Consols - their British government bonds, and other stocks - and prices
- dropped. Then Rothschild and his financial allies started secretly buying through agents.
- Myths, legends, you say? One hundred years later, the New York Times ran a story which said that Nathan's grandson had
- attempted to secure a court order to suppress a book with this stock market story in it. The Rothschild family claimed the
- story was untrue and libelous. But the court denied the Rothschilds' request and ordered the family to pay all court costs.
- What's even more interesting about this story is that some authors claim that the day after the Battle of Waterloo, in a matter
- of hours, Nathan Rothschild and allied financial interests came to dominate not only the bond market, but the Bank of England
- as well (an interesting feature of some Consols was that they were convertible to Bank of England stock).
- Intermarrige with the Montifiores, Cohens and Goldsmiths, banking families established in England in the century before the
- Rothschilds, enhanced the Rothschilds' financial control. This control was further consolidated through the passage of Peel's
- Bank Charter Act of 1844.
- Whether or not the Rothschild family and their financial allies seized outright control in this manner of the Bank of England -
- the first privately-owned central bank in a major European nation, and the wealthiest - one thing is certain, by the mid-
- 1800s, the Rothschilds were the richest family in the world, bar none. They dominated the new government bond markets and
- branched into other banks and industrial concerns worldwide. They also dominated a constellation of secondary, lesser
- families such as the Warburgs and Schiffs, who allied their own vast wealth with that of the Rothschilds'.
- In fact, the rest of the 19th century was known as the "Age of Rothschild." One author, Ignatius Balla, estimated their
- personal wealth in 1913 at over two billion dollars. Keep in mind, the purchasing power of the dollar was over 1,000% greater
- then than now. Despite this overwhelming wealth, the family has generally cultivated an aura of invisibility. Although the
- family controls scores of banking, industrial, commercial, mining and tourist corporations, only a handful bear the Rothschild
- name. By the end of the 19th century, one expert estimated that the Rothschild family controlled half the wealth of the world.
- Whatever the extent of their vast wealth, it is reasonable to assume that their percentage of the world's wealth has increased
- dramatically since then, as power begets power and the appetite therefore. But since the turn of the century, the Rothschilds
- have carefully cultivated the notion that their power has somehow waned, even as their wealth and that of their financial allies
- increases and hence their control of banks, debt-captive corporations, the media, politicians and nations, all through
- surrogates, agents, nominees and interlocking directorates, obscuring their role.
- [4th American Central Bank War (1816- 1836); 2nd BUS; 20 years duration]
- 15. SECOND BANK OF THE U.S.
- Meanwhile, back in Washington, in 1816, just one year after Waterloo and Rothschilds' alleged takeover of the Bank of
- England, the American Congress passed a bill permitting yet another privately-owned central bank - the fourth American
- Bank War had begun.
- This bank was called the Second Bank of the United States. The new Bank's charter was a copy of the previous Bank's. The
- U.S. government would own 20% of the shares. Of course, the Federal share was paid by the Treasury up front, into the
- Bank's coffers. Then, through the magic of fractional reserve lending, it was transformed into loans to private investors who
- then bought the remaining 80% of the shares. Sound familiar by now?
- J ust as before, the primary stockholders remained secret. But it is known that the largest single block of shares - about one-
- third of the total - was held by foreigners. As one observer put it:
- "It is certainly no exaggeration to say that the Second Bank of the United States was rooted as deeply in Britain as it was in
- America."
- 14
- So by 1816, some authors claim the Rothschilds and their allies, some by now related by marriage, had taken control over the
- Bank of England and backed the new privately-owned central bank in America (the 2nd BUS) as well. With Napoleon's defeat
- about the same time, they began to dominate the Bank of France as well.
- 16. ANDREW JACKSON
- After about a decade of monetary manipulations on the part of the Second Bank of the U.S., the American people, once again,
- had had just about enough. Opponents of the Bank nominated a famous senator from Tennessee, Andrew J ackson, the hero
- of the Battle of New Orleans, to run for president. His home he named 'The Hermitage." No one gave J ackson a chance
- initially. The Bank had long-ago learned how the political process could be controlled with money.
- To the surprise and dismay of the Money Changers, Jackson was swept into office in 1828. Jackson was determined to kill the
- Bank at the first opportunity, and wasted no time to trying to do so. But the Bank's 20 year charter didn't come up for
- renewal until 1836, the last year of his second term - if he could survive that long. During his first term, Jackson contented
- himself with rooting out the Bank's many minions from government service. He fired 2,000 of the 11,000 employees of the
- federal government.
- I n 1832, with his re-election approaching, the Bank struck an early blow, hoping J ackson would not want to stir up
- controversy. It asked Congress to pass a bank charter renewal bill four years early. Congress complied, and sent it to the
- President for signing. But Jackson weighed in with both feet. "Old Hickory," never a coward, vetoed the bill. His veto message
- is one of the great American documents. It clearly lays out the responsibility of the American government towards its citizens
- - rich and poor.
- "It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this
- bank are held by foreigners... It is easy to conceive that great evils to our country and its institutions might flow from such a
- concentration of power in the hands of a few irresponsible to the people.
- Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country?...
- Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence... would be more
- formidable and dangerous than a military power of the enemy...
- It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes... If
- [government] would confine itself to equal protection, and, as Heaven does its rains, shower its favor alike on the high and
- the low, the rich and the poor, it would be an unqualified blessing..
- In the act before me there seems to be a wide and unnecessary departure from these just principles. . . Many of our rich men
- have not been content with equal protection and equal benefits, but have besought us to make them richer by act of
- Congress...
- If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be,
- we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our
- Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in
- our code of laws and system of political economy.
- I have now done my duty to my country. I f sustained by my fellow-citizens, I shall be grateful and happy; if not, I shall find in
- the motives which impel me ample grounds for contentment and peace. In the difficulties which surround us and the dangers
- which threaten our institutions there is cause for neither dismay nor alarm. For relief and deliverance let us firmly rely on that
- kind Providence which I am sure watches with peculiar wisdom over our countrymen. Through His abundant goodness and
- their patriotic devotion our liberty and Union win be preserved." - Andrew J ackson
- Jackson also declared:
- "If Congress has the right to issue paper money, it was given them to be used by themselves, and not to be delegated to
- individuals or corporations. "
- Later that year, in J uly 1832, Congress was unable to override J ackson's veto. Now J ackson had to stand for re-election.
- J ackson took his argument directly to the people. For the first time in U.S. history, a candidate took a presidential campaign
- on the road. Before then, presidential candidates stayed at home and looked presidential. His campaign slogan was "Bank and
- no Jackson, or no Bank and Jackson!"
- Incredibly (unless one understands who funds university endowment funds and research dollars), some modern historians
- have completely overlooked this war between J ackson and the Bank. Yet, his presidency has little meaning without
- understanding this issue.
- The National Republican Party ran Senator Henry Clay against Jackson. Despite the fact that the Bank poured in over
- $3,000,000 into Clay's campaign, an enormous sum at that time, Jackson was re-elected by a landslide in November of 1832.
- Despite his presidential victory, Jackson knew the battle was only beginning: "The hydra of corruption is only scotched, not
- dead," said the newly-elected President. Jackson ordered his new Secretary of the Treasury, Louis McLane, to start removing
- the government's deposits from the Second Bank of the U.S. and to start placing them in state banks. McLane refused to do
- so. Jackson fired him and appointed William J. Duane as the new Secretary of the Treasury. Duane also refused to comply
- with the President's requests, and so Jackson fired him as well, and then appointed Roger B. Taney to the office. Taney did as
- told and withdrew government funds from the bank, starting on October 1, 1833. Jackson was jubilant: "/ have it chained. I
- am ready with screws to draw every tooth and then the stumps." But the Bank was not through fighting yet.
- Its head, Nicholas Biddle, used his influence to get the Senate to reject Taney's nomination.
- Then, in a rare, public display of arrogance, Biddle threatened to cause a national economic depression if the Bank were not
- re-chartered. He declared war:
- 15
- "This worthy President thirties that because he has scalped Indians and imprisoned J udges, he is to have his way with the
- Bank. He is mistaken."
- Next, in an unbelievable fit of honesty for a central banker, Biddle admitted that the bank was going to make money scarce in
- order to force Congress to restore the Bank:
- "Nothing but widespread suffering will produce any effect on Congress... Our only safety is in pursuing a steady course of firm
- [monetary] restriction -and I have no doubt that such a course will ultimately lead to restoration of the currency and the re-
- charter of the Bank."
- What a stunning revelation! Here was the pure truth, revealed with shocking clarity. Biddle intended to use the money
- contraction power given to the Bank to cause a massive depression until America gave in. Unfortunately, this has happened
- time and time again throughout U.S. history, though without the blunder of Biddle's arrogant admission, and may be about to
- happen again in our time.
- So much for the importance to the common good of central bank independence (or so called "autonomy") from political
- accountability and control.
- Nicholas Biddle made good on his threat. The Bank sharply contracted the money supply by calling in old loans and refusing to
- extend new ones. A financial panic ensued, followed by a deep economic depression. Predictably, Biddle blamed J ackson for
- the crash, saying that it was caused by the withdrawal of federal funds from the Bank. Unfortunately, his plan worked well.
- Wages and prices sagged. Unemployment soared along with business bankruptcies. The nation quickly went into an uproar.
- Newspaper editors blasted J ackson in editorials. A~er all, he was the President then. The Bank threatened to withhold
- payments to Congressmen which, at the time, could legally be made directly to key politicians for their support. Within only
- months. Congress assembled in what was called the "Panic Session."
- Six months after he had withdrawn funds from the bank, Jackson was officially censured by a resolution which passed the
- Senate by a vote of 26 to 20. It was the first time a President had ever been censured by Congress. Jackson lashed out at the
- Bank.
- "You are a den of vipers. I intend to rout you out and by the Eternal God I wll rout you out. "
- America's fate teetered on a knife edge. If Congress could muster enough votes to override Jackson's veto, the Bank would be
- granted another 20-year monopoly or more over America's money - time enough to consolidate its already great power.
- Biddle's bold cunning strategy was working.
- Then something close to a miracle occurred. The Governor of Pennsylvania, where the 2nd BUS was headquartered, came out
- supporting the President and strongly criticized the Bank. On top of that, Biddle had been caught boasting in public about the
- Bank's plan to crash the economy. Suddenly the tide shifted.
- In April of 1834, the House of Representatives voted 134 to 82 against re-chartering the Bank. This was followed up by an
- even more lopsided vote to establish a special committee to investigate whether the Bank had caused the crash.
- When the investigating committee arrived at the Bank's door in Philadelphia, armed with a subpoena to examine the books,
- Biddle refused to give them up. Nor would he allow any inspection of correspondence with Congressmen relating to their
- personal loans and advances. Biddle also arrogantly refused to testify before the committee back in Washington.
- On J anuary 8, 1835, eleven years after taking office, J ackson paid off the final installment on the national debt which had
- been necessitated by allowing the banks to issue currency to buy government bonds, rather than simply issuing Treasury
- notes without such debt. He was the only President ever to pay off the national debt.
