”Typically, economists do not bother to study the history of money; it is much easier to imagine it and to deduce the principles of this imaginary knowledge.” – Alexander Del Mar (1)
To understand why the world looks the way it does today, one must understand how the global financial system works. Moreover, one must have done their historical homework. Here is a history of how the banking power emerged and how the forces behind it managed to seize the power to enslave all of humanity.
Babylon
4500 years ago, people in Mesopotamia (modern-day Iraq) began using silver as a medium of exchange. Silver was weighed and divided into smaller pieces. Silver of different weights had different values, creating the standard and the path to debt-free money. North American Indians used beads made of seashells as a medium of exchange. This describes a relative and agreed-upon value. Local money can be used within organizations or cooperatives. 2000 years later, the first coin was minted in Lydia (modern-day Turkey). Lydian coins were a mixture of silver and gold and were flat. The word ”coin” comes from the act of minting. The word ”money” comes from the Latin word ”pecunia,” which means livestock. Coins could have their value anchored in a versatile way to:
- The mineral kingdom, like gold, silver, or copper.
- The vegetable kingdom, representing the value of agricultural land.
- The animal kingdom, representing the value of livestock.
With money as a medium of exchange, people could replace barter and the exchange of various kinds of labor, like between a hunter and a craftsman. What we call interest emerged early on but had a less flattering name: ”usury.” In other words, it’s a very ancient phenomenon and was controversial. Even in the Bible, it is considered something objectionable. Usury was then defined as the taking of interest. About 3,700 years ago, during the reign of King Hammurabi, a form of banking developed, and there are records in the laws of that time indicating that, in some cases, interest was charged on loans. One of Hammurabi’s laws describes a situation in which a man has received silver from a merchant and cannot pay for it. In this case, the man says the merchant can take as many dates as he wants from his orchard, but the merchant is not obliged to accept this arrangement. Instead, the man himself should pick the dates and pay back the silver with interest to the merchant according to the sale document that has been drawn up.
Grekland
The Greek philosopher Aristotle believed that democracy was the best form of government, while tyranny was the worst. He considered oligarchy, where a few individuals rule by virtue of their access to capital or inherited titles, to be the second worst. This system still prevails on Earth today, even though most people live under the illusion that it is not the case.
In the 4th century BCE, Aristotle wrote that money is an invention without intrinsic value, whose sole purpose is to facilitate the exchange of value between different goods and services. He argued that money, in itself, should not be considered a commodity and believed that the introduction of debt-based money would create problems, as people could confuse real economic resources with fictitious ones, thereby losing sight of what economics truly entails. He explained that people had previously only been familiar with an economy focused on basic needs. They recognized that the Earth’s resources were finite, as were people’s needs. Through the introduction of debt-based money, it became possible to create and lend an infinite amount of money. By blurring the line between nature’s resources and money, people fell into the illusion that money could create infinite value.
In his work ”Politics,” we can see that the Greeks were aware that there was a shift from the previous common form of loans between individuals bound by social ties to a more market-oriented, professional business. The fundamental rule in antiquity was that the state did not interfere in monetary matters, and professional moneylenders in Athens did not hesitate to charge exorbitant interest. They lent smaller sums for short periods and did not shy away from using brutal methods to ensure repayment. It was primarily poorer people without property as collateral who were forced to turn to these usurers.
Roman Empire
The Roman Empire had both bankers and a kind of stocks. There were currency transactions, mortgages, and trade loans. However, there was no banking system as we know it today, which means impersonal operations that affect all depositors in the event of bankruptcy without anyone being held individually responsible. Individual wealthy aristocrats acted as lenders, and profits from trade were used, among other things, for monetary loans, where interest on loans was common. The absence of a market essentially excluded the possibility of social mobility through the creation of commercial wealth. Like the Athenians, the Romans are also believed to have lacked legal guidelines for players in the loan market, and without such rules that create obligations between principals and third parties, it was almost impossible for the middle class to move up the hierarchy, especially in a society where private wealth was required for political ambitions.
From 264-31 BC, Rome established itself as the leading imperial power in the Mediterranean. After the conflicts with the powerful Carthage and the long Punic Wars, they had amassed great wealth. Just like in Greece, Roman generals were allowed to keep their conquests, making the already wealthy even richer, while the poorer became even poorer. In the last century BC, there was political unrest in the Roman Empire, partly because the Romans had not adapted their political system to the growing empire. Lack of protection against exploitation of the provinces generated strong resentment against Roman rule. Attempts to reduce injustices had been made. Public tribunes were untouchable officials with the task of protecting the poor from the abuses of the rich.
The Gracchus brothers, Tiberius and Gaius, were two tribunes who tried to reduce the power of money changers by reforming laws against usury and limiting legal land ownership to 500 acres. Unemployment was high as the wealthy used slaves on their estates, but as Roman citizens, the property-less had the right to vote in the assembly, and politicians tried to gain their votes by offering bread and entertainment. However, misery spread, and Tiberius Gracchus proposed that large land holdings should be distributed among the poor. He belonged to the highest political elite, and it is not surprising that the wealthy elite was furious with the proposal and ensured that Tiberius was murdered.
Ten years later, the brother Gracchus attempted to pass a similar reform and was later found dead. It was said that he had committed ”suicide.” Later, Caesar was crowned Rome’s ruler for life. During Caesar’s time in power, he implemented a series of reforms, including the distribution of land to the poor and ensuring that provincial governors did not impose excessive taxes. When he also challenged the powerful bankers and began minting his own coins to increase the welfare of the people, his fate was sealed. In 44 BC, Caesar was assassinated with 23 dagger blows by a group of senators. However, he likely did not say, ”Et tu, Brute,” which comes from Shakespeare’s play. According to the historian Plutarch, Caesar instead pulled his toga over his face when he saw that Brutus was one of the assassins.
Two thousand years ago, when the Jews came to Jerusalem to pay temple tax, they could only do so with a specific coin, the half-shekel, the only coin of fine silver at that time. The half-shekel had a standard weight and did not bear the image of the pagan emperor. Therefore, it was the only coin worthy before God for the Jews. However, these coins were not readily available in larger quantities because money changers had a monopoly on them and raised the price as high as possible. This allowed them to make significant profits, and the Jews had no choice but to pay what the money changers demanded.
