"Modern Banking" was actually created over 4,000 years ago in the ancient Babylonic days of slavery for the masses. [Of course, without the electronic information.] Let's Go FORWARD and understand how the power to create money interest-free was usurped from the people by the "money changers" in the past and how now the Private Central Bankers are in full control of the people (they use names like Federal Reserve or Bank of England to hide the fact that these banks are really privately owned).
Tell someone you are going to a convention of accountants and you might get a few yawns, yet money and how it works and controls the masses is probably one of the most interesting things on earth.
It is fascinating and almost magical how money appeared on our planet. Unlike most developments we enjoy, which can be traced back to a source, civilisation or inventor, money appeared in places then unconnected all over the world in a remarkably similar way.
Consider the American Indians using Wampum, West Africans trading in decorative metallic objects called Manillas and the Fijians economy based on whales teeth, some of which are still legal tender; add to that shells, amber, ivory, decorative feathers, cattle including oxen & pigs, a large number of stones including jade and quartz which have all been used for trade across the world, and we get a taste of the variety of accepted currency.
There is something charming and childlike imagining primitive societies, our ancestors, using all these colourful forms of money. As long as everyone concerned can agree on a value, this is a sensible thing for a community to do.
After all, the person who has what you need might not need what you have to trade. Money solves that problem neatly. Real value with each exchange, and everyone gaining from the convenience. The idea is really inspired which might explain why so many diverse minds came up with it.
Sadly, perhaps in the depth of the forest within earshot of people naturally involved in fair trade, a leech of an idea was being hatched which would prey on every individual needing trade to survive.
This idea and the enslaving process which it spawned was called usury; and despite being condemned worldwide by great thinkers, major religious institutions, and many social reformers on moral, ethical, spiritual and legal grounds, the process continues world wide, today better known as the charging of interest.
Just why usury is a negative force can best be explained using an analogy imagining our primitive tribe trading among themselves in an isolated community. As they trade using their accepted beads or stones, with each transaction both the buyer and seller benefit.
Along comes an individual with a bit more of the accepted currency which he offers to lend to one who has less, so long as the poorer member agrees to pay back all plus a bit more¹ in a given time. Immediately the poorer member is now even poorer because has to pay back not only what he now holds, but also a percentage of what he holds which he has yet to find.
This transaction in itself will not have increased the overall produce of the community, yet now the lender owns a bit more of the overall wealth without having added anything to it. This action, far from having helped the poorer member has actually deprived everyone. One such transaction might not appear to make a huge difference, but multiply the effects and soon our lender will have a growing pile of currency which he has acquired while adding absolutely nothing to the community.
If the community we imagine once consisted of individuals trading fairly to survive, now everyone who owes is working for the lender.
The lender might seem like the good guy and the borrower might be grateful for the loan, but in fact, the contract entered into is no favour and the lender is really only preying on the poor and giving nothing.
Usury leaves a bad taste because it allows the rich to get richer while not actually producing anything new for the community while taking advantage of those less fortunate by making them even poorer.
In our exploration of the History of Money we will be exposing how seemingly respectable institutions that are bleeding the world dry have been set up, and how they maintain their air of respectability through clever use of legislation.
We will also be looking at how the production of currency, meant to provide a way for us all to share, has been turned into a means to make huge profits for a given few at the expense of the rest of us.
History will disclose how more positive economic plans were proven to work too well, and how they were forced to stop by the institutions their success threatened, sending prospering communities into ruin.
Here we will look at what we inherited and in XAT3 (link at end of document) we will explore how we could change it to make it fairer for all.
Because money affects almost every aspect of our lives, how it works is something we should all be interested in understanding further, however we are mostly discouraged from doing this by experts, who assure us the topic is much too complicated for most of us to grasp.
Our accepting this leaves the whole subject largely unexplored, and allows those who do know to carry on unquestioned. As a result it is estimated that only one person in a thousand actually understands how money is created.
Reading this will not make you a financial wizard, but it will make you a 'one in a thousand' and hopefully in time help to raise the odds in favour of a better world.
"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."
President James Madison
Money, money, money, it's always just been there, right? Wrong.
Obviously it's issued by the government to make it easy for us to exchange things. Wrong again!
Truth is most people don't realise that the issuing of money is essentially a private business, and that the privilege of issuing money has been a major bone of contention throughout history.
Wars have been fought and depressions have been caused in the battle over who issues the money; however the majority of us are not aware of this, and this is largely due to the fact that the winning side became and increasingly continues to be a vital and respected member of our global society, having an influence over large aspects of our lives including our education, our media and our governments.
While we might feel powerless in trying to stop the manipulation of money for private profit at our expense, it is easy to forget that we collectively give money it's value. We have been taught to believe printed pieces of paper have special value, and because we know others believe this too, we are willing to work all our lives to get what we are convinced others will want.
An honest look at history will show us how our innocent trust has been misused.
Let's start our exploration of money with:
JESUS FLIPS (many coins) 33 A.D.
Jesus was so upset by the sight of the money changers in the temple, he waded in and started to tip over the tables and drive them out with a whip, this being the one and only time we ever hear of him using force during his entire ministry.
So what caused the ultimate pacifist to become so aggressive?
For a long time the Jews had been called upon to pay their temple tax with a special coin called the half shekle. It was a measured half ounce of pure silver with no image of a pagan emperor on it.
It was to them the only coin acceptable to God.
But because there was only a limited number of these coins in circulation, the money changers were in a buyers market and like with anything else in short supply, they were able to raise the price to what the market would bare.
They made huge profits with their monopoly on these coins and turned this time of devotion into a mockery for profit. Jesus saw this as stealing from the people and proclaimed the whole setup to be. "A den of thieves". Jesus' exposing of the money changers made him a target for them.
Once money is accepted as a form of exchange, those who produce, loan out and manipulate the quantity of money are obviously in a very strong position. They are the "Money Changers".
MEDIEVAL ENGLAND (1000 - 1100 A.D.)
Here we find goldsmith's offering to keep other people's gold and silver safe in their vaults, and in return people walking away with a receipt for what they have left there.
These paper receipts soon became popular for trade as they were less heavy to carry around than gold and silver coins.
After a while, the goldsmith's must have noticed that only a small percentage of their depositor's ever came in to demand their gold at any one time. So cleverly the goldsmith's made out some receipts for gold which didn't even exist, and then they loaned it out to earn interest.
A nod and a wink amongst themselves, they incorporated this practice into the banking system. They even gave it a name to make it seem more acceptable, christening the practice 'Fractional Reserve Banking' which translates to mean, lending out many times more money than you have assets on deposit.
Today banks are allowed to loan out at least ten times the amount they actually are holding, so while you wonder how they get rich charging you 11% interest, it's not 11% a year they make on that amount but actually 110%.
THE TALLY STICKS (1100 - 1854)
King Henry the First produced sticks of polished wood, with notches cut along one edge to signify the denominations. The stick was then split full length so each piece still had a record of the notches.
The King kept one half for proof against counterfeiting, and then spent the other half into the market place where it would continue to circulate as money.
Because only Tally Sticks were accepted by Henry for payment of taxes, there was a built in demand for them, which gave people confidence to accept these as money.
He could have used anything really, so long as the people agreed it had value, and his willingness to accept these sticks as legal tender made it easy for the people to agree. Money is only as valuable as peoples faith in it, and without that faith even today's money is just paper.
The tally stick system worked really well for 726 years. It was the most successful form of currency in recent history and the British Empire was actually built under the Tally Stick system, but how is it that most of us are not aware of its existence?
Perhaps the fact that in 1694 the Bank of England at it's formation attacked the Tally Stick System gives us a clue as to why most of us have never heard of them. They realised it was money outside the power of the money changers, (the very thing King Henry had intended).
What better way to eliminate the vital faith people had in this rival currency than to pretend it simply never existed and not discuss it. That seems to be what happened when the first shareholder's in the Bank of England bought their original shares with notched pieces of wood and retired the system. You heard correctly, they bought shares. The Bank of England is a privately owned bank which was actually set up by investors buying shares.
These investors, who's names were kept secret, were meant to invest one and a quarter million pounds, but only three quarters of a million was received when it was chartered in 1694.
It then began to lend out many times more than it had in reserve, collecting interest on the lot.
This is not something you could just impose on people without preparation. The money changers needed to created the climate to make the formation of this private concern seem acceptable.
Here's how they did it.
