United States Federal Credit System
To Restore the Original Bank of the United States
To Return the U.S. Economy to the Principles of the Credit System
Executive Intelligence Review
Volume 39, Number 49,
December 14, 2012.
—please download the issue from the LaRouche website, and read the full text of the 30-page essay
by Michael Kirsch
Mr. Kirsch claims in his essay that applying the british model of finance, establishing a privately owned central bank is somehow opposition to Great Britain’s influence, is somehow the asserting of national sovereignty; he also claims, that in an effort to reclaim british control over the United States, the british government supported elements in the United States who would demolish the Bank of the United States, who would discharge the Federal debt, who would reduce the Federal government to its constitutional size and influence…..
He either lies or he does not see the forest from the tree when he presents this struggle of the friends of a central bank, national debt, bank-issued national paper currency, with their opponents, as a contest between american nationalist forces and the agents of the british empire trying to re-establish control over the united States.
He shies away from dealing with the inherent flaw in fractional reserve banking; he also shies away from mentioning that there was another group of bankers who were in competition with what could be called the circle of friends of Baring and brothers of London.
According to the LaRouche crew, Gouverneur Morris’s and Alexander Hamilton’s credit system was a blessing to the U.S., and the re-establishment of it is its best future hope; because private central bank, bank paper, permanent national debt and high tariff should go hand-in-hand; because, as Alexander Hamilton wrote, a national debt is a national blessing, and the paying off this national debt the LaRouche crew considers a calamity.
Writes Michael Kirsch:–
“When the country was founded, it established a system of exchange depending not on hereditary or saved-up capital of gold and silver, but one based on mutual confidence, on credit, which formed the basis of trade for industry, both internal and external. The Bank of the United States concept evolved from the earlier system of the Massachusetts Bay Colony and Franklin’s system of credit in Pennsylvania. Crafted in collaboration with Robert Morris, Gouveneur Morris, James Wilson, and Benjamin Franklin, Alexander Hamilton’s ‘System of Public Credit,’ as expressed in his Bank of the United States, further developed the power of a sovereign currency.”
Kirsch brings into the picture Benjamin Franklin, but the paper money recommended by Franklin was government-issued notes, and not bank-notes as proposed by the bank promoters:
“ On the whole, no method has hitherto been framed to establish a medium of trade in lieu of money, equal in all its advantages to bills of credit, founded on sufficient taxes for discharging them, or land securities of double the value for repaying them at the end of the term, and in the mean time made a GENERAL LEGAL TENDER. The experience of now near half a century in the middle colonies, has convinced them of it among themselves, by the great increase of their settlements, numbers, buildings, improvements, agriculture, shipping, and commerce. And the same experience has satisfied the British merchants who trade thither, that it has been greatly useful to them, and not in a single instance prejudicial.”
—Yes, Mr. Franklin considered “bills of credit” substitutes of money ! What did he consider (real) money ? –silver and gold coin…..
Who were these upstanding individuals of the credit system (Mr. Kirsch’s heroes in the tale) who established the privately owned (mainly by british aristocrats) Bank of the United States in 1791 ? how did they operate in the first decade (Mr. Kirsch’s golden era) of the United States ?
Alexander Hamilton was a monarchist, admired Great Britain, admired the british financial system:—
“Hamilton was indeed a singular character. Of acute understanding, disinterested, honest, and honorable in all private transactions, amiable in society, and duly valuing virtue in private life, yet so bewitched & perverted by the British example, as to be under thoro’ conviction that corruption was essential to the government of a nation.”
In a letter to the President of the United States, Thomas Jefferson (Secretary of State), Philadelphia, May 23, 1792, on the aims of the promoters of permanent national debts and the credit system:
“the ultimate object of all this is to prepare the way for a change from the present republican form of government to that of a monarchy, of which the English Constitution is to be the model.”
Thomas Jefferson, John Adams, Alexander Hamilton, John Knox, Edmund Randolph, sitting at Jefferson’s table, April 1791, after dinner:–
“conversation began on other matters and, by some circumstance, was led to the British constitution, on which Mr. Adams observed ‘purge that constitution of it’s corruption, and give to it’s popular branch equality of representation, and it would be the most perfect constitution ever devised by the wit of man.’ Hamilton paused and said, ‘purge it of it’s corruption, and give to it’s popular branch equality of representation, & it would become an impracticable government: as it stands at present, with all it’s supposed defects, it is the most perfect government which ever existed.’ ”
Robert Morris, ‘the distinguished Financier of the Revolution,’ had begun his career in the counting room of Charles Willing, then the leading merchant of Philadelphia and engaged in the West India trade. Subsequently, Morris became a member of the firm of Willing and Morris.
Between Alexander Hamilton, John Jay and Robert Morris, were the closest business relations, and even more intimate connections between Jay and Hamilton. These two –Hamilton and Jay– were among the strongest factors in bringing about the adoption of the Constitution; Hamilton in the Federal Constitutional Convention and Jay in New York.
Under the patriotic pretence that the charter for which they asked was for a union of citizens to supply the army, a group of politicians, on April 1, 1782, pushed an act through the Pennsylvania Legislature, incorporating the Bank of North America. The directors of the bank, as specified by name in the act, comprised some of the foremost merchants and lawyers in Pennsylvania. Thomas Willing, partner of Robert Morris, was designated as president. The directors named were James Wilson (future supreme court justice), Thomas Fitzsimmons, Cadwallader Morris, Samuel Osgood, William Bingham, Samuel Inglis, Samuel Meredith and others.
In the Federal Constitutional Convention, James Wilson, as a delegate from Pennsylvania, did some extraordinary skillful work; to him is due the farsightedness of inserting in the Constitution of the United States a modest-looking little clause (shall make no law impairing the obligation of contracts) which has had the most far-reaching consequences. And the fact that it was the personal experience of himself, Robert Morris, Gouverneur Morris, Thomas Fitzsimmons and other Constitutional molders, in the notorious Bank of North America transaction, that led to the drafting and adoption of that clause, tends to prove that the men who drafted the Constitution knew fully the secret and ultimate purport of every clause.
