by Kieron McFadden
Introduction It is evident that our economic system is not working entirely to our benefit and, like any cranky, calamity-prone machine upon which we depend, is a serious hindrance to our efforts to survive.
The steady erosion of our standard of living, debt, depressions, recessions, inflation, deflation, credit-crunches, crashes, meltdowns and monetary mayhem, are the symptoms of an underlying cause.
Until the cause is identified and addressed, the symptoms will persist.
A virus, a parasite has invaded and is killing the host.
This essay identifies the virus and describes, in brief outline, its entry into the host and its progress as, over time, it has invaded the organism upon which it feeds.
This analogy is probably not the most apt. It would be truer to say that we are the victims of a massive hoax, a scam that defrauds us of our wealth and resources and plunges us into chaos.
But as you read this and come to understand the enormity of the fraud, realise that what you are looking at is, first and foremost, an opportunity.
Once you have the knowledge of how something works, you can repair it.
This is your world. Take the trouble to see how the power to shape it has been taken from you and you will know how to take it back.
You don't have to be short-changed, punished by punitive taxation, enslaved by debt, ripped off by non-producing parasites and spivs gambling with the futures of millions on the stock markets, dragged into wars or mucked about by the confused idiots masquerading as your government.
Aren't there a few things about your world you'd like to change?
Well, why not?
What else are you going to do with the rest of your life?
WHAT'S BEEN GOING ON?
After World War One, the international bankers - the world's major moneylenders - had already amassed wealth so vast it dwarfed that of entire nations.
In the post-war era those wealthy banking families assumed more and more control over the press and publishing industries.
Put yourself in the position of an international banker. The press barons have built their empires on credit you loaned them. They are mortgaged up to their eyeballs and you could bring them crashing down any time by refusing them further credit or calling in their loans. They are going to be very reluctant to do anything to earn your displeasure, aren't they?
It is hardly surprising then that, as the international banking families assumed control over the world's press and publishing industries, the once hot controversy over how precisely those families amassed their wealth vanished from public view.
That vanishing act has been so thorough that very few people today are aware there ever was a controversy, that the way our money is created and controlled was ever in contention or indeed that there is anything wrong with our money system at all.
Nowadays most people just blame the government as nations sink like scuppered freighters into the fetid waters of their own failed hopes or assume that decline and failure just sort of happen and that's just the way things are.
But things are the way they are because someone makes them that way.
If our economy and our money system consistently fail to run right, that is because someone is making them run wrong. And though the debate over how bankers managed to amass their fortunes and assume power over the economic destiny of an entire planet vanished from the media, the issues themselves were never resolved and the questions never satisfactorily answered.
So we still, as a consequence, live in a world teetering on the brink of economic collapse. The problem does not go away just because somebody sweeps it under the carpet.
Why is the issue of who creates our money so important? If you have read What is money? you will know the answer.
He who controls the creation and distribution of the means of exchange acquires complete power and dominion over all people, groups and nations who must use it in the business of living.
Anyone who can create the money supply and spend it into circulation for his own personal profit can wind up owning everything in the economy - without himself producing any wealth in exchange.
The bankers who have the privilege of money creation know that, and they have worked very hard to protect their privilege and the unimaginable wealth and power it brings them.
They have also been far from honest and good in the way they have gone about hijacking our economic system and using it for their own benefit rather than ours.
Banking as we know it is based on a deceit and fraud. It constitutes what is probably the greatest and most profitable hoax of all times.
James Madison, architect of the United States Constitution, writing way back in the eighteenth century, said:
"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."
So you can see this is not new news. The "money changers" - or international bankers and financiers as we know them today - have been at it for quite a while. All that has changed is that there is hardly anyone left to speak out.
In the words of Larry Bates, economist and author, speaking of the United States' equivalent of the Bank of England:
"The Federal Reserve [bank] really, even though it is not part of the Federal Government, ... is more powerful than the Federal Government. It is more powerful than the President, the Congress and the courts. The Federal Reserve determines what the average person's car payment is going to be, what their house payment is going to be, and whether they have a job or not. And I submit to you that that is total control."
How did all this come about? How was the economic system hijacked? Why doesn't it run smoothly?
This is a malady that evolved. It did not just suddenly spring out of nowhere. It has a history.
Let's start at the beginning.
THE MONEY CHANGERS
Two thousand years ago Jesus discovered money changers had set up shop in the temple and ejected the whole pack of them by force. He was pretty miffed by all accounts.
What was that all about? Those money changers were the distant forebears of our modern bankers and everyone knows banking is a highly respectable profession.
Money-changing was a lucrative profession and this dealing in currency opened the door to other lines of business: money lending for instance.
But what were the money changers doing in the temple that so annoyed Jesus? Well, in those days Jews came to the temple in Jerusalem to pay homage to God. When they did so they had to pay a Temple Tax and the tax could only be paid using a particular coin.
It was a coin of pure silver, about the size of the new five-pound coin recently issued in Britain. At that time it was the only coin around that was pure unalloyed silver and without the head of a Roman emperor on it. It was called the half shekel. For the Jews it was the only coin acceptable to their God and thus the only one they could use to pay the Temple Tax. So before they entered the temple they would change their money for the half-shekel.
This particular coin however did not happen to be plentiful. There were not great quantities of them in circulation. Seeing an opportunity to make some serious money, the money changers had cornered the market on them. Having monopolised the supply of these coins they were able to raise the price of them. The Jews had to have them to pay their Temple Tax and so, because they could not get them anywhere else except from the money changers, were forced to pay extortionate prices for them.
As far as Jesus was concerned this exhibition of greed and extortion totally violated the sanctity of God's House. So he took the money changers by the scruff of the neck and ejected them from the premises.
ROME
Two hundred years earlier the Roman Emperors were already having trouble with money changers who had control of the money supply.
Any economy depends on a sufficient supply of those tokens the society uses to enable goods and services to be exchanged among people and groups. If they become too plentiful, they lose value and if there are not enough of them in relation to the goods and services people are trying to exchange back and forth, economic activity grinds to a halt.
Most civilizations used metal coins (usually gold and silver) as their system of tokens and where they had problems with money those problems usually arose from the coins not being in sufficient supply, particularly where populations, commerce, trade and general economic activity were growing. And of course, where there was a scarcity of the coinage - either accidental or deliberately engineered - those who monopolized the coinage could make themselves very rich very quickly.
Two early emperors tried to limit the growing power of Rome's money changers. Both wound up assassinated.
In 48BC Julius Caesar took the power to coin money away from the money changers and had the government of the day mint the empire's coins and spend them into circulation for the benefit of all.
By making money plentiful and enabling the economy to boom, Caesar made himself very popular - with everyone but the money changers. Shortly thereafter he was assassinated.
When Caesar died, so did the supply of plentiful money as the money changers took back their invaluable privilege of coining silver and gold into money. Taxes and corruption increased and usury, instability and debased currency became the rule.
MEDIEVAL ENGLAND
One thousand years after Christ evicted their forebears from the Temple, money changers were at it again in Medieval England.
Use of gold or silver for coins varied from from time to time but as a rule coins of both metals were in circulation.
These coins provided a medium of exchange that was quite stable relative to our modern money.
In Medieval England there was little or no inflation, prices and costs were stable and the population, significantly, enjoyed a standard of living virtually unequaled right up to the beginning of the twentieth century when technological advance and cheap mass-produced goods made an impact on our lives.
Throughout that period, the money stock grew gradually, the quantity of coins in circulation increasing naturally as mining brought new gold and silver onto the market; some of this was melted down and minted into coinage. The supply of money rose roughly in line with growing demand for it caused by increasing trade.
Occasionally growing economic activity would outstrip the growth in the money supply or the money changers who monopolized the coinage would act in concert to create artificial shortages of money.
When they occurred, such shortages of money created problems for commerce.There would then not be enough money in the pockets of people to pay for all the goods available in the economy: business would encounter problems in selling their products; wages and prices would fall, businesses would fail and there would be a general economic slow-down. The amount of money the Monarch could raise in taxation from a population short of money would also be hit. Another method of adding to the money stock and increasing the quantities of coins in circulation was needed.
One such method was used in the reign of Henry VIII. Henry had relaxed the usury laws and the money changers were quick to reassert themselves by making sure gold and silver coins were plentiful for a few decades. The trick was to call in the gold and silver coins, melt them down and re-mint them with base metals such as tin or copper added. In this way far more coins could be issued without the need to find more gold and silver. Unfortunately, although the volume of the money stock increased, the coins themselves were worth less when used to trade abroad.
Henry VIII's daughter by Katherine of Aragon, Queen Mary, tightened the usury laws again, so the money changers began hoarding gold and silver coins, keeping them out of circulation and creating a shortage of money.
When Elizabeth I, Henry's daughter by Anne Boleyn, came to the throne England's economy was in poor shape. She was determined to regain control of the money system, issuing gold and silver coins from the public treasury in order to break the monopoly of the money changers.
On the "advice" of her "experts" Elizabeth reversed the debasing of the currency, had as much coinage as possible called in and re-minted back into coins with higher gold or silver content.
This did give England more spending power abroad but it meant that fewer coins could be put back into circulation than had been removed. The volume of money in circulation dropped sharply and England felt the full impact of a money shortage, the phenomenon we know today as a depression. Wages were forced down and so were prices. Profits were hit and poverty increased dramatically. Merchants, farmers, tradesmen and artisans all suffered.
Living standards actually fell lower than those of the previous century. Merchants and farmers sought markets abroad, trading the country's produce for gold and silver and as gold and silver began to find its way into the country, the actual wealth of the county - the food, textiles and other finished goods the people created - went overseas.
Money lending - usury - became an important component of economic life as it always does in a situation where there is a shortage of money.
Usury had been around for a long time. In its original form it involved someone who had gold or silver lending it to someone who did not and charging interest on the loan. In this form it did not add to the amount of money in the economy.
But as loans were repaid at interest or property was repossessed where borrowers defaulted, buying power and material wealth was gradually redistributed into the hands of the money lenders.
TALLEY STICKS
On the whole, the Middle Ages were a period of prosperity and expansion for England and although by the end of the era instability was beginning to set in, at the end of Elizabeth 1's reign the nation had emerged not only as a major maritime power but probably the richest and most powerful country in the world.
Alongside the mostly stable but occasionally scarce gold and silver currency there existed another, mysteriously half-forgotten form of money that is worthy of note. It was a currency the money changers were unable to either control or manipulate and had England made more use of it, she may well have saved herself a great deal of economic trouble.
Around 1100 AD, England's King Henry I had been having trouble with the money changers. England's money changers were her goldsmiths and King Henry had been resolved to remove from them their hold over the nation's money supply.
What he needed was something else that could be used for money that was neither gold nor silver.
He could have used anything: sea shells, bird feathers or what-have-you but what he chose was a system quite ingenious, which enabled a currency to circulate permanently out of the power of the goldsmiths. This new form of currency was in circulation for 726 years, right up to 1826 and right through England's greatest period of prosperity and expansion.
This was the Talley Stick, a currency made out of sticks of polished wood. The stick was cut with deep notches, the number of notches indicating the denomination. It was split in two, lengthwise, creating two matching halves. The King kept one half to provide a record and to protect against counterfeiting and spent the other half into the economy as money.
Why was it that for 700 years sticks of polished wood worked perfectly well as money?
Money is just a system of tokens: anything can be used as that system, provided people have confidence that it can at any time be exchanged for goods. It does not matter if one uses the Talley Stick, tins of Nescafe or pieces of paper with the Monarch's picture on it. Money is just an idea in which people have confidence and which people agree to use as money. Henry created that agreement and confidence by putting his government's backing behind it. He did that by demanding the Talley Stick as payment for taxes. This made the Talley Sticks valuable and trusted.
With the exception of metal coins, which date back to antiquity, no other form of money has worked so well and for so long as Talley Sticks. Paper money, for instance, has been around for a far shorter time.
All through England's expansion and rise to world power, the Talley Stick was in use.
The money changers constantly attacked it, naturally, favouring the use of gold and silver coins. Shortly after it was formed in 1694, the Bank of England attacked the Talley Stick because it was money operating completely outside the money changers' control, just as Henry had intended.
THE GOLDSMITHS
By the sixteenth century a new form of money had appeared. Instead of taking the form of gold or silver coins, the new money comprised promises written on pieces of paper.
With the advent of promissory notes, a deceit entered in that enabled new money to be created and to enter existence as debt and at that point we enter the realms of serious difficulties because money ceases to be true money and becomes a counterfeit. It lies at the foundation of our modern banking system.
The money changers of the time were the goldsmiths, natural enough as the goldsmiths had the premises and equipment necessary for working with precious metals.
And working with precious metals, they had to have the means of storing them safely and securely.
So began the practice of storing gold for other people, a service for which the goldsmith would charge a fee. The goldsmith had his vaults or strongboxes and a fee was worth paying for peace of mind. No merchant slept easily with a musket by his bed and a stash of gold or silver under his floorboards.
When someone left his gold with the goldsmith for safe-keeping in his vaults, the goldsmith would issue the depositor with a receipt for the gold. If the depositor left (say) five ounces of gold with the goldsmith, he would take away with him a receipt for five ounces of gold, a promise that if he came back later and presented the receipt, five ounces of gold would be returned to him. The promissory note was therefore worth five ounces of gold.
These promissory notes became the first paper money. They were easier to carry around than bags of gold. Soon people began using the notes to pay for things instead of the gold they represented and the notes passed through many hands. People were happy to accept them as payment because they were convenient and they were worth the gold they represented because one could at any time take the note to the goldsmith and exchange it for gold.
The goldsmiths noticed that the notes began to circulate for longer and longer periods and people would turn up with less and less frequency asking to exchange them for the gold they represented.
The goldsmiths had long been in the practice of lending out any spare gold they had at interest but now they found that, as people left gold with them for safekeeping, they had larger amounts of gold sitting in their vaults doing nothing.
As people were content to leave it there for long periods, why not lend that out as well? When the debt was repaid the gold could be replaced and the goldsmith pocket the interest. Thus the goldsmith could charge both for storing the gold and for lending it out!
But if everyone was happy to take promissory notes because they were more convenient, why not lend the borrower a promissory note and leave the gold safely stored in the vault? Thus the goldsmiths began lending promissory notes.
But if the goldsmith gives the depositor of a certain amount of gold a promissory note then gives a borrower a promissory note based on that gold deposit, there are now TWO promissory notes in circulation for the SAME quantity of gold: one held by the depositor and one held by the borrower. This of course is a fraud. Both notes promise to pay the gold on demand but it is a promise that is impossible to keep because the same quantity of gold cannot be handed over twice. If one promissory note is honoured, the other cannot be. One of the promises is a lie and a deception.
As both notes now circulate as currency, they double the amount of money in circulation at the stroke of a pen. It also means that as soon as the second promissory note was written, money was created out of nothing.
Soon the goldsmiths realized that as people rarely turned up all at once wanting their gold and as no-one had rumbled the fraud, they could extend it a bit further.
If one could issue two promissory notes for the same item of gold, why not issue ten?
So began the practice known as Fractional Reserve Lending. This is a respectable-sounding name for a deceit and fraud that allowed the goldsmiths to lend money created out of nothing and it is still the core and foundation of modern banking.
Put simply, it works like this. The banker has (say) £20 worth of gold in his vaults. He has a printer print up a promissory note for that £20 and gives it to the depositor. He then has nine more identical promissory notes drawn up fraudulently claiming to represent the same £20 of gold. This gives him promissory notes worth in total £200, while only a tenth of that amount sits in his vaults. He lends the other nine promissory notes to various borrowers, each note pretending to represent the same £20 deposit. In effect the banker is lending the same money nine times over. And for every £20 deposited he is CREATING £180, effectively out of thin air!
The £180 created by a stroke of his pen is loaned out and circulates in the economy where it is used as money. The £180 thus lent is eventually repaid by the borrowers - usually in REAL GOLD - PLUS (say) an additional £20 in interest. In other words the banker had created for HIMSELF the grand total of TWO HUNDRED POUNDS out of thin air, and initially based on promises to pay gold that did not belong to him in the first place!
But to carry this example further: when the borrowers repay their £180 of loans, plus £20 in interest, the goldsmith rakes in £200 that he can place in his vaults. Added to the original £20, this makes £220. But now he can use that as a reserve and by fractional reserve lending lend out promissory notes to ten times that value. He lends out £2200 at (say) 10% interest and when the loans are repaid, rakes in £2420, which added to the £220 sitting in his vaults, makes a total of £2640. This forms the reserve against which he lends out £26400 and so on.
As time goes on of course, there just is not enough gold around for all debts to be repaid in gold. However there are plenty of promissory notes. Debts start to be repaid by borrowers in promissory notes instead. No problem. The notes are accepted as money and can be used just like gold to buy things. He can accept promissory notes as payment, add them to his reserves and lend out ten times that in more promissory notes.
A somewhat simplified example maybe, but not as simplified as you think. You now understand the essence of modern banking.
It is the greatest get-rich-quick scheme ever invented.
If you wondered how Planet Earth's handful of elite banking dynasties became richer and more powerful than nations, well that's the scam at the core of it.
But it gets worse.
The early bankers, the Goldsmiths, did not always get away with it. From time to time too many people would turn up at the Goldsmith's stall with promissory notes demanding gold. If the promissory notes being waved under his nose amounted to more than the amount of gold he actually had in his vaults he was faced with promises he could not keep.
The term "bankrupt" comes from Italy where the bench or "bank" from whence the failed fraudster had plied his tried would be broken up - probably by angry customers using the goldsmith's head as a hammer.
Just as the practice of lending non-existent money has a modern polite name - fractional reserve lending - so situations where money lenders were caught out has a polite name too: a run on the bank. Either way it amounts to the same thing: fraud, deception and promises that cannot be kept.
There was however a way out for the goldsmith. While he might receive demands for £100 of gold where he only actually had £20 in his vaults, he had issued promissory notes as loans to many debtors: he could save his own hide by contacting his borrowers and calling in their loans, demanding they be repaid in gold - where no gold had been lent in the first place! In other words the dishonest promises he had made to pay on demand gold that did not exist were backed up by larger amounts owed to him by debtors, based on loans he had made of gold that did not exist. And if his debtor could not come up with the money? This was no problem where loans were secured against the borrower's property. The property could be seized by the goldsmith and sold off to raise the gold he owed to his own creditors. Thus a sinking goldsmith could drag a lot of innocent people, who had acted in good faith, down with him, or survive by dumping poverty and hardship on someone else. In fact the goldsmiths sometimes foreclosed on a debt even when they did not need to in order to acquire property worth more than the original debt.
As the goldsmiths got richer and more influential they would buy and operate from business premises. Swanky business premises and nice clothes gave them an air of respectability. What more respectable a profession could there be than banking?
Another point to bear in mind: fractional reserve lending enables a banker to lend out ten times what he has on deposit. Thus, where ten borrowers are loaned the same money and each borrower is loaned the money at 8% interest, the actual interest the banker is making on that money is TEN TIMES 8%. In other words 80%. Example: The banker has £20 on deposit. He lends that £20 to one person at 8% interest. When the loan is paid back, he receives the £20 loaned plus £1.60 in interest. If he makes that same loan to nine more people and makes interest of £1.60 each time, the total amount of interest he has made on that £20 is £16!
Remember that the next time you think how nice the bank is being lending you money at interest.
USURY
In the Middle Ages the law of the Catholic Church forbade the practice of charging interest on loans. The charging of interest on money - making a profit without actually doing any useful work - was not considered virtuous. Secular law tended to reflect church law, so it was common for the charging of interest on money to be regarded as a crime known as Usury.
As commerce grew and with it opportunities for investment, particularly in the late Middle Ages, the restrictions were eased somewhat as it became recognized that the practice of lending did involve a risk for the lender and, while his money was out on loan, lost opportunity. In recognition that a genuine service could be performed by the practice of lending, some charges were allowed but not interest as such.
However there is a vast difference between charging someone for the temporary use of one's own money and charging interest for the use of false promissory notes purporting to represent something that does not exist! And in the latter case there is neither risk for the lender nor lost opportunity.
None other than Sir Josiah Stamp, Governor of the Bank of England during World War Two, summed up the morality of the fraud thus:
"Banking was conceived in iniquity and born in sin. Bankers own the earth, take it away from them but leave them with the power to create credit; and, with a flick of the pen, they will create enough monmey to buy it back again. Take this power away from them and all great fortunes like mine will disappear, and they ought to disappear, for then the world would be a happier and better world to live in. But if you want to be slaves of the bankers and pay the cost of your own slavery, then let the bankers control money and control credit."
PROFIT BY THE MISFORTUNE OF OTHERS.
The money lenders/early bankers soon discovered that even more profits could be made by manipulating a nation's economy. This was done by periodically tightening up on money supplied to the economy through lending; then making money easy to borrow and thus plentiful; then tightening up on it again.
You have already seen how the practice known as fractional reserve lending (FRL) enabled the bankers to greatly increase the amount of money in circulation simply by creating it out of thin air.
Money thus created and loaned into existence soon became a major component of the total money supply. In fact its proportion has gone on increasing to a point where today it comprises a staggering 97% of all the money in circulation. Hard currency - the notes and coins issued by the government and spent (not loaned) into the economy - is now a meagre 3%.
But even in earlier times, debt-money created by the bankers was significant enough in volume to affect the entire economy.
The bankers evolved a scam that works like this: when they made money easy to acquire by offering cheap loans, money was plentiful and economic activity picked up. Businesses expanded. More money was then needed to match the increased production and as loans were cheap and "consumer confidence" high, people could be seduced into taking out more loans.
The bankers would then tighten the money supply by making money (loans) more difficult and expensive to get. What would happen then, is by and large what happens today when the money supply is tightened: increased repayments on past borrowing reduces disposable incomes - the amount of money people have available to spend on goods and services. This hits industry's ability to sell its goods and prices drop. Industry also has increased interest payments to contend with so between its own increased interest payments and falling prices, profits are hit. Wages go down and/or businesses go bust. People are thrown out of work so they no longer are earning wages they can spend on industry's goods and services but they STILL have to pay off their own loans, taken out in better times. So people find the property against which the loan was secured is repossessed. As less money is being issued into the economy by lending and more money is being removed from it by increased repayments there is a shortage of money created throughout the economy. But as the banks have tightened up on lending new money into existence, the shortfall is not replenished. The shortage of money continues until - and not before - the bankers decide to allow more money into the economy by making borrowing easier. It's called a depression. Depressions happen because those who control the money supply MAKE them happen.
When the banks tighten the money supply in this way, a certain percentage of people will not be able to meet their loan repayments or borrow more money in order to reschedule loans they can no longer handle. People go bankrupt and to settle their debts, have to surrender the assets, property or land against which the debt was secured to the money lenders, usually at much less than their market value. And those who survive flow more money into bank coffers through increased interest payments.
That's the scam. It worked when the money lenders dreamed it up four hundred years ago and it still works today. Ease off on the money supply and create a boom, seduce lots of people into borrowing, then tighten up on the money supply knowing that a certain percentage of people will go bust. As each boom and bust cycle unfolds the money lenders cream off a slice of the nation's wealth.
These boom and bust cycles - given the technical sounding name of the Business Cycle - have been engineered for so long many people assume they are natural phenomena. The truth is they are entirely created and very easily engineered.
THE ENGLISH CIVIL WAR
Although religious differences fueled the civil war, the bankers certainly played a central role in that they financed Cromwell's successful efforts to overthrow the King in 1649.
Cromwell had been able to raise The New Model Army with which to defeat King Charles I. This army was a modern fighting force, splendidly equipped and trained and highly professional, financed by money loaned by the financiers of the day.
The bankers were then given favourable treatment and enabled to consolidate their own power by a government whose victory they had financed. For the next fifty years, the country was plunged into a series of wars that were costly for the country but highly profitable for those who loaned the money to finance them.
The Monarchy was re-established in 1660 after Cromwell's death and the royal line of the Staurt Kings was restored.
AND LO! A CENTRAL BANK WAS BORN!