- A few weeks later, on J anuary 30, 1835, an assassin by the name of Richard Lawrence tried to shoot President J ackson. Both
- pistols misfired. Lawrence was later found not guilty by reason of insanity. After his release, he bragged to friends that
- powerful people in Europe had put him up to the task and promised to protect him if he were caught.
- The following year, when its charter ran out, the Second Bank of the United States ceased functioning as the nation's central
- bank. Biddle was later arrested and charged with fraud. He was tried and acquitted, but died shortly thereafter while still tied
- up in civil suits. The Second Bank of the US went belly up. The fourth American Bank War had ended in the fourth defeat for
- the Money Changers.
- After his second term as President, Jackson retired to The Hermitage outside Nashville. He is still remembered for his
- determination to "kill the Bank." In fact, he killed it so well that it took the Money Changers a full century - until 1935 (with
- the passage of the National Bank Act of 1935) - to undo the damage and reach the same point in their schemes. Late in life,
- when asked what his most important accomplishment had been, the war hero Jackson replied. "/ killed the Bank."
- Jackson also warned future generations of Americans:
- 'The bold effort the present bank had made to control the government... the distress it had wantonly produced ... are but
- premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution or the
- establishment of another like it."
- [5th American Central Bank War (1863-1913); National Banks/Federal Reserve Banks: 50 years duration]
- 17. ABE LI NCOLN and the CI VI L WAR
- Unfortunately, even Jackson failed to grasp the entire picture and its root cause. Although Jackson had killed the privately-
- owned central bank, the most insidious weapon of the Money Changers - fractional reserve banking - remained in use by the
- numerous state-chartered banks. For example, in Massachusetts by 1862 the state banks had loaned out eight times as much
- as they had gold and silver on deposit. One state bank had issued $50,000 backed by a total of $86.48. This fueled economic
- instability in the years before the Civil War, particularly as no reserve ratios were mandated for most of the state banks. Still,
- the central bankers were out and therefore coordinated monetary manipulation on a national scale was rendered impossible.
- As a result, America generally thrived as it expanded westward.
- 16
- During this time, the principal JVIoney Changers struggled to regain their lost centralized power and money monopoly, but to
- no avail. Finally they reverted to the old central banker's formula - finance a war, to create debt and dependency. If they
- couldn't get their central bank any other way, America could be brought to its knees by plunging it into a War, just as they
- were said to have done in 1812, after the First Bank of the U.S. was not re-chartered.
- One month after the inauguration of Abraham Lincoln, the first shots of the American Civil War were fired at Fort Sumter,
- South Carolina on April 12, 1861. The fifth and final American Bank War was beginning.
- Certainly slavery was a cause for the Civil War, but not the primary cause. Lincoln knew that the economy of the South
- depended upon slavery and so (before the Civil War) he had no intention of eliminating it. Lincoln had put it this way in his
- inaugural address only one month earlier:
- "/ have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it now exists. I believe
- I have no lawful right to do so, and I have no inclination to do so."
- Even after the first shots were fired at Fort Sumter, Lincoln continued to insist that the Civil War was not about the issue of
- slavery:
- "My paramount objective is to save the Union, and it is not either to save or destroy slavery. If I could save the Union without
- freeing any slave, I would do it. "
- So what was the Civil War all about? There were many factors at play. Northern industrialists had used protective tariffs to
- prevent their southern states from buying cheaper European goods. Europe retaliated by stopping cotton imports from the
- South. The Southern states were in a financial bind. They were forced to pay more for most of the necessities of life while
- their income from cotton exports plummeted. The South grew increasingly angry.
- But there were other factors at work. The Money Changers were still stung by America's withdrawal from their control 25
- years earlier. Since then, America's wildcat economy, despite the presence of fractional reserve banking with its attendant
- booms and busts, had made the nation rich - a bad example for the rest the world.
- The central bankers now saw an opportunity to use the North/South divisions to split the rich new nation - to divide and
- conquer by war. Was this just some sort of wild conspiracy theory? Well, let's look at what a well placed observer of the scene
- had to say at time.
- This was Otto von Bismarck, Chancellor of Germany, the man who united the German states in 1871. A few years later, in
- 1876, he is quoted as saying:
- "It is not to be doubted, I know of absolute certainty," Bismarck declared, "that the division of the United States into two
- federations of equal power was decided long before the Civil War by the high financial powers of Europe. These bankers were
- afraid that the United States, if they remained as one block and were to develop as one nation, would attain economic and
- financial independence, which would upset the capitalist domination of Europe over the world. "
- Within months after the first shots were fired at Fort Sumter, the central bankers loaned Napoleon III of France (the nephew
- of the Waterloo Napoleon) 210 million francs to seize Mexico and station troops along the southern border of the U.S., taking
- advantage of the Civil War to violate the Monroe Doctrine and return Mexico to colonial rule.
- No matter what the outcome of the Civil War, it was hoped that a war-weakened America, heavily indebted to the Money
- Changers, would open up Central and South America once again to European colonization and domination - the very thing
- America's Monroe Doctrine had forbade in 1823.
- At the same time. Great Britain moved 11,000 troops into Canada and positioned them along America's northern border. The
- British fleet went on war alert should their quick intervention be called for.
- Lincoln knew he was in a bind. He agonized over the fate of the Union. There was a lot more to it than just differences
- between the North and the South. That's why his emphasis was always on "Union" and not merely the defeat of the South.
- But Lincoln needed money to win.
- I n 1861, Lincoln and his Secretary of the Treasury, Salmon P. Chase, went to New York to apply for the necessary war loans.
- The Money Changers, anxious to maximize their war profits, only offered loans at 24-36% interest. Lincoln said thanks, but no
- thanks, and returned to Washington. He sent for an old friend. Colonel Dick Taylor of Chicago, and put him onto the problem
- off financing the War. At one particular meeting, Lincoln asked Taylor how else to finance the war. Taylor put it this way:
- "Why, Lincoln, that is easy; just get Congress to pass a bill authorizing the printing of full legal tender treasury notes... pay
- your soldiers with them and go ahead and win your war with them also. "
- When Lincoln asked if the people of the United States would accept the notes, Taylor said:
- "The people or anyone else will not have any choice in the matter, if you make them full legal tender. They will have the full
- sanction of the government and be just as good as any money ... the stamp of full legal tender by the Government is the
- thing that makes money good any time, and this will always be as good as any other money inside the borders of our country.
- So that's exactly what Lincoln did. From 1862 to 1865, with Congressional authorization, he printed up $432,000,000 of the
- new bills.
- In order to distinguish them from private bank notes in circulation, he had them printed with green ink on the back side.
- That's why the notes were called "Greenbacks." With this new money, Lincoln paid the troops, and bought their supplies.
- During the course of the war, nearly all of the 450 million dollars of Greenbacks authorized by Congress were printed at no
- interest to the federal government.
- By now Lincoln realized who was really pulling the strings and what was at stake for the American people. Lincoln understood
- the matter better than even J ackson apparently had. This is how he explained his monetary views:
- 17
- "The Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the
- Government and the buying power of consumers... The privilege of creating and issuing money is not only the supreme
- prerogative of Government, but it is the Government's greatest creative opportunity... By the adoption of these principles, the
- long- felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest. The financing of
- all public enterprises, and the conduct of the Treasury will become matters of practical administration. Money will cease to be
- master and become the servant of humanity."
- Meanwhile in Britain a truly incredible editorial in the London Times explained the Bank of England's attitude towards Lincoln's
- Greenbacks.
- "If this mischievous financial policy, which has its origin in North America, shall become indurated down to a fixture, then the
- Government will furnish its own money without cost. It will pay off debts and be without debt. It will have all the money
- necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains, and
- wealth of all countries will go to North America. That country must be destroyed or it will destroy every monarchy on the
- globe."
- Keep in mind, by this time the European monarchs were already chained to their private central banks, hence the bankers'
- concern to preserve their captive monarchs. Within four days of the passage of the law which allowed Greenbacks to be
- issued, bankers met in convention in Washington to discuss the situation. It was agreed that Greenbacks would surely be their
- ruin. Something had to be done. They devised a scheme gradually to undermine the value of the Greenbacks.
- Seemingly unimportant limitations on the use of Greenbacks (printed on the green back), insisted on by the bankers,
- forbidding their use to pay import duties and interest on the public debt, were utilized by the banks to slap a surcharge on
- Greenbacks of up to 185%. This undermined the confidence of the people in Greenbacks and necessitated further concessions
- to the bankers to obtain more, discounted as the Greenbacks now were.
- This scheme was effective - so effective that the next year, 1863, with Federal and Confederate troops beginning to mass for
- the decisive battle of the Civil War, and the Treasury in need of further Congressional authority at that time to issue more
- Greenbacks, Lincoln gave in to the pressure, which he described:
- "They persist, they have argued me almost blind - I am worse off than St. Paul. He was in a strait between two. I am in a
- strait between twenty and they are bankers and financiers."
- Lincoln allowed the bankers to push through the National Banking Act of 1863 in exchange for their support for the urgently
- needed additional Greenbacks.
- This act created "National Banks" (hence the N.A. still in use after National banks' names) and gave them a virtual tax-free
- status. The new banks also got the exclusive power to create the new form of money - National Bank Notes. Though
- Greenbacks continued to circulate, their quantity was limited and no more were authorized after the war.
- On J une 13, 1863, according to J udge Rutherford's book, "Vindication" this letter was sent from the Rothschilds' London
- office, which does, in fact, accurately assess the National Banking Act of 1863:
- "Rothschild Brothers, Bankers, London, June 25th, 1863
- Messrs Ikleheimer, Morton and Vandergould, No 3 Wall St., New York, US. A.
- Dear Sirs:
- A Mr. John Sherman has written us from a town in Ohio, U.S.A., as to the profits that may be made in the National Bankng
- business under a recent act of your Congress, a copy of which act accompanied his letter. Apparently this act has been drawn
- upon the plan formulated here last summer by the British Bankers Association and by that Association recommended to our
- American friends as one that if enacted into law, would prove highly profitable to the banking fraternity throughout the world.
- Mr. Sherman declares that there has never been such an opportunity for capitalists to accumulate money, as that presented
- by this act, and that the old plan of State Banks is so unpopular, that the new scheme will, by contrast, be most favorably
- regarded, notwithstanding the fact that it gives the National Banks an almost absolute control of the National finance.
- 'The few who can understand the system, ' he says, 'will either be so interested in its profits, or so dependent of its favors that
- there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of
- comprehending the tremendous advantages that capital derives from the system, will bear its burdens without complaint and
- perhaps without even suspecting that the system is inimical to their interests. '
- Please advise fully as to this matter and also state whether or not you will be of assistance to us, if we conclude to establish a
- National Bank in the City of New York. If you are acquainted with Mr. Sherman (he appears to have introduced the Banking
- Act) we will be glad to know something of him. If we avail ourselves of the information he furnished, we will, of course, make
- due compensation.
- Awaiting your reply, we are
- Your respectful servants, Rothschild Brothers"
- From this point on, the U.S. money supply would be created in parallel with an equivalent quantity of with debt by bankers
- buying U.S. government bonds, which they used as reserves for National Bank Notes, the nation's new form of money,
- instead of by direct debt-free issue by the government, as were Lincoln's Greenbacks. The banks got interest from the
- government on the bonds and from borrowers of their Bank Notes - thus almost doubling their interest income. As historian
- John Kenneth Galbraith explained:
- "In numerous years following the war, the Federal government ran a heavy surplus. It could not [however] pay off its debt,
- retire its securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was
- to destroy the money supply."