During his four years as President, in this golden decade of the credit system, John Adams, father of J.Q., imprisoned more people for sedition than King George during his life-time….. On the eve of Thomas Jefferson’s taking the office of presidency, the friends of the credit system and the british model of state finances, set the Treasury building on fire, to destroy the evidences of their involvements in banking operations. A century later Charles Beard spent time in the archives and managed to find documents to the effect, that were not in the Treasury and not destroyed:
“In two bitter pamphlets, John Taylor, of Virginia, lambasted the ‘stock-jobbing interest in Congress,’ even daring to print in thin disguise the names of Senators and Representatives who, according to rumor, held government securities and were interested in the Bank. …. In 1801 the Jeffersonians, in their turn, were about to take possession of the government, a fire occurred in the Treasury, destroying many of the books and papers containing the evidence in the case.
“More than a hundred years later, however, after the records of the federal loan offices in the several states had been collected in Washington, an examination confirmed the Anti-Federalist indictment. It showed that at least twenty-nine [out of 90] members of the first Congress held federal securities; that some members were extensive operators in public funds during their term of service, and that the list of names given out by John Taylor was astonishingly accurate. Jefferson, therefore, spoke truly when he said that the assumption of state debts could never have been carried if the men who profited by the operation had abstained from voting, on the ground that they were personally interested in it.”
The truth is, that the project of establishing a Bank in Philadelphia had been conceived by Mr. Robert Morris, before the commencement of the war, as appears from his own declaration: and he had entered into negociations in Europe with a view to effect this object. But a project for a Bank about the year 1763, had been vigorously opposed on the ground that it would give a few men a monopoly of trade: and it is probable that Mr. Robert Morris’s project would have encountered severe opposition, if it had not been brought forward as a fiscal measure, and at a time when neither the Legislature nor the people could give it that consideration it deserved.
The capture of Cornwallis, which is described by historians as the closing scene of the Revolutionary War, took place on the 9th of October, 1781, and the Bank did not go into operation till January 7th, 1782. The effects of the banks operations were such as Banking has always produced –a temporary plentifulness of money, followed by great scarcity, usury, ruin to the many, riches to the few. These effects were ably set forth in petitions to the Assembly, from the inhabitants of Philadelphia, and those of the counties of Chester and Bucks, presented on the 21st and 23d of March, praying for a repeal of the charter of the Bank.
Public outcry compelled the Pennsylvania Legislature to act. On September 13, 1785, an act repealing the Bank of North America’s charter was passed:
‘Whereas the bank established in the city of Philadelphia hath been found to be injurious to the welfare of this State, and in its tendency appears to be incompatible with the public safety, Therefore,’ etc., etc.
The shareholders of the Bank of North America responded by wailing and claiming that the original grant (a gift, not a perpetual contract) was a vested right and a contract which should not be impaired by legislation; for whatever reasons, in 1787 the legislature yielded to this absurdity, and re-chartered the bank for 14 years. In 1787 the convention convened to frame a constitution. The friends of Morris’s credit system and private central bank (and other banks and corporations) acted to make sure that the law was on their side, if in the future some anarchist legislators get into their heads to interfere with granted charters, and conjured up vested rights, such as the case of the Dartmouth College, in which Daniel Webster made his name)
This was the crew whose credit system LaRouche &co admire so much…….
On July 20, 1790, Alexander Hamilton, Secretary of the Treasury, submitted to Congress his plan of disposing of the public lands. This hero of LaRouche, this alleged champion of nationalism, proposed to alienate the land from the people of the United States –the people who actually live there and work the land, and prosper by what they harvest–, and hand it to land-grabbers, speculators, absentees ! —
“Purchasers may be contemplated in three classes: moneyed individuals and companies, who will buy to sell again; associations of persons who intend to make settlements themselves; single persons or families now resident in the Western country, or who may be emigrants thither thereafter. The two first will be frequently blended, and will always want considerable tracts. Hence, a plan for the sale of the Western lands should be calculated to obtain all of the advantages which may be derived from the first two classes. For this reason, it seems requisite that the General Land Office should be established at the seat of Government.”
—[Not where the land is and the prospective settlers are; no, in Washington, far far away from the land and the salt of the earth, where the scum of the earth congregates! what working person can afford to travel to Washington, on horseback, to purchase land ?]
Therefore, the champion of the people recommended, that
“No actual settler should get more than one hundred acres, and the price of land should be thirty cents an acre to be paid either in gold, silver or public securities. No credit should be allowed for any purchase of less quantity than a township of ten miles square, nor more than two years’ credit for any greater quantity, and one quarter of the consideration is to be paid down.”
The apostle of the credit system recommended that no credit should be extended to actual settlers, only to speculators ! But, when 40 years later, President Andrew Jackson reduced the price of land to 35cents, hoots and howlers went up from the Whigs, to this day LaRouche and crew considers it an infamy; when a circular went out of the Treasury in 1836, that gold and silver coins alone may be received in payment for land, the friends of the credit system and domestic improvements (Whigs) had a fit….
Mr. Kirsch continues his yarn, presenting John Randolph of Roanoke as a british agent; alleging that for this reason did Randolph promote state-rights, for this reason did he oppose the chartering of the second Bank of the United States. Mr. Kirsch very carefully leaves out, that in 1811 Henry Clay, the icon of the LaRouche co. and the Whigs, opposed the Bank just as much as John Randolph did……
Thursday, February 29, 1816.
