Two of the primary sources for this article are G. Edward Griffin’s book The Creature form Jekyll Island and William Still’s informative documentary The Secret of Oz. If you do anything, please watch these videos, regardless of your political affiliations. In order to provide a solution to the economic nightmare we now find ourselves in, we must understand the underlying root causes. Griffin and Still have done yeoman’s work in exposing the dangers of debt-based economy for many years now. It is time we listened to them; and make our representatives in Congress listen as well.
In this installment of “Plutocracy of the Damned,” we’ll take a deeper look at the history of debt-free currency and the role of central banks in U.S. history, and the forces behind them.
The Money Changers
“Jesus entered the temple area and drove out all who were buying and selling there. He overturned the tables of the money changers and the benches of those selling doves.” –Matthew 21:12 (NIV)
In order to gain a clearer picture of how a debt-based economy eventually leads to de facto serfdom, it is worth reviewing history and mining its depths for insight into what can be done, and what was done, to combat the tyranny of enslaving entire populations with debt and draining away their wealth and riches into the greedy hands of a few plutocrats–the rule of the ultra-rich.
For those versed in the New Testament, it was written that Christ was one who never “shouted or quarreled in the street.” There is only one instance, as recorded in the Gospel, where Christ became violently angry. But first, let’s take a look at what was occurring at that time in Jerusalem that so enraged Jesus Christ.
When the Jewish people made their pilgrimage to Herod’s Temple on the Feast of Passover, they were required to purchase animals for sacrifice, food, etc. Naturally, many merchants would set up shop, so to speak, to facilitate the needs of the throngs visiting the Temple during Passover.
The Jews were required to make purchases at the Temple with what was called the half sheckel–a silver coin that was not emblazoned with a graven image–like the Roman Emperor, for example. The money changers at the Temple were able to corner the market on the silver coins and would charge whatever the market could bear, thus resulting in many of the poor being required to give everything they had, just to attend the Temple services–some could not pay.
This is when Jesus became physically enraged and turned over the tables of the merchants and money changers in the Temple and ran them out with a set of cords, exclaiming: “It is written, My house shall be called the house of prayer; but ye have made it a den of thieves.”
There is a very important concept to be learned from this historical account: he who controls the money supply (quantity) controls the wealth. It also exposes a weakness of only relying on precious metals like gold to back a currency, since the quantity of a precious metal like gold is very limited and easily monopolized by those who control the supply–the ultra-rich.
I must admit, this is the most important lesson I learned in my research: if money is not plentiful enough in proportion to the population, then those who can control the money supply sit atop a mountain of wealth and riches, while those at the bottom sink ever deeper into monetary debt. The goldsmiths can collude to either stifle the supply or release it–a true monopoly.
The Mechanics of Fractional Reserve Banking
Before we go any further, it will behoove the reader to get a basic and concise understanding of what fractional reserve lending is really all about. Here is a short video that helps explain the concept. Moreover, William Still, in his ground-breaking documentary The Secret of Oz, gives an excellent and definitive description of the practice of fractional reserve banking–highly recommended.
The Tea Party
Prior to the Boston Tea Party, the colonies issued a debt-free currency called Colonial Scrip, whose quantity was carefully controlled to allow the free distribution of goods and trade between the inhabitants of the colonies, while at the same time preventing hyper-inflation by controlling the money supply in proportion to the size of the population. Prosperity bloomed within the colonies at this time. So effective was Colonial Scrip, the British Monarchy questioned Benjamin Franklin, wanting to know how such prosperity had been attained in the New Land. The following quote is attributed to Benjamin Franklin:
“In the Colonies, we issue our own paper money. It is called Colonial Scrip. We issue it to pay the government’s approved expenses and charities. We make sure it is issued in proper proportions to make the goods pass easily from the producers to the consumers. . . . In this manner, creating ourselves our own paper money, we control its purchasing power and we have no interest to pay to no one. You see, a legitimate government can both spend and lend money into circulation, while banks can only lend significant amounts of their promissory bank notes, for they can neither give away nor spend but a tiny fraction of the money the people need. Thus, when your bankers here in England place money in circulation, there is always a debt principal to be returned and usury to be paid. The result is that you have always too little credit in circulation to give the workers full employment. You do not have too many workers, you have too little money in circulation, and that which circulates, all bears the endless burden of unpayable debt and usury.” [Web of Debt, pp. 40-41]
Of course, not all agree with this history, but I will make my appeal to authority William Still’s work in the Secret of Oz. Naturally, history is always controversial … and it should be, for obvious reasons. Colonial Scrip did indeed exist. The fact whether certain self-described historians consider it “illegal” is besides the point. By the way, the British Parliament did consider it illegal and outlawed its use. WINK!
The British Parliament’s maneuver to ban Colonial Scrip led directly to the Stamp Act, which required that all taxes be paid in gold. Since gold was a precious commodity, the colonists were hard-pressed to pay the tax in gold, which led to the Boston Tea Party. Once again, this bit of history exposes the dangers of a pure gold standard–meaning, the one who controls the money supply controls the wealth.
A Brief History of “Fiat Money”
William Still points out, in Secret of Oz, two times in history where debt-free currency worked fabulously well, and the nefarious forces that soon sprung forth to crush it.
At one point, the Romans coined a debt-free currency from inexpensive metals–copper and bronze. This money was plentiful and its quantity (supply) was tightly controlled. An era of prosperity sprang forth and the building of a great empire ensued.
