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What this is about is the greatest ripoff in history, the very way money and debt are
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created and controlled.
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This affects everyone on the planet.
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It is the basic cause of all our economic problems today.
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Until we recognize this in every nation, nothing any national government does will
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fix the problem and all of us will see mounting debts and sinking standards of living.
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Our children will inherit this mess and it will get worse every single year.
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This is the first time I think in history where mothers are saying to themselves, ooh,
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what do my kids have to look forward to?
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Maybe they shouldn't have kids.
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The truth is that depressions are not normal.
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They are contrived.
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The truth is that nations don't need a national debt.
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The truth is that governments generally aren't printing money wildly.
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Governments are borrowing money wildly.
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Our money supply has to be borrowed into existence by the community of money users, that's us,
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from the commercial banks.
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The bulk of money creation is made by banks.
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The banks decide when and how much money they are going to produce, so to say.
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The money supply is out of control, out of any control.
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When governments today, they borrow money from the banks, basically you are just enslaving
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the rest of the economy, the people.
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You need to create the money for the good of the people.
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It has to be a common good.
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The banks have usurped that prerogative of creating money.
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The problem is that we have given the power to create money to the banking sector and
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we have let them use that power more or less unrestrained.
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The new money coming into the economy starts as debt created by the banks and it's unsustainable.
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The way the system is going now, that either wittingly or otherwise it is going to destroy
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Western civilization as we have known it for the last century.
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Interest on a loan is reaping where you do not sow.
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It's legalized theft.
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Legalized theft is what we now have with this monetary system.
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This is quite different from the past when money was created by the government.
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There is no reason for governments to run the debt.
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It's a game of power, really.
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The normal American citizen is becoming poorer and poorer and the world economy is collapsing.
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The good news is we can fix this.
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It won't take a war or revolution.
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It only takes a simple understanding of the problem and its simple solution.
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The truth is that anyone can understand what's going on.
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This is not rocket science.
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The truth is that those who are making money off this ripoff want to keep you confused.
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Confused about the basic facts of what your money is and who creates it.
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On Tuesday evening of November 22nd, 1910, just two days before Thanksgiving Day,
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a cold drizzle covered New York City with a foggy blanket.
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The sounds of an occasional passenger scurrying to catch a late train
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echoed across the marble floors of the new Hoboken, New Jersey train station.
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No one noticed the shiny Pullman car parked on the last track.
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Unlike the B-4, the train was not moving.
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The Pullman car parked on the last track.
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Unlike the beat up coach cars that the average person was familiar with,
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this long black beauty glistened in perfection.
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Its polished brass nameplate simply read Aldrich.
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The car belonged to Senator Nelson Aldrich, one of the most powerful men in the United States Senate.
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By 10 p.m., most New Yorkers were tucked into their beds,
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but one group was on the move to climb aboard the Aldrich car that night.
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All the participants had been instructed to arrive separately and in utmost secrecy.
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All were instructed to be sure that none of New York City's voracious press were following them.
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Who were these men and what was their secretive mission?
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They were some of the wealthiest men in America, but more importantly,
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each of them represented the world's richest banking families.
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They were so well known that their comings and goings were frequently monitored
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by the New York newspapers led by Joseph Pulitzer's New York World.
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If news got out that the representatives of the Money Trust had assembled,
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questions would be asked, conclusions drawn,
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conclusions that could spoil years of careful preparation.
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The papers knew that the Money Trust was behind the economic booms and busts
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that had ravaged America since the Civil War.
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The entire nation had been sent into an uproar with the latest one,
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the Great Bank Panic of 1907.
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The public was demanding a solution.
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Freedom-loving Americans were fighting back with the few effective tools they had.
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They were tired of a do-nothing Congress,
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which could never seem to come up with effective legislation
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to protect the public interest, only the banking interests.
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So, their goal this night was to assemble in secret, to write legislation,
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legislation which would be introduced in Congress.
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Supposedly to control them, the Money Trust, to fix the problems they had created.
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But a single whistleblower could lead to a disastrous outbreak of populism
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and a potential end to the most lucrative monopoly ever devised in human history,
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absolute control of the money supply of the fastest growing nation on earth.
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Their purpose was to maintain the fiction that America's banking panics
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were some sort of immutable cycle over which humans had no control.
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They called it the business cycle.
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Their solution, an omnipotent central bank,
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one which would pretend to operate in the public interest and under the public's control,
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but in reality would be a complete captive of the Money Trust.
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It was an audacious plan.
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The bankers had not dared to reconstruct a privately owned central bank in America
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since 1832 when President Jackson had labeled them a den of vipers
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and destroyed their last one, the second bank of the United States.
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There were six participants in the Aldrich car headed for Jekyll Island.
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Five of the six represented the three great banking families,
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the Rothschilds, the Rockefellers, and the Morgans.
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The Jekyll Island club did not have a large year-round population.
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The majority of the members arrived after Christmas and stayed through March.
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In other words, between Thanksgiving and Christmas,
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the place would be nearly deserted with only a minimal staff of caretakers.
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It was the perfect place to meet in anonymity.
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The Aldrich Express pulled into the Brunswick, Georgia station at dinnertime the next day,
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but a surprise awaited them.
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Reporters were waiting at the Brunswick, Georgia station.
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Mr. Davidson went out and talked to them.
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The reporters dispersed, and the secret of the strange journey was not divulged.
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Now let's take a look at these three great banking families to understand what they wanted.
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All three practiced extreme secrecy concerning their business activities.
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The Rothschilds are certainly the oldest of the big three banking families,
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and experts believe that they are the wealthiest,
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but estimates of the extent of their holdings are so shrouded in generations of secrecy
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that there are no reliable figures.
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We do know, however, that they have dominated European economics since the late 1700s.
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One of the greatest fortunes in history began in 1743 in Frankfurt, Germany,
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when a coin dealer named Amschel Bauer opened a counting house.
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He placed a sign over the door depicting a Roman eagle on a red shield.
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The shop became known as the Red Shield Firm, or in German, Rothschild.
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The Rothschilds were a Jewish family.
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Throughout Europe, Jews were forbidden by law from participating in most businesses or trades,
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so they naturally tended to provide for themselves through money-lending and banking activities.
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Amschel taught his son, Mayor Rothschild, the secret of banking, leveraging,
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or multiplying money by a process known as fractional reserve lending.
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This practice continues to this day and is one of the two major causes of the world's economic problems.
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Mayor Rothschild soon learned that loaning money to governments and kings
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was more profitable than loaning to private individuals.
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Not only were the loans bigger, but they could be secured by the nation's taxes.
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Government borrowing is the second major problem with the world economy today.
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Mayor Rothschild had five sons.
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He sent them to the major capitals of Europe to open branch offices of the family banking business.
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This internationality gave the Rothschilds a major advantage over all other banking houses
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and allowed them protection from the political tides of individual nations.
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The Rothschilds found that encouraging a nation to borrow, have a national debt, was their most powerful tool.
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Once they could convince a nation to borrow, that nation quickly became addicted to borrowing.
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What most people don't understand to this day is that the negative effects of government borrowing
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are not felt for years down the road, the compounding interest problem.
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The result, the borrowing nation quickly found itself a political captive of the Rothschilds.
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If that nation tried to oppose the House of Rothschild, they would find that their loans would be called in
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and no new loans would be issued.
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That in itself would cause domestic turmoil.
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But in addition, the rivals of that nation would suddenly be given ample loans,
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a subtle yet powerful manipulative force in the affairs of nations even today.
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The Rothschilds broke into dealings with European royalty here in 1769 in Wilhelm's Hoche,
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the palace of the wealthiest monarch in all of Europe, Prince William of Heskessell.
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At first, the Rothschilds were only helping William speculate in precious coins.
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But when war broke out between England and its American colonies,
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the Rothschilds became rich, brokering William's mercenary army, the Hessians,
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to go fight in America for the British.
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In 1806, Napoleon Bonaparte chased Prince William into exile.
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William sent 550,000 British pounds, a gigantic sum at the time,
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to one of Mayor Rothschild's five sons, Nathan, head of the London branch of the House of Rothschild,
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with instructions to buy consuls, British government bonds,
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which paid a small but very reliable interest rate on British national debt.
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But instead of buying the bonds, Rothschild used the money for his own purposes.
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With Napoleon on the loose, the opportunities for highly profitable wartime investments
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were nearly limitless.
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After Napoleon's first defeat in 1813 and imprisonment on Elba,
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William returned to Wilhelm's Hoche.
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He summoned the Rothschilds and demanded his money back.
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The Rothschilds returned William's money with the 8% interest
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the British consuls would have paid him had the investment actually been made.
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But the Rothschilds kept all the vast wartime profits they had made using William's money.
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Napoleon rose to power in the bloody aftermath of the French Revolution.
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He wanted to improve economic conditions at home, so he opposed any government debt.
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One has only to consider what loans can lead to in order to realize their danger.
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The hand that gives is above the hand that takes.
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Money has no motherland.
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Financeers are without patriotism and without decency.
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Their sole object is gain.
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In 1800, he established an independent bank of France and made himself its president.
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Insisting on no national debt was a difficult decision on Napoleon's part.
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France was broke.
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The French treasury had been emptied by the bloody French Revolution.
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But Napoleon knew that the Rothschilds would not rest as long as he was in power
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unless it was mutually beneficial.
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So he opened negotiations for a treaty with England
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by threatening to invade Holland, which was heavily in debt to the British.
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Always anxious to regain her lost colony,
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the British made a little-known counterproposal
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to combine forces with Napoleon to take back America.
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The proposal was that England would get the industrial north and combine it with Canada.
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France would get the rural agricultural south.
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In hopes of feeding Napoleon's well-known ego,
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England would proclaim Napoleon the King of America.
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Napoleon quickly saw that the British would be getting the better half of this deal,
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and so made the plan public to the great embarrassment of the British.
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From that point on, there was no going back.
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Napoleon was the sworn enemy of the Rothschilds.
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Napoleon knew he had to go on the offensive, but he needed money to pay an army.
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Then he came up with an audacious plan.
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On April 30, 1803, he sold the vast Louisiana territory to the Americans
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for less than three cents per acre,
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thereby raising more than $15 million in cash.
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A month later, England declared war on France,
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and Napoleon prepared to invade Britain, an invasion which would never occur.
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So off Napoleon went, conquering most of Europe with his military genius.
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He knew he had to install his own puppets in the Rothschild strongholds if he were to succeed.
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During the Napoleonic Wars, the Rothschilds developed a legendary network of spies and couriers
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to smuggle gold bullion around Europe to support Napoleon's defeat.
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The Rothschilds' red shield symbol on a courier's saddlebags
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meant unfettered passage through most national checkpoints.
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Napoleon's final battle began here at Waterloo, Belgium, in the summer of 1815.
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Here, 300,000 men met in battle representing seven different nations,
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led by Napoleon on the one side and the Duke of Wellington on the other.