House of Representatives
John Randolph of Roanoke speaking:
Every man you meet in this House or out of it –with some rare exceptions, which only serve to prove the rule– is either a stockholder, president, cashier, clerk, or doorkeeper, runner, engraver, paper-maker, or mechanic in some other way to a bank. The gentleman from Pennsylvania might dismiss his fears for the State banks, with their 170millions of paper on 82 millions of capital. However great the evil of their conduct might be, who is to bell the cat — who is to take the bull by the horns ? You might as well attack Gibraltar with a pocket pistol as to attempt to punish them. There are very few, who dare to speak truth to this mammoth; the banks are so linked together with the business of the world, that there are very few men exempt from their influence.
We are tied hand and foot, and bound to conciliate this great mammoth, which is set up to worship in this Christian land — we are bound to propitiate it. Thus, whilst our Government denounces hierarchy, will permit no privileged order for conducting the service of the only true God, whilst it denounces nobility, &c., has a privileged order of new men grown up, the pressure of whose foot at this moment I feel on my neck.
A man might as well go to Constantinople to preach Christianity, as to get up here [in the House of Representatives] and preach against banks.
—Thus spoke the man whom Mr. Kirsch claims to be a british agent.
Mr. Kirsch writes that the Bank of the United States provided direct credit to domestic improvement projects; this is simply not true: the bank did not have credit, the Federal Government had credit; the Bank merely acted as a middleman, lending out at interest that which was granted to it by the Government. An Independent Treasury, using Treasury notes could have done the same thing…..
“The Adams Administration worked closely, beginning 1823, with the new president of the Bank of the United States, Nicholas Biddle, to make the financial system a tool for these policies. Under its intended operation –during Alexander Hamilton’s direction in 1791-1801– the Bank was the means to implement the powers of Congress. The legislated act created a system of future payments on credit, making possible the long- and short-term investments associated with roads, canals, rails, and new manufactures. The system of future payments was the linchpin for economic stability and growth, creating a regulated national currency that promoted productive value rather than individual monetary profit.”
Yes, Nicholas Biddle and the Bank’s shareholders couldn’t care less about the vulgar concept of “monetary profit”, they joined in the enterprise purely for the purpose of benefitting the public….
Election 1824; four candidates: William Crawford, J.Q. Adams, Henry Clay, Andrew Jackson; three were friends of the Bank, Jackson opponent of it; the vote was split four ways, Andrew Jackson receiving the most electoral votes, Henry Clay the least, but no absolute majority; the House of Representatives had to decide; Henry Clay, Speaker of the House, was the mover and shaker there, and he managed to steer votes to J.Q., for which he received the office of Secretary of State.
Who voted for Andrew Jackson ? Western farmers (there were not enough large land-holders and slave-owners in the South to elect a president), agrarians (as Daniel Webster designated, denigrated, them), who were able to purchase land: an acre for one or two days’ pay; and hard-money loco-focos, workers in cities.
Daniel Webster, March 12, 1838:—
as the steed will, sometimes, throw himself against its enclosures, break away from its confinement, and, feeling now free, betake himself to the moors and barrens
they beseech the poor to make war upon the rich
they complain of oppression, speculation, and the pernicious influence of accumulated wealth
they cry out loudly against all banks and corporations
they carry on a mad hostility against all established institutions
they would move heaven and earth against privilege and monopoly
they rend the air with the shouting of agrarian doctrines
For reasons incomprehensible to Kirsch and LaRouche, these agrarians and city labourers did not understand what a blessing Biddle’s bank, disorganized currency and permanent national debt was to them…… And these confused people, who did not grasp what was good for them, elected Andrew Jackson twice and Martin Van Buren once
“On December 4, 1832, after his famous veto of the Bank of the United States, President Andrew Jackson was handed a speech to deliver as his fourth annual address to Congress. The speech was unprecedented and unfit for a President of the United States.”
Who exactly handed this speech to Jackson ?…… why was it unfit for a President of the United States to entertain such notions in writing as Mr. Jackson expressed ? What did he write ? the Federal debt –which the country carried since the war for independence– is being paid off, and soon will be paid off…… the protection of domestic industry should be limited to protection and not to the enabling of large monopolies….. the federal government should be limited to what it was originally intended: organizing common defence, and facilitating mutual benefit and general welfare.
Kirsch is aware of the fact that, much to the displeasure of free-traders, President Jackson stopped the reduction of tariff, but he does not mention this relevant piece of data.
Mr. Kirsch goes on to object to the concept of pay as you go, build roads and canals and later railways as there is need for them, as there is money for them, as there is reasonable expectation of revenue equal, at least, the cost of construction and operation.
Mr. Kirsch promotes the concept of paying for present wants and needs from future means; without even considering whether there will be any future means, whether these improvement projects will produce sufficient revenue.
As we know from history, Mr. Kirsch’s hero, Lincoln, unleashed a railroad building project which resulted in constructing four times as many miles of roads as was needed, at five times the real cost, and with 200million acres of land being handed over to robber barons….. (200million acres could have been the home and dwelling place to 200million families, but LaRouche & crew have no concern for the people, only for robber barons….)
On December 7th, 1835, President Andrew Jackson’s message announced that “All the remains of the public debt have been redeemed, or money has been placed in deposite for this purpose whenever the creditors choose to receive it. All the other pecuniary engagements have been promptly and honorably fulfilled, and there will be a balance in the Treasury at the close of the present year of about $19,000,000.”
From the 31st December, 1789, to the 31st December, 1835, the United States paid for interest on the public debt the sum of $157,629,950.69;
and for the principal the sum of $257,452,083.24;
together making the sum of $415,082,033.93.
As soon as the national debt was extinguished and Alexander Hamilton’s engine of the credit system was vetoed, the friends of debt and credit went to work on the member States, and in four years borrowed and expended more credit than the first or second war for independence cost.