Conflict between the bankers and the Stuarts led the bankers to act in concert with bankers in Europe. They joined forces with those in the Netherlands to finance the invasion of England by William of Orange, grandson of the deposed Charles I via Charles' daughter Mary. William overthrew the Stuart Kings in 1688 and became King William III.
By the end of the 1600s England was in financial ruin, gold and silver supplies were running low and a costly civil war followed by costly wars with France and Holland all in a fifty year period had left her up to her eyeballs in debt.
Government officials met with the financiers to negotiate the loans they needed to pursue their political goals.
King William, financed by the bankers six years earlier when he invaded England and took the throne, was £20 million in debt and could not pay his army. Apparently it did not occur to William or anyone that if William needed to pay his army or get the economy going, all he had to do was have the government print its own money and use that to pay the troops!
King Henry had done a similar thing using Talley Sticks six hundred years earlier and they were still going strong. All they had to do was get busy polishing up a few more lengths of wood!
But William was a soldier, who once he had finished invading England, he had gotten busy beating up the Irish, and what he needed was a quick fix, one that did not involve too much thinking. He was not a native in any case; and perhaps he was not too concerned about the future consequences to the English nation of the solution he and his financial backers came up with.
His "friends" the bankers were willing to loan him the money he needed but the price they wanted for their "help" was high. They wanted a government-sanctioned but privately owned central bank that could, through fractional reserve lending, create money out of nothing and loan it to the government.
They got their way. In 1694 the world's first privately owned central bank was created. It was to be called the Bank of England. The Bank's charter included the following immortal words:
"The bank hath benefit of the interest on all monies which it creates out of nothing."
Instead of exercising its right to create money and spend it into the economy, the government had the bank create it, then lend it to the government so that the government could spend it into the economy, then pay the loans back later at interest.
That completely unnecessary complication was to have devastating consequences for the futures of the English people. As well as delivering extraordinary power over the nation into the hands of a private profit-motivated corporation, it began the National Debt, a debt that would go on increasing remorselessly over the ensuing years until, in the present day it has reached over £380 billion, costs £30 billion a year in interest payments and is still climbing.
By that time, the end of the 17th century, the role of the banks in issuing the nation's supply of money had become widely accepted. Money was borrowed into the economy by two routes: private and commercial borrowing on the one hand and government borrowing on the other. The combined debt in the present day is now well over one trillion pounds.
In 1704, just ten years after the creation of the Bank of England and two years into the reign of Queen Anne, William III's successor, the banks' promissory notes, on the recommendation of the bankers and financiers who advised the government, were declared legal tender.
It is worth reflecting on the name of the new bank. Although it was an entirely privately owned corporation, the name chosen for it led generations of Englishmen to believe that it was part of their government, when it most certainly was not. Like any other privately owned corporation it sold shares to create its initial capital. Its investors - whose identities were never disclosed and may easily have been foreign financiers with no loyalty to or concern for the nation whose economy the bank was to dominate and manipulate over the ensuing centuries - were supposed to put up a total of £1¼ million in gold coin to purchase their shares. Only £¾ million were ever received. Nevertheless the bank was chartered in 1694 despite that minor technicality and started out on the business of lending out several times the money it supposedly had in its reserves.
In exchange for this unique and immensely profitable risk-free privilege, the bank would very kindly lend the English and later British government as much money as it wanted, at interest, provided the debt was secured by direct taxation of the people.
This legalistically of the Bank of England amounted to legalization of the counterfeiting of a national currency for private gain and at the cost to that nation that would prove to be completely un-repayable and go on mounting year after year to truly astronomical proportions.
Why does a national debt escalate? Let's strip it back to its inherent simplicity.
NATIONAL DEBT
Suppose a national economy can jog along just nicely with £10 million in circulation. That £10 million is just about the right level of money supply to enable exchange to occur freely between producer and consumer, without the over-supply of money called inflation or money shortages known as deflation.
Suppose there is an increase of economic activity due to more goods coming onto the market, the opening up of trade routes, population growth or some such cause. The economy now needs £11 million pounds to be able to function smoothly. Instead of creating the money the government borrows the extra £1 million from the bank at (say) ten per cent interest. The added supply of money enables the economy to function smoothly.
But what happens when the debt comes due for repayment? The government repays the £1 million to the bank plus £100,000 interest and settles the debt. But that leaves only £9.9 million in the economy, LESS than it started with and now £1.1 million less than it currently needs. So the government borrows the £1.1 million it is short of from the bank at 10% interest. The economy now has £11 million again. But the debt has to be repaid and when it is the government has to remove £1.1 million plus £0.11 million interest from the economy to pay it off. The economy is now £1.21 million short of what it needs. So the government borrows £1.21 million to cover the shortfall and when it pays of that loan plus interest, the economy is now short of £1.331. So the government borrows that.....
And so on. As this continues, the level of debt grows in proportion to the total money supply. At each stage to pay it off and not replace the money taken out of circulation by so doing, leaves the economy short of the money it needs to be able to function properly. The amount of money that has to be borrowed just to sustain the money supply at a certain level, always increases. It quickly becomes impossible to get out of debt.
But the borrowed money is soon spent and circulates in the economy. It is now, along with the rest of the money supply, in people's pockets or bank accounts. How does the government remove from the economy the money it must pay back to the bank? The obvious answer to that is: taxation.
By taxing the population the government raises the money it needs to pay off its debts. But the government will already have been raising taxes from its people to pay for the various services it provides: health care, education, roads, defense and so on. The burden of repaying the national debt is added to that existing tax burden and as the debt escalates, it creates an upwards pressure on taxation levels.
Those taxes are being levied on a population already burdened by their own debts. As you will see in The Worm in the Apple, Government borrowing is one route by which the money supply is maintained or increased, the other route is businesses and individuals borrowing from banks.
Where money is supplied to the economy by borrowing from banks, then borrowing must occur, either by the government or by the population. If there is no borrowing there is no money supply. In just the same way governments go deeper and deeper into debt in order to maintain or increase the money supply, then so amongst the population, the debt tends to increase. If government does not borrow then the population has to, if government shoulders a greater burden for borrowing money into the economy, then the pressure on the population to borrow tends to decrease.
Either way an economy becomes riddled with debt - and either way the population is paying for it, either through taxes or through direct debt repayment.
Let's now take a closer look at how this government borrowing occurs and what it really means.
GOVERNMENT BORROWING - SIMPLE FUNDAMENTALS
The government prints up bonds, which are merely glorified IOUs, promises to pay certain amounts of money at a future day PLUS INTEREST. These IOUs are then sold to the central bank for whatever value is printed on them (say, £1000). The money the bank uses to buy them is money created out of nothing by the fractional reserve borrowing trick discussed earlier. That money is then used by the government to finance whatever government projects it wishes to finance: building roads, public works, poor relief, or knocking the stuffing out of its neighbours and so on. When the IOU matures, the government has to pay back the £1000 plus interest. The rest you know.
It probably has not escaped your notice that if the government can draw up a bond, write the number £1000 on it and sell it to a bank, spend the proceeds from the sale on whatever it requires to spend the money on then later pay back the £1000 plus an amount of interest it has to raise from taxation, it could just as easily draw up a note, write £1000 on it and spend it into the economy. In fact far more easily. The £1000 would remain circulating in the economy, free of debt and the population would be saved the extra tax burden of paying interest to a bank that conjured the money out of thin air in the first place.
What the whole scam amounts to is an extra tax or toll paid by the people for the privilege of using their own money!
The stupidity and injustice of the system has remained difficult even for political leaders to see, partly because it is so fraudulent and so crass nobody can quite believe anyone would be that devious, or stupid; partly because of its breathtaking audacity, and partly because it is obscured by a smokescreen of complexity and economic gobbledegook. When's the last time you listened to a politician or "expert" explaining why we can't pay nurses a decent wage or our coal industry has to be shut down so we can import coal from Poland and wound up knowing what the hell he had been talking about? And if you couldn't follow what was being said, you assumed it was you didn't you? Economics is just too complex for the likes of us, better leave it to the experts! Well, if the experts are so expert, how come this nation is in such a mess?
Everyone assumes there must be some sense or purpose to it all, some underlying logic because, if not, surely respectable bankers and capable politicians would not be party to it. Unfortunately there isn't and they are.
BOOM, BUST AND WAR
With the formation of the Bank of England and the government embarked upon racking up an un-repayable and completely unnecessary debt like an athlete hell-bent on suicide-by-steroids, the nation was soon awash with money. Don't forget that the country's other banks were still hard at it lending counterfeit money to private individuals and businesses. Loans were being granted for any wild or hare-brained scheme.
By 1698 government debt alone had grown to £16 million in just four years and taxes were increased then increased again to pay for all the borrowing. Private individuals and businesses meanwhile were also going deeper and deeper into debt. And what did the bankers do once all and sundry had been seduced into borrowing?
You guessed it! The banks tightened the money supply, called in loans and demanded higher interest payments, reducing the amount of money in circulation below a level the economy needed to function properly and keep growing. Contraction of the money supply contracted economic activity, throwing the country into depression. In fact the economy began to experience endless rounds of booms and depressions - the very phenomena central banks claim to prevent. England's money and its economy has rarely been stable since the creation of the Bank of England. And with every depression came bankruptcies, lay-offs, closures and repossessions of property and land.
It is worth reflecting that the country could and still can swing very rapidly from boom to depression. One minute it is highly productive, its economy just whizzing along and the next "clunk!" depression. Suddenly people no longer want to buy shoes, potatoes, wines, pots and pans, roof tiles or the Sunday roast the way they did just weeks or even days before? Apparently there's a "drop in demand," as if everyone has suddenly gone off the idea of having the necessities and perks of life. So prices go down, profits are hit and all the rest. But what really has changed between boom and depression? People have not changed, the farms, fields and factories and their capacity to produce have not changed, people's needs and wants have not changed. What has changed is the money supply. Suddenly the consumer no longer has sufficient spending power with which to EXPRESS his demand.
Depressions were particularly cruel in earlier times: people went to prison for unpaid debts, even where the debts had suddenly been rendered unrepayable by a hike in interest rates that was no doing of their own. The impact of a depression was absolutely devastating to the poor and agriculture was particularly badly hit then as now because loans were raised against land and the productive cycle of farming - the time between tilling and sowing and the harvest and sale of finished goods where money could be recouped - is a long one.
In 1705 things had gotten so dire that John Law called for a commission to be appointed by Parliament with the task of creating and lending paper money on the security of land ownership. Land could not be taken abroad like gold or silver, which were under the control of the money lenders, and thus deprive the nation of the reserves against which it raised money. His idea was to create a regulated steady flow of money into the economy out of the hands of the money lenders and thus avoid the wild and devasating fluctuations the nation was experiencing.
By the mid 1700s Britain was nearing the zenith of its world power but since the creation of the Bank of England had found herself embroiled in a further series (four) of costly European wars in just fifty years. Government debt had reached £140 million, a truly staggering debt that colonization of half the planet had not managed to alleviate in the slightest. It was a desperate government's attempts to raise revenue by taxing the American colonies that eventually sparked the American War of Independence, of which more later.
In 1746, Bishop Berkley had this scathing criticism of the financial system and the economic instability that derived from it. He asked:
"Whether the quantities of beef, butter, wool and leather exported from these islands can be reckoned the superfluities of a country, where there are so many natives naked and famished? Whether we are not in fact the only people that may be said to starve in the midst of plenty? Whether it be not a mighty privilege for a private person to be able to create a hundred pounds with the dash of his pen?"
In 1793, King Edward wrote: "The issuing out of any notes for general circulation ought to be as sacred to a government....as the issuing out of gold and silver coin is sacred to a government and to the mint at the Tower."
In 1797 England faced yet another war with France. Much of England's gold and silver had found its way abroad and the shortage caused a crisis. With so little gold and silver around banks were completely insolvent.
Of course they had in reality always been insolvent by virtue of issuing promissory notes against reserves they did not have but by that year the banks' lending of paper notes vastly exceeded meagre gold and silver reserves.
Between 1794 and 1796, Bank of England gold reserves "fell" from £7 million to £1 million. The major banks began to restrict their lending sharply but this precipitated further economic slow-down and warned depositors that a crisis was afoot. It caused people to rush to exchange their money for gold and an all out run on the banks seemed immanent.
This had happened now and again in the past but this time it was threatening to happen just when England was poised for war with France, which was embarrassing as well as inconvenient. The remaining gold stocks had to be protected at all costs because they would be needed for waging a major war in Europe. English notes could not be spent abroad because they were generally not trusted.
In 1797, for the first time in England's history, the exchange of notes for gold was officially prohibited, a restriction that was to last until 1815. This deprived depositors of access to gold that was strictly speaking their property and left it in the hands of the bankers to do with as they wished. It probably did not make anyone feel any better about it knowing their gold was going to be put to work killing Frenchmen.
The currency was now only based upon bank lending. Banks regulated their lending much as they do today, but balancing the paper money loaned to borrowers against re-deposited paper money.
Government debt had stood at £16 million in 1698, a century later it had soared to £300 million and then over the ensuing years had taken off like a rocket, reaching a staggering £773 million in 1815 as the government had borrowed feverishly to finance its simultaneous wars with Napoleon and the United States.
The war with Napoleon ended at Waterloo in 1815 and it is here that a character called Nathan Rothschild enters the scene with a breathtaking scam that luridly illustrates the power and willingness of the international money lenders to fleece entire nations.
THE DAWN OF THE AGE OF THE ROTHSCHILDS.
In 1743, forty nine years after the Bank of England opened for business, a goldsmith by the name of Amschel Moses Bauer opened a coin shop or counting house in Frankfurt, Germany.
Over the door he hung a sign depicting a Roman eagle over a red shield. The shop became known as the Red Shield (Roth-schild) shop. When Bauer's son - also called Amschel - inherited the family business, he decided to change his name to Rothschild.
Amschel Rothschild soon learned that lending money to governments and kings was more profitable by far than lending it to lesser mortals. The loans were bigger and what's more could be secured against the nation's taxes. In other words they had as security the labour of entire peoples.
Rothschild had five sons, all of whom he trained in the black arts of lending insincere promissory notes and how to use the resultant profits to best effect. He sent them out to the major capitals of Europe to further the family banking business. His oldest son, also called Amschel, remained in Frankfurt; Solomon went to Vienna, Nathan (the cleverest) to London in 1798 at the age of 21; Karl to Naples and Jacob to Paris.
In 1785 Rothschild senior had moved his entire family to a large five-storey house they were to share with another banking family, the Schiffs. The Rothschilds and Schiffs would for the next two hundred years, right up to the present day, figure prominently in Europe's, America's and indeed the world's banking history.
The Rothschilds broke into big-time dealings with royalty at Williamshalt, the palace of Prince William of Hesse-Hessel. Prince William at that time was the richest man in Germany and probably in all of Europe.
When the business relationship began, the Rothschilds were merely helping William speculate in precious coins but when Napoleon invaded the principality and forced the prince into exile, William sent £550,000 (an enormous sum in those days) to Nathan Rothschild in London, with instructions for him to buy British government bonds with it.
Nathan had bigger and better ideas and without his client's knowledge he used the money for his own purposes. With Napoleon on the rampage and all of Europe embroiled in costly war, Nathan knew that the opportunities for investment, so far as the unscrupluous were concerned, were enormous. War had always been the most profitable scenario for the money lenders with governments on both sides desperate to borrow funds to finance their war efforts.
In 1815, just prior to the battle of Waterloo that finally ended Napoleon's career, Prince William had returned to Williamshalt, then summoned the Rothschilds and asked for his investment back. The Rothschilds were able to return his money along with the interest he would have made had it been used as instructed to buy British government bonds. They kept for themselves the vastly greater profits they had made using their unsuspecting client's money. Nathan Rothschild later boasted that in the seventeen years he had been in England, he had multiplied the original stake of £20,000 given to him by his father by 2500 times!
However much of a killing Nathan had made using Prince William's money it was nothing to the killing he was soon to make on the London stock market a day or two after Napoleon's defeat at Waterloo.
NAPOLEON
Napoleon, as a matter of interest, was not entirely happy with the central bankers either. The Bank of France was established in Paris in 1800, interestingly enough just after the anarchy that toppled the country's monarchy and aristocracy and installed in power the merchant/entrepreneurial classes, along the same lines as the Bank of England. However Napoleon was uneasy about his country's reliance upon international bankers to create its money, believing that when such a reliance exists, the bankers are in control:
"The hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
In 1803 Napoleon struck a deal with Thomas Jefferson, the incumbent third President of a United States that had only become independent of England twenty years earlier. For $3 million in gold the United States purchased from France a large chunk of French territory west of the Mississipi river - a deal that became known as the Louisiana Purchase.
Napoleon used the money to raise an army without the need to borrow from the international financiers he so mistrusted. He set off across Europe generally having a whale of a time attempting to inflict on everyone else, at gunpoint, his own version of the Roman Empire. Which just goes to show that a mistrust of the banking system does not of itself mean that one is a balanced and well-rounded human being.
The equally balanced and well rounded human beings that dictated the policy of the Bank of England mobilised to oppose the little Corsican, heroically lending vast sums of money to every nation in his path in order to defend civilisation-as-we-know-it and in so doing, naturally, reaping the vast profits that were to be made from nations at war. Prussia, Russia and Austria all plunged heavily into debt in failed attempts to defend themselves against Napoleon's advance.
Four years later, with Napoleon's main army in Russia, Nathan Rothschild masterminded a plan to smuggle a gold shipment through France to the Duke of Wellington in Spain. The adventure succeeded, providing much needed funds that enabled Wellington to successfully attack Napoleon's empire from Spain. Shortly thereafter, at a dinner party in London, Nathan boasted that it was the best business he had ever done.
But that was 1808. Waterloo was still seven years in the future. Nathan Rothschild was destined to do much better still.
Wellington's attacks from the South and other defeats by an alliance of England, Austria, Prussia and Russia eventually forced Napoleon to abdicate in April 1814 and he was exiled to the island of Elba while Loius XVII was crowned King of France.
In March 1815, Napoleon escaped from exile on Elba and returned to France. The King sent a troop of soldiers to arrest him but such was Napoleon's popularity that that the soldiers rallied around him and proclaimed him their emperor once more. Napoleon regained power and held it for one hundred days, long enough to raise an army and throw it into battle against an alliance of England and Prussia at Waterloo, which is now in Belgium.
Some writers claim that Napoleon borrowed £5 million from the Bank of England to finance his come-back and others that it came from a banking house in Paris. Perhaps it does not much matter: no-one knows the identity of the financiers who owned the Bank of England and it is entirely possible that both banks were owned or controlled by the same men, or the same clique. Certainly from around that time it became common for the same bank to fund both sides in a war. War is the biggest debt-producer there is. The ultimate loser of a war can be loaned just enough to keep him going in the hope of victory while the winner is loaned enough to win. That way the outcome can, upto a point, be controlled whilst huge profits are made from both sides. Such loans are usually given on the guarantee that the victor will pick up the debts of the vanquished.
Be that as it may, Napoleon got his funding, raised his army and met Wellington's army at Waterloo. History records that he was defeated, abdicated again and was exiled to St Helena where he died. However, while the battle was raging the outcome was by no means certain and quite possibly if Napoleon had attacked Wellington's army a few hours sooner, he might have won. But that's life.
In London, Nathan Rothschild - an anti-social personality if ever there was one but unfortunately clever with it - had worked out how to seize control of the London stock market and probably even the Bank of England, no matter which side won. All he had to do was make sure he knew the outcome of the battle before anyone else did. If people believed England had won, the stockmarket would rise. If people believed England had lost, the market would crash. All he had to do was make them believe the opposite of what was true.
So Nathan had the foresight to station a trusted agent on the north side of the Waterloo battlefield - a man named Rosworth. As soon as the watching Rosworth could see that Wellington had won the day he raced back to London and arrived there a full day ahead of Wellington's own couriers. Rosworth reported straight to Rothschild with the result of the battle. Rothschild rushed to the stock market and took up his usual position in front of an ancient pillar. Rothschild was a familar figure, having been in England as head of the London branch of the Rothschild empire for seventeen years by then. The Rothschilds had a legendary intelligence network that criss-crossed Europe and everyone present that day watched Rothschild nervously for some indication that he had already received news of the battle.
If England had lost and Napoleon was dominant in Europe again, the country's financial and trade position would be dire, particularly as during his earlier reign Napoleon had imposed a a ban on British goods throughout his vast empire, its allies and dependent states.
Standing in front of his pillar, aware that all eyes were upon him, Rothschild contrived to look downcast. He then began selling.
Everyone knew what that meant: England had lost. A panic ensued in which people scrambled to sell their British Government bonds. The bonds as you will recall, were the IOUs the government sold to raise money, buying them back at interest when they matured. To buy a government bond was usually a sound investment but if the nation was in serious trouble, with the possibility of another Napoleonic trade embargo or even another invasion attempt like the one Nelson had thwarted at Trafalgar ten years earlier, the government might be in no position to honour its bonds. The bonds might end up not worth the paper they were written on. So anyone who owned government bonds wanted to cut his losses and sell them for whatever price he could get for them - which wasn't much that day, as their price plummeted.
As the market value of the bonds hit rock bottom, Nathan Rothschild began secretly buying them up, at a fraction of their actual worth. When news finally reached London the next day that Wellington had in fact won, the value of the bonds was restored and Rothschild found himself the proud owner of millions of pounds worth of government IOUs, purchased at bargain basement prices.
As long as a hundred years later, Nathan Rothschild's grandson tried to suppress through the courts the publication of a book containing the story of the stock market killing. He lost the case.
THE ROTHSCHILD EMPIRE
Within 24 hours the Rothschilds had come to dominate not only the bonds market but, many authors claim, the Bank of England as well. It is difficult to know the truth when the ownership and dealings of the Bank of England, the richest central bank in the world, are to this very day cloaked in such secrecy that even MPs are not allowed to ask questions about it in the House of Commons. One thing is for certain though: the Rothschild family is the richest family in the world bar none. With branches of the family planted in Europe's major cities and by cooperating within the family and through alliances with other banking families such as the Schiffs they had by the mid 1800s come to dominate all European banking.
They were able to use their vast wealth to assist the expansion of friends and allies. They financed Cecil Rhodes and made it possible for him to establish control over the diamond and gold fields of South Africa. In the USA they financed the Harrimans in railroads, Vanderbilts in railroads and the press, Carnegie in the steel industry, the Rockefellers in oil, JP Morgan's diverse banking and industrial empire and many others. They dominated the government bond market and had branched into other banks and diverse industrial conecrns. The latter half of the nineteenth century was known as the Age of the Rothschilds.
Despite this overwhelming wealth the family has always been careful to avoid the limelight. Although they controlled scores of industrial, financial, mining, tourist and commercial corporations, only very few bear the Rothschild name. By the end of the last century, one expert had calculated that the Rothschilds actually controlled the wealth of the entire world. Whether that is an exaggeration or not one cannot be sure but if they do not control it all, it is certain that in the hundred years since that claim was made, with the banking scam operating unchecked across the entire planet and entire peoples being bled dry because of it, they do control a hell of a lot of it.
ENGLAND AFTER WATERLOO
During the 119 years between the founding of the Bank of England and the defeat of Naploeon at Waterloo England had been at war a total of 56 years and had been preparing for war for most of the rest. Government debt had soared like a seagull to £300 million in 1797, then soared even more majestically, like a high altitude jet, to a stratospheric £773 million in 1815.
In that same period the number of provincial banks had risen from 80 in 1797 to over 700 by 1810. These banks issued their own notes, and had taken to using Bank of England notes, instead of gold, as their fractional reserves. In other words instead of issuing notes that pretended to represent gold, the banks were now issuing notes that pretended to represent notes that pretended to represent figures in accounting ledgers!
In 1815, after Waterloo, the banks started calling in their loans and restricted further lending. Yet again the money stock collapsed as money was withdrawn from circulation. The total of money in circulation plummeted from £48 million in 1814 to £34 million in 1816 to £16 million in 1822.
As most of the money in circulation in 1816 had been paper money loaned out by the banks, the entire country was riddled with private, commercial and government debt and taxes were high.
