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How the International Banksters Took Control of the USA
Posted on November 15, 2021 by State of the Nation
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THE MONEY MASTERS – HOW INTERNATIONAL BANKERS GAINED CONTROL
OF AMERICA
The Money Masters is a 1996 documentary film that discusses
the concepts of money, debt, taxes, and describes their
development from biblical times onward.
Scraps From The Loft
What’s going on in America today? Why are we over our heads
in debt? Why can’t the politicians bring debt under control?
Why are so many people – often both parents now working at
low-paying, dead-end jobs and still making do with less?
What’s the future of the American economy and way of life?
Why does the government tell us inflation is low when the
buying power of our paychecks is declining at an alarming
rate? Only a generation ago, bread was a quarter and you
could get a new car for $1,995!
The problem is that since 1864 we’ve had a debt-based
banking system. All our money is based on government debt.
We cannot extinguish government debt without extinguishing
our money supply. That’s why talk of paying off the national
debt, without reforming our banking system, is an
impossibility. That’s why the solution does not lie in
discussing the size of national debt rather than lies in
reforming our banking system.
This is the Federal Reserve headquarters in Washington, D.C.
It sits on a very impressive address right on Constitution
Avenue, right across from the Lincoln Memorial. But is it
“Federal”? Is it really part of the United States
government?
Well, what we are about to show you is that there is nothing
federal about the Fed Reserve, and there are no reserves.
The name is a deception created back before the Fed Reserve
Act was passed in 1913 to make Americans think that
America’s new central bank operates in the public interest.
The truth is that the Fed Reserve is a private bank, owned
by private stockholders, and run purely for their private
profit.
[Henry Pasquet, Economist] “That’s exactly correct, the Fed
is privately-owned, for-profit corporation which has no
reserves, at least no reserve available to back up the
Federal Reserve notes which are our common currency.
[Larry Bates, Economist/Author] Well, absolutely. The Fed is
neither federal and has doubtful reserves. It’ a private
bank that is owned by member banks and it was chartered
under the guys of the seat by an act of congress in 1913.
If there’s still any doubt whether the Federal Reserve is a
part of the U.S. government, check your local telephone
book.
In most cities, it’s not listed in the blue “government
pages.” It is listed in the “business” white pages, right
next to Federal Express, another private company. But more
directly, U.S. Courts have ruled time and time again that
the Fed is a private corporation.
Why can’t Congress do something about the Fed? Most members
of Congress just don’t understand the system, and the few
who do are afraid to speak up. For example, initially a
veteran Congressman from Chicago asked us if he could be
interviewed for this video. However, both times our camera
crew arrived at his office to do the interview, this was all
we were able to film. The Congressman never appeared, and
eventually he decided he no longer wanted to participate.
But a few others in Congress have been bolder over the
years. Here are three quick examples.
In 1923, Representative Charles A. Lindbergh, a Republican
from Minnesota, the father of famed aviator, “Lucky” Lindy,
put it this way:
“The financial system … has been turned over to … the
Federal Reserve Board. That board administers the finance
system by authority of … a purely profiteering group. The
system is private, conducted for the sole purpose of
obtaining the greatest possible profits from the use of
other people’s money.”
—Rep. Charles A. Lindberg (R-MN)
One of the most outspoken critics in Congress of the Fed was
the former Chairman of the House Banking and Currency
Committee during the Great Depression years, Louis T.
McFadden, Republican of Pennsylvania, said in 1932:
“We have in this country one of the most corrupt
institutions the world has ever known. I refer to the
Federal Reserve Board…. This evil institution has
impoverished … the people of the United States … and has
practically bankrupted our Government. It has done this
through … the corrupt practices of the moneyed vultures who
control it.”
—Rep. Louis T. McFadden (R-PA)
Senator Barry Goldwater was a frequent critic of the Fed:
“Most Americans have no real understanding of the operation
of the international moneylenders …. The accounts of the
Federal Reserve System have never been audited. It operates
outside the control of Congress and … manipulates the credit
of the United States.”
—Sen. Barry Goldwater (R.-AZ)
[Larry Bates, Economist/Author] The Fed really, even though
it’s not part of the federal government, is more powerful
than the federal government. It is more powerful than the
President, Congress or the courts. A lot of people
challenges me on that. Let me prove my case. The Fed
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 is total
control. The Fed Reserve is the largest single creditor of
the U.S. government. What does Proverbs tell us? The
borrower is servant to the lender.
What one has to understand is that, from the day the
Constitution was adopted, right up to today the folks who
profit from privately owned central banks, as President
Madison called them, the “Money Changers”, have fought a
running battle for control over who gets to print America’s
money.
Why is who prints the money so important? Think of money as
just another commodity. If you have a monopoly on a
commodity that everyone needs, everyone wants, and nobody
has enough of, there are lots of ways to make a profit and
also exert tremendous political influence. That’s what this
battle is all about. Throughout the history of the United
States, the money power has gone back and forth between
Congress and some sort of privately-owned central bank.
The founding fathers knew the evils of a privately-owned
central bank. First of all, they had seen how the privately
owned British central bank, the Bank of England, had run up
the British national debt to such an extent that Parliament
had been forced to place unfair taxes on the American
colonies.
In fact, as we’ll see later, Ben Franklin claimed that this
was the real cause of the American Revolution. Most of the
founding fathers realized the potential dangers of banking,
and feared bankers’ accumulation of wealth and power.
Jefferson put it this way:
“I sincerely believe that banking institutions are more
dangerous to our liberties than standing armies. The issuing
power should be taken from the banks and restored to the
people to whom it properly belongs.”
—Thomas Jefferson
That succinct statement of Jefferson is, in fact, the
solution to all our economic problems today. It bears
repeating: the issuing power should be taken from the banks
and restored to the people to whom it properly belongs.
James Madison, the main author of the Constitution, agreed.
Interestingly, he called those behind the central bank
scheme “Money Changers”. Madison strongly criticized their
actions:
“History records that the money changers have used every
form of abuse, intrigue, deceit, and violent means possible
to maintain their control over governments by controlling
money and its issuance.”
—James Madison
The battle over who gets to issue our money has been the
pivotal issue through the history of the United States. Wars
are fought over it. Depressions are caused to acquire it.
Yet after World War I, this battle was rarely mentioned in
newspapers or history books. Why? By World War I, the Money
Changers with their dominant wealth, had seized control of
most of the nation’s press. Throughout U.S. history, the
battle over who gets the power to issue our money has raged.
In fact it has changed hands back and forth eight times
since 1764. Yet, this fact has virtually vanished from
public view for over three generations behind a smoke screen
emitted by Fed cheerleaders in the media.
Until we stop talking about “deficits” and “government
spending” and start talking about who controls how much
money we have, it’s all just a shell game – a complete and
utter deception. It won’t matter if we pass an iron-clad
amendment to the Constitution mandating a balanced budget.
Our situation is only going to get worse until we root out
the cause at its source.
What’s the solution for our national problem? First of all,
education. This is what this presentation is all about. But
secondly, we must act, we must take back the power to issue
our own money. Issuing our own money is not a radical
solution. I wanna stress that.
It’s the same solution proposed at different points in U.S.
history by men like Benjamin Franklin, Thomas Jefferson,
Andrew Jackson, Martin Van Buren, and Abraham Lincoln So, to
sum it up: in 1913, Congress gave an independent central
bank, deceptively named the Federal Reserve, a monopoly over
issuing America’s money, and the debt generated by this
quasi-private corporation is what is killing the American
economy.
Though the Federal Reserve is now the most powerful central
bank in the world, it was not the first. So where did this
idea come from? To really understand the magnitude of the
problem, we have to travel back to Europe.
2. The Money Changers
Just who are these “Money Changers” James Madison spoke of?
In the Bible, two thousand years ago, Jesus drove the Money
Changers from the Temple.
It was the only times Jesus used force during his ministry.
What were Money Changers doing in the Temple? When Jews came
to Jerusalem to pay their Temple tax, they could only pay it
with a special coin, the half shekel of the sanctuary. This
was a half-ounce of pure silver, about the size of a
quarter. It was the only coin around at that time which was
pure silver and of assured weight, without the image of a
pagan Emperor. Therefore, to Jews the half-shekel was the
only coin acceptable to God. But these coins were not
plentiful. The Money Changers had cornered the market on
them. Then, they raised the price of them – just like any
other commodity to whatever the market would bear. In other
words, the Money Changers were making exorbitant profits
because they held a virtual monopoly on money. The Jews had
to pay whatever they demanded. To Jesus, this totally
violated the sanctity of God’s house.
3. Roman Empire
But the money changing scam did not originate in Jesus’ day.
Two hundred years before Christ, Rome was having trouble
with Money Changers. Two early Roman emperors had tried to
diminish the power of the Money Changers by reforming usury
laws and limiting land ownership to 500 acres. They both
were assassinated. In 48 B.C., Julius Caesar took back the
power to coin money from the Money Changers and minted coins
for the benefit of all. With this new, plentiful supply of
money, he built great public works projects. By making money
plentiful, Caesar won the love of common man. But the Money
Changers hated him. Some believe this was an important
factor in Caesar’s assassination. One thing is for sure:
with the death of Caesar came the demise of plentiful money
in Rome. Taxes increased, as did corruption. Just as in the
case of America today, usury and debased coin became the
rule. Eventually, the Roman money supply was reduced by 90%.
As a result, the common people lost their lands and homes
just as is about to happen soon in America. With the demise
of plentiful money, the masses lost confidence in Roman
government and refused to support it. Rome plunged into the
gloom of the Dark Ages.
4. The Goldsmiths
A thousand years after the death of Christ, Money Changers –
those who loan out and manipulate the quantity of money were
active in medieval England. In fact, they were so active
that acting together they could manipulate the English
economy. These were not bankers, per se. The Money Changers
generally were the goldsmiths. They were the first bankers
because they started keeping other people’s gold for
safekeeping in their vaults. The first paper money in
Western Europe was merely receipts for gold left at the
goldsmiths. Paper money caught on because it was more
convenient and than carrying around a lot of heavy gold and
silver coins. Eventually goldsmiths noticed that only a
small fraction of the depositors ever came in and demanded
their gold at any one time. Goldsmiths started cheating on
the system. They discovered that they could print more money
than they had gold and usually no one would be the wiser.
Then, they could loan out this extra paper money and collect
interest on it. This was the birth of fractional reserve
banking, that is loaning out many times more money than you
have assets on deposit. So, for example, if $1,000 in gold
were deposited with them, they could loan out about $10,000
in paper money and draw interest payments on it, and no one
would ever discover the deception. By this means, goldsmiths
gradually accumulated more and more wealth and used this
wealth to accumulate more and more gold. Today, this
practice of loaning out more money than there are reserves
is known as fractional reserve banking. Every bank in the
United States is allowed to loan out at least ten times more
money they actually have. That’s why they get rich on
charging let’s say 8% interest. It’s not really 8% per year,
which is their income. It’s 80%. That’s why bank buildings
are always the largest in town.
But does that mean that all interest or all banking should
be illegal? Hardly. In the Middle Ages, Canon law, the law
of the Catholic Church, forbade charging interest on loans.
This concept followed the teachings of Aristotle and Saint
Thomas Aquinas. They taught that the purpose of money was to
serve the members of society to facilitate the exchange of
goods needed to lead a virtuous life. Interest, in their
belief, hindered this purpose by putting an unnecessary
burden on the use of money. In other words, interest was
contrary to reason and justice. Reflecting Church Law in the
Middle Ages, Europe forbade charging interest on loans and
made it a crime called usury. As commerce grew and therefore
opportunities for investment arose in the late Middle Ages,
it came to be recognized that to loan money had a cost to
the lender both in risk and in lost opportunity. So, some
charges were allowed, but not interest per se. But all
moralists, no matter what religion, condemn fraud,
oppression of the poor and injustice as clearly immoral. As
we will see, fractional reserve lending is rooted in a
fraud, results in widespread poverty and reduces the value
of everyone else’s money.
The ancient goldsmiths discovered that extra profits could
be made by “rowing” the economy between easy money and tight
money. When they made money easier to borrow, then the
amount of money in circulation expanded. Money was
plentiful. People took out more loans to expand their
businesses. But then the money changers would tighten the
money supply. They would make loans more difficult to get.
What would happen? Just what happens today. A certain
percentage of people could not repay their previous loans,
and could not take out new loans to repay the old ones.
Therefore they went bankrupt, and had to sell their assets
to the goldsmiths for pennies on the dollar.
The same thing is still going on today, only today we call
this rowing of the economy, up and down, the “Business
Cycle”.
5. Talley Sticks
Like Caesar, Henri I of England finally resolved to take the
money power away from the goldsmiths, about 1100 A.D. Henri
could have used anything as money, seashells, feathers, or
even yak dung as is often done in remote provinces. But he
invented one of the most unusual money systems in history.
It was called the “tally stick” system.
Here I have one of the few surviving examples of this form
of British money which lasted 726 years, until 1826 a tally
stick. The tally system was adopted to avoid the monetary
manipulation of the goldsmiths. Tally stick were money
fabricated out of stick of polished wood. Notches were cut
along one edge of the stick to indicate the denominations.
Then the stick was split lengthwise through the notches so
that both pieces still had a record of the notches. The king
kept one half to protect against counterfeiting. Then he
would “spend” the other half into the economy and they would
circulate as money. This particular Tally Stick is huge and
represented £25,000. One of the original stockholders in the
Bank of England purchased his original shares with this
stick. In other words, he bought shares in the world’s
richest and most powerful corporation, with a stick of wood.
It’s ironic that after its formation in 1694 the Bank of
England attacked the Tally Stick system because it was money
issued outside the power of the Money Changers just as king
Henri had wanted it to be.
Why would people accept sticks of wood for money? That’s a
great question. Throughout history, people have traded
anything they thought had value and used as money. You see,
the secret is that money is only what people agree on to use
as money. What’s our paper money today? It’s really just
paper. But here’s the trick: King Henry ordered that Tally
Sticks had to be used to pay the king’s taxes. This built in
demand for Tally Sticks and immediately made them circulate
and be accepted as money. And they worked well. In fact, no
other money worked so well and for so long as tally sticks.
Keep in mind: the British empire was built under the tally
stick system.
The tally stick system succeeded despite the fact that the
money changers constantly attacked it by offering the metal
coin system as competition. In other words, metal coins
never went completely out of circulation but tally sticks
hung on because they were good for the payment of taxes.
Finally, in the 1500’s, King Henry VIII relaxed the laws
concerning usury and the Money Changers wasted no time
reasserting themselves. They quickly made their gold and
silver money plentiful for a few decades. But when Queen
Mary took the throne and tightened the usury laws again the
Money Changers renewed the hoarding of gold and silver
coins, forcing the economy to plummet. When Mary’s
half-sister, Queen Elizabeth I, took the throne she was
determined to regain control over English money. Her
solution was to issue gold and silver coins from the public
treasury and thus take the control over the money supply,
away from the Money Changers. Although control over money
was not the only cause of the English Revolution in 1642 –
religious differences fuelled the conflict – monetary policy
played a major role. Financed by the Money Changers Oliver
Cromwell finally overthrew King Charles, purged Parliament,
and put the King to death. The Money Changers were
immediately allowed to consolidate their financial power.
The result was that for the next fifty years the Money
Changers plunged Great Britain into a series of costly wars.
They took over a square mile of property in the centre of
London known as The City of London. This area today is still
known as one of the three predominant financial centres of
the world. Conflicts with the Stuart kings led the Money
Changers in England to combine with those in the Netherlands
to finance the invasion of William of Orange who overthrew
the Stuarts in 1688 and took the English throne.
6. The Bank of England
By the end of the 1600s, England was in financial ruin.
Fifty years of more or less continuous wars with France and
Holland had exhausted her.
Frantic government officials met with the Money Changers to
beg for the loans necessary to pursue their political
purposes. The price was high: a government-sanctioned,
privately-owned bank which could issue money created out of
nothing. It was to be the modern world’s first privately
owned, central bank: the Bank of England. Although it was
deceptively called the Bank of England to make the general
population think it was part of the government it was not.
Like any other private corporation the Bank of England sold
shares to get started. The investors, whose names were never
revealed, were supposed to put up one and a quarter million
British pounds in gold coin to buy their shares in the Bank.
But only £750,000 pounds was ever received. Despite that,
the Bank was duly chartered in 1694 and started out in the
business of loaning out several times the money it
supposedly had in reserves, all at interest.
In exchange, the new bank would loan British politicians as
much as they wanted as long as they secured the debt by
direct taxation of the British people.
So, legalization of the Bank of England amounted to nothing
less than legal counterfeiting of a national currency for
private gain. Unfortunately, nearly every nation now has a
privately controlled central bank using the Bank of England
as the basic model. Such is the power of these central banks
that they soon take total control over a nation’s economy.
It soon amounts to nothing but a plutocracy ruled by the
rich. It would be is like putting control of the army in the
hands of the mafia. The danger of tyranny would be extreme.