Chinese Dynasties
From 618 to 907, the Tang Dynasty ruled in China, and the Chinese were the first to use paper money. Around 1000, Chinese merchants in the Sichuan province started using paper money. However, due to fraud, the Song Dynasty took over the right to issue paper money in 1024, giving rise to the first state-sponsored banknote issuance.
Temple Knights
It is usually said that the world’s first bankers were the Knights Templar. They received vast wealth from prosperous Christians who financed the Crusades. The Templar Knights were the wealthiest organization in all the countries where they settled, and their temples in London and Paris became financial centers.
Goldsmiths
The modern banking system was born when wealthy individuals began depositing their gold and silver in the vaults of goldsmiths. The goldsmiths would then issue receipts for the gold and silver they received, and the owners could settle their debts by withdrawing portions of their deposited assets. However, it was rather impractical to transport precious metals, so a system was developed where when you bought something or paid a debt, ownership of the gold and silver would change hands, but only on paper, while the actual metals remained in the vaults. This is how banknotes came into existence. After a while, goldsmiths realized that very few people actually withdrew substantial amounts of gold, and no one else knew how much gold was held in their vaults. They came up with the brilliant idea of counterfeiting receipts for gold that didn’t exist. They could use these receipts to live a life of luxury and lend the rest at interest.
This forms the basis of today’s banking system, where banks lend out money that doesn’t exist and collect interest on it. This setup benefits a relatively small elite, while the majority of people worldwide live in debt, with 2.5 billion individuals trying to survive on less than $2 a day. However, this is by design – the world’s banking system is built on debt, which means people are not supposed to be economically independent and free, unless they belong to a privileged elite. For example, if goldsmiths had 2,000 pounds of gold in their vaults, they could lend out around 20,000 pounds in paper money and charge interest on these funds without anyone discovering the deception. In this way, they could amass more and more wealth, using it to accumulate even further.
This abuse and deception constitute today’s banking system. The system, where more money is lent out than is covered by reserves, is evident through terms like ”reserve ratio,” meaning that banks only have a small portion of the coverage for what they lend out. If all account holders demanded their funds simultaneously, the bank would go under before even a fraction of the money was paid out. But sometimes, the bubble bursts anyway, resulting in a situation like the global economic 9/11 we experienced last autumn, where once again the masses are expected to foot the bill for the elite, enabling them to reload for further actions that enslave and fleece ordinary people.
The economic development of Western Europe is not primarily rooted in legal trade, solid work, and innovation, as history books often suggest. Our prosperity is largely built on exploitation, slavery, and genocide. The capital that facilitated investments in trade and industry, creating Western Europe’s industrial development and prosperity, is largely a result of colonial powers’ slaughter and exploitation of indigenous populations and countries in America, Africa, and Asia. But more on this later.
In 1024, money changers controlled the money supply in medieval England. Paper money began to be used because the receipts issued when depositing gold with goldsmiths started to serve as money. They had now hatched an idea of how to amass immense wealth. The following example illustrates how they could proceed in practice:
The goldsmiths decide to use the same interest rate for both creditors and borrowers, so those who deposit gold receive a 5% interest on it, and those who borrow money pay a 5% interest rate. Since the goldsmiths lent out ten times more money than they had in the vaults, it means they paid out a 5% interest to the creditors while collecting 50% interest from borrowers. Consequently, they could systematically flood the market with money by lending generously and then suddenly become very restrictive with lending, reducing the money flow in society. When people couldn’t pay their debts to them, the money lenders could demand the seizure of their assets, thus acquiring real values from the general public.
In a similar way, today’s bankers and speculators amass astronomical sums from the unsuspecting masses who, amidst the daily grind of wage slavery, commuting, picking up kids from daycare, and fast food consumption, are efficiently indoctrinated by the media with terms such as economic boom, recession, depression, and low economic times – all of this naturally a result of a ”natural” process or ”unexpected unfortunate circumstances” that sometimes just ”happen.” Later, these bankers, directors, and politicians who undermine the people and declare the necessity of ”tightening our belts” award themselves bonuses and pay raises without flinching. All the while, the public is expected to forget (which they often do), and these same forces can continue to operate and, through a form of national Stockholm syndrome, even get re-elected by the very people they so blatantly exploit.
The counting rods
In the year 1100, Henry I became the King of England, and he adopted a system using counting rods. During that time, the ”in natura” system was in use, which meant that people paid taxes with goods based on an estimate of the land’s yield when cultivated by serfs and low-ranking peasants who were obligated to pay taxes. When they kept records of the yield, scribes used a wooden rod with grooves, called a ”talea,” which means rod/twig. This was more efficient than relying solely on memory or the grooves on barn doors that were previously used. To prevent fraud with the rods, they were split lengthwise so that each party had half of the grooves, allowing the peasant and the local authorities to retain their respective halves for later comparison.
The Medici Family
In 1407, a form of banking was established in Casa San Giorgio in Genoa, Italy. Several noble and wealthy families, including the Grimaldis, who now rule over Monaco, were involved in establishing the bank. The ruling banking oligarchs naturally exercised significant influence over the politics of the time, as they would continue to do many times throughout history. They lent large sums to several European rulers, including Ferdinand and Isabella of Spain, who, thanks to the loans, could conquer large parts of the Americas and carry out extensive exploitation and terror against the indigenous peoples there. Of course, the bankers could influence the political direction of the countries where they practiced lending through their power.
In 1433, Cosimo de Medici took over political power in Florence through a coup. His family would go on to have a significant influence not only in Italy but also across Europe. Florence, known as a center of education and culture, was considered by some to be the birthplace of freedom on Earth. However, this was far from the truth. In reality, Florence had been under feudal rule with lords and vassals. People in all social classes were clients, depending on influential lords from powerful families, known as patroni, who protected them in various ways, either economically through loans, legally by advocating for them in court, politically by helping them obtain offices, or facilitating advantageous marriages for their sons and daughters. It was practically impossible to make any progress in Florence without recommendations from a powerful patronus. The city was teeming with both the poor and slaves, while the wealthy indulged in luxury and excess. The Medici family had a court of sycophants who followed their every command, and they ruled with absolute authority. Despite an official ”democracy,” in reality, tyranny prevailed, with the Medicis controlling everything. Their men held all high offices in the city and dictated the terms.
