Is Economic Ruin Inevitable?

7/30/2019 Is Economic Ruin Inevitable?

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An Essay

Part I

By C. R. Dickey

A Concise History of BankingWith Operational Mechanics of

Fractional Reserve Lending

Transcribed byDaniel S. Krynicki


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Copyright Destiny Publishers, 1949P O Box 177

Merrimac, Massachusetts 01860-0177

www.destinypublishers.comPhone: (978) 346 9311

Our Sincerest ThanksThat Destiny Publishers

Has allowed this most important

Essay to be reprinted in the year 2010 ADWhen most of the economic prognosticators

Are expecting a financial meltdownWorldwide.


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FOREWORD

This essay by C. R. Dickey was published byDestiny Publishers, Merrimac Massachusetts in theSeptember and October Destiny Editorial Letters of

1949, over sixty years ago. In it we find chroniclesof banking history and the immoral nature inherentin the operation of the Federal Reserve System and

all European central banks. It predated EustaceMullins treatise titled The Secrets of the FederalReserve by three years. Eustaces work, however,included many more details of the more modernhistory while Dickey explains clearly theFounding Fathers view of European banking

practices and why Alexander Hamilton wasprevented at first from obtaining a foothold for theEuropean bankers in our young nations economy.Both have a complete historical approach but

Dickey brings in additional insight explaining whyFranklin and Jefferson opposed Hamiltons Bankof the United States.

Dickeys prose is crisp and easily understoodby even the least trained readers. Simplearithmetic and a functional moral compass are allthat is necessary to grasp everything she presents.

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What is most important however is Dickeyknew that salvation for any nation will not comefrom the likes of men. The majority of a nationspeople will need to acknowledge humbly what theLord taught us 3,500 years ago in the Mosaic Law.The iron grip of usury is in reality, economicslavery.

Gods moral laws forbade usury among the

people in ancient Israel, and moral law does notchange over time. So after we learn from her essaywhy the operations of this banking monopoly areimmoral and how connivers and manipulators gottheir unconstitutional legislation passed she willthen explain that the solution has always been withus in the founding documents of our nation.Everything we need to know she reports in heressay.

We will learn that when a privately ownedcartel is allowed to issue the currency, place it intocirculation via a debt instrument and then collect

interest on it, the people as a whole are liable to

pay this usury to individuals who contributeabsolutely nothing useful back into society. And inaddition to this they are also allowed by existinglaw to lend out nine times the amount they have in

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deposits and collect usury on that too. They arelending money that doesnt exist. This is reallylegalized fraud. Try and write a check for ninehundred dollars when you have only one hundreddollars in your checking account and see whathappens. They will prosecute you for fraud andput you in jail. But the banks do this all the time;

and for them it is legal.

Following Dickeys and Coogansexplanations of this banking practice that has beenmade legal across three or four centuries willexpose to the reader how morally repugnant this is.Most people must work forty hours or more perweek to obtain money to live on. If they made aloan to someone out of the money they earned,their purchasing power would be reduced by theamount of the loan. This reduction in the lenderspurchasing power is what makes the charging ofinterest acceptable. But bankers do not experiencethis reduction in purchasing power. This ability to

legally create money with the stroke of a pen was

ceded to them by Congress in the Federal ReserveAct.

Two technical developments unfolded ineras subsequent to her writing that we can update

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right here before beginning her essay. One isdiscussion of cyberspace currency. When MsDickey authored this work the only computers inexistence occupied entire rooms with allmechanical relays. Very few existed, as this wasthe pioneering stage of computer development.Texas Instruments produced the first electronics

transistor in 1954, five years after Dickey

published this work. Beginning with widespreaduse of computers and the World Wide Web bankersare now able to create cyber-space currencywithout even involving the printing press fordemand notes and bonds. Thus the physicalrestraints of currency creation and fractionalreserve lending (leveraging loans against depositsat a nine to one ratio) have been mitigatedconsiderably with the advent of computers. All theFederal Reserve now needs to do is type innumbers onto a computer screen and the money isinstantly transferred to the US Treasury in return

for paperless cyberspace bonds.

Dickey could not have foreseen the seconddevelopment during the 1940s. It is the derivativemarket that only came into existence during themid 1980s. Written into these exotic wager

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instruments are leveraging ratios into the range of150 to 1 by investment bankers. Many brokeragefirms and various university professor economistsin their essays state that the floodgates of theseunbelievably high leveraging ratios took off whenBill Clinton signed the Financial ServicesModernization Act of 1999 on November 12, 1999.

Republicans in the House and Senate sponsored the

bill; then the Democrat President signed it. Thisbill primarily nullified portions of the Glass-Steagall Act of 1933.

From a 2009 book with the titleHoodwinkedby John Perkins (an economist) on page 117 wecan learn an understandable definition of thefinancial term derivative: We have become apaper economy, vulnerable to the whims of

lawyers and investment bankers. The trading of

corporations through mergers and acquisitions

and the pushing of financial paper in the form of

forwards, options, futures, swaps and other

derivatives are huge parts of our system. When

the economy peaked, just before the recessionbegan in 2007, over 40 percent of U.S. profits

were earned by the financial sector (although it

turned out to be paper profits). The very nature

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of a derivative a financial contract which value

depends on (is derived from) the value of

something else (for example, a commodity, stock,

home mortgage, market index) belies the trust

conveyed by paper. Perhaps it is a sign of thetimes that today paper pushers seldom use paper;

they do it all with the push of a button,

electronically. (Or as we noted above placed into

cyberspace via a computer keyboard.)Thus those elected officials whose wills have

been warped to allow the investment bankers freereign have proved that Americans no longer have agovernment interested in the Constitutionalmandate to promote the general welfare of thepeople. We can therefore reasonably infer that theConstitution truly became a dead instrument withpassage of the Federal Reserve Act of 1913.

Two times prior to 1913 privately ownedcentral banks were chartered in the United States.Dickeys discussion on these shows that they also

were gross violations of the Constitution. This

should raise serious questions about their historicalsignificance. Banking legislation in the 1840s andin the 1860s does indeed circumstantially tie inwith one unsuccessful and one successful

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presidential assassination. Dickey does not fail toreport about this.

We can observe that moral and ethicalinstruction is not really a part of our educationalprocess. Without adequate moral and ethicaltraining, students are not equipped to discern fraudin business practices and the bankers have been

allowed to build a system which allows a group of

elite in the private sector to have control over theissuance of currency rather than a government thatwas instituted to promote the general welfare.

Banking fundamentals is a simple enoughsubject to understand, so simple that by the timestudents enter the senior year in high school theyhave all the tools they need to comprehend it fully.But sufficient detail about morality and bankingpractices in the curricula is withheld from theclassrooms so the students graduate without everconnecting the two.

Even more egregious are the Christian

ministers who have their heads buried in the sand,

not teaching that Ancient Israels Constitutioncould bring any nation the prosperity that AlmightyGod intended for men. They are really pathetic fornot seeing the moral repugnance of fractional

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reserve lending. And for those who know butdeliberately do not declare it from the pulpits, theirshame will be manifest in due time for esteemingtheir 501-C3 status more desirable than AlmightyGods perfect laws. Dickey provides us with thenecessary information showing how our ownConstitution was in perfect harmony with Gods

eternal moral laws until the internationalists

mutilated it.Under the system now in operation business

cycles (booms and busts) are easily shown to be thedirect result of expansions and contractions in theavailability of credit. We undergo recessions anddepressions when bankers cause contractions incredit arbitrarily. During Ronald W. Reaganspresidency, this writer saw and heard with his owneyes and ears Mr. Reagan speak the followingwords after being asked by a reporter about theprime interest rate: You know those people overthere (at the Federal Reserve) they do what they

want. Dickey presents many of the sordid details

about how the bankers manipulate conditions andevents in order to allow them to gain footholds intaking over entire industries and agriculture asanalysis that confirms Mr. Reagans statement. On

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pages 57 through 60 Dickey provides the readerwith quotes from the Hon. Finly Gray out of theCongressional Record and Coogans book showinghow the Fed deliberately implemented policies thatdirectly caused the Agricultural Depression of 1921through 1923.

