Till now we have discussed the history of money and its evolution. How banks have played extremely significant role in the rise of our civilisation as the most technologically and materially advanced. Buts lets now discuses the dark side of the story. As they say nothing is free, so the question is, what has these bankers taken from us in exchange for what they have provided us with?
Starting off with a very modest beginning, we saw how bankers gradually raised to a status of extreme importance and power. Use, or rather abuse, of financial power to influence politics by a banker was visible even back in 15th century when Medici family frequently bribed state ministers to get things done. They also backed their nominated candidates to hold key government positions and asked for favours later on. Similar kinds of practices were seen during 18th century and this time the culprits were the mighty Rothschild.
At the height of their power, Nathan Mayer Rothschild and his brothers, thanks to their network of banks, had complete control of Europe’s economy. All the battles fought during 19th century in Europe were financed by their banks and none of the countries could successfully carry out a military expedition independently. According to one story, the family was involved in practise of funding both sides of a war when Nathan in England supplied gold to Wellington’s army and Jacob in France provided financial assistance to Napoleon’s army. This way both the governments got in debt to the Rothschild, and they used that as a bargaining tool.
The father of these five Rothschild brothers, Mayer Amschel Rothschild, said back in 1790 that “Let me issue and control a nation’s money and I care not who writes the laws”. It is clear by this statement that the Rothschild family knew from the very beginning that simply by controlling economy of a country you can dominated its representative government without abolishing it altogether. May be this was the very reason why the family aspired banking business so much. At the time of her death in 1849, Mama Rothschild i.e. mother of the five Rothschild brothers, Gutle Schnaper, reportedly said “If my sons did not want wars, there would be none.” This statement suggests that bankers have purposefully brought two nation states at the battlefield to achieve their own diplomatic targets. The most striking of all these statements came from the man himself, Nathan Rothschild, in 1815 when he said:
“I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls Britain’s money supply controls the British Empire, and I control the British money supply.”
Now this is coming at a time when Britain just defeated France and it became an established fact that no power on earth then could challenge them. British Empire was at its peak and a mere banker makes such a statement reflects the power he had to influence the throne.
Making the elephant dance
Island of America has been paradise for people who desire absolute freedom from all kind of obligations. Such were the aspirations of elders who risked everything they had to migrate to this virgin island. They desired freedom in all aspects of life and to be answerable to none. Most of the early immigrants were Europeans who were sick of the strong religious and cultural bondage in Europe. They wanted a land where they could live on their own terms and not being suppressed by the centuries old customs and traditions.
One such group was the money lenders. We saw earlier how Medici family had hard time coping up with the societal backlash for being indulged in sinful practises like usury. Although social conditions for bankers were not as bad in 18th century as they were during the days of Medici, money lenders were still considered grave sinners in the eyes of influential religious class of Europe. But USA, being a godless society with no interference of the religious laws, provided a lot of respect for the bankers.
Bankers certainly believed that the principles American society was built on were more compatible with their long term objective of dominating world finance than the Britain. Britain, as mentioned before, was a religious society and the form of government it had made more challenging for bankers to apply their free will. America on other hand was godless and democratic, which meant easier path for bankers.
The movement of American independence was started by the same people who first moved to America and for the very same reason why they moved there. They came to America in search of absolute freedom but being a British colony, America had to abide by British laws and pay taxes to their government. This defeated the purpose for migration in first place. The war of American Independence was funded by a rich Jewish financial broker called Haym Salomon. Some stories suggest that Haym had support from bankers back in England. He was reportedly found running multiple fundraisers across Europe to raise funds for the campaign. Now this was unusual as bankers who had been funding Britain to wage wars against its enemies for most part of the century were now funding America to gain independence against Britain. So in other words the same men who made Britain so economically strong were now putting their weight behind USA.
In 1791, post war of independence, America was in need of a central bank in order to pay back war debts and raise money for the new government. This was the moment when bankers seized the opportunity to have an influential say in American government. The plan proposed by Alexander Hamilton, first Secretary of the Treasury, was to raise initial funds for the central bank was through sale of $10 million worth of stocks of which the United States government would purchase the first $2 million in shares. The remaining $8 million of stock would be available to the public, both in the United States and overseas. The new central bank was called the ‘First Bank of United States’ and it is estimated that around 70 percent of it was owned by foreigners. As Britain was the primary source of capital for the U.S during this era, it is safe to say that the same people who dominated British economy occupied substantial stake in the First American National Bank as well.
In 1811, First Bank’s 20 year charter ended and was not given extension by the congress as they did not wanted private or foreign interests to dictate the money supply of the country. However this was not very pleasing for the foreign investors as this meant they lost control over America’s monetary policy. Some stories suggest that as a result of this, bankers forced Britain to go on war against USA, thus we had ‘War of 1812’. Although I failed to produce sound proofs to back this claim made by conspiracy theorist, the result of this war was exactly what bankers would have wanted. America found itself in mounting debt from a war with England, soaring prices, and devalued money from rising inflation. So in 1816, to address these issues, President James Madison authorized the creation of the Second Bank of the United States based on the same principals as the First Bank.
