The Founding Fathers, Colonial Script, the Federal Reserve and the National Debt


Note:  This story has been beat to death on the internet.  I must have read a hundred different versions of it, and consequently I’m somewhat reluctant to even post it.  But there definately is a story here, and an important one.  This is my version of it.  I do my best to include that which there seems to be consensus on, omitting some details which either seemed less significant or more controversial.  Have at it.

In Ayn Rand’s “Atlas Shrugged”, Rand describes what an incredibly unique advancement America represented at it’s outset, that “for the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work…” that for the first time “there appeared the real maker of wealth…” and that  “No other language or nation had ever used these words before; men had always thought of wealth as a static quantity—to be seized, begged, inherited, shared, looted of obtained as a favor. Americans were the first to understand that wealth has to be created.”
On September 17, 1787, as he was leaving Independence Hall in Philidelphia, Benjamin Franklin was asked by a citizen.” What have you given us ?”  Franklin replied, “A republic, if you can keep it.”  What were some of the events leading up to Franklin’s famous statement?
Several decades earlier, in the 1750s, the Colonies were very prosperous.  There was no income tax, no unemployment, and stable prices. When asked to explain this prosperity to leaders back in the motherland, Benjamin Franklin replied; 
“That is simple. In the Colonies we issue our own money. It is called Colonial Script. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers.  In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one”.
1764, the production of Colonial Script was made illegal by the Currency Act,  passed into law in England (of course due to pressure from the Bank of England) prohibiting the Colonies from issuing their own money, ordering them to use only the money that was provided (in insufficient quantities) by the English bankers.  Benjamin Franklin said,
“In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed”.
The effect that the English bankers were having on the Colonies was by far the most significant reason for the Revolutionary War in 1775, in contrast to what is taught in our history books.  Benjamin Franklin was clear about this;
“The colonies would gladly have borne the little tax on tea and other matters had it not been for the poverty caused by the bad influence of English bankers on the parliament which has caused, in the colonies, hatred of England and the revolutionary war”.
Although the Declaration of Independence was made in 1776, it wasn’t until the Treaty of Paris in 1783 that the new sovereign nation was recognized.   The Colonies were once again free to control their own currency.  In 1787, the founding fathers made certain that the control of currency was provided for in the United States Constitution.   Article 1, section 8, paragraph 5, states;  
“The Congress shall have the power to coin money and to regulate the value thereof”.
It’s clear that the issuance of currency is of utmost importance to any free society.  The abuse and/or exploitation of the issuance of currency has been alluded to by a great many influential people throughout history.  And although the Colonies had gained their independence, the flegling country was far from out of the dark.  Enter the looters (to borrow Rand’s terminology) of the era, the Rothschilds.  The Rothschilds were expert looters, ie; they had figured out how to enrich themselves at the expense of people who actually worked and produced.
“Permit me to issue and control the money of a nation, and I care not who makes its laws.”
Mayer Amschel Rothschild  
It has been said that “the wealth of Rothschild consists of the bankruptcy of nations” .  It has also been said that “the19th century was the age of the Rothschilds”, and estimated that during this period the Rothschilds owned as much as half of the world’s total wealth.  Though this is a bit hard for me to believe, suffice to say that they were extremely wealthy and powerful.  They were bankers, yet they controlled and manipulated entire governments because they controlled national banks” and thus the issuance of currency.   Benjamin Disraeli characterized Nathan Rothschild as the lord and master of the money markets of the world, and of course virtally lord and master of everything else.”
Nathan Rothschild ran the Bank of England during the period when the 13 Colonies sought their independence.  He understood the potential of the new fledgling country in North America and the problems it could pose to imperial England in the future.  Though the British could easily have crushed the Colonies in the American Revolution, they didn’t need to.  England would be better served by allowing independence and establishing a “national bank” on the United State’s soil which England would control.  Alexander Hamilton, the Minister of Finance, supported the idea of such a bank, but Thomas Jefferson, the Secretary of State, strongly opposed it.  Jefferson’s opposition to central bankers is legendary;
“I place economy among the first and most important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt.” 
“I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale” 
“If the American people ever allow private banks to control the issue of their currency, first by inflation then by deflation, the banks and the corporations will grow up around them, will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”
President Washington eventually sided with his Finance Minister, under the premise that making funds available for business and strengthening the national economy was desirable,  and the cleverly named The Bank of the United States was established in 1791 with a 20 year charter.  When the charter ran out in 1811, Congress voted against it’s renewal on the grounds that it was unconstitutional..  The Bank of England, under the direction of Nathan Rothschild, declared that either the renewal of the charter be granted, or the United States would find itself in “a most disastrous war“.  Nevertheless, on March 4,1811 the Bank of the United States was dissolved.  And on January 20, 1815,  President Madison vetoed another bill that would have created a second National Bank.  But finally, on January 8, 1816, faced with the financial hardship from the War of 1812 (just as Nathan Rothschild had promised …) Congress approved another national bank. 
In 1832,  President Andrew Jackson vetoed another move to renew the charter of the ‘Bank of the United States’ .   As a result the bank went out of business in 1836.   President Jackson was the only one of our presidents whose administration totally abolished the National Debt. 
“Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal God, I will rout you out!”
When asked what he felt was the greatest achievement of his career Andrew Jackson replied, “I killed the bank!” 