Yet again the country was deliberately shoved into a depression with the usual widespread hardship, increasing poverty, business failures and bank repossessions. Prices fell by 20% between 1814 and 1816 and 60% by 1820!
MORE BOOM AND BUST
Merchants, farmers and other producers of the nation's wealth, who had borrowed money to a degree manageable when their products sold for 1814 prices now had severe problems meeting debt repayments when the same goods sold for 60% less by 1822. Agriculture was extremely hard hit and many farms and estates went bankrupt.
One should bear in mind that throughout these dreadful years of hardship, when unemployed farm labourers rummaged in the hedgerows for food to feed their children next to fields full of crops for want of enough money to buy those crops - money that could be created by a stroke of the pen - the banks did absolutely nothing to help. They could have eased off on their demands for loan repayments or even written off loans altogether. Why? Because the loans were nothing but pieces of paper conjured out of thin air. No real wealth had been loaned and nothing but numbers in a ledger would have been lost if loans had been forgiven. The callousness displayed by the men masterminding the scam simply beggars belief and represents the destruction of people on a scale of which Joseph Stalin would have been proud.
Real wealth on the other hand was been accrued at a rapid rate by the bankers through the mechanism of repossession.
Not only were the bankers happy to sit and watch millions of people have their lives ruined, they were happy to cause that ruin. In the midst of a well equipped and physically productive economy with fleets of trading ships in the harbours, fields full of crops, mills and workshops operating well below capacity, the grinding poverty, on a scale England had never before seen, was an artificial poverty, a money poverty that contradicted the physical facts.
In the "Political Register" in 1830, William Cobbett observed:
"The Bank....has plunged agriculture and trade and rents and debts and credits all into confusion."
By 1790 forgery had become widespread and peaked after the Napoleonic Wars. People were hanged or deported for even possessing a forged bank note. The realization that the Bank of England had with impunity been doing much the same thing - counterfeiting gold - for over a century, and the banks in general for a lot longer than that, caused an outcry.
The political commentator Wooler wrote in an article entitled: "The Black Dwarf":
"The Old Hag of Threadneedle Street [the Bank of England] must have no repose, until she consents to abandon her infernal traffic in the blood of those who are tempted to imitate her ragged wealth."
In fact, the Bank of England became involved in decisions as to whether or not clemency should be granted to convicted forgers. William Cobbett, writing in 1819, did not mince his words:
"This villainous bank has slaughtered more people than would people a state. With rope, the prison, the hulk and the transport ship, this bank has destroyed perhaps 50,000 persons, including the widows and orphans of its victims. At the shop of this crew of fraudulent insolvents, there sits a council to determine which of their victims shall live and which shall swing! Having usurped the royal prerogative of coining and issuing money, it is but another step to usurp that of pardoning or causing to be hanged."
Unrest among the population was widespread. In Ely in 1816 there were riots in which starving farm labourers demanded "bread or blood!"
Much of the public anger focussed upon the banking system itself. During a protest in Birmingham a spokesman, Thomas Attwood, declared that the financial collapse had caused:
"The secret and unjust transfer of the prosperity of the debtors into the hands of their creditors, and the far more ruinous transfer of the productive powers of the nation from hands accustomed and competent to do them justice into other hands totally incompetent to guide them at all."
In 1816 and 1817 the government increased its borrowing from the Bank of England in order to try to alleviate the money shortage. It borrowed £1,750,000 to finance public works and for relief of famine.
Through 1818 there was a period of short-lived relative prosperity.
In 1819 there was a further contraction of bank lending plus increased repayment of government loans, which further contracted the money stock. Renewed and even more acute economic hardship resulted. Prices plummeted, as stated, to 60% of their previous levels by 1922. There was a renewed wave of repossessions, especially of farms and estates and much of this wealth passed into the hands of the large banking families as wealth must inevitably do in a debt economy where bankers can crash the economy simply by squeezing credit when it suits them. Modern farmers, suffering like their forebears under the combined weight of debt and a mysterious government unwillingness to come to their aid will recognise the phenomenon as the nation gradually surrenders to faceless financiers control over the land that feeds it. When a small clique of men seize control of a nation's food supply, there indeed is totalitarian power. And where a government does nothing to prevent it, there indeed is betrayal and surrender.
In 1819 an Act was passed, which committed the government to a return to the Gold Standard, which it did in 1822. It achieved nothing except to place more power into the hands of those who monopolised control over that scarce commodity.
In 1822, the idea having by then been established that a government should borrow to solve peacetime economic problems caused by borrowing as well as borrowing to fight a war, the government duly cranked up the National Debt by borrowing a further £4 million to alleviate agricultural problems.
It didn't. The economic collapse and the population's attendant distress continued through 1823.
By 1825, another round of government borrowing was undertaken to reflate the economy. As the government spent this borrowed money into the economy, conditions at last began to ease. The money stock now stood at £25 million, £9 million less than it had been in 1815! The National Debt, at over £773 million was some thirty times the size of the total money stock!
The Bank of England, having suddenly reversed its policy, undertook massive lending on a scale staggering for the time and in just two weeks increased its lending from around £8 million to just under £15 million.
But this was, of course, more borrowing and money borrowed today has to be paid back with interest tomorrow.
Between 1829 and 1833 there was another round of general economic distress and business failures and, once again, agriculture was particularly hard hit.
Later that century research was undertaken that had never been done before: to establish how living standards in England had changed. And everyone received something of a shock.
SINKING BRITANNIA
Research showed that in 1495 the wages of an agricultural worker enabled him to buy a year's supply of the food needed to feed his family with just 15 weeks of work. By 1564 the work required to buy a year's supply of the same food for the same family had risen to 43 weeks. By 1684 the entire year's wages of that same worker would not buy the same food for the same family. Buy 1725 that same worker's year's wages would only buy 80-85% of the provisions. By 1777 the purchasing power of wages had fallen over that period by a factor of three to four. In 300 years the nation's living standards had plummeted despite the country's burgeoning sea trade, its unsurpassed world standing and its conquest of an empire that incorporated the unstapped wealth of entire continents!
While England was sinking into bankruptcy and penury, whilst its young men were dying half across the globe to secure an empire that made no difference to plummeting living standards at home, Nathan Rothschild, from the comfort of his London offices, was amassing a fortune of £50 million, by buying up British government bonds and, in concert with his brothers, the bonds of other European governments. His fortune, you will notice, was twice the size of Great Britain's total money stock,
And the government had taken to relying on him to obtain gold supplies from abroad to make up for the recurrent shortages of gold at home. It was hardly surprising they bought gold from him considering he and his fellow money changers controlled much of the world's supply. Hardly surprising the government needed it too, being as the country was back on the Gold Standard.
Does anyone smell a rat here, or is it just me?
The banking elite, of which Nathan Rothschild was but one player, had amassed such wealth they were able to use their money to influence the destinies of entire nations. In 1820 and 1824, for instance, £2 million and £4¾ million were loaned to the rebels of Columbia fighting against Spanish rule. Major British bankers "invested" just under £3 million in Dom Pedro's attempt to seize the Portugese throne; they made loans to Argentina, Prussia, Spain, Naples, Guatemala, Russia, Mexico and Denmark and lent £15 million to America. Such was the philanthropy of British financiers that in the first 25 years of the nineteenth century a staggering £100 million was loaned abroad. And that was happening whilst money was being squeezed out of the economy at home!
Back home as the regular and terrible depressions sprang from causes the public could not see [bank lending] it was then easy to blame them on government policies, greedy industrialists, recalcitrant labour unions, the nation "living beyond its means", "overproduction" (when half the country is starving and clothed in rags!), foreigners, God or bad karma. Such false blame, operating as a smokescreen of confusion and falsehood, was easy to lay where the country's press was going the same way as every other industry, becoming increasingly mortgaged to the banks. A publisher, whose survival depends on continued bank credit is hardly likely to attack those upon whom he relies for his survival. The same goes for the "science" of economics, whose learned but usually impenitrable tomes omit to mention that money creation is based on a fraud or the role of the bankers and their debt money in crashing economies. But, as the banks have invested heavily in institutions that train economists, that is hardly surprising is it?
GOLD!
By the mid nineteenth century and after several more collapses, the situation was changed rather fortuitously by the discovery of large amounts of gold in America and Australia. For decades the world's production of gold had been around £3 million per year, which was totally inadequate for the world's curency needs but rather good for those who controlled the supply of that scarce commodity. But all that changed dramatically as gold produstion soared to £40 million a year. In the period 1848 to 1858, gold production matched that of the previous four centuries!
This was rather providential for many nations, in that it put more money into the system by a route the bankers could not control.
The boom was short-lived. By 1873 more scarcity had returned.
In 1875, Prime Minister Gladstone said: "The state ought to get into its own hands the whole business of [money] issue and that.....course should be taken upon the first available opportunity."
It is a pity no-one listened. In fact for the remainder of the century bank lending soared, accompanied by the occasional influx of gold from the American and Canadian gold rushes. The regular rounds of boom and depression - the so-called business cycle - continued through the end of the century and into the early twentieth century.
With each spate of lending the country became more indebted and the debt-money component of the money supply, private, commercial and national debt became greater and greater in proportion to the total money in circulation. The proportion of the total money stock provided on loan by the banks had increased from 40% in the eighteenth century, to 60% in the mid nineteenth and was destined to go on increasing until, in the present day it comprises a staggering 97% of the total money stock! Each cycle, in other words, increased the power of the banks to influence the economy.
STARVING IN THE MIDST OF PLENTY.
For the majority of the population the Victorian age was one of penury, squalor and hardship unparalleled in British history. On the part of many in the corridors of power there was a callous acceptance of starvation and squalor. And all this occurred throughout a period in history not of material scarcity occasioned by flood or earthquake but of historically unparalleled abundance! The agricultural and industrial revolutions had given us new technologies with which to produce food, clothing, sanitation, housing and all the material wherewithal of living on a scale never before seen. Britain had a global empire that provided access not only to massive resources but vast markets for all the wonderful new goods the country was able to produce. All that was needed was an adequate money system that would allow all these new products to flow, through the mechanism of exchange, between people.
There was a direct contradiction between the observable physical fact of abundance or potential abundance and the financial reality of scarcity. As the poor in Britain suffered a material standard of living often worse than that of the negro slave, Bishop Berkely's observation of a people who "starve in the midst of plenty" is shown to be highly astute.
In 1893, H D McCleod, an authority on the theory of banking, said:
"At the present time, Credit is the most gigantic species of property in this country, and the trade in debts is beyond all comparison the most colossal brach of commerce......The merchants who trade in debts - namely bankers - are now the rulers and regulators of commerce, they almost control the fortunes of states....banks are nothing but debt shops, and the Royal Exchange is the greatest debt market of Europe."
MORE WAR.
When World War One broke out in 1914, Britain was facing an all too familiar crisis. People started exchanging their bank notes for real gold, turning up at the bank exactly as people of old had turned up at the goldsmith's with their promissory notes, demanding the gold they had been promised was there. Naturally, the promises were false and gold was not there: the Bank of England held £9 million in gold reserves, whilst money (promissory notes) in circulation amounted to £240 million. In other words, for every £1 worth of real gold actually sitting in the vault, there were around twenty five promissory notes all claiming to represent the same piece of gold!
Embarrassing. Lloyd George and the commercial bankers feared a run on the bank that might well have resulted in a few well-heeled gentlemen being strung up from lamp posts, had the people rumbled their scam. And it might have dampened enthusiasm for the the big profitable war that someone had gone to so much trouble to start!
In May 1914, Lloyd George, then Chancellor of the Exchequer declared a suspension of gold payments, forbidding the population to claim the gold that was rightfully their property - or would have been had it really existed. Those who asked for gold in exchange for their money were given instead new Treasury Notes, legal tender printed up and issued by the government. The notes were called Bradburies, after the First Secratary to the Treasury, Sir John Bradbury, whose signature appeared on them. In all £3.2 million of the new notes was issued and this simple creation of new money simply by printing it and issuing it, helped finance the initial stages of the war effort.
This however was not the real intention of the new notes, which was to get the country's banks off the hook by heading off the impending run on the banks.
Naturally this government creation of debt-free money, so effective and simple to do, set a dangerous example so far as the bankers were concerned and might give people some funny ideas.
Once the immediate banking crisis was alleviated, the Bank of England moved quickly to expunge any further notion of the government actually doing anything effective to help the economy.
Thomas Johnson, in The Finances of the Nation said in 1934:
"[The Bank of England] insisted forcibly that the state must upon no account issue any more money on this interest free basis: if the war was to be run, it must be run with borrowed money, money upon which interest must be paid......"
The government, taking its orders from the banks, not the electorate, did as it was told. The Treasury acceded to their demands. A series of war loans were raised and added to the escalating National Debt. In fact they comprised the greatest addition to the National Debt ever made, to the immense benefit of the bankers and a massive cost to the nation in that it contributed to the Great Depression.
As each loan was spent by the government, another loan at higher interest was raised, with the creditors of the earlier loans able to transfer those loans to the higher rate of interest without charge. The government raised taxes considerably to recover some of the cost of the borrowing but tax revenues always fell short of escalating costs. In 1914, the National Debt was around £1 billion. By 1918 it was £8 billion.
It should be pointed out that not all of this debt was in fact bank loans. The government tried to sell war bonds to pension funds, other non-banking institutions and to the public in order to raise money. The bonds were sold at 5% interest. Even here, the banks got in on the act. They encouraged their customers to buy war bonds to "help the war effort" and offered to lend them the money with which to buy the bonds. The bank lent to its customers, at 3.5% interest, money to buy war bonds. Thus people were using to buy the bonds money created as a debt by the banks. The bond buyers received 5% interest from their bonds, paid the bank back its loan at 3.5% and made a small profit. The banks made a big one - 3.5% on all the money they created!
Britain never recovered from those debts. At every step she sank deeper into the debt mire.
In The Nations, 1935, Christopher Hollis wrote:
"Whle the nation struggled almost at death's door for its very existence....our banking fraternities continued to create for themselves a great volume of new credit and to lend that credit to us at interest, and indeed at progressively greater interest."
The aftermath of the Napoleonic war and through the Victorian era demonstrated clearly the folly of trying to limit or pay off a national debt - or should have. When your currency only exists as a debt, to pay off the debt merely takes currency out of circulation, whereupon it must be replaced by further borrowing or your economy moves into depression.
However from April 1920 both the American and British governments refused to extend their National Debts. There were immediate money shortages within both economies and the terrible effects that resulted from that shortage. In the United States, unemployment rose from negligible amounts to 6 million in three months! The UK experienced proportionately similar effects.
The United States government then reversed its policy and began to run up its National Debt in order to ensure the country was well supplied with money. The amount of money in circulation rose by $1.9 billion. As a result the US enjoyed 8 years of the greatest material prosperity the world had ever known - The Roaring Twenties.
In the UK the government stuck grimly to its deflationary policies, restricted its National Debt and watched the nation suffer much earlier than the US, the awful deprivations of the Great Depression.
The government of the US supplied money to its economy at a rate one hundred times that of Great Britain and the effects of those restrictive policies on post war Britain were dramatic. Prices fell by 50% in 20 months. Business failures soared: there were 2,286 recorded in 1920, 5,640 in 1921 and 7,636 in 1922. This terrible fiscal policy was, however, of benefit to the banks which held the bulk of our war debts: as the nation attempted to pay them off, there was a massive flow of money into their coffers, not to mention the seizing of land and property in the resulting repossessions.
As prices crashed, interest payments did not. The interest payments the banks were receiving were suddenly able to buy more goods in the economy because prices were down. In other words a fall in prices by half, doubled the value of outstanding war loans!
THE GREAT DEPRESSION.
Poverty amidst plenty returned with a vengeance. In developed nations families starved while food was allowed to rot in the fields, or burnt as fuel or simply dumped. Farms and industries by the thousand went bankrupt. It was the same everywhere: people wanted to work to receive wages to buy from industry the goods they desperately needed and wanted to buy but industry could not hire them because no-one wanted to buy their goods!
The UK had an industry working well below capacity - studies showed that given demand it could have TRIPLED its output - and able to produce goods in abundance, for which it would have been happy to hire people. It had millions of people desperate to buy the goods that it desperately wanted to sell, in fact all the hallmarks of a highly developed, highly productive economy and a population literally dying for want of what it could produce.
However the financial version of the situation showed an economy deeply and hopelessly in debt, with poor demand for goods, low output, low employment and productive units going out of business like lemmings over a cliff.
Yet demand was not low, not in the real world. What was missing was a means to express demand. How do you express a demand for a product? You offer money for it. Money was in short supply and that was all that was wrong.
In such a climate of low prices and "poor demand" (ie poor consumer purchasing power) cheap, mass-produced goods began to gain a marked advantage as producers attempted to cut overheads and tailor what they could produce to low profit levels and low consumer spending power, and were able to deploy new technology to that end. Housing and construction standards dropped sharply.
In the United States, the Depression was solved in the way governments in a debt economy solve problems of debt: instead of taking the simple, safe solution of creating their own money and issuing it debt-free, they went for more debt instead. Under Roosevelt's New deal, the US began a new round of borrowing and soared out of recession.
In the UK, the government persisted with a restrictive policy: high interest rates, cuts in government spending, no help to industry - the natural result of which is more private and commercial borrowing. In a debt economy where money only comes into existence where it is loaned, borrowing has to occur to keep up the mney supply. Somebody has to do it. Where the government won't, private individuals have to, if they want to survive.
The gain from all this hardship, the hunger, poverty, bankruptcies and lost opportunities? The country's national debt stood at £8 billion in 1918, twenty one years later with the country still in the grip of the depression at the outbreak of World War Two, the national debt stood at £7 billion, a reduction in a still astronomical and unrepayable debt of just 12½%!
And what happened thereafter? The debt soared in World War Two. It had reached £24.86 billion in 1946 then went on climbing to £26.6 billion in 1954 and has reached £360 billion today! Once A government unwilling to borrow to help its people fight the enemies Hunger and Misery at home was quite willing to borrow to fight an enemy known as Hitler abroad.
The debt is still climbing. Relative to the size of the economy Britain's is a modest debt, the result of successive governments working hard to limit its rate of increase.
Yet years of restrictions on government borrowing, in a money system where borrowing has to occur for money to exist, just trying to keep the borrowing under control has resulted in massive economic decline.
The UK's economic decline is the fastest in economic history and with it have come loss of empire and world standing; decline in transport, services and infrastructure; the selling off of entire industries in order to raise money to help pay off the debt; food, farming and fishing brought to their knees; the vanishing of textile, footwear, steel, coal, electrical, aeronautic, shipbuilding and many other industries from our economic life.
The government could have saved us all this misery at any time simply by issuing its own money debt-free to compensate for the money it was declining to borrow.
Even while we stand today on the brink of our final humiliation, our vanishing from the world scene as a free nation, they still could. If they wanted to. Or if we make them.
Of course Britain has not been alone on all this. Virtually every other country now has its own central bank, it is just that we have had ours the longest.
There are other dimensions to all this aside from Britain's self-inflicted wounds. Let's start by having a look at the history of the thing from another perspective, that of the United States.
TAXING THE COLONIES TO COVER THE DEBT.
In the mid 1700s, Britain was reaching the height of her world power. In the half century since the formation of the Bank of England, she had fought war after costly war. She was £140 million in debt - a staggering anmount in those days. The government decided to embark on a program of raising taxes in her American colonies in order to keep up interest payments on its debts.
At that time the American colonies were still relatively poor. There was a shortage of gold and silver coins in the colonial economies of the day but they were as yet unacquainted with the blight of a privately owned central bank. Many of the colonies had experimented with creating and issuing their own paper money and some of these experiments had been quite successful.
Benjamin Franklin was a supporter of the idea of the colonies producing their own paper money. Franklin, a scientist and politician, was a member of the Pennsylvania Assembly from 1751 to 1764. He sent was to London in 1757 to lobby Parliament about tax grievances. He remained in England for the next 18 years and achieved a repeal of the Stamp Act by which Britain had imposed a tax on all the documents of the American colonies.
While he was in England, the colonies had begun very successfully using a paper currency called Colonial Scrip, which provided a reliable and stable medium of exchange.
This was debt-free money spent into the economy in the public interest and not backed by either gold or silver. The colonial economies boomed.
One day officials of the Bank of England asked Franklin how he would account for the new-found prosperity of the colonies. To that 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."
To Franklin and his colleagues back home, this was just common sense. Colonial Scrip was a simple solution that worked to the universal benefit. It was certainly something that England herself could have done with as her national debt mounted yearly and her economy teetered between boom and depression. What problem could anyone have with that?
Franklin's problem was that being a decent chap with social intentions he did not realise that other men can be more anti-social in inclination. His revelations caused consternation among the controllers of the Bank of England.
The American colonists had twigged the secret of money! The bankers' scam depended utterly on no-one realising the powerful simplicity of the solution that lay within the grasp of all governments! And there was now a severe danger the American success would set an example others would follow. Where would the bankers be without their power to take the wealth of other people simply by printing bogus promissory notes? They might have to go out and earn an honest living like everyone else!
The cat had to be stuffed back in the bag - and preferably weighed down with bricks and tossed in the nearest river - as soon as possible. It seems that even then Parliament was taking its orders from the banking elite because in 1764 the Currency Act was passed, prohibiting colonial officials from issuing their own paper money and ordering them to pay all future taxes in gold and silver coin.
The effect on the colonial economy was devastating. In his autobiography Franklin recalled:
"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 also revealed that this was the cause of the American Revolution:
"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. The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the Revolutionary War."
One can only speculate as to how history might have turned out had not Parliament not so utterly alienated a colony of such vast potential.
REVOLUTIONARY WAR
On April 19th 1775, the Revolutionary War began. By the time the first shot had been fired, the colonies had been drained of gold and silver coin by British taxation and were forced to resume printing and issuing their own paper money.
At the beginning of the Revolution some $12 million of United States money were in circulation but by the end of it there were some $500 million, a vast overproduction of the currency that failed to balance the amount of money in circulation against the actual money requirements of the economy. In other words, inflation of the currency had occurred and the currency was virtually worthless; shoes, for instance, were selling for $500 per pair. Earlier Colonial Scrip had worked admirably because just enough had been issued and circulated to facilitate trade.
In 1781, towards the end of the Revolution, Congress allowed Robert Morris, their Financial Superintendant to open a privately owned central bank. Morris was a wealthy man who had prospered during the war with the British by trading in war materials.
The new central bank was called the Bank of North America, a virtual carbon copy of the Bank of England. Like any other bank it practised Fractional Reserve Lending - loaning out money it did not have and charging interest on it - providing a way for its shareholders to become very rich very quickly at the expense of the American government and people and at virtually no risk. The bank's charter required its investors to provide $400,000 of initial capital. However, just as the Bank of England's original investors failed to honour their commitment, what happened with the new Bank of North America was very different to what its charter required.
Morris used his political influence to have money that had been loaned to the United States by France deposited with his bank. This money was then loaned to Morris and his friends and the loans used to invest in shares in the bank! The bank was given a monopoly over the national currency. The dangers of such shenanigans soon became self evident: the value of American currency continued to plummet and in 1785 the bank had been such a miserable failure that its charter was not renewed.
What possessed Congress to approve such an institution? One must visualise the circumstances: a government immersed in the confusions and desperations of war, with the outcome as yet uncertain; a Congress with many among its ranks who did not fully understand money and had other problems more pressing upon which to focus their attention; a powerful pro-banking lobby on the revolutionary side who well understood the opportunity provided by talking Congress into setting up a central bank.
William Findley, a Congressman from Pennsylvania and leader of the effort to shut down the bank said:
"The 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."
The main players behind the central bank; Alaxander Hamilton, then Secretary of the Treasury, his mentor Robert Morris Congess' Financial Superintendant and Thomas Wyling, the bank's President, did not, however, give up on the idea of a central bank. Five years later they managed to get a second central bank approved by Congress.
ANOTHER CENTRAL BANK
This bank was to be called the First Bank of the United States. Wyling was again the bank's president, the only difference between the new bank and the old one was the name.
