history

A MONETARY HISTORY OF THE UNITED STATES.
Copied from Dick Distelhorst's History

1750's— COLONIAL SCRIP— FRANKLIN'S COMMENTS

During a visit to England in the 1750s, Benjamin Franklin was asked why the American Colonies were so prosperous. He replied, "That is simple. In the Colonies we issue our own money. It is called Colonial Scrip. We issue it in proper proportion to make goods and services pass easily from producers to consumers. In this manner, creating ourselves our own paper money, we control its purchasing power, and we have no interest to pay to anyone." (This is what the American Monetary Act would re-establish — control of our own debt-free and interest-free money).

Hearing this, the English Bankers had the British Parliament pass a law prohibiting the Colonies from issuing their own money, ordering them to use only British money, which was in short supply. Franklin later stated, "In one year the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed."

This action by the English was the main reason for the Revolutionary War. This was also the last time either the American Colonies or the United States of America spent its own interest-free and debt-free money into circulation until the Civil War, when Abraham Lincoln spent $450 million of Greenbacks into circulation to finance the Civil War. (more on that later).
Click http://en.wikipedia.org/wiki/Currency_Act for more

1776— DECLARATION OF INDEPENDENCE— REVOLUTIONARY WAR

We fought the Revolutionary war with paper money spent into circulation by the Colonial Government. While most of us remember from school that too much Continental Currency was issued and it became worthless, the textbooks forget to include the fact that the Colonial government did not issue too many Continentals — that was done by the British who printed billions of dollars worth of counterfeit Continentals and put them into circulation.

In any event, we fought and won the American Revolution with paper money issued by our own government. At the end of the Revolutionary War the Colonial Goverment was $25 million in debt and the 13 Colonies were $54 million in debt, a total debt of $79 million.
Click www.monetary.org/gracchusjones.html for more

1791— ALEXANDER HAMILTON— FIRST BANK OF THE UNITED STATES

A debt-based monetary system was imposed on us in 1791 by Alexander Hamilton. Incredibly, in the same year the Constitution and the Bill of Rights were ratified, Hamilton was able to persuade the Congress to vote in favor of the First Bank of the United States (which, despite its name, was privately owned) and we have used the privately owned, debt-based fractional reserve system of banking ever since. How Hamilton got this passed is an interesting story.

There was a shortage of money in the country. We had just fought and won the Revolutionary War. The Continental Congress printed Continental currency to pay for the war. These "continentals" eventually had no value at all, in good part because they were easy to counterfeit and the British did exactly that in huge amounts. So the Continental Congress then issued bonds to Revolutionary War soldiers as payment for their services. These too had no value because the Continental Congress had no power to tax or raise money to back up their promises. What Hamilton proposed was for the U.S. Government to take over all of the state debts and also to redeem all the soldiers' bonds at face value. Members of Congress knew this, but the soldiers did not, so members of Congress and their agents went out and bought up these bonds at five cents or less on the dollar. Then they voted for the First Bank of the United States and made huge profits. Greed is a powerful force, and greed is what fastened a debt-based monetary system on our nation right at its beginning.
Click www.let.rug.nl/usa/B/hamilton/hamil20.htm for more

1836— 2ND BANK OF UNITED STATES— ANDREW JACKSON

Here's what President Jackson said about the 2nd Bank of the United States, "You are a den of vipers and theives, I intend to rout you out, and by the eternal God I will rout you out." And he did. He refused to renew its charter in 1836. President Jackson was so proud of this achievement that "I KILLED THE BANK" is engraved on his tombstone. Unfortunately, Jackson did not understand that the government itself should issue money and he let other privately owned banks fill this void by printing their private banknotes and lending money into into circulation as interest bearing debt.
Click http://quotes.liberty-tree.ca/quotes_by/andrew+jackson for more

1863— LINCOLN SPENDS GREENBACKS INTO CIRCULATION

During the Civil War President Abraham Lincoln needed more money to pay for the war. He went to the big bankers of the time and they asked him to pay an interest rate of 24% or more for their bank notes. Instead of paying that outrageous rate, Lincoln printed and spent into circulation $450 million worth of so-called Greenbacks (the bills were green on the back).