James Garfield became President in 1881.  With regard to the European bankers, he said:

Whosoever controls the volume of money in any country is absolute master of all industry and commerce… And when you realise 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.”

Today our central bank is call ed “The Fed” or ‘Federal Reserve’, again a clever and intentionally misleading name.  (Similiarly the “Bank of England” is nothing of the sort, but cleverly named to instill confidence in the populace.   The bank sold shares to “private investors“, the names of which were never disclosed.)  After signing the act in 1913, President Wilson said;   

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men . We have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world, no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.” 

Since I entered politics, I have chiefly had men’s views confided to me privately. Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it.”   

( both from The New Freedom:  A Call for the Emancipation of the Generous Energies of a People (New York and Garden City: Doubleday, Page and Company, 1913)

Just after the Federal Reserve Act was passed, Congressman Charles Lindbergh said,
“the act established the most gigantic trust on earth.  When the President signs this bll, the invisible government of the monetary power will be legalized”     “the greatest crime of the ages is perpetrated by this banking and currency bill.”

The international bankers had created a currency panic in 1907 in order to get the American people to swallow the idea of  the ‘Federal Reserve’ in classic Hegelian dialectic form.   In 1911, John Moody’s “The Seven Men” was in McClure’s Magazine.  In it he states

“Seven men on Wall Street now control a great share of the fundamental industry and resources of the United States. Three of the seven men, J.P. Morgan, James J. Hill, George F. Baker, head of the First National Bank of New York belong to the so-called Morgan group; four of them, John D. and William Rockefeller, James Stillman, head of the National City Bank, and Jacob H. Schiff on the private banking firm of Kuhn, Loeb Company, to the so-called Standard Oil City Bank group…the central machine of capital extends its control over the United States…The process is not only economically logical; it is now practically automatic.”   

Consider the function of the Fed  Today’s dollar is  “fiat money”, meaning it is not backed by anything of value (gold) as it used to be, but it is backed only by government decree, by the “full faith and credit” of the United States government.  What are the economic effects of printing money carte blanche, ie; uninhibited by the need to have something of real value (and therefore something of limited supply…) behind the currency ?  With gold backing, there is something quantifiable behind our money, something of precise value that keeps money creation and thus economic growth in check.  Currently, getting more money is as easy as turning on the printing presses (incurring more debt…)  printing dollars by pure fiat, ‘out of thin air’, as it were.  Problem is, our government has to issue bonds to get those dollars.  This arrangement is great for whoever is running The Fed whoever is recieving the bondsbut not so great for the government that issues them.   In making good on the bonds they issue, our government not only has to pay full face dollar value (on dollars that cost about 5 cents for the Fed bankers to print) but interest as well !  The US Government, (ie; you and I)  gets strapped with the bill each time the “Fed ” turns on it’s printing presses.  In this manner, our government  is taken to the cleaners by our own central bank.  To add insult to injury, every time new dollars are printed and the money supply increases, your income and savings are worth less.  This has been referred to as a  stealth tax”. 

In lockstep our national debt goes through the roof, increasing tens of thousands of dollars every second – billions of dollars every day.  And is it a coincidence that we see a massive acceleration of national debt in the early 1970s, precisely when President Nixon announced that the government was abandoning the Bretton Woods Agreement (August 15, 1971), removing gold backing from the dollar?  Check out any graph of our national debt.  The correlation is pretty hard to miss.

Draw your own conclusions . . . 




 “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose.”

John Maynard Keynes  (The Economic Consequences of the Peace, 1920, page 235)
“This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.”        
Alan Greenspan     from Gold and Economic Freedom“, published in Ayn Rand’s “Objectivist” newsletter in 1966 (last paragraph)


*A must see video here from the Ludwig von Mises Institute.  If the link doesn’t work, it’s called “Money, Banking and the Federal Reserve”, and can easily be found on many video sites like youtube and google video.  (at least as of Dec. 2008 it’s still easy to find)

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