Elisabeth I
In the 16th century, Henry VIII decided to use counting sticks as evidence of taxes paid to the crown. This led to a demand for counting sticks, which then spread and were accepted as a form of currency. Counting sticks became the only type of money in England. However, the king eased the laws against usurers, and bankers began to regain ground. Both gold and silver coins began to circulate more widely, and moneylenders made significant profits. From 1553, Queen Mary ruled, and when she introduced stricter laws against usury, the angry money changers let gold and silver remain in the vaults, causing the economy to collapse, and misery to spread once again. In 1558, she was succeeded by Elizabeth I, and to take control of the economy, she decided to mint her own gold and silver coins, thus regaining power from the money changers.
The First Central Banks
The 80-year war with the Spaniards in 1583 drove thousands of Protestants and Jews from France and Flanders in the south, who came with both assets and knowledge to the Amsterdam region in the north. In 1609, Europe’s first central bank, Amsterdam Wisselbank, was established in the Netherlands. It would prove to be very influential and make Amsterdam the world’s financial capital. They engaged in all types of financial services and goods, including commodities, stocks, marine insurance, currency exchange, and more. Naturally, the place became a melting pot for speculators. (The word ”speculator” originally comes from Latin and means ”spy.”) The bank did not pay interest on deposits and did not give loans but raised capital through bond issuance and lotteries. They managed to become the capital-strongest nation of the 17th century through colonialism and a monopoly on spice trade from the East Indies.
Sweden’s central bank, Riksbanken, located in Riksbankshuset, Stockholm, was founded in 1668 under the name Riksens Ständers Bank. The bank was founded when Stockholm Banco (also called ”Palmstruch’s bank”) went bankrupt in 1668 and was acquired by the Swedish Parliament. Stockholm Banco was Sweden’s oldest bank and the first European bank to issue banknotes. The bankruptcy was due to this issuance of banknotes, and the mistrust following the founder Johan Palmstruch’s setback led to a long delay before authorization was given for new banknote issuance.
The baton was then taken over by the Netherlands from the Netherlands to Britain, which did everything in its power to continue slaughtering and conquering. The losers were the millions enslaved, raped, and murdered indigenous people in America, Africa, and later Asia, as well as all the hungry, sick, and poor people populating the dirty cities in, for example, England. The biggest winners in the constantly recurring and expensive wars were, then as now, the bankers. In 1694, after more than 50 years of costly wars, British politicians once again came to the bankers and asked for loans. They agreed to grant this on the condition that they could establish a private central bank in the name of the state, where they could continue to create capital out of nothing by lending money that did not exist and charging interest on it. This created ”The Bank of England,” which was not England’s bank at all but the bankers’, although by such a name, they deceived the people into thinking it was a government institution.
The idea was that, as usual, they would sell shares to get started. It was decided that private investors (whose names were kept secret) would contribute 1.2 million pounds in gold coins, but in reality, they only raised 750,000. Nevertheless, they quickly started and, as usual, they lent out ten times more than they had and charged interest on it. The government could borrow as much as they wanted as long as they issued guarantees in the form of more taxation on the population. Four years later, the government’s debt to the bank had risen from 1.2 million to 16 million.
So the technique is as follows:
If the capital circulating in a country is, for example, 6 million, and its central bank prints an additional 16 million and then sends it out to the market through loans and investments, the value of the 6 million that was circulating before the bank was created will decrease because it now constitutes only 25% of the economy. It also means that the bank now controls 75% of the country’s economy through the 16 million they have sent out. This, in turn, leads to inflation, which means that people have less to spend and must go to the bankers and borrow more. Then when a sufficient percentage of the population is in debt, they tighten the money supply by refusing to give out more loans.
Then they bide their time… and voila! When several borrowers go bankrupt, they reap the rewards by seizing their assets. Diabolical and ingenious at the same time.
Rothschild family
In 1760, a new figure entered the stage. He was born as Mayer Amschel Bauer but would become known by another name. Amschel Moses Bauer was a cloth merchant and moneylender in Frankfurt who didn’t attract much attention. However, his descendants would play a significant role in world history. His son Mayer Amschel was born in 1744 and was sent to a rabbinical school in Furth when he was 10 years old. His studies were interrupted when both of his parents died within a year, in 1755-56, and Mayer was sent to Hannover to apprentice at Wolf Jakob Oppenheim’s bank firm, which had previously had some dealings with the Bauers. Young Mayer now had the opportunity to see up close how things worked in the higher circles since Oppenheim also served as a banking agent at the court. His grandfather Samuel Oppenheim had been an agent to the Austrian emperor, and an uncle was an agent to the bishop of Cologne. Mayer began to collect rare coins and medals, an interest mainly cultivated by the aristocracy.
Already in 1760, at the age of 16, Mayer was well-versed in the world of finance and had also managed to acquire a substantial collection of valuable coins and medals. When his apprenticeship was over, he returned to Frankfurt, and at the age of 17, he started his own business. Quite soon, he made a good profit by selling his coin collection to various wealthy men, the most prominent of whom was the Prince of Hesse-Kassel.
Mayer’s father had hung a red sign (”rot schild” in German) above the entrance to his office, and Mayer decided to change his name from Bauer to Rothschild. After handling some other business for Prince William, Mayer asked for the prince’s permission to call himself a court agent, which was granted. He then hung a sign outside his business premises that read, ”M.A. Rothschild appointed court agent to His Royal Highness, Prince William of Hanau.”
In 1770, he married Gutle Schapper, the daughter of Wolf Salomon Schnapper, the court banker to the Prince of Saxe-Meiningen. This not only brought additional capital in the form of a dowry of 2,400 guilders but, more importantly, further valuable contacts in the upper echelons of the financial world. Between 1771 and 1792, they had 10 children, of which Amschel Mayer (1773), Salomon Mayer (1774), Nathan Mayer (1777), Carl (1788), and James (1792) received extensive education from their father in banking and business.
From being a moderately prosperous antique dealer in the early 1790s, Mayer was one of the richest men in Frankfurt by 1797. His business soon expanded to the rest of Germany and large parts of Europe. The plan was to send all five sons to Europe’s financial centers and gradually take control of the money power in each country. The first to move was Nathan, who settled in London.