With King Henry VIII relaxing the Usury Laws in the 1500's, the money changers flooded the market with their gold and silver coins becoming richer by the minute.
The English Revolution of 1642 was financed by the money changers backing Oliver Cromwell's successful attempt to purge the parliment and kill King Charles. What followed was 50 years of costly wars. Costly to those fighting them and profitable to those financing them.
So profitable that it allowed the money changers to take over a square mile of property still known as the City of London, which remains one of the three main financial centres in the world today.
The 50 years of war left England in financial ruin. The government officials went begging for loans from guess who, and the deal proposed resulted in a government sanctioned, privately owned bank which could produce money from nothing, essentially legally counterfeiting a national currency for private gain.
This privately owned bank was and still is known as The Bank of England.
Now the politicians had a source from which to borrow all the money they wanted to borrow, and the debt created was secured against public taxes.
You would think someone would have seen through this, and realised they could produce their own money and owe no interest, but instead the Bank of England has been used as a model and now nearly every nation has a Central Bank which is privately controlled.
These central banks have the power to take over a nations economy and become that nations real governing force. What we have here is a scam of mammoth proportions covering what is actually a hidden tax, being collected by private concerns.
The country sells bonds to the bank in return for money it cannot raise in taxes. The bonds are paid for by money produced from thin air. The government pays interest on the money it borrowed by borrowing more money in the same way. There is no way this debt can ever be paid, it has and will continue to increase.
If the government did find a way to pay off the debt, the result would be that there would be no bonds to back the currency, so to pay the debt would be to kill the currency.
With it's formation the Bank of England soon flooded Britain with money. With no quality control and no insistence on value for money, prices doubled with money being thrown in every direction.
One company was even offering to drain the Red Sea to find Egyptian gold lost when the sea closed in on their pursuit of Moses.
By1698 the national debt expanded from £1,250,000 to £16,000,000 and up went the taxes the debt was secured on.
As hard as it might be to believe, in times of economic upheaval, wealth is rarely destroyed and instead is often only transferred. And who benefits the most when money is scarce? You may have guessed. It's those controlling what everyone else wants, the money changer's.
When the majority of people are suffering through economic depression, you can be sure that a minority of people are continuing to get rich.
Even today the Bank of England expresses it's determination to prevent the ups and downs of booms and depressions, yet there have been nothing but ups and downs since it's formation with the British pound rarely being stable.
One thing however has been stable and that is the growing fortune of:
THE ROTHSCHILDS (1743)
A goldsmith named Amshall Moses Bower opened a counting house in Frankfurt Germany in 1743. He placed a Roman eagle on a red shield over the door prompting people to call his shop the Red Shield Firm pronounced in German as "Rothschild".
His son later changed his name to Rothschild when he inherited the business. Loaning money to individuals was all well and good but he soon found it much more profitable loaning money to governments and Kings. It always involved much bigger amounts, always secured from public taxes.
Once he got the hang of things he set his sights on the world by training his five sons in the art of money creation, before sending them out to the major financial centres of the world to create and dominate the central banking systems.
J.P. Morgan was thought by many to be the richest man in the world during the second world war, but upon his death it was discovered he was merely a lieutenant within the Rothschild empire owning only 19% of the J.P. Morgan Companies.
"There is but one power in Europe and that is Rothschild."
19th century French commentator
We will explore a little more about the richest family a little later, after we've had a look at:
THE AMERICAN REVOLUTION (1764 - 1781)
By the mid 1700's Britain was at its height of power, but was also heavily in debt.
Since the creation of the Bank of England, they had suffered four costly wars and the total debt now stood at £140,000,000, (which in those days was a lot of money).
In order to make their interest payments to the bank, the British government set about a programme to try to raise revenues from their American colonies, largely through an extensive program of taxation.
There was a shortage of material for minting coins in the colonies, so they began to print their own paper money, which they called Colonial Script. This provided a very successful means of exchange and also gave the colonies a sense of identity. Colonial Script was money provided to help the exchange of goods. It was debt free paper money not backed by gold or silver.
The Bank of England asked Benjamin Franklin how he would account for the new found prosperity in the colonies. Franklin replied.
"That is simple. In the colonies we issue our own money. It is called Colonial Script. 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."
America had learned that the people's confidence in the currency was all they needed, and they could be free of borrowing debts. That would mean being free of the Bank of England.
In Response the world's most powerful independent bank used it's influence on the British Parliment to press for the passing of the Currency Act of 1764.
This act made it illegal for the colonies to print their own money, and forced them to pay all future taxes to Britain in silver or gold.
Here is what Franklin said after that.
"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."
"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 war began on 19th April 1775 much of the gold and silver had been taken by British taxation. They were left with no other choice but to print money to finance the war.
What is interesting here is that Colonial Script was actually working so well, it became a threat to the established economic system of the time.
The idea of issuing money as Franklin put it "in proper proportion to the demands of trade and industry" and not charging any interest, was not causing any problems or inflation. This unfortunately was alien to the Bank of England which only issued money for the sake of making a profit for it's shareholder's.
THE BANK OF NORTH AMERICA (1781-1785)
If you can't beat them, join them, might well have been his argument when arms dealer, Robert Morris suggested he be allowed to set up a Bank of England style central bank in the USA in 1781.
Desperate for money, the $400,000 he proposed to deposit, to allow him to loan out many times that through fractional reserve banking, must have looked really attractive to the impoverished American Government.
Already spending the money they would be loaned, no one made a fuss when Robert Morris couldn't raise the deposit, and instead suggested he might use some gold, which had been loaned to America from France.
Once in, he simply used fractional reserve banking, and with the banks growing fortune he loaned to himself, and his friends the money to buy up all the remaining shares. The bank then began to loan out money multiplied by this new amount to eager politicians, who were probably too drunk with the new 'power cash' to notice or care how it was done.
The scam lasted five years until in 1785, with the value of American money dropping like a lead balloon. The banks charter did not get renewed.
The shareholder's walking off with the interest did not go unnoticed by the governor.
"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."
FIRST BANK OF THE UNITED STATES (1791-1811)
It worked once, it will work again. It's been six years. There are a lot of new hungry politicians. Let's give it a try. And so there it was, in 1791, the First Bank of the United States (BUS). Not only deceptively named to sound official, but also to take attention away from the real first bank which had been shut down.
It's initials however gave a clear indication that Americans were once again being taken for a ride. And true to it's British model, the name of the investors was never revealed.
Having gotten away with it a second time, some of them probably wished Amshall Rothschild had picked a different time to make his pronouncement from his private central bank in Frankfurt.
"Let me issue and control a nations money and I care not who writes the laws."
Not to worry, no one was listening, the American government borrowed 8.2 million dollars from the bank in the first 5 years and prices rose by 72%. This time round the money changer's had learned their lesson they had guaranteed a twenty year charter.
The president, who could see an ever increasing debt, with no chance of ever paying back, had this to say.
"I wish it were possible to obtain a single amendment to our Constitution - taking from the federal government their power of borrowing."
While the independent press, who had not been bought off yet, called the scam "a great swindle, a vulture, a viper, and a cobra."
As with the real first bank, the government had been the only depositor to put up any real money, with the remainder being raised from loans the investors made to each other, using the magic of fractional reserve banking. When time came for renewal of the charter, the bankers were warning of bad times ahead if they didn't get what they wanted. The charter was not renewed.
Five month later Britain had attacked America and started the war of 1812.
Meanwhile a short time earlier, an independent Rothschild business, the Bank of France, was being looked upon with suspicion by none other than:
NAPOLEON (1803 - 1825)
He didn't trust the bank saying:
"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."
For both sides of a war to be loaned money from the same privately owned Central Bank is not unusual. Nothing generates debt like war. A Nation will borrow any amount to win. So naturally if the loser is kept going to the last straw in a vain hope of winning, then the more resources will be used up by the winning side before their victory is obtained more resources used, more loans taken out, more money made by the bankers; and even more amazing, the loans are usually given on condition that the victor pays the debts left by the loser.
In 1803, instead of borrowing from the bank, Napoleon sold territory west of the Mississippi to the 3rd President of the United States, Thomas Jefferson for 3 million dollars in gold; a deal known as the Louisiana Purchase.
Three million dollars richer, Napoleon quickly gathered together an army and set about conquering much of Europe.
Each place he went to, Napoleon found his opposition being financed by the Bank of England, making huge profits as Prussia, Austria and finally Russia all went heavily into debt trying to stop him.