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The Butte de Lyon you see behind me is a massive earthen mountain
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with the Lion of Belgium facing the west, looking towards France.
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Napoleon was no friend of the Rothschilds,
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but Nathan Rothschild was prepared to make money no matter which way the battle went.
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He alerted his covert network to bring him news of the battle before anyone else could obtain it
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so that he might play the British stock market to his maximum advantage.
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Once the outcome of the battle was apparent, a Rothschild agent named Rothworth
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rode to the port of Astenda, arriving here after midnight.
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But the weather was stormy over the English Channel.
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Seas were running 30 feet or more.
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As a result, he had trouble hiring a boat to take him across.
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Finally, one owner of a small vessel said he would take him for 2,000 pounds.
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They arrived safely on the English coast about dawn,
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and Rothworth mounted a fresh horse and galloped for London.
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If Napoleon had been victorious, England, already deeply in debt to the Rothschilds,
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would be in even greater financial trouble than before.
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With her power and prestige damaged, the government would be unable to borrow more money
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through the sale of bonds, and the value of the outstanding bonds would plummet.
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British bonds, known as consuls or guilds, would flood into the market before they became worthless.
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Nathan Rothschild got the news a full 24 hours ahead of Wellington's own courier.
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On the morning of June 21, Rothschild took his place
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back to a marble column on the market floor known as Rothschild's Column.
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Everyone knew that Rothschild was the largest investor in British consuls.
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He looked dejected. Then he started selling.
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Rumors quickly swirled that Wellington had been defeated
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and Rothschild had received first word of the defeat.
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Soon everyone began selling their consuls,
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and the price collapse became a stampede.
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Then Rothschild, in one quick move, reversed his position
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and bought the entire market and consuls for pennies on the dollar.
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In just a few hours, he bought England's entire national debt
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for a tiny fraction of its worth.
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Nathan Rothschild later bragged that in the 17 years he had been in England,
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he had increased his original 20,000 pound steak given to him by his father
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by 2,500 times to 50 million pounds, a truly vast sum at that time.
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By cooperating within the family using fractional reserve banking techniques,
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the Rothschild banks grew unbelievably wealthy.
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By the mid-1800s, they dominated all European banking
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and were certainly the wealthiest family in the world.
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Most of the nobility of Europe became deeply indebted to them,
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making any effective control an impossibility.
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By 1850, James Rothschild, the heir of the French branch of the family,
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was said to be worth 600 million French francs,
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150 million more than all the other bankers in France put together.
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No fortune in America at that time equaled even one year's income of James.
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James built his fabulous mansion 15 miles east of Paris.
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The first German emperor, Wilhelm I, on seeing this, exclaimed,
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kings couldn't afford this, it could only belong to a Rothschild.
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In 1961, biographer Frederick Morton wrote of the house of Rothschild
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that they had conquered the world more thoroughly, more cunningly,
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and much more lastingly than all the Caesars before.
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But the Rothschilds were not the first to practice the two great evils of banking,
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fractional reserve lending and encouraging a national debt.
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900 years ago, goldsmiths served as the first bankers in England
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because they had large, secure vaults where they stored their gold
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as well as the gold of others.
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Most people simply left their gold in the goldsmith's vault,
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and the goldsmith wrote out paper receipts for their gold.
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Soon, people started trading these receipts as money.
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However, the goldsmiths soon learned two very important ways to abuse their new system.
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First of all, they discovered that on average,
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only about 10% of the depositors actually wanted their gold back at any one time.
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So if they were dishonest, they could print 10 paper receipts
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for every one ounce of gold in their vault.
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Then they could lend these extra receipts out to people.
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What a scam!
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So if they were lending out at 6% per year, their profit wouldn't just be 6% per year.
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It would really be 10 times that, or 60% per year.
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In reality, this is called fractional reserve lending,
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but it was nothing but counterfeiting.
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But fractional reserve lending not only made the goldsmiths rich,
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it gave them control over the quantity of money in the entire economy.
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What good was that?
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By acting in concert with other goldsmiths,
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if they refused to lend out their gold receipts and call in their old loans,
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it caused a depression.
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The second thing the goldsmiths learned
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was that if they could get the king to borrow from them,
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then soon the king would become dependent on these loans being renewed time and time again.
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Once the king was dependent on new loans,
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the goldsmiths could make sure that no new laws would ever be passed,
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which would harm their counterfeiting business,
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the most lucrative business in the history of humanity.
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Just think of it, a system where some people,
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because they have a special license to do it,
22:22.600 --> 22:26.600
can lend the same money five, ten, fifteen, or twenty times
22:26.600 --> 22:30.600
to that many different people or companies or governments
22:30.600 --> 22:33.600
and collect interest on it from each one of them.
22:33.600 --> 22:35.600
Well, this is just grand larceny.
22:35.600 --> 22:40.600
Around 1100 A.D., the son of William the Conqueror, Henry I,
22:40.600 --> 22:43.600
got tired of the goldsmiths owning everything
22:43.600 --> 22:46.600
and even controlling the political process
22:46.600 --> 22:49.600
by being in control of the quantity of money.
22:49.600 --> 22:54.600
So he created a totally unique form of money called tally sticks
22:54.600 --> 22:58.600
that eventually took the money power away from the goldsmiths.
22:58.600 --> 23:03.600
Tally sticks initially were a record of semi-annual tax payments.
23:03.600 --> 23:08.600
Notches of a certain size were cut into the stick to represent the amount.
23:08.600 --> 23:11.600
Then the stick was split lengthwise,
23:11.600 --> 23:16.600
and the king would keep one half as a receipt and a way to prevent counterfeiting.
23:16.600 --> 23:21.600
But since taxes were a necessity, tally sticks began circulating
23:21.600 --> 23:25.600
as a form of money because everyone needed them.
23:25.600 --> 23:27.600
They didn't replace gold coins.
23:27.600 --> 23:30.600
These have always been the money of the rich.
23:30.600 --> 23:35.600
But for the poor farmer, taking a pocketful of small tally sticks to market
23:35.600 --> 23:38.600
to buy and sell food was much easier
23:38.600 --> 23:42.600
than it was to take your cow and try to barter for the needed goods.
23:42.600 --> 23:45.600
It's not easy to make change with a cow.
23:45.600 --> 23:48.600
Having tally sticks as another form of money
23:48.600 --> 23:53.600
had the effect of keeping the English economy growing steadily for hundreds of years
23:53.600 --> 23:57.600
by keeping the money power out of the hands of the bankers
23:57.600 --> 24:01.600
who always thrive off creating bubbles and busts,
24:01.600 --> 24:03.600
which they call the business cycle,
24:03.600 --> 24:08.600
as though it was somehow connected to the inalterable celestial motions of Uranus.
24:09.600 --> 24:13.600
Those who control the cycle can't be surprised by it.
24:13.600 --> 24:19.600
Time periods of boom, of course, help the insiders to make a lot of money,
24:19.600 --> 24:21.600
increase their power that way.
24:21.600 --> 24:26.600
But also a lot of people will then lose a lot of money once you turn the cycle.
24:26.600 --> 24:30.600
People have called it the business cycle because I guess that is easier
24:30.600 --> 24:33.600
for them to masquerade what is really going on
24:33.600 --> 24:36.600
than to tell the truth and say, well, it's really a credit cycle
24:36.600 --> 24:40.600
and the banks are creating too much credit and they created a bubble
24:40.600 --> 24:45.600
and the bubbles burst and now the pain goes to the people.
24:45.600 --> 24:49.600
In other words, economic turmoil always benefits the bankers
24:49.600 --> 24:54.600
while economic stability benefits small businesses, the middle class,
24:54.600 --> 24:58.600
the nation as a whole, and freedom in general.
24:58.600 --> 25:04.600
Some authors, anxious to claim that only gold has provided stability in the money supply,
25:04.600 --> 25:08.600
ignore this ability of the bankers to monopolize the supply of gold
25:08.600 --> 25:12.600
and thereby completely control the national economy.
25:12.600 --> 25:16.600
How? By either lending the receipts out liberally,
25:16.600 --> 25:19.600
flooding the market with their fake paper gold receipts,
25:19.600 --> 25:24.600
or hoarding it all so that there is no money in the system.
25:24.600 --> 25:29.600
These same authors have claimed that tallies weren't a real money system
25:29.600 --> 25:33.600
because they were only used for very large transactions.
25:33.600 --> 25:35.600
But that's just not the case.
25:35.600 --> 25:38.600
According to the world's leading authority on tallies sticks,
25:38.600 --> 25:42.600
John Keyworth, curator of the Bank of England Museum,
25:42.600 --> 25:46.600
the man in charge of Britain's remaining tallies stick collection.
25:46.600 --> 25:51.600
In the Middle Ages, the average size was reckoned to be the length
25:51.600 --> 25:56.600
from the man's, the tip of his thumb to the tip of his forefinger, quite short.
25:56.600 --> 25:59.600
Because if you think of it in terms of this, this is 6000 pounds,
25:59.600 --> 26:02.600
that means it's a huge, huge sum of money.
26:02.600 --> 26:05.600
So the wider the spacing, the larger the amount.
26:05.600 --> 26:08.600
The larger the amount. But it was a prescribed distance.
26:08.600 --> 26:11.600
It was an inch, I think half an inch for hundreds,
26:11.600 --> 26:15.600
and a quarter of an inch for tens.
26:15.600 --> 26:19.600
And then it became little lines drawn across with a saw.
26:19.600 --> 26:24.600
In 1694, the bankers were finally able to convince the British parliament
26:24.600 --> 26:27.600
to allow a privately owned central bank.
26:27.600 --> 26:30.600
The idea, of course, was to eventually get the government
26:30.600 --> 26:33.600
borrowing money from the bankers again.
26:33.600 --> 26:38.600
Still, it took an entire generation to discontinue the use of tallies sticks.
26:38.600 --> 26:42.600
They had worked so well for over 600 years.
26:42.600 --> 26:47.600
During this period, England, an island with few natural resources,
26:47.600 --> 26:50.600
had become the mightiest power on earth.
26:50.600 --> 26:55.600
Serfdom had been outlawed and the arts and culture flourished.
26:55.600 --> 26:57.600
But tallies sticks got their revenge.
26:57.600 --> 27:00.600
They were stored in the basement of the Parliament building,
27:00.600 --> 27:03.600
known as Westminster, for many years.
27:03.600 --> 27:06.600
The bankers, now firmly in control of the English economy,
27:06.600 --> 27:10.600
did not want any remnant of this successful debt-free money system
27:10.600 --> 27:13.600
to remain in the public memory.
27:13.600 --> 27:18.600
So in 1834, they ordered all the tallies to be secretly burned
27:18.600 --> 27:22.600
in a large basement coal stove that heated the building.
27:22.600 --> 27:25.600
On the evening of October 16, 1834,
27:25.600 --> 27:29.600
the burning began after most of the workers had left for the day.