We have the data from Andrew Jackson’s and Martin Van Buren’s times:
Report of Mr. Flagg, May 1838:
$52,640,000 for banking !!! | $60,201,551; $42,871,084; $6,618,958; $8,474,684; $170,806,177 –this is more than what the war of 1812 cost
The white population of Arkansas in those days was 97,000, yet the government issued bonds ~$30 per person, gave them to private banks to bank on, and to issue bank notes…. (they could have just handed $30-worth of bonds to every man woman and child, and let them use bonds as currency; if providing currency was the excuse for the exercise?…..) Indiana had 980,000 people living in it, and borrowed ~$12million.
Mr. Sevier of Arkansas,
in the Senate, February 20th, 1840.
“Soon as the Bank of the United States was destroyed, and its days were known to be numbered, and its branches in the several States were being withdrawn, the States went to work to supply their places. They had no money to start their banks, and, from necessity, went into the market with their bonds to raise it. The ball, once put in motion, could not be stopped. If one city had a bank, another city must have one also; and if the cities had banks, the country villages must have them also. And in this way, the work was overdone, and too many banks were established; and as they were all banking upon borrowed capital, for which they were paying a high interest, it was necessary for them to make at least that interest, over and above their expenses. Each bank was driving at the same object; and to accomplish it, they were led into excessive issues of their paper, and we all but too painfully know the result. This is one of the causes of the State debts.”
This was what the friends and promoters of the Credit System and domestic improvements did at the State level when they could not avail themselves to the Federal government and the privately owned central bank. And as soon as State debts were piled up, and the States were unable to repay them, the friends of the credit system, funded debt and central bank, started another agitation for assumption of State debts by the Federal government –just as in Hamilton’s time, because a private central bank cannot exist without large, permanent, national debt.
Is borrowing from the Bank of the United States, or from other banks, the only way to finance road construction? canal building ? Is there no better way than a “system of future payments” ? Would Treasury notes issued by Congress not do, would Treasury notes not be a better and interest-free way than “future pay on credit”?……
Mr. Kirsch calls the discharging of the Federal debt a “fixation” as if there was something wrong with a person or government who wants to pay what he owes…….
“The stockholders of the Bank [of the United States] were increasingly representative of the population itself, and thus the Banks capital was the peoples capital, and its profits were profits they had earned: Those farmers and manufacturers had built themselves up over a generation, through the very access to credit provided by the Bank. At the time, the business class understood that the Bank of the United States and other credit banks of the period were merely other names for the farms, the commerce, the factories, and the infrastructure of the country, since the banks had no funds not already lent out to those purposes; they were the representatives of the peoples property.”
In 2012 over 50% of the shares of the 7,700 banks in the United States were held by pension funds and mutual funds –including the shares of the 2,900 banks that are members of the Federal Reserve system–; what a blessing these publicly held fractional reserve banks are !?…..
January 17th, 1832.
Top shareholders in the Bank of the United States–
It appears that the amount of stock held by foreigners is 84,055 shares, equal to $8,405,500, without including the premium. The whole number of foreign stockholders is 470.
Baring, Brothers, & Co. ….. 7,915
John Marshall ….. 3,878
Charles Dixon ….. 2,500
Thomas Coterall …. 1,829
Benjamin Heywood ….. 1,784
Sparks & Co. …… 1,236
Jonathan Austin …… 1,200
Francis C.S. Conway, Marquis of Hertford ….. 1,003
James Drake ……. 1,000
Abels Smith ….. 1,000
Gen. Sir William Keppel ….. 722
Mrs. Candelaria Bell ….. 637
Lt. Gen. Sir Marmaduke Warren Peacock …… 500
Hudson Gurney ….. 500
The domestic stockholders of the Bank are as we count them 3,602, holding 195,620 shares.
Stephen Girard …… 6,331
Charles Carroll ….. 2,683
Robert Ralston …… 2,026
William J. Barksdale …… 1,500
Bernard M. Carter ….. 1,417
John Potter …….. 1,400
William Bucknor …… 1,168
Don Francis …….. 1,150
The amount of specie on hand at the Bank of the United States and its several Branches, on the 1st of January 1832, was $7,038,823.12;
$7million was also the amount that the Federal government paid in, in specie, for its 20% share in the enterprise — in any other joint-stock company 20% generally gives the holder control over the corporation; but not in this one, this one was controlled by Nicholas Biddle who did not have any shares !!!
Mr. Kirsch cites and quotes several meetings and petitions of citizens, in opposition to the removal of the deposites; he carefully not cites the (much larger) meetings and resolutions in support of Andrew Jackson’s policy toward the Bank; he knows that the pro-Jackson and anti-Bank sentiments were so strong that even congressional friends of the Bank (such as Senator Dallas, or Jared Ingersoll) felt it was better for their political careers to feign agreement and join these meetings and attach their names to these resolutions.
“The charter of the Bank of the United States expired in January 1836” writes Mr. Kirsch; but he shyly does not write what Nicholas Biddle –his nationalist banker– did upon this turn of events:–
first: Mr. Kirsch is in error as to the expiration of the charter: it expired on March 4, 1836.
second: following correspondence and conversations between Nicholas Biddle and legislators, in January 1836, in the Legislature of Pennsylvania, a bill “to continue the improvement of the State by railroads and canals” was introduced, and in short order, passed both houses. This bill included a section for “other purposes,” which “contained the entire draught of a charter for the Bank of the United States, adopting it as a Pennsylvania State bank.”
From 1833, Thaddeus Stevens (future grand old commoner, radical re-constructionist and greenbacker) had been the able leader of the Pennsylvania Legislature where he organized Whigs and Anti-Masons to vote together; in 1835 these two parties elected Joseph Ritner as Governor of the State. The years between 1832 and 1836 were the years of Andrew Jackson’s war against the Bank of the United States; followed by 4 years of agitation against banks and for an Independent Treasury. In 1836 the whole entire membership of the Pennsylvania Legislature –under the able leadership of Thaddeus Stevens– managed NOT to notice this more than one page long charter of the Bank of the United States of Pennsylvania !?!