As Dickeys essay is a concise presentation

based on a thorough dissertation by Gertrude

Coogan, the reader can learn quite enough fromDickey to clearly see the morality violations usedin modern operational banking practices, enough toexpose the international bankers for what they are.They have gained their unimaginable wealththrough the two powers Congress ceded to them in1913 with passage of the Federal Reserve Act: 1,The power to issue the currency of our nation; and2, The power to lend money they do not actuallyhave in deposits. The latter is known as FractionalReserve Lending today. Dickey, in this essay, usesCoogans book Money Creators to explain

fractional reserve lending on page 73. In 1934

economists were not using the phrase fractionalreserve lending to describe this banking practice.

At this point in time, they have gainedcontrol over governments and media worldwide.

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Their control is now a force that is humanlyimpossible to overcome; only supernaturalintervention could successfully oppose it. We havethe examples of Abraham Lincoln and John F.Kennedy, both of whom were assassinated soonafter they attempted to issue US Treasury notes ascurrency without paying interest to the bankers.

Another president who was almost

assassinated was Andrew Jackson. This was theresult of his refusal to renew the forty-year charterof the Bank of the United States which was the firstprivately owned banking cartel chartered inAmerica.

Looking back at unabridged Americanhistory as presented herein with a keen eye towardthe internationalist bankers provides us with abroader vision about who and what were the causesof all wars, conflicts, labor disputes, depressions,and money panics. Here in the year 2010 we cansee Dickeys prediction (from 1949) on page 70

unfold before our eyes. A world currency scheme

by international bankers now holds all Westernnations in the iron grip of usury. It is certainly sadto see 95 percent of our princes of industry fallingin lock step behind the international bankers

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robbing virtually all of American labor their hopeand a future by forcing them to compete with thechild and slave labor of foreign lands for the lowestpossible wage. The International Monetary Fundand the World Bank across the past fifty years haveraped the resources and labor of the entire world.For what they took from all of us they gave nothing

in return but the shackles of debt.

As we near Ms Dickeys conclusionbeginning on pages 80-82 we will learn forourselves exactly which institution alone has bothConstitutional and God-given authority to createmoney for circulation. Take careful note with hercomment that privately owned banks must nolonger have the power to manufacture and cancelmoney. This power belongs to Congress alone.

In accordance with their mandate topromote the general welfare Congress by re-capturing this authority could thus wisely lendinterest-free money to US citizens such as college

students, young families in need of housing, small

businesses, farmers, and corporations. The nationwould prosper and jobs need not be shippedoffshore. Home and farm properties owned by UScitizens would stay in families for generations

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unencumbered without the threat of evictionthrough property tax sale.

Those in Christian-Israel know from Biblestudy that the day of the Lord is a dark day.Indeed, the bankers will cause it. Christian-Israelalso knows that salvation belongs to the Lord (Ps 3:8); that power belongs to God (Ps 62: 11); that

unto the Lord belongs mercy (Ps 62: 12); that

vengeance belongs to God, He will repay (Ps 94: 1;Heb 10: 30); and that righteousness belongs to theLord (Daniel 9:7). It will be a dark day; but Israelshall be saved out of it. Throughout all of recordedhistory, have not people without fail rejectedAlmighty Gods national moral requirements? Wemust always experience the absolute worst inhuman government before meaningful change issought.

Is Economic Ruin Inevitable? by C.R.Dickey can be purchased from Destiny Publishersby calling (978) 346 9311. Gertrude Coogans

bookMoney Creators is also available from them.

Coogans book was probably first released around1935. The history it presents is detailed andcomprehensive. Coogan had a masters degreefrom Northwestern University. Dickeys essay

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made use of Coogans comprehensive research toproduce an abridged version ofMoney Creators.So Ms Coogan is also deserving of the highestpraise that can be offered. Do order her book. Youwill not be disappointed.

And finally, Destiny Publishers has left us

with a legacy of steadfast faith steeped in Biblical

truth more than any other Christian organization onthe planet. The man who started it shall always beremembered as a great prince in Israel. The Lordshall surely reward him at the time of therestoration.

Very Truly Yours,Daniel S. KrynickiJune 30, 2010

P.S. A free PDF version of this essay that wastranscribed by Daniel S. Krynicki can be obtained

by emailing a request to

[email protected]

Also, please note that the transcriber addedfootnotes, appendixes, and underlined text.

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Is Economic Ruin Inevitable?

Part I

Although economic ruin is highly probable,it is not inevitable. It can be averted. The outcome

depends upon whether or not society as a whole arewilling to take the steps required to turn the tide ofa threatening financial collapse.

We say this despite the fact that the complexmachinery of another worldwide depression, stillmore calamitous than the last one, is in gear and

already on the move. This movement is evident inthe stream of reports on the world economy now

being fed daily through various newsgatheringagencies to newspapers, radio networks, andmagazines with large circulations. These reportsare conflicting and evasive. They are notunderstandable and they are not meant to be.They are framed to create fear and confusion; theiraim is to inoculate the citizenry with a hopelesscase of jitters in preparation for the final takeover.

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Practically all lines of legitimate enterprise

are showing symptoms of an inexplicable creepingparalysis. Businessmen are aware of thesymptoms, but do they know the cause? Men withwell established businesses are afraid to expand,and only a few intrepid optimists, here and there,

dare to start some new business venture. Yet when

capital is idle, jobs decrease and unemploymentincreases proportionately, until a national or worldcrisis may be precipitated. This is a simple fact,easy to grasp, when not shrouded in mystery by thejargon of the so-called liberal economists.

What, then, causes these crippling cycles ofdepression? Are they beyond the control of man,like sunshine, rain, and earthquakes? Or doessomebody deliberately plan them? If they comethrough the schemes of men, how are they carriedout, and who profits by them? Thoughtful men and

women of good intentions, who want a free and

decent world to live in, must find the answers tothese questions soon or it will be too late tocounteract the death-blow of an unprecedented

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economic collapse.

What is Money?

There is no better way to determine what iscausing todays emerging monetary crisis than tofind out what has caused previous panics and

depressions in this country. But first it is essential

to review the function of a monetary system. Whatis money anyway? And what kind of money ishonest and beneficial to all the people? Thesequestions can best be answered by quotingsomewhat at length from Gertrude M. Coogansexcellent book, Money Creators, permission forwhich has been kindly granted by the author.Summarizing the function and principles of moneyMiss Coogan writes:

The people constituting a nation produce and mustexchange goods and services with each other. If primitivebarter is to be avoided, a convenient mechanism or ticketsystem must be used. In the last analysis, money is the

peoples bookkeeping reduced to its simplest possible form.It has been ably defined as follows: Money is the nothingyou get forsomethingbefore you can get anything.

Let us consider the meaning of this definition:

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Money is nothing. It is a piece of paper inherently worthnothing but which entitles you, upon surrendering it, to

claim some valuable goods. You receive it (unless you areone of the privileged who has a right to create it) by givingup your time and services in some productive enterprise. Ifyou are working for a weekly wage, you gave up so manyhours a day, and so much of your mental and physicalenergy in the production of something useful to society.The money you received in return for your work is of novalue to you until you give it up for some physical goods orservice.

All producers give up their time and energy to helpprovide the goods and services useful to society. The thingswhich they produce but do not themselves consume, aremade available for society as a whole. They give up goodsof value fornothingbut a claim to receive other goods upon

demand.

Money is a demand claim on physical goods orservices. The amount of demand claims (money) must beara scientific relation to the amount of consumer goodsproduced and ready for consumption. If the amount ofdemand claims is either decreased or increased, the holdersof demand claims are either secretly benefited or secretlyrobbed. If a given volume of consumer goods are in thehopper ready for consumption, and some mysterious forceincreases the number of demand claims in the possession ofthe people, each dollars worth of demand claims will beexchangeable for a relatively smaller part of the physical

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units of goods; in other words, prices will rise and eachdemand claim becomes exchangeable for physical goods or

services of less value. If the opposite takes place thenumber of demand claims is suddenly and mysteriouslydecreased the reverse situation prevails.

In order to bring into existence a medium ofexchange, which is acceptable everywhere in the land,honesty demands that money be the creation of arepresentative body which has been authorized by thepeople to act for them in this respect. The Constitution ofthe United States is so written, but by perversion, the bodyauthorized by the people to perform that most importantfunction, has abdicated its powers, surrendering themagainst the expressed will of the people to privateindividuals; thus giving to privileged persons of a rightwhich properly belongs to all. This right has been gained

through trickery and stealth, as is perfectly obvious toanyone who will study the methods through whichmonetary legislation has been put through Congress.