- 18
- Predictably, the new National Banks quickly applied pressure to Congress to have state bank notes taxed out of existence.
- Congress complied. Thus the fifth American Bank War progressed in small stages in favor of the Money Changers, culminating
- in passage of the Federal Reserve Act of 1913 and the National Bank Act of 1935.
- In 1863, Lincoln got some unexpected help from Czar Alexander II of Russia. The Czar, like Bismarck in Germany, knew what
- the international Money Changers were up to and had steadfastly refused to grant them authority to set up a privately-owned
- central bank in Russia. If America survived and was able to remain out of their clutches, his position would be more secure. If
- the bankers were successful at dividing America and giving the pieces back to Great Britain and France (both nations by now
- under control of their privately-owned central banks), eventually they would turn on Russia.
- So, the Czar gave orders that if either England or France actively intervened and gave aid to the South, Russia would consider
- such action as a declaration of war. He sent his Pacific fleet under Admiral Popov to port in San Francisco, where it arrived on
- October 12, 1863, and part of his Baltic fleet under Admiral Lisiviski to port in New York harbor on September 24, 1863, and
- later to Alexandria, Virginia, which lies just across the river from Washington, D.C., as a forceful show of support for Lincoln
- and a warning to Britain and France.
- Further, the Czar was still in a revengeful mood from Russia's defeat in the Crimean War (1853-56) by Money Changer-
- controlled Britain and France (joined by Turkey and Sardinia).
- Lincoln was re-elected the next year, 1864. Prior to the end of the war, for more Green backs, the bankers obtained more
- concessions in the second National Banking Act, of 1864.
- Victorious in the Civil War, had he lived, as his statements quoted above and following make - abundantly clear, Lincoln
- would surely have killed the National Banks' money monopoly extracted from him during the war. On November 21, 1864, he
- wrote a friend the
- "The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic
- than monarchy, more insolent than autocracy, more selfish than bureaucracy. I see in the near future a crisis approaching
- that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of
- corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon
- the prejudices of the people until the wealth is aggregated in a few hands and the republic is destroyed."
- Shortly before Lincoln was assassinated, his former Secretary of the Treasury, Salomon P. Chase, bemoaned his role in
- helping secure the passage of the National Banking Act only one year earlier:
- "My agency in promoting the passage of the National Banking Act was the greatest financial mistake in my life. It has built up
- a monopoly which affects every interest in the country."
- On April 14, 1865, 41 days after his second inauguration, and five days after Lee surrendered to Grant at Appomattox, though
- the Civil War was over, Lincoln was shot by John Wilkes Booth, at Ford's theater. Bismarck Chancellor of Germany lamented
- the death of Abraham Lincoln:
- "The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his
- boots..."
- Bismarck well understood the Money Changers' plan. Allegations that international bankers were responsible for Lincoln's
- assassination surfaced in Canada 70 years later, in 1934. Gerald G. McGeer, a popular and well-respected Canadian attorney,
- revealed this stunning charge in a 5-hour speech before the House of Commons blasting Canada's debt-based money system.
- Remember, it was 1934, the height of the Great Depression which was ravaging Canada as well elsewhere.
- McGeer had obtained evidence deleted from the public record, provided to him by Secret Service agents, from the trial of John
- Wilkes Booth, after Booth's death. McGeer said it showed that Booth was a mercenary working for the international bankers.
- According to an article in the Vancouver Sun of May 2, 1934:
- "Abraham Lincoln was assassinated through the machinations of a group representative of the international bankers, who
- feared the United States President's national credit ambitions... There was only one group in the world at that time who had
- any reason to desire the death of Lincoln... They were the men opposed to his national currency programme and who had
- fought him throughout the whole Civil War on his policy of Greenback currency."
- Interestingly, McGeer claimed that Lincoln was assassinated not only because international bankers wanted to re-establish a
- central bank in America, but because they also wanted to base America's currency on gold - gold they controlled - in other
- words, put America on a "gold standard." Silver was to be demonetized and all Greenbacks retired for gold. Lincoln had done
- just the opposite by issuing U.S. Notes - Greenbacks - which were based purely on the good faith and credit of the United
- States. The article quoted McGeer as saying:
- "They were the men interested in the establishment of the gold standard and the right of the bankers to manage the currency
- and credit of every nation in the world. With Lincoln out of the way they were able to proceed with the plan and did proceed
- with it in the United States. Within eight years after Lincoln's assassination, silver was demonetized and the gold standard
- money system set up in the United States."
- Not since Lincoln has the U.S. issued debt-free United States Notes. The red-sealed U.S. Notes (Federal Reserve Notes are
- green-sealed) have been re-issued fourteen (14) times since Lincoln's assassination. They are not new issues, but merely the
- old Greenbacks reissued year after year as they wear out. Their quantity was eventually limited to $300 million, eventually
- less than one percent of U.S. currency.
- I n another act of folly and ignorance, the 1994 Reigle Act actually authorized the replacement of Lincoln's Greenbacks with
- debt-based Federal Reserve Notes. In other words, Lincoln's Greenbacks were in circulation in the United States until 1994,
- for 130 years. It was a discovery the bankers wanted carefully buried. They can now be found only in rare currency
- collections.
- 19
- Why was silver bad for the bankers and gold good? Simple. Because silver was plentiful in the United States and elsewhere.
- So it was relatively hard to control. Gold was, and always has been scarce. Throughout history it has been relatively easy to
- monopolize gold, but silver has historically been 15 times more plentiful.
- 18. RETURN OF THE GOLD STANDARD
- With Lincoln out of the way, the Money Changers' next objective was to gain complete, centralized control over America's
- money. This was no easy task. With the opening of the American West, silver had been discovered in huge quantities. On top
- of that, Lincoln's Greenbacks were generally popular and their existence had let the genie out of the bottle - the public was
- becoming accustomed to government-issued, debt-free money.
- Despite the European central bankers' deliberate attacks on the Greenbacks, they continued to circulate in the United States.
- According to author W. Cleon Skousen:
- "Right after the Civil War there was considerable talk about reviving Lincoln's brief experiment with the Constitutional
- monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution."
- It is clear that the reality of America printing her own debt-free money sent shock-waves throughout the European private-
- central-banking elite. They watched with horror as Americans began to petition for more Green backs. They may have killed
- Lincoln, but support for his monetary ideas grew.
- On April 12, 1866, nearly one year to the day of Lincoln's assassination. Congress went to work at the bidding of the
- European central-banking interests. It passed the Contraction Act, authorizing the Secretary of the Treasury to begin to retire
- the Greenbacks in circulation and to contract the money supply.
- Authors Theodore R. Thoren and Richard F. Warner explained the results of the money contraction in their book on the
- subject. The Truth in Money Book:
- "The hard times which occurred after the Civil War could have been avoided if the Greenback legislation had continued as
- President Lincoln had intended. Instead, there were a series of 'money panics' - what we call 'recessions' - which put
- pressure on Congress to enact legislation to place the banking system under centralized control. Eventually the Federal
- Reserve Act was passed on December 23, 1913."
- In other words, the Money Changers wanted two things: 1) the re-institution of a privately-owned central bank under their
- exclusive control, and, 2) an American currency issued by them and backed by their gold.
- Their strategy was two-fold: first, to cause a series of panics to try to convince the American people that the existing
- decentralized banking system did not work and that only centralized control of the money supply could provide economic
- stability; and secondly, to remove so much money from the system that most Americans would be so desperately poor that
- they either wouldn't be patient enough to fight for true reform, or would be too weak to oppose the bankers, who would offer
- them relief if the bankers' plans were approved: in short, to convince Americans it was worth the long-term risk to freedom to
- obtain short-term economic relief.
- In 1866, there was $1,800,000,000 in currency in circulation in the United States - about $50.46 per capita. In 1867 alone,
- $500,000,000 was removed from the U.S. money supply. Ten years later, in 1876, America's money supply was reduced to
- only $600,000,000. I n other words, two-thirds of America's money had been called in by the bankers. I ncredibly, only $14.60
- per capita remained in circulation.
- Ten years later, the money supply had been further reduced to only $400,000,000, even though the population had boomed.
- The result was that only $6.67 per capita remained in circulation, an 84% decline in just 20 years. The people suffered terribly
- in a protracted, severe depression.
- Today, bank-funded economists try to sell the idea that recessions and depressions are a natural part of something they call
- the "business cycle." One economist actually tried to explain business cycles with reference to sun spots! The truth is, our
- money supply is completely manipulated now, just as it was after the Civil War, just as it was by Nicholas Biddle and the 2nd
- BUS.
- How did money become so scarce? Simple - bank loans were called in and no new ones were given. In addition. Greenbacks
- were retired by the millions and silver coins were melted down.
- On March 13, 1868, James Rothschild wrote to his U.S. agent, Belmont, "warning ruin to those who might oppose the
- payment of U.S. Bonds in coin, or who might advocate their liquidation in greenbacks." Another scheme was afoot.
- On March 18, 1869, Congress, at these bankers' bidding, passed the Credit Strengthening Act which provided that U.S. bonds
- purchased during the Civil War with greenbacks the bankers had discounted on receipt to as little as S.35 on the dollar, would
- be repaid, in gold at full value. By this means the Treasury paid the bankers some $500 million more than they had paid for
- the bonds, plus the interest due. A colossal sum, equivalent to well over 5 billion dollars today, was thus transferred from the
- Treasury to the Money Changers. Thereafter, their power over the U.S., thus mightily augmented, continually increased.
- In 1872, a man named Ernest Seyd was given £100,000 (about $5,000,000 then) by the Bank of England and sent to America
- to bribe the necessary Congressmen to get silver "demonetized to further reduce the money supply." He was told that if this
- was not sufficient, to draw an additional £100,000, "or as much more as was necessary. "The next year. Congress passed the
- Coinage Act of 1873 and the minting of silver dollars abruptly stopped.
- In fact. Rep. Samuel Hooper, who introduced the bill in the House acknowledged that Mr. Seyd actually drafted the legislation.
- But it gets worse than that. In 1874, Seyd himself admitted who was behind the scheme:
- "/ went to America in the winter of 1872-73, authorized to secure, if I could, the passage of a bill demonetizing silver. It was
- in the interest of those I represented - the governors of the Bank of England - to have it done."
- The international bankers accomplished the same demonetization of silver in Germany (1871-73); the Latin Monetary Union
- (France, Italy, Belgium, Switzerland) in 1873-74; the Scandinavian Union (Denmark, Norway and Sweden) in 1875-76; and
- 20
- the Netherlands in 1875-76. Within five short years, the gold standard was thus imposed worldwide, with China being the only
- significant holdout.
- But the contest over control of America's money was not yet over. Only three years later, in 1876, with one-third of America's
- workforce unemployed, the population was growing restless. People were clamoring for a return to the Greenback money
- system of President Lincoln, or a return to silver money - anything that would make money more plentiful. A Greenback Party
- developed which received over one million votes at its height, as did a strong pro-silver movement.