Some years later the friends of the Bank were voted out of the Pennsylvania Legislature, and in January 1842 a committee opened an investigation into the affairs of this bank, relating to the charge of bribery. This committee ascertained that $479,000 was advanced as bribes by the Biddle bank to obtain the State charter in 1836….. Very good reason and explanation why those Whigs and Anti-Masons, and Thaddeus himself, managed NOT to notice that bank charter in a canal bill.
Mr. Kirsch continues:–
“The end of the American Credit System
“The purpose of the creation of the Bank of the United States was to enlarge the active and productive capital of the country. It was to create more transactions reflective of future payment, resulting from increases of productivity, rather than limiting trade to transactions of existing goods using expensive gold and silver (specie). The metallic-based system, insisted upon by the British, sought to restrict production to the currency in circulation, rather than to make the currency a reflection of growing powers of production.
“Under the regulation of the Bank of the United States, specie was a reserve in the banks to maintain a uniform currency entirely sufficient for the internal economy, and to settle accounts with foreign countries. Banks safely issued multiple times the specie they had on hand, maintaining the ability to redeem any note with specie. It was rarely necessary for the banks to do so, however, since within the internal economy of the Union, banknotes were the preferred means of payment amounting to roughly nine-tenths of all transactions. By the regulation of the Bank from 1823-1832, the proportion of reserve to banknotes in circulation was determined by the productive economy.
“A circulating currency was created of the magnitude proportional to the active capital of the country, such as manufactures, agriculture, etc., without requiring the trading in of most of that capital for specie with which to exchange goods, as was necessary with a metallic currency. The substitution of banknotes for metal decreased the capital required to be used as currency. This saving of physical capital meant that it could be absorbed in the purchase of land, new dwellings, and new manufactures.”
for whatever reason Kirsch leaves out that Baring, Brothers &co. were the largest shareholders in the 1st Bank of the United States: at least 2,220 shares out of 25,000 shares; he also leaves unmentioned that according to accepted wisdom in 1811, 70% of the shares of the 1st Bank were held by british nobility. He also leaves it unmentioned that in the 2nd Bank of the United States, once again, Baring, Brothers &co. were the largest foreign shareholders; Steven Girard (warm friend of the 1st Bank and the Baring brothers) was the 2nd largest domestic shareholder.
So, how is a Baring branch bank, which the BoUS was, being in opposition to the British oligarchy ? How is tying U.S. finances and currency to the Bank of England and to Baring brothers, a move against England, and towards national economic independence ?
Mr. Kirsch continues–
“On December 26, 1839, Abraham Lincoln attacked Van Buren’s proposed Sub-treasury system in a speech to the Illinois State Legislature, contrasting it to the expired Bank of the United States.”
This was the Independent Treasury system which segregated the Government from banks and decreed that lawful money alone may be received in payment to and from the Federal Government, bank notes may not….. Lincoln and the LaRouche crew are opposed to this concept.
In 1838, in opposition to the Independent Treasury system, Henry Clay (nationalist hero of the LaRouche crew) explained what would be the best, always-convertible, paper currency –a Treasury-issued draft, representing (always) specie on hand, and backed by the resources and taxing power of the government; of course, Mr. Clay and his co-horts did not like this sort of national currency, they wanted the notes of a privately-owned central bank…. Mr. Kirsch knows this, yet he still maintains that a Biddle bank is the solution to America’s financial problems…..
[section 10 of the proposed independent treasury act] provides that, for the purpose of payments on the public account, it shall be lawful for the Secretary to draw upon any of the said depositaries, as he may think most conducive to the public interest, or to the convenience of the public creditors, or both. It will be seen that no limit whatever is imposed upon the amount or form of the draft, or as to the depositary upon which it is drawn. He is made the exclusive judge of what is “most conducive to the public interests.”
Here is one of them, said Mr. Clay. [He here held up to the gaze of the Senate a Treasury note] This is a Government post note, put into circulation, paid out as money, and prepared and sent forth, gradually to accustom people of this country to Government paper.
Nowhere in the United States will it be under par. Do you suppose that the holder of these drafts would be fool enough to convert them into specie, to be carried and transported at his risk ? Do you think that he would not prefer that this money should be in the responsible custody of the Government, rather than his own insecure keeping ? Do you think he will deny to himself the opportunity of realizing the premium of which he may be perfectly sure ? The greatest want of the country is a medium of general circulation, and of uniform value every where. That, especially, is our want in the Western and interior States. Now, here is exactly such a medium; and, supposing the Government bank to be honestly and faithfully administered, it will, during such an administration, be the best convertible paper money in the world, for two reasons: The first is, that every dollar of paper out will be the representative of a dollar of specie in the hands of the receivers general, or other depositaries; and, secondly, if the receivers general should embezzle the public money, the responsibility of the Government to pay the drafts issued upon the basis of that money would remain unimpaired. The paper, therefore, would be as far superior to the paper of any private corporation as the ability and resources of the Government of the United States are superior to those of such corporations.
Whatever a Government agrees to receive in payment of the public dues, is a medium of circulation, is money, current money, no matter what its form may be, Treasury notes, drafts drawn at Washington, by the Treasurer, on the receiver general at New York, or, to use the language employed in various parts of this bill, “such notes, bills, or paper, issued under the authority of the United States.”
The want of the community of a general circulation of uniform value everywhere in the United States would occasion vast amounts of the species of drafts which I have described to remain in circulation. What amount would remain in circulation cannot be determined a priori; at the end of another year they would fill all the channels of circulation. Confidence would be lost in the notes of the local banks, their paper would gradually cease to circulate, and the banks themselves would be crippled and broken. The paper of the Government bank would ultimately fill the vacuum, as it would instantly occupy the place of the notes of the late Bank of the United States.
