18. RETURN OF THE GOLD STANDARD
With Lincoln out of the way, the Money Changers' next objective was to gain complete, centralized control over America's money. This was no easy task. With the opening ofthe American West, silver had been discovered in huge quantities. On top of that, Lincoln's Greenbacks were generally popular and their existence had let the genie out of the bottle - the public was becoming accustomed to government-issued, debt-free money.
Despite the European central bankers' deliberate attacks on the Greenbacks, they continued to circulate in the United States. According to author W. Cleon Skousen:
"Right after the Civil War there was considerable talk about reviving Lincoln's brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution."
It is clear that the reality of America printing her own debt-free money sent shock-waves throughout the European private-central-banking elite. They watched with horror as Americans began to petition for more Green backs. They may have killed Lincoln, but support for his monetary ideas grew.
On April 12, 1866, nearly one year to the day of Lincoln's assassination, Congress went to work at the bidding of the European central-banking interests. It passed the Contraction Act, authorizing the Secretary of the Treasury to begin to retire the Greenbacks in circulation and to contract the money supply.
Authors Theodore R. Thoren and Richard F. Warner explained the results of the money contraction in their book on the subject, The Truth in Money Book:
"The hard times which occurred after the Civil War could have been avoided if the Greenback legislation had continued as President Lincoln had intended. Instead, there were a series of 'money panics' - what we call 'recessions' - which put pressure on Congress to enact legislation to place the banking system under centralized control. Eventually the Federal Reserve Act was passed on December 23, 1913."
In other words, the Money Changers wanted two things: 1) the re-institution of a privately-owned central bank under their exclusive control, and, 2) an American currency issued by them and backed by their gold.
Their strategy was two-fold: first, to cause a series of panics to try to convince the American people that the existing decentralized banking system did not work and that only centralized control of the money supply could provide economic stability; and secondly, to remove so much money from the system that most Americans would be so desperately poor that they either wouldn't be patient enough to fight for true reform, or would be too weak to oppose the bankers, who would offer them relief if the bankers' plans were approved: in short, to convince Americans it was worth the long-term risk to freedom to obtain short-term economic relief.
In 1866, there was $1,800,000,000 in currency in circulation in the United States - about $50.46 per capita. In 1867 alone, $500,000,000 was removed from the U.S. money supply. Ten years later, in 1876, America's money supply was reduced to only $600,000,000. In other words, two-thirds of America's money had been called in by the bankers. Incredibly, only $14.60 per capita remained in circulation.
Ten years later, the money supply had been further reduced to only $400,000,000, even though the population had boomed. The result was that only $6.67 per capita remained in circulation, an 84% decline in just 20 years. The people suffered terribly in a protracted, severe depression.
Today, bank-funded economists try to sell the idea that recessions and depressions are a natural part of something they call the "business cycle." One economist actually tried to explain business cycles with reference to sun spots! The truth is, our money supply is completely manipulated now, just as it was after the Civil War, just as it was by Nicholas Biddle and the 2nd BUS.
How did money become so scarce? Simple - bank loans were called in and no new ones were given. In addition, Greenbacks were retired by the millions and silver coins were melted down.
On March 13, 1868, James Rothschild wrote to his U.S. agent, Belmont, "warning ruin to those who might oppose the payment of U.S. Bonds in coin, or who might advocate their liquidation in greenbacks." Another scheme was afoot.
On March 18, 1869, Congress, at these bankers' bidding, passed the Credit Strengthening Act which provided that U.S. bonds purchased during the Civil War with greenbacks the bankers had discounted on receipt to as little as S.35 on the dollar, would be repaid, in gold at full value. By this means the Treasury paid the bankers some $500 million more than they had paid for the bonds, plus the interest due. A colossal sum, equivalent to well over 5 billion dollars today, was thus transferred from the Treasury to the Money Changers. Thereafter, their power over the U.S ., thus mightily augmented, continually increased.
In 1872, a man named Ernest Seyd was given £100,000 (about $5,000,000 then) by the Bank of England and sent to America to bribe the necessary Congressmen to get silver "demonetized to further reduce the money supply." He was told that if this was not sufficient, to draw an additional £100,000, "or as much more as was necessary." The next year, Congress passed the Coinage Act of 1873 and the minting of silver dollars abruptly stopped.