If he had not done this, we would still be paying interest on that $450 million. From 1863 until 1907, even at a modest 4% interest rate, we would now have paid $5.1 billion in interest charges — and we would still owe the original $450 million. That's the way our debt-based system works.
Click www.xat.org/xat/usury.html for more

1910— JEKYLL ISLAND AND THE FEDERAL RESERVE ACT OF 1913

In the year 1910, what became the Federal Reserve Act was conceived and written in secrecy during a nine day period on Jekyll Island, Georgia. At the time the Populist movement was calling for the breakup of what was then called the "money trust." While this was going on seven men met in strict secrecy to write what became the Federal Reserve Act of 1913:

NELSON ALDRICH, the Senate Whip
ABRAHAM PIAT ANDREW, Assistant Secretary of the Treasury
FRANK VANDERLIP, President of National City Bank of New York*
HENRY DAVIDSON, Senior partner J. P. Morgan
CHARLES NORTON, President of the First National Bank of New York
BENJAMIN STRONG, Head of J.P. Morgan's Banker's Trust Company**
PAUL WARBURG, Partner Kuhn Loeb & Co***

* Largest American private bank—represented Rockefeller, Kuhn Loeb
** Strong became the first Fed Chairman
*** Warburg represented the Rothschilds in England and France

The only reason we now know these details is because years after passage of the Federal Reserve Act, when it was the accepted system in the U.S., they began to write books and articles about this secret meeting in 1910 on Jekyll Island.
Each wanted to take credit for what he had achieved.

The interesting thing about this is that the Federal Reserve Act was supposedly being written to break the power of the "Money Trust" — but the Federal Reserve Act was being written by the "Money Trust".

If this had been known at the time, the act would never have passed.

Click www.populistamerica.com/the_federal_reserve_jekyll_island_monster for more
Click http://video.google.com/videoplay?docid=638447372044116845&q=
financial+meltdown&total=671&start=0&num=10&so=0&type=search&plindex=6
for a 45 minute video about this meeting

1913— PERSONAL INCOME TAX AND FEDERAL RESERVE ACT

1913 was a year of great change in our nation. In the spring of 1913 the personal income tax was passed, then, in December, the Federal Reserve Act was passed — the same Act written at Jekyll Island. The fact that both the Personal Income Tax and the Federal Reserve Act were passed in the same year was not a coincidence. The big bankers who would greatly profit from the Federal Reserve System knew they had to find a way to get American citizens to pay the interest on the constantly growing debt they would create over the years. That interest-bearing debt, according the the latest Federal Reserve Report of Total Credit Market Debt at the end of the third quarter of 2007, is now very close to $48 trillion.
Click www.federalreserve.gov/RELEASES/z1/current/accessible/L1.htm for more

1929— THE CRASH AND THE GREAT DEPRESSION

After the stock market crash of 1929 the Great Depression began and it lasted until 1941 and World War II. The Great Depression was made much worse by the actions of the Federal Reserve which actually reduced the money supply from 1929 to 1933. After the election of 1932, President Franklin D. Roosevelt and his New Deal took actions to get more money into circulation.

Unfortunately he did this by borrowing more "debt-money." Roosevelt obviously did not understand that the solution was to eliminate the power of private banks to create almost all our money. He did not insist aht government spend needed money into circulation. If he had known that and done that, the Great Depression would have ended with adequate spending of needed money into circulation; instead it only ended with the spending for war, when the Federal Reserve, in effect, paid all government overdrafts against non-negotiable non-interest bearning government bonds, As my father used to say, "There is always enough money for war, but never enough money for peace."
Click http://blog.mises.org//blog/archives/timberlake.pdf for more

1934— "BANK HOLIDAY"

In 1934, President Roosevelt declared a Bank Holiday, At the end of the "holiday" thousands of banks never reopened. They paid their depositors ten cents on the dollar, or less, as they were liquidated. I know this on a personal basis. In 1930 my late wife's father was killed in an automobile accident. He had a $10,000 life insurance policy and my wife's mother deposited that $10,000 in the Iowa State Bank in Burlington for safekeeping. It was still there in 1934, the Iowa State Bank never reopened, and my wife's mother was paid $1,000 for her $10,000 deposit. Let's put those dollars into current dollars to give you an idea of how much she really lost. To equal the buying power of $10,000 in 1934 you would have to have over $150,000 today.
Click http://livinghistoryfarm.org/farminginthe30s/money_08.html for more

GLASS STEAGALL ACT— PASSED 1933 — REPEALED 1999

Much of the cause of the 1929 stock market crash was the fact that there was no separation of commercial banks, investment banks, brokerages and insurance companies.