In 1787 colonial leaders assembled in Philadelphia to replace the Articles of Confederation. Among their number were James Madison and Thomas Jefferson, both implacably opposed to the central bank idea, having seen the problems created by the Bank of England. Jefferson said:
"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 occupied." The issuing power of money should be taken from the banks and restored to Congess and the people to whom it belongs. I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies."
During the debate over the monetary system, another founding father, Gouvernor Morris, lambasted the motivations of the main players behind the central bank idea. He was in a position to know these motivations intimately because along with Robert Morris, his one-time boss, and Alexander Hamilton he had presented the plans for the original Bank of North America to the Congress in the last year of the Revolutionary War.
Gouvernor Morris went on to chair the committee that drew up the final draft of the United Stetes Constitution, one of the most enlightened political documents ever written. On the 2nd July 1787, in a letter to James Madison, he stated:
"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 Gouvernor Morris' change of heart and defection from their ranks, Hamilton, Robert Morris, Wyling and their European backers were not about to give up on their golden goose. They managed to convince the majority of the delegates to the Convention not to grant Congress the power to print paper money. Perhaps this was understandable: the delegates were still horribly aware of the inflation that had been caused by the over-issue of paper money during the war and had forgotten how Colonial Scrip had worked so well a little over twenty years earlier. The international financiers for whom Hamilton and his group worked were certainly determined to see no repeat of America's successful experience with paper money.
The Constitution clearly states: "Only the Congress shall have the power to coin money, regulate the value thereof...." omitting both the paper and debt forms of money and although the intent is clear the letter left the door wide open for the international financiers and their ever escalating issues of dishonest promissory notes, an omission at which the bankers must have rubbed their hands with glee.
One factor that may have assisted the pro-banking lobby was the fact that there were recurrent shortages of gold and silver in the economy, whether contrived by those who controlled the gold and silver supplies or as a result of a growth in population and economic activity with which gold and silver supplies could not keep pace. There were those who wanted to do away with fractional reserve lending, pointing out that issuing paper money well in excess of their gold and silver reserves and thus creating money was a clear breach of the spirit, if not the letter, of the constitution. Those who favoured the banking practise of issuing notes for gold or silver that did not actually exist were able to point to the gold and silver shortages and say that paper currency was absolutely needed if adequate money were to be circulated.
It could be said that right there a wonderful opportunity was missed: to establish in the new nation a stable money system whose success in time other nations would surely have copied.
In 1790 the bankers got their central bank. Alexander Hamilton, First Secretary of the treasury put a bill before Congress for a new privately owned First Bank of The United States. The new central bank was given a twenty year charter. Based in Philadelphia, it was given a monopoly on printing US currency even though 80% of its stock was to be held by private investors. The remaining 20% was to be provided by the US government. Yet again the bank's investors managed to put one over on the government: that 20% government investment ($2 million cash) was used as the reserve against which, by fractional reserve lending, the bank loaned to its private investors the money they needed to buy their shares in the bank!
This, incidentally, was the same year that Amschel Rothschild, from his bank in Frankfurt announced:
"Let me issue and control a nation's money and I care not who makes the laws."
US Presidential candidate Charles Collins summed up Hamilton's role thus:
"Alexander Hamilton was a tool of the international bankers. He wanted to create the Bank of the United States and did so."
The name First Bank of the United States was deliberately chosen to conceal the fact that it was a private bank, owned by private investors as a risk free investment for private profit. The bank did not belong to the American nation at all. As with the Bank of England, the names of the bank's private investors were never revealed, although it became common belief that the Rothschild family were the power behind it. The bank was sold to Congress as a way of stabilising the currency and controlling inflation just as our modern central banks declare their objectives to be monetary stability and controlling inflation. And just as happens with central banks today, the First Bank of the United States presided over anything but monetary stability.
In the first five years the US government borrowed $8.2 from the central bank - and prices rose by 72%!
Thomas Jefferson, the new Secretary of State, watched the rampant and completely unnecessary borrowing with helpless frustration. Unable to stop what was happening, he said:
"I wish it were possible to obtain a new amendment to our Constitution...taking from the federal government their power of borrowing."
Both the Bank of North America and the First Bank of the United States failed, in fact they created the opposite economic effects to the ones they had promised Congress.
YET ANOTHER CENTRAL BANK
In 1811, a bill was put before Congree to renew the bank's charter. A heated debate followed in which the proposal met stiff opposition. The legislatures of both Pennsylvania and Virginia passed resolutions asking Congress to kill the bank. The press of the day attacked the bank openly, those being days when the press was still free.
Opposition was so heated that the prospects did not look good for the First Bank of the United States gaining a renewal of its charter. Some commentators have reported that Nathan Rothschild himself threatened that if the US did not renew the bank's charter, the US would find itself embroiled in a costly war.
The renewal bill was defeated by a single vote in the House of Representatives and deadlocked in the Senate. James Madison was by then the United States' President, himself an arch opponent of the central bankers. His vice President, George Clinton, broke the deadlock in the Senate and the First Bank of the United States ceased to be.
Within five months, England attacked the United States.
This was the war of 1812, but England was already heavily committed to fighting Napoleon in Europe and war with America finished without victory for either side.
In 1816, a year after Napoleon's defeat at Waterloo and Rothschild's takeover of the Bank of England, the United States Congress passed a bill authorising the setting up of yet another privately owned central bank, the Second Bank of the United States, whose charter was a carbon copy of the previous central bank that had been killed just four years earlier. The government put up the cash for 20% of the shares and - surprise, surprise - the magic of fractional reserve lending was used to turn it into loans for private investors to buy their 80% of the shares for this risk free investment.
Again, the identities of the primary stockholders were a closely guarded secret. Around a third of the shares were owned by foreigners and it was claimed that the Second Bank of the United States was as deeply rooted in Europe as it was in the US. Having taken over the Bank of England, the Rothschilds were believed to be behind the new American central bank too.
ANDREW JACKSON
Twelve years went by. By 1828, the American people were sick and tired of manipulation of their economy by the central bank.
Opponents of the bank nominated an able and highly respected senator from Tennessee, Andrew Jackson - hero of the Battle of New Orleans - to run for President.
Few people actually expected Jackson to win and the bankers had long since learned how to manipulate the political process using the power of the money they now virtually monopolised. However to their dismay and everyone's surprise, Jackson won the presidential race and was elected to office in 1828.
The new President was determined to break the power of the central bank and lost no time once he was in office in trying to do just that. Unfortunately the bank's charter was only due for renewal in 1836, the last year of his second term in office.
During his first term, Jackson contented himself with doing what he could and focussed on removing from government service the bank's many minions. As a result no less than 7000 of the government's 11000 federal employees were removed from post and replaced by people whose first allegiance was to their country and its elected government, not its central bank.
In 1832, with Jackson's expected re-election looming, the bankers made their move, gambling that, in an election year, Jackson would be reluctant to stir up controversy. They asked Congress to pass a bill renewing the bank's charter four years early. Congress obliged. The renewal bill was sent to Jackson for approval. Jackson however was a man of integrity and made of sterner stuff than they imagined. He vetoed the bill. His message to Congress is regarded as one of the great American documents and clearly states his perception of a government's duties to all its citizens, rich or 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....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.
"If [government] would confine itself to equal protection, and, as Heaven does its rains, shower favour 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."
When, one wonders, did men of such courage and stature and such unswerving allegiance to high ideals over political expediency disappear from our political life?
Congress was unable to override Jackson's veto. In July 1832, Jackson had to stand for re-election and for the first time in history an American President took his campaign on the road, bringing his argument directly to the American people. His slogan was "Jackson and no bank."
The Republican Party ran Senator Henry Clay against Democrat Jackson and the banks invested $3 million, a colossal sum, in Clay's campaign. Jackson won by a landslide and was re-elected in Novemeber 1832.
Jackson swung into action, ordering his First Secretary of the Treasury, Lewis McClain to begin the process of removing government deposits from the bank. When McClain refused to do so, Jackson fired him and replaced him with William J Duane. When Duane also refused to comply with the presidential order, Jackson replaced him in turn with Roger B Tainey. Tainey complied and started the process of removing government deposits from the bank's vaults on the first of October 1833.
The central bank's then president, Nicholas Biddle, began using his political influence in the Congress to have Congress reject Tainey's nomination. The bankers were by then and had been for some time an extremely powerful lobby within the corridors of power. That that influence was based upon money is no better illustrated than by the case of Daniel Webster, Leader of the Senate, who was found to be in the pay of the Second Bank of the United States. After Webster had quashed a legal case against the bank, he wrote to Biddle, the bank's president, reminding him of their financial arrangements:
"I believe my retainer has not been renewed or refreshed as usual. If it be wished that my relation to the bank should be continued, it may be as well to send me the usual retainers."
As ever the best intentions of honest men were jeopardised by the less than honest infiltrated among them. In fact so sure was Biddle of his money power over the workings of the Congress that positive arrogance entered in and he went so far as to openly threaten to cause a depression if the bank's charter were not renewed:
"This worthy President thinks that because he has scalped Indians and imprisoned Judges, he is to have his way with the Bank. He is mistaken.....Nothing but widespread suffering will produce any effect on Congress.....Our only safety is in pursuing a steady course of restriction - and I have no doubt that such a course will ultimately lead to restoration of the currency and the recharter of the bank."
Such an unsavoury fit of honesty gives us a rare but stunning revelation of the bankers' view of their position in the affairs of men, a position not only senior to elected Presidents but in possession of the right to destroy the lives of millions of ordinary people for their own gain.
Jackson, elected by a landslide on a platform of "Jackson and no bank" had a clear mandate from the people for what he was trying to do, yet Biddle was clearly content to defy not only him but through him the expressed will of the American people by threatening to crash their entire economy unless he got his way.
One is reminded of a quote from Thomas Jefferson:
"I believe the 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...."
Biddle carried out his threat. The bank started to contract the money supply by calling in its loans and refusing to grant new ones. This created a financial panic and a depression quickly set in; wages and prices slumped and unemployment and bankruptcies soared. Biddle tried to lay the blame for the crisis on Jackson's government, claiming that it was caused by the government's withdrawal of capital from the bank. The press, by then falling more and more under the bankers' control, was rallied to the bank's cause and it blasted Jackson in newspaper editorials. At that time it was still legal to pay politicians for their support and the bank threatened to withold payments from its paid supporters in the Congress. Congress duly assembled and censured the President by a vote of 26 to 20. Jackson was never one to shirk a battle and stuck to his guns.
Then the tide turned. The government of Pennsylvania came out in Jackson's support and denounced the bank. Biddle was caught boasting in public that the bank would crash the economy. The House of Representatives voted in April 1834 against rechartering the bank and set up a committee to investigate whether the bank had caused the crash.
When the committee arrived at the bank's door in Philadelphia, armed with a subpoena empowering them to examine the bank's books, Biddle refused both to give them up and to allow the committtee to examine correspondence with congressmen concerning loans and advances Biddle had made to them, nor would Biddle give evidence before the committee in Washington.
On January 8th 1835, Jackson paid off the final installment on the national debt. He was the only President ever to pay it off. Today that debt stands at some $6 trillion and as the US money stock only amounts to some $5 trillion the point has long since been passed where it is even remotely repayable.
Three weeks later, on January 30 1835, an assassin named Richard Lawrence tried to shoot Jackson but mercifully both guns he was carrying jammed and failed to go off. Lawrence was tried and found not guilty by reason of insanity. After his release he told friends that powerful people in Europe had paid him to kill the president, promising to protect him if anything went wrong. It would appear they kept a promise for once.
In 1836, when the bank's charter ran out, it was not renewed. Biddle was arrested, charged with fraud and died soon after, still tied up in litigation. Thanks to President Andrew Jackson the United States remained free of a central bank for over seventy years.
CIVIL WAR
Unfortunately although Jackson had removed the parasitic institution of a central bank from the backs of the American people, he had failed to go one step further and recognise the underlying source of the money power: the practise of fractional reserve lending.
Fractional reserve lending remained in operation, the scam run by the country's numerous state chartered banks. This continued to fuel economic instability in the years leading up to the American Civil War. But at least the central bank was out of the picture and as a result America was able to thrive as she expanded into the virgin territories of the west.
During this period the international financiers fought hard to establish their lost power and when this availed them little resorted to their tried and trusted formula: war to create debt and through debt, dependency on further debt. If the bankers could not get their way, then America could be plunged into another costly war just like the war of 1812 with England after the closure of the First Bank of the United States. This time though, it would be a civil war.
One month after the inauguration of President Abraham Lincoln, in 1861, the first shots of the Civil War were fired at Fort Sumter in South Carolina.
In a matter of a few years Abraham Lincoln established himself deservedly as one of the greatest statesmen this planet has ever seen, a subject worthy of study but beyond the scope of this brief sketch. Contrary to popular belief however Lincoln's concern in fighting the war was not the freeing of slaves but the saving of the Union.
Lincoln well understood that sudden and wholesale freeing of slaves in the South would not only crash the South's economy and lead to widespread suffering among all sectors of the society but would result too in tens of thousands of freed slaves being dumped overnight into a state of vagrancy and starvation. He certainly was not in favour of slavery but favoured a gradual sustainable transition of the slaves over to paid labour with the provision of education for black children being a key factor.
Of course a debt money system where spending power was always in short supply, in that it creates a pressure for cost-cutting in labour, could be said to have slavery as its ultimate consequence, its ideal economic arrangement, and a more sustainable system that provided an adequate circulation of debt-free money would be needed to achieve such a transition.
Be that as it may, Lincoln had no intention before the war of ending slavery. In his inaugral address one month before the outbreak of hostilities he said:
"I have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it now exists. I beleieve I have no lawful right to do so, and I have no inclination to do so."
Even after the war had begun, Lincoln continued to insist that the Civil War was not about 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."
Opponents of the bank nominated an able and highly respected senator from Tennessee, Andrew Jackson - hero of the Battle of New Orleans - to run for President.
Few people actually expected Jackson to win and the bankers had long since learned how to manipulate the political process using the power of the money they now virtually monopolised. However to their dismay and everyone's surprise, Jackson won the presidential race and was elected to office in 1828.
The new President was determined to break the power of the central bank and lost no time once he was in office in trying to do just that. Unfortunately the bank's charter was only due for renewal in 1836, the last year of his second term in office.
During his first term, Jackson contented himself with doing what he could and focussed on removing from government service the bank's many minions. As a result no less than 7000 of the government's 11000 federal employees were removed from post and replaced by people whose first allegiance was to their country and its elected government, not its central bank.
In 1832, with Jackson's expected re-election looming, the bankers made their move, gambling that, in an election year, Jackson would be reluctant to stir up controversy. They asked Congress to pass a bill renewing the bank's charter four years early. Congress obliged. The renewal bill was sent to Jackson for approval. Jackson however was a man of integrity and made of sterner stuff than they imagined. He vetoed the bill. His message to Congress is regarded as one of the great American documents and clearly states his perception of a government's duties to all its citizens, rich or 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....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.
"If [government] would confine itself to equal protection, and, as Heaven does its rains, shower favour 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."
When, one wonders, did men of such courage and stature and such unswerving allegiance to high ideals over political expediency disappear from our political life?
Congress was unable to override Jackson's veto. In July 1832, Jackson had to stand for re-election and for the first time in history an American President took his campaign on the road, bringing his argument directly to the American people. His slogan was "Jackson and no bank."
The Republican Party ran Senator Henry Clay against Democrat Jackson and the banks invested $3 million, a colossal sum, in Clay's campaign. Jackson won by a landslide and was re-elected in Novemeber 1832.
Jackson swung into action, ordering his First Secretary of the Treasury, Lewis McClain to begin the process of removing government deposits from the bank. When McClain refused to do so, Jackson fired him and replaced him with William J Duane. When Duane also refused to comply with the presidential order, Jackson replaced him in turn with Roger B Tainey. Tainey complied and started the process of removing government deposits from the bank's vaults on the first of October 1833.
The central bank's then president, Nicholas Biddle, began using his political influence in the Congress to have Congress reject Tainey's nomination. The bankers were by then and had been for some time an extremely powerful lobby within the corridors of power. That that influence was based upon money is no better illustrated than by the case of Daniel Webster, Leader of the Senate, who was found to be in the pay of the Second Bank of the United States. After Webster had quashed a legal case against the bank, he wrote to Biddle, the bank's president, reminding him of their financial arrangements:
"I believe my retainer has not been renewed or refreshed as usual. If it be wished that my relation to the bank should be continued, it may be as well to send me the usual retainers."
As ever the best intentions of honest men were jeopardised by the less than honest infiltrated among them. In fact so sure was Biddle of his money power over the workings of the Congress that positive arrogance entered in and he went so far as to openly threaten to cause a depression if the bank's charter were not renewed:
"This worthy President thinks that because he has scalped Indians and imprisoned Judges, he is to have his way with the Bank. He is mistaken.....Nothing but widespread suffering will produce any effect on Congress.....Our only safety is in pursuing a steady course of restriction - and I have no doubt that such a course will ultimately lead to restoration of the currency and the recharter of the bank."
Such an unsavoury fit of honesty gives us a rare but stunning revelation of the bankers' view of their position in the affairs of men, a position not only senior to elected Presidents but in possession of the right to destroy the lives of millions of ordinary people for their own gain.
Jackson, elected by a landslide on a platform of "Jackson and no bank" had a clear mandate from the people for what he was trying to do, yet Biddle was clearly content to defy not only him but through him the expressed will of the American people by threatening to crash their entire economy unless he got his way.
One is reminded of a quote from Thomas Jefferson:
"I believe the 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...."
Biddle carried out his threat. The bank started to contract the money supply by calling in its loans and refusing to grant new ones. This created a financial panic and a depression quickly set in; wages and prices slumped and unemployment and bankruptcies soared. Biddle tried to lay the blame for the crisis on Jackson's government, claiming that it was caused by the government's withdrawal of capital from the bank. The press, by then falling more and more under the bankers' control, was rallied to the bank's cause and it blasted Jackson in newspaper editorials. At that time it was still legal to pay politicians for their support and the bank threatened to withold payments from its paid supporters in the Congress. Congress duly assembled and censured the President by a vote of 26 to 20. Jackson was never one to shirk a battle and stuck to his guns.
Then the tide turned. The government of Pennsylvania came out in Jackson's support and denounced the bank. Biddle was caught boasting in public that the bank would crash the economy. The House of Representatives voted in April 1834 against rechartering the bank and set up a committee to investigate whether the bank had caused the crash.
When the committee arrived at the bank's door in Philadelphia, armed with a subpoena empowering them to examine the bank's books, Biddle refused both to give them up and to allow the committtee to examine correspondence with congressmen concerning loans and advances Biddle had made to them, nor would Biddle give evidence before the committee in Washington.
On January 8th 1835, Jackson paid off the final installment on the national debt. He was the only President ever to pay it off. Today that debt stands at some $6 trillion and as the US money stock only amounts to some $5 trillion the point has long since been passed where it is even remotely repayable.
Three weeks later, on January 30 1835, an assassin named Richard Lawrence tried to shoot Jackson but mercifully both guns he was carrying jammed and failed to go off. Lawrence was tried and found not guilty by reason of insanity. After his release he told friends that powerful people in Europe had paid him to kill the president, promising to protect him if anything went wrong. It would appear they kept a promise for once.
In 1836, when the bank's charter ran out, it was not renewed. Biddle was arrested, charged with fraud and died soon after, still tied up in litigation. Thanks to President Andrew Jackson the United States remained free of a central bank for over seventy years.
CIVIL WAR
Unfortunately although Jackson had removed the parasitic institution of a central bank from the backs of the American people, he had failed to go one step further and recognise the underlying source of the money power: the practise of fractional reserve lending.
Fractional reserve lending remained in operation, the scam run by the country's numerous state chartered banks. This continued to fuel economic instability in the years leading up to the American Civil War. But at least the central bank was out of the picture and as a result America was able to thrive as she expanded into the virgin territories of the west.
During this period the international financiers fought hard to establish their lost power and when this availed them little resorted to their tried and trusted formula: war to create debt and through debt, dependency on further debt. If the bankers could not get their way, then America could be plunged into another costly war just like the war of 1812 with England after the closure of the First Bank of the United States. This time though, it would be a civil war.
One month after the inauguration of President Abraham Lincoln, in 1861, the first shots of the Civil War were fired at Fort Sumter in South Carolina.
In a matter of a few years Abraham Lincoln established himself deservedly as one of the greatest statesmen this planet has ever seen, a subject worthy of study but beyond the scope of this brief sketch. Contrary to popular belief however Lincoln's concern in fighting the war was not the freeing of slaves but the saving of the Union.
Lincoln well understood that sudden and wholesale freeing of slaves in the South would not only crash the South's economy and lead to widespread suffering among all sectors of the society but would result too in tens of thousands of freed slaves being dumped overnight into a state of vagrancy and starvation. He certainly was not in favour of slavery but favoured a gradual sustainable transition of the slaves over to paid labour with the provision of education for black children being a key factor.
Of course a debt money system where spending power was always in short supply, in that it creates a pressure for cost-cutting in labour, could be said to have slavery as its ultimate consequence, its ideal economic arrangement, and a more sustainable system that provided an adequate circulation of debt-free money would be needed to achieve such a transition.
Be that as it may, Lincoln had no intention before the war of ending slavery. In his inaugral address one month before the outbreak of hostilities he said:
"I have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it now exists. I beleieve I have no lawful right to do so, and I have no inclination to do so."
Even after the war had begun, Lincoln continued to insist that the Civil War was not about 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 were the causes of the war? There were many factors involved.
When the Southern States seceeded from the Union, it was indeed through a fear that Lincoln's presidency would abolish slavery. When he reluctantly sent soldiers to Fort Sumter, it was with the request that the southern states recognise and rejoin the Union. There was no request or demand that they abolish slavery. The soldiers were fired upon and the civil war had started.
The Southern States owed some $200 million to the money lenders in New York.
The South was heavily reliant on cotton exports, having been forced to specialise in these exports by its creditors.
There was heavy resentment iin the South of the high prices of goods from the North. The North at this time was heavily riddled with debt and the pressure of debt servicing was pushing up the prices of its goods.
The North was the country's financial centre and money and power was flowing to the North as a result.
The Northern idustrialists had used protective tariffs to prevent the Southern States from buying cheaper goods from Europe. Europe retaliated by stopping cotton imports from the Southern States.
The Southern States were therefore in a financial cleft stick. Heavily in debt themselves, they were forced to pay more for the necessitites of life whilst income from the export of cotton goods crashed.
The South was therefore in distress and its mood was one of anger.
The central bankers, stung by Jackson's defeat of their central bank 25 years earlier, since which America's economy had set a bad example to the rest of the world by expanding, were looking for an opportunity to regain control over America. It would be to their advantage if the rich new nation could be split and rendered dependent by war.
A wild conspiracy theory? Well that notion came from, among others, one well placed observer of the day, a man eminently qualified to make such an observation.
This was Otto Von Bismark, Chancellor of Germany. Bismark was an imaginitive and pragmatic politician who had successfully unified the German states and founded the modern German nation. His view on the matter was this:
"The division of the United States into federations of equal force 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 as one nation, would attain economic and financial independence, which would upset their financial domination over the world."
Within three months of the start of the Civil war, European central banks loaned Napoleon III of France, nephew of Bonaparte, Ff210 million to seize Mexico and to station troops along Mexico's border with the US, taking advantage of America's preoccupations to reopen Central and South America to European colonisation.
Great Britain at the same time moved 11000 troops into Canada and stationed them along the United States' northern borders, whilst the British fleet went to war alert, ready for action should it be needed.
The threat was obvious and Lincoln recognised that his country's situation was dire. With the armies of the world's then great powers encamped on his northern and southern borders and a hostile fleet prowling the seas, he knew that at all costs he must preserve the Union. If the US split became a permanency, whatever political entities that resulted would not be strong enough to resist the superpowers rattling sabres all along their borders.
GREENBACKS
Lincoln however had economic problems that with a civil war on, he needed like a hole in the head. As war loomed, the threat of it had led to people changing their paper currency for gold. As the banks' gold reserves ran low, the banks were left over-exposed and started calling in their loans, threatening the economy with contraction and disaster just when the government needed money to fight the war.