The question is, therefore, since all money orpurchasing power must come into existence by the act ofman, who shall be entitled to so act and thus be given theoriginal power to purchase what the new money will buy?Obviously, such original purchasing power should rest withthe people at large. The people at large, in civilization, actthrough government.

It is their government which should first create the

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money, and all of the people should have the benefit of itsoriginal purchasing power. Only the people, as a whole,

should share the benefits and the advantages involved in achange in the volume of money in existence in a nation. Byplacing this first buying power in the government, thebenefits fall to all of the people, for by whatever amount thenew money is issued, tax collections may becorrespondingly reduced.

This statement can be twisted into the thought thattaxes can be abolished by merely issuing money adinfinitum. This is fallacious, for new money should be paidinto use (circulation) only as the total stock of consumergoods the things the people have produced and need incivilization has been increased by expandedproduction.It should be injected into general use(circulation) by the peoples will, expressed in law.

It requires nothing more than a knowledge ofsimple arithmetic and the possession of plain common senseto see that as a nation grows, and its people, through scienceand invention, are able to produce more goods and servicesin civilization, more money is needed to effect thechanges. (From pp. 330-333.)

The wealth of any nation consists of its land,minerals, homes, food supplies, clothing factories,railroads, utilities, et cetera. They may be classifiedas follows:

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a) Consumer goods, or perishable goods.These are the physical things which areconsumed in daily living, such as food,clothing and fuel.

b) Capital assets used in the production anddistribution of consumer goods, such as

farm implements, factory equipment,

trucks and railroad cars. While these arenot consumed daily like food, they dowear out and must be replaced eventually.

Money is not real wealth and should neverbe regarded or used as a commodity. Its function isto serve as a medium of exchange and to determinethe relative values of the goods and services to beexchanged. Therefore:

A money system is a mechanical means set up tofacilitate production of goods and their distribution toindividuals. To give money anything but an exchangefunction permits perversion.

The total money in a community or a nation, thatis, the total demand claims, should bear a scientific relationto the total consumer goods which the members of thatcommunity or nation have produced and have in the hopper

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ready for human consumption at any particular time.Remember, money is a demand claim.

The quantity of money in a nation should notincrease or decrease excepting as the physical consumerwealth increases or decreases. As producers grow moreefficient and produce more physical goods available forhuman consumption, then, of course, there should be abigger money supply, because money is the only practicalmedium known to our civilization by which goods availablefor use may be moved from producers to consumers. Thistheory is so simple that it has taken innumerable lies,propagated through ostensibly respectable channels suchas business schools, text books, Economic ResearchBureaus, newspapers, etc. to conceal the fundamentaltruth. The misinformation was originated and propagatedby the few for selfish ulterior purposes to keep the

American people steeped in the falsehood that the troublewith our economic system is something mysterious; toodeep for any but the erudite few to understand.

It is all-important to remember that money nowtakes various forms. The functions are one, but the formsdiffer. In the United States the two principal forms ofmoney are bank deposits (created by bankers lending theirpromises-to-pay which are subject to checking), and papercurrency, which is tangible. Gold and silver tokens alsoexist but they play a very minor part in the actual conduct ofevery day business. People commonly use silver coins, butgold coins, under the present law, cannot be held by

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ordinary private American citizens. (Money Creators, pp.110-11.)

Only the Government of a nation canprovide a constitutional and safe system of money.Honest money must be created by the imprint of aSovereign State and paid into circulation asgovernment expenditures. Money thus created and

paid into use is interest-free at its source. As theproduction of a nation rises, more money is neededfor proper distribution as we have seen. It isobvious that additional money issued and put intocirculation for some government operation mustbear a direct relation to the growth of actual needsand production, or the purchasing power of all

money outstanding would be diluted. However,this ratio could be easily maintained byconscientious statesmen. Any increase ordecrease in the flow of money should be thefunction of the people acting through their dulyelected representatives, Congress, and it should

affect all producers of wealth in exactly the samemanner. How are Depressions Made?

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International Money-Changers At Work

The Congress shall have power: to coinmoney, regulate the value thereof and of foreigncoin so reads Article I, Section 8, Part 5, of theConstitution of the United States.

Our Founding fathers were wise and

farsighted men. They knew the danger of allowingthe control of our nations money system to fallinto the hands of a few scheming individuals.Therefore, as a means of preserving our

civilization, they placed that power in the hands ofCongress, the elected representatives of all the

citizens. Knowing well the basis of a scientific andhonest money system, the authors of ourConstitution decreed that Congress alone shall coinand regulate the value of the nations money; thislatter stipulation requires Congress to control thepurchasing power of all the money in the nation.Unfortunately, few realize the importance of this

regulation. It is at this very point that unscrupulousmanipulators, if permitted to do so, can producesudden changes in the purchasing power of moneyand bring on ruinous depressions.

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Under the Constitution, Congress has noright whatever to delegate this authority to privateindividuals. As Miss Coogan points out:

The entire proposition is reducible to this: Shouldthe Congress be compelled to exercise the power given it bythe Constitution to issue our money on a scientific basis, i.e.in accordance with the volume needed for the Nationswelfare; or should the privilege be left, as now, in private

hands to be manipulated for their own selfish purposes andto the Nations ill-fare?

Why should a few private individuals form acorporation, call it a Bank, and thereafter manufacture ourmoney? That right certainly resides primarily in the people,who granted it to Congress. Congress, in violation of the

Constitution, passed it on to a privileged few.Before theadvent of private money-creating power, if any privateindividual created money and caused the imprint of agovernment to be put upon it, he was guilty ofcounterfeiting.

One cannot give up what one does not possess. Ifthat right existed primarily in the people, it resided

secondarily in their Government, and only throughunconstitutional delegation by Congress of that power, intothe hands of a favored few. Congress cannot relinquish thatpower, given it by the people, through the Constitution, any

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more than it can give up what it does not possess.

Certainly the right of the Government to issuemoney is superior to any right of the few, and theGovernment must withdraw from the few whatever money-manufacturing powers it has previously granted. It is a dutywe owe ourselves, our dependents and our children todemand of our Congress that it recall the privilege fromprivate hands and exercise its constitutional mandate. (pp.260-61.)

Knowledge is not only power; it issometimes life itself. And it is truly a matter of lifeor death to America, as we know it, for its citizenryto learn the simple facts about an honestconstitutional monetary system. John Adams

wrote to Thomas Jefferson in 1787:

All the perplexities, confusion and distress inAmerica arise, not from defects in their Constitution orConfederation, not from want of honor or virtue, so much asfrom downright ignorance of the nature of coin, credit andcirculation.

Now let us review a few events not foundin any of our history textbooks to learn the wayin which a relatively small clique has been able totake over the control of Americas money and

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resources.

In 1606, the English Crown granted to theVirginia colonists their first charter to establish acolonial government. The Crown encouraged itscitizens to undertake settlements in America andgranted them charters on liberal terms. Each

colony was free to make its own laws and each had

its own Assembly. Originally the EnglishParliament exercised no power over the colonists.The Crown even relinquished its power over themoney of the colonies, according to Article X ofthe first charter of Virginia:

And that they shall, or lawfully may, establish and

cause to be made a coin, to pass current there between thePeople of those several Colonies, for the more ease oftraffic and bargaining amongst them and the natives there,of such metal and in such manner and form, as the saidCouncils shall there limit and appoint.

The paragraph below, from the first charter

of Massachusetts granted in 1628, shows thefreedom extended to colonies to make their ownlaws:

And we do ordain that once in the year.the

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governor, deputy governor and assistants and all otherofficers of the said company, shall be assembled to make,

ordain or establish all manner of wholesome and reasonableorders, laws, statutes, ordinances, directions andinstructions, not contrary to the laws of this our realm ofEngland.

The following words imprinted on one of theearly state notes of Massachusetts illustrates how

well those wise colonists understood the principlesof an honest monetary system:

This indented bill for ten shillings, due from theMassachusetts Colony to the possessor, shall be in valueequal to money, and shall be accordingly accepted by theTreasurer, and Receivers subordinate to him, in all public

payments, and for any stock at any time in the Treasury.Boston in New England, December the 10th, 1690. Byorder of the General Court.