Since the establishment of a privately owned central bank in England in 1694, the British had fought four wars in Europe, and by the mid-1700s, they were the dominant world power. But it had come at a cost, not only in terms of human suffering and general destruction but also in astronomical sums of money. The British government’s debt to the bankers had now reached £140 million!
Colonial scrip
In the American colonies, by the late 1700s, they had printed their own money, known as Colonial Scrip. They printed this money in proportion to the needs of trade and industry so that products could flow from producers to consumers as easily as possible. This allowed them to create their own paper money, control its purchasing power, and pay no interest to anyone.
This development set off alarm bells among the major bankers in England. The Americans had initiated a system that granted them freedom and independence from central banks. This was a threat that had to be stopped. The British swiftly passed ”The Currency Act” that same year, which prohibited the colonies from printing their own money and forced them to pay their taxes in gold and silver. This was just one in a series of laws and restrictions that the British would impose on the colonies to prevent them from becoming too independent. As a result, poverty increased, misery spread, and unemployment skyrocketed.
”The creation and circulation of credits by revolutionary assemblies in defiance of the efforts of the Crown to suppress paper money in America were so bold and lawless, so insulting to the Crown, that forgiveness thereafter was impossible,” wrote historian Alexander Del Mar. ”There was only one course for the Crown to pursue, and that was to suppress and punish these acts of rebellion.”
And further:
”Consequently, the bills (that the Americans printed), which historians sometimes arrogantly and prejudicially called the instruments of an irresponsible policy, became the standard of the revolution. They were more than this: they were the Revolution itself.”
The British not only imposed new taxes and duties but also introduced several regulations that, in various ways, limited the colonists’ ability to develop independently from Britain’s involvement. For example, it was forbidden to build blast furnaces, forges, and to receive foreign ships in the ports. The colonists had no voting rights or representatives in any of the parliaments in London.
However, the Americans resisted and, through boycotts of British goods, managed to repeal all taxes and duties except the one on tea. This led to ”The Boston Tea Party” on December 16, 1773 when 60 colonists sneaked aboard three cargo ships and threw 342 crates of tea into the water. The British continued to enact tax laws and restrictions on the colonies, eventually leading to the American Revolution, where the colonies declared their independence.
The colonies had been drained of silver and gold due to British taxes and were now forced to print more money to finance the War of Independence. At the beginning of the revolution, America’s treasury held $12 million, but by the end of the war, it had risen to $500 million (partly due to British counterfeiting and flooding America with counterfeit money), rendering the money almost worthless.
As Benjamin Franklin said:
”The colonies would gladly have borne a little tax on tea and other matters if it had not been that England took away from us our money, which created unemployment and dissatisfaction.”
In 1776, America declared its independence, George Washington was elected as president, and they drafted their own constitution.
Bank of north America
After all the conflicts with the British, the USA was in great need of capital, and in 1781, Robert Morris, the country’s financial adviser, along with his partner Thomas Willing and the lawyer and politician Alexander Hamilton, opened a privately owned central bank. This marked the birth of the ”Bank of North America.” The bank’s charter (permission to operate) stated that $400,000 of private funds should be invested, but Morris couldn’t raise that amount. Instead, he used his political influence to secure gold borrowed from France as collateral for the bank. He then loaned money to himself and his friends to invest in the bank’s shares, and the circus began again. The value of the American currency continued to decline, and the bank’s charter was not renewed when it expired in 1785. One of those who helped put a stop to the greedy bankers was the politician William Findley from Pennsylvania, who stated:
”This institution, which has no other principle but that of avarice, will never be varied in its object to engross all the wealth, power and influence of the state.”
In 1787, at the recommendation of the Federalists, a constitutional convention was held to find a way to transform the union of states into a stronger national government. Opposing them were the Anti-Federalists, most of whom were land-owning farmers. Americans were familiar with various forms of government, from feudal ”the rule of the strong” to monarchies sanctioned by ”divine right.” For more self-regulating societies, they had the old examples of democracy in Athens and the republican period of Rome.
This antagonism between the two ideologies was embedded in the Constitution. Hamilton’s desire for a more British monarchical model contrasted with the Constitution, which aimed to strengthen the national government but also to provide a wise distribution of power, which, in combination with Madison’s ”Bill of Rights,” was meant to prevent an authoritarian government. The Constitution provided the Federalists with a stronger government, and the Anti-Federalists were reassured by the distribution of power. The problem was that the Constitution had left a loophole that Jefferson and his allies had overlooked. This mistake would play into the hands of the banking elite and lead to much turmoil and struggle, particularly for Jefferson and Andrew Jackson in the coming decades. The Constitution had not clearly defined the monetary power in the new nation. Politically and religiously, the ability for authoritarian rule over the country had been regulated, but not monetarily. The reason for this was that Washington, Adams, Jefferson, and the other authors of the Constitution did not have a clear understanding of the nature of money, i.e., what money fundamentally is and how it should be defined. This is something that has been debated for a long time in history and continues to be so. The question is whether money is a concrete means of power that is part of a commodity, such as gold, or whether it is an abstract social invention, a legal institution?
Does money derive its value from the material it is made of, or from its acceptance in exchange, resulting from government sponsorship and legal requirements? Or is it a hybrid, a combination of these factors? If money is primarily a commodity, suited to conducting business and deriving its value from ”inherent” properties, it can be seen more as a creation of merchants and bankers than of governments. If, on the other hand, the true nature of money is an abstract social institution that is part of the law, a legal authority, then it is more a creation of governments, and the Constitution would have a better basis for handling it satisfactorily. The Calvinist minister John Witherspoon, one of the signers of the Declaration of Independence, anonymously wrote a book attacking government-issued money and advocating for Adam Smith’s view that only gold and silver are money.
Since ancient times, both philosophers and economists have had great difficulty determining what actually gives a commodity its value and price. Is it the amount of labor expended in producing the commodity? Or is the commodity valuable because it can be used for something and its use promotes life and well-being? The theory of pricing and valuation, called ”value theory,” deals with the theory that explains the value of a commodity. According to Aristotle, a commodity’s value was tied to its utility.