Four years later, with the main French army in Russia, Nathan Rothschild took charge of a bold plan to smuggle a shipment of gold through France to finance an attack by the Duke of Wellington from Spain.
Wellington's attack from the south and other defeats eventually forced Napoleon to abdicate. He was exiled to Elba, an Island off the coast of Italy. However in 1815 he escaped from exile and returned to Paris. The French soldiers sent out to capture him instead, rallied round their old leader.
By March of that year Napoleon had equipped an army with the help of borrowed money from the Eubard Banking House of Paris.
With 74,000 French troops led by Napoleon, sizing up to meet 67,000 British and other European Troops 200 miles NE of Paris on June 18th 1815, it was a difficult one to call. Back in London, the real potential winner, Nathan Rothschild, was poised to strike in a bold plan to take control of the British stock market, the bond market, and possibly even the Bank of England.
Nathan, knowing that information is power, stationed his trusted agent named Rothworth near the battle field.
As soon as the battle was over Rothworth quickly returned to London, delivering the news to Rothschild 24 hours ahead of Wellington's courier.
A victory by Napoleon would have devastated Britain's financial system. Nathan stationed himself in his usual place next to an ancient pillar in the stock market.
This powerful man was not without observers as he hung his head, and began openly to sell huge numbers of British Government Bonds.
Reading this to mean that Napoleon must have won, everyone started to sell their British Bonds as well.
The bottom fell out of the market until you could hardly give them away. Meanwhile Rothschild began to secretly buy up all the hugely devalued bonds at a fraction of what they were worth a few hours before.
In this way Nathan Rothschild captured more in one afternoon than the combined forces of Napoleon and Wellington had captured in their entire lifetime.
The 19th century became known as the age of the Rothschild's when it was estimated they controlled half of the world's wealth.
While their wealth continues to increase today, they have managed to blend into the background, giving an impression that their power has waned.
They only apply the Rothschild name to a small fraction of the companies they actually control.
Some authors claim that the Rothschild's had not only taken over the Bank of England but they had also in 1816 backed a new privately owned Central Bank in America called The Second Bank of The United States, causing huge problems to the American president.
ANDREW JACKSON (1828 - 1836)
When the American congress voted to renew the charter of The Second Bank of The United States, Jackson responded by using his veto to prevent the renewal bill from passing. His response gives us an interesting insight.
"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 favour alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles." Andrew Jackson
In 1832 Jackson ordered the withdrawal of government deposits from the Second bank and instead had them put into safe banks.
The Second Banks head, Nicholas Biddle was quite candid about the power and intention of the bank when he openly threatened to cause a depression if the bank was not re-chartered, we quote.
"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 re-charter of the bank."
By calling in existing loans and refusing to issue new loans he did cause a massive depression, but in 1836 when the charter ran out, the Second Bank ceased to function. When asked what he felt was the greatest achievement of his career Andrew Jackson replied without hesitation "I killed the bank!" However we will see this was not the end of private financial influence passing itself off as official when we look at.
ABRAHAM LINCOLN AND THE CIVIL WAR (1861 - 1865)
With the Central Bank killed off, fractional reserve banking moved like a virus through numerous state chartered banks instead causing the instability this form of economics thrives on.
When people lose their homes someone else wins them for a fraction of their worth. Depression is good news to the lender; but war causes even more debt and dependency than anything else, so if the money changers couldn't have their Central Bank with a license to print money, a war it would have to be.
We can see from this quote of the then chancellor of Germany that slavery was not the only cause for the American Civil War.
"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 US, 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 chancellor of Germany
On the 12th of April 1861 this economic war began.
Predictably Lincoln, needing money to finance his war effort, went with his secretary of the treasury to New York to apply for the necessary loans. The money changers wishing the Union to fail offered loans at 24% to 36%. Lincoln declined the offer.
An old friend of Lincoln's, Colonel Dick Taylor of Chicago was put in charge of solving the problem of how to finance the war.
His solution is recorded as this.
"Just get Congress to pass a bill authorising the printing of full legal tender treasury notes... and pay your soldiers with them and go ahead and win your war with them also." Colonel Dick Taylor
When Lincoln asked if the people of America 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
Lincoln agreed to try this solution and printed 450 million dollars worth of the new bills using green ink on the back to distinguish them from other notes.
"The Government should create, issue, and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers....
The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles... the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity." Abraham Lincoln
From this we see that the solution worked so well Lincoln was seriously considering adopting this emergency measure as a permanent policy.
This would have been great for everyone except the money changers who quickly realised how dangerous this policy would be for them. They wasted no time in expressing their view in the London Times. Oddly enough, while the article seems to have been designed to discourage this creative financial policy, in it's put down we're clearly able to see the policies goodness.
"If this mischievous 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
From this extract its plan to see that it is the advantage provided by the adopting of this policy which poses a threat to those not using it.
1863, nearly there, Lincoln needed just a bit more money to win the war, and seeing him in this vulnerable state, and knowing that the president could not get the congressional authority to issue more greenbacks, the money changers proposed the passing of the National Bank Act. The act went through.
From this point on the entire US money supply would be created out of debt by bankers buying US government bonds and issuing them from reserves for bank notes.
The greenbacks continued to be in circulation until 1994, their numbers were not increased but in fact decreased.
"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 Galbrath
The American economy has been based on government debt since 1864 and it is locked into this system. Talk of paying off the debt without first reforming the banking system is just talk and a complete impossibility.
That same year Lincoln had a pleasant surprise. Turns out the Tsar of Russia, Alexander II, was well aware of the money changers scam. The Tsar was refusing to allow them to set up a central bank in Russia.
If Lincoln could limit the power of the money changers and win the war, the bankers would not be able to split America and hand it back to Britain and France as planned. The Tsar knew that this handing back would come at a cost which would eventually need to be paid back by attacking Russia, it being clearly in the money changers sights.
The Tsar declared that if France or Britain gave help to the South, Russia would consider this an act of war. Britain and France would instead wait in vain to have the wealth of the colonies returned to them, and while they waited Lincoln won the civil war.
With an election coming up the next year, Lincoln himself would wait for renewed public support before reversing the National Bank Act he had been pressured into approving during the war.
Lincoln's opposition to the central banks financial control and a proposed return to the gold standard is well documented. He would certainly have killed off the national banks monopoly had he not been killed himself only 41 days after being re-elected.
The money changers were pressing for a gold standard because gold was scarce and easier to have a monopoly over.
Much of this was already waiting in their hands and each gold merchant was well aware that what they really had could be easily made to seem like much much more.
Silver would only widen the field and lower the share so they pressed for...
THE RETURN OF THE GOLD STANDARD (1866 - 1881)
"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 Skouse.
Even after his death, the idea that America might print it's own debt free money set off warning bells throughout the entire European banking community.
On April 12th in 1866, the American congress passed the Contraction Act, allowing the treasury to call in and retire some of Lincoln's greenbacks. With only the banks standing to gain from this, it's not hard to work out the source of this action.
To give the American public the false impression that they would be better off under the gold standard, the money changers used the control they had to cause economic instability and panic the people.
This was fairly easy to do by calling in existing loans and refusing to issue new ones, a tried and proven method of causing depression. They would then spread the word through the media they largely controlled that the lack of a single gold standard was the cause of the hardship which ensued, while all this time using the Contraction Act to lower the amount of money in circulation.
It went from
$1.8 billion in circulation in 1866 allowing $50.46 per person,
to $1.3 billion in 1867 allowing $44.00 per person,
to $0.6 billion in 1876 making only $14.60 per person and down
to $0.4 billion only ten years later leaving only $6.67 per person
and a continually growing population.
Most people believe the economists when they tell us that recessions and depressions are part of the natural flow, but in truth the money supply is controlled by a small minority who have always done so and will continue to do so if we let them.
By 1872 the American public was beginning to feel the squeeze, so the Bank of England, scheming in the back rooms, sent Ernest Seyd, with lots of money to bribe congress into demonetising silver.
Ernest drafted the legislation himself, which came into law with the passing of the Coinage Act, effectively stopping the minting of silver that year. Here's what he said about his trip, obviously pleased with himself.
"I went to America in the winter of 1872-73, authorised to secure, if I could, the passage of a bill demonetising silver. It was in the interest of those I represented - the governors of the Bank of England - to have it done. By 1873, gold coins were the only form of coin money." Ernest Seyd
Within three years, with 30% of the work force unemployed, the American people began to harken back to the days of and silver backed money the greenbacks.