In 1861, Lincoln went with his Secretary of the Treasury to the New York banks to see what kind of deal was on offer. When the banks, anxious to see the Union fail, offered to lend him money at 24-36% interest, Lincoln turned them down flat, recognising that loans under those terms were a trap he dare not lead his country into.
Lincoln returned to Washington and put an old friend, Colonel Dick Taylor in charge of solving the problem of financing the war. When Lincoln later asked him what he had come up with, Taylor replied:
"Why Lincoln, that is easy; just get Congress to pass a bill authorising the printing of full legal tender Treasury Notes....and pay your soldiers with them and go ahead and win your war with them also."
But Lincoln wanted to know if the people would accept the new notes. Taylor replied:
"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; as Congress is given that express right by the Constitution."
That is precisely what Lincoln did. In 1862-3 he printed up $460 million worth of the new Treasurey Notes. So that they were easy to distinguish from other notes already in circulation, he had them printed using green ink on one side. Thus the new notes became known as Greenbacks. With this new money, created by the government and simply spent into the economy without debt, he was able to equip his army and pay his soldiers.
By 1865 he had won the war - and without leaving his nation saddled with debts anywhere near as great as they would have been had he borrowed that $460 million from bankers at interest.
Lincoln well understood how the banking scam was working, who was behind it and what the simple solution was to the whole mess:
"The government should create, issue, and cirrculate all the currency.....needed to satisfy the spending power of the Government and the buying power of the consumers.
"The privelege of creating and issuing money is not only the extreme prerogative of Government, but it is the Government's greatest creative opportunity.
When the Southern States seceeded from the Union, it was indeed through a fear that Lincoln's presidency would abolish slavery. When he reluctantly sent soldiers to Fort Sumter, it was with the request that the southern states recognise and rejoin the Union. There was no request or demand that they abolish slavery. The soldiers were fired upon and the civil war had started.
The Southern States owed some $200 million to the money lenders in New York.
The South was heavily reliant on cotton exports, having been forced to specialise in these exports by its creditors.
There was heavy resentment iin the South of the high prices of goods from the North. The North at this time was heavily riddled with debt and the pressure of debt servicing was pushing up the prices of its goods.
The North was the country's financial centre and money and power was flowing to the North as a result.
The Northern idustrialists had used protective tariffs to prevent the Southern States from buying cheaper goods from Europe. Europe retaliated by stopping cotton imports from the Southern States.
The Southern States were therefore in a financial cleft stick. Heavily in debt themselves, they were forced to pay more for the necessitites of life whilst income from the export of cotton goods crashed.
The South was therefore in distress and its mood was one of anger.
The central bankers, stung by Jackson's defeat of their central bank 25 years earlier, since which America's economy had set a bad example to the rest of the world by expanding, were looking for an opportunity to regain control over America. It would be to their advantage if the rich new nation could be split and rendered dependent by war.
A wild conspiracy theory? Well that notion came from, among others, one well placed observer of the day, a man eminently qualified to make such an observation.
This was Otto Von Bismark, Chancellor of Germany. Bismark was an imaginitive and pragmatic politician who had successfully unified the German states and founded the modern German nation. His view on the matter was this:
"The division of the United States into federations of equal force 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 as one nation, would attain economic and financial independence, which would upset their financial domination over the world."
Within three months of the start of the Civil war, European central banks loaned Napoleon III of France, nephew of Bonaparte, Ff210 million to seize Mexico and to station troops along Mexico's border with the US, taking advantage of America's preoccupations to reopen Central and South America to European colonisation.
Great Britain at the same time moved 11000 troops into Canada and stationed them along the United States' northern borders, whilst the British fleet went to war alert, ready for action should it be needed.
The threat was obvious and Lincoln recognised that his country's situation was dire. With the armies of the world's then great powers encamped on his northern and southern borders and a hostile fleet prowling the seas, he knew that at all costs he must preserve the Union. If the US split became a permanency, whatever political entities that resulted would not be strong enough to resist the superpowers rattling sabres all along their borders.
GREENBACKS
Lincoln however had economic problems that with a civil war on, he needed like a hole in the head. As war loomed, the threat of it had led to people changing their paper currency for gold. As the banks' gold reserves ran low, the banks were left over-exposed and started calling in their loans, threatening the economy with contraction and disaster just when the government needed money to fight the war.
In 1861, Lincoln went with his Secretary of the Treasury to the New York banks to see what kind of deal was on offer. When the banks, anxious to see the Union fail, offered to lend him money at 24-36% interest, Lincoln turned them down flat, recognising that loans under those terms were a trap he dare not lead his country into.
Lincoln returned to Washington and put an old friend, Colonel Dick Taylor in charge of solving the problem of financing the war. When Lincoln later asked him what he had come up with, Taylor replied:
"Why Lincoln, that is easy; just get Congress to pass a bill authorising the printing of full legal tender Treasury Notes....and pay your soldiers with them and go ahead and win your war with them also."
But Lincoln wanted to know if the people would accept the new notes. Taylor replied:
"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; as Congress is given that express right by the Constitution."
That is precisely what Lincoln did. In 1862-3 he printed up $460 million worth of the new Treasurey Notes. So that they were easy to distinguish from other notes already in circulation, he had them printed using green ink on one side. Thus the new notes became known as Greenbacks. With this new money, created by the government and simply spent into the economy without debt, he was able to equip his army and pay his soldiers.
By 1865 he had won the war - and without leaving his nation saddled with debts anywhere near as great as they would have been had he borrowed that $460 million from bankers at interest.
Lincoln well understood how the banking scam was working, who was behind it and what the simple solution was to the whole mess:
"The government should create, issue, and cirrculate all the currency.....needed to satisfy the spending power of the Government and the buying power of the consumers.
"The privelege of creating and issuing money is not only the extreme prerogative of Government, but it is the Government's greatest creative opportunity.
"By the adoption of these principles....the taxpayers will be saved immense sums of interest. Money will cease to be the master and become the servant of humanity."
The English press had a different view of things. The London Times, for instance, acting as a mouthpiece for the bankers and apparently quite oblivious to the enormity of what it was saying, said in an editorial of the day:
"If this mischievious financial policy, [the issue of greenbacks] which has its origins in North America, shall become obdurated 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 propserous 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."
What the writer of the article meant of course was that it will destroy every banking scam on the globe. If monarchies had implemented the very reforms being discussed they too would have flourished beyond all imaginings. But evidently the bankers employed eloquent but brain dead morons to spread their propaganda. The writer completely missed the point that all the "terrible consequences" he was describing were exactly the things any honest person in his right mind would want! The editorial comprised one of the best arguments for monetary reform one could hope for!
A "Hazard Circular" circulated to all US banks during the Civil War puts the banking point of view just as eloquerntly:
"...[T]he European plan, led on by England, is that capital shall control labour by controlling wages....The great debt that capitalists will see to it is made out of the war must be used to control the value of money. To accomplish this, the Government bonds must be used as a banking basis....We are now waiting for the Secretary of the Treasury of the United States to make his recommendation. It will not do to allow greenbacks, as they are called, to circulate as money any length of time, as we cannot control that, but we can control the bonds and through them the bank issues."
The bankers in other words, hated greenbacks and they were none too happy with the fact that the US now had another President who had seen through their scam to a positive and unarguable solution.
Lincoln's Greenbacks were so successful that the following year, 1863, with the Civil war approaching its decisive stages, and the Treasury in need of authority from Congress to issue more Greenbacks, the bankers contrived to have the National Bank Act pushed through Congress.
Under this Act, the banks were granted virtually tax-free status and the exclusive monopoly on issuing new paper currency.
Abraham Lincoln must have longed for a Congress less in tune to the needs of the banks than the needs of their country and its people. Or an electorate itself better informed about money, able to fully understand the consequences of what their "representatives" were up to and thus enforce on Congress the levels of integrity a true democacracy requires.
Unfortunately he was building a world with broken democratic straws and did not get the back-up he needed. No further issues of Greenbacks were made, although the ones already issued continued to circulate. From that point on, the US money supply would be issued by bankers as a debt on which the nation would have to pay interest.
Historian, John Kenneth Galbraith reports:
"In numerous years following the war, the Federal Government ran a heavy surplus. It could not [however] pay off its debts, retire its securities, because to do so meant there would be no bonds to back the national banknotes. To pay off the debt was to destroy the money supply."
With the Civil War still raging, later in 1863, Lincoln got help from an unexpected source: Tsar Alexander II of Russia. The Tsar ("The Liberator", assassinated in 1881) like Bismark in Germany, knew what the international bankers were up to and had point blank refused for many years to allow a central bank to be set up in Russia. He was well aware that if America too remained out of the clutches of the bankers, then his own position was that much safer. If however the bankers were successful and the US was divided up and the pieces handed over to Britain and France, nations under banking control, his own country would in time fall as well. He gave orders that if either Britain or France actively intervened in the US, it was to be regarded by the Russian Empire as an act of war. To underscore the point he despatched part of his pacific fleet to San Francisco.
In 1864 Lincoln was re-elected. A highly respected President of immense statesmanship with four years in office stretching before him, who was unequivocally in favour of monetary reform, would almost certainly have taken back the monopoly the bankers had just managed to wangle through Congress.
On November 21st 1864 Lincoln wrote to a friend:
"The money power preys upon the nation in times of peace and conspires against it in times of adversity. It is more despotic then monarchy, more insolent than autocracy, more selfish than bureaucracy."
Lincoln's deputy, Solomon P Chase had come to regret his own role in steering the National Banking Act through Congress:
"My agency in promoting the passage of the National Banking Act was the greatest financial mistake of my life. It has biuilt up a monopoly which affects every interest in the country."
All in all the prospects did not look good for the bankers retaining hold of their power, with four years of Abraham Lincoln stretching before them.
However, those prospects perked up considerably when just 41 days after his inauguration and 5 days after the South's General Lee surrendered, Lincoln was shot dead by John Wills Booth.
Bismark lamented:
"The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots....I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America, and use it systematically to corrupt modern civilisation. They will not hestitate to plunge the whole of Christendom into wars and chaos in order that the earth shall become their inheritance."
As we look around the world today we can only wonder at how right Bismark's predictions turned out to be.
THE FINGER OF SUSPICION
Bismark was not alone in his conviction that the bankers had been responsible for Lincoln's assassination. Further accusations surfaced in Canada 70 years later, in 1934.
Gerald G McGreer, a popular and well respected attorney delivered a five hour speech before the Canadian House of Commons, blasting Canada's debt-based money system and implicating the internatioonal bankers in Lincoln's assassination. This was during the bank-engineered Great Depression that was ravaging Canada and the rest of the world.
McGeer produced evidence, originally deleted from public records but provided to him by Secret Service agents. The information concerned details of the trial of John Wills Booth that had been released after Booth's death. McGeer claimed that the evidence showed Booth had been a mercenary in the pay of international bankers.
As reported in the Vancouver Sun on 2nd may 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 - and the plot was hatched in Toronto and Montreal. 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 program and who had fought him throughout the whole of the Civil war, on his policy of greenback currency."
It is interesting that McGeer claimed Lincoln was murdered not only because of his opposition to a central bank but because the central bankers had wanted to base America's currency on gold - a commodity whose supply they monopolised and controlled. Lincoln had thwarted them there too, by introducing a currency based only on the good faith of the United States government.
The same article said: "They were the men interested in the establishment of a Gold Standard money system 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 that plan and did proceed with it in the United States. Within eight years after Lincoln's assassination, silver was demonetised and the Gold Standard money system set up in the United States."
Why was gold good for the bankers and silver bad? Silver was by then plentiful in the US, fifteen times more so than gold. Being plentiful, silver was harder to control. That simple.
AFTER LINCOLN
Since Lincoln, and with the exception of a brief period in John F Kennedy's presidency, no debt-free currency been issued in the US. A final act of venal stupidity finally killed off Lincoln's legacy in 1994, when the Regal Act authorised the replacement of Greenbacks. Despite frequent attacks on them by central bankers, they had continued to be popular and to circulate in the economy until that time. They were replaced with debt-based banknotes.
With Lincoln out of their hair, the next goal of the bankers was to secure complete control over America's money. This was not an easy task for them. As the American West had been opened up, silver had been discovered in vast quantities, whilst Lincoln's Greenbacks were generally very popular.
Historian W Cleon Skausen comments:
"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 no doubt have become an extablished institution."
Indeed, the international financiers watched with mounting alarm as support for Lincoln's monetary ideas grew.
In 1866, exactly one year after Lincoln's murder, Congress again got busy at the behest of the central bankers and passed the Contraction Act. This masterpiece of suppression authorised the Secretary of the Treasury to begin recalling some of Lincoln's Greenbacks. Naturally that contracted the money supply.
The monetary policy all through the 1870s was one of drastic deflation of the economy occasioned by steady withdrawal of the Greenbacks, a deflation in which prices tumbled: a bushel of wheat for instance dropped in price by half. Many farmers went bankrupt while others found it impossible to extricate themselves from debt.
With the cost of debt servicing cutting into his profit margins the farmer's only remedy was to produce more cheaply than his competitors in order to keep hold of his slice of a dwindling market. This involved the introduction of new machinery and mass production techniques but as each new invention that gave one farmer a lead was taken up and used by his competotrs that lead was lost. Once the lead was lost and he could not mainatin the required levels of sales, the farmer had no choice but to accept a lower standard of living or go into debt. Once he was in debt his creditors could control his policy and oblige him to produce for exports, as had happened to the southern farmers before the Civil War.
Charles Holt Carrol eloquently describes the slump that followed withdrawal of Greenbacks:
"...[I]t has crippled trade, sunk assets, ruined debtors, destroyed enterprises, thrown laboutr out of employment abnd caused wides[pread miswry in society.....[I]t is itself a consequence of inflation with false money....we feed the money channel with debt, the equivalent of nothing, and the very opposite of money."
Authors Theodore R Thoren and Richard F Warner in their book The Truth In Money Book:
"Hard times which occured 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 which put pressure on Congress to enact legislation to place the banking system under centralised control. Eventually the Federal Reserve Act was passed on Decemeber 23rd 1913."
Once more we see the tactics of the international bankers: cause a contraction in the money supply, thereby creating a depression and instability, then convince politicians that the solution to depression and instability is "centralised control". Centralised control means the setting up of a privately owned central bank run for private profit, whose main tactic for amassing vast profits is the creation of depression and instability.
Politicians fall for it time after time after time.
CREATING DEPRESSION
By 1876 corruption and insider dealing were rife in the American as well as the British stock exchanges. President Rutherford B Hayes complained at the time:
"This is government of the people, by the people and for the people no longer. It is a government of corporations, by corporations and for corporations."
Mathew Johnson, author of The Robber Barons commented:
"The halls of legislature were transformed into a mart where the price of votes was haggled over, and laws, made to order, were bought and sold."
Despite rapidly rising output, the United States at the end of the nineteeenth century was, like England, plagued by appalling working conditions, subsistence wages, and child labour, while strikes and other ptotests were put down ruuthlessly using private security forces and state and federal troops.
The bankers' stategy was threefold:
1.)Create a Depression by removing money from circulation.
2.)Remove as much money from the system as necessary to render Americans so desperate they would accept any proposed solution, or would be too weak to oppose any solutions with which they disagreed.
3.)Move in with a "solution" for instability: centralised control through a privately owned central bank.
Contraction did not only focus on Greenbacks, along with this the tried and trusted formula of calling in loans and refusing to grant new ones, was used to full effect.
In just ten years, two thirds of the American money supply was removed from circulation. In 1866 there were around $1.8 billion in circulation, about $35.46 per head of population. By 1876 there were only $0.6 billion in circulation - just $14.60 per head! By 1886, there were $0.4 billion in circulation, a paltry spernding power of $6.67 per head of population! This represented a 760% drop in buying power over 20 years, an absolutely devastating decline.
Today the pseudo-science of economics, created to provide a smokescreen of labyrinthine complexity that hides even from intelligent men the underlying simplicity of true common-sense principles, tries to portray such periods of boom and depression as a natural consequence of a mythical phenomenon called the Business Cycle. Far from being a naturally ccurring phenomoneon inflicted on Man by treacherous fates in order to puinish him for trying to build a decent productive civilisation, the Business Cycle is entirely and deliberately created by banks periodically contracting the money supply. Once you can see through the economic gibberish that obscures the truth, booms and depressions are not difficult to understand - or to avoid.
In 1872, one Ernest Seyd was given $500,000 by the Bank of England and sent to the US with orders to bribe the necessary Congressmen to get silver demonetised.
The next year, 1873, Congress passed the Coinage Act and the minting of silver coins abruptly stopped. In fact representative Samuel Hooper who introduced the bill to the House of Representatives even acknowledged that "Mr Seyd" actually drafted the legislation!
It gets worse: in 1874, Seyd himself admitted:
"I went to America in the winter of 1872-73, authorised to secure, if I could, the passage of a bill demonetising silver. It was in the interest of those I represented - the governors of the Bank of England - to have it done. By 1873, golds coins were the only form of coin money."
But the bankers had not yet won. In 1876, with one third of the nation's entire workforce unemployed, people were clamouring for a return to Lincoln's Greenbacks, or a return to silver money, anything that would nake money more plentiful. The population was growing restless.
In the same year Congress appointed the US Silver Commission to study the whole problem. Their report clearly blamed the bankers for the money contraction and compared the money contraction in the US after the Civil War with 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 $1800,000,000. By the end of the fifteenth century it had shrunk to less than $200,000,000 [one ninth]!.....History records no other such disastrous transition as that from the Roman Empire to the Dark Ages."
Despite that report, Congress did nothing, which causes one to reflect that though the Dark Ages may have been caused by a contraction of the Roman currency, the contraction was caused by someone taking money out of circulation, and someone taking money out of circulation happened because men in a position to do something to correct it did nothing.
In 1877 - the following year - riots broke out from Pittsburgh to Chicago as people made it very plain they had had enough of being starved half to death in a land abundant with food. The bankers met to decide what action to take but decided not to take any. They were not about to give up the power they had achieved just because a few million plebs were starving. They opted for sitting tight and waiting it out.
At a meeting of the American Banking Association (ABA) that year, they urged their members to do everything they could to suppress any popular move towards a return to Greenbacks.
The ABA Secretary, James Buel wrote to members encouraging them to use their influence to sway both Congress and the press. His words provide us with another insight into the modus operandi, both past and present, of these pillars of the community:
"It is advisable to do all in your power to sustain such 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 [emphasis added] 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."
Thus, as pressure from the electorate demanded change, the press and the bankers' friends were mobilised to sway public opinion away from the government issue of debt-free currency - and away from the truth.
The New York Tribune reported on 10th October 1878:
"The capital of the country is organized at last and we will see whether Congress will dare to fly in its face."
In other words, let's see who Congress is more scared of: the money powers or the people.
The whole operation was not entirely successful. In February 1878, Congress passed the Sherman Law, authorising a limited coining of silver dollars. However, this did not end the backing of the currency with gold, nor did it completely lift the restrictions placed upon the use of silver. Before 1873, anyone who brought silver to the US Mint could have it turned into silver dollars for free but in 1873 that right had been removed. Now some silver was being allowed to flow back into the economy and contribute to a small increase in the money stock.
However the bankers were well satisfied with what they had achieved and loosened up on their lending. The depression eased and the economy moved gradually out of its post Civil War agony.
ANOTHER DEAD PRESIDENT
Three years later Republican James Garfield was elected President. As a Congressman he had been chairman of the Appropriations Committee and a member of the Banking and Currency Committee and thus well understood how the economy was being manipulated. After his inauguration in 1871, he publicly attacked the bankers:
"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."
Quite obviously Garfield had set out his stall to be no friend of the bankers. Considering the fate of Lincoln and the near fate of Jackson, this was a brave stand to take. But take it he did.
A few weeks after making that statement, on July 2nd 1887, he too was assassinated.
The financiers were gathering power very rapidly. They created a periodic "fleecing of the flock" as they called it - in other words booms and depressions so they could buy up bankrupt industry, farms and property at knock-down prices.
In 1891 they were getting ready to take the American economy down yet again. An ABA memo laid out the strategy with mind-boggling clarity. The memo called upon the bankers to create a depression on a certain day 3 years in the future!
"On September 1st, 1894, we will not renew our loans under any consideration. On September 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 Mississipi, and thousands of them east of the Mississipi as well, at our own price....Then the farmers will become tenants as in England...."
It hardly needs pointing out that the sentiments herein expressed, in that they victimise honest hardworking people and their dependents, using as weaponry control of money that was created by a flick of the pen, are the sentiments of an enemy.
This is criminality, theft, corruption, extortion and plunder all rolled into one and then stripped naked of the social veneer that hides it from honest men.
It is suppression of an entire people, a suppression so ugly that it sorely tests our ability to confront its evil.
Yet confront it we must because its elimination lies in our hands and in our hands only.
These depressions were, as the late President Garfield had warned, a piece of cake to engineer by the handful of men who held the nation's purse strings, even down to naming the day on which they would begin.
By 1896 the issue of more silver had become an issue of the presidential campaign, while the Seyd Act of 1873 had become known, quite rightly, as the Crime of 1873. Democrat William Jennings Bryant, a senator from Nebraska, ran for President on the free silver issue.
At the democratic national Convention in Chicago he made an impassioned speech that concluded:
"We will answer their demand for a gold standard by saying to them: 'you shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold."
The bankers energetically supported the Republican candidate, McKinley, who favoured the Gold Standard. The resulting presidential contest was fierce. Bryant delivered 600 speeches in 27 states while McKinley's side got the factory owners and industrialists among their supporters to tell their workers that if Bryant became President their plants would close and the workforce would be thrown out of work.
It worked. McKinley was elected President by a small margin. Bryant ran for President again in 1900 and 1908 but each time was narrowly beaten. In 1912 the Democratic Party nominated Woodrow Wilson and Bryant was a powerful and influential supporter. When Wilson became President, he made Bryant Secretary of State, but Bryant soon became disillusioned with Wilson's Presidency and resigned two years.
Although he never became President, Bryant's formidable presence on the political scene and his ardent opposition to the international financiers' control over American money, delayed the bankers in their efforts to establish a central bank for many years.
TWENTIETH CENTURY - PUSH FOR CENTRAL BANK CONTINUES.
In the early 1900s men such as JP Morgan led the bankers' campaign for a central bank, the propaganda lie being that only a central bank could bring economic stability.
J.P. Morgan was the most powerful US banker of the era, and as discussed earlier, along with Rockefeller, Harriman, Carnegie and others was greatly assisted by Rothschild "investment" in establishing his commercial empire. He was a Rothschild (England) confidant, maintained a residence in England and sailed there each summer.
His father, Julius Morgan, had been America's financial agent to the British and after his death JP took on a British partner, Edward Grenfell, a director of the Bank of England.
After his own death it was revealed that Morgan's eststate only amounted to a few million dollars; the bulk of his vast business empire was in fact owned by others.
In 1902, incumbent President Theodore Roosevelt appeared to go after the vast monopolistic empires of Morgan and his friends using the Sherman anti-trust Act to break them up. In actual fact behind the apparency, Roosevelt did very little to interfere with the growing monopolisation of US industries by bankers and their surrogates.
For example, he supposedly broke up the Rockefeller Standard Oil monopoly but the reality was that it was simply divided into seven corporations all still owned and controlled by the Rockefellers.
In 1907, the year following Roosevelt's re-election, Morgan hatched another plan for a central bank. Using their combined financial might Morgan and his friends worked in concert to crash the stock market and create a panic. Thousands of small banks all across America were already heavily over-exposed, having lent out paper money up to a hundred times the amount they held in gold in their reserves. In those days, along with the booms and depressions and general economic instability, bank runs were commonplace and now another massive bank run loomed as confidence nose-dived.
Morgan heroically stepped in and offered to prop up the failing banks with his own money - or rather money he simply made out of nothing in the time-honoured fashion. His own bank printed up completely reserve-less notes to the value of $200 million and Congress let him do it! He then sent it to branch banks to loan out at interest. Soon, as money seemed to be plentiful, the public regained confidence. With the panic averted Morgan was feted as a hero by the president of Princeton University:
"All this trouble could be averted if we appointed a committee of six or seven public spirited men like JP Morgan to handle the affairs of our currency."
