IT’S TIME TO CHANGE THE BANKING SYSTEM

(A REGRETABLE HISTORY)

11/11/09

We have devolved into the necessity of both heads of the family having to work, earning less and drowning in debt, just to get by. Though the government presently claims to have inflation in check, the hidden inflation is the devaluing dollar. We work longer hours, with fewer benefits and less buying power. We have a debt based banking system, all on government debt, and cannot get rid of our debt without extinguishing our money supply, a deadly catch-22.

This debt system has been in place, within the United States, since 1864. It is impossible to solve our debt problem without reforming the banking system.

The Federal Reserve is not a government institution. It is a private bank deceptively established by Congress through the Federal Reserve Act in 1913, giving it a monopoly over issuing America’s money. The impression it held a reservoir of capital in reserve and worked for the public interest, as the central bank, was never further from the truth. In fact, it never has had our interests at heart. It is a corporation, owned by charter banks, with stockholders motivated in solely making profits. It doesn’t have the reserves to back our present government issued common currency. And the debt it has generated is killing our American economy.

Banks deal in what is called, “fractional reserve banking.” They have allowed themselves to loan out ten times as much as they have in reserve. So, if they get, say eight percent interest on a loan, because they are also loaning out ten times as much, they, in essence, are getting eighty percent on the actual amount they have in reserve; thus, huge profits. Exacerbate the leveraging in the recent deregulated derivative markets for the past thirty years, and the percentage ballooned from ten to one to forty to one. This enormous pyramid had no choice but eventually collapsing.

In 1781, towards the end of our Revolution, desperate for money, the Continental Congress allowed the first formation of a privately owned central bank. Called the Bank of North America and modeled after the Bank of England, it practiced fractional reserve banking, lending for interest on money it didn’t have. Because it had a monopoly on the national currency, its business practices ultimately created an atmosphere where the value of the American currency dramatically declined; so much so, that by 1785 the bank’s charter was not renewed. Six years later, however, and called The First bank of the United States, with the prodding of Secretary of the Treasury, Alexander Hamilton, the bank resurfaced by edict of Congress, with a twenty year charter.

Thomas Jefferson, author of The Declaration Of Independence, vehemently opposed a private central bank as modeled on the Bank of England, stating on different occasions, “I wish it were possible to obtain a single amendment to our constitution--taking from the federal government their power of borrowing.”

“I sincerely believe that banking institutions are more dangerous to our liberties than standing armies. The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”

“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 which grow up around them will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”

James Madison, the primary author of our most precious Constitution, strongly agreed, saying, “History records that the money changers have used every form of abuse, intrigue, deceit and violent means possible to maintain their control over governments by controlling money and its insurance.”

The private Central Bank of England had created such debts for Great Britain; Parliament was forced to pass unfair taxation onto the American colonies with hope to pay off this debt. Benjamin Franklyn thought this was the real cause of our revolution.

In France, Napoleon Bonaparte hated the power of the banks saying, “The hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency: their sole object is gain.” In short, when a nation is in debt, not its leaders, but the bankers are in control.

The United States Congress passed a bill allowing another privately owned central bank in 1816, called The Second bank of the United States. In 1832, a congressional bill to renew the charter of the Central Bank was presented to President Andrew Jackson, in the last year before his re-election. This came four years before the twenty-year charter was to come to an end in 1836. Being an election year, the bank lobbied Congress to write the bill, thinking Jackson would not want to create any controversy during an election year. He ran on the re-election plank, “Jackson and no bank.” Winning, not only did he subsequently veto the bill for renewing the bank’s charter, he went on to say, “It is not our own citizens only who are to receive the bounty of our Government. More than eight millions of the stock of this bank are held by foreigners … Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country? … Controlling our currency, receiving our public moneys, and holding thousands of our citizens in dependence … would be more formidable and dangerous than a military power of the enemy. If [government] would confine itself to equal protection, and, as Heaven does its rains, shower its favor 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.”

In 1835, Jackson paid off the final installment of the national debt. He is the only President to pay off the debt. When questioned about his legacy and what he thought was he greatest contribution, Jackson replied, “Killing the bank.”

In 1836, the Second Bank of the United States’ charter ran out and ceased to exist as our central bank. Jackson’s war on the central bank was so successful it would be another seventy-seven years before another private Central Bank’s returned, called the Federal Reserve. However, the insidious practice of fractional reserve banking continued on a state-by-state basis.

Otto von Bismarck, Chancellor of Germany, said about our Civil War, “The division of the United States into federations of equal force was decided long before the Civil War by the high financial powers of Europe. These bankers were afraid that the United States, if they remained as one block, and as one nation, would attain economic and financial independence, which would upset their financial domination over the world.”

Desperately needing money and not submitting to being bleed by interest in excess of twenty-six percent, Abraham Lincoln ordered congress to issue its own currency paying no interest. He said, “The Government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By the adoption of these principles … the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”

There have been members of Congress who were opposed to the Federal Reserve. In 1923, the Republican Minnesota Representative, Charles Lindberg, whose son would later be the first to fly across the Atlantic non stop in the Spirit of Saint Louis, said, “The financial system … has been turned over to … the Federal Reserve Board. That board administers the financial system by authority of … a purely profiteering group. The system is private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people’s money.”

Louis T. McFadden, Republican Representative of Pennsylvania and former Chairman of the House Banking and Currency Committee during the Depression, said in 1932, “We have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board … This evil institution has impoverished … the people of the United States … and has practically bankrupted our Government. It has done this through … the corrupt practices of the moneyed vultures who control it.”

Barry Goldwater, Republican Senator of Arizona 1953-65, 1969-87, was an extreme conservative who was strongly against the legacy of the New Deal. Democratic President Franklin Delano Roosevelt’s New Deal represented the only hope and restoration of dignity to the citizens of the United States who had received the brunt of a destroyed economy as a result of the corrupt banking practices that led us into the Great Depression.

It hard to understand why anyone, who lived through such economic devastation and subsequent regeneration would make a political plank against the legacy of the New Deal. But as conservative as Goldwater would prove himself, he still stated “Most Americans have no real understanding of the operation of the international money lenders … The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and … manipulated the credit of the United States.”

Even with all this history, we have allowed the special interests of the private banking world to repeatedly seduce Congress and charter a private central bank. Presently, our privately owned Federal Reserve is now the single largest creditor to the United States.

War is about profits for the few and we have been manipulated, globally, into constant warring. Certainly our own nation has been manipulated into wars since its creation. We have had several depressions. The power struggle between the moneylenders and our government, over who will issue our money, has wrestled back and forth eight times since 1764.

Now, we are at the precipice of total collapse. We have bailed out the banks so there would still be some monetary flow, but lending is tight, Commercial mortgages are presenting themselves as toxic as well, even with default home mortgages not bottoming out. The tsunami is still coming. Can we revitalize our economy enough to withstand such a cataclysmic second hit? It’s anyone’s guess.

Simply put, however, if we are to ever rid ourselves of our present economic calamity, and hopefully not repeat such folly again, we must change the status quo and take the power of the private central bank away from the abusive few and give it back to the people. Also, the practice of fractional reserve banking must finally be outlawed by constitutional amendment.