27:29.600 --> 27:33.600
However, the fire got so hot that it broke through the floor above
27:33.600 --> 27:36.600
and quickly spread, gutting most of the complex
27:36.600 --> 27:40.600
and attracting massive crowds in downtown London.
27:42.600 --> 27:47.600
The final revenge of the mistreated and misunderstood tallies sticks.
27:51.600 --> 27:54.600
Within 75 years of the founding of the Bank of England,
27:54.600 --> 27:57.600
the interest payments on England's national debt
27:57.600 --> 28:00.600
consumed the majority of its budget.
28:00.600 --> 28:05.600
As a result, England needed to squeeze more and more money from all her colonies.
28:05.600 --> 28:09.600
In British America, the result was the American Revolution.
28:11.600 --> 28:15.600
The money and banking system that we have, certainly in the West,
28:15.600 --> 28:19.600
is nothing but a perpetuation of a scam, in my opinion,
28:19.600 --> 28:24.600
an infinitely silly system that was developed by the goldsmiths
28:24.600 --> 28:29.600
of Lombard Street in London more than three centuries ago.
28:31.600 --> 28:35.600
Although America won its freedom in 1783 militarily,
28:35.600 --> 28:39.600
the money masters knew they could reclaim the former colony
28:39.600 --> 28:44.600
by convincing the government to borrow, to create a national debt,
28:44.600 --> 28:50.600
just as they had in England with the establishment of the Bank of England in 1694.
28:50.600 --> 28:55.600
What better way to bring the freedom-loving Americans back under control
28:55.600 --> 28:59.600
than to addict the American government to debt?
28:59.600 --> 29:03.600
Human nature is to take any loan offered.
29:03.600 --> 29:06.600
In the case of politicians, the attraction is clear.
29:06.600 --> 29:11.600
If a politician can borrow, they will spend more on their constituents
29:11.600 --> 29:16.600
without having to raise their taxes and thereby get re-elected.
29:16.600 --> 29:21.600
That's why government borrowing is the most dangerous force on the planet.
29:21.600 --> 29:24.600
Dangerous to human freedom, that is.
29:24.600 --> 29:29.600
However, the two statesmen of the Great American Experiment in political freedom
29:29.600 --> 29:32.600
were very aware of the problem.
29:32.600 --> 29:36.600
How to deal with the threat posed by the wealthy bankers,
29:36.600 --> 29:41.600
mostly with direct ties to the Bank of England, was the cause of much debate.
29:41.600 --> 29:46.600
One of the main authors of the U.S. Constitution was Gouverneur Morris.
29:46.600 --> 29:49.600
Morris wrote large sections of the Constitution.
29:49.600 --> 29:56.600
Surprisingly, Morris himself, an aristocrat, explained in a letter to James Madison
29:56.600 --> 29:59.600
during the debate on the contents of the Constitution
29:59.600 --> 30:04.600
what the relationship between the new freedom-loving nation and its bankers
30:04.600 --> 30:08.600
should be on July 2nd, 1787.
30:08.600 --> 30:13.600
The rich will strive to establish their dominion and enslave the rest.
30:13.600 --> 30:16.600
They always did. They always will.
30:16.600 --> 30:19.600
They will have the same effect here as elsewhere
30:19.600 --> 30:25.600
if we do not by the power of government keep them in their proper spheres.
30:25.600 --> 30:28.600
Morris wasn't talking about taking their money.
30:28.600 --> 30:32.600
He wasn't talking about outlawing banks or banking.
30:32.600 --> 30:36.600
He merely wanted to figure out a way to keep the bankers and their money
30:36.600 --> 30:39.600
out of controlling the political process.
30:39.600 --> 30:44.600
Down through the decades, the battle for the monetary soul of America has raged.
30:44.600 --> 30:47.600
The issues are remarkably the same,
30:47.600 --> 30:52.600
yet this battle is nowhere recounted in school texts on American history.
30:52.600 --> 30:56.600
A generation later, former President Thomas Jefferson
30:56.600 --> 31:00.600
wrote to then-President James Monroe in January of 1815.
31:01.600 --> 31:07.600
The dominion of the banks must be broken, or it will break us.
31:07.600 --> 31:12.600
Remarkably, over a century later, populist William Jennings Bryan
31:12.600 --> 31:17.600
said basically the same thing in his Cross of Gold speech in 1896.
31:17.600 --> 31:22.600
The bankers tell us that this issue of money is a function of the bank
31:22.600 --> 31:25.600
and that the government ought to go out of the banking business.
31:25.600 --> 31:28.600
I stand with Jefferson rather than with them and say
31:28.600 --> 31:31.600
that the issue of money is a function of the government
31:31.600 --> 31:34.600
and that the bank should go out of the governing business.
31:34.600 --> 31:40.600
In another 1815 letter, Jefferson wrote to then-Treasury Secretary Gallatin.
31:41.600 --> 31:44.600
The Treasury, lacking confidence in the country,
31:44.600 --> 31:49.600
delivered itself bound hand and foot to bold and bankrupt bankers
31:49.600 --> 31:54.600
pretending to have money, whom it could have crushed at any moment.
31:54.600 --> 31:57.600
If they'd done what Jefferson and wanted them to do
31:57.600 --> 32:01.600
and others have suggested that they do,
32:01.600 --> 32:04.600
they wouldn't have any government debt.
32:04.600 --> 32:07.600
They could be debt-free, and that's the way it should have been.
32:07.600 --> 32:13.600
But they were taken to the cleaners by a small clique of international bankers.
32:13.600 --> 32:15.600
It was international even then.
32:15.600 --> 32:19.600
They were smarter than they were, and they had done their homework,
32:19.600 --> 32:23.600
and the American people have been paying for it ever since.
32:23.600 --> 32:28.600
Whenever the banking sector, particularly the big, the large banks,
32:28.600 --> 32:33.600
have gained control of the money supply, then we always have had crises.
32:33.600 --> 32:39.600
We always have had inflation, asset inflation, financial crisis,
32:39.600 --> 32:44.600
banking crisis, systemic crisis, and that's the truth.
32:44.600 --> 32:48.600
Keep in mind, this was at a time when Napoleon had conquered most of Europe
32:48.600 --> 32:52.600
and would begin attacking Russia five months later.
32:52.600 --> 32:58.600
British influence was evident in three failed attempts at privately-owned central banks,
32:58.600 --> 33:01.600
generally modeled after the Bank of England.
33:01.600 --> 33:03.600
The strategy was obvious.
33:03.600 --> 33:06.600
Control and consolidate the American money supply
33:06.600 --> 33:10.600
and thereby retake this great experiment in freedom.
33:10.600 --> 33:14.600
In the entire history of this battle over financial control of America,
33:14.600 --> 33:19.600
no one defeated this British invention of privately-owned central banking
33:19.600 --> 33:23.600
more courageously than President Andrew Jackson.
33:23.600 --> 33:27.600
During Jackson's inaugural speech on March 4, 1829,
33:27.600 --> 33:31.600
he challenged the purveyors of a national debt directly.
33:31.600 --> 33:34.600
Seeing Jackson's opposition to the bank was unshakable,
33:34.600 --> 33:39.600
the bank got busy using its unlimited ability to create money,
33:39.600 --> 33:43.600
to bribe Congress, to put up a bill to re-charter the bank.
33:43.600 --> 33:46.600
As President Jackson put it,
33:46.600 --> 33:53.600
I have no hesitation to say if they can re-charter the bank with this hydra of corruption,
33:53.600 --> 33:56.600
they will rule the nation and its charter will be perpetual
33:56.600 --> 34:00.600
and its corrupting influence destroy the liberty of our country.
34:00.600 --> 34:05.600
When I came into this administration, I had a majority of 75.
34:05.600 --> 34:10.600
Since then, it is now believed the bank has bought votes in Congress.
34:10.600 --> 34:16.600
In 1832, Congress passed the re-charter bill, but Jackson vetoed the bill.
34:16.600 --> 34:20.600
His veto message is applicable to every nation today
34:20.600 --> 34:24.600
and is one of the greatest documents in American history.
34:24.600 --> 34:28.600
It appears that more than a fourth part of the stock is held by foreigners
34:28.600 --> 34:32.600
and the residue is held by a few hundred of our own citizens,
34:32.600 --> 34:35.600
chiefly of the richest class.
34:35.600 --> 34:39.600
Is there no danger to our liberty and independence in a bank
34:39.600 --> 34:43.600
that in its nature has so little to bind it to our country,
34:43.600 --> 34:47.600
controlling our currency, receiving our public monies,
34:47.600 --> 34:50.600
and holding thousands of our citizens' independence
34:50.600 --> 34:56.600
would be more formidable and dangerous than a naval and military power of the enemy?
34:56.600 --> 35:00.600
If government would confine itself to equal protection
35:00.600 --> 35:05.600
and as heaven does its reins, shower its favor alike on the high and the low,
35:05.600 --> 35:10.600
the rich and the poor, it would be an unqualified blessing.
35:10.600 --> 35:16.600
In the act before me, there seems to be a wide and unnecessary departure from these just principles.
35:16.600 --> 35:22.600
Later that year, the bank's supporters in Congress were unable to override Jackson's veto,
35:22.600 --> 35:25.600
but Jackson knew that the battle was not over.
35:25.600 --> 35:30.600
And he was right. The battle with the bank raged on for another two years
35:30.600 --> 35:33.600
and included an attempt to break apart the United States
35:33.600 --> 35:37.600
by causing a civil war between North and South.
35:37.600 --> 35:43.600
Remember, just 25 years earlier, Napoleon had turned down a British proposal
35:43.600 --> 35:48.600
to divide America between the industrial North and the rural South.
35:48.600 --> 35:56.600
The hydra of corruption is only scotched, not dead.
35:56.600 --> 36:03.600
Late in 1832, South Carolina threatened to secede from the Union,
36:03.600 --> 36:07.600
supposedly due to a tariff bill passed by Congress.
36:07.600 --> 36:11.600
The bill raised the price of certain English-manufactured items
36:12.600 --> 36:15.600
the Southern planters needed.
36:15.600 --> 36:22.600
The idea was to stimulate internal production and reduce outflows of money to England.
36:22.600 --> 36:27.600
Although Jackson actually sympathized with South Carolina on the tariff issue,
36:27.600 --> 36:34.600
he knew that sinister forces in Britain were at work to undercut the rising economic power of the United States.
36:34.600 --> 36:39.600
Jackson threatened to send troops and warships to surround the port of Charleston,
36:39.600 --> 36:43.600
South Carolina, to forcibly collect the tariff and warned,
36:43.600 --> 36:48.600
The Constitution forms a government, not a league.
36:48.600 --> 36:52.600
To say that any state may at pleasure secede from the Union
36:52.600 --> 36:56.600
is to say that the United States is not a nation.
36:56.600 --> 37:04.600
After bringing the nation to the brink of civil war, a compromise was reached on March 1st, 1833.