Yes, we need central banks no, we do not need them in
private hands!
The central bank scam is really a hidden tax. The nation
sells bonds to the central bank to pay for things for which
the government does not have the political will to raise
taxes to pay for. But the bonds are purchased with money the
central bank creates out of nothing. More money in
circulation makes your money worth less. The government gets
as much money as it needs and the people pay for it in
inflation. The beauty of the plan is that not one person in
a thousand can figure it out because it’s usually hidden
behind complex-sounding economics gibberish. With the
formation of the Bank of England, the nation was soon awash
in money. Prices throughout the country doubled. Massive
loans were granted for just about any wild scheme. One
venture proposed to drain the Red Sea to recover gold
supposedly lost when the Egyptian army drowned pursuing
Moses and the Israelites. By 1698, government debt grew from
the initial 1-1/4 million pounds to 16 million pounds.
Naturally, taxes were increased and then increased again to
pay for all this. With the British money supply firmly in
their grip, the British economy began a wild roller coaster
series of booms and depressions, exactly the sort of thing a
central bank claims it is determined to prevent.
[Eddie George, Governor, Bank of England] There are two
things which are intrinsic not just to the Bank of England,
but to central banking generally. The first is an
involvement in the formulation of monetary policy with the
specific objective of achieving monetary stability.
However, since the Bank of England took control, the British
pound has rarely been stable. Now, let’s take a look at the
role of the Rothschilds family, believed the wealthiest in
the world.
7. The Rise of the Rothschilds
This is Frankfort, Germany. Fifty years after the Bank of
England opened its doors, a goldsmith named Amschel Moses
Bauer opened a coin shop – a counting house – in 1743, and
over the door he placed a sign depicting a Roman eagle on a
red shield. The shop became known as the Red Shield firm,
or, in German, Rothschild. When his son, Amschel Meyer
Bauer, inherited the business, he decided to change his name
to Rothschild. Meyer soon learned that loan money to
governments and kings was more profitable than loaning to
private individuals. Not only were the loans bigger but they
were secured by the nation’s taxes.
Meyer Rothschild had five sons. He trained them all in the
skills of money creation, then sent them to the major
capitals of Europe to open branch offices of the family
banking business. His first son, Amschel Meyer, stayed in
Frankfort to mind the hometown bank. His second son, Salomon
was sent to Vienna. His third son, Nathan was clearly the
most clever. He was sent to London at age 21 in 1798, a
hundred years after the founding of the Bank of England. His
fourth son, Karl, went to Naples. His fifth son, Jakob, went
to Paris. In 1785, Meyer Amschel moved his entire family to
this larger house, a five story dwelling he shared with the
Schiff family. This house was known as the “Green Shield.”
The Rothschilds and the Schiffs would play a central role in
the rest of European financial history and in that of the
United States.
The Rothschilds broke into dealings with European royalty
here at Wilhelmshohe, the palace of the wealthiest man in
Germany in fact, the wealthiest monarch in all of Europe,
prince William of Hesse-Kassel. At first, the Rothschilds
were only helping William speculate in precious coins. But
when Napoleon chased Prince William into exile, he sent
£550,000 – a gigantic sum at that time – to Nathan
Rothschild in London with instructions from him to buy
Consols – British government bonds also called government
stock. But Rothschild used the money for his own purposes.
With Napoleon on the loose the opportunities of wartime
investments were nearly limitless.
William returned here, sometime prior to the Battle of
Waterloo in 1815. He summoned Rothschilds and demanded his
money back. The Rothschilds returned William’s money, with
the interest the British Consols would have paid him had the
investment actually been made. But the Rothschilds kept all
the past profits they had made using Wilhelm’s money. Nathan
Rothschild later brag that in the seventeen years he had
been in England, he had increased his original £20,000 stake
given to him by his father by 2,500 times.
By cooperating within the family, the Rothschilds soon grew
unbelievably wealthy. By the mid-1800s, they dominated all
European banking, and were certainly the wealthiest family
in the world. They financed Cecil Rhodes, making it possible
for him to establish a monopoly over the diamond and gold
fields of South Africa. In America, they financed the
Hermans in railroads, the Van Der Bilt in railroad and the
press, the Carnegie in the steel industry, among many
others.
In fact, during WWI, J.P. Morgan was thought to be the
richest man in America. But after his death, it was
discovered that he was actually only a lieutenant of the
Rothschilds. Once Morgan’s will became public, it was
discovered that he owned only 19% of J.P. Morgan’s
companies. By 1850, James Rothschild, the heir of the French
branch of the family, was said to be worth 600 million
French francs, 150 million more than all the other bankers
in France put together.
He built this mansion, called Ferrières, 19 miles northeast
of Paris. Wilhelm I, on seeing it exclaimed “Kings couldn’t
afford this. It could only belong to a Rothschild.” Another
19 century French commentator put it this way; “There is but
one power in Europe and that is Rothschild.” There is no
evidence that their predominant standing in European or
world finance has changed.
Now let’s take a look at the results the Bank of England
produced on the British economy and how that later was the
root cause of the American Revolution.
8. The American Revolution
By the mid-1700s the British Empire was approaching its
height of power around the world. Britain had fought four
wars in Europe since the creation of its privately-owned
central bank, the Bank of England. The cost had been high.
To finance these wars, the British Parliament had borrowed
heavily from the Bank. By the mid-1700s, the government’s
debt, here in Britain, was £140,000,000 a staggering sum for
those days. Consequently, the British government embarked on
a program of trying to raise revenues from their American
colonies in order to make the interest payments to the Bank.
But in America, it was a different story. The scourge of a
privately-owned central bank had not yet hit.
This is independence hall in Philadelphia where the
declaration of independence and constitution were signed. In
the mid-1700s, pre-Revolutionary America was still
relatively poor. There was a severe shortage of precious
metal coins to trade for goods, so the early colonists were
forced to experiment with printing their own home-grown
paper money. Some of these experiments were successful.
Franklin was a big supporter of the colonies printing their
own paper money.
In 1757, Franklin was sent to London. He ended up staying
for the next 18 years, nearly until the start of the
American Revolution. During this period, the American
colonies began to issue their own money. Called Colonial
Scrip, the endeavour was very successful. It provided a
reliable medium of exchange and it also helped to provide a
feeling of unity between the colonies. Remember, most
Colonial Scrip was just paper money – debt-free money –
printed in the public interest and not backed by gold or
silver coin. In other words, it was a totally fiat currency.
One day, officials of the Bank of England asked Franklin how
he would account for the new-found prosperity of the
colonies. Without hesitation he replied:
“That is simple. In the Colonies we issue our own money. It
is called Colonial Scrip. We issue it in proper proportion
to the demands of trade and industry to make the products
pass easily from the producers to the consumers. In this
manner, creating for ourselves our own paper money, we
control its purchasing power, and we have no interest to pay
to no one.”
—Benjamin Franklin
This was just common sense to Franklin but you can imagine
the impact it had on the Bank of England. America had
learned the secret of money and that genie had to be
returned to its bottle as soon as possible.
As a result, Parliament hurriedly passed the Currency Act of
1764. This prohibited colonial officials from issuing their
own money and ordered them to pay all future taxes in gold
or silver coins. In other words, it forced the colonies on a
gold or silver standard. For those who still believe that a
gold standard is the answer for America’s current monetary
problems, look what happened to America after that. Writing
in his autobiography, Franklin said:
“In one year, the conditions were so reversed that the era
of prosperity ended, and a depression set in, to such an
extent that the streets of the Colonies were filled with
unemployed.”
—Benjamin Franklin
Franklin claims that this was even the basic cause for the
American Revolution. As Franklin put it in his
autobiography:
“The colonies would gladly have borne the little tax on tea
and other matters had it not been that England took away
from the colonies their money, which created unemployment
and dissatisfaction. 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.”
—Benjamin Franklin’s autobiography
By the time the first shots were fired in Lexington,
Massachusetts on April 19, 1775 the colonies had been
drained of gold and silver coin by British taxation. As
result, the Continental government had no choice but to
print money to finance the war. At the start of the
Revolution, the U.S. money supply stood at $12 million. By
the end of the war, it was nearly $500 million. As a result,
the currency was virtually worthless. Shoes sold for $5,000
a pair. Colonial scrip had worked because just enough was
issued to facilitate trade. As George Washington lamented, a
wagonload of money was scarcely purchase of a wagonload of
provisions.
Today, those who support a gold-backed currency point to
this period during the Revolution to demonstrate the evils
of a fiat currency. But remember, the same currency had
worked so well twenty years earlier during times of peace
that the Bank of England had Parliament outlaw it.
9. The Bank of North America
Towards the end of the Revolution, the Continental Congress
meeting at Independence Hall, grew desperate for money. In
1781, they allowed Robert Morris, their Financial
Superintendent to open a privately-owned central bank.
Incidentally, Morris was a wealthy man who had grown
wealthier during the Revolution by trading in war materials.
Called the Bank of North America, the new bank was closely
modelled after the Bank of England. It was allowed to
practice fractional reserve banking – that is, it could lend
out money it didn’t have then charge interest on it. If you
or I were to do that, we would be charged with fraud, a
felony.
The Bank’s charter called for private investors to put up
$400,000 worth of initial capital. But when Morris was
unable to raise the money he brazenly used his political
influence to have gold deposited in the bank which had been
loaned to America by France. He then loaned this money to
himself and his friends to reinvest in shares of the bank.
And, like the Bank of England, the bank was given a monopoly
over the nation currency. Soon, the dangers became clear.
The value of American currency continued to plummet so, four
years later, in 1785 the Bank’s charter was not renewed. The
leader of the successful effort to kill the Bank William
Findley, of Pennsylvania explained the problem this way:
“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.”
—William Findley
The men behind the Bank of North America – Alexander
Hamilton, Robert Morris, and the Bank’s President, Thomas
Willing did not give up. Only six years later, Hamilton –
then Secretary of the Treasury and his mentor, Morris rammed
a new privately-owned central bank through the new Congress.
Called the First Bank of the United States Thomas Willing
again served as the Bank’s President. The players were the
same, only the name of the Bank was changed.
10. The Constitutional Convention
In 1787, colonial leaders assembled in Philadelphia to
replace the ailing Articles of Confederation. As we saw
earlier, both Thomas Jefferson and James Madison were
unalterably opposed to a privately-owned central bank. They
had seen the problems caused by the Bank of England.
They wanted nothing of it. As Jefferson later put it:
“If the American people ever allow private banks to control
the issue of their currency, first by inflation, then by
deflation, the banks and the corporations which grow up
around them will deprive the people of all property until
their children wake up homeless on the continent their
fathers conquered.”
—Thomas Jefferson
During the debate over the future monetary system, another
one of the founding fathers, Gouverneur Morris, castigated
the motivations of the owners of the bank of North America.
Gouverneur Morris headed the committee that wrote the final
draft of the constitution. Morris knew the motivations of
the bank well. Along with his old boss, Robert Morris,
Gouverneur Morris and Alexander Hamilton were the ones who
had presented the original plan for the Bank of North
America to the Continental Congress in the last year of the
Revolution. In a letter he wrote to James Madison on July 2,
1787 Gouverneur Morris revealed what was really going on:
“The rich will strive to establish their dominion and
enslave the rest. They always did. They always will …. They
will have the same effect here as elsewhere, if we do not,
by [the power of] government, keep them in their proper
spheres.”
—Gouvernnr Morris
Despite the defection of Gouverneur Morris from the ranks of
the Bank Hamilton, Robert Morris, Thomas Willing, and their
European backers were not about to give up. They convinced
the bulk of the delegates to the Constitution Convention to
not give Congress the power to issue paper money. Most of
the delegates were still reeling from the wild inflation of
the paper currency during the Revolution. They had forgotten
how well Colonial Scrip had worked before the War. But the
Bank of England had not. The Money Changers could not stand
to have America printing her own money again.
The Constitution is silent on the matter. This defect left
the door wide open for the Money Changers just as they had
planned.
11. First Bank of the United Sates
In 1790, less than three years after the Constitution had
been signed the Money Changers struck again. The
newly-appointed first Secretary of the Treasury, Alexander
Hamilton proposed a bill to the Congress calling for a new
privately-owned central bank. Coincidentally, that was the
very year that Amschel Rothschild made his pronouncement
from his flagship bank in Frankfort:
“Let me issue and control a nation’s money and I care not
who writes its laws.”
[Charles Collins, presidential Candidate] Alexander Hamilton
was a tool of the international bankers. He wanted to create
the Bank of the United States, and did so.
Interestingly, one of Hamilton’s first jobs after graduating
from law school in 1782 was as an aide to Robert Morris, the
head of the Bank of North America. In fact, the year before,
Hamilton had written Morris a letter, saying: “A national
debt, if it is not excessive, will be to us a national
blessing”. A blessing to whom?
After a year of intense debate, in 1791 Congress passed the
bill and gave it a 20-year charter. The new bank was to be
called the First Bank of the United States, or BUS. Here we
are in front of the first Bank of the United States in
Philadelphia. The Bank was given a monopoly on printing U.S.
currency even though 80% of its stock would be held by
private investors. The other 20% would be purchased by the
U.S. Government but the reason was not to give the
government a piece of the action, it was to provide the
capital for the other 80% owners. As with the old bank of
North America and the Bank of England before that, the
stockholders never paid the full amount for their shares.
The U.S. government put up their initial $2,000,000 in cash,
then the Bank through the old magic of fractional reserve
lending, made loans to its charter investors so they could
come up with the remaining $8,000,000 of capital needed for
this risk-free investment.
Like the Bank of England the name of the Bank of the United
States was deliberately chosen to hide the fact that it was
privately controlled. And like the Bank of England, the
names of the investors in the Bank were never revealed. Many
years later it was a common saying that the Rothschilds were
the power behind the old Bank of the United States.
The Bank was sold to Congress as a way to bring stability to
the banking system and to eliminate inflation. So what
happened? Over the first five years, the U.S. government
borrowed $8.2 million from the Bank of the United States. In
the same 5-year period, prices rose by 72%. Jefferson, as
the new Secretary of State, watched the borrowing with
sadness and frustration, unable to stop it.
“I wish it were possible to obtain a single amendment to our
Constitution — taking from the federal government their
power of borrowing.”
— Thomas Jefferson
Millions of Americans feel the same way today. They watch in
helpless frustration as the Federal government borrows the
American economy into oblivion. So, although it was called
the First Bank of the United States, it was not the first
attempt at a privately-owned central bank in this country.
As with the Bank of North America, the government put up
most of the cash to get this private bank going, then the
bankers loaned that money to each other to buy the remaining
stock in the bank. It was a scam, plain and simple. And they
wouldn’t be able to get away with it for long, but first we
have to travel back to Europe to see how a single man was
able to manipulate the entire British economy by obtaining
the first news of Napoleon’s final defeat.
12. Napoleon’s Rise to Power
Here in Paris, the Bank of France was organized in 1800 just
like the Bank of England. But Napoleon decided France had to
break free of debt and he never trusted the Bank of France.
He declared that when a government is dependent upon bankers
for money, the bankers, not the leaders of the government
are in control:
“The hand that gives is above the hand that takes. Money has
no motherland; financiers are without patriotism and without
decency: their sole object is gain.”
—Napoleon Bonaparte
Back in America, unexpected help was about to arrive. In
1800, Thomas Jefferson narrowly defeated John Adams to
become the third President of the United States. By 1803,
Jefferson and Napoleon had struck a deal. The U.S. would
give Napoleon $3,000,000 in gold in exchange for a huge
chunk of territory west of the Mississippi River – the
Louisiana Purchase. With that three million dollars,
Napoleon quickly forged an army and set off across Europe,
conquering everything in his path. But the Bank of England
quickly rose to oppose him. They financed every nation in
his path, reaping the enormous profits of war. Prussia,
Austria, and finally Russia all went heavily into debt in a
futile attempt to stop Napoleon. Four years later, with the
main French Army in Russia, 30-year-old Nathan Rothschild –
the head of the London office of the Rothschild family –
personally took charge of a bold plan to smuggle a
much-needed shipment of gold right through France to finance
an attack by the Duke of Wellington from Spain. Nathan later
bragged at a dinner party in London that it was the best
business he’d ever done. Little did he know that he would do
much better business in the near future. Wellington’s
attacks from the south, and other defeats, eventually forced
Napoleon to abdicate, and Louis XVIII was crowned King.
Napoleon was exiled to Elba, a tiny island off the coast of
Italy, supposedly exiled from France forever.
While Napoleon was on Elba, temporarily defeated by England
with the financial help of the Rothschilds America was
trying to break free of its central bank as well.
13. Death of the First Bank
In 1811, a bill was put before Congress to renew the charter
of the Bank of the United States. The debate grew very
heated and the legislatures of both Pennsylvania and
Virginia passed resolutions asking Congress to kill the
Bank.
The press corps of the day attacked the Bank openly, calling
it “a great swindle”, a “vulture”, a “viper”, and a “cobra”.