Next Kirsch presents a reasonable conspiracy theory that the Rothschilds had President Harrison assassinated, because he would have signed the proposed charter of a 3rd Bank of the United States; he knows that the Rothschilds were opposed to this Bank (showing that the charlatans and the ignorant groupies who support these professional liars had no idea what the reality was around the veto of the re-charter and the vetoes of the new charter); in the views of the LaRouche crew, even Thomas Jefferson is bad for the health of America and its citizens:
“President William Henry Harrison promised to sign a bill in Congress for a new Bank, and such a bill was prepared and passed. Unfortunately, Harrison mysteriously died on April 4, 1841, exactly four weeks after his Inauguration. He was replaced by Vice President John Tyler, described by John Quincy Adams in 1840 in his diary as a “political sectarian, of the slave-driving, Virginian Jeffersonian school, principled against all improvement, with all the interests and passions and vices of slavery rooted in his moral and political constitution.”
He then relates, proudly, that Lincoln, throughout his political life, was a friend and advocate of a privately-owned bank of the United States which would act as the fiscal agent of the Government, which would issue its own notes as national currency. Lincoln (and Mr. Kirsch) says Independent Treasury is misery, private central bank is prosperity.
And this is the Lincoln to whose aid the Tsar of Russia sent his naval ships, in whose behalf he was ready to make war !!!
“Lincoln stood firm with his December 1839 resolve, and in 1843, on March 1, submitted a proposal to a Whig meeting in Springfield, Ill., including the resolution, [Collected Works, Vol 1, pages 307-8-9-18]
‘That a national bank, properly restricted, is highly necessary and proper to the establishment and maintenance of a sound currency, and for the cheap and safe collection, keeping, and disbursing of the public revenue.’
“Three days later he explained his resolution in an address, saying,
‘Upon the question of expediency, we only ask you to examine the history of the times during the existence of the two banks, and compare those times with the miserable present.’
“On July 1, 1848, as an advisor to Gen. Zachary Taylor, Lincoln crafted policies for Taylor to enunciate as a Presidential candidate, including:
‘Should Congress see fit to pass an act to establish a National Bank I should not arrest it by the veto, unless I should consider it subject to some constitutional objection from which I believe the two former banks to have been free.’
Mr. Kirsch claims that the representative of the foremost bank came to the United States to act on behalf of the British oligarchy, in opposition to the concept of a privately-owned central bank and in support of the Independent Treasury system !?….
“Rothschild banker, August Belmont, sent from London to New York city in 1837, ran the Democratic Party for several decades after Van Buren’s tenure, as a direct British hand within American finance. …. By the time Lincoln became President, thousands of un-redeemable currencies were in circulation, and the nation was entirely bankrupt.”
What reason does Kirsch have for stating in print such falsehoods? Belmont was a very young man, fresh out of apprenticeship (by the age of 21 this man was good enough to be a manager for the House of Rothschilds, today’s youth can hardly fill a teller’s job at the age of 20); he only passed through London because the ships sailed from there……
Kirsch knows that during Lincoln’s presidency August Belmont firmly supported Lincoln’s aims and policies, he also knows that Belmont advised Portland Chase as to what sort of banking system to set up; he also knows that during the war the Baring brothers and the british banks fell out of favour, while the House of Seligman fell in-favour and became banker to the United States…..
Kirsch also knows that in January 1861 the debt of the United States stood at $70,000,000 ($2/citizen), he knows that there were $300,000,000 in coins in the country (half of it in the possession of banks), meaning: that the $2-300,000,000 bank-notes in existence could have been redeemed, in coin, on demand; this also means that the banks issued no more than 3 notes for every coin in their vaults –he also knows that the 3:1 ratio was the one recommended by Henry Clay, as the prudent way to conduct banking business; he also knows that the Bank of the United States always issued more than 3 notes for each coin it had, sometimes they discounted $70,000,000 while they had only $2,000,000 in coin in their possession……
“The strong nationalist Taylor won the Presidency in 1848. His Treasury Secretary, William Meredith, was a relative of Gouverneur Morris who established the credit system with Robert Morris and Hamilton; he was a vocal advocate against the British doctrine of laissez faire, and wrote plans for a higher tariff in 1849. However, Taylor died mysteriously on July 9, 1850, from causes that have never been fully established.”
After this Kirsch proudly tells us that the National currency Bank System of February 1863 WAS Lincoln’s banking system; but he blatantly lies as to what this banking system was: he is cognizant that the Federal Reserve System was merely a re-organization and adjustment of the National currency Bank System, he has read the text of both Acts, he just doesn’t want his readers to know this.
“President Franklin Roosevelt’s Glass-Steagall Act restored stability to Lincoln’s national banking system, and FDR’s use of the Reconstruction Finance Corporation as a direct conduit for Treasury lending, superseded the money system of the Federal Reserve, and once again propelled the nation forward in the greatest density of industry- and infrastructure-building in the nation’s history.”
“But the full use of Congress’s powers, as they expressed themselves in the most effective means through the Bank of the United States credit system, was never restored.”
Mr. Kirsch’s closing comment—
“The Ghost of the American Credit System
“A nation freed from the British Empire was reshackled by the controllers of Andrew Jackson and subsequent administrations, British agents working against the United States. The unconstitutional shutdown of the Bank of the United States signaled the destruction of full Congressional control over the nation’s finances, and the integral relation of the currency with increasing the powers of production.
“The Bank was never merely an instrument of commerce; it was the means by which Congress could most effectively promote the economic interests of the nation, and uphold its duty to carry out its assigned powers of government. This power of regulation was attacked, and the development of the economy destroyed. The bonds that held the nation together were dissolved.
“Drawing from the recent speeches of statesman Lyndon LaRouche on the revival of the American credit system, the successful operations of the Bank of the United States from 1791-1801 and 1823-1832, Lincoln’s Greenbacks, the lessons learned from Roosevelt’s RFC, a new system of credit can be organized in short order, and the remaining productive powers of the nation put to use. New laws and government regulations will foster a productive currency, one defined by the system of laws in which it operates. The value of currency does not lie in the individual unit, but in the process which it facilitates, the flows of trade and commerce, not the abstract material which is exchanged.”