37:04.600 --> 37:09.600
Two months later, Jackson accurately predicted that civil war was yet to come
37:09.600 --> 37:13.600
and even predicted the justification.
37:13.600 --> 37:19.600
The tariff was only the pretext and disunion and Southern Confederacy the real object.
37:19.600 --> 37:24.600
Jackson returned to the bank problem in the autumn of 1833.
37:24.600 --> 37:31.600
Jackson ordered his Secretary of Treasury to withdraw U.S. government deposits from the Second Bank,
37:31.600 --> 37:35.600
but he refused, so Jackson fired him.
37:35.600 --> 37:41.600
He then appointed a new Secretary of Treasury, but he refused as well.
37:41.600 --> 37:45.600
Finally, Jackson appointed Roger B. Taney to the office,
37:45.600 --> 37:52.600
and on October 1st, 1833, government funds began moving out of the Second Bank of the U.S.
37:52.600 --> 37:57.600
and into the decentralized state banks.
37:57.600 --> 38:00.600
Jackson was jubilant.
38:00.600 --> 38:07.600
I have it chained. I am ready with screws to draw every tooth and then the stumps.
38:07.600 --> 38:15.600
Writing in 1834, Jackson explained that there were only two choices in the basic forms of governance.
38:15.600 --> 38:20.600
A republic where power is maximally decentralized,
38:20.600 --> 38:25.600
or a plutocracy where it is maximally centralized.
38:25.600 --> 38:31.600
It is not in a splendid government supported by powerful monopolies and aristocratic establishments
38:31.600 --> 38:35.600
that they will find happiness or their liberties protected,
38:35.600 --> 38:40.600
but in a plain system, void of pomp, protecting all and granting favors to none.
38:40.600 --> 38:44.600
It is such a government that the genius of our people requires,
38:44.600 --> 38:52.600
one under which our states may remain for ages to come, united, prosperous, and free.
38:52.600 --> 38:57.600
By 1835, Jackson was able to pay off the last of the bonds,
38:57.600 --> 39:04.600
thereby completely eliminating the American national debt, the only president to do so.
39:04.600 --> 39:07.600
Three weeks later, an assassin by the name of Richard Lawrence,
39:07.600 --> 39:10.600
an unemployed house painter from England,
39:10.600 --> 39:15.600
fired two flintlock pistols at Jackson at close range as he was leaving the capital.
39:15.600 --> 39:18.600
The pistols, however, misfired.
39:18.600 --> 39:22.600
It was the first ever attempt to kill a sitting president.
39:22.600 --> 39:25.600
Lawrence stated that with Jackson dead,
39:29.600 --> 39:33.600
a reference to Jackson's battle with the Second Bank.
39:33.600 --> 39:37.600
After his release from prison, Lawrence boasted to friends
39:37.600 --> 39:42.600
that powerful people in the banking industry had engaged him for the assassination
39:42.600 --> 39:45.600
and promised to protect him if he were caught.
39:45.600 --> 39:50.600
After the assassination attempt, Lawrence's pistols were tested and re-tested
39:50.600 --> 39:53.600
and performed perfectly each time.
39:53.600 --> 39:58.600
This led many to see Jackson's survival as an act of divine providence,
39:58.600 --> 40:02.600
protecting both he and his rapidly expanding new nation.
40:04.600 --> 40:08.600
As government money flowed into state banks, the economy boomed
40:08.600 --> 40:12.600
as these state banks, practicing fractional reserve lending,
40:12.600 --> 40:16.600
created money by issuing loans with few restrictions.
40:16.600 --> 40:21.600
By 1836, in an attempt to check the speculative bubble in land sales
40:21.600 --> 40:24.600
this wild money creation caused,
40:24.600 --> 40:30.600
Jackson required that buyers of government lands pay only in gold and silver coin.
40:30.600 --> 40:37.600
This return to hard money caused a financial collapse called the Panic of 1837,
40:37.600 --> 40:39.600
which brought on a deep depression,
40:39.600 --> 40:43.600
just as a return to gold money always had in the past.
40:43.600 --> 40:49.600
Jackson had unwittingly given the bankers back their centralized control over money
40:49.600 --> 40:52.600
by reinstituting a gold money system.
40:52.600 --> 40:58.600
What Jackson should have done was a return to debt-free, government-issued money
40:58.600 --> 41:03.600
that had served America so well during the Revolution and the pre-Revolutionary period.
41:03.600 --> 41:07.600
But Jackson had just spent all eight years of his presidency
41:07.600 --> 41:10.600
killing a centralized, privately owned bank,
41:10.600 --> 41:16.600
so he was in no mood to centralize the money power again, even under government control.
41:16.600 --> 41:22.600
However, Jackson knew that giving the money power to the bankers was the wrong idea.
41:22.600 --> 41:26.600
If Congress has the right under the Constitution to issue paper money,
41:26.600 --> 41:34.600
it was given them to be used by themselves, not to be delegated to individuals or corporations.
41:35.600 --> 41:40.600
It would take another 50 years for this question to be settled by the Supreme Court
41:40.600 --> 41:46.600
unequivocally in a series of decisions culminating in 1884.
41:46.600 --> 41:53.600
Today, even the most ardent gold money supporter, Professor Murray Rothbard, has admitted defeat.
41:59.600 --> 42:03.600
At the end of his presidency, President Jackson again predicted
42:03.600 --> 42:10.600
the Civil War was still coming. In his farewell address on March 4, 1837, he urged,
42:33.600 --> 42:59.600
When Jackson left office in 1837, America was without debt.
42:59.600 --> 43:05.600
But what Jackson failed to do was install a permanent remedy to government borrowing
43:05.600 --> 43:09.600
and unlimited money creation by private banks.
43:09.600 --> 43:12.600
Jackson had left America on the gold money system.
43:12.600 --> 43:18.600
This automatically leaves the control over the quantity of a nation's money to who?
43:18.600 --> 43:26.600
The owners of gold, the largest banks, both domestically and most importantly, internationally.
43:26.600 --> 43:30.600
After Jackson left office, the bankers could easily deepen the depression
43:30.600 --> 43:36.600
by withdrawing their loans from the general public and sharply contracting the money supply.
43:36.600 --> 43:44.600
Yes, gold was the currency of the day, but currency is just a small portion of a national money supply.
43:44.600 --> 43:49.600
Loans by banks are a much larger portion of a nation's money supply.
43:49.600 --> 43:54.600
So despite Jackson's hard money system, the banks were able to plunge America
43:54.600 --> 43:59.600
into a deep depression from 1837 into the 1840s.
43:59.600 --> 44:04.600
That's why the 1840s became known as the Hungry Forties.
44:04.600 --> 44:09.600
Money was so scarce that even state governments began defaulting on their state bonds,
44:09.600 --> 44:14.600
sold to Europeans by bond dealers in London.
44:14.600 --> 44:18.600
Maryland, Pennsylvania, Mississippi, Indiana, Arkansas, and Michigan,
44:18.600 --> 44:23.600
as well as the Florida Territory, all defaulted.
44:23.600 --> 44:30.600
In fact, Mississippi today is still in default from these bonds floated in the 1830s.
44:30.600 --> 44:34.600
Although Jackson had paid off the national debt on a gold money system,
44:34.600 --> 44:40.600
the depression forced the next president, Martin Van Buren, to immediately begin borrowing again.
44:40.600 --> 44:44.600
Had Van Buren chosen to return to issuing debt-free government currency
44:44.600 --> 44:48.600
and made gold coin a complementary currency,
44:48.600 --> 44:52.600
then the power of the bankers would have been broken, but he did not.
44:52.600 --> 44:59.600
Therefore, by the end of 1837, the national debt again rose to over $3 million.
44:59.600 --> 45:02.600
The next year, it rose to $10 million.
45:02.600 --> 45:05.600
But the bankers wanted to make an example of Jackson
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because of his defeat of their cherished second bank of the U.S.
45:09.600 --> 45:12.600
So they continued to restrict their lending.
45:12.600 --> 45:16.600
In 1842, in order to end the depression,
45:16.600 --> 45:20.600
Treasury officials visited James Rothschild
45:20.600 --> 45:26.600
at his mansion outside Paris, Chateau Ferrier, seeking a loan for the United States.
45:26.600 --> 45:31.600
Rothschild, incensed by the defeat of the second bank, thundered,
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Tell your colleagues that you have seen the man who is at the head of the finances of Europe,
45:37.600 --> 45:43.600
and that he has told you that they cannot borrow a dollar, not a dollar.
45:43.600 --> 45:49.600
By the end of 1842, the U.S. national debt had doubled again to $20 million.
45:49.600 --> 45:55.600
Seven years later, at the end of 1849, it had tripled to $63 million.
45:55.600 --> 46:00.600
Twelve years later, in 1861, the bankers mounted another plan
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to divide the United States north and south by a civil war,
46:04.600 --> 46:10.600
one which had been predicted accurately by Jackson 24 years earlier.
46:10.600 --> 46:14.600
With the inauguration of Abraham Lincoln on March 4, 1861,
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the nation had another president who was determined to fight the Rothschilds
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for the heart and soul of the great American political experiment in maximizing human freedom.
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Lincoln understood the roots of the battle.
46:29.600 --> 46:33.600
On his way to the inauguration, he stopped at Independence Hall in Philadelphia
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and told an audience that the Declaration of Independence gave
46:38.600 --> 46:45.600
liberty not alone to the people of this country, but hope to the world for all future time.
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It was that which gave promise that in due time the weight should be lifted from the shoulders of all men,
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and that all should have an equal chance.
46:55.600 --> 47:01.600
The very next month, the first shots were fired here at Fort Sumter, South Carolina,
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after seven southern states seceded from the Union.
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The American Civil War was on.
47:11.600 --> 47:16.600
The bankers wanted the South to win, or at least to the point of a stalemate,
47:16.600 --> 47:19.600
keeping the nation permanently divided.
47:19.600 --> 47:22.600
Lincoln needed money to keep the nation together,
47:22.600 --> 47:27.600
so he went to New York to try to secure the necessary loans from the big bankers.
47:27.600 --> 47:32.600
The bankers demanded an interest rate of as much as 36%.
47:32.600 --> 47:36.600
Then Lincoln came up with the most brilliant idea of his presidency.
47:36.600 --> 47:43.600
He decided to return to America's colonial monetary roots, have the government issue their own money.
47:43.600 --> 47:50.600
As Congressman E.G. Spalding from Buffalo, New York, the chairman of the House Ways and Means Committee explained it,
47:50.600 --> 47:54.600
Why then should we go into Wall Street begging for money?
47:54.600 --> 47:57.600
Their money is not as secure as government money.
47:57.600 --> 48:03.600
I am unwilling that this government should be left in the hands of any class of men, bankers, or moneylenders,
48:03.600 --> 48:06.600
however respectable or patriotic they may be.
48:06.600 --> 48:09.600
The government is much stronger than any of them.
48:09.600 --> 48:13.600
All the gold they possess would not carry on the government for 90 days.