Oh, to have an independent press once again in America!
A Congressman named P.B. Porter attacked the bank from the
floor of Congress, saying that if the bank’s charter were
renewed, Congress “will have planted in the bosom of this
Constitution a viper, which one day or another will sting
the liberties of this country to the heart.”
Prospects didn’t look that good for the Bank. Some writers
even have claimed that Nathan Rothschild warned that the
United States would find itself involved in a most
disastrous war if the Bank’s charter were not renewed.
But it wasn’t enough. When the smoke had cleared, the
renewal bill was defeated by a single vote in the House and
was deadlocked in the Senate.
By now, America’s fourth President, James Madison, was in
the White House. Remember, Madison was a staunch opponent of
the Bank. His Vice President, George Clinton, broke a tie in
the Senate and sent the Bank into oblivion.
Within 5 months England attacked the U.S. and the War of
1812 was on. But the British were still busy fighting
Napoleon, and so the war of 1812 ended in a draw in 1814.
Though the Money Changers were temporarily down, they were
far from out. it would take them only another two years to
bring back their bank – bigger and stronger than ever.
14. Waterloo
But now let’s return to Napoleon. Because nothing else in
history more aptly demonstrates the ingenuity of the
Rothschild family then their control of the British stock
market after Waterloo.
In 1815, a year after the end of the War of 1812 in America,
Napoleon escaped his exile and returned to Paris. French
troops were sent out to capture him, but such was his
charisma that the soldiers rallied around their old leader
and hailed him as their Emperor once again. In March of 1815
Napoleon equipped an army which Britain’s Duke of Wellington
defeated less than 90 days later at Waterloo. Some writers
claim Napoleon borrowed 5 million pounds from the Bank of
England to rearm. But it appears these funds actually came
from the Ouvrard banking house in Paris. Nevertheless, from
about this point on, it was not unusual for
privately-controlled central banks to finance both sides in
a war. Why would a central bank finance opposing sides in a
war? Because war is the biggest debt-generator of them all.
A nation will borrow any amount for victory. The ultimate
looser is loaned just enough to hold out the vain hope of
victory, and the ultimate winner is given enough to win.
Besides, such loans are usually conditioned upon the
guarantee that the victor will honour the debts of the
vanquished.
This is the Waterloo battlefield about 200 miles northeast
of Paris, in what today is Belgium. Here, Napoleon suffered
his final defeat, but not before thousands of French and
English men gave their lives on a steamy summer day in June
of 1815. Right over there, on June 18, 1815, 74,000 French
troops met 67,000 troops from Britain, and other European
nations. The outcome was certainly in doubt. In fact, had
Napoleon attacked a few hours earlier, he would probably
have won the battle. But no matter who won or lost, back in
London, Nathan Rothschild planned to use the opportunity to
try to seize control over the British stock and bond market,
and possibly even the Bank of England. Rothschild stationed
a trusted agent, a man named Rothworth, on the north side of
the battlefield – closer to the English Channel.
Once the battle had been decided, Rothworth took off for the
Channel. He delivered the news to Nathan Rothschild a full
24 hours before Wellington’s own courier. Rothschild hurried
to the Stock Market and took up his usual position in front
of an ancient pillar. All eyes were on him. The Rothschilds
had a legendary communication network.
If Wellington had been defeated and Napoleon were loose on
the Continent again, Britain’s financial situation would
become grave indeed.
Rothschild looked saddened. He stood there motionless, eyes
downcast. Then suddenly, he began selling.
Other nervous investors saw that Rothschild was selling. It
could only mean one thing. Napoleon must have won.
Wellington must have lost. The market plummeted. Soon,
everyone was selling their Consols – their British
government bonds and prices dropped sharply. But then
Rothschild started secretly buying up the Consols through
his agents for only a fraction of their worth hours before.
Myths, legends, you say? One hundred years later, the New
York Times ran a story which said that Nathan’s grandson had
attempted to secure a court order to suppress a book with
this stock market story in it. The Rothschild family claimed
the story was untrue and libellous. But the court denied the
Rothschilds’ request and ordered the family to pay all court
costs.
What’s even more interesting about this story is that some
authors claim that the day after the Battle of Waterloo, in
a matter of hours, Nathan Rothschild came to dominate not
only the bond market, but the Bank of England as well.
Whether or not the Rothschild family seized control of the
Bank of England – the first privately-owned central bank in
a major European nation, and the wealthiest one thing is
certain by the mid-1800s, the Rothschilds were the richest
family in the world, bar none. They dominated the new
government bond markets and branched into other banks and
industrial concerns.
In fact, the rest of the 19th century was known as the “Age
of Rothschild”. Despite this overwhelming wealth, the family
has generally cultivated an aura of invisibility. Although
the family controls scores of industrial, commercial, mining
and tourist corporations, only a handful bear the Rothschild
name. By the end of the 19th century, one expert estimated
that the Rothschild family controlled half the wealth of he
world. Whatever the extent of their vast wealth, it is
reasonable to assume that their percentage of the world’s
wealth has increased since then. But since the turn of the
century, the Rothschilds have cultivated the notion that
their power has somehow waned, even as their wealth
increases.
15. Second Bank of the U.S.
Meanwhile, back in Washington in 1816, just one year after
Waterloo and Rothschilds’ alleged takeover of the Bank of
England, the American Congress passed a bill permitting yet
another privately-owned central bank. This bank was called
the Second Bank of the United States. The new Bank’s charter
was a copy of the previous Bank’s. The U.S. government would
own 20% of the shares. Of course, the Federal share was paid
by the Treasury up front, into the Bank’s coffers. Then,
through the magic of fractional reserve lending, it was
transformed into loans to private investors who then bought
the remaining 80% of the shares.
Just as before, the primary stockholders remained secret.
But it is known that the largest block of shares – about
one-third of the total was sold to foreigners. As one
observer put it: “It is certainly no exaggeration to say
that the Second Bank of the United States was rooted as
deeply in Britain as it was in America.” So by 1816, some
authors claim the Rothschilds had taken control over the
Bank of England and backed the new privately-owned central
bank in America as well.
16. Andrew Jackson
After 12 years of manipulations of the U.S. economy on the
part of the 2nd bank of the U.S., the American people, had
had just about enough. Opponents of the Bank nominated a
dignified senator from Tennessee, Andrew Jackson the hero of
the Battle of New Orleans, to run for president.
This is his home, “The Hermitage”.
No one gave Jackson a chance initially. The Bank had long
ago learned how the political process could be controlled
with money. To the surprise and dismay of the Money
Changers, Jackson was swept into office in 1828. Jackson was
determined to kill the Bank at the first opportunity, and
wasted no time in trying to do so. But the Bank’s 20 year
charter didn’t come up for renewal until 1836, the last year
of his second term – if he could survive that long.
During his first term, Jackson contented himself with
rooting out the Bank’s many minions from government service.
He fired 2,000 of the 11,000 employees of the federal
government. In 1832, with his re-election approaching, the
Bank struck an early blow, hoping Jackson would not want to
stir up controversy. They asked Congress to pass a renewal
bill four years early. Naturally, Congress complied, and
sent it to the President for signing. But Jackson weighed in
with both feet. “Old Hickory,” never a coward, vetoed the
bill. His veto message is one of the great American
documents. It clearly lays out the responsibility of the
American government towards its citizens – rich and poor.
“It is not our own citizens only who are to receive the
bounty of our Government. More than eight millions of the
stock of this bank are held by foreigners …. 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 its favor alike on the
high and the low, the rich and the poor, it would be an
unqualified blessing. In the act before me there seems to be
a wide and unnecessary departure from these just
principles.”
—Andrew Jackson
Later that year, in July 1832, Congress was unable to
override Jackson’s veto. Now Jackson had to stand for
re-election. Jackson took his argument directly to the
people. For the first time in U.S. history, Jackson took his
presidential campaign on the road. Before then, presidential
candidates stayed at home and looked presidential. His
campaign slogan was ” Jackson and no Bank!” The National
Republican Party ran Senator Henry Clay against Jackson.
Despite the fact that the Bank poured in over $3,000,000
into Clay’s campaign, Jackson was re-elected by a landslide
in November of 1832. Despite his presidential victory,
Jackson knew the battle was only beginning: “The hydra of
corruption is only scotched, not dead,” said the
newly-elected President. Jackson ordered his new Secretary
of the Treasury, Louis McLane, to start removing the
government’s deposits from the Second Bank and to start
placing them in state banks. McLane refused to do so.
Jackson fired him and appointed William J. Duane as the new
Secretary of the Treasury. Duane also refused to comply with
the President’s requests, and so Jackson fired him as well,
and then appointed Roger B. Taney to the office. Taney did
withdraw government funds from the bank, starting on October
1st, 1833. Jackson was jubilant: “I have it chained. I am
ready with screws to draw every tooth and then the stumps”
But the Bank was yet done fighting. Its head, Nicholas
Biddle, used his influence to get the Senate to reject
Taney’s nomination. Then, in a rare show of arrogance,
Biddle threatened to cause a depression if the Bank were not
re-chartered.
“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.”
—Nicholas Biddle
Next, in an unbelievable fit of honesty for a central
banker, Biddle admitted that the bank was going to make
money scarce to force Congress to restore the Bank:
“Nothing but widespread suffering will produce any effect on
Congress…. Our only safety is in pursuing a steady course of
firm restriction – and I have no doubt that such a course
will ultimately lead to restoration of the currency and the
recharter of the bank.”
—Nicholas Biddle
What a stunning revelation! Here was the pure truth,
revealed with shocking clarity. Biddle intended to use the
money contraction power of the Bank to cause a massive
depression until America gave in. Unfortunately, this has
happened time and time again throughout U.S. history, and is
about to happen again in today’s world. Nicholas Biddle made
good on his threat. The Bank sharply contracted the money
supply by calling in old loans and refusing to extend new
ones. A financial panic ensued, followed by a deep
depression. Naturally, Biddle blamed Jackson for the crash,
saying that it was caused by the withdrawal of federal funds
from the Bank. Unfortunately, his plan worked well. Wages
and prices sagged. Unemployment soared along with business
bankruptcies. The nation quickly went into an uproar.
Newspaper editors blasted Jackson in editorials. The Bank
threatened to withhold payments which then could be made
directly to key politicians for their support. Within only
months, Congress assembled in what was called the “Panic
Session.”
Six months after he had withdrawn funds from the bank,
Jackson was officially censured by a resolution which passed
the Senate by a vote of 26 to 20. It was the first time a
President had ever been censured by Congress. Jackson lashed
out at the Bank. “You are a den of vipers. I intend to rout
you out and by the Eternal God I will rout you out.”
America’s fate teetered on a knife edge. If Congress could
muster enough votes to override Jackson’s veto, the Bank
would be granted another 20-year monopoly or more over
America’s money – time enough to consolidate its already
great power. Then, a miracle occurred. The Governor of
Pennsylvania came out supporting President Jackson and
strongly criticized the Bank. On top of that, Biddle had
been caught boasting in public about the Bank’s plan to
crash the economy. Suddenly the tide shifted. In April of
1834, the House of Representatives voted 134 to 82 against
re-chartering the Bank. This was followed up by an even more
lopsided vote to establish a special committee to
investigate whether the Bank had caused the crash.
When the investigating committee arrived at the Bank’s door
in Philadelphia, armed with a subpoena to examine the books,
Biddle refused to give them up. Nor would he allow
inspection of correspondence with Congressmen relating to
their personal loans and advances he made to them. Biddle
refused to testify before the committee back in Washington.
On January 8, 1835, Jackson paid off the final instalment on
the national debt which had been necessitated by allowing
the banks to issue currency for government bonds, rather
than simply issuing Treasury notes without such debt. He was
the only President to ever pay off the debt.
A few weeks later, on January 30, 1835, an assassin by the
name of Richard Lawrence tried to shoot President Jackson.
By the grace of God, both pistols misfired. Lawrence was
later found not guilty by reason of insanity. After his
release, he bragged to friends that powerful people in
Europe had put him up to the task and promised to protect
him if he were caught.
The following year, when its charter ran out, the Second
Bank of the United States ceased functioning as the nation’s
central bank. Biddle was later arrested and charged with
fraud. He was tried and acquitted, but died shortly
thereafter while still tied up in civil suits.
After his second term as President, Jackson retired to The
Hermitage outside Nashville to live out his life. He is
still remembered for his determination to “kill the Bank”.
In fact, he killed it so well that it took the Money
Changers 77 years to undo the damage.
When asked what his most important accomplishment had been,
Jackson replied. “I killed the Bank.”
17. Abe Lincoln
Unfortunately, even Jackson failed to grasp the entire
picture and its root cause. Although Jackson had killed the
central bank, the most insidious weapon of the Money
Changers – fractional reserve banking remained in use by the
numerous state-chartered banks. This fuelled economic
instability in the years before the Civil War. Still, the
central bankers were out and as a result America thrived as
it expanded westward.
During this time, the principal Money Changers struggled to
regain their lost centralized power, but to no avail.
Finally they reverted to the old central banker’s formula –
finance a war, to create debt and dependency. If they
couldn’t get their central bank any other way, America could
be brought to its knees by plunging it into a civil war just
as they had done in 1812, after the First Bank of the U.S.
was not re-chartered. One month after the inauguration of
Abraham Lincoln, the first shots of the American Civil War
were fired at Fort Sumter, South Carolina on April 12, 1861.
Certainly slavery was a cause for the Civil War, but not the
primary cause. Lincoln knew that the economy of the South
depended upon slavery and so (before the Civil War) he had
no intention of eliminating it. Lincoln had put it this way
in his inaugural address only one month earlier:
“I have no purpose, directly or indirectly, to interfere
with the institution of slavery in the states where it now
exists. I believe I have no lawful right to do so, and I
have no inclination to do so.”
—Abraham Lincoln
Even after the first shots were fired at Fort Sumter,
Lincoln continued to insist that the Civil War was not about
the issue of slavery:
“My paramount objective is to save the Union, and it is not
either to save or destroy slavery. If I could save the Union
without freeing any slave, I would do it”
—Abraham Lincoln
So what was the Civil War all about? There were many factors
at play. Northern industrialists had used protective tariffs
to prevent their southern states from buying cheaper
European goods.
Europe retaliated by stopping cotton imports from the South.
The Southern states were in a double financial bind.
They were forced to pay more for most of the necessities of
life while their income from cotton exports plummeted. The
South was angry. But there were other factors at work. The
Money Changers were still stung by America’s withdrawal from
their control 25 years earlier. Since then, America’s
wildcat economy had made the nation rich, a bad example for
the rest the world. The central bankers now saw an
opportunity to split the rich new nation to divide and
conquer by war.
Was this just some sort of wild conspiracy theory at the
time? Well, let’s look at what a well placed observer of the
scene had to say at the time. His name was Otto von
Bismarck, Chancellor of Germany, the man who united the
German states a few years later.
“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.”
—Otto von Bismark
Within months after the first shots here at Fort Sumter, the
central bankers loaned Napoleon III of France (the nephew of
the Waterloo Napoleon) 210 million francs to seize Mexico
and station troops along the southern border of the U.S.,
taking advantage of the War to violate the Monroe Doctrine
and return Mexico to colonial rule.
No matter what the outcome of the Civil War, a weakened
America, heavily indebted to the Money Changers, would open
up Central and South America once again to European
colonization and domination, the very thing America’s Monroe
Doctrine had forbade in 1823.
At the same time, Great Britain moved 11,000 troops into
Canada and positioned them menacingly along America’s
northern border. The British fleet went on war alert should
their quick intervention be called for.
Lincoln knew he was in a double bind. That’s why he agonized
over the fate of the Union. There was a lot more to it than
just differences between the North and the South. That’s why
his emphasis was always on “Union” and not merely the defeat
of the South. But Lincoln needed money to win. In 1861,
Lincoln and his Secretary of the Treasury, Salmon P. Chase,
went to New York to apply for the necessary loans. The Money
Changers, anxious to see the Union fail, offered loans at
24-36% interest. Lincoln said thanks, but no thanks, and
returned to Washington. He sent for an old friend, Colonel
Dick Taylor of Chicago, and put him onto the problem off
financing the War. During one meeting, Lincoln asked Taylor
what he discovered. Taylor put it this way:
“Why, Lincoln, that is easy; just get Congress to pass a
bill authorizing the printing of full legal tender treasury
notes … and pay your soldiers with them and go ahead and win
your war with them also.”
— Colonel Dick Taylor
When Lincoln asked if the people of the United States would
accept the notes, Taylor said:
“The people or anyone else will not have any choice in the
matter, if you make them full legal tender. They will have
the full sanction of the government and be just as good as
any money; as Congress is given that express right by the
Constitution.”