In fact, Rep. Samuel Hooper, who introduced the bill in the House acknowledged that Mr. Seyd actually drafted the legislation. But it gets worse than that. In 1874, Seyd himself admitted who was behind the scheme:
"I went to America in the winter of 1872-73, authorized to secure, if I could, the passage of a bill demonetizing silver. It was in the interest of those I represented - the governors of the Bank of England - to have it done."
The international bankers accomplished the same demonetization of silver in Germany (1871-73); the Latin Monetary Union (France, Italy, Be1gium, Switzerland) in 1873-74; the Scandinavian Union (Denmark, Norway and Sweden) in 1875-76; and the Netherlands in 1875-76. Wlthin five short years, the gold standard was thus imposed worldwide, with China being the only significant holdout.
But the contest over control of America's money was not yet over. Only three years later, in 1876, with one-third of America's workforce unemployed, the population was growing restless. People were clamoring for a return to the Greenback money system of President Lincoln, or a return to silver money - anything that would make money more plentiful. A Greenback Party developed which received over one million votes at its height, as did a strong pro-silver movement.
That year, Congress created the United States Silver Commission to study the problem. Their report clearly blamed the monetary contraction on the National Bankers. The report is interesting because it compares the deliberate money contraction by the National Bankers after the Civil War, to the Fall of the Roman Empire.
"The disaster of the Dark Ages was caused by decreasing money and falling prices… Without money, civilization could not have had a beginning, and with a diminishing supply, it must languish and unless relieved, finally perish. At the Christian era the metallic money of the Roman Empire amounted to $1,800,000,000, bythe end of the fifteenth century it had shrunk to less than S200,000,000. … - History records no other such disastrous transition as that from the Roman Empire to the Dark Ages." (1876) - U.S. Silver Commission.
Despite this report by the Silver Commission, Congress took no action. The next year, 1877, riots broke out from Pittsburgh to Chicago. The torches of starving vandals lit up the sky. The bankers huddled to decide on their next move. They decided to hang tough. Now that they were back in control of America's money, to a large extent (though not yet to the degree the 2nd BUS had been before Jackson killed it), they were not about to give it up. At the meeting of the American Bankers Association that year, they urged their membership to do everything in their power to put down the notion of a return to Greenbacks. The ABA Secretary, James Buel, authored a letter to the members which blatantly called on the banks to subvert not only Congress, but the press:
"It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the Agricultural and Religious Press, as will oppose the greenback issue of paper money and that you will also withhold patronage from all applicants who are not willing to oppose the government issue of money… To repeal the Act creating bank notes, or to restore to circulation the government issue of money will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders. See your Congressman at once and engage him to support our interests that we may control legislation."
As political pressure mounted in Congress for change, the bank-influenced press tried to turn the American people away from the truth. The New York Tribune put it this way on January 10, 1878: "The capital of the country oarganized at last [i.e. the National Banks], and we will see whether Congress will dare to fly in its face." But it didn't work entirely.
On February 28, 1878, Congress passed the Sherman Law allowing the minting of a limited number of silver dollars, ending a 5-year hiatus. This did not end gold-backing of the currency, however. Nor did it completely free silver. Previous to 1873, anyone who brought silver to the U.S. mint could have it struck into silver dollars free of charge. No longer. But at least some silver money began to flow back into the economy again. Under political pressure, the bankers loosened up on loans for awhile and the post-Civil War depression was finally ended.
Three years later, the American people elected Republican James Garfield President. Garfield understood how the economy was being manipulated. As a Congressman, he had been chairman of the Appropriations Committee, and was a member of the Banking and Currency Committee. After his inauguration, he slammed the Money Changers publically in 1881:
"Whoever controls the volume of money in any 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."
Garfield understood. Within a few weeks of making this statement, on July 2 of 1881, President Garfield was assassinated.
Acknowledgement and credits
The Money Masters: How International Bankers Gained Control of America
Produced by Patrick S. J. Carmack
Directed by Bill Still
Royalty Production Company 1998