48:13.600 --> 48:18.600
They issue promises to pay which, if Congress does its duty, are not half as secure
48:18.600 --> 48:25.600
as the United States Treasury notes based on adequate taxation upon all the property of the country.
48:25.600 --> 48:28.600
So that is exactly what Lincoln did.
48:28.600 --> 48:38.600
From 1862 to 1865, Congress authorized the printing of $450 million of new bills that he called U.S. notes.
48:38.600 --> 48:46.600
To distinguish them from debt-based money, he had them printed in green ink on the back and a red seal on the front.
48:46.600 --> 48:49.600
That is why the notes were called greenbacks.
48:49.600 --> 48:54.600
Since Congress had declared greenbacks to be legal tender for all debts,
48:54.600 --> 48:58.600
Lincoln was able to pay his troops and buy their supplies with this new money,
48:58.600 --> 49:02.600
all created at no interest to the federal government.
49:02.600 --> 49:06.600
Within four days of the passage of the law authorizing greenbacks,
49:06.600 --> 49:11.600
bankers met in convention in Washington, D.C. to discuss the situation.
49:11.600 --> 49:15.600
It was agreed that greenbacks would surely be their ruination.
49:15.600 --> 49:17.600
Something had to be done.
49:17.600 --> 49:21.600
They circulated a private letter known as the Hazard Circular
49:21.600 --> 49:24.600
amongst themselves and their wealthiest stockholders,
49:24.600 --> 49:30.600
which was later placed into the historical record by Congressman Charles A. Lindbergh.
49:30.600 --> 49:33.600
The Hazard Circular proclaimed that
49:33.600 --> 49:39.600
It will not do to allow the greenback, as it is called, to circulate as money any length of time,
49:39.600 --> 49:41.600
as we cannot control that.
49:41.600 --> 49:46.600
But we can control the bonds and through them the bank issues.
49:46.600 --> 49:50.600
Modern day critics take issue with Lincoln's greenback money plan
49:50.600 --> 49:56.600
as ignoring or being ignorant of the risks involved with government issued debt-free money.
49:56.600 --> 50:00.600
According to Congressman Spalding, the temptation of the government
50:00.600 --> 50:05.600
printing too much money was well known by he and the Secretary of Treasury.
50:05.600 --> 50:11.600
The risk of a depreciated and depreciating and finally worthless paper money,
50:11.600 --> 50:16.600
The immeasurable eagles of dishonored public faith and national bankruptcy
50:16.600 --> 50:22.600
are possible consequences of the adoption of a system of government circulation.
50:22.600 --> 50:27.600
Then Spalding addressed the alternative, borrowing the money from banks.
50:27.600 --> 50:34.600
It may be said that greenbacks are less deplorable than those of an irredeemable bank circulation.
50:34.600 --> 50:37.600
This argument is still relevant today.
50:37.600 --> 50:43.600
Yes, Congress might print too much, but at least that's better than having the banks print too much
50:43.600 --> 50:46.600
because bank money is all at interest.
50:46.600 --> 50:51.600
With an adequate debt-free money supply created completely in the public interest,
50:51.600 --> 50:55.600
Lincoln won the Civil War and reunited the nation.
50:55.600 --> 51:01.600
His chief economic advisor was the greatest economist of his day, Henry C. Carey,
51:01.600 --> 51:05.600
the founder of what would become known as the American School of Economics.
51:05.600 --> 51:08.600
In a letter to the speaker of the U.S. House of Representatives,
51:08.600 --> 51:13.600
Carey explained the benefits of Lincoln's greenbacks on the nation
51:13.600 --> 51:18.600
just three months before the South surrendered and Lincoln was assassinated.
51:18.600 --> 51:22.600
That here, for the first time in the history of the world,
51:22.600 --> 51:29.600
every man who had coal, iron, food or cloth to sell could find it once a person able
51:29.600 --> 51:32.600
and willing to buy and pay for it.
51:32.600 --> 51:35.600
That for the first time too in the history of the world,
51:35.600 --> 51:40.600
there has been presented a community in which nearly all business was done for cash
51:40.600 --> 51:43.600
and in which debt had scarcely in existence.
51:43.600 --> 51:46.600
That, as a necessary consequence of this,
51:46.600 --> 51:50.600
there has been a large and general diminution of the rate of interest.
51:50.600 --> 51:56.600
The country at large has become more independent of the wealthy capitalists of Europe.
51:56.600 --> 51:59.600
Lincoln, of course, had the right idea.
51:59.600 --> 52:06.600
He said, well, we'll create some money and not be dependent on these foreign sources for our money.
52:06.600 --> 52:09.600
And, of course, there have been a lot of people in the United States
52:09.600 --> 52:16.600
that have said that they should follow his example and create greenbacks
52:16.600 --> 52:22.600
rather than having to borrow money from a bunch of vultures on Wall Street
52:22.600 --> 52:25.600
to take advantage of everyone in sight.
52:25.600 --> 52:31.600
And they were nothing but really bloodsuckers if you look at it in the correct language
52:31.600 --> 52:39.600
and get out from under this horrible, insane kind of albatross
52:39.600 --> 52:44.600
that is around the neck of ordinary people and has been for so long.
52:44.600 --> 52:51.600
As MIT professor Dr. Davis Rich Dewey would write 40 years after Lincoln's issuance of greenbacks
52:51.600 --> 52:54.600
in his Financial History of the United States,
52:54.600 --> 53:00.600
the underlying idea in the greenback philosophy is that the issue of currency is a function of government,
53:00.600 --> 53:05.600
a sovereign right which ought not to be delegated to corporations.
53:05.600 --> 53:11.600
Throughout the Civil War, the bankers and their bought politicians continued to attack the greenbacks.
53:11.600 --> 53:17.600
Bond dealers convinced Congress to not issue further greenbacks to completely finance the war effort.
53:17.600 --> 53:23.600
So U.S. government bonds were offered for sale in London, thereby running up the national debt.
53:26.600 --> 53:31.600
If our nation can issue a dollar bond, it can issue a dollar bill,
53:31.600 --> 53:38.600
it is absurd to say our country can issue 30 million in bonds and not 30 million in currency.
53:38.600 --> 53:45.600
Both are promises to pay, but one promise faddens the userers, and the other helps the people.
53:47.600 --> 53:54.600
The solution is very simple. Don't issue government bonds. What are they doing issuing government bonds?
53:54.600 --> 54:00.600
And who was the London-based chief financial agent selling these bonds for the Union government?
54:00.600 --> 54:05.600
None other than Junius Morgan in London and his 24-year-old son,
54:05.600 --> 54:10.600
budding financier J.P. Morgan, known in the family as Pierpoint.
54:10.600 --> 54:16.600
The young Pierpoint was already a significant wheeler-dealer in the summer of 1861
54:16.600 --> 54:23.600
and in the wake of the Union defeat at Fort Sumter in April, the ill-prepared Union Army urgently needed guns.
54:23.600 --> 54:33.600
Pierpoint financed a deal, which bought 5,000 obsolete carbine rifles from an Army warehouse for $3.50 apiece,
54:33.600 --> 54:39.600
then had them upgraded and then sold them back to the Army for $22 each.
54:39.600 --> 54:46.600
Two years later in the summer of 1863, Pierpoint Morgan, facing conscription to fight in the Union Army,
54:46.600 --> 54:51.600
paid a substitute $300 to take his place in war.
54:51.600 --> 54:58.600
Pierpoint's income was rising quickly with the many investment opportunities available during wartime.
54:58.600 --> 55:08.600
His share of the net profits of J.P. Morgan and company rose from $30,000 in 1862 to $58,000 in 1863.
55:08.600 --> 55:19.600
A notation in the firm's books showed he spent $300 on cigars in 1863 alone, exactly the cost of that substitute soldier.
55:19.600 --> 55:25.600
Later in 1863, he and Edward Ketchum began quietly buying gold.
55:25.600 --> 55:34.600
By mid-October, they dumped over a million dollars of gold suddenly on the London market, creating a temporary gold shortage in New York.
55:34.600 --> 55:44.600
This drove up the price of gold in New York, and Morgan and Ketchum were able to sell the rest of their gold at a tidy profit, some $66,000 each.
55:45.600 --> 55:54.600
Pierpoint's father Junius, as a proud American in London, was outraged and threatened to sever all business ties with his own son
55:54.600 --> 55:59.600
because this action constituted evidence of greed.
55:59.600 --> 56:05.600
Meanwhile in Washington, bankers were trying to put an end to greenback money permanently.
56:05.600 --> 56:10.600
In February 1863, Congress passed the National Bank Act.
56:10.600 --> 56:20.600
This act didn't kill greenbacks, but it allowed for the first time a system of federally chartered banks with permission to lend bank-created banknotes
56:20.600 --> 56:26.600
into the money supply as a complementary currency, but all as a debt.
56:26.600 --> 56:33.600
To further assist the new national banks, incredibly they were given a virtual tax-free status.
56:33.600 --> 56:42.600
In fact, these national banks remain today and are denoted by the suffix N.A., National Banking Association.
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For example, Bank of America N.A. or Citibank N.A. means their origin was as the result of this 1863 National Bank Act.
56:53.600 --> 57:03.600
Within two years, by the end of the Civil War, there were four times as many debt-backed U.S. banknotes in circulation as there were debt-free U.S. notes, greenbacks.
57:03.600 --> 57:11.600
Private banks now had the money power, and Congress has not been able to wrest it from them ever since.
57:11.600 --> 57:21.600
So, from that point on, since most money was created out of debt, it would be impossible under this system for the federal government to ever get out of debt.
57:21.600 --> 57:24.600
As historian John Kenneth Galebraith put it,
57:25.600 --> 57:30.600
In numerous years following the war, the federal government ran a heavy surplus.
57:30.600 --> 57:39.600
It could not, however, pay off its debt, retire its securities, because to do so meant there would be no bonds to back the national banknotes.
57:39.600 --> 57:43.600
To pay off the debt was to destroy the money supply.
57:43.600 --> 57:56.600
In 1864, shortly before Lincoln was murdered, his former Secretary of Treasury Salmon P. Chase bemoaned his role in helping secure the passage of the National Banking Act only one year earlier.
57:56.600 --> 58:03.600
My agency in promoting the passage of the National Banking Act was the greatest financial mistake in my life.
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It has built up a monopoly that affects every interest in the country.
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It should be repealed, but before that can be accomplished, the people will be arrayed on one side and the banks on the other in a contest such as we have never seen before in this country.
58:19.600 --> 58:33.600
On April 14, 1865, 41 days after his second inauguration and just five days after the end of the Civil War, Lincoln was shot by John Wilkes Booth at Ford's Theater.
58:34.600 --> 58:40.600
After the death of President Lincoln, the bankers continued to reassert their control over America's money.
58:40.600 --> 58:42.600
This was no easy task.
58:42.600 --> 58:51.600
Lincoln's greenbacks, just like England's debt-free tally sticks, were generally popular, and their existence had let the genie out of the bottle.