— Colonel Dick Taylor
So that’s exactly what Lincoln did. In 1862-63, he printed
up $450 million of the new bills. In order to distinguish
them from other bank notes in circulation, he printed them
in green ink on the back side. That’s why the notes were
called “Greenbacks.” With this new money, Lincoln paid the
troops, and bought their supplies. During the course of the
war, nearly 450 million dollars worth of Greenbacks were
printed at no interest to the federal government.
Lincoln understood who was really pulling the strings and
what was at stake for the American people. This is how he
explained his rationale:
“The Government should create, issue, and circulate all the
currency and credit needed to satisfy the spending power of
the Government and the buying power of consumers.
The privilege of creating and issuing money is not only the
supreme prerogative of Government, but it is the
Government’s greatest creative opportunity.
By the adoption of these principles … the taxpayers will be
saved immense sums of interest. Money will cease to be
master and become the servant of humanity.”
—Abraham Lincoln
A truly incredible editorial in the London Times explained
the Bank of England’s attitude towards Lincoln’s Greenbacks.
“If this mischievious financial policy, which has its origin
in North America, shall become endurated down to a fixture,
then that Government will furnish its own money without
cost. It will pay off debts and be without debt. It will
have all the money necessary to carry on its commerce. It
will become prosperous without precedent in the history of
the world. The brains, and wealth of all countries will go
to North America. That country must be destroyed or it will
destroy every monarchy on the globe.”
—Times of London
This scheme was effective, so effective that the next year,
1863, with Federal and Confederate troops beginning to mass
for the decisive battle of the Civil War, and the Treasury
in need of further Congressional authority to issue more
Greenbacks, Lincoln allowed the bankers to push through the
National Banking Act. These new national banks would operate
under a virtual tax-free status and collectively have the
exclusive monopoly power to create the new form of money –
Bank Notes. Though Greenbacks continued to circulate, their
numbers were not increased.
But most importantly, from this point on, the entire U.S.
money supply would be created out of debt by bankers buying
U.S. government bonds, and issuing them for reserves for
Bank Notes. As historian John Kenneth Galbraith explained
it:
“In numerous years following the war, the Federal government
ran a heavy surplus. It could not [however] pay off its
debt, retire its securities, because to do so meant there
would be no bonds to back the national bank notes. To pay
off the debt was to destroy the money supply.”
—John Kenneth Galbrait
In 1863, Lincoln got some unexpected help from Czar
Alexander II of Russia. The Czar, like Bismarck in Germany,
knew what the international Money Changers were up to and
had steadfastly refused to let them set up a central bank in
Russia. If America survived and was able to remain out of
their clutches, the Czar position would remain secure. If
the bankers were successful at dividing America and giving
the pieces back to Great Britain and France (both nations
under control of their central banks) eventually they would
threaten Russia again.
So, the Czar gave orders that if either England or France
actively intervened and gave aid to the South, Russia would
consider such action as a declaration of war. He did the
same with part of his Pacific fleet and sent them to port in
San Francisco. Lincoln was re-elected the next year, 1864.
Had he lived, he would surely have killed the National
Banks’ money monopoly extracted from him during the war. On
November 21, 1864, he wrote a friend the following:
“The money power preys upon the nation in times of peace and
conspires against it in times of adversity. It is more
despotic than monarchy, more insolent than autocracy, more
selfish than bureaucracy.”
—Abraham Lincoln
Shortly before Lincoln was murdered, his former Secretary of
the Treasury, Salmon P. Chase, bemoaned his role in helping
secure the passage of the National Banking Act only one year
earlier:
“My agency in promoting the passage of the National Banking
Act was the greatest financial mistake in my life. It has
built up a monopoly which affects every interest in the
country”
—Salmon P. Chase
On April 14, 1865, 41 days after his second inauguration,
and just five days after Lee surrendered to Grant at
Appomattox, Lincoln was shot by John Wilkes Booth, at Ford’s
theatre. Bismarck Chancellor of Germany lamented the death
of Abraham Lincoln:
“The death of Lincoln was a disaster for Christendom. There
was no man in the United States great enough to wear his
boots…. 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 civilization. They will not hesitate to plunge the
whole of Christendom into wars and chaos in order that the
earth should become their inheritance.”
—Otto von Bismark
Bismarck well understood the Money Changers’ plan.
Allegations that international bankers were responsible for
Lincoln’s assassination surfaced in Canada 70 years later,
in 1934.
Gerald G. McGeer, a popular and well-respected Canadian
attorney, revealed this stunning charge in a 5-hour speech
before the Canadian House of Commons blasting Canada’s
debt-based money system. Remember, it was 1934, the height
of the Great Depression which was ravaging Canada as well.
McGeer had obtained evidence deleted from the public record,
provided to him by Secret Service agents, from the trial of
John Wilkes Booth, after Booth’s death. McGeer said it
showed that Booth was a mercenary working for the
international bankers. According to an article in the
Vancouver Sun of May 2, 1934:
“Abraham Lincoln, the martyred emancipator of the slaves,
was assassinated through the machinations of a group
representative of the international bankers, who feared the
United States President’s national credit ambitions. […]
There was only one group in the world at that time who had
any reason to desire the death of Lincoln.
They were the men opposed to his national currency programme
and who had fought him throughout the whole Civil War on his
policy of green-back currency.”
Interestingly, McGeer claimed that Lincoln was assassinated
not only because international bankers wanted to
re-establish a central bank in America, but because they
also wanted to base America’s currency on gold – gold they
controlled. In other words, put America on a “gold
standard.” Lincoln had done just the opposite by issuing
U.S. Notes – Greenbacks which were based purely on the good
faith and credit of the United States. The article quoted
McGeer as saying:
“They were the men interested in the establishment of the
Gold Standard 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
demonetized and the Gold Standard money system set up in the
United States.”
Not since Lincoln has the U.S. issued debt-free United
States Notes. These red-sealed bills, which were issued in
1963, were not a new issue from president Kennedy, but
merely the old Greenbacks reissued year after year.
In another act of folly and ignorance, the 1994 Reigle Act
actually authorized the replacement of Lincoln’s Greenbacks
with debt-based Notes. In other words, Greenbacks were in
circulation in the United States until 1994. Why was silver
bad for the bankers and gold good? Simple. Because silver
was plentiful in the United States, it was very hard to
control. Gold was, and always has been scarce. Throughout
history it has been relatively easy to monopolize gold, but
silver has historically been 15 times more plentiful.
18. The Return of the Gold Standard
With Lincoln out of the way, the Money Changers’ next
objective was to gain complete control over America’s money.
This was no easy task. With the opening of the American
West, silver had been discovered in huge quantities. On top
of that, Lincoln’s Greenbacks were generally popular.
Despite the European central bankers’ deliberate attacks on
Greenbacks, they continued to circulate in the United
States, in fact until a few years ago. According to
historian W. Cleon Skousen:
“Right after the Civil War there was considerable talk about
reviving Lincoln’s brief experiment with the Constitutional
monetary system. Had not the European money-trust
intervened, it would have no doubt become an established
institution.”
—W. Cleon Skousen
It is clear that the concept of America printing her own
debt-free money sent shock-waves throughout the European
private-central-banking elite. They watched with horror as
Americans clamoured for more Greenbacks. They may have
killed Lincoln, but support for his monetary ideas grew.
On April 12, 1866, nearly one year to the day of Lincoln’s
assassination, Congress went to work at the bidding of the
European central-banking interests. It passed the
Contraction Act, authorizing the Secretary of the Treasury
to begin to retire the Greenbacks in circulation and to
contract the money supply.
Authors Theodore R. Thoren and Richard F. Warner explained
the results of the money contraction in their classic book
on the subject, “The Truth in Money Book”:
“The hard times which occurred after the Civil War could
have been avoided if the Greenback legislation had continued
as President Lincoln had intended. Instead, there were a
series of ‘money panics’ – what we call ‘recessions’ which
put pressure on Congress to enact legislation to place the
banking system under centralized control. Eventually the
Federal Reserve Act was passed on December 23, 1913.”
In other words, the Money Changers wanted two things: 1) the
re-institution of a central bank under their exclusive
control, and, 2) an American currency backed by their gold.
Their strategy was two-fold: first of all, to cause a series
of panics to try to convince the American people that only
centralized control of the money supply could provide
economic stability; and secondly, to remove so much money
from the system that most Americans would be so desperately
poor that they either wouldn’t care or would be too weak to
oppose the bankers.
In 1866, there was $1,8 billion in circulation in the United
States, about $50.46 per capita. In 1867 alone, $500 million
was removed from the U.S. money supply. Ten years later, in
1876, America’s money supply was reduced to only $600
million. In other words, two-thirds of America’s money had
been called in by the bankers. Only $14.60 per capita
remained in circulation. Ten years later, the money supply
had been reduced to only $400 million, even though the
population had boomed. The result was that only $6.67 per
capita remained in circulation, a 760% loss in buying power
over 20 years. Today, economists try to sell the idea that
recessions and depressions are a natural part of something
they call the “business cycle”. The truth is, our money
supply is manipulated now, just as it was before and after
the Civil War.
How did this happen? How did money become so scarce? Simple
– bank loans were called in and no new ones were given. In
addition, silver coins were melted down. In 1872, a man
named Ernest Seyd was given £100,000 (about $5,000,000 then)
by the Bank of England and sent to America to bribe the
necessary Congressmen to get silver “demonetised”. He was
told that if this was not sufficient, to draw an additional
£100,000, “or as much more as was necessary” The next year,
Congress passed the Coinage Act of 1873 and the minting of
silver dollars abruptly stopped. In fact, Rep. Samuel
Hooper, who introduced the bill in the House acknowledged
that Mr. Seyd actually drafted the legislation. But it gets
even worse than that. In 1874, Seyd himself admitted who was
behind the scheme:
“I went to America in the winter of 1872-73, authorized to
secure, if I could, the passage of a bill demonetizing
silver. It was in the interest of those I represented – the
governors of the Bank of England – to have it done. By 1873,
gold coins were the only form of coin money.”
—Ernest Seyd
But the contest over control of America’s money was not yet
over. Only three years later, in 1876, with one-third of
America’s workforce unemployed, the population was growing
restless. People were clamouring for a return to the
Greenback money system of President Lincoln, or a return to
silver money – anything that would make money more
plentiful. That year, Congress created the United States
Silver Commission to study the problem. Their report clearly
blamed the monetary contraction on the National Bankers. The
report is interesting because it compares the deliberate
money contraction by the National Bankers after the Civil
War, to the Fall of the Roman Empire.
“The disaster of the Dark Ages was caused by decreasing
money and falling prices…. Without money, civilization could
not have had a beginning, and with a diminishing supply, it
must languish and unless relieved, finally perish.
At the Christian era the metallic money of the Roman Empire
amounted to $1,800,000,000. By the end of the Fifteenth
century it had shrunk to less than $200,000,000…. History
records no other such disastrous transition as that from the
Roman Empire to the Dark Ages….”
—United States Silver Commission
Despite this report by the Silver Commission, Congress took
no action. The next year, 1877, riots broke out from
Pittsburgh to Chicago. The torches of starving vandals lit
up the sky. The bankers huddled to decide what to do. They
decided to hang on. Now that they were back in control to a
large extent they were not about to give it up. At the
meeting of the American Bankers Association that year, they
urged their membership to do everything in their power to
put down the notion of a return to Greenbacks. The ABA
Secretary, James Buel, authored a letter to the members
which blatantly called on the banks to subvert not only
Congress, but the press:
“It is advisable to do all in your power to sustain such
prominent daily and weekly newspapers, especially the
Agricultural and Religious Press, as will oppose the
greenback issue of paper money and that you will also
withhold patronage from all applicants who are not willing
to oppose the government issue of money.
“…. To repeal the Act creating bank notes, or to restore to
circulation the government issue of money will be to provide
the people with money and will therefore seriously affect
our individual profits as bankers and lenders.
“See your Congressman at once and engage him to support our
interests that we may control legislation.”
— James Buel, American Bankers Association
As political pressure mounted in Congress for change, the
press tried to turn the American people away from the truth.
The New York Tribune put it this way on January 10, 1878:
“The capital of the country organized at last, and we will
see whether Congress will dare to fly in its face.”
But it didn’t work entirely. On February 28, 1878, Congress
passed the Sherman Law allowing the minting of a limited
number of silver dollars, ending a 5-year hiatus. This did
not end gold-backing of the currency, however. Nor did it
completely free silver. Previous to 1873, anyone who brought
silver to the U.S. mint could have it struck into silver
dollars free of charge. No longer. But at least some money
began to flow back into the economy again. With no further
thread to their control, the bankers loosened up on loans
and the post-Civil War depression was finally ended.
Three years later, the American people elected Republican
James Garfield President. Garfield understood how the
economy was being manipulated. As a Congressman, he had been
chairman of the Appropriations Committee, and was a member
of the Banking and Currency Committee. After his
inauguration, he slammed the Money Changers publicly in
1881:
“Whosoever 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.”
—James Garfield
Unfortunately, within a few weeks of making this statement,
on July 2 of 1881, President Garfield was assassinated.
19. Free Silver
The Money Changers were gathering strength fast. They began
a periodic fleecing of the flock by creating – as the called
it – by creating economic booms, followed by further
depressions, so they could buy up thousands of homes and
farms for pennies on the dollar. In 1891, the Money Changers
prepared to take the American economy down again and their
methods and motives were laid out with shocking clarity in a
memo sent out by the American Bankers Association, the ABA,
an organization in which most bankers were members. Notice
that this memo called for bankers to create a depression on
a certain date three years in the future. According to the
congressional record, here is how it read in part:
“On Sept. 1st, 1894, we will not renew our loans under any
consideration. On Sept. 1st we will demand our money. We
will foreclose and become mortgagees in possession. We can
take two-thirds of the farms west of the Mississippi, and
thousands of them east of the Mississippi as well, at our
own price…. Then the farmers will become tenants as in
England ….”
—1891 American Bankers Association as printed in the
Congressional Record of April 29,1913
These depressions could be controlled because America was on
the gold standard. Since gold is scarce, it’s one of the
easiest commodities to manipulate. People wanted silver
money legalized again so they could escape the stranglehold
the Money Changers had on gold-backed money. People wanted
silver money reinstated, reversing Mr. Seyd’s Act of 1873,
by then called the “Crime of ’73”.
By 1896, the issue of more silver money had become the
central issue in the Presidential campaign. William Jennings
Bryan, a Senator from Nebraska ran for President as a
Democrat on the “Free Silver” issue. At the Democratic
National Convention in Chicago, he made an emotional speech,
which won him the nomination entitled “Crown of Thorns and
Cross of Gold.” Though Bryan was only 36 years old at the
time, this speech is widely regarded as the most famous
oration ever made before a political convention. In the
dramatic conclusion, Bryan said:
“We will answer their demand for a gold standard by saying
to them: You shall not press down upon the brow of labor
this crown of thorns, you shall not crucify mankind upon a
cross of gold.”
—William Jennings Bryan
The bankers lavishly supported the Republican candidate,
William McKinley, who favoured the gold standard. The
resulting contest was among the most fiercely contested
Presidential races in American history. Bryan made over 600
speeches in 27 states. The McKinley campaign got
manufacturers and industrialists to inform their employees
that if Bryan were elected, all factories and plants would
close and there would be no work. The ruse succeeded.
McKinley beat Bryan by a small margin. Bryan ran for
president again in 1900 and in 1908, but fell short each
time. During the 1912 Democratic Convention, Bryan was a
powerful figure who helped Woodrow Wilson win the
nomination. When Wilson became President he appointed Bryan
as Secretary of State. But Bryan soon became disenchanted
with the Wilson administration.
Bryan served only two years in the Wilson administration
before resigning in 1915 over the highly suspicious sinking
of the Lusitania, the event which was used to drive America
into World War I. Although William Jennings Bryan never
gained the Presidency, his efforts delayed the Money
Changers for seventeen years from attaining their next goal:
a new, privately-owned central bank for America.
20. JP. Morgan and the Crash of 1907
Now it was time for the Money Changers to get back to the
business of a new, private central bank for America. During
the early 1900s, men like J.P. Morgan led the charge. One
final panic would be necessary to focus the nation’s
attention on the supposed need for a central bank. The
rationale was that only a central bank could prevent bank
failures.
Morgan was clearly the most powerful banker in America and a
suspected agent for the Rothschilds. Morgan had helped
finance John D. Rockefeller standard oil empire he had also
helped finance the monopolies of Edgar Herman in railroads,
of Andrew Carnegie in steel and of others in numerous
industries.
But, on top of that, J.P. Morgan’s father, Junius Morgan,
had been American financial agent to the British. After his
father’s death, J.P. Morgan took on a British partner,
Edward Grenfell, a long-time director of the Bank of
England.
In fact, upon Morgan’s death, his estate contained only a
few million dollars. The bulk of the securities most people
thought he owned, were in fact owned by others.
In 1902, President Theodore Roosevelt allegedly went after
Morgan and his friends by using the Sherman Anti-Trust Act
to try to break up their industrial monopolies. Actually,
Roosevelt did very little to interfere in the growing
monopolization of American industry by the bankers and their
surrogates. For example, Roosevelt supposedly broke up the
Standard Oil monopoly. But it wasn’t really broken at all.