Like the First Bank, Second Bank of U.S also had a charter of 20 years and was also was denied renewal when it ended. This time the man who stood against bankers was the great American patriot and 7th President, Andrew Jackson. In 1932, Jackson carried out election campaign for his second term in office under the slogan, “Jackson And No Bank!” This is in reference to his plan to take back the control of the American money system to benefit the American people and not the banks. He started removing the government’s deposits from the Second Bank of the United States and deposited them into banks controlled by democratic bankers. But this bold move came with a price when bankers who controlled Second Bank contracted money supply causing a depression in the country. Jackson personally had to face an assassination attempt when a gunman opened fire on him. Miraculously both of the assassin’s pistols misfired and President Jackson survived. He would later claim that he knew the banks were responsible for that attempted assassination. In 1945, before his death he is asked what he regarded his as greatest achievement. He replied without hesitation:
“I Killed The Bank!”
Next American president who withstood financial institutions and was later subject to their persecution was Abraham Lincoln. Lincoln is one of the most loved American presidents and was truly faithful to his country. During his is entire presidential period America was undergoing civil war and coping up with it was his biggest challenge. He reached out to banks for war financing but was appalled at the offer by them. The Bankers were going to charge him 24% to 36% interest on the loans. Lincoln was greatly distressed, for he knew this would put his beloved country into a debt they would find impossible to pay back. Eventually, he was advised to get Congress to pass a law authorizing the printing of his own debt free money and informed the public that this is now legal tender for both public and private debts. Few years later, in 1865, he gave this statement to Congress:
“I have two great enemies, the Southern Army in front of me, and the financial institutions in the rear. Of the two, the one in my rear is my greatest foe.”
Historians consider dealing with civil war was the greatest challenge president Lincoln had to tackle, but in his own words his struggle against the powerful banks was his hardest battle. Having tremendous support from American people, and to the disliking of the international bankers, he won the next presidential election for his second term. Unsurprisingly, he was assassinated a few months later.
For next 100 years, no United States president dared to mess with international bankers’ monopoly over U.S monetary policy. Only in 1963, when John F. Kennedy was in office, he ventured to go down the “wrong path”. Kennedy understood how the Federal Reserve System was being used to destroy the United States and being loyal to his country, he could not tolerate such a system. So on June 4th, 1963, he issued Executive Order 11110 which gave him, as President of the United States, legal clearance to create his own money to run the country. But only six months later, In November of 1963, that the world received the shocking news of President Kennedy’s assassination. It is interesting to note that, only one day after Kennedy’s assassination, all the currency which Kennedy had issued, were called out of circulation.
If you study closely the lives of great leaders faithful to their people from last century or more, you would find one thing common in majority of them: they all at some point in their career were tyrannize by these large financial institutions. Not just the leaders, central banks through their monetary policy have time and again robbed even the masses to fill up their reserves. One such incident took place on 5 April 1933 in USA when President Franklin D. Roosevelt signed Executive Order 6102 that prohibited hoarding of gold within the continent of United States. All citizens were required to redeem any gold they possessed to the Federal Reserve before May 1, 1933 in exchange for $20.67 per ounce. Anyone found with more than 160 grams of gold after the given deadline was punishable by fine up to $10,000 or up to ten years in prison, or both. This way the Fed sucked all the gold from American people in its reserves and leaving people only with paper currency.
What they did next was heinous! In January 1934, under Gold Reserve Act, Fed again allowed U.S citizens to buy back their gold but this time at an increased price of $35 an ounce. This meant all those who deposited their gold the previous year would receive around 40% less gold than what they initially had. Through this process, in less than one year, Federal Reserve ripped off American people by taking away around two fifth of their wealth.
These rich elite of America has treated the country like a corporation, where they are the shareholder and thus permanent, American people are the poor workers, and their government is the management that changes every four years. It would be fair enough to say that America is more of plutocracy then a democracy, where there is dictatorship of the capitalists.
If you still want a simple answer to what you have lost in exchange to the services provided by the banks, it’s your freedom stupid!
Conclusion
I have always believed that finance to a society is what blood is to a body and anyone who controls flow of money plays the role of heart for the society. Bankers have been extremely successful in developing such complex financial systems which had allowed them to become heart of this modern world. Complexity of modern financial systems has given hard time even to the very well educated people in understanding them and this inability of majority to understand these systems has allowed bankers to exploit and control the world.
In my quest to find the answer to why human civilisation got so much more material success in recent three to four centuries as compare to all previous years of human history, I have come to this conclusion that financial innovations are to take most of its credit than any other factor. I do not undermine work done by scientist and engineers who had play significantly important role in modernising us, but their work was highly dependent on availability of capital. Had bankers not proliferated money in so many important ways, achievements scientist and engineers would have been relatively modest.
The goal of this series was to convince the reader to agree with me on this conclusion and on this fact that people who pioneered financial innovation are, we like it or not, masters of this modern world. Now I wonder what the next important event to take place after the most recent innovation where we have been introduced by a new form of money called crypot-currencies. Only time will tell.
One question might be still bouncing around your head, who are these bankers? Is there a common characteristics found in most banker? Do they belong to a single ethnic group or are followers of similar ideology? Hmm let’s leave that for some other day.
Originally published at haq.life, Financial Innovations series is an essay divided in 7 parts which should be read in sequence for better understanding. Click on the links below to navigate to other parts of this series:
Table of Contents