The US Silver Commission was set up to study the problem and responded with telling history:
"The disaster of the Dark Ages was caused by decreasing money and falling prices... Without money, civilisation 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,million. By the end of the fifteenth century it had shrunk to less than $200,million. History records no other such disastrous transition as that from the Roman Empire to the Dark Ages..." United States Silver Commission
While they obviously could see the problems being caused by the restricted money supply, this declaration did little to help the problem, and in 1877 riots broke out all over the country. The bank's response was to do nothing except to campaign against the idea that greenbacks should be reissued.
The American Bankers Association secretary James Buel expressed the bankers attitude well in a letter to fellow members of the association. He wrote:
"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 interest that we may control legislation." James Buel American Bankers Association
What this statement exposes is the difference in mentality between your average person and a banker. With a banker 'less really is more' and every need an opportunity to exploit.
James Garfield became President in 1881 with a firm grasp of where the problem lay.
"Whosoever controls the volume of money in any country is absolute master of all industry and commerce... And when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." James Garfield
Within weeks of releasing this statement President Garfield was assasinated.
The cry from the streets was to...
FREE SILVER (1891 - 1912)
Fleecing of the flock is the term the money changers use for the process of booms and depressions which make it possible for them to repossess property at a fraction of it's worth. In 1891 a major fleece was being planned.
"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
The continued gold standard made this possible.
William Jennings Bryan was the Democratic candidate for president in 1896, campaigning to bring silver back as a money standard. (free Silver)
"We will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold." William Jennings Bryan
Of course the money changers supported his opposition on the Republican side so long as he wanted the gold standard maintained. The factory bosses were somehow convinced to tell their work force that business would close down if Bryan was elected, and everyone would lose their jobs.
The Republicans won by a small margin.
Bryan tried again in 1900 and in 1908 but lost both times. He became secretary of state under Wilson in 1912 but became disenchanted and resigned in 1915 under suspicious circumstances connected with the sinking of the Lucitania which drove America into the First World War .
J.P.MORGAN AND THE CRASH OF 1907
If you want to work out the cause of the crash of 1907, checking who benefited is where you might like to look first.
With the stock market slump causing most of the over extended banks to falter, in steps J.P. Morgan offering to save the day. People will do strange things when in a panic, and this might explain why Morgan was authorised to print $200 million from nothing, which he then used to prop things up.
Some of the troubled banks with less than 1% in reserve had no choice. It was accept this solution or go under. Even if they had worked out that their problems had been caused by the same people now offering the solution, there is not a lot they could have done about it.
J.P.Morgan was hailed a hero.
"All this trouble could be averted if we appointed a committee of six or seven men like J.P.Morgan to handle the affairs of our country." Woodrow Wilson (total idiot!)
But not everyone was fooled.
"Those not favourable to the money trust could be squeezed out of business and the people frightened into demanding changes in the banking and currency laws which the Money Trust would frame." Rep. Charkes A. Lindbergh (R-MN)
Causing booms and busts is a tried and proven method of raking in massive wealth, and what people often forget when they lose what they have, is that in the process someone else has won it.
Apart from making a small number rich at the expense of the many, in this case the instability also served the second purpose of encouraging the public to believe that they would be better off living under a Central Bank and a Gold Standard.
Desperate people have little time for logic.
In Washington the statue of Lincoln sitting in his chair is facing a building called the Federal Reserve Headquarters.
This institution would not be there if Lincoln had lived to finish his second term in office.
It is not Federal and it has doubtful reserves. The name is an open deception designed to give this private bank the appearance that it is operating in the public's interest, when in fact it is run solely to gain private profit for it's select stock holders. It came into being as the result of one of the slickest moves in financial history. Here's how.
A secret meeting was held on Jekyll Island (owned by J.P. Morgan) in Georgia (around 1910) at which the roadmap towards creating the Federal Reserve was finalized. It included the birth of a banking cartel to protect its members from competition; the strategy of how to convince Congress and the public that this cartel was an agency of the United States government, etc.. At this meeting were seven men who represented an estimated one forth of the total wealth of the entire world:
1. Nelson W. Aldrich, Republican "whip" in the Senate, Chairman of the National Monetary Commission, business associate of J.P. Morgan, father-in-law to John D. Rockefeller, Jr.;
2. Abraham Piatt Andrew, Assistant Secretary of the United States Treasury;
3. Frank A. Vanderlip, president of the National City Bank of New York, the most powerful of the banks at that time,representing William Rockefeller and the international investment banking house of Kuhn, Loeb & Company;
4. Henry P. Davison, senior partner of the J.P Morgan Company;
5. Charles D. Norton, president of J.P. Morgan's First National Bank ofNew York;
6. Benjamin Strong, head of J.P. Morgan's Bankers Trust Company;and
7. Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative of the Rothschild banking dynasty in England and France, and brother to Max Warburg who was head of the Warburg banking consortium in Germany and the Netherlands.
The Illuminati interests wanted to create a Central Bank in America. They wanted to create the privately owned Federal Reserve modeled on the privately owned Bank of England. First, they needed a bunch of banking crisis' that would push public opinion towards a Federal Reserve system. These were provided by the Illuminati, including J.P. Morgan's Knickerbocker Panic of 1907. Second, they needed a favorable U.S. president in office. Rothschild agent Colonel House provided this by getting Woodrow Wilson elected. The American people were being conditioned. To provide the 'reform of the American banking system" a congressional National Monetary Commission was created and a man related to the Rockefellers, Nelson Aldrich, was put in charge. For two years this Commission traveled around Europe hob-nobbing with the IllumInati and getting directions as to how the central bank should be set up. Then the Commission returned in 1910, and Nelson Aldrich went to a secret meeting at the Jekyll Island Hunt Club in Georgia to write the legislation for an American central bank to be run by the IllumInati. Others at the Jekyll island meeting were these Illuminati men - A. Platt Andrew, Frank Vanderiip (of a Kuhn-Loeb & Company bank), Henry Davidson (of J.P. Morgan), Charies Norton (of a Morgan bank), Paul Warburg (of Kuhn-Loeb & Company and brother-in-law of Schiff), Benjamin Strong (of another Morgan company). Most of these men were connected to Jacob Schiff or J.P. Morgan, who in turn were agents for the House of Rothschild.
The Titanic which sank in 1912 was carrying the richest men on earth. These men who went down with the Titanic were wealthy Jews who were resisting the establishment of a private centralized bank in America, particularly John Jacob Astor, who was a personal friend of Supreme Court Justice Louis Brandeis. Brandeis greatly resisted the establishment of the private Central Bank. Astor, Guggenheim, and Straus were three extremely wealthy Jewish men who went down with the Titanic. Astor was some say the wealthiest man in the world other than the Pope. However, he was NOT using his wealth in accord with the Rothschild Order. After his death in the Titanic, his son, John Jacob Astor IV, took over his money trust (see Eugene Sue's The Wandering Jew). John Jacob was willing to go along with being part of the privately owned central bank system.
The Federal Reserve bill was sneakily passed through congress in the winter of 1913 and President Woodrow Wilson signed the bill into law. The Illuminati, particularly the Rockefellers and Rothschilds, bad usurped the financial power of the United States. The first governor of the New York branch of the Federal Reserve was Benjamin Strong. The first governor of the FED's board of directors was Paul Warburg. Both connected to Schiff, J.P. Morgan, Jr, and the House of Rothschild. The FED has been an effective tool of the Illuminati and the Rothschilds, creating crisis such as the Great Depression (which J.P. Morgan, Jr was very involved in creating). Apparentiy (according to Congressman Louis McFadden), the Depression helped consolidate financial power over the US., putting It in the hands of the Rothschild banking alliance between J.P. Morgan's First National Bank group and Schiff's Kuhn, Loeb-run National City Bank. The Great Depression also lead to Roosevelt's New Deal.
On 23rd December 1913 the house of representatives had past the Federal Reserve Act, but it was still having difficulty getting it out of the senate. Most members of congress had gone home for the holidays, but unfortunately the senate had not adjourn sine dei (without day) so they were technically still in session. There were only three members still present. On a unanimous consent voice vote the 1913 Federal Reserve Act was passed. No objection was made, possibly because there was no one there to object.
Charles Lindbergh would have objected.
"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 peoples money." Rep Charles A, Lindbergh (R-MN)
Louis T. McFadden would have objected.
"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 practice of the moneyed vultures who control it."
Rep. Louis T, McFadden (R-PA)
Barry Goldwater would also have objected.