- That year. Congress created the United States Silver Commission to study the problem. Their report clearly blamed the
- monetary contraction on the National Bankers. The report is interesting because it compares the deliberate money contraction
- by the National Bankers after the Civil War, to the fall of the Roman Empire.
- "The disaster of the Dark Ages was caused by decreasing money and falling prices... Without money, civilization could not
- have had a beginning, and with a diminishing supply, it must languish and unless relieved, finally perish. At the Christian era
- the metallic money of the Roman Empire amounted to $1,800,000,000, by the end of the fifteenth century it had shrunk to
- less than 5200,000,000. ... History records no other such disastrous transition as that from the Roman Empire to the Dark
- Ages."
- - U.S. Silver Commission (1876)
- Despite this report by the Silver Commission, Congress took no action. The next year, 1877, riots broke out from Pittsburgh
- to Chicago. The torches of starving vandals lit up the sky. The bankers huddled to decide on their next move. They decided to
- hang tough. Now that they were back in control of America's money, to a large extent (though not yet to the degree the 2nd
- BUS had been before J ackson killed it), they were not about to give it up. At the meeting of the American Bankers Association
- that year, they urged their membership to do everything in their power to put down the notion of a return to Greenbacks. The
- ABA Secretary, James Buel, authored a letter to the members which blatantly called on the banks to subvert not only
- Congress, but the press:
- "It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the Agricultural and
- Religious Press, as will oppose the greenback issue of paper money and that you will also withhold patronage from all
- applicants who are not willing to oppose the government issue of money... To repeal the Act creating bank notes, or to restore
- to circulation the government issue of money will be to provide the people with money and will therefore seriously affect our
- individual profits as bankers and lenders. See your Congressman at once and engage him to support our interests that we
- may control legislation."
- As political pressure mounted in Congress for change, the bank-influenced press tried to turn the American people away from
- the truth. The New York Tribune put it this way on J anuary 10, 1878: "The capital of the country organized at last [i.e. the
- National Banks], and we will see whether Congress will dare to fly in its face." But it didn't work entirely.
- On February 28, 1878, Congress passed the Sherman Law allowing the minting of a limited number of silver dollars, ending a
- 5-year hiatus. This did not end gold-backing of the currency, however. Nor did it completely free silver. Previous to 1873,
- anyone who brought silver to the U.S. mint could have it struck into silver dollars free of charge. No longer. But at least some
- silver money began to flow back into the economy again. Under political pressure, the bankers loosened up on loans for
- awhile and the post-Civil War depression was finally ended.
- Three years later, the American people elected Republican James Garfield President. Garfield understood how the economy
- was being manipulated. As a Congressman, he had been chairman of the Appropriations Committee, and was a member of
- the Banking and Currency Committee. After his inauguration, he slammed the Money Changers publicly in 1881:
- "Whoever controls the volume of money in any country is absolute master of all industry and commerce... and when you
- realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not
- have to be told how periods of inflation and depression originate."
- Garfield understood. Within a few weeks of making this statement, on J uly 2 of 1881, President Garfield was assassinated.
- 19. FREE SILVER
- Under the National Banking Act the Money Changers were gathering strength fast. They began a periodic fleecing of the flock
- by creating economic booms with easy money and loans, followed by busts caused by tight money and loans fewer, so they
- could buy up thousands of homes and farms for pennies on the dollar on foreclosure.
- In 1891, the Money Changers prepared to take the American economy down again and their methods and motives were laid
- out with shocking clarity in a memo sent out by the American Bankers Association (ABA), an organization in which most
- bankers were members. Notice that this memo called for bankers to create a depression on a certain date three years in the
- future. Here is how it read in part (note the telling reference to England, home of the Mother Bank):
- "On Sept, 1, 1894, we will not renew our loans under any consideration. On Sept. 1st we will demand our money. We will
- foreclose and become mortgagees in possession. We can take two-thirds of the farms west of the Mississippi, and thousands
- of them east of the Mississippi as well, at our own price... We may as well own three-fourths of the farms of the West and the
- money of the country. Then the farmers will become tenants as in England ..." - 1891, American Bankers Association, as
- printed in the Congressional Record of April 29, 1913.
- These depressions could be controlled if the National Banks coordinated their contraction, and more easily because America
- was on the gold standard. Since gold is scarce, it's one of the easiest commodities to manipulate. People wanted silver money
- legalized again so they could escape the stranglehold the Money Changers had on gold-backed money. People wanted silver
- money reinstated, reversing Mr. Seyd's Act of 1873, by then called the "Crime of 73."
- By 1896, the issue of more silver money had become the central issue in the Presidential campaign. William Jennings Bryan, a
- Senator from Nebraska ran for President as a Democrat on the "Free Silver" issue. His father had been an ardent
- Greenbacker. At the Democratic National Convention in Chicago, he made an emotional speech which won him the nomination
- 21
- entitled, "Crown of Thorns and Cross of Gold." Though Bryan was only 36 years old at the time, this speech is widely regarded
- as the most famous oration ever made before a political convention. In the dramatic conclusion. Bryan aid:
- "We will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this
- crown of thorns, you shall not crucify mankind upon a cross of old. "
- The bankers lavishly supported the Republican candidate, William McKinley, who favored the gold standard. The resulting
- contest was among the most fiercely contested Presidential races in American history.
- Bryan made over 600 speeches in 27 states. Bryan stood with the Greenbackers:
- 'The right to coin and issue money is a function of Government. It is a part of sovereignty and cannot, with safety, be
- delegated to private individuals."
- The McKinley campaign got manufacturers and industrialists to inform their employees that if Bryan were elected, all factories
- and plants would close and there would be no work. The ruse succeeded. McKinley beat Bryan by a small margin.
- Some authors believe, and the course of history supports them, that under the bankers' President, McKinley, before the
- summer of 1897, the United States entered into a secret agreement (no papers of any sort were signed) that the U.S. would
- support England in its inevitable conflict with Germany - the product of Bismarck's nation building.
- This was, de facto, an agreement surrendering American independence into a worldwide alliance (France being a minor
- partner) to dominate the world, presided over by the Money Changers who dominated the Bank of England from the City, in
- London, and through it, the British government.
- Almost immediately, in 1898, the Spanish-American War was begun. Later, the U.S. was dragged into two World Wars (and
- other minor ones) to secure the worldwide imperialistic designs of the Money Changers. The 1897 Agreement made the U.S. a
- principal in the British Empire, which has been succeeded by the international financial empire of the Money Changers,
- defended and expanded by U.S., and more recently, by U.S. -led U.N. armed forces.
- Bryan ran for president again in 1900 and in 1908, but fell short each time. But the threat his presence presented to the
- National Bankers afforded the Republican alternatives, Roosevelt and Taft, a grating measure of independence from the
- bankers (Roosevelt mildly opposed their monopolies and Taft was unenthusiastic about their proposed central bank
- legislation), who therefore shifted support to Wilson in 1912.
- During the 1912 Democratic Convention, Bryan was a powerful figure who stepped aside to help Woodrow Wilson win the
- nomination. When Wilson became President he appointed Bryan as Secretary of State. But Bryan soon became disenchanted
- with the Wilson administration.
- Bryan served only two years in the Wilson administration before resigning in 1915 over the highly-suspicious sinking of the
- Lusitania, the event which was used to drive America into World War I .
- Although William Jennings Bryan never gained the Presidency, his efforts delayed the Money Changers for seventeen years
- from attaining their next goal - a new, privately-owned central bank for America. But like Wilson, Bryan was deceived as to
- the true import of the Federal Reserve Act of 1913. Both initially supported it. Both later publicly repented over their support
- of it. Bryan later wrote:
- "That is the one thing in my public career that I regret - my work to secure the enactment of the Federal Reserve Law."
- 20. J .P. MORGAN & the CRASH OF 1907/ ROCKEFELLER
- Now it was time for the Money Changers to get back a new, private central bank for America, the fifth private central bank to
- control and manipulate America's money supply.
- A major final panic would be necessary to focus the nation's attention on the supposed need for a central bank. The thin
- rationale offered was that only a central bank can prevent widespread bank failures and stabilize the currency. The critically
- important feature of who would own and control it was an issue carefully avoided.
- Before the Civil War, the Rothschilds had previously used, as principal agents in the U.S., J .L and S.I J oseph & Company.
- Later George Peabody, an American bond salesman, traveled to London before the Civil War and developed a relationship with
- Nathan Rothschild, which became a highly profitable one for Peabody. His business expanding, he took on an American
- partner, J unius Morgan, father of J .P.
- I n 1857 J unius was the recipient of a £800,000 loan from the Bank of England at a time of financial crisis when many other
- firms were denied such loans. Junius Morgan became the Union's financial agent in Britain, often closely associated with the
- Rothschilds.
- In the post-Civil War period the connection between Morgan and the Rothschilds was certainly well known in financial circles.
- As one writer noted:
- "Morgan's activities in 1895-1896 in selling U.S. gold bonds in Europe were based on his alliance with the House of
- Rothschild."
- After his father's death, J .P. Morgan took on a British partner, Edward Grenfell, a long-time director of the Bank of England.
- There is speculation the Morgans became the Rothschilds' principal agents in the U.S., eventually to be eclipsed by the
- Rockefellers.
- Early in this century, in U.S. finance, the press and in politics, all lines of power converged on the financial houses of J .P.
- Morgan (J .P. Morgan Company; Bankers Trust Company; First National Bank of New York, Guaranty Trust), the Rockefellers
- (National City Bank of New York; Chase National Bank; Chemical Bank); Kuhn, Loeb & Company (a representative of the
- Rothschild banks; National City Bank of New York) and the Warburg's (Manhattan Corp. bank).
- 22
- Morgan was clearly the most powerful banker in America, and like his father, worked as an agent for the Rothschild family,
- but also for his own interests. He helped finance the monopolization of various industries, consolidated big steel holdings into
- a monopoly by buying Andrew Carnegie's steel companies, and owned numerous industrial companies and banks.
- Interestingly, though reputedly America's richest banker, upon J .P.'s death, his estate contained $68 million dollars, only 19%
- of J .P. Morgan company. The bulk of the securities most people thought he owned, were in fact owned by others. When J .P.
- Morgan, Jr. (Jack) died in 1943 his estate was valued at only $16 million. By contrast, when Alphonse Rothschild died in 1905
- his estate contained $60 million in U.S. securities alone.
- John D. Rockefeller and his brother William used their enormous profits from the Standard Oil monopoly to dominate the
- National City Bank, merged in 1955 with Morgan's and Kuhn, Loeb & Company's First National Bank of New York, which
- resulted in Citibank (Citicorp).
- Similarly, J ohn D. bought control of Chase National Bank, and merged it with Warburg's Manhattan bank, resulting in the
- Rockefeller-dominated Chase Manhattan bank, recently merged with the Rockefeller-controlled Chemical Bank.
- The combination of the Rockefeller-controlled Chase-Manhattan/Citicorp banks gives them majority control over the New York
- Fed (52%), which completely dominates the Federal Reserve System. But the New York Fed was controlled by Rockefeller
- long before any majority ownership was reached.
