Today, most American students don't even understand what a central bank is,
much less that the battle over central banks is one of the most important
themes in U.S. history.
The truth is that our nation was
birthed in the midst of a conflict over taxation and the control of our
money. Central banking has played a key role in nearly all of the wars that
America has fought. Presidents that resisted the central bankers were shot,
while others shamefully caved in to their demands. Our current central bank
is called the Federal Reserve and it is about as "federal" as
Federal Express is. The truth is that it is a privately-owned financial
institution that is designed to ensnare the U.S. government in an endlessly
expanding spiral of debt from which there is no escape. The Federal Reserve
caused the Great Depression and the Federal Reserve is at the core of our
current economic crisis. None of these things is taught to students in
America's schools today.
In 2010, young Americans are taught a sanitized version of American history
that doesn't even make any sense. As with so many things, if you want to know
what really happened just follow the money.
The following are 41 facts about the history of central banks in the United
States that every American should know....
- As a result of the
Seven Years War with France, King George III of England was deeply in
debt to the central bankers of England.
- In an attempt to
raise revenue, King George tried to heavily tax the colonies in America.
- In 1763, Benjamin
Franklin was asked by the Bank of England why the colonies were so
prosperous, and this was his response....
"That is simple. In the colonies we issue our
own money. It is called Colonial Script. We issue it in proper proportion to
the demands of trade and industry to make the products pass easily from the
producers to the consumers. In this manner, creating for ourselves our
own paper money, we control its purchasing power, and we have no interest to
pay to no one."
- The Currency Act of
1764 ordered the American Colonists to stop printing their own money.
Colonial script (the money the colonists were using at the time) was to
be exchanged at a two-to-one ratio for "notes" from the Bank
- Later, in his
autobiography, Benjamin Franklin explained the impact that this currency
change had on the colonies....
"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."
- In fact, Benjamin
Franklin stated unequivocally in his autobiography that the power to
issue currency was the primary reason for the Revolutionary War....
"The colonies would gladly have borne the
little tax on tea and other matters had it not been that England took away
from the colonies their money, which created unemployment and
dissatisfaction. The inability of the colonists to get power to issue their
own money permanently out of the hands of George III and the international
bankers was the prime reason for the Revolutionary War."
- Gouverneur Morris, one of the authors of the U.S.
Constitution, solemnly warned us in 1787 that we must not allow the
bankers to enslave us....
"The rich will strive to establish their
dominion and enslave the rest. They always did. They always will...
They will have the same effect here as elsewhere, if
we do not, by (the power of) government, keep them in their proper
- Unfortunately, those
warning us about the dangers of a central bank did not prevail. After an
aborted attempt to establish a central bank in the 1780s, the First Bank
of the United States was established in 1791. Alexander Hamilton (who
had close ties to the Rothschild banking family) cut a deal under which
he would support the move of the nation's capital to Washington D.C. in
exchange for southern support for the establishment of a central bank.
- George Washington
signed the bill creating the First Bank of the United States on April
25, 1791. It was given
a 20 year charter.
- In the first five
years of the First Bank of the United States, the U.S. government
borrowed 8.2 million dollars and prices rose by 72 percent.
- The opponents of
central banking were not pleased. In 1798, Thomas Jefferson said the
following...."I wish it were possible to obtain a single amendment
to our Constitution - taking from the federal government their power of
- In 1811, the charter
of the First Bank of the United States was not renewed.
- One year later, the
War of 1812 erupted. The British and the Americans were at war once
- In 1814, the British
captured and burned Washington D.C., but the Americans subsequently
experienced key victories at New York and at New Orleans.
- The Treaty of Ghent,
officially ending the war, was ratified by the U.S. Senate on February
16th, 1815 and was ratified by the British on February 18th, 1815.
- In 1816, another
central bank was created. The Second Bank of the United States was
established and was given a 20 year charter.
- Andrew Jackson, who
became president in 1828, was determined to end the power of the central
bankers over the United States.
- In fact, in 1832,
Andrew Jackson's re-election slogan was "JACKSON and NO BANK!"
- On July 10th, 1832
President Jackson said the following about the danger of a central
"It is not our own citizens only who are to
receive the bounty of our government. More than eight millions of the stock
of this bank are held by foreigners...is there no danger to our liberty and
independence in a bank that in its nature has so little to bind it to our country?