"Most Americans have no real understanding of the operation of the international money lenders... 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)
Most Americans would object if they knew.
The Federal Reserve is the largest single creditor of the United States Government, and they are also the people who decide how much the average persons car payments are going to be, what their house payments are going to be, and whether they have a job or not.
The three people who passed the Federal Reserve Act in 1913, knew exactly what they were doing when they set up this private bank, modelled on the Bank of England and the fact that THE BANK OF ENGLAND had been operating independently unopposed since 1694 must have given them a great deal of confidence indeed.
WHERE THERE'S WAR THERE'S MONEY
War uses up more materials more quickly than most anything else on earth. In war expensive equipment doesn't wear out slowly, it gets blown up.
(It's interesting to note that during the 119 year period from the founding of the Bank of England to Napoleon's defeat at Waterloo, England had been at war for 56 years, while the rest of the time preparing for it. In the process the money changers had been getting rich.)
So there it was, the newly formed Federal Reserve poised to produce any money the U.S. Government might need from thin air with each dollar standing to make a healthy interest.
Nine days after it's formation the Federal Reserve founders were wishing each other a Happy New Year. What good fortune might 1914 bring?
WORLD WAR I (1914-1918)
The Germans borrowed money from the German Rothschilds bank, the British from the British Rothschilds bank, and the French from the French Rothschilds.
American super banker J.P. Morgan was amongst other things also a sales agent for war materials. Six months into the war his spending of $10 million a day made him the largest consumer on the planet.
The Rockefeller's and the head of president Willson's War Industries Board, Bernard Baruch each made some 200 million dollars while families contributed their sons to the bloody front lines, but profit was not the only motive for involvement.
Russia had spoiled the money changers plan to split America in two, and remained the last major country not to have it's own central bank. Now they would pay for their stubborn independence.
Three years after the start of the war the entire Russian Royal Family was killed and Communism began.
You might find it strange to learn that the Russian Revolution was also fuelled with British money. Capitalist businessmen financing Communism?
Author Gary Allen gives his explanation:
"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
W.Cleon Skousen wrote in his 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
Extreme revolutionary groups were controlled by being financed when they complied and cut off, with money sometimes being given to their opposition, when they didn't.
If you find this hard to believe, listen to what the so called dictator of the new Soviet Union had to say.
"The state does not function as we desired. The car does not obey. A man is at the wheel and seems to lead it, but the car does not drive in the desired direction. It moves as another force wishes." Vladimir Lenin
Rep. Louis T. McFadden, chairman of the House Banking and Currency Committee throughout the 1920-30s 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)
Even when Communism collapsed in the Soviet Union, Boris Yeltsin revealed that most of the foreign aid was ending up, we quote. "straight back into the coffers of western banks in debt service."
With Russia down the money changers now had control of every major national economy. Like a steam roller moving and a wolf gathering it's pack, there was only one thing left to do and that was to go global. The first attempt was the proposal at the Paris Peace Conference after WWI to set up the League of Nations. Old habits die hard, and even what they called 'the war to end all wars' was not enough to convince nations to dissolve their boundaries. The League died.
If politicians really were being controlled, you would think at least one would break ranks and cry out against it. Many did. One was no less than the president of the United States speaking before his death in 1919.
"These International bankers and Rockefeller-Standard Oil interests control the majority of newspapers and the columns of these papers to club into submission or drive out of public office officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government." Theodore Roosevelt
Another was the Mayor of New York expanding on Roosevelt's statement in 1922.
"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 generalisations, 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 organisations, 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. 1922
These warnings fell on deaf ears, drowned out by the music and excitement of the roaring 20's. People don't tend to complain much in times of prosperity, so the money changers used this boom time they had created to defuse any complaints about their growing control.
DEPRESSION IN 1929
Stack in front of you the biographies of all the Wall Street giants, J.P. Morgan, Joe F. Kennedy, J.D Rockefeller, Bernard Baruch, and you'll find they all marvel at how they got out of the stock market and put their assets in gold just before the crash.
Non mention a secret directive, since revealed, sent by the father of the Federal Reserve, Paul Warburg, warning of the coming collapse and depression.
With control of the press and the education system, few Americans are aware that the Fed caused the depression. It is however a well known fact among leading top economists.
"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
"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)
"I think it can hardly be disputed that the statesmen and financiers of Europe are ready to take almost any means to re-acquire rapidly the gold stock which Europe lost to America as the result of World War I." Rep. Louis T.McFadden (D-PA)
40 billion dollars somehow vanished in the crash.
It didn't really vanish, it simply shifted into the hands of the money changers. This is how Joe Kennedy went from having 4 million dollars in 1929 to having over 100 million in 1935.
During this time the Fed caused a 33% reduction of the money supply, causing deeper depression.
The Illuminati's two greatest weapons are secrecy and money. Mayer Amschel Rothschild, head of the House of Rothschild, and who was also head of the Illuminati, said in 1838, "Allow me to issue and control the money of a nation and I care not who writes its laws." How very true! Even in today's society, if a federally-sponsored charity does not listen to what these groups want, it will be cut off from all governmental funding. This is "monetarial dictatorship."
Down the corridor of time, a political figure emerged in the 1920's who would become President of the United States. During the 1932 presidential campaign, Franklin D. Roosevelt's political platform was based on what he termed "The New Deal," though many rumors were spreading that this platform did not represent his true plans. Fearing a deeper depression, the public began a run on the banks. Many closed their doors by the time Roosevelt was inaugurated.
Even the Great Depression, beginning in late 1929, was part of this overall plan. Congressman Louis T. McFadden, Chairman of the House Banking Committee, said... "It was no accident. It was a carefully contrived occurrence. The international bankers sought to bring about a condition of despair here so they might emerge as rulers of us all." (sounds like a familiar story, i.e. 911, famous Masonic words from Bush "out of chaos will emerge order").
So the Roosevelt administration asked the United States Congress to pass legislation which would force the American people to give up their gold in exchange for paper money. When the passing of the appropriate legislation was accomplished, the American people were forced to give up their gold for this new paper money called "greenbacks" or US Government Notes (contrast this with the Federal Reserve Notes which we now have). They had received $20.67 in paper money for an ounce of gold. This sounded fair in the very beginning, but, shortly thereafter, the government raised the price of gold to $35.00 an ounce. In short, the government (during the great depression) had robbed the American populace of over three billion dollars. Senator Carter Glass was asked his opinion on this new development. He replied, "President Roosevelt, I think that this is worse than anything that Ali Baba's forty thieves could ever have perpetrated."
As Roosevelt's "New Deal" was put into motion, every new dollar bill coming off the presses carried with it two new seals that had never been there before; the Two Seals of the Illuminati. They could now openly declare that their conspiracy had finally born fruit, their "NOVUS ORDO SECLORUM" or "New Deal."
HOW THE PRIVATE FED CREATES MONEY
We've been talking about how the privately owned Federal Reserve can produce money from thin air. Here's how it's done.
1. The purchase of bonds is approved by the Federal Open Market Committee.
2. The Fed buys the bonds which it pays for with electronic credits made to the sellers bank. These credits are based on nothing.
3. The receiving banks then use these credits as reserves from which they can loan out ten times the amount.
To reduce the amount of money in the economy they simply reverse the process.
The Fed sells bonds to the public and money is drawn from the purchasers bank to pay for them.
Each million withdrawn lowers the banks ability to loan by 10 million.
The Federal bank in this way has overall control of the US money supply, as each country's central bank does in the same way. The bankers through the magic of fractional reserve banking have been delegated the right to create 90% of the money supply. This control makes a mockery of any elected government. It places so called leaders behind a toy steering wheel, like the plastic ones, set up to amuse small children.
Or as Rep.Charles Lindbergh father of famous aviator Lucky Lindy puts it when commenting on the Federal Reserve Act:
"This act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalised.
The people may not know it immediately, but the day of reckoning is only a few years removed... The worst legislative crime of the ages is perpetrated by this banking bill."
Rep. Charles Lindbergh (R-MN)
Or as Woodrow Wilson put it:
"We have come to be one of the worst ruled, one of the most completely controlled governments in the civilised world - no longer a government of free opinion, no longer a government by... a vote of the majority, but a government by the opinion and duress of a small group of dominant men.
Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organised, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it."
In order to clearly establish that this is not a conspiracy theory, but is actually how things are controlled, we further quote Charles Lindbergh. From the house of representatives, Lindbergh was well placed to see exactly what was happening back then and continues to happen today.