Morris, Willing, and Hamilton acted skillfully and with the assistance of European bankers. They lobbied enough members of Congress to pass a new privately owned central bank, ”The First Bank of the United States,” modeled after the English system. The question now was whether the bank or the government should issue the notes. Would the profit from issuing currency benefit the entire nation, or the private bank? Gold and silver served as a smokescreen; what the bank directors cared about was the legislation regarding the money. They knew that all that was needed to give value to the paper notes was for the government to accept them as payment for taxes. Of the bank’s $10 million, only a tenth was paid in gold; the rest was accepted in the form of bonds, which Hamilton had changed from face value to full value. The money for the private bank essentially came from the American people.
Thomas Jefferson, one of the Founding Fathers of the American Constitution and a future president, was the Secretary of State at the time. In a letter to his political colleague John Taylor in 1816, he wrote:
”I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jackass paper money, that they won’t stop short of its entire annihilation, which will be a blessing of the first order.” (6)
Persuaded by Hamilton, Washington agreed to charter the bank on April 25, 1791, and a 20-year contract was established. In the first five years after that, the government borrowed $8.2 million, and prices in the country increased by 72%. When the bank’s charter expired in April 1811, Congress, largely thanks to Jefferson’s efforts, voted against its renewal, and the bank was liquidated. It was then revealed that three-quarters of the bank was owned by English and Dutch interests. This led the British to declare war on the USA the following year. However, the British already had their hands full fighting the French and were unable to defeat the Americans.
By the turn of the 19th century, France had a central bank similar to England’s, and one of those who found it to be a nuisance was a certain Napoleon Bonaparte. Despite having appointed some of his relatives to the bank’s board, he never trusted the bank. Napoleon argued that when a government is dependent on banks for money, it is the bankers and not the government that rule. Those who understood how the game worked knew that he was right.
In the early 1800s, Prince William of Hesse-Kassel was one of the richest men in the world. In 1785, he had inherited the largest family fortune in Europe. Part of it had been accumulated by the family by leasing troops to Britain in the war against the colonies. During the Napoleonic Wars in 1806, William fled to Denmark, and his treasurer, Buderus von Carlhausen, who had responsibility and power over the fortune, allowed Amschel Rothschild to manage £600,000. Rothschild had his son Nathan use them for his own investments, including in the East India Company.
In 1812, Amschel Mayer Rothschild passed away, and his five sons were now positioned as follows: Amschel Jr. (Frankfurt), Salomon (Vienna), Nathan (London), James (Paris), and Carl (Naples). The most prominent of these bankers was Nathan, who was already a powerful businessman in England. Soon, he would become even more powerful. The Rothschilds financed both sides in the Napoleonic Wars and profited greatly from it.
On June 18, 1815, Napoleon and Wellington’s forces met at the Mont-Saint-Jean hill near Waterloo, two miles south of Brussels. Napoleon’s army consisted of 73,000 men, and Wellington’s had 67,000. Early reports suggested victory for Napoleon, but ultimately, after more than 8 hours of fighting and with the help of Blucher’s German army that arrived at 4 in the afternoon, Wellington’s troops won. Nathan Rothschild had an agent named Rothworth nearby, and when he saw that Napoleon had lost, he quickly rode to Brussels and then to Ostend, where he paid a sailor 2,000 francs to take him to England.
Rothschild knew this was a golden opportunity to make huge profits. The people in England, including speculators in the stock market, were still unaware of the outcome of the battle. When Rothschild, known for his inside information, started selling government bonds in massive quantities, it was immediately interpreted as Wellington’s loss, causing the value of the bonds to plummet. As masses of actors in the stock market began panic-selling bonds, Rothschild’s agents bought them up. When news of Wellington’s victory reached the British Isles, the value of the bonds skyrocketed, and Rothschild made an enormous profit. Now, he was the one controlling Britain’s economy.
In 1817, France began securing loans to boost its economy, including through the French bank Ouvrads and Baring Brothers in London. In October of the same year, Rothschild’s agents began buying enormous amounts of French government bonds, which then rose in value. On November 5, they were dumped on the open market, causing the bonds to take a nosedive and a financial panic to ensue. Rothschild began taking control of the French economy as well. In a letter to President Madison, his political colleague Governor Morris, who had worked in the banking world for several years (including under Robert Morris and Alexander Hamilton, the creators of the first central bank in America), and had seen the game from the inside, wrote:
”The rich will strive to establish their dominion and enslave the rest. They always did. They always will.” (7)
According to Patrick Carmack, a judge and a member of the US Supreme Court, who had a background in the banking world and was the man behind the documentary ”The Money Masters,” and Charles Collins, a lawyer and banker who researched the matter, Robert Morris and Hamilton were tools for the international bankers. Madison was succeeded by James Monroe, and in 1823, he created the ”Monroe Doctrine,” which stated that any interference by European powers in the affairs of the Western Hemisphere would be seen as an unfriendly act towards the USA, and, in return, the USA would not interfere in European conflicts.
Andrew Jackson’s war on the bankers
In 1829, Andrew Jackson entered the stage, and this is where the international bankers would meet a formidable opponent. He had participated in the Revolutionary War against the British, and after defeating them in the Battle of New Orleans in 1812, he became something of a national hero. Jackson was a passionate opponent of the financial powers, who even attempted to renew the 20-year bank charter four years before it expired. The President vetoed it and stated:
”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 men irresponsible to the people. Their power would be great whenever they might choose to exert it … to influence elections or control the affairs of the nation.” (8)
He continued:
”But if any private citizen or public functionary should interpose to curtail its powers or prevent a renewal of its privileges, it cannot be doubted that he would feel the influence of the monied institutions.” (9)
Congress could not override Jackson’s veto, and now the bankers were genuinely furious. When he ran for re-election in 1832, they sponsored his opponent, Henry Clay, with a whopping 3 million dollars. They also controlled a significant portion of the press. Jackson did something no other presidential candidate had done before; he embarked on a campaign tour across the country. Previously, candidates had been nominated, given a few speeches, and then sat by the fireplace, but Jackson knew what was at stake, left nothing to chance, took his message to the people on-site. His campaign slogan was ”Jackson, and no bank!” The result was a landslide victory. In a letter to Congressman James K. Polk, Jackson wrote a warning:
”The hydra of corruption is only scotched, not dead!” (10)
Jackson instructed his Secretary of the Treasury, Louis McLane, to move the government’s deposits from the central bank to state banks, but McLane refused. Jackson dismissed him and hired William DeVane, who also declined. However, the President’s third Secretary of the Treasury, Roger B. Taney, took action, and the bank’s president, Nicholas Biddle, then tried to use his influence to prevent the Senate from approving Taney’s appointment. On January 27, 1834, Biddle wrote to William Appleton, the head of his Boston branch:
”Nothing but the evidence of a foreign influence suffered by our foreign affairs can produce any effect on the national legislature. Our only safety is in a steady course of firm restriction, and I have no doubt that such a course will lead to the restoration of the currency and a recharter of the bank.” (11)
The bankers now demanded the repayment of all loans and refused to provide new ones, triggering a national financial crisis as predicted, resulting in unemployment and a depression. Jackson had taken strong actions to try to clean up the corrupt financial world, firing 2,000 officials who were serving the bankers’ interests. When he wanted to regain control of the currency from the money changers and return it to the people, they were absolutely furious. Biddle and his peers blamed Jackson, and the press followed suit.