58:51.600 --> 58:59.600
The public was becoming accustomed to government-issued debt-free money and the debt-free prosperity they brought to the nation.
58:59.600 --> 59:02.600
Popular songs sang the greenbacks' praises.
59:02.600 --> 59:19.600
On April 12, 1866, nearly one year to the day of Lincoln's assassination, Congress passed the Contraction Act, authorizing the Secretary of Treasury to begin to retire the greenbacks in circulation and to contract the money supply.
59:19.600 --> 59:24.600
Well, as it turned out, this became the mother of all depressions.
59:24.600 --> 59:35.600
In 1866, there was $1,800,000,000 in currency and circulation in the United States, about $50.46 per capita.
59:35.600 --> 59:42.600
In 1867 alone, $500,000,000 was removed from the U.S. money supply.
59:42.600 --> 59:44.600
But that wasn't enough.
59:44.600 --> 59:51.600
The big banks wanted complete control over the nation's money by putting America on a gold-only money system.
59:51.600 --> 59:59.600
In 1873, President Grant signed the Coinage Act into law, which stopped the minting of silver dollars.
59:59.600 --> 01:00:06.600
The effect was an immediate depression with high unemployment, falling prices, and bank failures.
01:00:06.600 --> 01:00:15.600
Wages dropped 24 percent. Unemployment soared to 14 percent, and one-quarter of American railroads went bankrupt.
01:00:15.600 --> 01:00:21.600
Demonetizing silver was decried by the newspapers as the crime of 73.
01:00:21.600 --> 01:00:27.600
By 1876, America's money supply was reduced to only $600,000,000.
01:00:27.600 --> 01:00:32.600
In other words, two-thirds of America's money had been called in by the bankers.
01:00:32.600 --> 01:00:38.600
Incredibly, only $13.33 per capita remained in circulation.
01:00:38.600 --> 01:00:45.600
Riots broke out from Pittsburgh to Chicago. The torches of starving vandals lit up the sky.
01:00:45.600 --> 01:00:53.600
To quell the violence, Congress created the United States Silver Commission to study the crime of 73 situation.
01:00:53.600 --> 01:00:59.600
Their report compared the demonetization of silver to the deflation of the Roman era.
01:00:59.600 --> 01:01:04.600
Their report issued on March 2, 1876, read in part.
01:01:04.600 --> 01:01:10.600
The disaster of the Dark Ages was caused by decreasing money and falling prices.
01:01:10.600 --> 01:01:19.600
Without money, civilization could not have had a beginning, and with the diminishing supply it must languish, and unless relieved, finally perish.
01:01:19.600 --> 01:01:23.600
Falling prices and misery and destitution are inseparable companions.
01:01:23.600 --> 01:01:29.600
It is universally conceded that falling prices result from the contraction of the money volume.
01:01:29.600 --> 01:01:35.600
So why did the bill pass Congress? Senator William B. Allison of Iowa put it this way.
01:01:35.600 --> 01:01:40.600
When the secret history of this bill of 1873 comes to be told,
01:01:40.600 --> 01:01:49.600
it will disclose the fact that the House of Representatives intended to coin both gold and silver, but that the bill afterward was doctored.
01:01:49.600 --> 01:01:52.600
It was changed after the discussion.
01:01:52.600 --> 01:01:55.600
Senator Boege of Missouri put it this way.
01:01:56.600 --> 01:02:06.600
Why the Act of 1873, which forbids the coinage of the silver dollar, was passed, no one at this day can give a good reason.
01:02:06.600 --> 01:02:15.600
And who was behind the deception to limit the amount of money in circulation and centralize money into the hands of a few of the biggest bankers?
01:02:15.600 --> 01:02:24.600
Senator Beck of Kentucky told the committee on January 10, 1878, the bondholders, the holders of the national debt.
01:02:24.600 --> 01:02:34.600
I know that the bondholders and monopolists of this country are seeking to destroy all the industries of this people in their greed to enhance the value of their gold.
01:02:34.600 --> 01:02:40.600
I know the Act of 1873 did more than all else to accomplish that result.
01:02:40.600 --> 01:02:45.600
What's so important about how money was withdrawn from the U.S. money supply?
01:02:45.600 --> 01:02:55.600
Because the real cause of depressions is deliberate contractions of the money supply by big bankers in order to get what they want politically,
01:02:55.600 --> 01:03:03.600
the very thing that King Henry of England was trying to prevent when he created tally sticks in 1100 A.D.
01:03:03.600 --> 01:03:12.600
The big bankers were bankrupting America merely by taking all the money over which they had exclusive control out of the system.
01:03:12.600 --> 01:03:18.600
This is not difficult to understand. No money in the system means no money for people.
01:03:18.600 --> 01:03:22.600
And the only money is the gold money of the bankers.
01:03:23.600 --> 01:03:31.600
Congress finally passed the Bland-Allison Act in 1878, which authorized the minting again of silver coinage.
01:03:31.600 --> 01:03:35.600
But President Rutherford Hayes vetoed it.
01:03:35.600 --> 01:03:41.600
Hayes was closely allied to the big banks. He explained his veto this way.
01:03:41.600 --> 01:03:46.600
Expediency and justice both demand an honest currency.
01:03:47.600 --> 01:03:54.600
Of course, throughout history, gold money has always been called honest money by those who own a lot of the gold.
01:03:54.600 --> 01:04:03.600
So great was the pressure that Congress quickly overrode the Hayes veto, and soon some silver coinage began to flow back into the U.S. economy.
01:04:03.600 --> 01:04:08.600
These were the first issues of the famous Morgan silver dollars.
01:04:08.600 --> 01:04:20.600
But according to Nobel Prize winning economist Milton Friedman, most of the new coins were stockpiled in the Treasury as reserves for pieces of paper called silver certificates.
01:04:20.600 --> 01:04:27.600
So most of the original Morgan silver dollars were never circulated. But were the bankers satisfied? Hardly.
01:04:27.600 --> 01:04:37.600
About this time in 1879, J.P. Morgan, at age 42, began to come into his own as the head of the American branch of the family firm.
01:04:37.600 --> 01:04:48.600
He was picked to sell the largest block of stock ever publicly offered, 250,000 shares of Commodore Cornelius Vanderbilt's New York Central Railroad.
01:04:48.600 --> 01:04:56.600
The task with the marketing of the New York Central stock was how to sell such a large block without collapsing the shares.
01:04:56.600 --> 01:05:01.600
Pierpoint initially shuffled 50,000 of the shares off to his father's firm in London.
01:05:02.600 --> 01:05:10.600
When he finally announced that he had successfully placed the rest, most of it abroad, the financial world was deeply impressed.
01:05:10.600 --> 01:05:15.600
Pierpoint's commission on the deal was a colossal three million dollars.
01:05:15.600 --> 01:05:26.600
By 1882, J.P. Morgan was making a half million dollars a year. He bought a new home here at 219 Madison Avenue, where the Morgan Library stands today.
01:05:26.600 --> 01:05:30.600
It was the first electrically lighted private residence in the world.
01:05:30.600 --> 01:05:40.600
Morgan's interest in the newly harnessed energy came from a partnership he had assembled to fund Thomas Edison's Edison Electric Illuminating Company.
01:05:40.600 --> 01:05:48.600
Morgan's firms in London and New York were at the forefront of the sale of bonds in Europe to fund America's expansion westward.
01:05:48.600 --> 01:05:55.600
But with America's tradition of state-charted banks, the national banks were quickly losing control.
01:05:56.600 --> 01:06:01.600
By 1891, the bankers were ready to unleash additional monetary restrictions.
01:06:01.600 --> 01:06:11.600
Their methods and motives were laid out with shocking clarity in a memo sent out by the American Bankers Association, the ABA, in 1891.
01:06:11.600 --> 01:06:19.600
Notice that this memo called for bankers to create a depression on a certain date, three years in the future.
01:06:19.600 --> 01:06:25.600
Here is how it read in part. Note the telling reference to England, home of the mother bank.
01:06:26.600 --> 01:06:31.600
On September 1st, 1894, we will not renew our loans under any consideration.
01:06:31.600 --> 01:06:38.600
On September 1st, we will demand our money. We will foreclose and become mortgagees in possession.
01:06:38.600 --> 01:06:46.600
We can take two-thirds of the farms west of the Mississippi and thousands of them east of the Mississippi as well, at our own price.
01:06:46.600 --> 01:06:51.600
Then the farmers will become tenants, as in England.
01:06:52.600 --> 01:07:01.600
As the impending planned depression date drew nearer, another memo was issued to bankers nationwide on March 11, 1893.
01:07:01.600 --> 01:07:10.600
Known as the Panic Circular, it was issued under the name of the American Bankers Association and was subsequently published in many newspapers.
01:07:10.600 --> 01:07:16.600
Senator Robert Owen, a Democrat from Oklahoma, would later testify before a congressional committee
01:07:16.600 --> 01:07:24.600
that he himself had received a copy of the Panic Circular when he was president of the first national bank of Muskegee, Oklahoma.
01:07:24.600 --> 01:07:35.600
The Panic Circular urged all national banks to take all the silver coins and silver certificates, as well as the greenbacks, out of circulation.
01:07:35.600 --> 01:07:40.600
In other words, to reestablish a gold-only money system.
01:07:40.600 --> 01:07:51.600
Silver certificates and treasury bonds, that is to say all the government's money, must be retired and, interest-bearing, national banknotes made the only money.
01:07:51.600 --> 01:07:57.600
You will at once retire one-third of your circulation, your paper money, and call in one-half of your loans.
01:07:57.600 --> 01:08:04.600
Be careful to make a monetary emergency among your patrons, especially among influential businessmen.
01:08:05.600 --> 01:08:16.600
The future of our debt-based money system depends upon immediate action, as there is an increasing sentiment in favor of government legal tender notes and silver coinage.
01:08:16.600 --> 01:08:25.600
Sure enough, the latest depression began in 1893, with what historians now call the Panic of 1893.
01:08:25.600 --> 01:08:34.600
It all started when European investors demanded payment only in gold, not silver coin, quickly draining gold reserves in the U.S.
01:08:34.600 --> 01:08:40.600
Again, America was being forced by the Europeans onto a gold-only money system.
01:08:40.600 --> 01:08:50.600
The results were as inevitable as before, a deep depression quickly set in as the major holders of gold in Europe choked the life out of the American economy.
01:08:50.600 --> 01:08:58.600
By the 1896 presidential campaign, opposition to the bankers' monopoly on money had reached a fever pitch.
01:08:58.600 --> 01:09:08.600
Unlike today, Americans understood much more completely the cause of the problem, though most of them were still confused about the solution.
01:09:08.600 --> 01:09:16.600
Again, the problem was that bankers were in complete control of the quantity of money.
01:09:16.600 --> 01:09:19.600
The best solution would have been twofold.