"To cause high prices all the Federal Reserve board will do will be to lower the re-discount 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 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 Lindbergh (R-MN)
Most all will be aware of Hitler's rise to power. What they probably don't know is that he was almost completely financed by money drawn from the privately owned American Federal Reserve.
"After WWI, Germany fell into the hands of the international bankers. Those bankers bought her and they now own her, lock, stock, and barrel. They have purchased her industries, they have mortgages on her soil, they control her production, they control all her public utilities.
The international German bankers have subsidised 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 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 billion 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."
Congressman Louis T.McFadden (D-PA) who served twelve years as Chairman of the Committee on Banking and Currency.
In 1933 new President Franklin D. Roosevelt signed a bill forcing all the American people, to hand over all their gold at base rate. With the exception of rare coins. He disowned himself from the bill claiming to not have read it and his secretary of the treasury claimed this was "what the experts wanted".
Bought at bargain basement price with money produced from nothing by the Federal Reserve, the gold was melted down and stacked in the newly built bullion depository called Fort Knox. Once collected in 1935 the price of gold was raised from $20.66 up to $35 per ounce, but only non American gold qualified to be sold. This meant those who had avoided the crash by investing in gold they had shipped to London could now nearly double their money while the rest of America starved.
But that's not all folks. By the end of WWII Fort Knox did hold 70% of the world's gold, but over the years it was sold off to the European money changers while a public audit of Fort Knox reserves was repeatedly denied.
Rumours spread about missing gold.
"Allegations of missing gold from our Fort Knox vaults are being widely discussed in European circles. But what is puzzling is that the Administration is not hastening to demonstrate conclusively that there is no cause for concern over our gold treasure - if indeed it is in a position to do so." Edith Roosevelt
Finally in 1981 President Ronald Reagan was convinced to have a look into Fort Knox with a view to re-introducing the Gold Standard. He appointed a group called The Gold Commission. They found that the US Treasury owned no gold at all.
All the Fort Knox gold remaining is now being held as collateral by the Federal Reserve against the national debt. Using credits made from nothing. The Fed had robbed the largest treasure of gold on earth.
WORLD WAR II (1939-1945)
World War II saw the US debt increased by 598%, while Japan's debt went up by 1,348%, with France up by 583% and Canada up by 417%.
When you hear this, what is your first impression? Do you automatically think this is bad or this is good? Most of us feel a well programmed sense of desperation when we hear figures like this, but remember, to the money changers, this is music to their ears.
With the hot war over, the cold war began, the arms race causing more and more borrowing. Now the money changers could really concentrate on global domination.
Step one, the European Monetary Union and NAFTA.
Step two, centralise the global economy via the World Central Bank.
THE WORLD CENTRAL BANK (1948 - Present)
In Washington, the headquarters of both the World Bank and the IMF (International Monetary Fund) face each other on the same street. What are these organisations, and who controls them?
To find out we need to look back to just after WWI. At this point the money changers were attempting to consolidate the central banks under the guise of peacemaking. To stop future wars they put forward the formation of a world central bank named the Bank of International Settlements, a world court called the World Court in the Hague, and a world executive for legislation called the League of Nations.
On June 4, 1963, a virtually unknown Presidential decree, Executive Order 11110, was signed with the authority to basically strip the Federal Reserve Bank of its power to create from nothing and loan money to the United States Federal Government at interest. With the stroke of a pen, President Kennedy declared that the privately owned Federal Reserve Bank would soon be out of business. President Kennedy Nov. 12, 1963 said: "The high office of the President has been used to foment a plot to destroy the American's freedom and before I leave office, I must inform the citizen of this plight." On Nov. 22nd, he was assassinated.
Note that all four presidents who tried to end the banking monopolies were assassinated (Lincoln, Garfield, McKinley, Kennedy) and anyone who tries to expose these Banking Dynasties is demonized like Rep. Congressman James Traficant in 1993 and many others. Note also that most of the other US Presidents have been and are part of the Freemason/Zionist Brotherhoods. Another interesting fact to consider is that of the 37 Presidents of the United States before Jimmy Carter, at least 18 or 21 or 42 (depending on which source you believe, 33 of them alone go back to Charlemagne, one of the most famous medieval monarchs of what we now call France and who just happens to be a major figure in the story of these bloodlines and their expansion out of Britain, France, Germany, and elsewhere) were close relatives. Of the 224 ancestors in the family tree of 21 Presidents, we find 13 Roosevelt's, 16 Coolidge's, and 14 Tyler's. Another source manages to relate 60 percent of the Presidents and link most of them to the super-rich Astor family.
In his 1966 book entitled Tragedy and Hope, president Clinton's mentor Carroll Quigley writes about the banking dynasties:
"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
They got 2 out of 3. The league of nations failed largely owing to the suspicions of the people and while opposition concentrated on this, the other two proposals snuck their way through.
It would take another war to wear the public resistance down. Wall street invested heavily to rebuild Germany, as the Chase bank had propped up the Russian revolution.
Now the Chase merged with the Warburg's Manhattan Bank to form the ChaseManhattan which would later merge with the Chemical Bank to become the largest bank on Wall Street.
In 1944 the US approved it's full participation in the IMF and the World Bank. By 1945 the second League of Nations was approved under the new name 'The United Nations'. The war had dissolved all opposition. The methods used in the National Banking Act of 1864 and the Federal Reserve Act of 1913 were now simply used on a Global scale.
The Federal Reserve Act allowing the creation of Federal Reserve notes is mirrored by the IMF's authority to produce money called Special Drawing Rights (SDR's). It is estimated the IMF has produced $30 billion dollars worth of SDR's so far. In the United States SDR's are already accepted as legal money, and all other member nations are being pressured to follow suit. With SDR's being partially backed by gold, a world gold standard is sneaking it's way in through the back door, which comes with no objection from the money changers who now hold two-thirds of the worlds gold and can use this to structure the worlds economy to their further advantage.
We have gone from the goldsmith's fraud being reproduced on a national scale through the Bank of England and the Federal Reserve, to a Global level with the IMF and the World Bank. Unless we together stop giving these exchange units their power by our collective faith in them, the future will probably see the Intergalactic Bank and the Federation of Planets Reserve set up in much the same way.
This radical transfer of power has taken place with absolutely no mandate from the people.
Nations borrow Special Drawing Right from the International Monetary Fund in order to pay interest on their mounting debts. With these SDR's produced at no cost, the IMF charges more interest. This contrary to bold claims does not alleviate poverty or further any development. It just creates a steady flow of wealth from borrowing nations to the money changers who now control the IMF and the World Bank.
The permanent debt of Third World Countries is constantly being increased to provide temporary relief from the poverty being caused by previous borrowing.
These repayments already exceed the amount of new loans. By 1992 Africa's debt had reached $290 billion dollars, which is two and a half times greater than it was in 1980. A noble attempt to repay it has caused increased infant mortality and unemployment, plus deteriorating schools, and general health and welfare problems.
As world resources continue to be sucked into this insatiable black hole of greed, if allowed to continue the entire world will face a similar fate.
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."
If a group or organisation had used it's hard earned money to help these developing nations, then we might sympathise that there should be a real effort to repay these loans. But the money used was created from fractional reserve banking. The money loaned to the Third World came from the 90% the banks allow themselves to loan on the 10% they actually held. It didn't exist, it was created from nothing, and now people are suffering and dying in an effort to pay it back.
Peter Kershaw in "Economic Solutions" and Larry Burkett in "The Coming Economic Earthquake" have named the private owners of the United States Federal Reserve system established in 1913 (under Benjamin Strong, the Reserve System was brought into interlocking relations with the Bank of England and the Bank of France and Reserve Governors and heads of European central banks brought on the Great Depression of 1929-31) as:
1) The Rockefeller Family - New York
2) The Rothschild Family - London
3) The Rothschild Family - Berlin
4) The Lazard Brothers - Paris
5) Israel Seiff - Italy
6) Kuhn-Loeb Company - Germany
7) The Warburgs - Amsterdam Representative of the Rothschild Family in France
8) The Warburgs - Hamburg Representative of the Rothschild Family in Germany 9) Lehman Brothers - New York
10) Goldman & Sachs - New York. The Federal Reserve Bank of New York, which controls the 11 other Federal Reserve branches, is majority controlled by a) Chase-Manhattan (a Rockefeller stronghold) - 6,389,445 shares - 32.3% b) Citibank - 4,051,851 shares - 20.5%.