It was merely divided into seven corporations, all still
controlled by the Rockefellers. The public was aware of this
thanks to political cartoonists like Thomas Nast who
referred to the bankers as the “Money Trust.”
By 1907, the year after Teddy Roosevelt’s re-election,
Morgan decided it was time to try for a central bank again.
Using their combined financial muscle, Morgan and his
friends were secretly able to crash the stock market.
Thousands of small banks were vastly overextended. Some had
reserves of less than one percent (1%), thanks to the
fractional reserve principle.
Within days, banks runs were commonplace across the nation.
Now Morgan stepped into the public arena and offered to prop
up the faltering American economy by supporting failing
banks with money he manufactured out of nothing. It was an
outrageous proposal, far worse than even fractional reserve
banking, but Congress let him do it. Morgan manufactured
$200 million worth of this completely reserveless, private
money and bought things with it, paid for services with it,
and sent some of it to his branch banks to lend out at
interest. His plan worked. Soon, the public regained
confidence in money in general and quit hoarding their
currency. But as a result, banking power was further
consolidated into the hands of a few large banks. By 1908
the panic was over and Morgan was hailed as a hero by the
president of Princeton University, a man by the name of
Woodrow Wilson:
“All this trouble could be averted if we appointed a
committee of six or seven public-spirited men like J.P.
Morgan to handle the affairs of our country.”
—Woodrow Wilson
Economics textbooks would later explain that the creation of
the Federal Reserve System was the direct result of the
panic of 1907:
“with its alarming epidemic of bank failures, the country
was fed up once and for all with the anarchy of unstable
private banking.”
But Minnesota Congressman Charles A. Lindbergh, Sr., the
father of the famous aviator, “Lucky Lindy,” later explained
that the Panic of 1907 was really just a scam:
“Those not favorable to the money trust could be squeezed
out of business and the people frightened into demanding
changes in the banking and currency laws which the Money
Trust would frame.”
—Rep. Charles A. Lindbergh (R-MN)
So, since the passage of the National Banking Act of 1863,
the Money Changers had been able to coordinate a series of
booms and busts. The purpose was not only to fleece the
American public of their property, but to later claim that
the banking system was basically so unstable that it had to
be consolidated into a central bank once again.
21. Jekyll Island
After the crash, Teddy Roosevelt, in response to the Panic
of 1907, signed into law a bill creating something called
the National Monetary Commission. The Commission was to
study the banking problem and make recommendations to
Congress. Of course, the Commission was packed with Morgan’s
friends and cronies.
The Chairman was a man named Senator Nelson Aldrich from
Rhode Island. Aldrich represented the Newport, Rhode Island
homes of America’s richest banking families. His daughter
married John D. Rockefeller, Jr., and together they had five
sons: John, Nelson (who would become the Vice-President in
1974), Laurence, Winthrop, and David (the head of the
Council on Foreign Relations and former Chairman of Chase
Manhattan bank).
As soon as the National Monetary Commission was set up,
Senator Aldrich immediately embarked on a two-year tour of
Europe, where he consulted at length with the private
central bankers in England, France and Germany. The total
cost of his trip alone to the taxpayers was $300,000, an
astronomical sum in those days. Shortly after his return, on
the evening of November 22, 1910, some of the wealthiest and
most powerful men in America boarded Senator Aldrich’s
private rail car and in the strictest secrecy journeyed to
this place, Jekyll Island, off the coast of Georgia. With
the group came Paul Warburg. Warburg had been given a
$500,000 per year salary to lobby for the passage of a
privately-owned central bank in America by the investment
firm, Kuhn, Loeb & Company.
Warburg’s partner in this firm was a man named Jacob Schiff,
the grandson of the man who shared the Green Shield house
with the Rothschild family in Frankfort. Schiff, as we’ll
later find out, was in the process of spending $20 million
to finance the overthrow of the Tsar in Russia. These three
European banking families, the Rothschilds, the Warburgs,
and the Schiffs were interconnected by marriage down through
the years, just as were their American banking counterparts,
the Morgans, Rockefellers and Aldrichs.
Secrecy was so tight that all seven primary participants
were cautioned to use only first names to prevent servants
from learning their identities. Years later one participant,
Frank Vanderlip, president of National City Bank of New York
and a representative of the Rockefeller family, confirmed
the Jekyll Island trip in the February 9, 1935 edition of
the Saturday Evening Post:
“I was as secretive – indeed, as furtive – as any
conspirator…. Discovery, we knew, simply must not happen, or
else all our time and effort would be wasted. If it were to
be exposed that our particular group had got together and
written a banking bill, that bill would have no chance
whatever of passage by Congress”
—Frank Vanderlip
The participants came here to figure out how to solve their
major problem: how to bring back a privately-owned central
bank. But there were other problems that needed to be
addressed as well. First of all, the market share of the big
national banks was shrinking fast. In the first ten years of
the century, the number of U.S. banks had more than doubled
to over 20,000. By 1913, only 29% of all banks were National
Banks and they held only 57% of all deposits. As Senator
Aldrich later admitted in a magazine article:
“Before passage of this Act, the New York Bankers could only
dominate the reserves of New York. Now, we are able to
dominate the bank reserves of the entire country.”
—Sen. Nelson Aldrich
Therefore, something had to be done to bring these new banks
under their control. As John D. Rockefeller put it:
“Competition is a sin.”
Secondly, the nation’s economy was so strong that
corporations were starting to finance their expansions out
of profits instead of taking out huge loans from large
banks. In the first 10 years of the new century, 70% of
corporate funding came from profits. In other words,
American industry was becoming independent of the Money
Changers, and that trend had to be stopped.
All the participants knew that these problems could be
hammered out into a workable solution, but perhaps their
biggest problem was a public relations problem, the name of
the new bank. That discussion took place right here in this
room, one of the many conference rooms in this sprawling
hotel today known as the Jekyll Island Club Hotel. Aldrich
believed that the word “bank” should not even appear in the
name. Warburg wanted to call the legislation the National
Reserve Bill or the Federal Reserve Bill. The idea here was
to give the impression that the purpose of the new central
bank was to stop bank runs, but also to conceal its monopoly
character. However, it was Aldrich, the egotistical
politician, who insisted it be called the Aldrich Bill.
After nine days at Jekyll Island, the group dispersed. The
new central bank would be very similar to the old Bank of
the United States. It would be given a monopoly over U.S.
currency and create that money out of nothing.
How does the Fed “create” money out of nothing? It is a
four-step process. But first a word on bonds. Bonds are
simply promises to pay – or government IOUs. People buy
bonds to get a secure rate of interest. At the end of the
term of the bond, the government repays the bond, plus
interest, and the bond is destroyed. There are about 3.6
trillion dollars worth of these bonds at present. Now here
is the Fed moneymaking process:
Step 1. The Fed Open Market Committee approves the purchase
of U.S. Bonds on the open market.
Step 2. The bonds are purchased by the Fed Bank from whoever
is offering them for sale on the open market.
Step 3. The Fed pays for the bonds with electronic credits
to the seller’s bank, which in turn credits the seller’s
bank account. The trick is that these credits are based on
nothing. The Fed just creates them.
Step 4. The banks use these deposits as reserves. They can
loan out over ten times the amount of their reserves to new
borrowers, all at interest.
In this way, a Fed purchase of, say a million dollars worth
of bonds, gets turned into over 10 million dollars in bank
accounts. The Fed, in effect, creates 10% of this totally
new money and the banks create the other 90%. To reduce the
amount of money in the economy, the process is just
reversed: the Fed sells bonds to the public, and the money
flows out of the purchaser’s local bank. Loans must be
reduced by ten times the amount of the sale. So a Fed sale
of a million dollars in bonds, results in 10 million dollars
less money in the economy. So how does this benefit the
bankers whose representatives huddled at Jekyll Island?
1st – it totally misdirected banking reform efforts from
proper solutions.
2nd – it prevented a proper, debt-free system of government
finance like Lincoln’s Greenbacks – from making a comeback.
The bond-based system of government finance, forced on
Lincoln after he created Greenbacks, was now cast in stone.
3rd – it delegated to the bankers the right to create 90% of
our money supply based on only fractional reserves which
they could then loan out at interest.
4th – it centralized overall control of our nation’s money
supply in the hands of a few men.
5th – it established a central bank with a high degree of
independence from effective political control.
Soon after its creation, the Fed’s Great Contraction in the
early 1930s would cause the Great Depression. This
independence has been enhanced since then, through
additional laws.
In order to fool the public into thinking the government
retained control, the plan called for the Fed to be run by a
Board of Governors appointed by the President and approved
by the Senate. But all the bankers had to do was to be sure
that their men got appointed to the Board of Governors. That
wasn’t hard. Bankers have money, and money buys influence
over politicians.
Once the participants left Jekyll Island, the public
relations blitz was on. The big New York banks put together
an “educational” fund of five million dollars to finance
professors at respected universities to endorse the new
bank. Woodrow Wilson at Princeton was one of the first to
jump on the bandwagon. But the bankers’ subterfuge didn’t
work. The Aldrich Bill was quickly identified as the bankers
bill a bill to benefit only what become known as the “Money
Trust.” As Congressman Lindbergh put it during the
Congressional debate:
“The Aldrich Plan is the Wall Street Plan. It means another
panic, if necessary, to intimidate the people. Aldrich, paid
by the government to represent the people, proposes a plan
for the trusts instead.”
—Rep. Charles A. Lindbergh (R-MN)
Seeing they didn’t have the votes to win in Congress, the
Republican leadership never brought the Aldrich Bill to a
vote. The bankers quietly decided to move to track two, the
Democratic alternative. They began financing Woodrow Wilson
as the Democratic nominee. As respected historian James
Perloff put it, Wall Street financier Bernard Baruch was put
in charge of Wilson’s education:
“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….”
— James Perloff
So now, the stage was set. The Money Changers were poised to
install their privately-owned central bank once again. The
damage president Andrew Jackson had done 67 years earlier
had been only partly repaired with the passage of the
national bank act during the civil war. Since then, the
battle had raged on across the decades. The “Jacksonians”
became the “Greebackers” who became the hard-core supporters
of William Jennings Bryan. With Bryan leading the charge,
these opponents of the Money Changers, ignorant of Baruch’s
tutelage, now threw themselves behind democrat Widrow
Wilson. They and Bryan would soon be betrayed.
22. Fed Act of 1913
During the Presidential campaign, the Democrats were careful
to pretend to oppose the Aldrich Bill. As Rep. Louis
McFadden, himself a Democrat as well as chairman of the
House Banking and Currency Committee, explained it 20 years
after the fact:
“The Aldrich bill was condemned in the platform … when
Woodrow Wilson was nominated…. The men who ruled the
Democratic party promised the people that if they were
returned to power there would be no central bank established
here while they held the reins of government.
Thirteen months later that promise was broken, and the
Wilson administration, under the tutelage of those sinister
Wall Street figures who stood behind Colonel House,
established here in our free country the worm-eaten
monarchical institution of the ‘king’s bank’ to control us
from the top downward, and to shackle us from the cradle to
the grave.”
—Rep. Louis McFadden (D-PA)
Once Wilson was elected, Morgan, Warburg, Baruch and company
advanced a “new” plan, which Warburg named the Federal
Reserve System. The Democratic leadership hailed the new
bill, called the Glass-Owen Bill, as something radically
different from the Aldrich Bill. But in fact, the bill was
virtually identical in every important detail. In fact, so
vehement were the Democratic denials of similarity that Paul
Warburg – the father of both bills – had to step in to
reassure his paid friends in Congress that the two bills
were virtually identical:
“Brushing aside the external differences affecting the
‘shells,’ we find the ‘kernals’ of the two systems very
closely resembling and related to one another.”
—Paul Warburg
But that admission was for private consumption only.
Publicly, the Money Trust trotted out Senator Aldrich and
Frank Vanderlip, the president of Rockefeller’s National
City Bank of New York and one of the Jekyll Island seven, to
oppose the new Federal Reserve System. Years later, however,
Vanderlip admitted in the Saturday Evening Post that the two
measures were virtually identical:
“Although the Aldrich Federal Reserve Plan was defeated when
it bore the name Aldrich, neverless its essential points
were all contained in the plan that finally was adopted.”
—Frank Vanderlip
As Congress neared a vote, they called Ohio attorney Alfred
Crozier to testify. Crozier noted the similarities between
the Aldrich Bill and the Glass-Owen Bill:
“The … bill grants just what Wall Street and the big banks
for twenty-five years have been striving for – private
instead of public control of currency.
“It [the Glass-Owen bill] does this as completely as the
Aldrich Bill. Both measures rob the government and the
people of all effective control over the public’s money, and
vest in the banks exclusively the dangerous power to make
money among the people scarce or plenty.”
-Alfred Crozier, Ohio attorney
During the debate on the measure, Senators complained that
the big banks were using their financial muscle to influence
the outcome. “There are bankers in this country who are
enemies of the public welfare,” said one Senator. What an
understatement! Despite the charges of deceit and
corruption, the bill was finally snuck through the Senate on
December 22, 1913, after must Senators had left town for the
Holidays, after having been assured by the leadership that
nothing would be done until long after the Christmas recess.
On the day the bill was passed, Congressman Lindbergh
prophetically warned his countrymen that:
“This Act establishes the most gigantic trust on earth. When
the President signs this bill, the invisible government by
the Monetary Power will be legalized. The people may not
know it immediately, but the day of reckoning is only a few
years removed…. The worst legislative crime of the ages is
perpetrated by this banking bill.”
—Rep. Charles Lindbergh (R-MN)
On top of all this, only weeks earlier, Congress had finally
passed a bill legalizing income tax. Why was the income tax
law important? Because bankers finally had in place a system
which would run up a virtually unlimited federal debt. How
would the interest on this debt be repaid, never mind the
principal? Remember, a privately-owned central bank creates
the principal out of nothing. The federal government was
small then. Up to then, it had subsisted merely on tariffs
and excise taxes. Just as with the Bank of England, the
interest payments had to be guaranteed by direct taxation of
the people. The Money Changers knew that if they had to rely
on contributions from the states, eventually the individual
state legislatures would revolt and either refuse to pay the
interest on their own money, or at least bring political
pressure to bear to keep the debt small.
It is interesting to note that in 1895 the Supreme Court had
found a similar income tax law to be unconstitutional. The
Supreme Court even found a corporate income tax law
unconstitutional in 1909. As a result, Senator Aldrich
hustled a bill for a constitutional amendment allowing
income tax through the Congress. The proposed 16th Amendment
to the Constitution was then sent to the state legislatures
for approval, but some critics claim that the 16th Amendment
was never ratified by the necessary 3/4s of the states. In
other words, the 16th Amendment may not be legal.
But the Money Changers were in no mood to debate the fine
points. By October of 1913, senator Aldrich had hustled the
income tax bill through Congress. Without the power to tax
the people directly and bypass the states, the Federal
Reserve Bill would be far less useful to those who wanted to
drive America deeply into their debt.
A year after the passage of the Federal Reserve Bill,
Congressman Lindbergh explained how the Fed created what we
have come to call the “Business Cycle” and how they use it
to their advantage:
“To cause high prices, all the Federal Reserve Board will do
will be to lower the rediscount rate…, producing an
expansion of credit and a rising stock market; then when …
business men are adjusted to these conditions, it can check
… prosperity in mid-career by arbitrarily raising the rate
of interest.
“It can cause the pendulum of a rising and falling market to
swing gently back and forth by slight changes in the
discount rate, or cause violent fluctuations by a greater
rate variation, and in either case it will possess inside
information as to financial conditions and advance knowledge
of the coming change, either up or down.
“This is the strangest, most dangerous advantage ever placed
in the hands of a special privilege class by any Government
that ever existed.
“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 to their
advantage. They also know when to stop panic. Inflation and
deflation work equally well for them when they control
finance….”
—Rep. Charles Linbergh (R-MN)
Congressman Lindbergh was correct on all points. What he
didn’t realize was that most European nations had already
fallen prey to the central bankers decades or centuries
earlier. But he also mentions the interesting fact that only
one year later, the Fed had cornered the market in gold;
this is how he put it: “Already the Federal Reserve banks
have cornered the gold and gold certificates…”
But Congressman Lindbergh was not the only critic of the
Fed. Congressman Louis McFadden, the Chairman of the House
Banking and Currency committee from 1920 to 1931 remarked
that the Federal Reserve Act brought about:
“A super-state controlled by international bankers and
international industrialists acting together to enslave the
world for their own pleasure.”
—Rep. Louis McFadden (D-PA)
Notice how McFadden saw the international character of the
stockholders of the Federal Reserve. Another chairman of the
House Banking and Currency Committee in the 1960s, Wright
Patman from Texas, put it this way:
“In the United States today we have in effect two
governments…. We have the duly constituted Government…. Then
we have an independent, uncontrolled and uncoordinated
government in the Federal Reserve System, operating the
money powers which are reserved to Congress by the
Constitution.”