Commercial banks, with their fractional reserve power to create "debt-money" out of their own credit worth loans, would make loans to investment banks who, in turn, would invest it in the stock market, often using a 10% margin (today the margin is 50%). This is what brought on the "roaring twenties" before the crash of 1929. In 1933 the Roosevelt Administration passed the Glass-Steagall Act which separated commerical banking from investment banking in order to prevent this from happening again.

Then, in 1999, the Congress passed and President Clinton signed into law the Gramm-Leach-Bliley Financial Modernization Act which repealed the Glass-Steagall Act and put back in place the same situation we had before the crash of 1929.

We are now seeing, and have seen, the fruits of the Gramm-Leach-Bliley Bill of 1999— the stock market crash of 2001, the Enron and World Com, etc. disasters, the rise of so-called derivative funds, the current sub-prime mortgage disaster and the severe recession or worse that may be now underway.
Click http://en.wikipedia.org/wiki/Glass-Steagall_Act for more
Click www.sifma.org/legislative/gramm-leach-bliley_act.html for more

POST-WAR LIQUIDITY, COLD WAR BIG GOVERNMENT— CREATE THE GREAT MIDDLE CLASS— 1945-1975

1945 to 1975 were the golden years of the U. S. economy. Years in which the great middle class came into being, and economic life improved each year for scores of millions of Americans. (In spite of the fact that during those years the top income tax rate was either 91% or 70% — President Kennedy's congress reduced it to 70% in 1962).

Then, from 1979 to 1999, during deregulation, privatization, cuts in social programs and greatly reduced taxes (especially for the very wealthy) only the top 20%, and especially the top 1%, showed real income growth.
Click http://memory.loc.gov/learn/features/timeline/depwwii/newdeal/newdeal.html for more on New Deal inspired government spending
Click www.kellysite.net/ for more on democratic capitalism

[Questionable text follows:]

1941— PEARL HARBOR AND OUR ENTRANCE INTO WWII

I have already covered the fact that the creation of billions of dollars of "debt-money" was borrowed into circulation to fight World War II and the fact that the Great Depression ended as a result.

What is almost totally unknown and unremembered is that Congressman Wright Patman (one of my main mentors in learning about our unjust and immoral monetary system) introduced legislation in 1942 to have the Federal Reserve finance World War II by buying zero interest government bonds directly from the U. S. Treasury so the war could be fought without paying interest to the private banking system. Naturally, the real rulers of our country made sure that no such legislation passed, and we are still paying them interest on the money the private banking system created out of nothing and loaned to us, with an interest charge attached, to fight World War II.

The big banks love war, it is highly profitable to them. Again I repeat, we are now almost $48 trillion in debt— and, by 2016, if the system lasts that long, which I doubt, current trends indicate that we will then be over $100 trillion in debt!!!

Click the link below to see a graph of our national debt over the years, note the WWI and WWII jumps, then the giant recent increase in debt which comes from our debt-based monetary system and its need for more and more debt, faster and faster.
www.die.net/musings/national_debt/

1980s: REAGAN TAX CUTS STARTED "RACE TO THE BOTTOM"

1981 started the era of the rich getting richer and the poor getting poorer, an era that is still with us today. Reagan started the tax cuts for the wealthy, and George W. Bush has continued them. They both knew where their campaign contributions would come from. In 1981, President Reagan signed into law the Garn- St. Germain Act which deregulated the Savings and Loans and put them in the banking business and resulted in the S & L disaster, which has now cost the American taxpayer almost 500 billion. Unlike the Great Depression, the S & L disaster was not paid for by the depositors, it was paid for, and is still being paid for, by the American taxpayers.

From 1981 to the present has been a time of deregulate, privatize, cut social programs and cut taxes, especially for the very wealthy. Without exception, everywhere this so-called "Washington Concensus" program has been tried, and it has been tried in many, many countries, including the United States, the result has been extreme wealth for the few, and a worse economic life for the many. And this "race to the bottom" continues today.
Click this link for more on why Gart-St. Germaine Act caused the S&L debacle
www.chicagomediawatch.org/02_1_enron.shtml

BILL CLINTON ELECTED IN 1992

While the period from 1992 to 2000 was generally a period of "good times," (Like the "roaring twenties") President Clinton failed to pass many of the social programs he advocated while running for President, especially universal health care. Clinton turned out to be, as he himself said, "an Eisenhower Republican."