The HSBC bank controlled by the Freemasons is another example of a fraudulent setup that gets to create money from nothing and charge interest on it. More on how the Federal Reserve System fraud operates later in this document by Edward Griffin and Eustace Mullin.
This has gone beyond clever financing, its wholesale murder and it's time we stopped it.
Highlights of U.S. Financial History.
1787 U.S. Constitution is ratified granting Congress alone the right to COIN money - not to print it. Only gold and silver were considered REAL money!!
1791 1st. U.S. Bank is chartered.
1811 Charter of U.S. Bank expires.
1812 War with Great Britain over the lapsed charter. The MONEY POWER tries to get the New England States to leave the Union.
1816 2nd Bank of the U.S. is chartered.
1832 President Jackson vetoes charter of 2nd Bank.
1860 Civil War begins. Defeated MONEY POWER successful in getting 13 States to leave the Union.
1862 Congress passes Banking Act authorizing the printing of paper money (greenbacks) to finance the war. This was supposed to be an emergency measure only until the war was over. All the provisions of the Banking Act were to expire in 20 years.
1873 Silver is demonetized. Free coinage of silver is ended. U.S. goes on gold standard.
1882 Banking Act expires but is renewed for another 20 years.
1901 President McKinley is assassinated by MONEY POWER and Roosevelt becomes President.
1902 Banking Act which gave the U.S. paper money was supposed to expire this year. Due to the murder of President McKinley, the banking laws and paper money system was continued.
1910 Postal Savings Bank is inaugurated.
1910 Secret meeting on Jekyll Island, Georgia, to charter 3rd U.S. Bank.
1913 Monster reborn. President Wilson signs bill authorizing the creation of 3rd U.S. Bank.
1917 President Wilson destroys Postal Savings Bank by refusing to lift ceiling on deposits.
1929 Great Depression begins due to manipulation of economy by U.S. Bank.
1933 Possession of gold is outlawed. U.S. citizens forbidden to own gold by order of President Roosevelt.
1960 Goldfinger begins to steal U.S. gold reserves from Fort Knox.
1971 U.S. is completely off the gold standard. Foreign holders of dollars are promised U.S. land as collateral instead of gold.
1990 Fall of the Soviet Union. U.S. gold reserves start to move to European Central Bank.
The Federal Reserve dollar is the official currency of the United States. It is also widely used as a reserve currency outside of the United States. Currently, the issuance of currency is controlled by the private Federal Reserve Banking system. The most commonly used symbol for the U.S. dollar is the dollar sign ($). The ISO 4217 code for the United States Dollar is USD. When currently issued in circulating form, denominations equal to or less than a dollar are emitted as coins while denominations equal to or greater than a dollar are emitted as Federal Reserve notes.
Until 1974 the value of the United States dollar was tied to and backed by either silver, gold, or a combination of the two. From 1792 to 1873 the U.S. dollar was freely backed by both gold and silver at a ratio of 15:1 under a system known as bimetallism. Through a series of legislative changes from 1873 to 1900, the status of silver was slowly diminished until 1900 when a gold standard was formally adopted. The gold standard survived, with several modifications, until 1974.
Modern U.S. dollar banknotes have been printed by the Federal Reserve since 1929. Notes above the $100 denomination ceased being printed in 1946. Below are some Federal Reserve Notes from the private central bank known fraudulently as the US Federal Reserve System, i.e. these are not the original public US Government United States Notes which are much less than 1% of the notes in circulation.
Both United States Notes and Federal Reserve notes are parts of the national currency of the United States and both are legal tender. They circulate as money in the same way. However, the issuing authority for them comes from different statutes. United States Notes were redeemable in gold until 1933, when the United States abandoned the gold standard. Since then, both currencies have served essentially the same purpose, and have had the same value. Because United States Notes serve no function that is not already adequately served by Federal Reserve Notes, their issuance was discontinued, and none have been placed in to circulation since January 21, 1971.
United States Notes (characterized by a red seal and serial number) were the first national currency, authorized by the Legal Tender Act of 1862 and began circulating during the Civil War. The Treasury Department issued these notes directly into circulation, and they are obligations of the United States Government. The issuance of United States Notes is subject to limitations established by Congress. It established a statutory limitation of $300 million on the amount of United States Notes authorized to be outstanding and in circulation. While this was a significant figure in Civil War days, it is now a very small fraction of the total currency in circulation in the United States.
GREENBACKS were a form of paper currency in the United States, so named from the green colour used on the backs of the notes. They are treasury notes, and were first issued by the government in 1862, "as a question of hard necessity," to provide for the expenses of the Civil War. The first act, providing for the issue Of notes to the amount of $150,000,000, was that of the 25th February 1862; the acts of 11th July 1862 and 3rd March 1863 each authorized further issues of $150,000,000. In January 1879 the nominal amount of notes then stood at $346,681,000, which is still outstanding.
The so-called Greenback party (also called the Independent, and the national party) first appeared in a presidential campaign in 1876, when its candidate, Peter Cooper, received 81,740 votes. It advocated increasing the volume of greenbacks, forbidding bank issues, and the paying in greenbacks of the principal of all government bonds not expressly payable in coin. In 1884 their candidate Benjamin F. Butler (also the candidate of the Anti-Monopoly party) received 175,370 votes. Subsequently the party went out of existence. Peter Cooper wanted to free the people from the yoke of the privately owned central banking systems controlled by the Rothschilds & associates. "At a reception in his honour in his later years he summed up his philosophy: 'I have endeavoured to remember that the object of life is to do good.'" This quote is remarkable when compared to others of similar means who were Cooper's contemporaries. An article by Peter Lyon in American Heritage ("Peter Cooper, the Honest Man," February 1959, v.10, #2) notes in particular Cornelius Vanderbilt ("Law? What do I care about the law? Hain't I got the power?"), William Tweed, who plundered hundreds of millions of dollars from New York City, and Uncle Dan Drew ("It's the still hog that eats the most"). Cooper gave his money away without receiving any tax breaks. As alluded to above, his family fully supported him in this, giving up their own inheritances to match a grant by Andrew Carnegie just after Cooper's death. His example directly nudged Carnegie, George Peabody, Matthew Vassar, Ezra Cornell and many others into commencing their more famous philanthropies. Cooper was the first wealthy industrialist of the 19th century to equate the acquisition of wealth with social responsibility. It is a tragedy that history, especially the history we teach our schoolchildren, seems to have largely forgotten this pivotal figure in the history of New York City, the United States, and perhaps the world. Peter Cooper died on April 4, 1883 in New York City at the age of 92. Thousands of New Yorkers spontaneously poured into the streets as his casket was taken to its resting place in Green-Wood Cemetary in Brooklyn, in tribute to the great man who had dedicated his life and fortune to the city he loved so well.
The following is a list of the portraits on all denominations of US notes original greenbacks.
Denomination U.S. Paper Currency Features
$1.00 George Washington (1st U.S. President) on front. Great Seal of the United States on back.
$2.00 Thomas Jefferson (3rd U.S. President) on front. Declaration of Independence on back.
$5.00 Abraham Lincoln (16th U.S. President) on front. Lincoln Memorial on back.
$10.00 Alexander Hamilton (1st U.S. Treasury Secretary) on front. U.S. Treasury Building on back.
$20.00 Andrew Jackson (7th U.S. President) on front. White House on back.
$50.00 Ulysses S. Grant (18th U.S. President) on front. U.S. Capitol on back.
$100.00 Benjamin Franklin on front. Independence Hall on back.
* $500.00 William McKinley (25th U.S. President) on front. $500 on back. Has not been printed since 1946.
* $1000.00 Grover Cleveland (22nd & 24th U.S. President) on front. "One Thousand Dollars" on back. Has not been printed since 1969.
* $5000.00 James Madison (4th U.S. President) on front. $5000 on back. Has not been printed since 1946.
* $10,000.00 Salmon P. Chase (25th U.S. Treasury Secretary) on front. $10,000 on back. Has not been printed since 1946.
* $100,000.00 Woodrow Wilson (28th U.S. President) on front. The largest note ever printed by the U.S. Bureau of Engraving and Printing. Printed from December 18, 1934 through January 9, 1935. Used for transactions between Federal Reserve Banks. Not circulated among the general public.
* No longer printed and being withdrawn from circulation.