—Rep. Wright Patman (D-TX)
Even the inventor of the electric light, Thomas Edison,
joined the fray in criticizing the system of the Federal
Reserve:
“If our nation can issue a dollar bond, it can issue a
dollar bill. The element that makes the bond good, makes the
bill good, also. The difference between the bond and the
bill is the bond lets money brokers collect twice the amount
of the bond and an additional 20%, where as 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 promise fattens the usurers and the other
helps the people.”
—Thomas Edison
Three years after the passage of the Federal Reserve Act,
even President Wilson began to have second thoughts about
what had been unleashed during his first term in office.
“We have come to be one of the worst ruled, one of the most
completely controlled governments in the civilized world –
no longer a government of free opinion, no longer a
government by … a vote of the majority, but a government by
the opinion and duress of a small group of dominant men.
“Some of the biggest men in the United States, in the field
of commerce and manufacture, are afraid of something. They
know that there is a power somewhere so organized, so
subtle, so watchful, so interlocked, so complete, so
pervasive, that they had better not speak above their breath
when they speak in condemnation of it.”
—Woodrow Wilson
Before his death in 1924, President Wilson realized the full
extent of the damage he had done to America, when he
confessed: “I have unwittingly ruined my government.”
So finally, the Money Changers, those who profit by
manipulating the amount of money in circulation, had their
privately owned central bank installed again in America. The
major newspapers (which they also owned) hailed passage of
the Federal Reserve Act of 1913, telling the public that
“now depressions could be scientifically prevented.” The
fact of the matter was that now depressions could be
scientifically created.
23. World War I
Power was now centralized to a tremendous extent. Now it was
time for a war – a really big war – in fact, the first World
War. Of course, to the central bankers, the political issues
of war don’t matter nearly as much as the profit potential,
and nothing creates debts like warfare. England was the best
example at that time. During the 119-year period between the
founding of the Bank of England and Napoleon’s defeat at
Waterloo, England had been at war for 56 years. And much of
the remaining time, she’d been preparing for war.
In World War I, the German Rothschilds loaned money to the
Germans, the British Rothschilds loaned money to the
British, and the French Rothschilds loaned money to the
French. In America, J.P. Morgan was the sales agent for war
materials to both the British and the French. In fact, six
months into the war, Morgan became the largest consumer on
earth, spending $10 million a day. His offices at 23 Wall
Street were mobbed by brokers and salesmen trying to cut a
deal. In fact, it got so bad that the bank had to post
guards at every door and at the partners’ homes as well.
Many of the New York bankers made out as well from the war.
President Wilson appointed Bernard Baruch to head the War
Industries Board. According to historian James Perloff, both
Baruch and the Rockefellers profited by some $200 million
during the war. But profits were not the only motive. There
was also revenge. The Money Changers never forgave the Tsars
for their support of Lincoln during the Civil War. Also,
Russia was the last major European nation to refuse to give
in to the privately owned central bank scheme.
Three years after World War I broke out, the Russian
Revolution toppled the Tsar and installed the scourge of
communism. Jacob Schiff of Kuhn, Loeb & Co. bragged on
his deathbed that he had spent $20 million towards the
defeat of the Tsar.
Money was funnelled from England to support the revolution
as well.
Why would some of the richest men in the world financially
back communism, the system that was openly vowing to destroy
the so-called capitalism that made them wealthy? Researcher
Gary Allen explained it was this way:
“If one understands that socialism is not a share-the-wealth
program, but is in reality a method to consolidate and
control the wealth, then the seeming paradox of super-rich
men promoting socialism becomes no paradox at all. Instead,
it becomes logical, even the perfect tool of power-seeking
megalomaniacs.
Communism, or more accurately, socialism, is not a movement
of the downtrodden masses, but of the economic elite.”
—Gary Allen, author
As W. Cleon Skousen put it in his 1970 book “The Naked
Capitalist”:
“Power from any source tends to create an appetite for
additional power…. It was almost inevitable that the
super-rich would one day aspire to control not only their
own wealth, but the wealth of the whole world.
To achieve this, they were perfectly willing to feed the
ambitions of the power-hungry political conspirators who
were committed to the overthrow of all existing governments
and the establishments of a central world-wide
dictatorship.”
— W. Cleon Skousen
But what if these revolutionaries get out of control and try
to seize power from the super rich? After all, it was Mao
Tse Tung who in 1938 stated his position concerning power:
“Political power grows out of the barrel of a gun.” The Wall
Street/London axis elected to take the risk. The
master-planners attempted to control revolutionary communist
groups by feeding them vast quantities of money when they
obeyed, and contracting their money supply, or even
financing their opposition, if they got out of control.
Lenin began to understand that although he was the absolute
dictator of the new Soviet Union, he was not pulling the
financial strings; someone else was silently in control:
“The state does not function as we desired. The car does not
obey. A man is at the wheel and seems to lead it, but the
car does not drive in the desired direction. It moves as
another force wishes.”
—Vladimir Lenin
Who was behind it? Rep. Louis T. McFadden, the Chairman of
the House Banking and Currency Committee throughout the
1920s and into the Great Depression years of the 1930s,
explained it this way:
“The course of Russian history has, indeed, been greatly
affected by the operations of international bankers…. The
Soviet Government has been given United States Treasury
funds by the Federal Reserve Board … acting through the
Chase Bank.
England has drawn money from us through the Federal Reserve
banks and has re-lent it at high rates of interest to the
Soviet Government…. The Dnieperstory Dam was built with
funds unlawfully taken from the United States Treasury by
the corrupt and dishonest Federal Reserve Board and the
Federal Reserve banks.”
—Rep. Louis T. McFadden (D-PA)
In other words, the Fed and the Bank of England, at the
behest of the international bankers who controlled them,
were creating a monster, one which would fuel seven decades
of unprecedented Communist revolution, warfare, and most
importantly – debt.
In case you think there is some chance that the Money
Changers got communism going and then lost control, in 1992,
The Washington Times reported that Russian President Boris
Jeltsin was upset that most of the incoming foreign aid was
being siphoned off “straight back into the coffers of
Western banks in debt service.”
No one in his right mind, would claim that a war as large as
World War I had a single cause. Wars are complex things with
many causative factors. But on the other hand it would also
be equally foolish to ignore as a prime cause of WWI those
who would profit the most from the war. The role of the
Money Changers is no wild conspiracy theory. They had a
motive – a short-range, self-serving motive as well as a
long-range, political motive of advancing totalitarian
government, with the Money Changers maintaining the
financial clout to control whatever politicians might emerge
as the leaders. Next, we’ll see what the Money Changers’
ultimate political goal is for the world.
24. Great Depression
Shortly after WWI, the overall political agenda of the Money
Changers began to be clear. Now that they controlled
national economies individually, the next step was the
ultimate form of consolidation: world government.
The new world government proposal was given top priority at
the Paris peace conference after WWI. It was called the
League of Nations. But much to the surprise of Paul Warburg
and Bernard Baruch, who attended the peace conference with
president Wilson, the world was not yet ready to dissolve
national boundaries. Nationalism still beats strong in the
human breast.
For example, Lord Curzon, the British foreign secretary
called the League of Nations a good joke. Even though it was
the stated policy of the British government to support it.
To the humiliation of president Wilson, the U.S. Congress
wouldn’t ratify the League either. Despite the fact that it
had been ratified by many other nations, without money
flowing from the U.S. treasury, the League died.
After WWI, the American public had grown tired of the
internationalist policies of democrat Woodrow Wilson. In the
presidential election of 1920, republican Warren Harding won
a landslide victory with over 60% of the votes. Harding was
an ardent follower of both bolshevism and the League of
Nations. His election, which opened a 12 year run of
republican presidents in the White House, lead to an
unprecedented era of prosperity known as the “roaring
twenties”.
Despite the fact that war had brought America a debt ten
times larger than its civil war debt, still the American
economy surged. Gold had poured into the country during the
war and it continued to do so afterwards. In the early
1920’s, the governor of this bank, the Federal Reserve Bank
of New York, a man named Benjamin Strong, met frequently
with the secretive and eccentric governor of the Bank of
England, Montague Norman. Norman was determined to replace
the gold England had lost to the U.S. during WWI and return
the Bank of England to its former position of dominance in
world finance.
On top of that, rich with gold, the American economy might
get out of control again, just like it had done after the
civil war. During the next 8 years, under the president
seize of Harding and Coolidge, the huge federal debt built
up during WWI was cut by 38%, down to $16 billion. The
greatest percentage drop in U.S. history.
During the election of 1920, Warren Harding and Calvin
Coolidge ran against James Cox, the governor of Ohio, and
the little known Franklin D. Roosevelt, who had previously
risen to no higher post than president Wilson’s assistant
secretary of the navy.
After his inauguration, Harding moved quickly to formally
kill the League of Nations. Then he quickly moved to reduce
domestic taxes while raising tariffs to record heights. Now,
this was a revenue policy of which most of the founding
fathers would certainly have approved. His second year in
office, Harding took ill on a train trip in the West and
suddenly died. Although no autopsy was performed the cause
was said to be either pneumonia or food poisoning.
When Coolidge took over, he continued Harding’s domestic
economic policy of high tariffs on imports while cutting
income taxes. As a result, the economy grew at such a rate
that net revenue still increased. Now, that had to be
stopped. So, just as they had done so frequently before, the
Money Changers decided it was time to crash the American
economy. The Federal Reserve began flooding the country with
money. They increased the money supply by 62% during these
years. Money was plentiful. This is why it was known as the
“roaring twenties”.
Before his death in 1919, former president Teddy Roosevelt
warned the American people what was going on. As reported in
the March 27th, 1922 edition of the New York Times,
Roosevelt said:
“These International bankers and Rockefeller-Standard Oil
interests control the majority of newspapers and the columns
of these papers to club into submission or drive out of
public office officials who refuse to do the bidding of the
powerful corrupt cliques which compose the invisible
government.”
—Theodore Roosevelt
Just one day before, in the New York Times, the major of New
York, John Highland quoted Roosevelt and blasted those he
saw as taking control of America, its political machinery
and its press:
“The warning of Theodore Roosevelt has much timeliness
today, for the real menace of our republic is this invisible
government which like a giant octopus sprawls its slimy
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 generalizations, let me say that at the
head of this octopus are the Rockefeller-Standard Oil
interest 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 States government 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.
—John Hylan, Mayor of New York – New York Times, March
26,1922
Why didn’t people listen to such strong warnings and demand
that Congress reverse its 1913 passage of the Federal
Reserve Act? Because remember: it was the 1920s: a steady
increase in bank loans contributed to a rising market. In
other words, just as it is today, in times of prosperity, no
one wants to worry about economic issues. But there was a
dark side to all this prosperity. Businesses expanded and
became strong out on credit. Speculation in the booming
stock market became rampant. Although everything looked
rosy, it was a castle made of sand. When all was in
readiness, in April of 1929, Paul Warburg, the father of the
Federal Reserve, sent out a secret advisory warning his
friends that a collapse and nationwide depression was
certain. In August of 1929, the Fed began to tighten money.
It is not a coincidence that the biographies of all the Wall
Street giants of that era, John D. Rockefeller, J.P. Morgan,
Bernard Beruch etc. all marvelled that they got out of the
stock market just before the crash and put all their assets
in cash or gold. On October 24th, 1929, the big New York
bankers called in their 24-hour broker call loans. This
meant that both stockbrokers and customers had to dump their
stocks on the market to cover their loans, no matter what
price they had to sell them for. As a result, the market
tumbled and that day was known as “black Thursday”.
According to John Kenneth Galbraith, writing in “The great
crash 1929”, at the height of the selling frenzy, Bernard
Beruch brought Winston Churchill into the visitors gallery
of the New York stock exchange here, to witness the panic
and impress him with his power over the wild events down on
the floor.
Congressman Louis McFadden, chairman of the House Committee
on banking and currency from 1920 to 1931, knew whom to
blame. He accused the Fed and the international bankers of
orchestrating the crash.
“It was not accidental. It was a carefully contrived
occurrence…. The international bankers sought to bring about
a condition of despair here so that they might emerge as
rulers of us all.”
—Rep. Louis T. McFadden (D-PA)
But McFadden went even farther: he openly accused them of
causing the crash in order to steal America’s gold. In
February 1931, in the midst of the depression, he put it his
way:
“I think it can hardly be disputed that the statesman and
financiers of Europe are ready to take almost any means to
reacquire rapidly the gold stock which Europe lost to
America as the result of World War I”
—Rep. Louis T. McFadden (D-PA)
Curtis Dall, a broker for Lehman brothers, was on the floor
of the New York stock exchange the day of the crash. In his
1970 book, “FDR: my exploited father in law”, he explained
that the crash was triggered by the planned sudden shortage
of call money in the New York money market.
“Actually, it was the calculated ‘shearing’ of the public by
the World-Money powers triggered by the planned sudden
shortage of call money in the New York Money Market.”
—Curtis Dall, son-in-law of FDR
Within a few weeks, $3 billion of wealth simply seemed to
vanish. Within a year, $40 billion had been lost.
But did it really disappear? Or was it simply consolidated
in fewer hands?
And what did the Federal Reserve do? Instead of moving to
help the economy out, by quickly lowering interest rates to
stimulate the economy, the Fed continued to broodily
contract the money supply further, deepening the depression.
Between 1929 and 1933, the Fed reduced the money supply by
an additional 33%.
Although most Americans have never heard that the Fed was
the cause of the depression, this is well known among top
economists. Milton Friedman, the Nobel price-winning
economist, now at Stanford University, said the same thing
in a national public radio interview in January of 1996:
“The Federal Reserve definitely caused the Great depression
by contracting the amount of currency in circulation by
one-third from 1929 to 1933.”
—Milton Friedman, Nobel Prize winning economist
But the money lost by most Americans during the depression,
didn’t just vanish. It was just re-distributed into the
hands of those who had gotten out just before the crash and
had purchased gold, which is always a safe place to put your
money just before a depression. But America’s money also
went overseas. Incredibly, as president Hoover was
heroically trying to rescue banks and prop up businesses,
with millions of Americans starving as the great depression
deepened, millions of dollars were being spent re-building
Germany from damage sustained during WWI.
Eight years before Hitler would invade Poland,
representative Louis McFadden, chairman of the House Banking
and Currency Committee, warned Congress that Americans were
paying for Hitler’s rise to power.
“After WWI, Germany fell into the hands of the German
international bankers. Those bankers brought her and they
now own her, lock, stock, and barrel. They have purchased
her industries, they have mortages on her soil, they control
her production, they control all her public utilities.
The international German bankers have subsidized the present
Government of Germany and they have also supplied every
dollar 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 German
International 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.”
—Rep. Louis McFadden (D-PA)
Franklin D. Roosevelt was swept into office during the 1932
presidential election. Once Roosevelt was in office,
however, sweeping emergency banking measures were
immediately announced, which did nothing but increase the
Fed’s power over the money supply. Then, and only then, did
the Fed finally began to loosen the purse strings and feed
new money out to the starving American people.
25. FDR/WWII
At first, Roosevelt railed against the Money Changers as
being the cause of the depression. Believe it or not, this
is what he said on March 4th, 1933 in his inaugural address:
“Practices of the unscrupulous money changers stand indicted
in the court of public opinion, rejected by the hearts and
minds of men…. The money changers have fled from their high
seats in the temple of our civilization.”
—Franklin D. Roosevelt, March 4, 1933
But two days later, Roosevelt declared a bank holiday and
closed all banks. Later that year, Roosevelt outlawed
private ownership of all gold bullion and all gold coins
with the exception of rare coins. Most of the gold in the
hands of the average American was in the form of gold coins.
The new decree was, in effect, a confiscation. Those who
didn’t comply risked as much as ten years in prison and a
$10,000 fine, the equivalent of a $100,000 today.
Out in small town America, some people didn’t trust
Roosevelt’s order. Many were torn between keeping their hard
earned wealth or obeying the government. Those who did turn
in their gold, were paid the official price for it: $20.66
per ounce.
So unpopular was the confiscation order, that no one
anywhere in government would take credit for authoring it.
No congressman claimed it. At the signing ceremony,
president Roosevelt made it clear to all present that he was
not the author of it and publicly stated that he had not
ever read it. Even a secretary of the Treasury said he had
never read it either, saying it was “what the experts
wanted”. Roosevelt convinced the public to give up their
gold by saying that pulling the nation’s resources was
necessary to get America out of the depression. With great
fanfare, he ordered a new bullion depository, built to hold
the mountain of gold the U.S. government was illegally
confiscating. By 1936, the U.S. bullion depository of Fort
Knox was completed and in January 1937 the gold began to
flow into it. The rip-off of the ages was about to proceed.