...Controlling our currency, receiving our public moneys, and holding
thousands of our citizens in dependence... would be more formidable and
dangerous than a military power of the enemy."
- In 1835, President
Jackson completely paid off the U.S. national debt. He is the only U.S. president that has
ever been able to accomplish this.
- President Jackson
vetoed the attempt to renew the charter of the Second Bank of the United
States in 1836.
- Richard Lawrence
attempted to shoot Andrew Jackson, but he survived. It is alleged that
Lawrence said that "wealthy people in Europe" had put him up
- The Civil War was
another opportunity for the central bankers of Europe to get their hooks
into America. In fact, it is claimed that Abraham Lincoln actually
contacted Rothschild banking interests in Europe in an attempt to
finance the war effort. Reportedly, the Rothschilds
were demanding very high interest rates and Lincoln balked at paying
- Instead, Lincoln
pushed through the Legal Tender Act of 1862. Under that act, the U.S.
government issued $449,338,902 of debt-free money.
- This debt-free money
was known as "Greenbacks" because of the green ink that was
- The central bankers
of Europe were not pleased. The following quote appeared in the London
Times in 1865....
"If this mischievous financial policy, which
has its origin in North America, shall become endurated
down to a fixture, then that Government will furnish its own money without
cost. It will pay off debts and be without debt. It will have all the money
necessary to carry on its commerce. It will become prosperous without
precedent in the history of the world. The brains,
and wealth of all countries will go to North America. That country must be
destroyed or it will destroy every monarchy on the globe."
- Abraham Lincoln was
shot dead by John Wilkes Booth on April 14th, 1865.
- After the Civil War,
all money in the United States was created by bankers buying U.S.
government bonds in exchange for bank notes.
- James A. Garfield
became president in 1881, and he was a staunch opponent of the banking
powers. In 1881 he
said the following....
"Whoever controls the volume of money in our
country is absolute master of all industry and commerce...and when you
realize that the entire system is very easily controlled, one way or another,
by a few powerful men at the top, you will not have to be told how periods of
inflation and depression originate."
- President Garfield
was shot about two weeks later by Charles J. Guiteau
on July 2nd, 1881. He died from medical complications
on September 19th, 1881.
- In 1906, the U.S.
stock market was setting all kinds of records. However, in March 1907
the U.S. stock market absolutely crashed. It is alleged that elite New
York bankers were responsible.
- In addition, in 1907
J.P. Morgan circulated rumors that a major New York bank had gone
bankrupt. This caused a massive run on the banks. In turn, the banks
started recalling all of their loans. The panic of 1907 resulted in a
congressional investigation that ended up concluding that a central bank
was "necessary" so that these kinds of panics would never
- It took a few years,
but the international bankers finally got their central bank in 1913.
- Congress voted on
the Federal Reserve Act on December 22nd, 1913 between the hours of 1:30
AM and 4:30 AM.
- A significant
portion of Congress was either sleeping at the time or was already at
home with their families celebrating the holidays.
- The president that
signed the law that created the Federal Reserve, Woodrow Wilson, later
sounded like he very much regretted the decision when he wrote the
"A great industrial nation is controlled by its
system of credit. Our system of credit is privately concentrated. The growth
of the nation, therefore, and all our activities are in the hands of a few
men ... [W]e have come to be one of the worst ruled, one of the most
completely controlled and dominated, governments in the civilized world--no
longer a government by free opinion, no longer a government by conviction and
the vote of the majority, but a government by the opinion and the duress of
small groups of dominant men."
- Between 1921 and
1929 the Federal Reserve increased the U.S. money supply by 62 percent. This was the time known as
"The Roaring 20s".
- In addition, highly
leveraged "margin loans" became very common during this time
- In October 1929, the
New York bankers started calling in these margin loans on a massive
scale. This created the initial crash that launched the Great
- Rather than expand
the money supply in response to this crisis, the Federal Reserve really
tightened it up.
- In fact, it was
reported the the U.S. money supply contracted
by eight billion dollars between 1929 and 1933. That was an
extraordinary amount of money in those days. Over one-third of all U.S.
banks went bankrupt. The New York bankers were able to buy up other
banks and all kinds of other assets for pennies on the dollar.
But are American students being taught
any of this today?
Of course not.
In fact, it is a rare student that can even adequately explain what a central
We have lost so much of what is important about our history.
And you know what they say - those who forget history are doomed to repeat
Editor, the Prudent Investor