Here we have the American coloniescreating convenient paper money and paying it intouse as legal tender at a time when the mother

country was still using wooden tallies as legaltender. Colonial Money, being issued and paid intocirculation by the colonial government, was notsubject to sudden fluctuation in purchasing value; it

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was not founded on bonds; therefore, the colonistshad no bonded indebtedness; and, furthermore,being interest-free at the point of origin, it was notsubject to manipulation. Consequently, with aneconomic order in which the law of supply anddemand could function normally, the prosperity ofearly colonial days was limited only by the ability

of those sturdy and industrious pioneers to produce

goods to trade.

Strangely enough, while the colonies wereenjoying the benefits of lawful money, Englandwas falling into the clutches of international goldbrokers. In 1688, these money-changers staged arevolution in England to lay the foundation of thedeceptively named Bank of England. By 1694their private bank gained its special privileges, setup a Board of Trade and launched its far-reaching,insidious work.

Under the guise of a disputed succession to

the throne of England, the gold gang forcedWilliam III to legalize their previous subrosa (Latin secret) practice, thereby legalizing the system bymeans of which the gold worshipers could

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periodically despoil all producers and workers.

In his book, The Breakdown of Money,Christopher Hollis gives us the followingillustration of the method used by the seventeenthcentury international bankers:

In 1694 the Government of William III was in sorestraits for money. A company of rich men under theleadership of one William Paterson offered to lend William1,200,000 pounds at 8 percent on the condition that theGovernor and Company of the Bank of England, as theycalled themselves, should have the right to issue notes to thefull extent of its capital. That is to say, the Bank got theright to collect 1,200,000 pounds in gold and silver and toturn it into 2,400,000 pounds, lending 1,200,000 pounds,

the gold and silver, to the Government, and using the other1,200,000 pounds, the banknotes, themselves. Patersonwas quite frank about it that this privilege which had been

given to the Bank was a privilege to make up money. If theproprietors of the Bank, he wrote, can circulate their ownfoundation of twelve hundred thousand pounds withouthaving more than two or three hundred thousand poundslying dead at one time with another, this Bank will be ineffect as nine hundred thousand pounds or a million of freshmoney brought into the nation. In practice they did notkeep a cash reserve of nearly two or three hundred thousandpounds. By 1696 we find them circulating 1,750,000

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pounds worth of notes against a cash reserve of 36,000pounds.

Intelligent critics saw that the experiment hadproved that it was perfectly possible to manufacture moneywithout any metallic backing but that it was dangerous andiniquitous to allow the privilege of that manufacture to be inprivate hands.

It is to be expected that so rich a plum as thefast growing American colonies would not escapethe attention of covetous Internationalists. A fewparagraphs from Money Creators are mostenlightening on this subject:

Our early history books strangely omit the facts

that for some years prior to 1773 the British Parliament hadbusied itself annulling the laws under which the Americancolonies had exercised their fundamental right to create andissue their own money. Much is said about Taxationwithout Representation, but what underlies that phrase isomitted. The fact is that the Bank of Englandmanipulators, having gained control over British industrythrough frequent depressions, cast their greedy eyes on thecommerce and industry of America, and set to work to layhold of the money of the Colonies and, hence, the industryof the Colonists.

Mayer Amschel, of Frankfort-on-the-Main, entered

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the scene. He conceived the idea of enlisting young men asmercenary troops, painting to them the glories of military

service, etc. When King George III was unable to secureBritish soldiers to fight their cousins across the Atlantic, hewent to the Landgrave of Hesse Kassel, at Hanau, nearFrankfort. George III paid $20,000,000 to the Landgravefor approximately 16,800 Hessian mercenaries ($1,200 perhead) who had been organized and trained by MayerAmschel. The Landgrave loaned this twenty million toMayer Amschel at a low rate of interest for ten years.

It is well known that the foreign borrowing offunds for the American Revolution was accomplishedthrough the efforts of Robert Morris. It is not so wellknown (although it is boasted of by some historians) thatRobert Morris secured his funds from Haym Solomon. It isfurthermore stated that although Solomon gave everything

he had to the American Revolution; he still remained therichest man in America!

Those who know anything of international bankersolidarity will appreciate immediately that Mayer Amschel(whose family of five sons and five daughters took thename of Rothschild from the Red Shield which hung infront of Mayers shop in Frankfort as his trade-mark)loaned the money to Solomon, which was in turn loanedthrough Robert Morris to the American Colonies. Thus,George III paid for the American Revolution and theinternational financiers played both ends against the middle;no matter who lost, they won, and lives were sacrificed on

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both sides.

The greed of the English financiers had broughton the American Revolution, and it was money-changers inother quarters who facilitated the financing.These factsare stated to show that the greed of international money wasrampant then, as now. They created the trouble between theColonies and the British Empire by their greed, and thenprofited from the trouble created.

The entire attempt to usurp the rights of theColonists was laid along such lines as would serve thebanking interests, by at last bringing the Americanseconomically to their knees. High prices were placed uponBritish manufactures sent to the Colonists, though there wasover-production at home. This drained the Colonists ofspecie obtained by trade with other nations. An embargo

was laid upon commerce with nations other than England,which then made it impossible for the Americans to obtainthe specie with which to pay English manufacturers, whowere already by this time mere factory managers for thebankers, as many of our princes of industry are in thepresent day. This forced American borrowing from thebank overseas, and the building up of bonds and interest inacknowledgment thereof.

The money of the Colonial Governments wasabolished by laws passed in violation of the Americancharters by the English Parliament. The Bankers did noteven want the colonists to be able to trade among

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themselves without paying tributes across the Atlanticin interest on the promises of the Bank of England, which

they were thus forcing the Americans to borrow for homeuse in trading.

The Stamp Act of March 22, 1765 was not onlytaxation without representation, which the Colonist couldhave borne with nothing but a loss of dignity; but its termsdemanded that the stamps must be paid for inspecie (gold),which they did not have and were not allowed to obtain bytrading with alien nations. The trap was set so that theywould have to borrow from the Bank of England atinterest in order to pay the tax. Do our school historiesexplain this?

The objective was to force tribute by theAmericans on the Bank of Englands fictitious and

dishonest money creations. [Benjamin] Franklin showshow it required twenty years to corrupt sufficiently theHouse of Commons to cause the passage of the laws desiredby the Bank of England, which were a direct usurpation ofthe rights granted by the Crown to the Colonial assemblies.Willing Kings had granted those rights a hundred yearsbefore several generations before the money creatorsusurped money powers in England. (From pp. 181-183.)

It was for the purpose of throwing off theyoke of international finance that a ColonialCongress met in Philadelphia and issued, on July 4,

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1776, The Declaration of Independence. As aresult of this Declaration, and the victorious warwhich followed it, the international Bank ofEngland gold control was broken for a time. It wasfor the purpose of keeping America forever freefrom such control that Franklin, Jefferson and theirvaliant co-workers wrote into the very first Article

of our Constitution these significant words:

The Congress shall have power: to coinmoney, regulate the value thereof and of foreigncoin.

The first violation of the new Constitutionwas accomplished in 1791, when the so-calledBank of the United States was given a forty-yearcharter. It was patterned after the Banks ofEngland, of France, of Italy, - all privatelyowned by Internationalists, who had usurped thesovereign right of issuing and regulating the value

of money.

Who was the key man used by the money-changers to betray young America into their hands?He was none other than that greatest Secretary of

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the Treasury of our history books, AlexanderHamilton. While it is no secret that a hatredexisted between Hamilton and Jefferson, few haveever learned the cause of their antagonism. Brieflyit was this: Jefferson, like Franklin, worked toplace the control of money issue and volumepermanently in the hands of the people through

Congress; Hamilton worked to transfer that control

to the international bankers of England and Europe.The battle between them continued for more thanten years and ended tragically in Hamiltonsvictory over Jefferson. Thus Hamiltons system of

perpetual debt, interest-bearing bonds, and a

strong centralized government for the benefit of asmall but powerful financial clique fastened itselflike a gigantic leech to the young Republic.

The following information regardingHamiltons background, not only helps tounderstand the man himself, but gives the clue as to

how his program ties in with the present super-

government of Internationalists now operating sodetrimentally in Washington, DC:

Hamilton was born in the West Indies. For at leasttwo years after his birth, his mother, Rachel, was married to

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one Levine, a wealthy planter. Hamilton claimed that hewas born January 11, 1757, but even a friendly biographer

states that this may be doubted on the ground that this datewould credit him with impossible precocity.