In 1935, once the gold had all been turned in, the official
price of gold was suddenly raised to $35 per ounce. But the
catch was, only foreigners could sell their gold at the new
higher price. The Money Changers, who had headed Warburg’s
note and gotten out of the stock market just before the
crash and bought gold at $20.66 per ounce and then shipped
it to London, could now bring it back and sell it back to
the government nearly doubling their money while the average
American starved. The Fort Knox bullion depository sits here
in the middle of the Fort Knox military reservation, 30
miles southwest of Louisville, Kentucky. This is as close as
we were permitted to get to the depository despite years of
letters from members of Congress to allow our film crew
inside.
The 4-acre grounds immediately surrounding the building are
guarded by an electrified steel fence, an open moat and four
machine gun-armed guard pillboxes at the structure’s
corners. When the gold began arriving, on January 13th 1937,
there was unprecedented security. Thousands of official
guests watched the arrival of a nine-car train from
Philadelphia, guarded by armed soldiers, postal inspectors,
secret servicemen and guards from the U.S. mint. It was all
great theatre: America’s gold supply from across the land
had been pulled, supposedly for the public benefit, and then
safely tucked into Fort Knox. But all that security would
soon be breached by the government itself.
Now the stage was set for a really big war, one which would
pile up death far beyond that of WWI.
For example, in 1944 alone, the U.S. national income was
only $183 billion, yet $103 billion was spent on the war.
This was 30 times the spending rate during WWI. In fact, the
American taxpayer picked up 55% of the total allied cost of
the war. But, equally important, virtually every nation
involved in WW-II greatly multiplied their debt. In the U.S.
for example, federal debt went from $43 billion in 1940 up
to $257 billion in 1950, an increase of 598%. Between 1940
and 1950, Japanese debt swelled 1348%. French debt grew 583%
and Canadian debt swelled 417%.
After the war, the world was now divided into two economic
camps. Communist-command economies on one hand vs monopoly
capitalists on the other, set to fight it out in one
perpetual and highly profitable arms raise. It was finally
time for the central bankers to embark in earnest on their
three-step plan to centralize the economic systems of the
entire world and finally bring about their global government
or New World Order. The phases of this plan were:
Step 1: central bank domination of national economies
worldwide.
Step 2: centralize regional economies through organizations
such as the European Monetary Union and regional trade
unions such as NAFTA.
Step 3: centralize the world economy through a World Central
Bank, a world money and ending national independence through
abolition of all tariffs by treaties like GATT.
Step 1 was completed long ago. Steps 2 and 3 are far
advanced, nearing completion.
What about gold? Amongst central banks, the largest holder
of gold is now the IMF. It and central banks now control 2/3
of the world gold supply, giving them the ability to
manipulate the gold market. Remember the Money Changers’
golden rule: “He who has the gold makes the rules”.
But before we get into solutions to our problem, let’s take
a look to what happened to all that gold in Fort Knox.
Because if we don’t understand that the gold has been
stolen, we will allow ourselves to be stampeded into the
wrong solution: a gold-backed currency.
Most Americans still believe that the gold is still here, at
Fort Knox. At the end of WW-II, Fort Knox contained over 700
million ounces of gold, an incredible 70% of all the gold in
the world. How much remains? No one knows. Despite the fact
that federal law requires an annual physical audit of Fort
Knox gold, the treasury has consistently refused to conduct
one. The truth is that a reliable audit of whatever remains
here, has not been conducted since president Eisenhower
ordered one in 1953.
Where did America’s gold in Fort Knox go? Over the years, it
was sold off to European Money Changers at the $35 per ounce
price. Remember: this was during the time when it was
illegal for Americans to buy any of their own gold from Fort
Knox. In fact, there was a very infamous case where the
Firestone family set up a string of dummy corporations to
purchase Fort Knox’s gold and keep it in Switzerland, never
hitting U.S. shores. They were eventually caught, however,
and successfully prosecuted.
Finally, by 1971, all the pure gold had been secretly
removed from Fort Knox, drained back to London. Once the
gold was gone from Fort Knox, president Nixon closed the
gold window by repealing Roosevelt’s gold reserve act of
1934, finally making it legal once again for Americans to
buy gold.
Naturally, gold prices immediately began to soar: nine years
later, gold sold for $880 per ounce, 25 times what the gold
in Fort Knox was sold for.
One would think that eventually, someone in the government
would get wind of what was happening and blow the whistle.
The largest fortune in the history of the world, stolen.
Shades of the old James Bond film Goldfinger. Well, as a
matter of fact, Ian Flaming, the author of the James Bond
series, was head of the British counter-intelligence service
MI5.
Some believed in the intelligence community that he wrote
much of his fiction as a warning as many authors of fiction
do.
If the removal of all the good delivery gold from Fort Knox
can be viewed as a deliberate raid on the U.S. treasury,
then such an operation might well have been years in the
making. Namely, 40 years. Certainly enough time for Fleming
to get wind of it and try to prevent it.
So just how did the story of the Fort Knox gold robbery get
out? It all started with an article in a New York periodical
in 1974. The article charts that the Rockefeller family was
manipulating the Fed to sell off Fort Knox gold at
bargain-basement prices to anonymous European speculators.
Three days later, the anonymous source of the story, Louise
Auchincloss Boyer, mysteriously fell to her death from the
window of her 10th floor apartment in New York. How had Mrs.
Boyer known of the Rockefeller connection to the Fort Knox
gold heist? She was the long-time secretary of Nelson
Rockefeller.
For the next 14 years, this man Ed Durell, a wealthy Ohio
industrialist, devoted himself to a quest for the truth
concerning the Fort Knox gold. He wrote thousands of letters
to over 1000 government and banking officials trying to find
out how much gold was really left and where the rest of it
had gone.
Edith Roosevelt, the granddaughter of president Teddy
Roosevelt, questioned the actions of the government in a
March 1975 edition of the New Hampshire’s Sunday news:
“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
concern over our gold treasure – if indeed it is in a
position to do so.”
—Edith Roosevelt
Unfortunately, Ed Durell never did accomplish his primary
goal: a full audit of the gold reserves in Fort Knox. It’s
incredible that the world’s greater treasure has had little
accounting or auditing. This gold belonged to the American
people, not to the Federal Reserve and their foreign owners.
One thing is certain: the government could blow all of this
speculation away in a few days with a well publicized audit
under the searing lights of media cameras. It has chosen not
to do so. One must conclude that they are afraid of the
truth such an audit would reveal.
What is the government so afraid of? Here is the answer:
when president Ronal Reagan took office in 1981, his
conservative friends urged him to study the feasibility of
returning to a gold standard as the only way to curb
government’s spending. It sounded like a reasonable
alternative, so president Reagan appointed a group of men
called the “Gold Commission”, to study the situation and
report back to Congress. What Reagan’s Gold Commission
reported back to Congress in 1982, was the following
shocking revelation concerning gold: the U.S. treasury owned
no gold at all. All the gold that was left in Fort Knox, was
now owned by the Federal Reserve, a group of private
bankers, as collateral against the national debt. The truth
of the matter is that never before had so much money been
stolen from the hands of the general public and put into the
hands of a small group of private investors: the Money
Changers.
26. IMF/World Bank
I’m standing in front of the headquarters of the
International Monetary Fund, located in Washington D.C.
Across the street, right over there, is the headquarters of
the World Bank. What are these organizations? Who controls
them? And, most importantly, are they about to create a huge
worldwide depression? Let us step back in time for a moment
to the aftermath of WWI. People were tired of war. So, under
the guys of peacemaking, the international banker devised
the plan to consolidate power even further. Claiming only an
international government would stand the tide of world wars,
the Money Changers pushed forward a proposal for world
government, which stood on three legs: a world central bank,
to be called the Bank of International Settlements, a world
judiciary, to be called the world court located in The
Hagues in the Netherlands and a world executive and
legislator, to be called the League of Nations.
As president Clinton’s mentor, Georgetown historian Carrol
Quigley, wrote in his 1966 book “Tragedy and Hope”:
“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 feudalist 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 for 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 in
the country, and to influence cooperative politicians by
subsequent economic rewards in the business world.”
—Carroll Quigley, Professor, Georgetown University
Despite intense pressure from the international banker and
the press, a handful of U.S. senators, lead by senator Henri
Cabbot Lodge, kept the U.S. out of these schemes. Without
U.S. participation, the League was doomed. Incredibly, event
though the U.S. rejected the World Central Bank, the BIS,
the New York Federal Reserve ignored its government and
arrogantly sent representatives to Switzerland to
participate in the central bankers’ meeting right up until
1994, when the U.S. was finally officially dragged into it.
Their World Government’s schemes thwarted, the bankers
resorted to the old formula: another war to wear down the
resistance to world government while reaping handsome
profits. To this end, Wall Street helped resurrect Germany
through the Thissen Banks, which were affiliated with the
Herman interests in New York, just as the Chase Bank had
assisted in the financing of the Bolshevik revolution in
Russia during WWI. Chase Bank was controlled by the
Rockefeller family. Subsequently, it was merged with
Warburg’s Manhattan Bank to form the Chase-Manhattan Bank.
Now, this has merged with Chemical Bank of NY making it the
largest Wall Street bank.
Their strategy worked: even before WW-II was over, world
government was back on track. In 1944 at Bretton Woods, New
Hampshire, the International Monetary Fund and the World
Bank were approved with full U.S. participation. The second
League of Nations, renamed the United Nations, was approved
in 1945. Soon a new international court system was
functioning as well. All effective opposition to these
international bodies before the war had evaporated in the
heat of war, just as planned.
These new organizations simply repeated on a world scale
what the National Banking Act of 1864 and the Federal
Reserve Act of 1913 had established in the U.S. They created
a baking cartel composed of the world’s central banks, which
gradually assumed the power to dictate credit policies to
the banks of all the nations.
For example, just as the Federal Reserve Act authorized the
creation of a new national fiat currency called Federal
Reserve notes, the IMF has been given the authority to issue
a world fiat money called Special Drawing Rights, or SDRs.
To date, the IMF has created an excess of $30 billion worth
of SDRs. Member nations have been pressured to make their
currencies fully exchangeable for SDRs. In 1968, Congress
approved laws authorizing the Fed to accept SDRs as reserves
in the U.S. and to issue Federal Reserve notes in exchange
for SDRs.
What does that mean. It means that in the U.S., SDRs are
already a part of our lawful money. And what about gold?
SDRs are already partially backed by gold, and with 2/3 of
world’s gold now in the hands of Central Banks, the Money
Changers can go about structuring the world’s economic
future in whichever way they deem most profitable.
Keep in mind: just as the Fed is controlled by its board of
governors, the IMF is controlled by its board of governors,
which are either the heads of the different Central Banks or
the heads of the various national treasury departments,
dominated by their Central Banks. Voting power in the IMF
gives the U.S. and the U.K., that is to say the Fed and the
Bank of England, effective control.
Just as the Fed controls the amount of money in the U.S.,
the BIS, IMF and World Bank control the money supply for the
world.
So we see the repetition of the old goldsmiths’ fraud,
replicated on the national scale, with Central Banks like
the Fed, and on the international scale by the three arms of
the World Central Bank.
Is this organization of the BIS, the IMF and the World Bank,
which we refer to collectively as the “World Central Bank”,
presently expanding and contracting world credit? Yes.
Regulations put into effect in 1988 by the BIS required the
world’s bankers to raise their capital and reserves to 8% of
liabilities by 1992. Increased capital requirements put an
upper limit to the fractional reserve lending similar to the
way cash reserve requirements do. What is this seemingly
insignificant regulation made in a Swiss city 8 years ago
meant to the world?
It means our banks cannot loan more and more money to buy
more and more time before the next depression as a maximum
loan ratio is now set. It means those nations with the
lowest bank reserves in their systems have already felt the
terrible effects of this credit contraction as their banks
scramble to raise money to increase their reserves to 8%. To
raise the money, they had to sell stocks, which depressed
their stock markets and began the depression first in their
countries.
Japan, which in 1988 had among the lowest capital and
reserve requirements, and thus was the most affected by the
regulation, has experienced the financial crash, which began
almost immediately in 1989, which has wiped out a staggering
50% of the value of its stock market since 1990 and 60% of
the value of its commercial real estate. The Bank of Japan
has lowered its interest rates to 0.5%, practically giving
away money to resurrect the economy, but still the
depression worsens.
Due to the $20 billion U.S. bailout of Mexico, the financial
collapse in that nation is already known here. Yet, despite
the bailout, the economy continues to be a disaster. One
huge debt after another is rolled over, as new loans have
been made simply to enable Mexico to pay the interests on
the old loans. In the south of Mexico, the poor have been in
open revolt, as every spare peso has been siphoned out of
the country to make interest payments.
It is important to note that a radical transfer of power is
taking place as nations become subservient to a
supra-national World Central Bank, controlled by a handful
of the world’s richest bankers.
As the IMF creates more and more SDRs by the stroke of a pen
on IMF ledgers, more and more nations borrow them to pay
interests on their mounting debts and gradually fall under
the control of the faceless bureaucrats of the World Central
Bank. As the worldwide depression worsens and spreads, this
will give the World Central Bank the power of economic life
and death over these nations. It will decide which nations
will be permitted to receive further loans and which nations
will starve.
Despite all the rhetoric about development and the
alleviation of poverty, the result is a steady transfer of
wealth from the deader nations to the Money Changers’
Central Banks, which control the IMF and the World Bank. For
example, in 1992, the third world deader nations, which
borrowed from the World Bank, paid $198 million more to the
central banks of the developed nations for World Bank funded
purposes, then they received from the World Bank. All this
increases their permanent debt in exchange for temporary
relief of poverty caused by prior borrowings.
Already, these repayments exceed the amount of the new
loans. By 1992 Africa’s external debt had reached $290
billion, 2.5 times greater then in 1980, resulting in
skyrocketing infant mortality rates and unemployment,
deterioration of schools, housing and the general health of
the people.
The entire world faces the immeasurable suffering already
destroying the third world and now Japan, all for the
benefit of the Money Changers. As one prominent Brazilian
politician put it:
“The Third World War has already started. It is a silent
war. Not, for that reason, any less sinister. The war is
tearing down Brazil, Latin America, and practically all the
Third World. Instead of soldiers dying, there are children.
It is a war over the Third World debt, one which has as its
main weapon, interest, a weapon more deadly than the atom
bomb, more shattering than a laser beam.”
27. Conclusions
Although it would be absurd to ignore the pivotal role
played by influential families such as the Rothschilds, the
Warburgs, the Shiffs, the Morgans and the Rockefellers, in
any review of the history of central banking and fractional
banking, keep in mind: by now, central banks and the large
commercial banks are up to three centuries old and deeply
entrenched in the economic life of many nations. These banks
are no longer dependent on clever individuals such as a
Nathan Rothschild. Years ago, the question of ownership was
important, but no longer. For example, both the Bank of
England and the Bank of France were nationalized after WW-II
and nothing changed, nothing at all. They endure and
continue to grow now protected by numerous laws, paid
politicians and mortgage media, untouched by the changing of
generations. Three centuries have given them an aura of
respectability; the old-school tie is now worn by the sixth
generation son, who has been raised in a system that he may
never question as he is named to serve on the governing
boards of countless philanthropic organizations. To focus
attention today on individuals or families or to attempt to
sort out the current holders of power, serves little useful
purpose and would be a distraction from the cure. The
problem is far bigger than that. It is the corrupt banking
system that was and is being used to consolidate vast wealth
into fewer and fewer hands, that is our current economic
problem. Change the names of the main player now, and the
problem would neither go away, nor even miss a beat.
Likewise, among the hordes of bureaucrats working in the
World Bank, central banks and international banks, only a
tiny fraction have any idea of what’s really going on. No
doubt they’d be horrified to learn that their work is
contributing to the terrible impoverishment and gradual
enslavement of mankind to a few, incredibly rich plutocrats.
So really, there is no use in emphasizing the role of
individuals anymore. And the problem even transcends the
normal spectrum of political right and left. Both, communism
and socialism, as well as monopoly capitalism have been used
by the Money Changers. Today they profit from either side of
the new political spectrum: the big government welfare state
on the so-called left wing, vs. the neo-conservative
laissez-faire capitalists who want big government totally
out of their lives, on the right wing. Either way the
bankers win. Monetary reform is the most important political
issue facing this nation. That clarified, let’s proceed to
the conclusions in the spirit Lincoln declared: “with malice
towards none, with charity towards all”.
* * *
At the start of this video, we asked a number of troubling
questions. Let’s be sure we’ve answered them.
What’s going on in America today? Why are we over our heads
in debt? Why can’t the politicians bring debt under control?