That this naive notion sounds more like an oligarchy than a democracy is all the more surprising since the man who made the obsequious statement was none other than Woodrow Wilson.
Morgan and friends must have really liked the cut of Wilson's jib because they really took him under their wing. With their patronage and backing he was himself elected President four years later, in 1912.
Economic textbooks tend to suggest that the creation of the United States central bank in 1913, the Federal Reserve, was a direct result of the panic in 1907 and that this latest alarming epidemic of bank failures had left the entire nation fed up with the anarachy of the banking system and longing for centralised control that would bring stability.
However Minnesota Congressman, Charles A Lindberg was closer to the mark when he later claimed that the panic of 1907 was nothing but a scam:
"Those not favourable 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 Bank Act of 1863, the money lenders had been able to engineer a series of booms and busts. The purpose of this was not only to "fleece the flock" but also to create a climate of such instability that to consolidate the banking system into a single central bank would appear the "only solution."
In response to the 1907 panic engineeered by Morgan and chums, Theodore Roosevelt set up the National Monetary Commission, to study the banking problem and make recommendations to Congress.
The Commission was packed with Morgan's friends and cronies. Its chairman was Senator Nelson Aldrich from Rhode Island, who represented the Newport constituency of America's most wealthy banking dynasty. Aldrich's daughter married John D Rockefeller Junior and among their four sons was Nelson Rockefeller who became vice-president in 1974 to Gerald Ford who himself had been vice-President to the disgraced Richard Nixon. Another son, David Rockefeller became head of the infamous Council On Foreign Relations and chairman of the Chase Manhattan Bank.
As soon as the Monetary Commission was set up, Aldrich departed for a long tour of Europe at the taxpayers' expense where he "consulted" with central bankers in England, France and Germany. The cost of this trip to visist his banking pals? The American taxpayer pucked up the tab for $300,000, a colossal sum equivalenmt to many million of dollars today.
JECKYLL ISLAND
Shortly after his return to the US in November 1910, some of the wealthiest and most powerful men in America gathered in a hotel on Jeckyll Island off the coast of Georgia.
Among their number was Paul Warburg who had been dispatched by Rothschild to New York from Germany the previous year with the plans for a central banking system and received a $500,000 a year salary by the investment firm Kohn Loeb and Co to lobby Congress for a privately owned central bank. Warburg's partner in this firm was Jacob Schiff, grandson of the Schiff whose family had moved in with the Rothschilds back in Frankfurt in 1785. Jacob Schiff at that time was busy investing $20 million in the overthrow of the Tsar of Russia.
The three European banking families, the Warburgs, Schiffs and Rothschilds had been as interconnected through marriage, alliances and mutual business interests down through the years, as had their proteges and counterparts in the US, the Rockefellers, Morgans and Aldriches.
Years later Frank Vanderlip, President of the National Citibank of New York and a representative of the Rockefeller family confirmed that the Jeckyll Island meeting had taken place in a February 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 conspirators had assembled to thrash out how to overcome their main problem: the reintroduction of a private central bank with themselves and their cronies as the main beneficiaries of its licence to counterfeit money.
However they had other problems to contend with that must have cost them many sleepless nights, haunted by the spectre of lost profits.
The market share of the big national banks based mainly in New York was shrinking fast. So many banks had set up operations throughout the country that the number of US banks had more than doubled to over twenty thousand in the first ten years of the twentieth century. Only 29% of all banks were controlled by the big national banks and they held only 57% of the market share. That sort of thing would just not do. Free enterprise was fine but not when practised by somebody else. Aldrich himself later admitted:
"Before passage of this Act, the New York banks could only dominate the reseves of new York. Now, we are able to dominate the bank reserves of the entire country."
Therefore the conspirators needed to bring all these new independent banks under their control or their lives would simply not be worth living. As John D Rockefeller once put it:
"Competition is sin."
Unfortunately for them, the crash of 1907 notwithstanding, the American economy had in the past few years become so strong that corporations were starting to finance their own exopansion from their profits rather than huge borrowing from the larger banks.
In the first ten years of the twentieth century, 70% of corporate funding came from profits. In other words American Industry was starting to become independent of the money lenders and that simply could not be allowed.
All those assembled on Jeckyll Island knew that all these problems would be resolved by getting a new central bank approved by Congress. But for public relations reasons it and the bill that would establish it had to have the right name in order to create the impression that the new institution was all about preventing bank runs and creating stablity whilst concealing its real private-profit, monopolistic character. Preferably the word "bank" would not be used.
After nine days the group dispersed, their plans agreed and their legislation drafted. The new central bank would be very similar to the old First and Second Banks of the United States. It would be given a complete monopoly over the currency of the US and create that money out of nothing. It was to be called the Federal Reserve.
In case you were wondering how the US Federal Reserve creates money, here are the four essential steps:
1.) The Federal Open Market Committee approves the purchase of US bonds on the open market. US bonds are basically IOUs, pieces of paper drawn up by the government and assigned a value. The bonds are bought at that value and then at a future date, when the bond matures, are bought back by the government at that amount plus a certain % of interest.
2.)Bonds are bought by the Federal Reserve from whoever is offering them for sale on the open market, be that the government or some individual or institution that is in possession of bonds previously purchsed from the governement.
3.) The Federal Reserve (aka The Fed) pays for those bonds using money created out of nothing. Nowadays that is done by electronic credits, numbers entered into the account of the seller's bank. The seller's bank in turn credits the seller's bank account. These credits ARE BASED ON NOTHING. They are just numbers. When an account is credited no other account is debited the amount.
4.) The banks use these "deposits" as reserves. By fractional reserve lending they can then loan out to new borrowers ten times the amount credited, all at interest and again by simply entering numbers into an account WITHOUT A CORRESPONDING AMOUNT BEING DEBITED FROM ANY OTHER ACOUNT.
In this way a Fed purchase of, say, $1 million gets turned into $10 million in other bank accounts. New money is created at each step. In effect the Fed creates 10% of all new money and the other banks down the chain create the other 90%.
This rapidly expands the amount of new money in the economy. It even more rapidly expands the amount of debt in the economy.
To reduce the amount of money in circulation the Fed can simply reverse the process by selling the bonds it holds to the public. Each time the public buys a bond for, say, $1000, $1000 enters the bank's coffers and thus is removed from general circulation.
Why was gold good for the bankers and silver bad? Silver was by then plentiful in the US, fifteen times more so than gold. Being plentiful, silver was harder to control. That simple.
AFTER LINCOLN
Since Lincoln, and with the exception of a brief period in John F Kennedy's presidency, no debt-free currency been issued in the US. A final act of venal stupidity finally killed off Lincoln's legacy in 1994, when the Regal Act authorised the replacement of Greenbacks. Despite frequent attacks on them by central bankers, they had continued to be popular and to circulate in the economy until that time. They were replaced with debt-based banknotes.
With Lincoln out of their hair, the next goal of the bankers was to secure complete control over America's money. This was not an easy task for them. As the American West had been opened up, silver had been discovered in vast quantities, whilst Lincoln's Greenbacks were generally very popular.
Historian W Cleon Skausen comments:
"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 no doubt have become an extablished institution."
Indeed, the international financiers watched with mounting alarm as support for Lincoln's monetary ideas grew.
In 1866, exactly one year after Lincoln's murder, Congress again got busy at the behest of the central bankers and passed the Contraction Act. This masterpiece of suppression authorised the Secretary of the Treasury to begin recalling some of Lincoln's Greenbacks. Naturally that contracted the money supply.
The monetary policy all through the 1870s was one of drastic deflation of the economy occasioned by steady withdrawal of the Greenbacks, a deflation in which prices tumbled: a bushel of wheat for instance dropped in price by half. Many farmers went bankrupt while others found it impossible to extricate themselves from debt.
With the cost of debt servicing cutting into his profit margins the farmer's only remedy was to produce more cheaply than his competitors in order to keep hold of his slice of a dwindling market. This involved the introduction of new machinery and mass production techniques but as each new invention that gave one farmer a lead was taken up and used by his competotrs that lead was lost. Once the lead was lost and he could not mainatin the required levels of sales, the farmer had no choice but to accept a lower standard of living or go into debt. Once he was in debt his creditors could control his policy and oblige him to produce for exports, as had happened to the southern farmers before the Civil War.
Charles Holt Carrol eloquently describes the slump that followed withdrawal of Greenbacks:
"...[I]t has crippled trade, sunk assets, ruined debtors, destroyed enterprises, thrown laboutr out of employment abnd caused wides[pread miswry in society.....[I]t is itself a consequence of inflation with false money....we feed the money channel with debt, the equivalent of nothing, and the very opposite of money."
Authors Theodore R Thoren and Richard F Warner in their book The Truth In Money Book:
"Hard times which occured 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 which put pressure on Congress to enact legislation to place the banking system under centralised control. Eventually the Federal Reserve Act was passed on Decemeber 23rd 1913."
Once more we see the tactics of the international bankers: cause a contraction in the money supply, thereby creating a depression and instability, then convince politicians that the solution to depression and instability is "centralised control". Centralised control means the setting up of a privately owned central bank run for private profit, whose main tactic for amassing vast profits is the creation of depression and instability.
Politicians fall for it time after time after time.
CREATING DEPRESSION
By 1876 corruption and insider dealing were rife in the American as well as the British stock exchanges. President Rutherford B Hayes complained at the time:
"This is government of the people, by the people and for the people no longer. It is a government of corporations, by corporations and for corporations."
Mathew Johnson, author of The Robber Barons commented:
"The halls of legislature were transformed into a mart where the price of votes was haggled over, and laws, made to order, were bought and sold."
Despite rapidly rising output, the United States at the end of the nineteeenth century was, like England, plagued by appalling working conditions, subsistence wages, and child labour, while strikes and other ptotests were put down ruuthlessly using private security forces and state and federal troops.
The bankers' stategy was threefold:
1.)Create a Depression by removing money from circulation.
2.)Remove as much money from the system as necessary to render Americans so desperate they would accept any proposed solution, or would be too weak to oppose any solutions with which they disagreed.
3.)Move in with a "solution" for instability: centralised control through a privately owned central bank.
Contraction did not only focus on Greenbacks, along with this the tried and trusted formula of calling in loans and refusing to grant new ones, was used to full effect.
In just ten years, two thirds of the American money supply was removed from circulation. In 1866 there were around $1.8 billion in circulation, about $35.46 per head of population. By 1876 there were only $0.6 billion in circulation - just $14.60 per head! By 1886, there were $0.4 billion in circulation, a paltry spernding power of $6.67 per head of population! This represented a 760% drop in buying power over 20 years, an absolutely devastating decline.
Today the pseudo-science of economics, created to provide a smokescreen of labyrinthine complexity that hides even from intelligent men the underlying simplicity of true common-sense principles, tries to portray such periods of boom and depression as a natural consequence of a mythical phenomenon called the Business Cycle. Far from being a naturally ccurring phenomoneon inflicted on Man by treacherous fates in order to puinish him for trying to build a decent productive civilisation, the Business Cycle is entirely and deliberately created by banks periodically contracting the money supply. Once you can see through the economic gibberish that obscures the truth, booms and depressions are not difficult to understand - or to avoid.
In 1872, one Ernest Seyd was given $500,000 by the Bank of England and sent to the US with orders to bribe the necessary Congressmen to get silver demonetised.
The next year, 1873, Congress passed the Coinage Act and the minting of silver coins abruptly stopped. In fact representative Samuel Hooper who introduced the bill to the House of Representatives even acknowledged that "Mr Seyd" actually drafted the legislation!
It gets worse: in 1874, Seyd himself admitted:
"I went to America in the winter of 1872-73, authorised to secure, if I could, the passage of a bill demonetising silver. It was in the interest of those I represented - the governors of the Bank of England - to have it done. By 1873, golds coins were the only form of coin money."
But the bankers had not yet won. In 1876, with one third of the nation's entire workforce unemployed, people were clamouring for a return to Lincoln's Greenbacks, or a return to silver money, anything that would nake money more plentiful. The population was growing restless.
In the same year Congress appointed the US Silver Commission to study the whole problem. Their report clearly blamed the bankers for the money contraction and compared the money contraction in the US after the Civil War with 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 $1800,000,000. By the end of the fifteenth century it had shrunk to less than $200,000,000 [one ninth]!.....History records no other such disastrous transition as that from the Roman Empire to the Dark Ages."
Despite that report, Congress did nothing, which causes one to reflect that though the Dark Ages may have been caused by a contraction of the Roman currency, the contraction was caused by someone taking money out of circulation, and someone taking money out of circulation happened because men in a position to do something to correct it did nothing.
In 1877 - the following year - riots broke out from Pittsburgh to Chicago as people made it very plain they had had enough of being starved half to death in a land abundant with food. The bankers met to decide what action to take but decided not to take any. They were not about to give up the power they had achieved just because a few million plebs were starving. They opted for sitting tight and waiting it out.
At a meeting of the American Banking Association (ABA) that year, they urged their members to do everything they could to suppress any popular move towards a return to Greenbacks.
The ABA Secretary, James Buel wrote to members encouraging them to use their influence to sway both Congress and the press. His words provide us with another insight into the modus operandi, both past and present, of these pillars of the community:
"It is advisable to do all in your power to sustain such 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 [emphasis added] 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."
Thus, as pressure from the electorate demanded change, the press and the bankers' friends were mobilised to sway public opinion away from the government issue of debt-free currency - and away from the truth.
The New York Tribune reported on 10th October 1878:
"The capital of the country is organized at last and we will see whether Congress will dare to fly in its face."
In other words, let's see who Congress is more scared of: the money powers or the people.
The whole operation was not entirely successful. In February 1878, Congress passed the Sherman Law, authorising a limited coining of silver dollars. However, this did not end the backing of the currency with gold, nor did it completely lift the restrictions placed upon the use of silver. Before 1873, anyone who brought silver to the US Mint could have it turned into silver dollars for free but in 1873 that right had been removed. Now some silver was being allowed to flow back into the economy and contribute to a small increase in the money stock.
However the bankers were well satisfied with what they had achieved and loosened up on their lending. The depression eased and the economy moved gradually out of its post Civil War agony.
ANOTHER DEAD PRESIDENT
Three years later Republican James Garfield was elected President. As a Congressman he had been chairman of the Appropriations Committee and a member of the Banking and Currency Committee and thus well understood how the economy was being manipulated. After his inauguration in 1871, he publicly attacked the bankers:
"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."
Quite obviously Garfield had set out his stall to be no friend of the bankers. Considering the fate of Lincoln and the near fate of Jackson, this was a brave stand to take. But take it he did.
A few weeks after making that statement, on July 2nd 1887, he too was assassinated.
The financiers were gathering power very rapidly. They created a periodic "fleecing of the flock" as they called it - in other words booms and depressions so they could buy up bankrupt industry, farms and property at knock-down prices.
In 1891 they were getting ready to take the American economy down yet again. An ABA memo laid out the strategy with mind-boggling clarity. The memo called upon the bankers to create a depression on a certain day 3 years in the future!
"On September 1st, 1894, we will not renew our loans under any consideration. On September 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 Mississipi, and thousands of them east of the Mississipi as well, at our own price....Then the farmers will become tenants as in England...."
It hardly needs pointing out that the sentiments herein expressed, in that they victimise honest hardworking people and their dependents, using as weaponry control of money that was created by a flick of the pen, are the sentiments of an enemy.
This is criminality, theft, corruption, extortion and plunder all rolled into one and then stripped naked of the social veneer that hides it from honest men.
It is suppression of an entire people, a suppression so ugly that it sorely tests our ability to confront its evil.
Yet confront it we must because its elimination lies in our hands and in our hands only.
These depressions were, as the late President Garfield had warned, a piece of cake to engineer by the handful of men who held the nation's purse strings, even down to naming the day on which they would begin.
By 1896 the issue of more silver had become an issue of the presidential campaign, while the Seyd Act of 1873 had become known, quite rightly, as the Crime of 1873. Democrat William Jennings Bryant, a senator from Nebraska, ran for President on the free silver issue.
At the democratic national Convention in Chicago he made an impassioned speech that concluded:
"We will answer their demand for a gold standard by saying to them: 'you shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold."
The bankers energetically supported the Republican candidate, McKinley, who favoured the Gold Standard. The resulting presidential contest was fierce. Bryant delivered 600 speeches in 27 states while McKinley's side got the factory owners and industrialists among their supporters to tell their workers that if Bryant became President their plants would close and the workforce would be thrown out of work.
It worked. McKinley was elected President by a small margin. Bryant ran for President again in 1900 and 1908 but each time was narrowly beaten. In 1912 the Democratic Party nominated Woodrow Wilson and Bryant was a powerful and influential supporter. When Wilson became President, he made Bryant Secretary of State, but Bryant soon became disillusioned with Wilson's Presidency and resigned two years.
Although he never became President, Bryant's formidable presence on the political scene and his ardent opposition to the international financiers' control over American money, delayed the bankers in their efforts to establish a central bank for many years.
TWENTIETH CENTURY - PUSH FOR CENTRAL BANK CONTINUES.
In the early 1900s men such as JP Morgan led the bankers' campaign for a central bank, the propaganda lie being that only a central bank could bring economic stability.
J.P. Morgan was the most powerful US banker of the era, and as discussed earlier, along with Rockefeller, Harriman, Carnegie and others was greatly assisted by Rothschild "investment" in establishing his commercial empire. He was a Rothschild (England) confidant, maintained a residence in England and sailed there each summer.
His father, Julius Morgan, had been America's financial agent to the British and after his death JP took on a British partner, Edward Grenfell, a director of the Bank of England.
After his own death it was revealed that Morgan's eststate only amounted to a few million dollars; the bulk of his vast business empire was in fact owned by others.
In 1902, incumbent President Theodore Roosevelt appeared to go after the vast monopolistic empires of Morgan and his friends using the Sherman anti-trust Act to break them up. In actual fact behind the apparency, Roosevelt did very little to interfere with the growing monopolisation of US industries by bankers and their surrogates.
For example, he supposedly broke up the Rockefeller Standard Oil monopoly but the reality was that it was simply divided into seven corporations all still owned and controlled by the Rockefellers.
In 1907, the year following Roosevelt's re-election, Morgan hatched another plan for a central bank. Using their combined financial might Morgan and his friends worked in concert to crash the stock market and create a panic. Thousands of small banks all across America were already heavily over-exposed, having lent out paper money up to a hundred times the amount they held in gold in their reserves. In those days, along with the booms and depressions and general economic instability, bank runs were commonplace and now another massive bank run loomed as confidence nose-dived.
Morgan heroically stepped in and offered to prop up the failing banks with his own money - or rather money he simply made out of nothing in the time-honoured fashion. His own bank printed up completely reserve-less notes to the value of $200 million and Congress let him do it! He then sent it to branch banks to loan out at interest. Soon, as money seemed to be plentiful, the public regained confidence. With the panic averted Morgan was feted as a hero by the president of Princeton University:
"All this trouble could be averted if we appointed a committee of six or seven public spirited men like JP Morgan to handle the affairs of our currency."
That this naive notion sounds more like an oligarchy than a democracy is all the more surprising since the man who made the obsequious statement was none other than Woodrow Wilson.
Morgan and friends must have really liked the cut of Wilson's jib because they really took him under their wing. With their patronage and backing he was himself elected President four years later, in 1912.
Economic textbooks tend to suggest that the creation of the United States central bank in 1913, the Federal Reserve, was a direct result of the panic in 1907 and that this latest alarming epidemic of bank failures had left the entire nation fed up with the anarachy of the banking system and longing for centralised control that would bring stability.
However Minnesota Congressman, Charles A Lindberg was closer to the mark when he later claimed that the panic of 1907 was nothing but a scam:
"Those not favourable 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 Bank Act of 1863, the money lenders had been able to engineer a series of booms and busts. The purpose of this was not only to "fleece the flock" but also to create a climate of such instability that to consolidate the banking system into a single central bank would appear the "only solution."
In response to the 1907 panic engineeered by Morgan and chums, Theodore Roosevelt set up the National Monetary Commission, to study the banking problem and make recommendations to Congress.
The Commission was packed with Morgan's friends and cronies. Its chairman was Senator Nelson Aldrich from Rhode Island, who represented the Newport constituency of America's most wealthy banking dynasty. Aldrich's daughter married John D Rockefeller Junior and among their four sons was Nelson Rockefeller who became vice-president in 1974 to Gerald Ford who himself had been vice-President to the disgraced Richard Nixon. Another son, David Rockefeller became head of the infamous Council On Foreign Relations and chairman of the Chase Manhattan Bank.
As soon as the Monetary Commission was set up, Aldrich departed for a long tour of Europe at the taxpayers' expense where he "consulted" with central bankers in England, France and Germany. The cost of this trip to visist his banking pals? The American taxpayer pucked up the tab for $300,000, a colossal sum equivalenmt to many million of dollars today.
JECKYLL ISLAND
Shortly after his return to the US in November 1910, some of the wealthiest and most powerful men in America gathered in a hotel on Jeckyll Island off the coast of Georgia.
Among their number was Paul Warburg who had been dispatched by Rothschild to New York from Germany the previous year with the plans for a central banking system and received a $500,000 a year salary by the investment firm Kohn Loeb and Co to lobby Congress for a privately owned central bank. Warburg's partner in this firm was Jacob Schiff, grandson of the Schiff whose family had moved in with the Rothschilds back in Frankfurt in 1785. Jacob Schiff at that time was busy investing $20 million in the overthrow of the Tsar of Russia.
The three European banking families, the Warburgs, Schiffs and Rothschilds had been as interconnected through marriage, alliances and mutual business interests down through the years, as had their proteges and counterparts in the US, the Rockefellers, Morgans and Aldriches.
Years later Frank Vanderlip, President of the National Citibank of New York and a representative of the Rockefeller family confirmed that the Jeckyll Island meeting had taken place in a February 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 conspirators had assembled to thrash out how to overcome their main problem: the reintroduction of a private central bank with themselves and their cronies as the main beneficiaries of its licence to counterfeit money.
However they had other problems to contend with that must have cost them many sleepless nights, haunted by the spectre of lost profits.
The market share of the big national banks based mainly in New York was shrinking fast. So many banks had set up operations throughout the country that the number of US banks had more than doubled to over twenty thousand in the first ten years of the twentieth century. Only 29% of all banks were controlled by the big national banks and they held only 57% of the market share. That sort of thing would just not do. Free enterprise was fine but not when practised by somebody else. Aldrich himself later admitted:
"Before passage of this Act, the New York banks could only dominate the reseves of new York. Now, we are able to dominate the bank reserves of the entire country."
Therefore the conspirators needed to bring all these new independent banks under their control or their lives would simply not be worth living. As John D Rockefeller once put it:
"Competition is sin."
Unfortunately for them, the crash of 1907 notwithstanding, the American economy had in the past few years become so strong that corporations were starting to finance their own exopansion from their profits rather than huge borrowing from the larger banks.
In the first ten years of the twentieth century, 70% of corporate funding came from profits. In other words American Industry was starting to become independent of the money lenders and that simply could not be allowed.
All those assembled on Jeckyll Island knew that all these problems would be resolved by getting a new central bank approved by Congress. But for public relations reasons it and the bill that would establish it had to have the right name in order to create the impression that the new institution was all about preventing bank runs and creating stablity whilst concealing its real private-profit, monopolistic character. Preferably the word "bank" would not be used.
After nine days the group dispersed, their plans agreed and their legislation drafted. The new central bank would be very similar to the old First and Second Banks of the United States. It would be given a complete monopoly over the currency of the US and create that money out of nothing. It was to be called the Federal Reserve.
In case you were wondering how the US Federal Reserve creates money, here are the four essential steps:
1.) The Federal Open Market Committee approves the purchase of US bonds on the open market. US bonds are basically IOUs, pieces of paper drawn up by the government and assigned a value. The bonds are bought at that value and then at a future date, when the bond matures, are bought back by the government at that amount plus a certain % of interest.