Jackson is alleged to have said, ”You are a den of vipers and I intend to rout you out, and by the Eternal God, I will rout you out,” about the bankers, but there is no definitive evidence that this quote is accurate. However, there is an authenticated quote regarding the bank that suggests the former is fabricated:
”I have no hostility to the bank. I am willing it should expire in peace, but if it does persist in its war with the government, I have a measure in contemplation which will destroy it at once, and which I am resolved to apply, let the consequences be what they may.” (12)
Now the moment of truth had arrived. If Congress could muster enough support through a full majority, they could override Jackson’s veto. The concern combined with the bankers’ persuasion campaign and bribes indicated that Jackson would be defeated. Then, suddenly, one of the heroes in history, a person endowed with high morals and great courage, stepped forward. Governor of Pennsylvania, George Wolf, declared his support for Jackson’s veto because he did not trust the bankers. Simultaneously, it was revealed that Biddle had publicly boasted about the bank’s plans to crash the American economy.
Now public opinion swung in Jackson’s favor, and the House of Representatives voted against the proposal to renew the bank’s charter with 134 votes against 82. They also passed a motion to appoint a committee to investigate the bank’s involvement in the financial crash. However, when representatives of the committee asked to access the bank’s accounts and notes, Biddle refused to release them. He also did not allow them to examine the correspondence between him and the congressmen who received personal loans, as well as the advance payments made to them. Furthermore, he refused to testify before the committee in Washington. So much for the bank’s honesty.
On January 30, 1835, as Jackson was leaving the government building on Capitol Hill, a man rushed toward him with a pistol in hand to take a shot. However, the pistol misfired, and the man then drew a second pistol, which also misfired. The would-be assassin was subdued and identified as a house painter from England named Richard Lawrence. Friends of the man later stated how he had boasted that if he were caught after the deed, powerful people in Europe would ensure his release. Lawrence was acquitted on the grounds of being insane.
In 1836, the charter for The Second Bank of the United States expired. The same year, Biddle was indicted for fraud. The evidence was not sufficient for a conviction, but Biddle faced several civil suits when he died eight years later. On January 8, 1838, President Jackson made the final payment on the U.S. national debt, an unprecedented achievement in the country’s history. While Jackson’s handling of the Indian issue left a bitter taste, regarding his handling of the bankers and the national debt, he is remembered as a unique figure in history.
In 1852, the then British Chancellor of the Exchequer, William Gladstone, stated the following:
”From the day I became Chancellor of the Exchequer I began to learn that the State held in its hands, by mismanagement of its funds, a false position toward the whole financial world. The Government was not to have real power, but was to leave the Money power supreme and unquestioned.” (13)
Greenbacks
In 1860, a former lawyer from Kentucky entered the stage. His name was Abraham Lincoln.
Contrary to what most people believe, slavery was not the primary cause of the American Civil War. In a letter to Horace Greeley, the influential editor of the New York Tribune, Lincoln wrote:
”My paramount object in this struggle is to save the Union, and it is not either to save or destroy slavery. If I could save the Union without freeing any slave, I would do it.” (14)
One of the main causes of the war was, among other things, that industrialists in the North used high tariffs that prevented them from buying cheap goods from Europe. As a result, Europeans boycotted Southern cotton, causing their economy to collapse. There was a conflict of interest between the expansive, industrialized North and the more agrarian South. This perspective was supported by one of the most influential historians in the United States, Charles Austin Beard, who argued that slavery played a subordinate role and only served as a cover for a deep economic conflict, which was, in fact, a part of the concentration of power by industrial capitalists.
The evidence for this was that all attempts to make slavery the main issue before 1860 had failed. Similarly, Beard dismissed the Southern argument that the war was a constitutional conflict. The Civil War was about the capitalist North’s exploitation of the Southern states, and the bankers inflamed the situation to bring chaos to the country.
However, Lincoln was a problem because he had shown early on that he did not trust the big bankers and their desire to control the country’s currency. When Lincoln went to the bankers in New York to borrow money to finance the war, they made unreasonable demands for interest, and he had to decline, just as they had expected. Lincoln returned to Washington and discussed the matter during a meeting with Colonel Dick Taylor on January 16, 1862. Taylor suggested issuing interest-free state bonds printed on the best banknote paper. Lincoln asked Taylor for proposals on how to finance the war. ”Just get Congress to pass a bill authorizing the printing of full legal tender treasury notes,” Taylor replied, ”and pay your soldiers with them and go ahead and win your war with them also. If you make them full legal tender, they will have the full sanction of the government, and be as good as any money; as Congress is given that express right by the Constitution.” (15) In a letter dated December 16, 1864, Lincoln referred to Colonel Taylor as ”the father of the greenback.” (16)
After this, Lincoln’s so-called greenbacks were printed, interest-free money. Moreover, the new banknote printing technology had developed, making the new money much more difficult to counterfeit. Somewhat unexpectedly, Tsar Alexander II came to Lincoln’s aid. Russia had refused to join a central banking system, and the Tsar knew that if the bankers gained control of the United States, they would be next in line. Therefore, he sent part of his fleet to America to assist Lincoln in case England or France intervened. Just over 50 years later, the big bankers in London, Germany, and, ironically, the USA would sponsor the Communists to overthrow Tsar Nicholas II, as I have written about in the article ”The Elite Behind the Russian Revolution.”
