The Murderous Quest for Power Through Law and Money
“Give me control of a nation’s money and I care not who makes it’s laws” is a notion reflecting the power of a central bank.
The US has a history of central banks controlled by foreign powers subverting the US government, and, the use of war, assassination, and crisis to ensure the presence and survival of these corrupted central banks.
Bank of North America
- The fact that England tried to place the colonies under the monetary control of the Bank of England was seen by many as the “last straw” of oppression which led directly to the American Revolutionary War`
- As ratification in early 1781 of the Articles of Confederation had extended to Congress the sovereign power to generate bills of credit, it passed later that year an ordinance to incorporate a privately subscribed national bank following in the footsteps of the Bank of England. However, it was thwarted in fulfilling its intended role as a nationwide central bank due to objections of “alarming foreign influence and fictitious credit,” favoritism to foreigners and unfair policies against less corrupt state banks
First Bank of the United States
Others were troubled by the fact that two-thirds of the bank stock was held by British interests
In 1811, the First Bank of the United States charter expired, and congress did not renew it. Shortly after which, the British, who held majoriy interest in that bank, and who benefitted from its existence, commited multiple acts of war on the US, including
- 2.) Great Britain began stopping American sea vessels and forcing subjects on the vessels into the British military. This practice was called “impressment.” The British justified the practice with the idea that American soldiers, once subjects of the King, were always subjects of the King.
- 3.) Great Britain issued a series of trade restrictions designed to disrupt American trade with France.
- 4.) Great Britain provided arms and support to Native Americans in the western frontiers who were attacking American settlers.
- 5.) Great Britain controlled much of Canada and many Americans simply wanted to expel the British from the North American continent and expand America’s borders.
which incited the War of 1812, which led to US national debt, requiring the chartering of a new central bank, the Second Bank of the United States.
It seems the British were more cautious with the Second Bank of the United States, limiting direct holding, such that in Andrew Jackson’s veto, he presented,
It appears that more than a fourth part of the stock is held by foreigners and the residue is held by a few hundred of our own citizens, chiefly of the richest class, but Jackson still saw the subversion potential of the bank:
Already is almost a third of the stock in foreign hands and not represented in elections. It is constantly passing out of the country, and this act will accelerate its departure. The entire control of the institution would necessarily fall into the hands of a few citizen stockholders, and the ease with which the object would be accomplished would be a temptation to designing men to secure that control in their own hands by monopolizing the remaining stock. There is danger that a president and directors would then be able to elect themselves from year to year, and without responsibility or control manage the whole concerns of the bank during the existence of its charter. It is easy to conceive that great evils to our country and its institutions millet flow from such a concentration of power in the hands of a few men irresponsible to the people.
Should its influence become concentered, as it may under the operation of such an act as this, in the hands of a self-elected directory whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the purity of our elections in peace and for the independence of our country in war? Their power would be great whenever they might choose to exert it; but if this monopoly were regularly renewed every fifteen or twenty years on terms proposed by themselves, they might seldom in peace put forth their strength to influence elections or control the affairs of the nation. But if any private citizen or public functionary should interpose to curtail its powers or prevent a renewal of its privileges, it can not be doubted that he would be made to feel its influence.
Should the stock of the bank principally pass into the hands of the subjects of a foreign country, and we should unfortunately become involved in a war with that country, what would be our condition? Of the course which would be pursued by a bank almost wholly owned by the subjects of a foreign power, and managed by those whose interests, if not affections, would run in the same direction there can be no doubt. All its operations within would be in aid of the hostile fleets and armies without. Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence, it would be more formidable and dangerous than the naval and military power of the enemy.
This act authorizes and encourages transfers of its stock to foreigners and grants them an exemption from all State and national taxation. So far from being "necessary and proper" that the bank should possess this power to make it a safe and efficient agent of the Government in its fiscal operations, it is calculated to convert the Bank of the United States into a foreign bank, to impoverish our people in time of peace, to disseminate a foreign influence through every section of the Republic, and in war to endanger our independence.
Jackson presented a very potent understanding:
It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society-the farmers, mechanics, and laborers-who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their Government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles. Nor is our Government to be maintained or our Union preserved by invasions of the rights and powers of the several States. In thus attempting to make our General Government strong we make it weak. Its true strength consists in leaving individuals and States as much as possible to themselves-in making itself felt, not in its power, but in its beneficence; not in its control, but in its protection; not in binding the States more closely to the center, but leaving each to move unobstructed in its proper orbit. Experience should teach us wisdom. Most of the difficulties our Government now encounters and most of the dangers which impend over our Union have sprung from an abandonment of the legitimate objects of Government by our national legislation, and the adoption of such principles as are embodied in this act. Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress. By attempting to gratify their desires we have in the results of our legislation arrayed section against section, interest against interest, and man against man, in a fearful commotion which threatens to shake the foundations of our Union. It is time to pause in our career to review our principles, and if possible revive that devoted patriotism and spirit of compromise which distinguished the sages of the Revolution and the fathers of our Union. If we can not at once, in justice to interests vested under improvident legislation, make our Government what it ought to be, we can at least take a stand against all new grants of monopolies and exclusive privileges, against any prostitution of our Government to the advancement of the few at the expense of the many, and in favor of compromise and gradual reform in our code of laws and system of political economy.
Here, Jackson presents a fundamental concept of economics that highlights the major problem of government: the efforts of entities to gain unfair advantages, and, in this case, to gain unfair advantages through money and law.
Shortly after this, in 1835, Jackson became the first president on which there was an assassination attempt. Jackson attributed this to his opposition to the central bank.
After Jackson’s presidency, economic turbulance, likely both natural and incited, failed to bring about another central bank. And, so, the American Civil War (How We Know The So-Called “Civil War” Was Not Over Slavery), led to the National Banking Act, wherein newly prescribed national banks would compete with state banks. But, things didn’t go so well for the national banks:
The National Banking system grew rapidly at first (Table 1). Much of the increase came at the expense of the state-chartered banking systems, which contracted over the same period, largely because they were no longer able to issue notes.
the growth of deposit-taking, combined with less stringent capital requirements, convinced many state bankers that they could do without either the ability to issue banknotes or a federal charter, and led to a resurgence of state banking in the 1880s and 1890s.
in 1877 only about one-fifth of state banks had a capital of less than $50,000; by 1899 the proportion was over three-fifths.
Recognizing this competition, the Gold Standard Act of 1900 reduced the minimum capital necessary for national banks
And, in this situation of decreasing national banks’ power, those who use crisis to get what they want, presented:
Early in 1907, Jacob Schiff, the chief executive officer of Kuhn, Loeb and Co., in a speech to the New York Chamber of Commerce, warned that "unless we have a central bank with adequate control of credit resources, this country is going to undergo the most severe and far reaching money panic in its history." "The Panic of 1907" hit full stride in October. [Herrick] [https://en.wikipedia.org/wiki/History_of_central_banking_in_the_United_States].
And, so, shortly after threatening a crisis to get what they want, those who use crises to get what they want, created the crisis that they had threatened, and got what they wanted: the present central bank, the Federal Reserve System.