01:09:19.600 --> 01:09:36.600
To outlaw government borrowing, as President Jackson had done, and to ban fractional reserve lending and issue enough greenbacks to fully lubricate the American monetary system without debt and entirely in the public interest.
01:09:37.600 --> 01:09:51.600
A greenback party had developed and run congressional candidates as well as presidential candidates in 1876, 1880, and 1884, but never won more than 3.3% of the vote.
01:09:52.600 --> 01:10:12.600
So when a virtually unknown congressman from Nebraska, William Jennings Bryan, burst upon the scene, campaigning on reversing the crime of 1973 by legalizing the minting of silver dollars freely once again, he was swept into the nomination to run as the presidential candidate of the Democratic Party.
01:10:13.600 --> 01:10:23.600
At the Democratic National Convention in Chicago in 1896, Bryan made an emotional speech entitled, Crown of Thorns and Cross of Gold.
01:10:23.600 --> 01:10:35.600
Bryan's speech was so powerful that it propelled him from relative obscurity to the presidential nomination on the fifth ballot at the tender age of 36.
01:10:36.600 --> 01:10:45.600
Bryan explained why monetary reform was and will always be the most important issue in the politics of every nation.
01:10:46.600 --> 01:10:57.600
When we have restored the money of the Constitution, all other necessary reforms will be possible, and until that is done, there is no reform that can be accomplished.
01:10:58.600 --> 01:11:04.600
Amazingly, years later, Thomas Edison captured Bryan's actual voice.
01:11:04.600 --> 01:11:15.600
Bryan concluded his speech with its namesake line, obliterating for all time the notion that a gold money system promoted freedom for the middle class.
01:11:15.600 --> 01:11:22.600
Although the recording does not capture the power of the original moment, it does allow us to hear Bryan's voice.
01:11:27.600 --> 01:11:36.600
Bryan has been very in vain to find a single instance where the common people of any land have ever declared themselves in favor of the gold standard.
01:11:36.600 --> 01:11:44.600
They can find where the holders of fixed investments have declared for a gold standard, but not where the masses have.
01:11:44.600 --> 01:11:52.600
If they dare to come out in the open field and defend the gold standards to good things, we will fight them to the uttermost.
01:11:52.600 --> 01:12:02.600
We will answer their demand for a gold standard by saying to them, you shall not press down upon the bow of labor this crown of thorns.
01:12:02.600 --> 01:12:08.600
You shall not justify mankind upon a cross of gold.
01:12:09.600 --> 01:12:22.600
In fact, the gold standard and its 30-year-long restrictive impact on the money supply had become so unpopular that even most Republicans had come out against it.
01:12:22.600 --> 01:12:31.600
So Bryan became the silver money candidate, running against Republican William McKinley, the gold money candidate.
01:12:32.600 --> 01:12:43.600
Remember, silver wasn't the perfect solution, but the average person was so desperate for some sort of cash money to spend that they flocked to the Bryan campaign.
01:12:43.600 --> 01:12:52.600
So Bryan's silver solution in that day and age was the equivalent of an effective complementary currency in the present day.
01:12:53.600 --> 01:12:57.600
Bryan scared the financial community, who painted him as a communist.
01:12:57.600 --> 01:13:11.600
The day after Bryan's nomination, 150 members of the New York Stock Exchange waving American flags marched to the rostrum of the Chicago Democratic Convention and put on McKinley buttons and shouted,
01:13:11.600 --> 01:13:16.600
Down with the red flag, up with the stars and stripes.
01:13:17.600 --> 01:13:25.600
Just a year earlier, J.P. Morgan had made his feelings on a gold money system clear in a letter to his brother.
01:13:26.600 --> 01:13:33.600
As a man of sense, I am a gold bug and support a gold bug government and gold bug society.
01:13:33.600 --> 01:13:39.600
As a man of the world, I like confusion, anarchy and war.
01:13:40.600 --> 01:13:48.600
J.P. Morgan and the Rothschild sued their New York agent August Belmont, contributed to the McKinley campaign mightily.
01:13:48.600 --> 01:14:01.600
But even more importantly, they had financed a rescue of the nation's most important newspaper by loaning the gold loving owner of the Chattanooga Times, Adolf Oaks, sufficient money to buy the New York Times.
01:14:01.600 --> 01:14:06.600
According to historian Gene Strauss' biography on J.P. Morgan,
01:14:06.600 --> 01:14:12.600
Rumors that Morgan owned the New York Times haunted the paper and the banker for years.
01:14:12.600 --> 01:14:20.600
As a result, the 1896 campaign was among the most fiercely contested presidential races in American history.
01:14:20.600 --> 01:14:25.600
The McKinley campaign outspent Bryan by a five to one margin.
01:14:25.600 --> 01:14:32.600
But the real spending was even more. McKinley did not go around the nation campaigning like Bryan did.
01:14:32.600 --> 01:14:41.600
He stayed at home in Ohio and the J.P. Morgan dominated railroads brought the voters to him with most expenses paid.
01:14:41.600 --> 01:14:47.600
Over 750,000 people made the trip to McKinley's home.
01:14:47.600 --> 01:14:52.600
That was nearly 11 percent of everyone who ended up voting for McKinley.
01:14:52.600 --> 01:14:57.600
Even one of the largest newspapers in Ohio, the pro-silver Cleveland Plain Dealer,
01:14:57.600 --> 01:15:05.600
had disgustingly stated that going to McKinley's home in Canton, Ohio had been made cheaper than staying at home.
01:15:05.600 --> 01:15:09.600
Bryan's strategy was to take his political campaign on the road.
01:15:09.600 --> 01:15:12.600
Bryan invented the National Stumping Tour.
01:15:12.600 --> 01:15:22.600
He made over 500 speeches in 27 states during the four-month campaign, an average of four a day, many of them lasting over two hours.
01:15:22.600 --> 01:15:31.600
Across the nation, tens of thousands of Americans rallied around Bryan's appearances with torchlight parades.
01:15:31.600 --> 01:15:40.600
On November 3, McKinley defeated Bryan by an electoral college margin of 271 to 176.
01:15:40.600 --> 01:15:47.600
However, Bryan won nearly 6.5 million votes, more than any previous president.
01:15:47.600 --> 01:15:54.600
But the silver Democrats suffered major losses in both Congress and many state legislatures as well,
01:15:54.600 --> 01:15:59.600
sealing the fate of the populist revolt for at least a century.
01:15:59.600 --> 01:16:07.600
The sweeping Republican victory meant a return to an uncontested gold standard and the domination of big business.
01:16:08.600 --> 01:16:13.600
Four years later, McKinley beat Bryan again by an even larger margin.
01:16:13.600 --> 01:16:23.600
From this point on, government-issued debt-free money would never again regain a significant political following in the United States.
01:16:23.600 --> 01:16:28.600
So what did the big three banking families want at the Jekyll Island meeting?
01:16:28.600 --> 01:16:32.600
Central control over the American money supply.
01:16:33.600 --> 01:16:40.600
By the turn of the century, the biggest New York banks could control less than half of the American money supply.
01:16:40.600 --> 01:16:49.600
States were still chartering their own banks, and the center of financial gravity was rapidly shifting westward, away from New York.
01:16:49.600 --> 01:16:56.600
Something had to be done to bring it all under one central control point back in New York.
01:16:56.600 --> 01:17:01.600
President McKinley was assassinated about six months into his second administration,
01:17:01.600 --> 01:17:09.600
and the bombastic Theodore Roosevelt became the youngest president to ever hold office at age 42.
01:17:09.600 --> 01:17:17.600
As a former governor of New York, the big bankers felt confident that Roosevelt would not interfere with their plans.
01:17:17.600 --> 01:17:25.600
However, just one year in office, Roosevelt, aware that the money trust was the cause of most of the economic problems,
01:17:25.600 --> 01:17:28.600
revived the Sherman Antitrust Act.
01:17:28.600 --> 01:17:34.600
He went after a huge banker conglomerate called Northern Securities Company,
01:17:34.600 --> 01:17:43.600
a giant combine of railroads owned by J.P. Morgan, John D. Rockefeller, Edward H. Harriman, and James Hill.
01:17:43.600 --> 01:17:53.600
During the following seven years, Roosevelt pursued his trust-busting policies by bringing suit against 43 other major corporations.
01:17:53.600 --> 01:17:59.600
After Roosevelt's election in 1904, he increased the pressure on the money trust again.
01:17:59.600 --> 01:18:08.600
What is a trust? It's a term that was popular before World War I to indicate a monopoly held by a group of individuals.
01:18:08.600 --> 01:18:13.600
By 1907, Morgan and the other money changers had had enough.
01:18:13.600 --> 01:18:20.600
First, they created a panic by attacking Morgan's primary Wall Street rival, the Heinz Morse Group,
01:18:20.600 --> 01:18:25.600
the holders of considerable banking, mining, steel, and shipping interests.
01:18:25.600 --> 01:18:33.600
By cleverly manipulating the stock market, the Rockefellers drove down the stock of Heinz's Union Copper Company
01:18:33.600 --> 01:18:37.600
from as high as $60 a share down to $10 a share.
01:18:37.600 --> 01:18:46.600
In addition, Rockefellers spread the rumor that not only were Heinz Copper interests in trouble, but also Heinz banks as well.
01:18:46.600 --> 01:18:53.600
J.P. Morgan then jumped in, predicting that he thought the Knickerbocker Trust Company would be the first Heinz bank to go under.
01:18:53.600 --> 01:18:56.600
As historian Skousen explained,
01:18:56.600 --> 01:19:04.600
That was all it took to send depositors storming to the tellers' cages of the Knickerbocker Bank to get their money.
01:19:04.600 --> 01:19:08.600
Within a few days, the bank was forced to close its doors.
01:19:08.600 --> 01:19:13.600
Similar fear spread to other Heinz banks, and then to the whole banking world.
01:19:13.600 --> 01:19:15.600
The crash was on.
01:19:16.600 --> 01:19:20.600
Morgan interests called loans and refused to grant new ones.
01:19:20.600 --> 01:19:23.600
Before long, the panic had engulfed America.
01:19:23.600 --> 01:19:29.600
Thousands of banks were vastly overextended, some having maintained less than 1% reserves.
01:19:29.600 --> 01:19:34.600
The weaker banks went under first, closing their doors to depositors.
01:19:34.600 --> 01:19:42.600
Compounding the effect was the fact that the news spread more quickly than ever before, thanks to the new communications technologies.
01:19:42.600 --> 01:19:46.600
Within days, every bank in the nation was trying to reassure its customers.
01:19:46.600 --> 01:19:50.600
Many closed their doors and never reopened.
01:19:50.600 --> 01:19:53.600
Skousen described the effect on the money supply.
01:19:53.600 --> 01:19:57.600
Circulating money was hoarded by any who happened to get some.
01:19:57.600 --> 01:20:02.600
So before long, a viable medium of exchange became practically non-existent.