- By these mergers, the Rockefellers gradually replaced the Morgans, Schiffs and Warburgs as the principal Rothschild allies in
- the U.S.
- Recent 1998 mega-bank mergers have further consolidated this monolithic control.
- David Rockefeller, retired Chairman, was the point man for the Rockefellers in recent decades. One wag described the
- Rockefellers' seventy-five palatial Pocantico Hills residences (on over 4,000 acres) in New York as "the kind of place God
- would have built if he had had the money. "
- In Europe a similar consolidation resulted in two main banking dynasties - the Warburgs and the Rothschilds. But whereas the
- Morgans and the Rockefellers were relatively fierce competitors until the famous Northern Securities battle resulted in a sort
- of truce, the Warburgs have always been subordinate to the Rothschilds and have not seriously challenged them.
- The relationship between the Rothschilds and Rockefellers was initially one of debtor/creditor, as the Rothschild's provided the
- seed money for J .D. Rockefeller to monopolize the U.S. oil refinery business and most oil production.
- Subsequently, the relationship entered into measured competition here (local wars between subordinates sometimes
- resulting) and cooperation there, but like the competition between the other banks, this too has resolved into a power sharing
- arrangement.
- The centers of power are not easy to identify and remain to a large extent hidden through carefully concealed and interlocking
- directorships, off-shore accounts, nominee holdings, private foundations, trusts and the rest. But the top international bankers
- are vested with the last word in economic and political power.
- Most commentators are of the opinion that the Rothschilds are definitely the dominant partner; citing for example, the 1950's
- appointment of J . Richardson Dilworth, partner of Kuhn, Loeb & Co. (a satellite of the Rothschild family) who left to take
- control of the Rockefeller family purse strings, where he managed the investments of Rockefeller descendants in as many as
- 200 private foundations.
- However, the operative relationship described by Georgetown historian Carroll Ouigley is "feudalistic, " that is, analogous to
- the relationships between a feudal king and the aristocracy consisting of dukes, earls, barons, etc., all mutually supportive,
- while safeguarding their own turf and "independence," expanding it when permitted without violating the fundamental
- hierarchical relationships - violations can result in wars.
- Lesser members of this "feudalistic" international banking plutocracy include or have included, the Sassoon's (in India and the
- Far East); Lazard Freres Fance; Mendelsohn (Netherlands); Israel Moses Self (Italy); Kuhn, Loeb (U.S.); Goldman Sachs
- (U.S.) Lehman Bros. (U.S.); Schroeders (Germany) ; Hambros (Scandinavia), the Bethmanns, Ladenburgs, Eriangers, Sterns,
- Seligmans, Schiffs, Speyers, Abs, Mirabauds, Mallets, Faulds, and many others.
- The ruling clique in most nations now, excepting a portion of the Muslim world and a few so called "rogue" states, are
- equivalent to local barons, subservient to the higher banking dukes, earls, etc.
- This generally reaches right down to the city level, where the dominant local bankers are usually the petty aristocracy,
- affiliated through banking and commercial relationships with their banking "barons" and so on.
- As Georgetown historian Professor Carroll Ouigley has noted, if it were possible to detail the asset portfolios of the banking
- plutocrats one would find the title-deeds of practically all the buildings, industries, farms, transport systems and mineral
- resources of the world. Accounting for this, Ouigley wrote:
- "Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money
- on debt-terms requiring tribute both in principal and interest."
- Unfortunately, rather than benevolent rulers, this international banking plutocracy has taken the Malthusian position that the
- world is overpopulated with serfs, and, at the highest levels, they are deadly serious about correcting this "threat" and
- "imbalance," whatever the cost in human misery and suffering.
- To return to 1902: President Theodore Roosevelt allegedly went after Morgan and his friends by using the Sherman Anti-Trust
- Act to try to break up their industrial monopolies. Actually, Roosevelt did very little to interfere in the growing monopolization
- of American industry by the bankers and their surrogates.
- For example, Roosevelt supposedly broke up the Standard Oil monopoly. But it wasn't really broken up at all. It was merely
- divided into seven corporations, all still controlled by the Rockefellers, who had been originally financed by the Rothschild-
- 23
- controlled National City Bank of Cleveland. The public was aware of this thanks to political cartoonists like Thomas Nast who
- referred to the bankers as the "Money Trust."
- By 1907, the year after Teddy Roosevelt's re-election, Morgan decided it was time to try for a central bank again. Using their
- combined financial muscle, Morgan and his friends were able to crash the stock market.
- Thousands of small banks were vastly overextended. Some of Morgan's principal competitors went under. Some had reserves
- of less than one percent (1%), thanks to the fractional reserve banking technique.
- Within days, runs on banks were commonplace across the nation. Now Morgan stepped into the public arena and offered to
- prop up the faltering American economy by supporting failing banks with money he generously offered to create out of
- nothing.
- It was an outrageous proposal, worse than even fractional reserve banking, but, in a panic. Congress let him do it. Morgan
- manufactured $200 million worth of this completely reserveless, private money - and bought things with it, paid for services
- with it, and sent some of it to his branch banks to lend out at interest.
- His plan worked. Soon, the public regained confidence in money in general and quit hoarding their currency. But in the
- interim, many small banks failed and banking power was further consolidated into the hands of a few large banks. By 1908
- the arranged panic was over and Morgan was hailed as a hero by the president of Princeton University, a naive man by the
- name of Woodrow Wilson, who naively wrote:
- "All this trouble could be averted if we appointed a committee of six or seven public-spirited men like J .P. Morgan to handle
- the affairs of our country."
- Economic textbooks would later explain that the creation of the Federal Reserve System was the direct result of the panic of
- 1907, quote: "with its alarming epidemic of bank failures: the country was fed up once and for all with the anarchy of
- unstable private banking. "
- But Minnesota Congressman Charles A. Lindbergh, Sr., the father of the famous aviator, "Lucky Lindy," later explained that
- the Panic of 1907 was really just a scam:
- "The Money Trust caused the 1907 panic... those not favorable to the Money Trust could be squeezed out of business and the
- people frightened into demanding changes in the banking and currency laws which the Money Trust would frame."
- Since the passage of the National Banking Act of 1863, the National Banks that y\ct established as a cartel, had been able to
- coordinate a series of booms and busts. The purpose was not only to fleece the American public of their property, but later to
- claim that the decentralized banking system was basically so unstable that it had to be further consolidated and control
- centralized into a central bank once again, as it had been before J ackson ended it.
- The supremely critical economic issue of private vs. state ownership and control was carefully skirted, as was the fractional
- reserve banking fraud causing the booms and busts.
- 21. JEKYLL ISLAND
- After the crash, Teddy Roosevelt, in response to the Panic of 1907, signed into law a bill creating something called the
- National Monetary Commission. The Commission was to study the banking problem and make recommendations to Congress.
- Of course, the Commission was packed with Morgan's friends and cronies.
- The Chairman was a man named Senator Nelson Aldrich from Rhode Island. Aldrich represented the Newport, Rhode Island
- homes of America's richest banking families and was an investment associate of J. P. Morgan, with extensive bank holdings.
- His daughter married J ohn D. Rockefeller, J r., and together they had five sons: J ohn. Nelson (who would become the Vice-
- President in 1974), Laurence, Winthrop, and David (the head of the Council on Foreign Relations and former Chairman of
- Chase Manhattan bank).
- As soon as the National Monetary Commission was set up. Senator Aldrich immediately embarked on a two-year tour of
- Europe, where he consulted at length with the private central bankers in England, France and German. The total cost of his
- trip to the taxpayers was $300,000 - a huge sum in those days.
- Shortly after his return, on the evening of November 22, 1910, seven of the wealthiest and most powerful men in America
- boarded Senator Aldrich's private rail car and in the strictest secrecy journeyed tojekyll Island, off the coast of Georgia.
- With Aldrich and three Morgan representatives was Paul Warburg. Warburg had been given a $500,000 per year salary to
- lobby for passage of a privately-owned central bank in America by the investment firm, Kuhn, Loeb & Company. Warburg's
- partner in this firm was a man named J acob Schiff, the grandson of the man who shared the Green Shield house with the
- Rothschild family in Frankfort.
- Schiff, as, we'll later find out, was in the process of spending $20 million to finance the overthrow of the Czar of Russia. These
- three European banking families, the Rothschilds, the Warburgs, and the Schiffs were interconnected by marriage down
- through the years, just as were their American banking counterparts, the Morgans, Rockefellers and Aldrichs.
- Secrecy was so tight that all seven primary participants were cautioned to use only first names to prevent servants from
- learning their identities. Years later one participant, Frank Vanderlip, president of Rockefeller's National City Bank of New York
- and a representative of the Kuhn, Loeb & Company interests, confirmed the Jekyll Island trip in the February 9, 1935 edition
- of the Saturday Evening Post:
- "I was as secretive - indeed, as furtive - as any conspirator... Discovery, we knew, simply must not happen, or else all our
- time and effort would be wasted. If it were to be exposed that our particular group had got together and written a banking
- bill, that bill would have no chance whatever of passage by Congress."
- The participants came together to figure out how to solve their major problem - how to bring back a privately-owned central
- bank - but there were other problems that needed to be addressed as well. First of all, the market share of the big national
- banks was shrinking fast.
- 24
- In the first ten years of the century, the number of U.S. banks had more than doubled to over 20,000. By 1913, only 29% of
- all banks were National Banks and they held only 57% of all deposits. As Senator Aldrich later admitted in a magazine article:
- "Before passage of this Act, the New York bankers could only dominate the reserves of New York. Now, we are able to
- dominate the bank reserves of the entire county. "
- Therefore, something had to be done to bring these new banks under their control. As John D. Rockefeller put it: "Competition
- is a sin." Actually, moralists agree that monopoly abuse is a sin. But why quibble when there's money to be made.
- Secondly, the nation's economy was so strong that corporations were starting to finance their expansion out of profits instead
- of taking out huge loans from large banks. In the first 10 years of the new century, 70% of corporate funding came from
- profits. In other words, American industry was becoming independent of the Money Changers, and that trend had to be
- stopped.
- All the participants knew that these problems could be hammered out into a workable solution, but perhaps their biggest
- problem was a public relations problem - the name of the new central bank. That discussion took place in one of the many
- conference rooms in the sprawling hotel now known as thejekyll Island Club.
- Aldrich believed that the word "bank" should not even appear in the name. Warburg wanted to call the legislation the National
- Reserve Bill or the Federal Reserve Bill. The idea here was to give the impression that the purpose of the new central bank
- was to stop bank runs, but also to conceal its monopoly character. However, it was Aldrich, the egotistical politician, who
- insisted it be called the Aldrich Bill.
- After nine days atjekyll Island, the group dispersed. The new central bank (with twelve branches, ultimately) would be very
- similar to the old Bank of the United States. It would eventually be given a monopoly over the national currency and create
- that money out of nothing.
- How does the Fed "create" money out of nothing? It is a four-step process. But first a word on bonds. Bonds are simply
- promises to pay - or government I OUs. People buy bonds to get a secure rate of interest. At the end of the term of the bond,
- the government repays the principal, plus interest (if not paid periodically), and the bond is destroyed. There are about 3.6
- trillion dollars worth of these bonds at present. Now here is the Fed moneymaking process:
- Step 1. The Fed Open Market Committee approves the purchase of U.S. Bonds on the open market.