2.)Bonds are bought by the Federal Reserve from whoever is offering them for sale on the open market, be that the government or some individual or institution that is in possession of bonds previously purchsed from the governement.
3.) The Federal Reserve (aka The Fed) pays for those bonds using money created out of nothing. Nowadays that is done by electronic credits, numbers entered into the account of the seller's bank. The seller's bank in turn credits the seller's bank account. These credits ARE BASED ON NOTHING. They are just numbers. When an account is credited no other account is debited the amount.
4.) The banks use these "deposits" as reserves. By fractional reserve lending they can then loan out to new borrowers ten times the amount credited, all at interest and again by simply entering numbers into an account WITHOUT A CORRESPONDING AMOUNT BEING DEBITED FROM ANY OTHER ACOUNT.
In this way a Fed purchase of, say, $1 million gets turned into $10 million in other bank accounts. New money is created at each step. In effect the Fed creates 10% of all new money and the other banks down the chain create the other 90%.
This rapidly expands the amount of new money in the economy. It even more rapidly expands the amount of debt in the economy.
To reduce the amount of money in circulation the Fed can simply reverse the process by selling the bonds it holds to the public. Each time the public buys a bond for, say, $1000, $1000 enters the bank's coffers and thus is removed from general circulation.
However that $1,000 is no longer in the buyer's bank account and as his bank was using that $1,000 as a reserve against which to lend $10,000, his bank now "has" $10,000 less that it can lend. In other words the Fed sale of a single bond of $1,000 becomes $11,000 less money in the economy.
The new Federal Reserve bill was designed to cast in stone the bond-backed debt-money system and to prevent the effective and much needed reform that would have resulted from allowing Lincoln's Greenback currency or similar debt-free money from making a come-back. It delivered to the bankers the right to create 90% of the country's money supply through fractional reserve lending and delivered control of that money supply into the hands of a few men - namely those who had drafted the legislation.
But look at this: if money only comes into circulation through borrowing, that is borrowing by the productive citizenry, householders, farmers, entrepreneurs and so on, and if interest is charged on the money thus issued, that interest amounts to a toll or charge levied on people for the use of their own money. Take mortgage lending for example: mortgage payers carry the greatest burden of supplying money to the economy, and the interest one pays on one's mortgage throughout one's life is one's share of the toll charged for the privilege of having money in the economy! But most people EARN their money, why should they pay a toll for having it?
Well, basically because the money lenders have managed to have their scam enshrined in law.
ANOTHER CENTRAL BANK? NOT YET....
The new bill established a central bank with a very high degree of independence from government control. In fact with this system in place, control soon begins to work the other way. If governments are dependent on money lenders for the money supply, if they have to go back for more and more loans to keep the money supply at workable levels, ultimately for loans just to pay the interest on old loans, if the bank decides for whatever reason to cut back on its lending, the economy and thus the government are in serious trouble. Who is senior to whom in this arrangement?
Once the conspirators left Jeckyll Island there started a huge public relations blitz. The banks put together an "educational fund" of $5 million whose aim was to influence senior academics at respected Universities to back the plan for the central bank. Put it this way: a university professor who did not endorse the bank was not very likely to receive for his department a donation from the fund. Those who did, were.
Among those who did was Woodrow Wilson. In fact he was one of the first to climb aboard the central bank bandwaggon.
As it happened the ruse on that occasion did not work. The Aldrich Bill was soon identified for what it was: a bill designed to deliver power into the hands of what by then had come to be known as The Money Trust.
Charles A Lindgerg was among the opponents of the bill:
"The Aldrich plan is the Wall Street plan. It means another panic, if necessary, to intimidate the people. Aldrich, paid by the goverrnment to represent the people, proposes a plan for the trusts instead."
Aware they would not be able to muster the votes to win the issue in Congress, the Republican leadership decided to drop the bill rather than bring it to a vote and risk defeat.
Down but not out, the bankers decided on a new approach: get themselves a friendly President. They began financing Woodrow Wilson's campaign for nomination as the Democratic Party candidate.
A FRIENDLY PRESIDENT
According to respected historian James Parloff, Wall Street financier Bernard Baruch was put in charge of Wilson's indoctrination:
"Baruch brought Wilson to the Democratic Party headquarters in New York in 1912, 'leading him like one would a poodle on a string.' Wilson received an 'indoctrination course' from the leaders convened there."
When Wilson was elected President, the bankers were poised to have their central bank once more and to undo the damage done to them seventy years earlier by Andrew Jackson, which had only been partially repaired by the National Bank Act of the Civil War.
Over those years the supporters of Jackson had become the supporters of Lincoln's Greenbacks and then the supporters of William Jennings Bryant. But Bryant's faction supported Wilson's nomination, unaware that behind Wilson were Baruch and the Money Trust.
They were destined to be betrayed. During the Presidential campaign, the democrats in Wilson's camp were careful to pretend to oppose the Aldrich bill. Congressman Louis McFadden explains what happened then:
"The Aldrich Bill was condemned in the platform....when 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 had the reins of government. Thirteen months later that promise was broken, and the Wilson administration, under the tutelage of those sinister Wall Street figures.....established here in our free country the worm-eaten monarchical institution of the 'king bank' to control us from the top downward, and to saddle us from the cradle to the grave."
THE REINCARNATION OF THE CENTRAL BANK
Once Wilson was elected Morgan, Warburg, Baruch and company advanced the central bank idea once more, under the innocuous sounding name of: The Federal Reserve System. The democratic party leadership backed the new plan as if it were something profoundly different from the Aldrich Bill, yet it was virtually identical in every important detail.
Claims that the two bills were not the same thing were so vehement that Paul Warburg was forced to reassure his friends in Congress that they were indeed the same:
"Brushing aside the external differences affecting the "shells", we find the "kernals" of the two systems very closely resembling and related to one another."
That admission however, was on a "need to know" basis and not for public consumption.
Cleverly, the Money Trust had senator Aldridge and Frank Vanderlys - president of the Rockefeller National Citibank of New York and another Jeckyll Island conspirator - stand up and oppose the new bill. Many years later, Vanderlip was quoted in the Saturday Evening Post:
"Although the Federal Reserve plan was was defeated when it bore the name Aldrich, nevertheless its essential points were all contained in the plan that was finally adopted."
As Congress, debated the bill, they called Ohio Attorney Alfred Crozier to testify. Crozier reported:
"The....bill grants just what Wall Street and the city banks for 25 years have been striving for - private instead of public control of currency. It [the new bill] does this as completely as the Aldrich Bill. Both measures rob the government and the people of all effective control over the public money, and invest in the banks exclusively the dangerous power to make money among the people scarce or plenty."
During the debate on the bill, senators complained that the money powers were using their financial muscle to influence the outcome but that was nothing new. As it tranmspired the bill was finally sneaked through onto the statute books on a technicality.
On December 22nd 1913, most Senators had left the Senate for the Christmas recess, having been assured that nothing further would be dome until after the Christmass. With only a handful of Senators remaining, the bill was voted into law.
Congressman Lindberg warned:
"This Act establishes the most gigantic money trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalised. 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 perpetuated by this banking bill."
USING THE PEOPLE AS COLLATERAL
As was the case with the Bank of England, discussed earlier, money loaned to government by the central bank was advanced on the condition that interest payments were guaranteed by direct taxation of the people.
As you have seen the government borrows by selling bonds at such and such a price and then, after so many years when the bond matures, has to buy them back at such and such a price plus interest. In any one year a certain number of these bonds mature and become due for repayment. In Britain at present about £30 billion worth of bonds have to be repaid each year. What is meant by interest in this case is the value of bonds that have matured and must be repaid.
Fair enough you might say. The borrowed money pays for services provided to the people so in effect the people are paying through their tax for the services provided.
But look: the government borrows (say) $1 billion and provides with it $1 billion worth of services for the people. However the people are taxed to pay not only for that $1 billion but also the interest, say $100 million. In other words the taxpayer is constantly shelling out more than the value of the services he receives. In terms of services provided by the government the taxpayer never gets what he pays for.
In 1895 the Supreme Court had declared a similar income tax unconstitutional and in 1909 had found a corporate income tax law unconstitutional as well. A Constitutional Amendment was therefore hustled through Congress allowing the new income tax law. This Amendment was sent to the state legislatures for approvaal, reuquiring three quarters of the states to ratify it before it became law. Many claim that the Amendment was never ratified by the required three quarters of the states and may not be legal.
Nevertheless the Constitution was amended and in October 1913 Senator Aldrich got an income tax bill through Congress.
However, the massive wealths of the likes of Rockefeller, Morgan, Carnegie et al needed protection from Income Tax system: so in 1913 the "Foundation Law" was also passed which allowed Rockefeller and Carnegie to pass that wealth onto the control of their offspring unmolested by tax laws they themselves had instigated. Any money donated to the Rockefeller Foundation, for instance became tax deductible. In other words, if any Rockefeller donated 1/2 of their per annum income to their own Foundation they could claim this as a deduction which "zeroed out" their income tax! When Nelson Rockefeller tried to run for the Presidency, in the sixties, he had to disclose his income tax return - which showed he paid only $680.oo!
A year after the passage of the Federal Reserve Act, Senator Lindberg said of the newly installed system:
"This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed.
"The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money.
"They know in advance when to create panics for their advantage. They also know when to stop panic. Inflation and deflation work equally well for them when they control finance."
Senator Lindberg's observations were spot on. He also observed that:
"Already the Federal Reserve Bank have cornered the gold and gold certificates."
Lindberg was far from alone in his disquiet over what had happened. Congressman Lewis McFadden, in a position to know because he was chairman of the House Banking and Currency Committee from 1920 to 1933 warned that the creation of the Fed had brought about:
"A super-state controlled by international bankers and international industrialists acting together to enslave the world for their own pleasure."
Again, spot on. Such statesmen not only saw through the whole ruse but were aware of consequences far into the future. Recent history, the current behaviour of the United States and Britain on the international stage, the plight of the Third World and political and economic events begin to make sense when viewed in the light on Congressman McFadden's statement.
His words were echoed by another chairman of the House Banking and Currency Committee around forty years later, in the 1960s. Wright Patman, Congressman from Texas:
In the United States today we have in effect two governments....we have the duly consituted 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 Thomas Edison, inventor of the light bulb, was alarmed by what was happening to his democracy:
"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. The difference between the bond and the bill is the bond lets the brokers collect twice the amount of the bond and an additional 20%, but the currency pays nobody but those who contribute directly in some useful way.
"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 fattens the usurers and the other helps the people."
Just three years after the passage of the Federal Reserve Act, even Woodrow Wilson himself was beginning to realise what he had done.
"We have come to be the worst ruled, one of the most completely controlled governments in the civilised 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 organised, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better no speak its name above their breath when they speak in condemnation of it."
And it appears that before he died in 1924, Wilson came to fully realise the enormity of what he had done:
"I have unwittingly ruined my country."
The major newspapers in the US, which the money men by that time also owned, not surprisingly eulogised over the 1913 Act as if it were a major breakthrough, claiming that now economic depression could be "scienticially prevented."
The reality, born out by subsequent history, was that they could now be scientifically engineered. Very very easily.
AND NOW FOR A REALLY BIG WAR!
With economic power now very largely centrally controlled not only in the United States, but Britain, France and many other countries, the time had arrived for the bankers to flex their muscles and make some serious money - through the biggest war, and biggest debt-spinner, of all time: World War One, which started in Europe just one year after the US joined the central bank flock.
It is true that nothing creates debt as fast and on such a scale as warfare and England at that time was the prime example.
The Bank of England was 119 years old by the time of the Napoleonic Wars and in that relatively short period had managed to become embroiled in 56 years of warfare and preparations for war in much of the remaining 63.
In World War One the bankers had a ball. The British Rothschilds loaned money to Britain, the French Rothschilds loaned money to France, the German Rothschilds loaned money to Germany, the same family in other words supporting BOTH SIDES in the war!
In the US, JP Morgan, the Rothschilds' associate, was busy selling war materials on behalf of US manufacturers to both the British and the French, doing business to the tune of $10 million a DAY, while many other American bankers did very nicely indeed out of the organised death, mutilation and mayhem.
Bernard Baruch was appointed by Woodrow Wilson, still at that time unaware that he was aiding and abetting the biggest criminal operation in history, to head the War Industries Board. According to historian James Perloff, both Baruch and the Rockefellers made around $200 million from the war, while the manhood of many nations was bleeding to death on European battlefields.
In the middle of all this, Russia suffered her revolution and the Tsar, head of the last European nation to stand firm against the central bank scheme, whose grandfather had aided Abraham Lincoln, whose country had vast oil resources and a growing oil industry that threatened Rockefeller's Standard Oil share of the market, was toppled.
Money to assist the revolution had been supplied by financiers based in England, and by Jacob Schiff, the Rockefeller partner-in-crime who admitted on his death bed he had invested $20 million in the defeat of Tsar Nicholas, whilst Lenin was smuggled into Russia aboard a blacked-out train from Germany.
But why would some of the richest men in the world financially back communism? Historian Gary Allen explains:
"If one understands that socialism is not a share-the-wealth program, but is in reality a method to consolidate and control wealth, then the seeming paradox becomes no paradox at all. Instead, it becomes logical, even the perfect tool of power-seeking megalomaniacs.
"Communism, or more accurately, socialism, is not a movement of the downtrodden masses, but of the economic elite."
And another historian, W Cleon Skausen 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."
Indeed if one is a banker and wishes to help some revolutionary group topple a government, one is ideally placed to assist in that effort, not only through the channeling of funds but by the use of one's control of the money supply, either through a central bank or, if one does not exist, through the many city and regional banks, to sow the seeds of economic instabilty and chaos upon which revolutions feed.
UNLEASHING MONSTERS
The problem with revolutionary groups is that they have their own agenda and tend to be difficult to control. But what happens if they get out of control and try to seize power from the very super-rich elite that aided and abetted them?
The Wall Steet and London financiers took a chance on the communists, feeding such revolutionary groups funds when they were compliant and witholding funds when they were not. Vladimir Illyich Lenin soon realised that although he was absolute dictator of the entire Russian Empire, he was not quite in control:
"The state does not function as we desired. The car does not obey. A man is at the wheel and seemes to lead it, but the car does not drive in the desired direction. It moves as another force wishes."
Lewis T McFadden had the answer:
"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 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."
All this help, of course, was feeding a rapacious monster that for seventy or so years fomented revolution, and turmoil across the globe, backed terrorism, enslaved and murdered millions of people and locked the entire plant into the Cold War.
But in so doing, Communist Russia generated a hell of a lot of debt world-wide.
In 1992, Boris Yeltsin was quoted in the Washington Times as complaining that most of the billions loaned to the USSR in foreign aid were not finding their way into the Russian economy at all but were winding up straight back in the coffers of western banks in payments on earlier debts.
The unstable Communist experiment was finally killed off but Russia's unrepayable debts were not. The country continued to descend into economic chaos and, while the "Russian Mafia" were blamed for that vast nation's ills, the real mafia were still in place, milking the ailing cow to within an inch of its life.
The colossal debts still had to be paid, the annual repayments coming from taxation. When the taxation of an impoverished people became such a burden that even major companies were not paying their taxes, western newspapers reported that the Russian army was sending in troops to make the tax collections, in other words forcing people, businesses and even major gas companies to cough up at gun point!
MEANWHILE, BACK AT THE FRONT....
But back to World War One. Millions died, Europe was torn apart and great nations laid low. Only the bankers emerged bright-eyed, bushy-tailed, their smart suits unruffled, from that misadventure. All the participant nations vastly expanded their national debts in an effort to win the good fight.
The influences at work in any war are many and complex but if one really looks one finds in any such conflict the work of a third party, hidden from view, working on both sides to bring them into conflict. And behind World War One, one finds the Rothschilds and their fellow-travellers, "in good" with both sides, lending them vast oceans of money to build their war machines and sustain their war economies.
The terrible irony is that such power could have been used for good. The bankers could have used their power over governments to stop the conflict before it got started. They could have witheld funds from both sides until they kissed and made up. Or even the threat of doing so would have done the trick. How long would it have taken Rothschild to whisper a friendly word of advice in some Prime Minister's ear?
When World War One ended, the Paris Peace Conference saw the bankers embark upon their next objective: the further centralisation and consolidation of power into a single World Government.
Such proposals were given priority at the Peace Conference: the so-called League of Nations. The title sounded innocuous, even idealistic and inspiring to people tired of war, no doubt many idealists fell for it, but any trap, to be effective, has to have a good bait. However even slavery can be made to sound inviting if you call all the slave of the same slave-master the League of Slaves.
President Wilson, Paul Warburg and Bernard Baruch all attended the conference but soon discovered that nations were not yet weary or beaten down enough to surrender their sovereignty.
The British Foreign Secretary called the League "a good joke" and president Wilson was humiliated when his own Congress refused to ratify the League. Without the input of US money, the whole concept died a premature death.
STILL MORE DEAD PRESIDENTS
After World War One the American public seemed to tire of Wilson's internationalist policies. In 1920 they elected republican Warren Harding to the White House with over 60% of the vote. Harding was emphatically opposed to the League of Nations and to Bolshevism. His election heralded a run of 12 years of Republican Presidents and an era of unprecedented prosperity known as the Roaring Twenties.
World War One had seen the US accrue a national debt ten times the debt from the Civil war, yet despite that the economy boomed. How?
Well, for one thing gold had poured into the United States during World War One and continued to do so afterwards, enabling the economy to gain a little independence of the paper money monopolised by the banks and thus weakening the bankers' control.
For another thing, after killing off the League of Nations, Harding moved quickly to reduce domestic taxes whilst raising tariffs on imports to record levels, a policy of which the Founding Fathers might have heartily approved and something from which modern government could learn.
The US economy took off and production, sales and profits increased to such an extent that tax revenues still rose despite a reduction in taxation levels. In addition, under Harding and Coolidge, his vice-President who succeeded him and continued his good work, the Federal debt was cut by 38% down to $16 billion, the biggest percentage drop on record.
Once more the bankers were faced with a serious threat to their power: the economy was gaining independence from them and Harding was setting such an example of sound economic management that other governments might copy it.
But the bankers seemed to have the luck of the Devil in so far as Presidents they didn't like kept coming to premature and often sticky ends.
Where Lincoln and Garfield had been struck down by the bullets from the guns of crazed "loners" and Jackson almost so, Harding's assassin was a mystery germ contracted on a train trip in his second year of office. No autopsy was carried out. The cause was said to be pneumonia or food poisoning - a strange display of medical inexactitude considering it was the United States President who had just be scythed down in his prime by the Grim Reaper.
We shall never know what really killed a thoroughly capable statesman.
Fortunately for America, Coolidge was also a thoroughly decent and capable statesman too and went on cutting taxes and restricting imports, letting producers produce unshackled by supressive levels of taxation and seeing no point in the country importing goods it was quite capable of producing itself. So the boom went on booming.
It perhaps would have been asking too much of the bankers' incredible run of luck for it to kill off two Presidents in a row.
But so far as the bankers were concerned, the prosperity had occured without their permission and to add insult to injury was hitting their own profits because prosperous people don't need to borrow. That sort of shenanigans just would not do. It had to be stopped.
As they had done in the past, the international bankers mobilised to crash the economy.
CRASHING THE ECONOMY? PIECE OF CAKE!
The Federal Reserve began flooding the country with money, making credit cheap and easy enough to seduce people into borrowing. It increased the money supply by 62% in three years. Money was plentiful and the boom went into overdrive. Only now it was the boom before the bust. The healthy organism had been infected with cancerous cells.
Before he died in 1919, Theodore Roosevelt warned the nation:
"These International Bankers and Rockefeller-Standard Oil interests control the majority of newspapers and use the columns of these newspapers to club into submission or drive out of public office officials who refuse to do the bidding of the powerful corrupt cliques which comprise the invisible government."
The Mayor of New York, John Hylan, concurred:
"The warning of Theodore Roosevelt has much timeliness today, for the real menace of our republic is this invisibble governmentv which like an octopus sparwls its slemy length over city, state and nation.....It seizes in its long and powerful tentacles our executive officers, our legislative bodies, our schools, our courts, our newspapers and every agency created for the public protection....
"To depart from mere generalisatoion, let me say that at the head of the octopus are the Rockefeller-Standard Oil interests and a small group of powerful banking houses generally referred to as the international bankers. The little coterie of powerful international bankers virtually run the United Stets governemt for their own selfish purposes.
"They practically control both parties, write political platforms, make catspaws of party leaders, use the leading men of private organizations, and resort to every device to place in nomination for high public office only such candidates as will be amenable to the dictates of corrupt big business....
"These international bankers and Rockefeller-Standard Oil interests control the majority of newspapers and magazines in this country."
As warnings go, these were about as strong as they come, from eminent politicians in a position to know what they were talking about. Yet no-one listened, or if they did, no-one took action.
This was the Roaring Twenties, a time of unprecedented prosperity, and no-one wanted to worry too much about economics. But as John Burke once said:
"For evil to triumph it is only necessary for good men to do nothing."
America was soon to pay dearly for its failure to heed those warnings.
The prosperity had a cancer at the heart of it. As businesses expanded as never before, borrowing to finance the expansion, confident of profit margins that would accomodate repayments, they became increasingly strung out on credit. On the booming, confident stock market speculation became excessive.
The bankers waited until the moment was right and then in April 1929, Paul Warburg sent out a secret message to his friends warning them that a stock market crash and a nationwide depression were immanent.
In August the Federal Reserve began to tighten its lending, constricting the money supply.
In October the big New York bankers called in their 24 hour broker call loans. Such loans, used to buy shares, had to be honoured as soon as they were called in. This meant that stockbrokers and their customers had to sell shares quickly to cover the loans - and without being too fussy as to what kind of a price they got for them. The sudden spate of selling caused a panic as cut-price shares began to be dumped on the market. Soon everyone was trying to dump their shares in an effort to get out quick before their price fell too low.
This of course created a scramble to sell, which brought prices down, which created further selling, which caused prices to tumble - fast. The market crashed.
However all the Wall Street giants of the era: JP Morgan, Joseph Kennedy, Bernard Baruch et al, had miraculously escaped harm in that by some bizarre coincidence they had all dumped their own shares and put their assets into cash or gold just before the crash. Phew!
Congressman Louis McFadden accused the bankers of orchestrating the crash:
"It was not an accident. It was a carefully contrived occurence...The international bankers sought to bring about a condition of despair here so they might emerge as rulers of us all."
In February 1931, in the midst of the ensuing Depression he also said:
"I think it can hardly be disputed that the statesmen and financiers of Europe are ready to take almost any means to reacquire rapidly the gold stock which Europe lost to America as a result of World War One."
Curtis Dahl, the son-in-law of Franklin D Roosevelt was a broker for Leman Brothers at the time and on the floor of the stock exchange on the day it crashed. In his 1970 book FDR - My Exploited Father-in-Law, he said:
"Actually it was a calculated "shearing" of the public by the World Money Powers triggered by the sudden shortage of call money in the new York money market."
In actual fact the stock market crash was just a blind. When stock markets crash the people who get hurt are the speculators, mainly the small to middle-size ones. Such crashes do not of themselves cause massive depressions.
The real cause of the Depression was the planned contraction of the money supply orchestrated by the powers of the Federal Reserve. As Milton Friedman, Nobel-Prize-winning economist points out:
"The Federal Reserve definitely caused the Great Depression by contracting the amount of money in circulation by one-third from 1929 to 1933."
And a vast amount of wealth was most definitely redistributed. For example, Joseph Kennedy's wealth was $14 million in 1929 and by 1935, whilst the rest of America was on its uppers, had miraculously grown to $100 million.
The funny thing about money is that while it is definitely created, it is most certainly not destroyed. While the Crash and the depression saw to it that a great deal of it vanished from a great many pockets, it reappeared in rather fewer but greatly larger pockets.
The brutality of what was done almost beggars belief. Throughout that period, whilst businesses crashed, families starved, farms went bankrupt and suited gentlemen threw themselves off Wall Street window ledges, the bankers of the Federal Reserve could at any time have ended the misery by loosening up on lending and allowing money to flow back into the economy. But they chose not to do so, chose to keep the screws turned tight.