Why are we over our heads in debt? Because we’re labouring
under a debt money system, that is designed and controlled
by private bankers. Some will argue that the Federal Reserve
system is a quasi-governmental agency. But the president
appoints only two of the seven members of the Fed’s board of
governors every four years. And he appoints them to 14 year
terms, far longer than his own. The senate does confirm
those appointments, but the whole truth is that the
president wouldn’t dare appoint anyone to that board of whom
Wall Street does not approve. Of course, this does not
preclude the possibility that some honourable men may be
appointed to the board of governors. But the fact is that
the Fed is specifically designed to operate independently of
our government as are nearly all other central banks. Some
argue that the Fed promotes monetary stability. We saw the
current head of the Bank of England, Eddie George, claim
that this was the most important role of a central bank. In
fact, the Fed’s record of stabilizing the economy, shows it
to be a miserable failure in this regard. Within the first
25 years of its existence, the Fed caused three major
economic downturns, including the great depression, and for
the last 30 years has shepherded the American economy into a
period of unprecedented inflation. Again, this is not some
wild conspiracy theory; it’s a well known fact among top
economists. As Nobel price-winning economist Milton Friedman
put it:
“The stock of money, prices and output was decidedly more
unstable after the establishment of the Reserve System than
before. The most dramatic period of instability in output
was, of course, the period between the two wars, which
includes the severe [monetary] contractions of
1920-21,1929-33, and 1937-38. No other 20-year period in
American history contains as many as three such severe
contractions.
“This evidence persuades me that at least a third of the
price rise during and just after World War I is attributable
to the establishment of the Federal Reserve System… and that
the severity of each of the major contractions —
1920-21,1929-33, and 1937-38 — is directly attributable to
acts of commission and omission by the Reserve authorities….
“Any system which gives so much power and so much discretion
to a few men, [so] that mistakes — excusable or not — can
have such far reaching effects, is a bad system. It is a bad
system to believers in freedom just because it gives a few
men such power without any effective check by the body
politic — this is the key political argument against an
independent central bank….
“To paraphrase Clemenceau money is much too serious a matter
to be left to the central bankers.”
—Milton Friedman, economist
We must learn from our history before it is too late. Why
can’t politicians control the federal debt? Because all our
money is created out of debt. Again, it’s a debt-money
system. Our money is created initially by the purchase of
U.S. bonds. The public buys bonds, like savings bonds, the
banks buy bonds, foreigners buy bonds, and when the Fed
wants to create more money in the system, it buys bonds but
pays for them with a simple bookkeeping entry, which it
creates out of nothing. Then, this new money created by the
Fed is multiplied by a factor of ten by the banks, thanks to
the fractional reserve principle.
So, although the banks don’t create currency, they do create
check book money, or deposits, by making new loans. They
even invest some of this created money. In fact, over one
trillion dollars of this privately-created money has been
used to purchase U.S. Bonds on the open market, which
provides the banks with roughly 50 billion dollars in
interest, risk free, each year, less the interest they pay
some depositors. In this way, through fractional reserve
lending, banks create over 90% of the money, and therefore
cause over 90% of our inflation. What can we do about all
this? Fortunately, there’s a way to fix the problem fairly
easily, speedily, and without any serious financial
problems. We can get our country totally out of debt in 1-2
years by simply paying off U.S. bonds with debt-free U.S.
Notes, just like Lincoln issued. Of course, that by itself
would create tremendous inflation, since our currency is
presently multiplied by the fractional reserve banking
system. But here’s the ingenious solution advanced in part
by Milton Friedman to keep the money supply stable and avoid
inflation and deflation while the debt is retired. As the
Treasury buys up its bonds on the open market with U.S.
Notes, the reserve requirements of your hometown local bank
will be proportionally raised so the amount of money in
circulation remains constant. As those holding bonds are
paid off in U.S. Notes, they will deposit this money, thus
making available the currency then needed by the banks to
increase their reserves. Once all the U.S. bonds are
replaced with U.S. Notes, banks will be at 100% reserve
banking, instead of the fractional reserve system currently
in use. From this point on, the former Fed buildings will
only be needed as a central clearing houses for checks, and
as vaults for U.S. Notes. The Federal Reserve Act will no
longer be necessary, and could be repealed. Monetary power
could be transferred back to the treasury department. There
would be no further creation or contraction of money by
banks. By doing it this way, our national debt can be paid
off in a single year or so, and the Fed and fractional
reserve banking abolished without national bankruptcy,
financial collapse, inflation or deflation, or any
significant change in the way the average American goes
about his business. To the average person, the primary
difference would be that for the first time since the
Federal Reserve Act was passed in 1913, taxes would begin to
go down. Now there’s a real national blessing for you,
rather than for Hamilton’s banker friends.
Now, let’s take a look at these proposals in more detail.
Here are the main provisions of a Money Reform Act, which
needs to be passed by Congress. We’ve drafted a proposed
Monetary Reform Act, which follows at the end of this tape.
Of course, variations with the same results would be equally
welcome.
1. Pay off the debt with debt-free U.S. Notes.
As Thomas Edison put it, if the U.S. can issue a dollar
bond, it can issue a dollar bill. They both rest purely on
the faith and credit of the U.S. government. This amounts to
a simple substitution of one type of government obligation
for another. One bears interest, the other doesn’t. Federal
Reserve Notes could be used for this as well, but could not
be printed after the Fed is abolished, as we propose, so we
suggest using U.S. Notes instead.
2. Abolish Fractional Reserve Banking.
As the debt is paid off, the reserve requirements of all
banks and financial institutions would be raised
proportionally at the same time to absorb the new U.S.
Notes, which would be deposited and become the banks’
increased reserves. Towards the end of the first year of the
transition period, the remaining liabilities of financial
institutions would be assumed or acquired by the U.S.
government in a one-time operation. In other words, they too
would eventually be paid off with debt-free U.S. Notes, in
order to keep the total money supply stable. At the end of
the first year, or so, all of the national debt would be
paid, and we could start enjoying the benefits of
full-reserve banking. The Fed would be obsolete, an
anachronism.
3. Repeal of the Federal Reserve Act of 1913 and the
National Banking Act of 1864.
These acts delegate the money power to a private banking
monopoly. They must be repealed and the monetary power
handed back to the Department of the Treasury, where they
were initially, under President Abraham Lincoln. No banker
or person in any way affiliated with financial institutions
should be allow to regulate banking. After the first two
reforms, these Acts would serve no useful purpose anyway,
since they relate to a fractional reserve banking system.
4. Withdraw the U.S. from the IMF, the BIS and the World
Bank.
These institutions, like the Federal Reserve, are designed
to further centralize the power of the international bankers
over the world’s economy and the U.S. must withdraw from
them. Their harmless functions such as currency exchange can
be accomplished either nationally, or in new organizations
limited to those functions.
Such a Monetary Reform Act would guarantee that the amount
of money in circulation would stay very stable, causing
neither inflation nor deflation. Remember: for the last
three decades the Fed has doubled the American money supply
every 10 years. That fact and fractional reserve banking are
the real causes of inflation and the reduction in our buying
power, a hidden tax. These and other taxes are the real
reasons both parents now have to work just to get by.
The money supply should increase slowly to keep prices
stable, roughly in proportion to population growth, about 3%
per year, not at the whim of a group of bankers meeting in
secret. In fact, all future decisions on how much money
would be in the American economy must be made based on
statistics of population growth and the price level index.
The new monetary regulators and the treasury department,
perhaps called the Monetary Committee, would have absolutely
no discretion in this matter except in time of declared war.
This would ensure a steady, stable money growth of roughly
3% per year, resulting in stable prices and no sharp changes
in the money supply. To make certain the process is
completely open and honest, all deliberations would be
public, not secret as meetings of the Fed’s board of
governors are today.
How do we know this would work? Because these steps remove
the two major causes of economic instability: the Fed and
fractional reserve banking and the newest one as well, the
BIS, Bank of International Settlements. But, most
importantly, the danger of a severe depression would be
eliminated. Let’s listen to Milton Freedman on the single
cause of severe economic depressions:
“I know of no severe depression, in any country or any time,
that was not accompanied by a sharp decline in the stock of
money, and equally of no sharp decline in the stock of money
that was not accompanied by a severe depression.”
—Milton Friedman, economist
Issuing our own currency, is not a radical solution. It’s
been advocated by Presidents Jefferson, Madison, Jackson,
Van Buren and Lincoln. But has been used at different times
in Europe as well. Perhaps the best example is one of the
small islands off the coast of France in the English
Channel. Called Guernsey, it has been using debt-free money
issues to pay for large building projects for nearly 200
years.
Here we are in Guernsey, and this is the Guernsey flower and
vegetable market. Guernsey is one of the most successful
examples of just how well a debt-free money system can work.
In 1815, a committee was appointed to investigate how best
to finance this new market. The impoverished island could
not afford more new taxes, so the State’s fathers decided to
try a revolutionary idea: issue their own paper money. They
were just colourful paper notes, backed by nothing, but the
people of this tiny island agreed to accept them and trade
with them. To be sure they circulated widely, they were
declared to be “good for the payment of taxes”.
Of course this idea was nothing new. It was exactly what
America had done before the American Revolution and there
are many other examples throughout the world. But it was new
to Guernsey, and it worked miracles. This market is still in
use, and remember, it was built for no debt to the people of
this island’s state.
But what if we follow Guernsey’s example? How would the
bankers react to these reforms? Certainly the international
bankers’ cartel will oppose reforms that do away with their
control of the world’s economies, as they have in the past.
But it is equally certain that Congress has the
Constitutional authority and responsibility to authorize the
issuance of debt free money, U.S. Notes, and to reform the
very banking laws it ill-advisedly enacted. Undoubtedly, the
bankers will claim that issuing debt-free money will cause
severe inflation or make other dire predictions, but
remember, it is fractional reserve banking which is the real
cause of over 90% of all inflation not whether debt-free
U.S. Notes are used to pay for government deficits.
In the current system, any spending excesses on the part of
Congress, are turned into more debt bonds, and the 10%
purchased by the Fed, are then multiplied many times over by
the bankers, causing over 90% of all inflation.
Our fractional reserve and debt-based banking system is the
problem. We must ignore its inevitable resistance to reform
and remain firm until the cure is complete. As the director
of the Bank of England in the 1920s, Sir Josiah Stamp put
it, referring to this modern fractional reserve banking
system:
“Banking is conceived in iniquity and born in sin. Bankers
own the earth. Take it away from them, but leave them the
power to create money and control credit, and with the flick
of a pen they will create enough money to buy it back again.
Take this great power away from the bankers and all great
fortunes like mine will disappear, and they ought to
disappear, for this would be a better and happier world to
live in.
But if you want to continue the slaves of bankers and pay
the cost of your own slavery, let them continue to create
money and to control credit.”
—Sir Josiah Stamp
Americans are slowly figuring this out. Today, over 3,200
cities and counties have endorsed the proposal of a
non-profit organization called “Sovereignty”. The
Sovereignty movement calls for Congress to authorize the
secretary of the treasury to issue $90 billion per year of
U.S. Notes, not Fed notes nor debt-based bonds, to loan
money, interest-free, to cities, counties and school
districts for needed capital improvements. Remarkably, and
to their praise, the community bankers association of
Illinois, representing 515 member banks, has endorsed this
Sovereignty proposal, a good step in the right direction.
As Milton Friedman has repeatedly pointed out, no severe
depression can occur without a severe contraction of money.
In our system, only the Fed, the Bank for International
Settlements, with U.S. bankers cooperation or a combination
of the largest Wall Street banks could cause a depression.
In other words, our economy is so huge and resilient a
depression just can’t happen by accident. Unless we reform
our banking system, they will always have that power. They
can pull the plug on our economy any time they chose. The
only solution is to abolish the Fed and the fractional
reserve banking system and withdraw from the BIS. Only that
would brake the power of the international bankers over our
economy. And keep in mind, a stock market crash itself
cannot cause a severe depression. Only the severe
contraction of our money supply can cause a severe
depression. The stock market crash of 1929 only wiped out
market speculators, mostly the small and the medium ones,
resulting in $3 billion in wealth changing hands.
But it served as a smoke screen for a 33% contraction in
credit by the Fed over the next 4 years, which resulted in
over $40 billion of wealth from the American middle class
being transferred to the big banks.
Then, despite impotent howls of protest from a divided
Congress, the independent Fed kept the money supply
contracted for a full decade. Only WW-II ended the terrible
suffering the Fed inflicted on the American people.
In a depression, the remaining wealth of the debt-burned
American middle class would be wiped out by unemployment,
declining wages and the resulting foreclosures. If we start
to act to reform our monetary system, the Money Changers may
do what they did in 1929 and then the 1930s: crash the stock
market and use that as a smoke screen while contracting the
money supply. But if we’re determined to fight to regain
control over our money, we can come out of it fairly
quickly, perhaps in only a very few months, as U.S. Notes
begin to circulate and replace the money withdrawn by the
bankers. The longer we wait, the greater the danger we’ll
permanently loose control of our Nation.
But some still wonder why the international bankers would
want to cause a depression. Wouldn’t that be killing the
goose that is currently laying all those gold and interest
eggs? Remember what Larry Bates said at the first of this
videotape:
“In periods of economic crisis, wealth is not destroyed, it
is merely transferred”.
Do we have any hints as to what the Money Changers have in
store for us? Here is what David Rockefeller, the chairman
of Chase-Manhattan Bank, the largest Wall Street bank, had
to say:
“We are on the verge of a global transformation. All we need
is the right major crisis and the nation will accept the New
World Order.”
—David Rockefeller
So, crisis is needed to fulfil their plans quickly. The only
question is when the crisis will occur. Fortunately, we
probably have a little time. It’s unlikely that this crisis
will occur before the 1996 elections but after that, the
danger begins rising.
But whether or not they decide to cause a crash or
depression through relentless increases in taxes and the
loss of hundreds of thousands of jobs being sent overseas,
thanks to trade agreements such as GATT or NAFTA, the
American middle class is an endangered species. Cheaper
labour, including slave labour in red China, which Harry Wu
has heroically documented, is being used to compete with
American labour. In other words, money is being consolidated
in fewer and fewer hands as never before in the history of
this nation or the world. Without reform, the American
middle class will soon be extinct, leaving only the very
rich few and the very many poor as has already occurred in
most of the world. We’ve been warned of all this by
Congressmen, presidents, industrialists and economists down
through the years. Religious leader too, have seen the
danger. About 1898, during the time of William Jennings
Bryan, Pope Leo XIII put it this way:
“On the one side there is the party which holds the power
because it holds the wealth; which has in its grasp all
labor and all trade; which manipulates for its own benefit
and its own purposes all the sources of supply, and which is
powerfully represented in the councils of State itself. On
the other side there is the needy and powerless multitude,
sore and suffering.
Rapacious usury, which, although more than once condemned by
the Church, is nevertheless under a different form but with
the same guilt, still practiced by avaricious and grasping
men… so that a small number of very rich men have been able
to lay upon the masses of the poor a yoke little better than
slavery itself.”
—Pope Leo XIII
More recently, during America’s great depression, Pope Pius
XI spoke of the same problem:
“In our days not alone is wealth accumulated, but immense
power and despotic economic domination is concentrated in
the hands of a few….
This power becomes particularly irresistible when exercised
by those who, because they hold and control money, are able
also to govern credit and determine its allotment, for this
reason supplying, so to speak, the life-blood to the entire
economic body, and grasping, as it were, in their hands the
very soul of the economy so that no one dare breathe against
their will.”
—Pope Pius XI
Educate your friends. Our country needs a solid group who
really understand how our money is manipulated and what the
solutions really are, because, if a depression comes, there
will be those who will call themselves conservatives who
will come forward advancing solutions framed by the
international bankers. Beware of calls to return to a gold
standard. Why? Simple: because never before has so much gold
been so concentrated outside of American hands. And never
before has so much gold been in the hands of international
governmental bodies such as the World Bank and International
Monetary Fund. A gold-backed currency usually brings despair
to a nation and to return to it would certainly be a false
solution in our case. Remember, we had a gold-backed
currency in 1929 and during the first four years of the
great depression. Likewise, beware of any plans advanced for
a regional or world currency: this is the international
bankers’ Trojan horse.
Educate your member of Congress. It only takes a few
persuasive members to make the others pay attention. Most
Congressmen just don’t understand the system. Some
understand it, but are so influenced by bank PAC
contributions that they ignore it, not realizing the gravity
of their neglect.
We hope we have made a valuable contribution to the national
debate on monetary reform. It remains for each man to do his
duty, consistent with his state in life. May God give us the
light to help reform our nation, and ourselves. We say
ourselves, because ultimately vast multitudes of men are
going to be driven more and more to desperation by the
accumulation of the world’s wealth in fewer and fewer hands.
Men will tend to become like their oppressors, selfish and
greedy. Rather, let’s keep in mind, during this period of
reform, a warning not to lose sight of greater things. As
Pope Pius XI put it:
“For what will it profit men that a more prudent
distribution and use of riches make it possible for them to
gain even the whole world, if thereby they suffer the loss
of their own souls?
What will it profit to teach them sound principles in
economics, if they permit themselves to be so swept away by
selfishness, by unbridled and sordid greed, that ‘hearing
the Commandments of the Lord, they do all things contrary.’
”
—Pope Pius XI
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