Lincoln emerged victorious on the battlefield, but only five days after General Lee’s surrender to Grant, he was assassinated at Ford’s Theatre. In reality, the big bankers were the real winners, even though slavery was officially abolished, and African Americans were theoretically free. They were still without citizenship and the right to vote.
A hundred years later, another president would challenge the banking establishment by signing a decree allowing the state to print its own money. He would also be assassinated. His name was John F. Kennedy.
The Panic of 1907
In the early 1907, the banker Jacob Schiff from Kuhn, Loeb & Company delivered a speech at the New York Chamber of Commerce in which he warned:
”If we do not have a central bank with adequate control over credits, this country will undergo the most serious and far-reaching financial panic in its history.” (17)
And lo and behold, the same year, the stock market crashed, stocks plummeted, and numerous banks, industries, and businesses across the country went bankrupt, leading to an economic depression.
One of the main causes was a widespread lack of liquidity, meaning a shortage of readily available cash or other means of payment to settle debts, largely due to a withdrawal of funds by bankers in… you guessed it, New York. It was the old trick in a new guise. They ensured a shortage of money, leading many people to go bankrupt.
A crucial part of the plan was that the major bankers, J.P. Morgan, an agent for Rothschild, and Chase, representing Rockefeller, staged a coup against Knickerbocker Trust Company. They sold off a significant portion of their holdings in the company and leaked stories about bad loans to the press.
The bank in Minneapolis claimed that the panic of 1907 resulted from manipulation by the banking establishment. If Knickerbocker Trust Company fell, Congress and the public would lose confidence in all companies, and the banks would profit from it, according to the bankers’ reasoning.
Panic erupted, and the government called upon the most powerful banker, J.P. Morgan, to resolve the crisis. He received $25 million in government funds from President Theodore Roosevelt and was also granted the ability to issue an additional $200 million without collateral. Consequently, the same person who had contributed to the financial crash was credited as the savior and appeared as a very reliable figure in the eyes of the public.
With this, the foundation was laid for the next step in the agenda, which would come six years later in 1913 with the creation of the Federal Reserve (FED).
J.P. Morgan was considered the wealthiest man in the United States. He had financed both Standard Oil, Harriman’s railroads, and Carnegie’s steel production. However, when he died, it turned out that he ”only” owned a few million and was not as wealthy as he should have been to act the way he did. This also suggests that he acted on behalf of the Rothschilds.
Arsène Pujo, a board member of the House Committee on Banking & Currency, initiated an investigation to examine the major capital owners. The investigation revealed that representatives of J.P. Morgan & Co also sat on the boards of 112 companies with market shares totaling $22 billion! The total value of the New York Stock Exchange was estimated at $26 billion at that time.
The final report concluded:
”There is an established and well-defined identity and community of interest between a few large financiers, created and held together through stock ownership, interlocking directorates, holding companies, and other forms of domination over banks, trust companies, railroads, public service and industrial companies.” (18).
In other words, the United States was now effectively controlled by a few bankers and industrialists.
The federal reserve
In 1910, seven men gathered on Jekyll Island in Georgia, USA, to discuss how to take control of the economic power in the United States.
These men were:
- Nelson W. Aldrich, a Republican politician and the father-in-law of John D. Rockefeller.
- A. Piatt Andrew, Assistant Secretary of the Treasury.
- Henry P. Davison, Sr., a member of J.P. Morgan Company.
- Charles D. Norton, the head of the 1st National Bank in New York.
- Benjamin Strong, the head of JP Morgan Bankers Trust.
- Frank A. Vanderlip, the head of the National City Bank of New York, representing Rockefeller.
- Paul M. Warburg, a partner in Kuhn, Loeb & Company, representing the Rothschilds and Warburgs in Europe.
The plan was to privatize the entire banking system through a single central bank, and no other banks would be able to operate outside of it. This marked the birth of ”The Federal Reserve Bank.” The bank was neither federal nor a reserve; it was just a trick to deceive the American people into believing it was owned by the government. Woodrow Wilson was promised significant donations during his presidential campaign if he supported the magnates. During the Christmas holidays of 1913, when most senators had gone home, they managed to pass the proposal to entrust the government’s money-printing to a private bank. This meant that the government allowed a private company to print money on which they charged interest. Before 1913, there was no income tax in the United States, but now the U.S. government taxed the population to pay the Federal Reserve Bank.
Congressman Charles A. Lindbergh, the father of the famous aviator, expressed the following after the coup was successful:
”The Act establishes the most gigantic trust on Earth. When the President signs this bill, the invisible government behind the money power will be legalized. The greatest crime of the ages is perpetrated by this banking and currency bill.” (19)
Congressman Louis T. McFadden, who had a background in the banking world, had this to say about the proposal:
”When the Federal Reserve Act was passed, the people did not perceive that a world system was being set up. A superstate controlled by international bankers and industrialists acting together to enslave the world.” (20)
The bankers’ ingenious business idea was to print money that wasn’t backed by anything. If the U.S. government needs capital for a major project, the U.S. president goes to Congress, which authorizes the Department of the Treasury to print government bonds worth $1 billion. These government bonds are then delivered to the Federal Reserve bankers, where the Federal Reserve, in turn, provides the government with $1 billion in cash.
According to the existing rules, the Federal Reserve can now use this government bond as a reserve for new loans. The reserve ratio is 1 to 15, which means that the Federal Reserve can print 15 new billion-dollar credits to states, businesses, and individuals in the USA, with one part existing in the form of a bond that the American people pay interest on and the other 15 parts being essentially non-existent. In other words:
These 15 billion dollars only exist in theory, not in reality, and the Federal Reserve earns interest on money that doesn’t exist.