- Step 2. The bonds are purchased by the New York Fed Bank from whoever is offering them for sale on the open market.
- Step 3. The Fed pays for the bonds with electronic credits to the seller's bank, which in turn credits the seller's bank account.
- These credits are based on nothing tangible. The Fed just creates them.
- Step 4. The banks use these deposits as reserves. They can loan out ten times the amount of their reserves to new
- borrowers, all at interest.
- In this way, a Fed purchase of, say a million dollars worth of bonds, gets turned into over 10 million dollars in bank deposits.
- The Fed, in effect, creates 10% of this totally new money and the banks create the other 90%.
- Actually, due to a number of important exceptions to the 10% reserve ratio, many loans require no (0%) reserves, making it
- possible for banks to create many times more than ten times the money they have in "reserve."
- To reduce the amount of money in the economy, the process is just reversed - the Fed sells bonds to the public, and money
- flows out of the purchaser's local bank. Loans must be reduced by ten times the amount of the sale. So a Fed sale of a million
- dollars in bonds, results in 10 million dollars less money in the economy.
- So how did the Federal Reform Act of 1913 benefit the bankers whose representatives huddled atjekyll Island?
- 1st - it totally misdirected banking reform efforts from proper solutions.
- 2nd - it prevented a proper, debt-free system of government finance - like Lincoln's Greenbacks - from making a comeback.
- The bond-based system of government finance, forced on Lincoln after he created Greenbacks, was now cast in stone.
- 3rd - it delegated to the bankers the right to create 90% of our money supply-based on only fractional reserves - which they
- could loan out at interest.
- 4th - it centralized overall control of our nation's money supply in the hands of a few men.
- 5th - it established a new private U.S. central bank with a high degree of independence from effective political control.
- Sixteen (16) years after it's creation, the Fed's Great Contraction in the early 1930s would cause the Great Depression. This
- independence has been enhanced since then, through additional amendments.
- In order to fool the public into thinking the government retained control, the plan called for the Fed to be run by a Board of
- Governors appointed by the President and approved by the Senate. But all the bankers had to do was to be sure that their
- men got appointed to the Board of Governors. That wasn't hard. Bankers have money, and money buys influence over
- politicians.
- Once the participants left J ekyll I sland, the public relations blitz was on. The big New York banks pooled an "educational" fund
- of five million dollars to finance professors at respected universities to endorse the new bank. Woodrow Wilson at Princeton
- was one of the first to jump on the bandwagon.
- But the bankers' subterfuge didn't work. The Aldrich Bill was quickly identified as a bankers bill - a bill to benefit only what
- had become known as the "Money Trust. " As Congressman Lindbergh put it during the Congressional debate:
- "The Aldrich Plan is the Wall Street Plan. It means another panic, if necessary, to intimidate the people. Aldrich, paid by the
- government to represent the people, proposes a plan for the trusts instead."
- Seeing they didn't have the votes to win in Congress, the Republican leadership never brought the Aldrich Bill to a vote.
- President Taft would not back the Aldrich bill. The bankers quietly decided to move to track two, the Democratic alternative.
- 25
- They began financing Woodrow Wilson as the Democratic nominee. He was considered far more tractable than Bryan. As
- historian J ames Perloff put it, Wall Street financier Bernard Baruch was put in charge of Wilson's education:
- To increase Wilson's chances of defeating the popular Taft, they funded the unwitting Teddy Roosevelt in order to split the
- Republican vote - a tactic often used since to insure getting their man in. The campaigning Roosevelt said:
- "Issue of currency should be lodged with the government and be protected from domination by Wall Street... We are opposed
- to the Aldrich Bill because its provisions would place our currency and credit system in private hands. "
- This was certainly correct, and it helped draw votes from Taft and got Wilson elected.
- 22. FED ACT OF 1913
- During the Presidential campaign, the Democrats were careful to pretend to oppose the Aldrich Bill. As Rep. Louis McFadden,
- himself a Democrat as well as chairman of the House Banking and Currency Committee, explained it 20 years after the fact:
- "The Aldrich bill was condemned in the platform ... when Woodrow Wilson was nominated... The men who ruled the
- Democratic party promised the people that if they were returned to power there would be no central bank established here
- while they held the reins of government. Thirteen months later that promise was broken, and the Wilson administration,
- under the tutelage of those sinister Wall Street figures who stood behind Colonel House, established here in our free country
- the worm-eaten monarchical institution of the 'king's bank' to control us from the top downward, and to shackle us from the
- cradle to the grave."
- Once Wilson was elected, Warburg, Baruch and company advanced a "new" plan, which Warburg named the Federal Reserve
- System. The Democratic leadership hailed the new bill, called the Glass-Owen Bill, as something radically different from the
- Aldrich Bill. But in fact, the bill was virtually identical in every important detail.
- I n fact, so vehement were the Democratic denials of similarity to the Aldrich Bill that Paul Warburg - the father of both bills -
- had to step in privately to reassure his paid friends in Congress that the two bills were virtually identical:
- "Brushing aside the external differences affecting the 'shells, ' we fmd the 'kernels' of the two systems very closely resembling
- and related to one another."
- But that admission was for private consumption only. Publicly, the Money Trust trotted out Senator Aldrich and Frank
- Vanderlip, the president of the Morgan/ Rockefeller dominated National City Bank of New York and one of the Jekyll Island
- seven, to offer token opposition to the new Federal Reserve System.
- Years later, however, Vanderlip admitted in the Saturday Evening Post that the two measures were virtually identical:
- Saturday Evening Post, February 9, 1935, p. 25,
- "From Farmboy to Financier
- Although the Aldrich Federal Reserve Plan was defeated when it bore the name Aldrich, nevertheless its essential points were
- all contained in the plan that finally was adopted."
- As Congress neared a vote, they called Ohio attorney Alfred Crozier to testify. Crozier noted the similarities between the
- Aldrich Bill and the Glass-Owen Bill:
- "The ... bill grants just what Wall Street and the big banks for twenty- five years have been striving for - private instead of
- public control of currency. It [the Glass-Owen bill] does this as completely as the Aldrich Bill. Both measures rob the
- government and the people of all effective control over the public's money, and vest in the banks exclusively the dangerous
- power to make money among the people scarce or plenty."
- Exactly. During the debate on the measure. Senators complained that the big banks were using their financial muscle to
- influence the outcome. "There are bankers in this country who are enemies of the public welfare," declared one Senator. What
- an understatement!
- Despite the charges of deceit and corruption, the bill was finally rammed through the House and Senate on December 23,
- 1913, after many Senators and Representatives had left town for the Holidays, having been assured by the leadership that
- nothing would be done until long after the Christmas recess. On the day the bill was passed. Congressman Lindbergh
- prophetically warned his countrymen that:
- "This Act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the
- Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years
- removed... The worst legislative crime of the ages is perpetrated by this banking bill."
- On top of all this, only weeks earlier. Congress had finally passed a bill legalizing the income tax. Why was the income tax law
- important? Because bankers finally had in place a system which would run up a virtually unlimited federal debt. How would
- the interest on this debt be repaid, never mind the principal? Remember, a privately-owned central bank creates the principal
- out of nothing. The federal government was small then. Up to then, it had subsisted merely on tariffs and excise taxes.
- J ust as with the Bank of England, the interest payments had to be guaranteed by direct taxation of the people. The Money
- Changers knew that if they had to rely on contributions from the states, eventually the individual state legislatures would
- revolt and either refuse to pay the interest on their own money, or at least bring political pressure to bear to keep the debt
- small.
- It is interesting to note that in 1895 the Supreme Court had found a similar income tax law to be unconstitutional. The
- Supreme Court even found a corporate income tax law unconstitutional in 1909. As a result, in October, 1913 Senator Aldrich
- hustled a bill through the Congress for a constitutional amendment allowing income tax.
- The proposed 16th Amendment to the Constitution was then sent to the state legislatures for approval, but some critics claim
- that the 16th Amendment was never passed by the necessary 3/4s of the states. In other words, the 16th Amendment may
- not be legal. But the Money Changers were in no mood to debate the fine points. Without the power to tax the people directly
- 26
- and bypass the states, the Federal Reserve Bill would be far less useful to those who wanted to drive America deeply into their
- debt.
- A year after passage of the Federal Reserve Bill, Congressman Lindbergh explained how the Fed created what we have come
- to call the "Business Cycle" and how they use it to their advantage:
- "To cause high prices, all the Federal Reserve Board will do will be to lower the rediscount rate..., producing an expansion of
- credit and a rising stock market; then when... business men are adjusted to these conditions, it can check... prosperity in
- mid-career by arbitrarily raising the rate of interest.
- It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate,
- or cause violent fluctuations by a greater rate variation, and in either case it will possess inside information as to financial
- conditions and advance knowledge of the coming change, either up or down.
- This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that
- ever existed.
- They know in advance when to create panics to their advantage. They also know when to stop panic. Inflation and deflation
- work equally well for them when they control finance..."
- Congressman Lindbergh was correct on all points. What he didn't realize was that most European nations had already fallen
- prey to the private central bankers decades or even centuries earlier. But he also mentions the interesting fact that only one
- year later, the Fed had cornered the market in gold: According to Lindbergh, "Already the Federal Reserve banks have
- cornered the gold and gold certificates..."
- But Congressman Lindbergh was not the only critic of the Fed. Congressman Louis McFadden, the Chairman of the House
- Banking and Currency committee from 1920 to 1931 remarked that the Federal Reserve Act brought about:
- "A super state controlled by international bankers and international industrialists acting together to enslave the world for their
- own pleasure. "
- Notice how McFadden saw the international character of the stockholders of the Federal Reserve. Another chairman of the
- House Banking and Currency Committee in the 1960s, Wright Patman from Texas, put it this way:
- "In the United States today we have in effect two governments ... We have the duly constituted Government ... Then we have
- an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers
- which are reserved to Congress by the Constitution."
- Even the inventor of the electric light, Thomas Edison, joined the fray in criticizing the system of the Federal Reserve:
- "If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good, makes the bill good,
- also... It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises
- to pay, but one promise fattens the userers and the other helps the people. "
- Three years after the passage of the Federal Reserve Act, even President Wilson began to have second thoughts about what
- he had unleashed during his first term in office.
- "We have come to be one of the worst ruled, one of the most completely controlled governments in the civilized world - no
- longer a government of free opinion, no longer a government by ... a vote of the majority, but a government by the opinion
- and duress of a small group of dominant men.
- Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know
- that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they
- had better not speak above their breath when they speak in condemnation of it."
- Before his death in 1924, President Wilson realized the full extent of the damage he had done to America, when he sadly
- confessed:
- "/ have unwittingly ruined my government."
- So finally, the Money Changers, those who profit by creating and manipulating the amount of money in circulation, had their
- privately owned central bank installed again in America. The major newspapers (which they owned or heavily influenced
- through their advertising) hailed passage of the Federal Reserve Act of 1913, telling the public that "now depressions could be
- scientifically prevented. "The fact of the matter was that now depressions could be scientifically initiated.