His mother, Rachel, was unfaithful, and Levinedivorced her in 1759. Rachel then went to James Hamilton;and her son, Alexander changed his name, a commonpractice among money-changers. He grew up crowned withability, but cursed with an inferiority complex, whichaccounted for his savage determination to rule.

From 1777 to February 1781, Alexander Hamiltonwas on General Washingtons staff handling commissaryaffairs. During this time he was studying The Wealth of theNations by Adam Smith, which had been given to him byhis mysterious discoverer, whose identity has never been

disclosed.

During the time when Hamilton was in GeneralWashingtons service, he was writing letters to influentialmen discussing economics. Even at that time, he waspreparing to inject his (that is, Adam Smiths) ideas ofgovernment and finance into the new nation which wasbeing born in the struggle with England. He already hadformed definite ideas for a privately owned central bank.He based his plan on the Bank of England, the greatprivate privileges of which he so admired, and on thedoctrines of Adam Smith, the father of classical orthodoxeconomics. (Money Creators, pp. 188,190.)

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Although Hamilton was later discharged bythe group he had served so well, and though hisBank of the United States was closed when itscharter expired, the illegal process of using debtfor legal tender was propagated and strengthenedby his shrewd successors.

The National Banking Act was passed in

1863, against the advice of Lincoln. By that ActCongress, in flagrant violation of the Constitution,delegated to certain rapacious financiers theprivilege of issuing and controlling the nationsmoney. At the very time the National Bank Actwas passed, President Lincoln was explaining tothe people that non-convertible paper moneycreated on the authority of the United StatesGovernment was the only kind of currency that

should be allowed. When he attempted to issueconstitutional money, he was violently opposed bythe Bullion Brokers, as the international bankers

were called in his day. However, he continued to

demand honest money until he was silenced bywhom?

The true history of the Civil War will never

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be known until the time comes in the providence ofGod, when He will bring to light the hidden thingsof darkness the time to which Jesus Himselfreferred in Luke 12: 1-3:

Beware ye of the leaven of the Pharisees, which

is hypocrisy. For there is nothing covered, that shall not

be revealed; neither hid, that shall not be known.

Therefore whatsoever ye have spoken in darkness shall

be heard in the light; and that which ye have spoken in

the ear in closets shall be proclaimed upon the

housetops.

Notwithstanding the suppression of truth, wedo know a few things which shed light on the

subject. From the time Hamiltons bank charter

expired, until the Civil War, international bankershad been unsuccessful in their efforts to set up acentral bank in America through which they couldmanipulate the entire money system of the nation.To accomplish this purpose the Civil War washatched in London in 1857, by certain bankers who

agreed that the Paris branch of one group wouldsupport and finance the south, and the Britishbranch of the same group would take the similarrole for the North. Through clever propagandathey fostered the Slavery Issue. The real issue

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was to divide the United States against itself and soweaken the Republic that it could eventually bedivided among the internationalists forexploitation.

Unless one is totally blind to the trend ofcurrent events, he will see the same sinister motive

back of the agitation now being promoted among

our Negro population.

Because the banking business of this countryis still operating under the principles of theNational Banking Act, it is necessary to acquaintourselves with the method by which it became lawand also the nature of its operation.

Fearing Lincolns determination to issueGovernment currency, the international bankershad one of their agents prepare what is known asthe infamous Hazard circular. In July 1862, it

was circulated among the Senators, Congressmen,

and moneylenders of the United States. Itapproved the abolition of chattel slavery, to besure, but only as a means to a worse form ofslavery involving both white and black. Here also

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we find the initial steps for the present control ofAmerican labor by unscrupulous high-poweredbosses. We quote two paragraphs from the Hazardcircular:

Slavery is likely to be abolished by the war powerand chattel slavery destroyed. This I and my Europeanfriends are in favor of, for slavery is but the owning of laborand carries with it the care of the laborers, while theEuropean plan, led by England, is that capital[Internationalists] shall control labor by controlling wages[that is, by destroying their purchasing power and creatingunemployment].

This can be done by controlling the money. Thegreat debt [national] that capitalists will see to - that is made

out of the war - must be used as a means to control thevolume of money. To accomplish this the bonds [wardebts] must be used as a banking basis. We are nowwaiting for the Secretary of the Treasury to make thisrecommendation to Congress.

It was the job of Jay Cooke, the great warfinancier, fiscal agent of the Government andgeneral spokesman for the beneficiaries, to assumethe somewhat difficult role of restating Hamiltonsfalsehood so as to fool the people again on theblessings of public debt. Here is Cookes

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absurd proposal:

We lay down the proposition that our national debtmade permanent and rightly managed will be a nationalblessing. The funded debt of the United States is theaddition of $3,000,000,000 added to the available actualcapital. To pay this debt would be to extinguish this capitaland lose this wealth.

Imagine the deception and audacity of Mr. Cooke.Wealth is a physical thing resources, houses, farms, etc.He tried to tell the American people and did make some ofthem believe that debts of the taxpayers (governmentbonds) are wealth. They are not. Mr. Cooke received$25,000 per year for repeating the lie and making it stick.

The National Banking act was enacted on

February 25, 1863. It was then and is now known to beoutrageous. The act was misnamed National to deceivethe people. It was national only to the extent of using thenations money issuance powers dishonestly. It gavenational banks the power to issue the nations currency.National banks under that act have power to issue currency(paper money) by simply depositing certain issues of

government bonds with the United States Treasury andobtaining currency. Therefore, the privately owned nationalbanks collect interest on bonds deposited with the Treasurybut they pay no interest for the currency which is releasedto them. They keep only a 5% gold certificate reserve withthe Treasury to take care of whatever currency might be

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presented for payment at the Treasury. Think this fallaciousproposition through! Government bonds are taxpayers

promises-to-pay, secured by a first lien on all physicalproperty within the nation and a first lien on nationalincome, because Congress has the power to tax. These fullysecured interest-bearing taxpayers promises-to-pay arecreated by the Government and exchanged for privately-owned banks promises-to-pay which are unsecured. Theseunsecured promises-to-pay are called money. Imagine abanking system which permits taxpayers promises-to-payto be exchanger for private individuals promises-to-pay.(Money Creators, pp 213-214.)

Regarding his opinion of the National Bank

Act, Horace Greeley wrote in 1872:

We have stricken the shackles from four million

human beings and brought all laborers to a common level,not so much by the elevation of the former slaves as bypractically reducing the whole working population, whiteand black, to a condition of serfdom. While boasting of ournoble deeds, we are careful to conceal the ugly fact that byour iniquitous money system we have nationalized a systemof oppression which, though more refined, is not less cruel

than the old system of chattel slavery.

Writing of the period following theAmerican Civil War, the German statesmanBismarck said:

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I fear that foreign bankers with their craftiness andtortuous tricks will entirely control the exuberant riches of

America, and use it to systematically corrupt moderncivilization. They will not hesitate to plunge the whole ofChristendom into wars and chaos in order that the earthshould become their inheritance.

Now that we have seen how the system of

international control was firmly established in

American finance and industry, let us watch thesteps by which it maneuvered the Panic of 1873.

Originally, in England, both gold and silverwere equally important parts of the money base. Inthe United States, from the adoption of theConstitution in 1789 until 1873, both gold andsilver served equally as a money base. Thecombination of the two metals worked well for thepeople as a whole, but it did not suit the purpose ofthe gold brokers. Mayer Amschel (Rothschild) hadtaught his five sons to induce all countries to adopt

gold as a single basis for money. England

capitulated and demonetized silver in 1818. Butthe United States was harder to convince, havingwithin it borders some of the largest silver depositsin the world.

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Nevertheless, through conniving and bribery,foreign bankers finally accomplished their purpose.In 1872. Ernest Seyd came from London, bringingwith him the tidy sum of $500,000. He came as arepresentative of the governors of the Bank ofEngland, for the purpose of bribing AmericanCongressmen to pass a law demonetizing silver.

He was instructed to call upon the Governors for

any amount of money required to get the job done.His success was stated in The Bankers Magazine,August 1873, as follows:

In 1872, silver being demonetized in France,England, and Holland, a capital of $500,000 was raised andErnest Seyd, of London, was sent to this country with this

fund, as the agent of foreign bondholders and capitalists, toeffect the same object here, which was accomplished.

It is interesting to note how cleverly thesordid transaction was further disguised by thisentry in the Congressional Record of April 1872,

page 3032:

Ernest Seyd, of London, a distinguished writer andbullionist, who is now here, has given great attention to thesubject of mint and coinage. After having examined thefirst draft of the bill, he made sensible suggestions which

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the committee adopted and embodied in the bill.