Unfortunately, for the Roman people, eventually, Julius Caesar declared himself Emperor of Rome and he decreed a gold standard–all money must now be backed up with gold in the Roman Empire. As happened with the British Stamp Act in the colonies, so happened in Rome–only the ultra-rich had a corner on gold; the average citizen did not have easy access to such a precious commodity. As a result of Caesar’s edict, the money supply was contracted by 90%, plunging the Roman Empire into economic chaos. A short time later, Rome was sacked by the Visigoths.
Another great empire that experienced prosperity and progress as a result of debt-free economy, was the British Empire. King Henry of England in the 1200’s introduced an interest-free currency known as the Tally Stick. King Henry was angered by the money changers of his time and boldly exercised his sovereignty by creating a currency that used sticks as money. It worked amazingly well; a great deal of the British Empire was built using this form of currency.
This gets back to the concept, as William Still so eloquently points out in his documentary Secret of Oz, that it doesn’t matter what a currency ends up being, as long as its supply is controlled–it must have value between the two concerned parties–meaning: an equitable transaction that serve both parties satisfactorily–the quintessential definition of prosperity.
Opponents of this sort of debt-free currency refer to it as “fiat money”–which is rather ironic since the current economic system creates money out of thin air and is backed up by nothing (e.g. Federal Reserve Notes, i.e. money).
The Bankers Meet Old Hickory
To recap our history, in 1791, Alexander Hamilton formed the First Central Bank in America; it was a privately owned enterprise, which violates Article 1, Section 8 of the U.S. Constitution–meaning, Congress shall have power to coin money and regulate the value thereof. The first central bank in America was given a 20-year charter.
From my research, it is disappointing that such an undeniably accomplished man as Alexander Hamilton (cf. Federalist Papers) would become so closely allied with the European bankers of his day. But, this has always been my biggest criticism of Hamilton–his penchant for big government.
Hamilton’s allegiance to the inner-cabal of central bankers is disturbing, to say the least. But, as is the beauty of America, not all agreed. In 1811, the central bank’s charter came up for renewal. The press openly attacked it as a “great swindle.” The charter was defeated by by just one vote in Congress. The Bank of England–Nathan Rothschild being the controlling interest–vowed that if the U.S. Central Bank Charter was not renewed a disastrous war would result. Five months later, the War of 1812 commenced–which culminated in the burning down of Washington, D.C. by the British Army.
In 1813, Jefferson wrote:
“Although we have so foolishly allowed the [power of issuing our own debt-free money] to be filched from us by private individuals, I think we may recover it …. The states should be asked to transfer the right of issuing paper money to the Congress, in perpetuity.”
Following the War of 1812, the ever-persistent bankers arose from the primordial ooze to insist on a Second Central Bank in 1816. Thomas Jefferson lashed out at then Secretary of the Treasury Gallatin:
“The treasury, lacking confidence in the country, delivered itself bound hand and foot to bold and bankrupt … bankers pretending to have money, whom it could have crushed at any moment.”
Despite the Jefferson’s protests, the Congress formed yet another central bank in America. But then the bankers ran head-long into Andrew Jackson–the hero of the War of 1812. The banks poured millions into Jackson’s defeat, but to no avail. The American people were fed up with a centrally-owned private bank and wanted out. Jackson won in a landslide.
The insipid bankers tried to have the Central Bank charter renewed a full four years early, thinking that Jackson would not want such a controversy with the bankers prior to an election campaign. They were wrong. Although Congress passed the renewal bill, Jackson vetoed it. This was a big ole middle-finger to the masters at the Bank of England.
“It is easy to conceive that great evils to our country and its institutions might flow from such a concentration of power in the hands of a few [who are] irresponsible to the people.
“Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence … would be more formidable and dangerous that a military power of the enemy ….”
—1832, President Andrew Jackson
Nicholas Biddle was the head of the 2nd Central Bank and was intoxicated by his own power he wielded over the United States. He threatened to cause a depression if Jackson’s veto was not overturned.
“Nothing but widespread suffering will produce any effect on Congress…. Our only safety in pursuing a steady course of firm [monetary] restriction–and I have no doubt such a course will ultimately lead to restoration of the currency and the re-charter fo the Bank”
–1832, Nicholas Biddle
Biddle made good on his threats. America was plunged into a deep depression. Property was foreclosed on and picked up for pennies-on-the-dollar. Jackson responded forcefully:
“You are a den of vipers. I intend to rout you out and by the Eternal God I will rout you out.”
–1832, President Andrew Jackson
The press and the American people sided with Jackson; the Second Central Bank’s charter was not renewed. The ability of a private corporation to issue our nation’s currency was cut off at the knees. Jackson then went about paying of the nation’s debt–a debt brought about by the central bank borrowing the nation’s money supply into existence. Which lends credence to the old adage “you can’t drink yourself sober,” nor can one borrow their way out of debt. In 1835, Jackson distributes a $35 million surplus–the only time in history the United States had balanced its books.
As is usually the case with anybody who challenges the international banking cabal effectively, an assassin attempted to kill Jackson, but fortunately both pistols jammed. Following the failed attempt on his life, Jackson said the following:
“The bold effort the present bank made to control the government … the it had wantonly produced … are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.”
–President Andrew Jackson
Recently we heard the head of the Fed threaten to take our current economy over the “fiscal cliff” if their demands were not met. Vaguely familiar, no?
In the final installment of “Plutocracy of the Damned,” we’ll examine Lincoln’s “Greenback” debt-free currency and the backlash from the central bankers. We will also take a critical look at the current role of today’s Federal Reserve and how its policies are driving not only the U.S. toward a full-blown depression, but the entire global economy as well. Most importantly, an examination of viable solutions will be provided.
- Plutocracy of the Damned (Part 1)
- Plutocracy of the Damned (Part 2)
- Plutocracy of the Damned (Part 4)