- By bribery, deceitful political manipulation and abuse of their press influence and ownership, they had usurped the monetary
- function of government. The U.S. government was left with only trivial relics of its sovereign monetary power: the minting of
- coins (a tiny fraction of the money supply, but a debt-free one); the re-printing of Lincoln's U.S. notes (Greenbacks, but
- limited to $300,000,000 total); and issuing a limited number of gold and silver certificates.
- As Mr. J ames Rand, former President of Remington Rand, Inc. well said:
- "No government should permit such coercive power over its own credit to be held by any one group or class as the privately
- owned Federal Reserve System holds today.
- No government should delegate to private interests the control over the purchasing power of money.
- The issue must be faced and settled. There can be no complete restoration of confidence until the conflict between private and
- government control over money is ended. "
- The 5th American Bank War ended in victory for the Money Changers and the defeat of the American people. I n the interim,
- the Money Changers' grip has gradually tightened, hiding this history, propagandizing our people to support their various
- nefarious activities through their media control, and choking our liberties by degrees. Whether America will escape their
- tightening grip is an open question, but is increasingly unlikely.
- 23. MORGAN/ WORLD WAR I
- 27
- Economic power was now centralized to a tremendous extent. Now it was time for a war - a really big war - in fact, the first
- World War. Of course, as the central bankers knew, nothing creates debts like warfare. England was the best example up to
- that time. During the 119-year period between the founding of the Bank of England and Napoleon's defeat at Waterloo,
- England had been at war for 56 years. And much of the remaining time, she'd been preparing for war.
- In World War I, the German Rothschilds loaned money to the Germans, the British Rothschilds loaned money to the British,
- and the French Rothschilds loaned money to the French. It was all highly profitable. I n America, J .P. Morgan was the sales
- agent for war materials to both the British and the French.
- In fact, six months into the war, Morgan became the largest consumer on earth, spending $10 million a day. His offices at 23
- Wall Street were mobbed by brokers and salesmen trying to cut a deal. In fact, it got so bad that the bank had to post guards
- at every door and at the partners' homes as well.
- Other Rothschild allies in the United States made out as well from the war. President Wilson appointed Bernard Baruch to
- head the War Industries Board. According to historian James Perloff, both Baruch and the Rockefellers profited by some $200
- million during the war.
- But profits were not the only motive. There was also revenge and power. The Money Changers never forgave the Czars for
- their opposition nor for supporting Lincoln during the Civil War. Also, Russia was the last major European nation to refuse to
- give in to the privately-owned central bank scheme.
- Three years after World War I broke out, the Russian Revolution toppled the Czar. Jacob Schiff of Kuhn, Loeb & Company
- bragged on his deathbed that he had spent $20 million towards the defeat of the Czar. But the truth was that much of that
- money funded the communist coup d'etat replacing the democratically elected Kerensky regime, which had replaced the Czar
- months earlier.
- The bankers were not so much enemies of the Czar, as they were intent on seizing power in Russia, through the Bolsheviks.
- Three gold shipments in 1920 alone, from Lenin to Kuhn, Loeb & Company and Morgan Guaranty Trust repaid the $20 million
- to the bankers, and this was just a small down payment.
- But would some of the richest men in the world financially back communism, the system that was openly vowing to destroy
- the so-called capitalism that made them wealthy? Communism, like plutocracy, is a product of capitalism. Researcher Gary
- Allen explained it was this way:
- "If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control the
- wealth, then the seeming paradox of super-rich men promoting socialism becomes no paradox at all. Instead, it becomes
- logical, even the perfect tool for power-seeking megalomaniacs. Communism or more accurately, socialism, is not a
- movement of the downtrodden masses, but of the economic elite."
- As W. Cleon Skousen put it in his 1970 book The Naked Capitalist:
- "Power from any source tends to create an appetite for additional power... It was almost inevitable that the super-rich would
- one day aspire to control not only their own wealth, but the wealth of the whole world. To achieve this, they were perfectly
- willing to feed the ambitions of the power-hungry political conspirators who were committed to the overthrow of all existing
- governments and the establishment of a central world-wide dictatorship."
- But what if these revolutionaries get out of control and try to seize power from the Money Changers? After all, it was Mao
- Tse-tung who in 1938 stated his position concerning power:
- "Political power grows out of the barrel of a gun. "
- The London/Wall Street axis elected to take the risk. The master-planners attempted to control revolutionary communist
- groups by feeding them vast quantities of money when they obeyed, and contracting their money supply, or even financing
- their opposition or fascist parties in bordering nations, if they got out of control. Lenin began to understand that although he
- was the dictator of the new Soviet Union, he was not pulling the financial strings, someone else was silently in control:
- "The state does not function as we desired. The car does not obey. A man is at the wheel and seems to lead it, but the car
- does not drive in the desired direction. It moves as another force wishes."
- Who was behind it? Rep. Louis T. McFadden, the Chairman of the House Banking and Currency Committee throughout the
- 1920s and into the Great Depression years of the 1930s, explained it this way:
- "The course of Russian history has, indeed, been greatly affected by the operations of international bankers... The Soviet
- Government has been given United States Treasury funds by the Federal Reserve Board ... acting through the Chase Bank
- England has drawn money from us through the Federal Reserve banks and has re-lent it at high rates of interest to the Soviet
- Government... The Dnieperstory Dam was built with funds unlawfully taken from the United States Treasury by the corrupt
- and dishonest Federal Reserve Board and the Federal Reserve banks."
- In other words, the Fed and the Bank of England, along with their controlling stock-holders, the Rothschilds, Rockefellers,
- Morgans, Schiffs, Warburgs, etc., were creating a monster, one which would fuel seven decades of unprecedented Communist
- revolution, warfare, and most importantly - debt.
- The Soviet Union was also a useful counterbalance to Germany, and later to the U.S., until 1989 with its dismemberment into
- fifteen countries. China then became a new counterbalance to the U.S., and is being built up at the rate of over $100 million
- dollars a day by lopsided trade deals, IMF loans and Western investments.
- Such balance-of-power arrangements assure that the Money Changers cannot be overthrown worldwide by a political revolt in
- any single country. In that case, they simply shift support to the counter-balanced country. Additionally, the inevitable
- military rivalry between roughly balanced powers results in massive expenditures and so more national borrowing and debt.
- In case one thinks there is some chance that the Money Changers got communism going and then lost control - keep in mind
- that even in the socialist paradise. Rockefeller's National City Bank (now Citigroup) in St. Petersburg was never nationalized,
- as were all Russian banks. Numerous Western bankers operated openly in the Soviet Union, and made vast profits.
- 28
- However, setbacks, some major, did occur. For instance, it is lil<ely the banl<ers early on preferred the more compliant
- Mensheviks to the more independent Bolsheviks, but Lenin got the upper hand. But both groups had the same end and so this
- was not a fundamental division. However, it did lead to a serious problem when Lenin died, as an even more independent sort
- - Stalin - squeezed out the bankers' candidate - Leon Trotzky (real name: Bronstein; whose wife was linked to the Warburgs)
- - and took control of Soviet Communism. Even then Stalin continued to fear Trotzky's powerful connections, and so had him
- tracked down and eventually assassinated in Mexico.
- To pressure Stalin back into the ranks, as C.G. Rakovsky explained, the bankers financed Hitler, who was an avowed enemy
- of communism and openly advocated invading the Soviet Union. Anthony C. Sutton and others have documented the money
- trail from Wall Street to Hitler, which was mentioned above by Congressman McFadden. But it was only on the death of Stalin,
- with the rise of Khruschev et seq., that the Soviet Union was fully back in the ranks, securely under the bankers' control.
- In 1992, The Washington Times reported that Russian President Boris Yeltsen was upset that most of the incoming foreign aid
- was being siphoned off "straight back into the coffers of Western banks in debt service." Much of that debt was incurred under
- the prior communist regimes, which were heavily in debt to the Money Changers.
- Similarly, once in power, Mao Tse-Tung spread his wings and expelled the Soviets from Red China leading to the Sino-Soviet
- rift of the 1960's. The U.S. and the U.S.S.R. initiated an encirclement policy of China including: heavy Soviet troop
- concentrations and border provocations in Manchuria; drawing North Korea and Mongolia tightly into the Soviet camp; placing
- nuclear weapons in Manchuria; arming Tibetan freedom fighters and Taiwanese troops; and establishing important U.S. (now
- Soviet) air and naval bases in Vietnam (such as Cam Rahn Bay) while beefing up U.S. forces in Guam, Japan, Laos and
- Thailand, all under the pretext of the Vietnam War.
- Under this growing pressure, Mao first responded with internal political purges just as Stalin had done, but with the failure of
- the Great Leap Forward and with the U.S. /U.S.S.R. noose tightening, Mao blinked and Kissinger was sent in to strike the deal.
- Still, Mao's price for China's cooperation and integration in the bankers' one-world scheme was obviously high, here is the
- result: the encirclement ended, including U.S. abandonment of South Vietnam and Laos; China got Taiwan's U.N. seat (and
- doubtless a pledge of eventually getting Taiwan itself); a free hand in Tibet, Hong Kong; and gigantic bribes in the form of
- Western development of China.
- This left the Bankers with few obstacles worldwide: Muslim fundamentalism here and there, India's nuclear development, and
- the weak remnants of Western nationalism (concentrated in the large [but rapidly shrinking] U.S. middle class and in a
- minority of the British, French, and Russian aristocracy [e.g. Thatcher and Le Pen]).
- To overcome these, the Russian Empire was dismembered into fifteen nations; the U.K, France and the U.S.A. are gradually
- being submerged into regional and global entities (such as NAFTA, WTO, MAI, EEC, EU, etc.) and Desert Storm et seq. is
- keeping the Muslims on a tight leash while India is being pressured to abandon its nuclear program.
- The bankers' three main regional groupings: the European Union, the proposed American Union in the Western hemisphere,
- and Chinese dominance in Asia, are rapidly bringing to life Orwell's three virtually identical world nations set forth in his book
- 1984: Eurasia, Oceania and East Asia - all set to engage in perpetual war (WWI 1 1 ) with its attendant debt and population
- reduction and control.
- {Orwell got this idea from James Burnham's book The Managerial Revolution: burnham.html -- Peter Meyer's note}
- Wars are complex things with many causative factors. But on the other hand, it would also be equally foolish to ignore as a
- prime cause of World Wars I and II those who would profit the most from war, both financially and politically.
- Senator Nye of North Dakota raised the possibility that the Wilson administration entered WWI, at a critical juncture for the
- allies, in order to protect huge Wall Street bank loans to the allies. During the War the U.S. money supply was doubled to pay
- for it, halving the dollar's purchasing power and so Americans' savings.
- It is also interesting to note that the most belligerent pro-war hawk surrounding President Wilson was a man named Colonel
- Edward Mandell House, the son of a man commonly believed to be a Rothschild agent, who was himself closely associated
- with Wall Street and European bankers.
- The role of the Money Changers is no wild conspiracy theory. They had a motive - a short-range, self-serving motive as well
- as a long-range, political motive of advancing totalitarian government, with the Money Changers maintaining the financial
- clout to control whatever politicians might emerge as the leaders.
- Next, we'll see what the Money Changers' political goal for the world is. ...