The vicious law was passed thanks to Mr.Seyds sensible suggestions. Silver wasdemonetized. And the result was such animmediate and drastic curtailment in the volume ofmoney that the nation was thrown into a panic anda terrible depression that lasted for five years.

Regarding the Panic of 1873, Senator Ferry ofMichigan said:

Millions of people were reduced from goodcircumstances to penury, or covered with debt, beneathwhich burden their backs must bend until it is unloaded atthe grave, where an innocent posterity must take it up andbear it on.

President Grant, before his death, admittedthat he had been misled in allowing a silverdemonetization bill to become law.

By passing the Bland-Allison Act of 1878,

Congress partially restored the monetary use ofsilver. Again the people became more prosperous,whereupon conspirators began to set the stage forthe Panic of 1893. In the spring of 1891, while

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Benjamin Harrison was president, Internationalistsprepared and circulated among bankers and otheragents the following revealing confidentialcircular:

We authorize our loan agents in the Western Statesthat loan our funds on real estate to make them fall due onSeptember 1, 1894, and at no time thereafter. OnSeptember 1, 1894 we will not renew our loans under any

consideration. On September 1st we will demand ourmoney. We will foreclose and become mortgagees inpossession. We can take two-thirds of the farms west of theMississippi, and thousands of them east of the greatMississippi as well, at our own price.We may as wellown three-fourths of the farms of the West and the moneyof the country. Then the farmers will become tenants as in

England. After September 1

st

, the interest we receive oncoupons will be accumulated. We will not lend any of ourfunds after that date, as we can make more money bywithholding our interest income.

It is not necessary to comment on thisdiabolical plot, except to call attention first to the

due date for loans- September 1

st

, 1894 and to thefact that none of these loans were to be renewed;and, second, to the fact that the particular aim ofthis conspiracy was to ruin the well-to-doAmerican farmers. Loans made in 1891 were due

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in 1894. The planned panic was effected onschedule in 1893. The fictitious scarcity ofmoney, resulting from the premeditated withdrawalof credit by the international bankers, left most ofthe borrowers unable to pay their loans inSeptember 1894. Then came the predictedforeclosures and sudden poverty, which many

living persons experienced again as they once

did in the bitter hardships of their childhooddays. 1

1. Another chapter of this same tactic was used whenbankers re-set interest rates high enough onAdjustable Rate Mortgages in 2007 so that home-owners could no longer make their mortgage

payments. Foreclosures numbered in the millions.At the same time bankers shrunk the availability ofcredit to small businesses. This resulted in millionsof workers laid off.

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End of Part I

(Part II will trace the influence ofInternationalists in the Federal Reserve

System, the World Wars, and the post-war

debacle. It will trace also the steps required

to avert an approaching avalanche of

disaster.)

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Is Economic Ruin

Inevitable?Part II

By C. R. Dickey

Destiny Publishers


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Part II

At the turn of the century, moneymanipulation in the United States moved withaccelerated pace. The Panic of 1903 was followed

by another in 1907, which came so suddenly thatlocal bankers over the nation, as well as the generalpublic, were caught unawares. New Yorks greatbanks even refused to honor the drafts of these

interior banks on their own deposits in the NewYork banks. Again a few scheming individuals

had deliberately curtailed the medium of exchangeto the detriment of all except themselves.

During this period long-range plans werelaid for further economic control of America. Thisgolden era of international banking chicanery islinked with the emigration of the Warburg banking

clan from Hamburg, Germany to New York. Itbegan in 1894 with the arrival of Felix M.Warburg, who became a member of the New Yorkbanking firm of Kuhn, Loeb & Company. Since

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1895 Paul M. had been a partner in the Hamburgbank of another brother, Max M. Warburg. Maxremained in Hamburg to help guide the destiny ofGermany. He wrote books on finance toenlighten the German people, and from 1924served as adviser to the Reichsbank.

Paul M. Warburg was a dominant figure inthe American financial scene from 1907 until hisdeath in 1932. Although he did not become anaturalized American citizen until 1911, he wasmost active in planning national bankingreorganization from 1907 to 1914, and was amember of the first Federal Reserve Board. Thisfact should be kept in mind as we look into thebeginning of the so-called Federal ReserveSystem.

After the crash of 1907, Senator Nelson W.

Aldrich of the Banking and Currency Committee

sponsored the Aldrich plan, which was the firstofficial step toward the Federal Reserve Bank law.When the farmers and small merchants realizedthat the National Bankers Association supported

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the Aldrich plan they made such vigorous protestsagainst it that the plan had to be revised. The newBill, written by Senator Robert L. Owen, wasknown as the Owen Glass Federal Reserve Bill.The Bill, as originally written by Senator Owenand approved by the Senate Committee, containeda mandatory provision that the price levels be kept

stable. But when the Bill reached the House of

Representatives this extremely importantmandatory provision was stricken out thus thevery nature of the Act was changed and its purpose

defeated.

Here is the story in Senator Owens wordsfrom his Foreword in Money Creators byGertrude M. Coogan:

In December 1907, I entered the United StatesSenate and served there for eighteen years. Within ninetydays after I entered the Senate, on the 25th day of February1908, I analyzed completely the Panic of 1907; showed itscauses, how it could be cured, and how depressions could

be prevented in the future. My text was stability in thevalue of Money.

I was made Chairman of the Committee onBanking and Currency of the United States Senate on

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March 5, 1913, and immediately drafted a Bill Called aFederal Reserve Bill.

In July 1913, Hon. Carter Glass joined me inpresenting to the Senate and to the House the so-calledFederal Reserve Bill which had been prepared by me theprevious March, but which had been expanded, andcontained provisions with which I was not entirely content.My committee was immediately called together to take

testimony on this Senate Bill, and after 3,000 pages ofprinted testimony had been taken, my colleagues in theSenate authorized me to write another Bill. I thereupon hadthe Senate strike out the Bill that had been prepared in theHouse and substitute the Bill which I had originallyprepared. The Senate adopted the Bill written by mewithout a change of word. In the Bill introduced in July, inwhich the Hon. Carter Glass joined me, I had inserted a

provision requiringthat the powers of the Reserve Systembe employed in the service of commerce and to promote astable price level. The meaning of this, of course, was toestablish and maintain the stable value of money undermandate. This mandatoryprovision was stricken out in theHouse under the leadership of Hon. Carter Glass. I wasunable to keep this mandatory provision in the Bill becauseof the secret hostilities not fully understood.

What happened to the Federal Reserve Bill

from the time it was written by Senator Owen inMarch 1913 until the Federal Reserve Act was

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passed by Congress in December of that sameyear?

One significant thing, which took place inthe meantime, was a call meeting of bankers inNew York City. Top international bankerssummoned leading domestic bankers from all the

forty eight states to attend this meeting for

discussions of a confidential nature Intelligibleonly to bankers. The presiding officer was ashrewd internationalist, trained in European ways.His job was to sell the community bankers on theidea that the Federal Reserve System should be setup on the pattern of the European internationalbanks.

He addressed the group on the advantages tobe obtained by the bankers themselves, and theblessings they could bestow upon the people as awhole, by giving America a really unified banking

system. A few banks, he told them, had become

strong enough to serve the country adequately; butin the main, unfortunately, banks had remainedlocal in scope and had not become an integral partof the great international system of banking. Real

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progress, he pointed out, is based uponinternational cooperation.

England, he explained, is now asking us toset up a banking system similar to the Banks ofEngland, France, and the Reichsbank. Did heexplain also that this request had not come from the

British Government, but from the Rothschild

privately owned Bank of England? Did he tellhis audience that none of these European bankswith the misleading names are governmentinstitutions? And that they are, instead, aninterlocking chain of private banks owned by aclosely-knit group of moneychangers? Did he letthem see this gigantic banking monopoly encirclingthe globe and preying upon the people andresources of all nations? It is highly probable thathe did none of these things. Domestic bankersshould not be too well informed about themysteries of banking.

However, the speaker had no troubleconvincing most of the bankers present that ourcountry must have a system that will make ourcurrency very elastic. The best way to do this, he

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said, is to establish twelve great Central Banks invarious parts of the United States. Apparently,each of the twelve banks would be independent,but the lesser eleven will be expected to cooperatewith the great Central Bank at New York City.Furthermore, he proposed that these bankinginstitutions be called the Federal Reserve

System.