Today, like the currency of most nations, the Federal Reserve Note dollar is fiat money without intrinsic value. Some argue that it has no backing and would be entirely worthless, except for the fact that people have been persuaded to use and accept it as if it had worth. According to the Bureau of Engraving and Printing, as of July 31, 2000, there were $539,890,223,079 in total currency in worldwide circulation, of which $364,724,397,100 was in the $100 denomination (compare this to the United States Government Notes of which $346,681,000 are in circulation).
Federal Reserve notes are legal tender currency notes. They are issued by the Federal Reserve Banks and have replaced United_States_Notes which were once issued by the Treasury Department. The authority of the Federal Reserve Banks to issue notes comes from the fraudulent Federal Reserve Act of 1913. A commercial bank belonging to the Federal Reserve System can obtain Federal Reserve notes from the Federal Reserve Bank in its district whenever it wishes. It must pay for them in full, dollar for dollar, by drawing down its account with its district Federal Reserve Bank. Despite no longer being issued by Treasury Department, Federal Reserve notes must be ritually signed by the Treasurer of the United States and the United States Secretary of the Treasury before becoming legal currency.
Federal Reserve Banks obtain the notes from the United States Bureau of Engraving and Printing (BEP). It pays the BEP for the cost of producing the notes, which then become liabilities of the Federal Reserve Banks, and obligations of the United States Government.
Federal Reserve notes are not redeemable in gold, silver or any other commodity. This has been the case since 1933. The notes have no value for themselves, but for what they will buy. They have no backing other than the "full faith of the US government", i.e., the government's ability to levy taxes to pay its debts and US property and assets. In another sense, because they are legal tender, Federal Reserve notes are "backed" by all the goods and services in the economy.
The name for the United States dollar comes from the Spanish dollar (which itself is derived from the thaler) which was the silver coin widely circulated in the United States during the time of the American Revolutionary War. Although private banks issued currency that was backed in Spanish dollars, the Federal government did not do so until the American Civil War. The Thaler was a silver coin first minted in Bohemia, in 1518. The name thaler originally came from the guldengroschen (great gulden, being of silver but equal in value to a gold gulden) coins minted from the silver from a rich mine at Joachimsthal (St. Joachim's Valley, Czech: Jáchymov) in what is now the Czech Republic and called the Joachimsthaler, where thal means "valley". St. Joachim, the father of the Virgin Mary, was portrayed on the coin. The Thaler was a very popular coin and became used thoughout Europe with equivalent coins such as the peso and the crown being issued and in general use. In England the word dollar was in use for the thaler for 200 years before the issue of the American Dollar, and until the half crown ceased to be used following decimalisation in 1971, the term "half a dollar" could be heard for "half a crown". The Thaler was introduced and became the most spread currency in Sweden under the name Daler during the early 17th century. The Daler was in circulation until 1873 when it was replaced by the Krona, the new currency introduced by the Scandinavian Monetary Union.
Original United States Government Notes (not private Federal Reserve Notes)
PRIVATE FEDERAL RESERVE NOTES
The six kinds of currency in 1929, colored coded with the colors of their seals and serial numbers, and with the denominations they were issued in series 1928 and 1929 (though not always in those years themselves), were:
• United States Notes (Series 1928: $1 $2 $5)
• Gold Certificates (Series 1928: $10 $20 $50 $100 $500 $1000 $5000 $10,000)
• National Bank Notes (Series 1929: $5 $10 $20 $50 $100)
• Silver Certificates (Series 1928: $1)
• Federal Reserve Bank Notes (Series 1929: $5 $10 $20 $50 $100)
• Federal Reserve Notes (Series 1928: $5 $10 $20 $50 $100 $500 $1000 $5000 $10,000)
The three kinds of currency that remained after the Depression were:
• United States Notes (Series 1953: $2 $5)
• Silver Certificates (Series 1953: $5 $10 -- Series 1957: $1)
• Federal Reserve Notes (Series 1950: $5 $10 $20 $50 $100)
And all that remained by 1970 were:
• Federal Reserve Notes (Series 1969: $1 $5 $10 $20 $50 $100 -- Series 1976: $2).
Until 1963 all United States currency stated that its value was "Payable to the Bearer on Demand," which reflected the circumstance that real money was originally considered to be gold or silver coin, not a paper document. In that year, however, when Silver Certificates were discontinued and the first $1 Federal Reserve Note and the last $2 and $5 United States Notes were issued, the ancient formula was deleted from the new series. A year later the last silver was eliminated from United States coins. Thus paper and tokens became United States money. This entire process, starting with the New Deal, or perhaps even the Civil War, and culminating in 1963, was unconstitutional. Article I, Section 10, Paragraph 1 of the United States Constitution says, "No State shall...make any Thing but gold and silver Coin a Tender in Payment of Debts." So the question is, if the States can't do it, this must mean that the Federal Government can. No... The Tenth Amendment says, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." The Constitution, as it happens, does not "delegate" the power to "make any Thing but gold and silver Coin a Tender in Payment of Debts" to the Federal Government. Therefore, government at no level has the power to make anything but gold and silver coin tender in payment of debts. James Madison himself called paper money a "wicked scheme." It is, when its purpose is to inflate debts and license fiscal irresponsibility by government (the greatest debtor). That is the kind of government we now have.
Federal Reserve Notes, until 1981
1969 1974 1977 1981
$5 1928 1934
1950 1963 1969 1974 1977 1981
1963 1969 1974 1977 1981
1934 1950 1963 1969 1974 1977 1981
$50 1928 1934 1950 1963 1969 1974 1977 1981
$100 1928 1934 1950 1963 1969 1974 1977 1981
$1000 1928 1934
$10,000 1928 1934
A new kind of currency was created by the Federal Reserve Act of December 23, 1913. The Federal Reserve System was initially designed to be a decentralized organization of no less than twelve Federal Reserve Banks: Boston (1-A), New York (2-B), Philadelphia (3-C), Cleveland (4-D), Richmond (5-E), Atlanta (6-F), Chicago (7-G), St. Louis (8-H), Minneapolis (9-I), Kansas City (10-J), Dallas (11-K), and San Francisco (12-L). The names of the banks and their characteristic number or letter have always appeared on Federal Reserve Notes and Federal Reserve Bank Notes issued by them. This assignment clearly reflects the distribution of population and economic development in 1914. It has not been modified since. The significance of the multiple Federal Reserve Banks and the decentralized system, however, has declined. The system was made a lot more centralized in the 1930's, as part of the aforementioned conclusion that only the federal government can be trusted with power over the economy, banking, and money. The Depression at the time was seen as resulting from the misbehavior of "speculators" and loose practices by the financial and stock markets. However, it is now much clearer that one of the prime villains at the beginning of the Great Depression was the Federal Reserve System itself, whose mistakes had nothing to do with lack of power or centralization. Indeed, the System could have responded better if it had been even less, not more, centralized than it was. Nevertheless, centralization continues, and the new, redesigned Federal Reserve Notes no longer bear the seal of their bank of issue, though the bank is still indicated, without name, by the letter and number code. Compare the Series 1996 $50 Federal Reserve Note with the previous Series 1993 $50 Federal Reserve Note [reverse].
Since Federal Reserve Notes were initially redeemable in gold (though perhaps only at the United States Treasury), they would have been just the kind of reassuring currency to supply to banks during a run. Since there was only a fractional reserve behind the Notes, however, the temptation would always be there to overextend them for political purposes. Although the Treasury had been unable to print money since 1878, it was now given an indirect ability to do so, whenever it could persuade the Federal Reserve to create money by buying United States securities itself, either directly from the Treasury or indirectly off the open market.
The problem is what happened during the Depression. When banking panics started (as unemployment abruptly jumpted from 6% to 15% at the end of 1930), the private Federal Reserve suddenly didn't trust other priavate banks enough to back them up. Unfortunately, so many banks were seen as insolvent and allowed to fail that it took the whole United States economy down with it. But the Federal Reserve could be proud of being financially solid itself! Failed banks means bankers out of a job. Perhaps even bankers committing suicide. But among all the Depression stories about window leaps on Wall Street, there don't seem to be any about leaps from the nearby Federal Reserve Bank of New York.
Thus the Federal Reserve System has become the last thing that was supposed to be possible in America: A Central Bank. And a political football. The inflation of the 1970's never was blamed on the Federal Reserve expanding the money supply too quickly, even though the popular economic theory of the time, Neo-Keynesianism, held that inflation could cause prosperity. That didn't work out very well. But it has been more obvious recently that the lower inflation of the 1980's and 90's has been the result of restraint in money creation.
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