- [several pages excerpted here]
- We must learn from our history before it is too late. Why can't politicians control the federal debt? Because all our money is
- created in parallel with an equivalent quantity of debt. Again, it's a debt-money system. Our money is created initially by the
- sale of U.S. Bonds. The public buys bonds, the banks buy bonds, foreigners buy bonds, and when the Fed wants to create
- more money in the system, it buys bonds but pays for them with brand new Federal Reserve Notes (or book entries) which it
- creates out of nothing. Then, whatever new money the Fed creates is multiplied by at least a factor of ten by the private
- banks, thanks to the fractional reserve principle. Actually, exceptions to the reserve ratios allow a much greater multiplier.
- So, although the banks don't create currency, they do create checkbook money, or deposits, by making new loans. They even
- invest some of this created money. I n fact, over one trillion dollars of this privately-created money has been used to purchase
- U.S. Bonds on the open market, which provides the banks with roughly 50 billion dollars in interest, risk free, each year, less
- the interest they pay some depositors. In this way, through fractional reserve lending, banks create far in excess of 90% of
- the money, and therefore cause over 90% of our inflation (approximately 97%).
- What can we do about all this? Fortunately, viewed purely as a technical problem there's a way to fix the problem fairly easily
- (theoretically), speedily, and without any serious financial problems. We can get our county totally out of debt in 1-2 years by
- simply paying off U.S. bonds with debt-free U.S. Notes (or Treasury Department Deposits convertible to U.S. Notes) - just
- 29
- like Lincoln issued. Of course, that by itself would create tremendous inflation, since our currency is presently multiplied by
- the fractional reserve banking system.
- But here's the ingenious solution advanced in part by Milton Friedman, and others, to keep the money supply stable and avoid
- inflation and deflation while the debt is retired. As the Treasury buys up its bonds on the open market with U.S. Notes, the
- reserve requirements of your hometown local bank will be proportionally raised so the amount of money in circulation remains
- constant.
- As those holding bonds are paid off in U.S. Notes, they will deposit this money, thus making available the currency then
- needed by the banks to increase their reserves. Once all the U.S. bonds, are replaced with U.S. Notes, banks will be at 100%
- reserve banking, instead of the fractional reserve system currently in use.
- From that point on, the former Fed buildings will only be needed as central clearing houses for checks, and as vaults for U.S.
- Notes. The Federal Reserve Act will no longer be necessary, and could be repealed. Monetary power would be under
- government control. There would be no further creation or contraction of money by banks.
- By doing it this way, our national debt can be paid off in a single year or so, and the Fed and fractional reserve banking
- abolished without national bankruptcy, financial collapse, inflation or deflation, or any significant change in the way the
- average American goes about his business.
- To the average person, the primary difference would be that for the first time since the Federal Reserve Act was passed in
- 1913, taxes would begin to go down and inflation would cease, preserving the value of their savings, wages and fixed
- incomes. Now there's a real national blessing for you, rather than for Hamilton's banker friends.
- Without their awful money-creating power, the Money Changers would gradually lose their political control and clout. Of
- course, their mass media control is another issue, but even it depends on their massive money-creating power.
- Now, let's take a look at these proposals in more detail. We have drafted a proposed Money Reform Act, which follows at the
- end of this text. Of course, variations with the same results would be equally welcome.
- ELEMENTS OF MONETARY REFORM
- 1. Pay of the national debt with debt-free U.S. Notes (or Treasury department credits convertible to U.S. Notes). As Thomas
- Edison put it, if the U.S. can issue a dollar bond, it can issue a dollar bill. They both rest purely on the good faith and credit of
- the U.S. This amounts to a simple substitution of one type of government obligation for another. One bears interest, the other
- doesn't. Federal Reserve Notes could be used for this as well, but could not be printed after the Fed is abolished, as we
- propose, so we suggest using U.S. Notes instead, as Lincoln did.
- 2. Abolish Fractional Reserve Banking. As the debt is paid off, the reserve requirements of all banks and financial institutions
- would be raised proportionally at the same time to absorb the new U.S. Notes and prevent inflation, which would be deposited
- and become the banks' increased reserves. At the end of the first year, or so, all of the national debt would be paid, and we
- could start enjoying the benefits of full-reserve banking. The Fed would be obsolete, an anachronism. This same approach
- would work equally well in Canada, England and in virtually all debt-based, central bank controlled economies.
- 3. Repeal of the Federal Reserve Act of 1913 and the National Banking Act of 1864. These acts delegate the money power to a
- private banking monopoly. They must be repealed and the monetary power handed back to the government (in the U.S., the
- Department of the Treasury), where they were initially, under President Abraham Lincoln. No banker or person in any way
- affiliated with financial institutions should be allow to regulate banking. After the first two reforms, these Acts would serve no
- useful purpose anyway, since they relate to a fractional reserve banking system.
- 4. Withdraw the U.S. from the IMF, the BIS and the World Bank. These institutions, like the Federal Reserve, are designed to
- further centralize the power of the international bankers over the world's economy and the U.S. must withdraw from them or
- lose its sovereignty and independence. Their harmless, useful functions such as currency exchange can be accomplished
- either nationally, or in new organizations limited to those functions. ...
- Issuing debt- free currency, not tied to bond issues, is not a radical solution. It's been advocated in its parts by Presidents
- Jefferson, Madison, J ackson. Van Buren and Lincoln. It's been used at different times in Europe as well. One current example
- is one of the small islands off the coast of France in the English Channel. Called Guernsey, it has been using debt-free money
- issues to pay for large building projects for nearly 200 years.
- Guernsey is an example of just how well a debt-free money system can work. In 1815, a committee was appointed to
- investigate how best to finance a new market. The impoverished island could not afford more new taxes, so the State's
- fathers decided to issue their own paper money. They were just colorful paper notes, backed by nothing, but the people of
- this tiny island agreed to accept them and trade with them.
- To be sure they circulated widely, they were declared to be "good for the payment of taxes." Of course this idea was nothing
- new. It was exactly what America had done before the American Revolution and there are many other examples throughout
- the world. But it was new to Guernsey, and it worked. The market is still in use, and remember, it was built with no debt to
- the people of this island state.
- But what if we follow Guernsey's example? The resulting advantages would include: no more bank runs; bank failures would
- be very rare (on the rare massive theft); the national debt would be entirely paid-off; the monetary, banking, and tax system
- would be more efficient and simplified; significant inflation and deflation would be eliminated; booms and busts would be
- reduced to insignificance; banker control of our industry and political life would end.
- How would the bankers react to these reforms? Certainly the international bankers' cartel will oppose reforms that do away
- with their control of the world's economies, as they have in the past. But it is equally certain that Congress has the
- Constitutional authority and responsibility to authorize the issuance of debt free money - U.S. Notes, just the same as
- Lincoln's Greenbacks, and to reform the very banking laws it ill-advisedly enacted.
- 30
- Undoubtedly, the bankers will claim that issuing debt-free money will cause severe inflation or make other dire predictions,
- but remember, it is fractional reserve banking which is the real cause of over 90% of all inflation - not whether debt-free U.S.
- Notes are used to pay for government deficits. The simultaneous transition to full reserve banking will absorb the new notes,
- thus preventing inflation, while stabilizing banking and the economy.
- In the current system, any spending excesses on the part of Congress, are turned into more U.S. debt bonds. The 10% of the
- bonds purchased by the Fed (in order to provide the high-powered money liquidity in the capital markets needed to purchase
- of the rest of the new bonds), are then multiplied ten times over by the bankers, causing over 90% of all inflation. ...
- [several pages excerpted here]
- Educate yourself and your friends: read. "When you know a thing to recognize that you l<now it, and when you do not, to
- l<now that you do not l<now - this is l<nowledge." - Confucius
- Our country needs a solid group who really understand how our money is manipulated and what the solutions are, because if
- a depression comes, there will be those who will come forward advancing solutions framed by the international bankers.
- Beware of calls to return to a gold standard. Why? Simple. Because never before has so much gold been so concentrated
- outside of American hands. And never before has so much gold been in the hands of international governmental bodies such
- as the World Bank and International Monetary Fund. In fact, the IMF now holds more gold then any central bank.
- The Swiss are under intense pressure from the Money Changers to dispose of their gold. This is most likely either a prelude to
- the complete demonetization of gold (like silver before it), or to its monopolization and re-monetization by the Money
- Changers.
- Therefore, to return to a gold standard would almost certainly be a false solution in our case. As was repeated in the Great
- Depression: "In gold we trusted; by gold we're busted."
- Likewise, beware of any plans advanced for a regional or world currency - this is another international banker's Trojan Horse
- - a deception to open the national gates to more international control.
- Educate your member of Congress. It only takes a few persuasive members to make the others pay attention. Most
- Congressmen just don't understand the system. Some understand it, but are influenced their bank stock ownership or by
- bank PAC contributions to ignore it, not realizing the gravity of their neglect. Obviously, there is little chance for significant
- monetary reform at present. But if an opportunity ever does present itself, perhaps in a crisis, at least they will have been
- given the information to avoid merely floundering in banker-inspired confusion as did many sincere reform-minded
- Congressmen in the Great Depression.
- We hope we have made a useful contribution to the national debate on monetary reform. It remains for each man to do his
- duty, consistent with his state in life. May God give us the light to help reform our nation, and ourselves. We say ourselves,
- because ultimately vast multitudes of men are going to be driven more and more to desperation by the accumulation of the
- world's wealth in fewer and fewer hands. Men will be tempted more to become like their oppressors, selfish and greedy.
- Rather, let's keep in mind a warning not to lose sight of greater things. As Pope Pius put it:
- "For what will it profit men that a more prudent distribution and use of riches make it possible for them to gain even the
- whole world, if thereby they suffer the loss of their own souls? ..."
- Patrick S.J . Carmack, B.B.A., J .D. on the video:
- ... In 1995, I produced the Money Masters video ... total sales to date are approximately 50,000 units. Interestingly, sales
- have increased almost every year. Apart from a very few personal appearances and a few small ads in 1995, we utilized no
- (zero) advertising to promote it. We do however maintain a website (themoneymasters.com) and a toll-free number (1-888-
- THE-PLOT [843-7568]). So the interest in the video, which is international (the majority of sales in the present millennium
- have been overseas), has been by word-of-mouth. ...
- The videotext I have since rewritten, expanded, added appendices and updated into a 135 page (8-y2"xll") book of the same
- title, which I am updating again. But one can only cram in about 70 pages of dialogue into a SVi hour video. That makes
- explaining the mechanisms and history of modern banking and its political ramifications on video a daunting task. Thus we
- had to hit only the highlights and the core explanations, and cut nearly 21 hours of footage. We simply could not see how to
- get it any shorter than SVi hours and yet cover the topic sufficiently, even for a "popular" video. On the other hand, any more
- than SVi hours would, we thought, be too much for the general public. ...
- The only significant error in the history - which is nevertheless minor - involves the precise circumstances surrounding the
- passage of the U.S. Federal Reserve Act of 1913 in Congress. Congress was indeed "railroaded" into passing the Act, but the
- exact numbers of Congressmen voting given was incorrect. Otherwise the 300-year history has not been successfully
- challenged, in our view. ...
- http://www.themoneymasters.com/making.htm
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