This system will enable us to create muchwider gyrations in the price structure, he added;and besides, we shall have bigger and betterbusiness cycles. The required minimumreserves will be much smaller than under presentbanking laws, he assured the nations localbankers, and you can then issue a greater volume of(fountain pen) money.

Under the proposed system you communitybankers in the smaller cities will be required to keep only13% reserve against your demand deposits and 3% againstyour time deposits. You see, this will give you greater

leeway. In reality, for every dollar of real money depositedas a demand deposit, you can expand 7 plus times, and forevery dollar deposited as a time deposit, you can expand 33times. This will provide immense possibilities for the

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creation of broad business cycles.

You will keep your reserves in the Central Bank ofyour district. The Central Bank of your district will berequired to keep a 35% gold reserve against your deposits(reserves). This will mean that since only 35% goldreserve is needed to back deposits (your reserves at CentralBank), $1.00 of gold in the vaults of the Central FederalReserve Bank will support a maximum of $30.00 in yourprivate promises-to-pay, which the people have been taughtto regard as money.

The community bank must have on the books ofone of the twelve Central Banks a deposit of $14,500.Against this deposit (reserve) the Central Bank must have a35% gold reserve; 35% of $14,500 equals $5,075.Therefore, $5,075 in gold will support $150,000 deposits

(loans) in the community bank. In other words, $1.00 ingold will support $30.00 in promises-to-pay of thecommunity bank, for $150,000 is approximately 30 times$5,075.

This Federal Reserve System will enable us to useGovernment bonds (taxpayers promises-to-pay given toprivate bankers in exchange for private bankers unsecuredpromises-to-pay) as a part of our reserves in a much moreefficient way than we have ever done before. We will beable to carry on what are known as open marketoperations. That simply means expanding or contractingthe volume of the community bank reserves on the books of

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the Central Bank, by taking Government bonds in or out ofcommunity banks.

This system will be Federal in name only. Theprivate bankers will own it. Originally we will promise toshare with the Government the heavy profits on ourmonetary franchise which the Government will thus placein our hands; but later on, when profits are ready fordistribution, doubtless ways can be found to avoid toogenerous a sharing of the proceeds derived from ourmanagement.Of course, the public will be told that theobject of the new system is to act as a stabilizer. (SeeMoney Creators, chapter 5.)

It is not difficult to discover the source of thesecret hostilities to which Senator Owen referred,when one looks into the writings of Paul M.Warburg. In the following paragraph, note how hetakes credit for influencing the passage of theFederal Reserve Act in its final form:

I do not claim to have originated any new bankingprinciple; but from my arrival in America I have beenimpelled to urge the adoption of the fundamental principlesupon which, under varying forms, were based on thepractices of every industrially advanced country except theUnited States. It was owing to the interest I had shown inbanking reform that, when the Aldrich Banking & CurrencyCommittee was appointed, I was invited to assist it in

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formulating a plan providing for the creation of a CentralReserve Association with Regional branches. (The

Federal Reserve System, Its Origin and Growth,page 8.)

Edwin R. A. Seligmans introduction to PaulM. Warburgs Essays on Banking Reform in theU.S. written in August 1914, contains thisstatement:

For it may be stated without fear of contradictionthat in its fundamental features the Federal Reserve Act isthe work of Mr. Warburg more than of any other man in theCountry.

The late Edwin R. A. Seligman, a ColumbiaUniversity teacher and economist, was the son of

Joseph Seligman, founder of the J. & W. Seligman& Company, international banking house in New

York, with branches in San Francisco, NewOrleans, London, Paris, and Frankfurt am Main.

The extent of Warburgs proposed controlthrough a Central Reserve Bank is suggested onpage 39 of theEssays:

The currency Committee of the Merchants of NewYork, in a letter dated July 27, 1910, recognizes as Paul M.

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Warburgs plan the proposed United Reserve Bank, whichwas to end all currency famines and money panics, and

relieve the national treasury of all responsibility for themoney market, international exchanges and movements ofgold.

It is important to note that this letter is datedJuly 27, 1910, and Paul M. Warburg did notbecome a naturalized American citizen until 1911.

Was he invited to assist the Senate Banking &Currency, as he says? Or was pressure brought tobear upon the Committee to make his help seemindispensable?

By this somewhat devious path we can begin

to see the blighting work of certain powerful,united aliens in our midst. Their presence explainsthe strange metamorphosis for the Federal ReserveBill from its inception in March 1913, until itspassage by Congress on December 23, 1913. Theirpresence explains why Senator Owens genuineFederal Reserve Bill ended in a colossal private

banking system for Mr. Warburg and hisinternational colleagues. It has been well said thatthe Federal Reserve System is one of the mostdestructive economic instruments ever placed in

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the hands of private individuals and has been usedas such.

A few comments from Money Creatorsfurnish food for thought at this point:

In 1913 Congress passed the Federal ReserveAct. It was loudly advertised as a glorious achievement.The Congress was told that it was the last word in modernbanking practice. Undoubtedly it was for those whoinserted trick clauses and removed essential protectivemandates. Congressmen were told that it was modeled afterthe Bank of England, the Bank of France, and theReichsbank of Germany, so that it could not fail to be wellnigh perfect.

What the American people were not told was thatall of these European banks are not governmentalinstitutions as their names were intended to infer, but areprivate banks, whose charters were the result of legislativetrickery and have for centuries enslaved the people of theirrespective nations. Our people were nottold that the NewFederal Reserve System was modeled upon the systemexemplified by the Rothschild European Central Banks with

their misleading names.

So we accepted the misstatements of 1913, and ourtextbooks in high schools, colleges, and universities wererewritten to proclaim the glories of the Federal Reserve

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System. We were told that we would never again havebanking collapses, and that business depressions could now

be avoided due to the elasticity of the system. These weregrave falsehoods because the Federal Reserve Systemsimply turned over to agents of the international bankersstill greater powers to create a collapsible banking structurethan they had previously possessed.

The stock of the Federal Reserve Banks is notowned by the Government of the United States. It is ownedby private banks exclusively. They do not pay one cent forthe use of the great privilege of lending to the United Statesthe nations own credit. Instead the nation pays them. TheUnited States does not, in any way, participate in the profitsof the Federal Reserve System. When the Act wasoriginally passed, an inducement was offered the people inthat the United States Government was to participate in the

profits after the surplus account had reached a certainpercent of the total capital invested. But later on so-calledperfecting amendments were added to the Act so thattoday the United States is not entitled to one single centfrom the operations of the Federal Reserve Banks.

Examine a Federal Reserve Note issued by any oneof the twelve Central Federal Reserve Banks. You will notethat The Federal Reserve Banks do not agree to redeemthem. The Federal Reserve Notes read: The United Statesof America will pay to the bearer on demand. The UnitedStates guarantees all of the paper money that is issued bythe Federal Reserve Banks. The Federal Reserve Banks do

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not issue this paper money upon their own financialresponsibility, yet they collect interest on it.

Do the Federal Banks pay for the privilege ofissuing these Federal Reserve Notes (paper Currency)? Nothey do not. The Federal Reserve Act, Section 16, providedthat they would pay an interest charge fixed by the FederalReserve Board. The Federal Reserve Board has alwaysfixed that rate at zero. [Note: Remember Paul M.Warburg was a member of that first Federal Reserve Board.Therefore, these twelve Central Banks and the memberbanks use the nations credit to the extent of many, manybillions and never pay for it. Practically all of the currency(pocket money) we have in circulation today is currencyissued by the Federal Reserve Banks. They use the nationscredit free, but the nation itself is paying interest on it everyday it is outstanding. Under the present Federal Reserve

Laws the people can expand their currency only by goingdeeper into debt and paying more interest.]

Under our present arrangements, if the UnitedStates Government needs a million dollars, it issues bondsfor that amount to the Federal Reserve Banks. The FederalReserve Banks buy the million dollars in bonds. They canthen redeposit those same bonds with the Government andreceive a million dollars in new currency printed at theBureau of Engraving and Printing (owned and operated bythe United States Government). While these FederalReserve Banks use and loan the currency, they will also getinterest on the Government bonds which they have

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deposited. They are required to keep only 5% cash ondeposit with the Treasury and to pay of 1% tax which is

supposed to cover the cost of printing and replacing wornout currency. No intelligent person can give any goodreasons (excepting that the system is thoroughly dishonest),as to why the United States Government should not issuethe currency in the first place, rather than issue tax-exemptinterest-bearing bonds, and then permit the holders of thosebonds, the bankers, to sue the bonds as security for theissuance of currency.