The reality was that two groups competed for the control of the United States; one was the old, established bankers of London, the other was the up and coming circle of friends of Frankfurt; these two groups mercilessly competed in Europe, why would it be different in America ?
The 1st bank of the United States –and its friends and promoters– belonged to the british establishment; the truth is that the 1st and 2nd bank and all the people whom Mr. Kirsch lists as opponents of the british money power, were friends and allies of the british money power, and the british system of banking, permanent debt, private central bank, state finances.
All the outstanding figures on the side of the Bank and the american credit system, started their political careers in the opposite camp:
Henry Clay was opposed to a central bank –later he was employed by the bank as attorney, and he changed his alliance
John Sergeant was opposed to a central bank –later he was employed by the bank as attorney, and he changed his alliance
Daniel Webster was opposed to a central bank, opposed to tariff –later he was employed by the bank as attorney, and he changed his alliance
John Calhoun, on the other hand, started out as a supporter of Bank and tariff, then changed his stance, and opposed both……
The United States, from its beginning, was under the control of the Baring circle of friends; during England’s war against Napoleon the Frankfurt banking circle made great advancements in Europe and at the time of the battle of Waterloo gave these refined british noblemen a really bad haircut; now the Frankfurt friends had the financial power and the time to direct their attention to the taking of America from the Baring circle of friends. The Frankfurt friends opposed the Bank of the United States which was simply a branch bank of the Bank of England and Baring, Brothers &co.; they supported representatives, senators and presidents who, for whatever reason, opposed the Bank of US.
As the contemporary, Condy Raguet observed in 1834:–
“Nothing but providing for the collection of the public revenue without the instrumentality of banks, can prevent the incorporation of a new federal bank, before three years are over. A large portion of those who have been instrumental in destroying the present one, have been actuated by no motives in the world, but the desire of having a fresh speculation in bank stock to gamble with, and if the real opponents of such a bank upon principle, do not unite in some plan of separating the government from the banking system, they, or their children will live to see the day, when the country will again be convulsed from one extremity to another, as it has been of late.”
During Andrew Jackson’s Presidency the account of the United States was switched from Baring, Brothers and Company (who handled it since the formation of the Federal Government) to N.M. Rothschild (Mr. Jackson’s portrait hangs in the NMR office to this day); the Frankfurt circle of friends managed to accomplish the non-renewal of the charter of the Bank; during Mantin Van Buren’s presidency the Independent Treasury Act was passed, which segregated the federal government from banks entirely; in 1841 the Whigs, representatives and advocates of the british money power and monetary system, returned to power with a vengeance –they carried both houses and the presidency–, unfortunately for them, President Harrison died before he could sign into law the charter of a 3rd bank of the united States; President Tyler vetoed the proposed charter and the Whigs did not have the numbers in Congress to over-ride this veto.
In 1846 the Independent Treasury law was re-enacted, and it remained in force until Lincoln’s war started.
“For three decades a union of the South and West prevented a restoration of the centralized banking system. Not until the planting statesmen withdrew from Congress, and the storm of the Civil War swept minor gusts before it, were the ravages wrought by Jackson repaired by the directors of affairs in Washington.”
In the 25 years between Jackson and Lincoln the money power prepared for a shooting war which would provide the opportunity for them to establish the banking system in the United States that was to their liking, and to establish a lasting control over the United States.
Lincoln, Chase, Seward, were old Whig hands, but they and the Whig establishment that gained control in 1861 were outsmarted by the Frankfurt circle of friends; the british establishment played the wrong hand: for 20 years they fanned the flames of discontent and fomented war in the South among the people whose arch-enemies they were, and now, in 1861, they presented themselves as friends of national independence and self-determination –expecting that after the conclusion of the war, using their age-old methods, they can gain control over these mis-guided States…..
The Frankfurt circle of friends –the supporters of anti-bank presidents, representatives and senators and publications–, on the other hand, now (showing their true colours) presented themselves to Lincoln and his government as the warm friends of saving the Union, of radically re-constructing the United States, of establishing the authority of the Washington government over the whole United States; August Belmont and Joseph Seligman became friends, advisors and fiscal agents of Lincoln’s government; upon their advice did Secretary of the Treasury, Portland Chase, propose and carry into legislation the implementing of the New York free-banking system to the whole Union; the free-banking system started in New York State, in 1838, the same year that William Seward (Lincoln’s police minister) became governor of that State. The free-banking law freed banks from State (or any) charter, it allowed banks to use State bonds as capital upon which to issue and circulate their notes (a State credit system, which Mr. Kirsch should love very much), and allowed these debt-based bank-notes (credit printed on a pieces of paper) to be received in payment to and from the State government.
In 1863 the Frankfurt friends got what they wanted, for what they struggled for 30 years, for which they put the people of the country through several economic disasters, for which they, and their british competitors, brought upon the country a self-exterminating war; after the conclusion of Lincoln’s war the british circle of bankers had no more power and influence to mount any sort of counter measure; after 1863 the bank agitation stopped, and we heard of it no more…..
Legacy of Sovereign Credit, part I
Legacy of Sovereign Credit: PART II —history of the Credit System of Alexander Hamilton & Robert Morris
Webster Tarpley and the Tsar of Russia rushing to the aid of Abraham Lincoln—
Tarpley and the LaRouche crew are about the only people in conspiracy circles who studied history and researched the subjects on which they write. Therefore, it can only be for nefarious reasons that they twist the truth, that they withhold certain facts, that they use what they learned to present a twisted picture…..