Clinton supported and signed into law the North American Free Trade Agreement (NAFTA), which has sent hundreds of thousands of good jobs out of our country. Then he signed into law legislation to make us part of the World Trade Organization (WTO), which has resulted in millions of good jobs going overseas. As far as I know, the only truly beneficial social program he passed was the Family Leave Act, which protects your job to take time off (without pay) to care for your family or loved ones.

Clinton also balanced the budget and began to pay down the publicly held portion of the national debt.This, as it always does, resulted in a recession in 2001. There have now been seven different times when serious efforts were made to balance the budget and pay down our debt. All of them ended in recession or worse. Why? Because we use debt as a substitute for money and when we pay down our debt we begin to eliminate our money, which always causes recession.

Another interesting, but little known fact, is that our national debt did not go down during the Clinton years— only the publicly held portion went down, the portion of the debt held by the government went up more than the publicly held portion went down, and the national debt grew larger every year, just as it has done ever since.
Click http://www.kellysite.net/modrep.html for more

2001- 2006— GREENSPAN BEGINS BUILDING THE STOCK MARKET BUBBLE AND LATER THE HOUSING BUBBLE BY HOLDING FED FUNDS RATE AT 1% FOR FOUR YEARS
Click for moree on Greenspan bubbles
www.nypost.com/php/pfriendly/print.php?url=http://www.nypost.com/seven/09122007/
business/greenspan_in_trouble_for_doubl.htm
Click for 3 minute video on Greenspan http://www.brasschecktv.com/page/207.html

2007—ALL THE MONEY TO FIGHT THE IRAQ WAR AND THE AFGHANISTAN WAR IS BORROWED

Unlike every previous war, President Bush has called for no sacrifice by anyone (other than those actually fighting the wars and their families). To the contrary, he has cut taxes (again mostly for the very wealthy) and told us to help fight the war "by going shopping."

USEFUL LINKS

http://harvardmagazine.com/2006/05/the-2-trillion-war.html
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt.htm

OCTOBER, 2008:A FORECAST THAT SEEMS POSSIBLE TO ME

Now I'm using my crystal ball.

By October of 2008, in addition to the continuing wars in Iraq and Afghanistan (hopefully not in Iran as well), with 47 million Americans without health insurance, with our constitutional liberties under attack, with both high inflation and high unemployment underway— in addition to all those things, we will be in the midst of a very severe recession. Right before the November election.
If another 9/11 type attack were to occur in October, 2008, President Bush already has the power to declare a national emergency, to declare martial law and to cancel the November elections.
In a previous newsletter I described the proposed North American Union and the Amero, which would replace the U. S. dollar.
That may be the time that we are told that, to protect America and recover from the recession, we must implement the North American Union and make Mexico, the U.S.A. and Canada all one country, and, at the same time, "to fight inflation," replace the U. S. Dollar, the Mexican Peso and the Canadian Dollar with the Amero, which, we will be told, is worth ten U. S. dollars.
Of course, making the Amero worth ten U. S. dollars does nothing but move the decimal point. It does not change our present debt-based system. It would be a move to make our debts seem to be lower without really changing anything. And the present debt-based system would continue.

We'll see how well my crystal ball works in less than a year. Click below for a video about the North American Union and the Amero
www.youtube.com/watch?v=vuBo4E77ZXo

USEFUL QUOTATIONS

"If Tyranny and Oppression come to this land, it will be in the guise of fighting a foreign enemy." — President James Madison

"What difference does it make to the dead, the orphans, and the homeless, whether the mad destruction is wrought under the name of totalitarianism or the holy name of liberty and democracy?" — Mahatma Gandhi

"Emergencies" have always been the pretext on which the safeguards of individual liberty have been eroded." — FA Hayek

"I destroy my enemies when I make them my friends." — President Abraham Lincoln.

"Wars have ever been but another aristocratic mode of plundering and oppressing commerce," — Richard Cobden

"Mankind must put an end to war, or war will put an end to mankind." – President John F. Kennedy

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