A few years ago Mr. Thomas A. Edison was askedif he favored the government borrowing to develop a

project then being considered. Mr. Edisons reply 2 was:

Any government that can issue a bond, interest-bearing,that is good, can issue a dollar bill non-interest bearing, thatis good. The only difference is that the billdoes not draw

interest. (pp. 132-3, 141-3.)

Did the international bankers know in 1913

that a war was in the making and timed to break in

2. Included at the back of this book is the complete text

of Thomas Edisons Editorial Letter with respect tofinancing of the Mussel Shoals Dam Projectreprinted here from the Spotlight Newspaper inAugust of 1983. (Appendix A.)

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1914? Undoubtedly they did. Some parts of theFederal Reserve Act, as Miss Coogan says, seem tohave been altered at the instigation of those who apparentlyknew that a great war was being planned. Financing a warwould require a great central bank, which wouldmanufacture billions of new credit money to finance the

huge production for destruction.

After all, she adds, it is a magnanimousgovernment that allows a few private individuals to createits money for it, and then allows the dear hard-workingprivate citizens to buy those creations, and pay tribute everafter in interest. (pp 54-55.)

From the foregoing facts we see that theFederal Reserve System was finally established

along the lines advocated by the internationalbankers. This system was guaranteed to end allmoney panics, and relieve the national treasury ofall responsibility for the money market,international exchanges and movements of gold.Its sponsors and manipulators have certainly

relieved the national treasury all right and leftit more than two hundred and fifty billion dollars inthe hole. And, as everyone knows, it did notprevent the panics of 1921 and 1929, as promised.

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Therefore, it will not be amiss to see how theFederal Reserve System was actually used to bringabout those depressions.

World War I began in August of 1914, afterthe passage of the Federal Reserve Act inDecember 1913. Soon the United States wasinvolved in financing war supplies for the allies,

and later for our own vast Army and Navy.

How did we finance the purchase of those giganticamounts of perishable goods which were destroyed in theconduct of the World War? We financed them by allowingthe Federal Reserve System (a privately-owned andcontrolled central banking institution) to create its ownprivate promises-to-pay and our national Governmentborrowed these privately-owned banks promises-to-pay.

The United States Government printedGovernment bonds which were signed by the Secretary ofthe Treasury. These Government bonds are taxpayerspromises-to-pay. They are secured by mortgage on all theproperties within the nation and are a prior claim on all

national income, due to the fact that Congress has the powerto levy taxes. The member banks of the Federal ReserveSystem took these interest-bearing Government bonds(taxpayers promises-to-pay) in other words, theprivately-owned Federal Reserve Banks createddeposits

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payable to the United States Government. The FederalReserve Banks turned over to the United States Treasury a

5% reserve of real money issued to them in exchange fortheir private promises-to-pay (which they called money andwhich was spent by the United States Government). Thesemanufactured deposits became immediately available forchecking purposes by the United States Government. Thiswas credit, or bank deposit inflation, the most dangerouskind possible, because it could be collapsed at will by secretprivate interests; which was done in 1920 when,suddenly, the bottom fell out of our economic structure.(Money Creators, pp. 137-8.)

Let us now see how this was done. On May

18, 1920 a secret bankers meeting was held inWashington, D.C. According to the published

proceedings of this meeting, it was held in thename of the Federal Board, the Federal AdvisoryCouncil and the Class A Directors of the FederalReserve Banks. On the recommendation of theOrderly Deflation Committee of the AmericanBankers Association, a secret resolution waspassed declaring for the contraction of money and

credits. Presumably the American BankersAssociation recommended the resolution.

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An account of this meeting is contained inVolume 64, Part 5 of the 67

thCongress, Fourth

Session; and in the Congressional Record, page4858, Proceedings of February 28, 1923. Thenames of those attending the meeting, and theirstatements, can be obtained by writing theSuperintendent of Documents, Washington, D.C.,

and requesting Document No. 310 of the 67th

Congress, Fourth Session. However, as to thenames mentioned in the Document, and thepurpose of the secret resolution, it is well toremember the following statements from the Hon.Finly H. Grays report of this same meeting:

The manipulating financiers and bankers, the

masterminds of frenzied finance, engineering this giganticsecret movement, were not there, present and in person, butwere pulling the wires, directing and prompting their tools,puppets and cats-paws from afar.

Mr. John Skelton Williams, Comptroller of theCurrency, when this contraction of money was proposed,explained his efforts to stop the resolution being drawn. Inrelating his efforts to the late John A. Simpson, he said: Itold the other members of the board, Do you know that thiswill break lots of little country banks? They cold-bloodedlyanswered me, they ought to break there are too many ofthem. I then told them, dont you know its going to

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ruin lots of farmers, and they cold-bloodedly replied to me,they ought to be ruined they are getting so prosperous

they will not work. (Congressional Record, May 2, 1933.)

Thus, once more hard-working Americanpatriots were sold down the river. FederalReserve Banks, under orders of the FederalReserve Board, pursuant to the secret resolution ofMay 18, 1920, without notice or warning, began toraise the rediscount rate from 2% to 5%, to 7%, to8%, to 9% and until, for some farm banks, the rates

were much higher. The results of this highhandedmanipulation through the Federal Reserve Systemare ably stated in a few paragraphs from MoneyCreators:

Simultaneously with this drastic increase in therates, the Central Reserve Banks begansellingGovernmentbonds. This selling continued until the price of Libertybonds dropped to 80. The people who remember their ownefforts to get anything like the price they paid for LibertyBonds which they had to sell to live, will recall the type ofpurchasers who opened over-the-counter places in which

these bonds were bought at bargain levels. Had these bondbuyers been particularly noted for their patriotism duringthe war?

Falling bond prices decreased the reserves of the

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community banks. Decreasing reserves made it imperativethat the community banks call in their local loans and force

all borrowers to pay. This brought a terrific liquidation ofall agricultural products. Almost in the twinkling of aneye, agricultural prices tumbled to ruinously lowlevels.This was premeditated: the farmer had to be ruinedand kept ruined if Americans were to be finally subjectedand eventually bolshevized.

Rural banks could accept farmers deposits, butcould not loan farmers money to farmers; such loans wereunsound by decree of the Federal Reserve dictators. Thus,the sluices were prepared for draining the rural money toindustrial centers, and thus, via speculation, into the handsof the Internationalists. On this sudden fall of the pricelevels, the confiding and unsuspecting farmers and othercitizens of the agricultural districts saw their property,

crops, and produce sinking in a vortex of falling values,forcing down and destroying their buying power, theirinterest, debt, and mortgage paying power.Thisdestructive policy was pursued intentionally. It was not anexperiment. Hon. Finly Gray said that they knew exactlywhat the result would be.

It is interesting to note that at the time of theagricultural collapse in the United States, some in charge ofthe destructive policies sent their paid agents out into theagricultural states to misinform and mislead farmers. Thepurpose was to promote dissension and radicalism. Thosewho instigated these movements were the paid agents of the

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very ones who were responsible for placing the terribleeconomic pressure on farmers. Their object was to make

the American Farmer lose faith in his own institutions andinnocently become a party to the destruction of his owncountry. (pp. 62-64.)

Now that farmers could be kept paralyzedwith agricultural prices below the cost ofproduction, plans were laid for another upward

swing in the business cycle, which would end thistime in the crash of 1929. The dizzy spiral aimedespecially at businessmen, investors, andindustrialists started in 1923, when the UnitedStates began making irresponsible foreign loans tothe countries of Europe and South America.

Many of these loans, says an informed analyst,were for fantastic purposes and the borrowers hadno intention of ever paying them.

Then in 1927, Montagu Norman of theRothschild-controlled Bank of England came toNew York for the purpose of persuading the

Federal Reserve Board to reduce the rediscountrate. This reduction was opposed by the elevenFederal Reserve Banks outside New York City;nevertheless, they were ordered to lower their

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rediscount rates and begin buying additionalGovernment bonds. The purpose of this move wasto build up huge reserves in the city banks withwhich to float the frenzied credit inflation andstock market speculation of 1928-29.

People were encouraged to borrow an