Tarpley is not ignorant of who the House of Romanov were, what sort of society they organized in Russia and in the countries they conquered. Another name for Russia of the Romanovs was “cemetery of nations“. Yet, this House of Romanov –these paragons of national sovereignty and individual freedom– are held up by Tarpley (and the dumb and dumber) as the hero in shining glory, who sent his naval ships to America with sealed instruction……. to preserve the authority of the Federal government, “to restore cotton to loyalty”, to aid “a re-construction of but one government over all the states of our confederacy”
What other Union have the House of Romanov helped out ? In 1848, silly and misguided individuals in Hungary got this absurd idea into their pretty heads that they secede from the Union of the Habsburg Empire, which the Habsburg considered perpetual and inviolable…… By 1849 these disloyal, cranky and ungrateful Hungarians were making headways, and they were winning the war for secession; not to worry: the House of Romanov to the aid and rescue of the Empire of Habsburgs, and the Union was saved, the authority and constitution of the central government in Vienna was restored…….
During the 1830s, while the LaRouche crew’s designated villains, Andrew Jackson and Martin van Buren, were presidents in the united States, the House of Romanov transported and killed more Polish officers, soldiers, civilians, than Stalin did in the Katyn forest….
Without the help of the House of Romanov (and the Russian ruling class) the British Oligarchy could not have defeated Napoleon who tried to liberate Europe from the clutches of these enemies of humanity. Some hero these LaRouche people pick for themselves…….
Who was Abraham Lincoln whose central government needed the aid of the Tsar of Russia ? Not an unwitting tool of bankers he was, but a willing partner and instrument of theirs, who knew full well what he was doing…… To show the attitude and nature of Lincoln and company—
July 4th, 1861.
House of Representatives
Speaker of the House, Galusha Grow, speaking:
“No flag alien to the sources of the Mississippi river will ever float over its mouths till its waters are crimsoned with human gore; and not one foot of American soil can ever be wrenched from the jurisdiction of the Constitution of the United States until it is baptized in fire and blood.” [vociferous applause upon the floor and in the galleries, which lasted for many minutes.]
Who were these bankers in whose behalf Lincoln killed 600,000 people, burned down cities and food stores and put women and children out on the snow in the middle of Winter without food and shelter ?
Well, they were the circle of friends of Frankfurt:
Lazard Speyer-Ellissen & Co. —- Speyer & Co.
Seligmann & Stettheimer —- J.&W. Seligmann
Deutsche bank —- Speyer & Co.
Disconto Gesellschaft —- Kuhn Loeb & Co.
Darmstaedter Bank —- Hallgarten & Co.
Bleichroeder —- Landeburg, Thalmann & Co.
add to this the Dresdner Bank —- J.P. Morgan & Co.
Who were Abraham Lincoln’s and Portland Chase’s fiscal advisers during the war years ? Oh dear; August Belmont and Joseph Seligman.
Joseph Seligman was one of the vice-presidents of the Union Square mass-meeting called in aid of the Union on April 20, 1861, during the Civil war, and his firm, J&W Seligman & Co., rendered the government signal service in maintaining its credit and floating its bonds, and for a time Seligmann & Stettheimer, in Frankfurt, were the official bankers to the United States
Seligman sold more than $100million US bonds in Frankfurt
Very far form the floor in the conspiracist house of cards —far from the figment of imagination that the regurgitators sold to us— the House of Rothschild did NOT want to split the United States into two units; NO; what they wanted was to keep it as one unit, re-constructed under the absolute power of the central government in Washington (similar to the power of the central government of the Habsburg Empire in Vienna). While the regurgitators have to resort to quote fabrication, invention of death-bed confessions 50 years after the fact, to prop up their house cards; while Tarpley has to resort to lying and withholding facts, we have Mr. Belmont’s handwritten statement and recorded actions, to demonstrate that the House of Rothschild was on the side of Abraham Lincoln –and Abraham Lincoln on the side of the Frankfurt circle of friends.
What else has the Frankfurt money power wanted ?
A banking system –not a central bank, like the bank of the United States, but a network of banks, issuing national currency based on permanent federal debt; and Abraham Lincoln –with the support of the Tsar of Russia– was more than happy to establish it:—
We do not pretend, that a National Bank can establish and maintain a sound and uniform state of currency in the country, in spite of the National Government; but we do say, that it has established and maintained such a currency, and can do so again, by the aid of that Government; and we further say, that no duty is more imperative on that Government, than the duty it owes the people, of furnishing them a sound and uniform currency. —Abraham Lincoln, December 26, 1839.
a national bank is highly necessary and proper to the establishment and maintenance of a sound currency, and for the cheap and safe collection, keeping, and disbursing of the public revenue. —Abraham Lincoln, March 1, 1843.
I know of none which promises so certain results as the organization of banking associations. To such associations the Government might furnish circulating notes, on the security of United States bonds deposited in the Treasury. —Abraham Lincoln, December 1, 1862.
currency can be furnished by banking associations, as suggested in my message at the beginning of the present session. —Abraham Lincoln, January 17, 1863.
Tarply read many times Abraham Lincoln’s above statements, and he is very proud of him for holding such views.
The House of Romanov rushed to the aid of Abraham Lincoln to make sure the plans of the House of Rothschild are carried out; to make sure that Napoleon’s annoying nephew does not throw a monkey wrench into their scheme, upon which they have been working dedicatedly in the past 20-30 years.
Napoleon’s nephew, the designated villain in Tarpley’s nefarious story and in the regurgitations of the book-peddlers, had obnoxious ideas —national agriculture, national industry, silver money, stable currency issued by a bank in the service of the nation, latin league of silver coin users— he had to be put out of his misery. The ill-advised and ill-fated venture in Mexico was one step; the second, the war with the Frankfurt money power’s other willing instrument; Otto Bismarck (who, for the sake and benefit of this money power, already demonetized silver in the area under his control), was more than happy to oblige, and remove this obstacle from the way of progress.