Today’s monetary system
The current monetary system is based on so-called fiat money, meaning money that has value solely because the institution issuing it claims it has value. The word ”fiat” comes from Latin and is a conjunctive form of the verb ”to make,” roughly meaning ”Let it be done.” (21) Sometimes it’s also referenced as ”fiat lux” (let there be light) from the first book of Genesis in the Bible (22), and as we’ve seen, what the financial elite has done and what the political elite has allowed to happen has indeed led to a bright existence for the world’s power elite, while most of the world’s population has been kept in the dark about what has truly been happening behind the scenes.
In the year 1900, there were 18 central banks in the world. By 1950, the number was 59, and by 1990, it had risen to 161. In 1998, The Economist magazine announced that there were half a million bankers in the world (23), and today, over 172 countries manage their economy through a central banking system, (24) all coordinated by the Bank for International Settlements in Basel, Switzerland. This means that over 90% of United Nations member countries now have their own central bank. (25)
In ”The Quest for Wealth: A Study of Acquisitive Man,” economist and historian Robert L. Heilbroner wrote:
”For most of history, wealth and power have gone hand in hand, for wealth, which is the ability to command men, gives power, and power, which is the ability to control men, gives wealth.” (26)
In a striking comment on Heilbroner’s words, author James Presley, more than twenty years later in ”A Saga of Wealth: The Rise of the Texas Oilmen,” wrote that ”this obvious alliance has weathered only a few popular storms. By cooperating, holders of wealth and power achieve a certain stability of their own.” (27)
In his monumental work ”The Lost Science of Money,” Stephen Zarlenga wrote that ”an important arena for human struggle is over the monetary control of societies” and that ”this control has been and is now exercised through obscure theories of what money is. If it were to be summarized in one sentence, it is that by misdefining the nature of money, special interests have often been able to take control of the monetary systems of societies and thus of society itself.” (28)
Sources:
(1) Alexander del Mar, ”History of Monetary Systems,” University Press of the Pacific, 2000, (page 60)
(2) Alexander Del Mar, ”The History of Money in America: From the Earliest Times to the Establishment of the Constitution,” Cambridge Encyclopedia Company, 1899, (page 96)
(3) Stephen Zarlenga, ”The Lost Science of Money: The Mythology of Money, The Story of Power First Edition,” American Monetary Institute; First Edition , 2002, (page 378)
(4) Congressional Record: Proceedings and Debates of the Third Session of the Seventy-Fifth Congress, Congress of the United States. Congress, Volume 83, Part 7, Unites States Gouvernment Printing Office, 1938, (page 7676)
(5) Bruce H. Mann, ”Republic of Debtors”, Harvard University Press, 2002, (page 173)
(6) Thomas Jefferson, ”The Writings of Thomas Jefferson Volume VI”, Riker, Thorne and Company, 1855, (page 608)
(7) Madison Debates, July 2, Monday July 2, 1787. The Avalon Project – Documents in Law, History and Diplomacy, Yale Law School.
(8) Adresses and Messages of The Presidents of The United States – From 1789 to 1839, McClean & Taylor, 1839, (page 402)
(9) Adresses and Messages of The Presidents of The United States – From 1789 to 1839, McClean & Taylor, 1839, (page 402)
(10) Arthur M. Schlesinger, Sean Wilentz, ”Andrew Jackson: The American Presidents Series: The 7th President, 1829-1837,” Times Books, Henry Holt & Company, 2005, (page 104)
(11) Roger Brooke Taney, ”Without Fear of Favor ”, Houghton, Mifflin Cpmpany, 1965, (page 181)
(12) Niles’ National Register: Containing Political, Historical, Geographical, Scinetifical, Statistical, Economical and Biographical Documents, Essays and Facts, Volume 46, Franklin Press, 1834, (page 9)
(13) Sir Arnold Talbot Wilson, George Stewart Mackay, ”Old Age Pensions: An Historical and Critical Study,” Oxford University Press, 1941, (sidan 7) Se även: House of Commons Debates, Official Report, Volume 13, Canada. Parliament. House of Commons, 1966, Queen’s Printer, (page 13919)
(14) Letter to Horace Greeley, Executive Mansion,Washington, August 22, 1862. abrahamlincolnonline.org.
(15) Brown, Ellen (April 8, 2009). ”Revive Lincoln’s Monetary Policy”. webofdebt.com. Retrieved 9 July 2013.
(16) Abraham Lincoln, George Mandeville Van Buren (1890), ”Abraham Lincoln’s pen and voice,” (page 404)
(17) Nomi Prins, ”All the Presidents’ Bankers: The Hidden Alliances that Drive American Power”, Nation books, 2014, (page 20)
(18) Congressional Record: Proceedings and Debates of the First Session of The Sixty-Ninth Congress, Volume 17, Part 3, United States. Congress, (page 2844)
(19) Charles Merlin Umpenhour, ”Freedom, a Fading Illusion,” Bookmakers Ink, 2005, (page 170)
(20) Congressional Record: Proceedings and Debates of the 90:th Congress, Second Session, Volume 114, Part 23, (page 30315)
(21) Gabriel Adeleye, Kofi Acquah-Dadzie, ”World Dictionary of Foreign Expressions: A Resource for Readers and Writers”, Bolchazy-Carducci Publishers,U.S. 1999, (page 144)
(22) Gabriel Adeleye, Kofi Acquah-Dadzie, ”World Dictionary of Foreign Expressions: A Resource for Readers and Writers”, Bolchazy-Carducci Publishers,U.S. 1999, (page 144)
(23) John Singleton, ”Central Banking in the Twentieth Century”, (page 277)
(24) Niall Ferguson, ”The cash nexus: money and power in the modern world, 1700-2000”, Basic Books; Reprint edition, 2002, (sidan 160) Se även: John Singleton, ”Central Banking in the Twentieth Century”, (page 134)
(25) Niall Ferguson, ”The cash nexus: money and power in the modern world, 1700-2000”, Basic Books; Reprint edition, 2002, (page 160)
(26) Robert L Heilbroner, ”The Quest for Wealth: A Study of Acquisitive Man”, Simon and Schuster, 1956, (page 106)
(27) James Presley, ”A saga of wealth: The rise of the Texas oilmen”, Putnam, 1978, (page 303)
(28) Stephen Zarlenga, ”The Lost Science of Money: The Mythology of Money, The Story of Power First Edition,” American Monetary Institute; First Edition , 2002, (page 3)
Banking dominion – A History
