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.”
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.”
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.”
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.”
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.”
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.”
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.”
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.”
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.
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.”
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.”
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.”
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.”
Even after the first shots were fired at Fort Sumter, Lincoln continued to insist that the Civil War was not about the issue of slavery:
“My paramount objective is to save the Union, and it is not either to save or destroy slavery. If I could save the Union without freeing any slave, I would do it”
So what was the Civil War all about? There were many factors at play. Northern industrialists had used protective tariffs to prevent their southern states from buying cheaper European goods.
Europe retaliated by stopping cotton imports from the South. The Southern states were in a 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.”
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.”
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.”
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.”
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.”
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”
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.”
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.”
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.”
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.”
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.”
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.”
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.
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.”
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.”
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”.
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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.”
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