A controlled press meanwhile could have done a great service to millions of innocent people had it done its duty and told them the truth. But it did not.
And bear in mind that while this was happening in America, the same thing was happening in England and Europe. Like puppets dancing on the same string the central banks were all tightening their lending, creating the very economic turmoil they purported to prevent.
AND NOW IT GETS REALLY UGLY....
While the then President, Hoover, was desperately trying to prop up banks and save millions of his people from starvation in the midst of plentiful harvests, as unemployment swept a land whose wheels of industry had been turning at dizzying speeds only moments before, while money was being sucked out of the American economy, much of that lost moeny was going abroad. Guess where!
Well let's let the venerable Congressman McFadden tell you. Eight years before Hitler was to invade Poland he said:
"After World War One, Germany fell into the hands of the German international bankers. Those bankers bought her and they now own her lock, stock and barrel. They have purchased her industries, they have mortgages on her soil, they control her production, they control her public utilities.
"The international German bankers have subsidised the present Government of Germany and they have also supplied every diollar of the money Adolph Hitler has used in his lavish campaign to build up a threat to the government of Bruening.
"When Bruening fails to obey the orders of the Herman Internatoional bankers, Hitler is brought forth to scare the Germans into submission.....
"Through the Federal Reserve Board....over $30 billions of American money.....has been pumped into Germany.....You have all heard of the spending that has taken place in Germany.....modernistic dwellings, her great planetariums, her gymnasiums, her swimming pools, her fine public highways, her perfect factories. All this was done on our money. All this was given to Germany through the Federal Reserve Board.
"The Federal Reserve Board.....has pumped so many billions of dollars into Germany that they dare not name the total."
THE GREAT GOLD ROBBERY
In 1932, whilst Germany was thriving on money stolen from the American economy, Franklin D Roosevelt was swept into the Presidency.
He immediately enacted emergency "banking measures" which achieved nothing but to increase the Federal Reserve's power over the economy. Only then did the Fed begin to loosen the financial screws and allow new money to begin to feed into the starving economy.
Later that year Roosevelt outlawed the private ownership of all gold coin and bullion. Most of the gold owned by the average American was in the form of coins and the decree was tantamount to a confiscation. Those who failed or refused to comply faced a year in prison and a ten thousand dollar fine - the equivalent of ten times that amount today.
The decree, as you might expect, was not very popular. In fact it proved so unpopular that no-one in the government would admit authorising it! No Congressman stepped forward and claimed it and FDR made it clear to everyone that he was not the author of it and even stated that he had not read it! That did not stop him signing it though, which seems a very loopy thing for a President to do. Mind you, he was not alone: the Secretary of the Treasury claimed not to have read it either and that it was "what the experts wanted."
The American public might have been forgiven for wondering if they had just elected the Marx Brothers to the White House but FDR managed to convince them to hand over the loot by telling them that pooling the nation's resources was necessary to get America out of depression.
The public was torn between hanging onto their wealth or obeying the government, they could smell a rat even when they could not quite see it. They did not trust FDR but on the other hand the penalties for non-compliance were pretty savage. In the end people obeyed the government, handed over their gold and received paper money for it, at $20.66 per ounce.
To house the mountain of gold illegally confiscated from the people by their own government, a depository was set up near Louisville Kentucky, behind electrified fences, a moat and machine gun posts, presumably to discourage anyone from stealing it back again. It was called Fort Knox.
And now for the rip-off to end all rip-offs.
The gold was compulsorily purchased from the people by the government at $20.66 per ounce, using money borrowed from the Federal Reserve to buy it. Once all the gold had been turned in, the official price of gold was suddenly raised to $35 an ounce.
But the big guns of Wall Street had been using the millions they had made out of the Crash and the Depression to buy up as much gold as they could lay hands on, at the $20.66 per ounce price. They had shipped it to Europe and waited until the price was raised, then shipped it back and sold it to the government at the higher price, making an immediate profit of around $15 per ounce. But again, where does the government get the money to buy it? Why, from the only place money could come from: borrowed from the banks!
In the US the Depression was finally ended the only way a government can, in a debt economy, solve the problem of debt: by going further into debt. FDR introduced his "New deal" which was in fact more of the same old deal: the government stimulated economic growth by creating bonds which it sold to the banks, who used money created out of thin air to buy them.
If you think that is stupid, the British government went one better: it solved the problems caused by a constricted money supply by a policy of further restriction. With factories working half time, if at all, and unemployment at catastrophic levels with all the human misery that entails, our government went for higher interest rates, wage cuts and cuts in dole for the unemployed!
So while America surged out of recession like a race-horse tanked up on steroids, Britain remained in depression right up to World War Two, whereupon the government, with a war to fight rather than a population to look after, decided it really didn't mind borrowing after all.
Which brings us to the biggest debt producer yet: World War Two.
....AND AN EVEN BIGGER WAR
Money squeezed out of the suffering American people was used by the Federal Reserve to finance Germany and ultimately the building of Hitler's war machine.
But the involvement of the Wall Street giants and the Bank of England in Nazi Germany went further and nastier than that.
From the 1920s The Rockefeller Foundation, for instance, poured money into Germany to finance a "medical" speciality known as psychiatric genetics.
Psychiatric genetics is that branch of psychiatry which teaches that heredity establishes that some races are superior and "more worthy of life" than others. It was German psychiatry, led by men such as the infamous Ernst Rudin, that turned the concept of race purification into a pseudo science and which planned, championed and carried out the sterilisation, then extermination of so-called inferior people in Germany, the definition of "inferior" at first encompassing the mentally handicapped and criminals but becoming gradually extended until it included entire races such as the Jews.
The whole sick story of psychiatry's creation of the holocaust is beyond the scope of this book but in the years before Hitler, himself rendered stark staring bonkers by psychiatric "treatment," invaded Poland, the Rockefellers directed and financed the creation of the Kaiser Willhelm Institute for Psychiatry in Munich. This Institute, headed by Ernst Rudin played a leading role in the development of psychiatric genetics, both in theory and practice.
Another contributor to the Institute was Paul Warburg's brother-in-law, James Loeb of the Kuhn Loeb banking family. The Warburgs were intimate partners of the Rockefellers.
Rockefeller sponsorship of the Institute, to the tune of millions of dollars continued throughout the Hitler era.
Whilst the Rockefellers and the Warburg-owned Kuhn Loeb bank were pouring funds into Nazi psychiatry and continued to do so right through the war and the holocaust, the Bank of England was also getting in on the act.
Its then governor, occultist and psychiatric patient Montagu Norman, according to the Executive Intelligence Review of 7th October 1994:
"...propped up Hitler's credit, arranged the armanent of Germany, and guided the strategies of Hitler's powerful supporters, the Rockefellers, Warburgs and Harrimans."
The same publication also goes on to report:
"The German chemical company IG Farben [supplier of Zylon B gas to the gas chambers] and Rockefeller's Standard Oil....were effectively a single firm, merged in hundreds of cartel arrangements. IG Farben was led, up until 1937 by the Warburg family, Rockefeller's partners in banking and in the design of Nazi German [race purification]."
That relationship, indeed a Standard Oil supply operation for the German war machine, continued right through the war and even included Standard Oil funds helping to pay for the SS guards at Auschwitz where the Kaiser Willhelm Institute assistant director, Jospeh Mengele carried out his horrific experiments on human guinea pigs.
The involvement of the Wall Street-London banking axis and its pet mass manipulation cult, psychiatry, in the creation and sustaining of Nazi Germany long enough for their deranged front-man Hitler to lay waste to Europe, is worthy of a whole study in itself but we hope from the instances mentioned that you have got the picture.
As Napoleon said: "Money has no motherland; financiers are without patriotism and without decency; their sole object is gain."
The whole point of World War Two, from the bankers' point of view was that it racked up debt: Hitler racked up debt to build his Reich then took the gold fillings from the corpses of Jews to pay it back before he collapsed; nations racked up debts fighting with or against him; the victors picked up the tab for rebuilding Europe once the war was over. And millions lay dead.
In 1944 alone, the US spent $103 billion on the war. Its entire national income was only $183 billion. Every nation involved in the war greatly multiplied its National Debt: the US sixfold, Japan by 134%; France by 583%; Canada by 472%; Britain by 350%.
POST WAR BOOM
After World War two, Britain did not return immediately to its old restrictive economic policies. The post war boom occured precisely because the government made no attempt to pay off its debt but let it go on rising. Added to this was finance from America but when these latter funds were eventually cut - while America's flow of money to the reconstruction of Germany continued - the governement made no attempt to compensate for the lost funds by increasing its National Debt borrowing.
In fact by the 1960s and right up to the present the government returned to its old ways: high interest rates, attempts to cut the National Debt and so on. This drastic restriction of the money supply plunged the country into the rapid decline through which we have all been forced to live: escalating private and commercial debt, lost competitiveness at home and abroad, lost jobs, lost industries, lost hopes and lost confidence being the price we have all had to pay for attempts to cut the National Debt - attempts which failed. Although the rate at which the debt was increasing slowed slightly, it nevertheless went on climbing even though the country rendered itself almost destitute trying to pay it off. Today it stands at £380 billion, more than half of all the money in circulation.
But government unwillingness to borrow threw the burden of keeping up the money supply onto the shoulders of industry, the home-owner and private borrower. Private and commercial debt has escalated and now stands at around £780 billion. As a result, it now takes both partners in a marriage to keep up with the mortgage and most families are creaking under the burden of debt as they attempt to maintain their standard of living.
Notice too, that while the National Debt comprises around half the existing money supply, the British pay one way or another around half their income in tax. It has been said an Englishman works for the government for around half his working life. Perhaps it would be truer to say he works for the Bank of England for around half his working life.
In the last year or so, as of this writing, the Bank of England has secured for itself a further slice of the power of life and death over the economy: the power to decide interest rates was handed over to it by the Blair government.
Meanwhile Britain's gold reserves are being sold by the Blair government under instructions from its creditors to the United States Federal Reserve - at about one third of their real market value.
The government has said it will use the procedes from this bargain basement gold sale to "invest in the Euro." What that means is it will use the money raised by selling off our gold reserves to prop up the ailing Euro and make it look good when it comes to convincing us all we would be better off with a single currency.
The single currency will be created out of thin air by the central European bank and loaned to member governments at interest. The bank will therefore control the economies of all the member nations.
By now you know enough to understand what that means.
But back to the US....
GOLD? WHAT GOLD?
While we are on the subject of gold, what happened to the Fort Knox gold?
Most Americans believe that their gold is still in safe-keeping in Fort Knox. At the end of World War Two, Fort Knox contained over 700 million ounces, over 70% of all the gold in the world.
But no-one knows how much of it, if any, is still there behind the moat and the machine gun posts. Although the law requires an annual physical audit, no such audit of the Fort Knox gold has been done since President Eisenhower ordered one in 1953. The Treasury consistently refuses to do it.
Is the Fort Knox gold still there? If not, where did it go?
Graham Still, (correct name?) in the video documantary The Money Masters, says:
"Over the years it was sold off to the European money changers at the $35 an ounce rate. This was during a time that it was illegal for Americans to buy their gold from Fort Knox.
"By 1971 all the pure gold had been secretly removed from Fort Knox to London. Once that was done, President Noxon replealed Roosevelt's Gold Reserve Act of 1934, making it lkegal once more for Americans to buy their gold.
"Naturally the price of gold immediately went through the roof. Nine years later, gold sold for £880 an ounce, twenty five times what the gold in Fort Kox was purchased from the population for."
It does not take a genius to work out how much richer anyone who had purchsed gold at $35 an ounce would be.
The story of the missing Fort Knox gold was not meant to get out. But it appeared in the New York Periodical in 1974. The article charged that the Rockefeller family was selling off gold held by the Fed to anymous European buyers. The source was 59-year-old Louise Auchincloss Boyer, long-serving secretary to none other than Nelson Rockefeller, who became vice-President to Gerald Ford after the resignation of Nixon mid public scandal.
Ms Boyer might have had more to tell us except that the gods that watch over bankers struck again and 32 days after the article appeared, she mysteriously "fell" to her death from the window of a tenth floor apartment.
Wealthy Ohio business man Ed Dorell started his own investigation in order to uncover the truth, whatever it may be, of the Fort Knox gold. He pursued the case for fourteen years, spending a small fortune, writing thousands of letters to governments and banking officials enquiring as to how much of the gold that was supposed to be in safekeeping in the national depository was a actually still there and where the rest had gone. He died without ever having gotten an answer to his question.
In March 1975, in the New Hampshire Sunday News, Theodore Roosevelt's grandaughter, Edith Roosevelt, said:
"Allegations of missing gold from our Fort Knox vaults are being widely discussed in European financial circles. But what is puzzling is that the administration is not hastening to demonstrate conclusively that there is no cause for concenr over our gold treasure - if indeed it is in a position to do so."
Certainly a full audit conducted in full public view would have been the logical step to calm public fears. It was never done.
In 1981, when President Reagan took office, he appointed a "Gold Commission" to study the situation.
In 1982 the Commission reported some shocking news: The United States owned no gold at all! All the gold left in Fort Knox, however much that might be, was owned by the Federal Reserve bank and ultimately its investors, as collateral on the National Debt!
Which makes that by far the biggest gold robbery in all history and as Britain now obligingly sells its gold to the Federal Reserve one can only speculate as to exactly how much of the entire planet's gold reserves are now in the hands of a few wealthy criminals.
A WORLD CENTRAL BANK
Towards the end of World War Two, the allies held a conference at Bretton Woods in the US at which they set up three new banking organisations which were to further consolidate and centralise the power of the banking elite over the nations of the world and determine the subsequent catastrophic development of the world economy.
These were the Bank of International Settlements (BIS), the World Bank (WB) and International Monetary Fund (IMF). The purpose behind these new organisations was clear.
Carroll Qigley, Professor at Georgetown University and President Clinton's mentor put it this way:
"The powers of financial capitalism had [a] far-reaching [plan], nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.
"This system was to be controlled in a feudalistic fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences.
"The apex of the system was to be the Bank of International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks, which were themselves private corporations.
"Each central bank....sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity, and to influence cooperative politicians by subsequent economic rewards in the business world."
In 1945, the League of Nations world government concept was revived and this time successfully put in place with full US cooperation. It was named the United Nations.
But it is the banking organisations, with near total control over the currencies and thus the economies of the world's nations, where the covert power to influence world events lies.
For a brief study of how the money powers have manipulated very recent world events - and public perception of those events - please check this site for my essay "The Spoils of War in Yugoslavia," which I plan to have posted as soon as possible.
The World Bank and IMF simply duplicate on a world scale what the Bank of England established in the UK and the Federal Reserve in the US, the Bank of France, Bank of Germany, Bank of Russia, Finland, Brazil and so on and so on.
Just as the Fed or the Bank of England are controlled by their respective Boards of Governors, the IMF and WB are controlled by their Boards of Governors. And these are comprised of the heads of the world's central banks or the heads of national treasury departments, which are dominated by their central banks. Voting power in the IMF is rigged in such a way as to give the Fed and Bank of England effective control.
The three world banking organisations: The IMF, WB, and BIS control the money supply of the entire world. Collectively they comprise a world central bank and duplicate the basic goldsmith's fraud, politely termed fractional reserve lending, on a planetary scale. As always the lender is senior to the borrower. The manufacture of money out of thin air that is borrowed by governments at interest to form an inherently unrepayable debt, delivers power into the hands of the World Central Bank. The WCB can control nations simply by expanding and contracting their credit, calling in loans, selling bonds or setting conditions for the rescheduling of loans.
They costitute a banking cartel, owned and controlled by shadowy, unelected, private individuals that, through the central banks placed in each county, gradually assume the power to dictate economic policy to those nations.
And when they determine your country's economic policy, they determine your standard of living, the quality of the food you buy, your wages, whether you will have a job or not, the information you receive through a heavily mortgaged press, the whole shape and quality of your life.
As soon as I can I'll be posting "Third World Death," and a further essay "Globalization," brief outlines of the globalization of the money hoax that will give you an inkling as to how the economic fortunes of entire nations are manipulated.
This operation may be about as evil as things get but there is no denying its cleverness. Through manipulation of its purse strings a handful of not very benign individuals have assumed control over the destinies of millions of people.
Just as the Bank of England or the Fed issue currency out of thin air and lend it into the economy, so the IMF has been given the power to issue a world currency called Special Drawing Rights (SDRs). Well over $30 billion of these SDRs have been issued and member nations have been ordered to make them fully exchangeable with their own currencies.
In 1988 the BIS put into effect regulations requiring the world's central banks to raise their reserves to 8% of liabilities by 1992. In other words an upper limit was set to fractional reserve lending: what banks had in reserves must be no less than eight percent of their total lending.
This meant that nations with low reserves, less than 8%, had to constrict credit, call in loans or sell stock to raise their reserve levels. This constriction of the money supply had the usual predictable effects: recession.
Japan, whose economy had been one of the world's success stories - there is no denying the industry and productivity of the Japanese nation - was deeply affected by this restriction: she had had until 1988 one of the lowest capital reserve requirements in the world. She experienced in 1989 a crash which began almost as soon as the new regulations were put in place. Since 1990 around 50% of the value of her stock market and 60% of the value of her commercial real estate has been wiped out.
There are several things about this example that are glaringly obvious.
The first is that Japan is a highly organised, highly productive nation with a vigorous work ethic and a reputation for high quality goods, yet still she crashed. What happened to her fiscally bore no relation to the observable, physical condition of her economy. In real terms: skills, workforce, plant, productivity levels, social stability, quality of product, world demand for product, product viability and so on she was a roaring powerhouse. None of that changed overnight, yet she crashed. What changed overnight was the policy of her central bank under instruction from the World Bank, a mere adjustment of numbers in a computer.
The second thing is that the whole process completely bypasses government and the democratic process. Decisions are taken by a few unknown individuals who are not even Japaneses (probably) and passed around through private institutions and the whole socio- economic landscape changes. The desires and needs, hopes, wishes, preferences, goals or dreams of her people amounted to nothing, nothing at all.
MONETARY TYRRANY
The IMF and WB brings us inevitably to the subject of Third World Debt. A discussion of this will be briefly sketched out for you in a forthcoming essay as mentioned above.
It is worthy of study if you care at all what happens to your fellow human beings, particularly when that involves hunger and desperation on a massive scale and through no fault of their own.
WB and IMF lending, suffice to say, has shoved the economies of many nations into a disastrous trend. It has saddled them with unrepayable loans, loans which they have rendered themselves utterly ruined trying to pay off. It has robbed them of control of their economic destinies: conditions attached to loans that cover the interest on earlier unrepayable loans have meant that the WCB now decides their policies, not their governments.
Those policies have enforced an orientation of their economies towards exports, selling the wealth their people produce in order to pay off unrepayable loans. In the meantime the loans do not benefit the people of Third World countries: they do consume the wealth they produce, they hungry or suffer the steady annihilation of the infrastructure, health care, education and even the environment of their country.
Third World Debt is rigged to be unrepayable and to siphon off the wealth of nations and nations thus victimised are getting poorer very fast. The rhetoric about the alleviation of poverty is shown to be a downright lie because observably, painfully, shamefully the very opposite is happening.
A radical transfer of power has rendered nations subservient to the global money powers.
Although the Third World pays more and more to the banks, frequently unable to even cover the interest on its loans, the total indebtedness just goes on rising.
The next time your TV screens show you emaciated Third World children scratching in the dust, remember that the cause of it is money created out of nothing by the stroke of a pen by a banker in some distant office and loaned to their government at interest.
And remember too that all their governments could solve their economic problems tomorrow simply by creating their own currency instead of borrowing it.
THOSE PRESIDENTS KEEP DROPPING LIKE FLIES...
In the United States in 1963 one final attempt to break loose of the central bankers was made by John F Kennedy.
He signed Executive Order 11110 that returned to the elected US government the power to issue currency without having to borrow it from the Federal Reserve.
Kennedy's order gave the US Treasury the power to "issue silver certificates against any silver bullion, silver or standard silver dollars in the treasury."
In all Kennedy actually brought around $4.3 billion of debt free money into circulation.
Just five months later an assassin's bullet blew the back of his head off. No more debt free money was issued by the Treasury. His successor withdrew the debt free money in circulation.
Had Kennedy lived, his actions might well have spelled the beginning of the end for the Federal Reserve and the banking scam world-wide. The bankers got lucky again.
America has not been so fortunate. Her standard of living has steadily declined and almost all of her 6 TRILLION dollars of debt have accumulated since that time.
CONCLUSIONS.
This publication has been an ettempt to outline the inception and growth of the biggest fraud in history.
I leave you to your own conclusions as to what this means for you and your loved ones, whether something should be done about it or not.
In The Worm In The Apple, and yet-to-be-published essays, I take a look at the impact of this fraud on the many different aspects of our lives, not least the dangerous decline in the quality of the food we eat, the destruction of our environment, depressions, economic decline, escalating debt and the great con of Monetary Union.
My endeavour here has been to show you how it all came about and how that fraud grew and evolved until it enabled a handful of men factually and in the here and now to bypass elected government and exert control over millions for their own ends.
The term Financial Dictatorship is neither exaggeration nor rhetoric: it is a statement of fact. It is real. It has the blood of millions on its hands and the unnecessary suffering and impoverishment of many millions more. It represents a clear and present danger to our freedoms, our health, safety and happiness and more importantly to those of our children.
The money powers have always moved in the direction of consolidating power, of removing it further and further from the reach of people like you and I, to remove any possibility of discovery or, if it is discovered, of you or I being able to do anything about it.
Inherently dishonest and corrupt, motivated by self protection and greed, it is bringing about the ruination of human civilisation.
We happen to believe that human civilisation is worth saving, that our world can be run better than this, our economies rendered the servants of our needs not the masters of our destinies and that there is no endeavour more in need of our attention nor more worthwhile than a shoulder to shoulder effort to put matters right.
Just as a thief has no inherent right to steal or a murderer to kill, the bankers have no inherent right to their position of dominance: it has been stolen by a sleight of hand, a cowardly criminal deceit.
Are we going to let them get away with it? Can we in the slightest afford to let this criminal operation continue?
My contention is that restoring to the people of Earth a sane, honest and stable money system is not just something that would be nice to do, nor is it something we can leave to others to do for us while we watch the world go to pot on TV. We have simply got to put this thing right, if not for our own sakes, then for our children. And soon: we are running out of time.
For all their power, these criminals are in a position that is inherently weak.
Their fraud depends for its existence on your ignorance of it, your being unable to see or understand what is being done. Thus the controlled press will lie to you, you can expect no better of your politicians and the "experts" of a pseudo-science called "economics" can be guaranteed to confuse you with a barrage of labyrinthine gibberish.
You always suspected as much didn't you?
However bad things look, take another look, look beyond the bad news to the possibilities that become achievable if we make the effort to help ourselves.
How do you break the dictatorship of the money powers? Simple. Get your government to start issuing its own money debt-free into the economy. It's been done before and every time it was done sensibly, nations boomed, became happier and more at peace with themselves.
Each time the bankers managed to nip such dangerous examples in the bud, but something was missing from the equation in those earlier times.
That something was a broad public understanding of what money is and how the banking fraud works. Leaders lacked the will or the means to make sure the public were properly educated and accurately informed and thus the population was unable to help them.
We don't have to be fooled again and one thing that will dawn on you if you take the trouble to understand all this is: as a race we have the technology, the democratic forms and the experience to create a golden age the likes of which Planet Earth has never seen. All we lack is a decent money system that will get parasitic criminals off our backs.
We are not beasts and we are not inherently unworthy, we just had the wool pulled over our eyes.
But now the secret is out. Help us spread the word. Help us ensure that every single one of your fellow human beings understands what is going on.
There are only a few bankers, there are countless millions of us. It's time we ran our world for a change. And bequeathed to our children and our children's children a civilisation for which they will thank, not curse, us.
My essay "Age of Prosperity" explores some of the wonderful potential that awaits, should we get it right.
Let's create something truly wonderful for future generations.
Kieron McFadden