01:20:02.600 --> 01:20:08.600
Many business concerns began printing IOUs on small pieces of paper and exchanging these for raw materials,
01:20:08.600 --> 01:20:11.600
as well as giving them to their workers for wages.
01:20:11.600 --> 01:20:15.600
These tokens passed around as a temporary medium of exchange.
01:20:17.600 --> 01:20:20.600
Now, the American people were really angry.
01:20:20.600 --> 01:20:24.600
Forty years on the financial rollercoaster had worn thin.
01:20:24.600 --> 01:20:30.600
Americans desperately wanted safe banks that they could entrust with their money.
01:20:30.600 --> 01:20:36.600
They wanted a stable financial system, and it seemed like Morgan was providing just the opposite.
01:20:36.600 --> 01:20:44.600
At this critical moment, J.P. Morgan staged a brilliant public relations coup with a very profitable solution.
01:20:44.600 --> 01:20:49.600
He offered to salvage the last Heinz Bank, the trust company of America,
01:20:49.600 --> 01:20:56.600
if it would sell him their valuable Tennessee coal and iron company for a small fraction of its real value.
01:20:57.600 --> 01:21:05.600
Although the proposal violated U.S. antitrust laws, the country was so desperate that the deal was still approved by Washington.
01:21:05.600 --> 01:21:12.600
Morgan then convinced Congress to allow him to circulate $200 million of his own private money.
01:21:12.600 --> 01:21:16.600
Of course, this token money would be issued by Morgan Banks.
01:21:16.600 --> 01:21:22.600
Morgan said this flow of new money might be just the thing to get the economy moving again.
01:21:22.600 --> 01:21:24.600
So the plan was approved.
01:21:24.600 --> 01:21:29.600
Morgan printed $200 million out of literally nothing.
01:21:30.600 --> 01:21:34.600
He bought things with the new funny money, paid for services with it,
01:21:34.600 --> 01:21:38.600
and sent it to his branch banks to lend out at interest.
01:21:38.600 --> 01:21:45.600
It worked. Soon the public had regained confidence in money in general and quit hoarding their currency.
01:21:45.600 --> 01:21:56.600
By 1908, the panic was over, and Morgan was seen as a hero for saving the nation from a crisis he had not only created, but also profited from.
01:21:56.600 --> 01:22:04.600
As incredible as it may seem, the president of Princeton University, Woodrow Wilson, actually applauded Morgan's efforts.
01:22:04.600 --> 01:22:15.600
All this trouble, the 1907 Depression, could be averted if we appointed a committee of six or seven public-spirited men like J.P. Morgan to handle the affairs of our country.
01:22:15.600 --> 01:22:25.600
The real purposes for the repeated crashes since the Civil War had been threefold.
01:22:25.600 --> 01:22:39.600
To concentrate more of America's rapidly developing wealth into the hands of a super-rich elite by the roller coaster effect, whereby booms and busts generate bankruptcies and foreclosures.
01:22:39.600 --> 01:22:46.600
To make the independent decentralized banking system look unstable.
01:22:46.600 --> 01:22:57.600
And finally, to make people so desperate for monetary security that they would be ready to accept practically any solution, namely the institution of a new central bank.
01:22:57.600 --> 01:23:07.600
As mainline economics textbooks would later verify, the creation of the Federal Reserve System was a direct effect of the Panic of 1907.
01:23:07.600 --> 01:23:18.600
It sprang from the Panic of 1907. With its alarming epidemic of bank failures, the country was fed up once and for all with the anarchy of unstable private banking.
01:23:18.600 --> 01:23:28.600
Minnesota Congressman Charles A. Lindbergh, Sr., later explained that the Panic of 1907 was the method by which...
01:23:28.600 --> 01:23:38.600
Those not favorable to the money trust could be squeezed out of business, and the people frightened into demanding changes in the banking and currency laws, which the money trust would frame.
01:23:38.600 --> 01:23:44.600
The stage was now set for the introduction of America's fourth attempt at central banking.
01:23:44.600 --> 01:23:55.600
However, the public was angry. Roosevelt had been politically embarrassed by the Panic of 1907, so he created the National Monetary Commission in 1908 to study the problem of monetary instability in response to the public outrage.
01:23:55.600 --> 01:24:05.600
Roosevelt then suddenly retired from the political scene, declining to run for president again. He threw his political support to his Secretary of War, William Howard Taft.
01:24:05.600 --> 01:24:12.600
Later that year, Taft beat William Jennings Bryan in Bryan's third and final presidential race.
01:24:12.600 --> 01:24:19.600
He threw his political support to his Secretary of War, William Howard Taft.
01:24:19.600 --> 01:24:25.600
Later that year, Taft beat William Jennings Bryan in Bryan's third and final presidential run.
01:24:25.600 --> 01:24:33.600
And Roosevelt disappeared from the rough and tumble of politics with the funding from the Carnegie Foundation.
01:24:33.600 --> 01:24:38.600
He took off on an African safari and other world globetrotting.
01:24:38.600 --> 01:24:41.600
Taft was supposed to be the big bankers candidate.
01:24:41.600 --> 01:24:58.600
However, so great was the political outrage against the bankers that Taft initiated 90 trust busting prosecutions for violations of the Sherman Antitrust Act, including one against U.S. Steel, which was now owned by J.P. Morgan.
01:24:58.600 --> 01:25:09.600
The bankers knew they were in trouble, thanks in large part to an honest press led by Joseph Pulitzer's New York World and St. Louis Post dispatch.
01:25:09.600 --> 01:25:14.600
Public outrage was affecting their political control over the nation.
01:25:14.600 --> 01:25:27.600
They knew that they had only a relatively brief window of time to propose a legislative solution that would allow them to increase their control, yet disguise it as a reform truly in the public interest.
01:25:27.600 --> 01:25:34.600
So, two days before Thanksgiving, on November 22, 1910, off they went to Jekyll Island.
01:25:34.600 --> 01:25:53.600
Secrecy was essential. If the newspapers found out about the meeting before the legislation could be rushed through Congress, all could be lost in a tidal wave of genuine monetary reform that might permanently remold the money power to actually serve the public interest.
01:25:54.600 --> 01:25:58.600
Eventually, the story would leak out, but too late to do any harm.
01:25:58.600 --> 01:26:04.600
In 1916, the first Inside Look was published by Leslie's Weekly.
01:26:04.600 --> 01:26:12.600
It was written by a financial reporter by the name of B.C. Forbes, who later founded Forbes Magazine.
01:26:13.600 --> 01:26:30.600
Picture a party of the nation's greatest bankers, stealing out of New York on a private railroad car under cover of darkness, stealthily traveling hundreds of miles south and barking on a mysterious launch a full week under such rigid secrecy that the names of not one of them was once mentioned.
01:26:30.600 --> 01:26:39.600
Less servants learned the identity and disclosed to the world this strangest, most secret expedition in the history of American finance.
01:26:39.600 --> 01:26:42.600
After ten days, the group dispersed.
01:26:42.600 --> 01:26:47.600
Senator Aldrich returned to Washington with the new central bank plan.
01:26:47.600 --> 01:26:51.600
The most difficult challenge was how to sell it to the American public.
01:26:51.600 --> 01:26:54.600
The name would be all important.
01:26:54.600 --> 01:27:02.600
Certainly the word bank could not have any part of the name because the public was at this point aware of what they called the money trust.
01:27:02.600 --> 01:27:08.600
Early in 1912, Aldrich presented the Aldrich bill to Congress.
01:27:08.600 --> 01:27:13.600
The mechanism proposed was very similar to the old Bank of the United States.
01:27:13.600 --> 01:27:27.600
The bill gave the new bank the power to issue U.S. currency, lend the government money at interest, then convert that federal debt into money to be loaned out to its member banks ten times over or more to their customers.
01:27:27.600 --> 01:27:28.600
What a deal.
01:27:28.600 --> 01:27:37.600
Never before had a central bank sought such complete control over the banks of a nation and its supply of money.
01:27:37.600 --> 01:27:46.600
What was looming over the financial horizon was a debt monster, far bigger and more destructive than anything proposed before.
01:27:46.600 --> 01:27:52.600
But few were sharp enough to see through the numerous deceptions the bankers would throw up.
01:27:52.600 --> 01:28:00.600
According to Congressman Lindberg, the initial proposal presented to Congress was to give the new central bank a 50 year charter.
01:28:00.600 --> 01:28:09.600
Incidentally, the Greek Parliament granted the privately owned Greek Central Bank a 50 year charter in January of 2013.
01:28:09.600 --> 01:28:16.600
So year after year, the same scam is being perpetrated on the people of every nation.
01:28:16.600 --> 01:28:20.600
Congressman Lindberg wrote that Aldrich's monetary commission.
01:28:21.600 --> 01:28:29.600
Spent over $300,000 in order to learn how to form a plan by which to create a greater money trust.
01:28:29.600 --> 01:28:38.600
And it afterwards recommended to Congress to give this proposed trust a 50 year charter by means of which it could rob and plunder all humanity.
01:28:38.600 --> 01:28:47.600
Unfortunately for Morgan and the other bankers, Senator Aldrich was already well known as the bankers favorite senator in Congress.
01:28:48.600 --> 01:28:53.600
Consequently, the Aldrich bill died for lack of support in Congress.
01:28:53.600 --> 01:29:04.600
But that didn't stop the bankers. Within weeks, a new initiative was rolled out, complete with the most lavishly funded public relations campaign in history.
01:29:05.600 --> 01:29:18.600
The big New York banks, the Morgans, the Rockefellers, etc. contributed to a $5 million educational fund to finance professors at respected universities to endorse the new concept.
01:29:18.600 --> 01:29:25.600
An organization called the National Citizens League was formed under the personal guidance of Paul Warburg.
01:29:25.600 --> 01:29:35.600
On April 8, 1912, the New York Times wrote a story passively justifying the enormous funding of the League by the national banks.
01:29:35.600 --> 01:29:45.600
A million dollars doesn't go very far in a campaign of education such as being carried on by the National Citizens League for the promotion of a sound banking system.
01:29:45.600 --> 01:30:00.600
Yet the contribution of a million dollars for that purpose by individual directors of the national banks of the country a short time ago provoked much comment and a suggestion that the electorate was to be corrupted by the use of these funds.
01:30:02.600 --> 01:30:12.600
The New York Times story went on to include sample letters the banks could provide to their best customers to enlist their aid in propagandizing for the League.
01:30:12.600 --> 01:30:21.600
But there were other initiatives as well. Funding was shuttled to the emerging schools of economics around the nation. As Gale Braith explained it.
01:30:22.600 --> 01:30:32.600
Under Aldrich's direction, a score or more of studies of monetary institutions in the United States and more particularly in other countries were commissioned from the emergent economics profession.
01:30:32.600 --> 01:30:45.600
It is at least possible that the reverence in which the Federal Reserve System has since been held by economists owes something to the circumstance that so many who pioneered in the profession participated also in its birth.
01:30:46.600 --> 01:30:53.600
Heading up the League's propaganda was J. Lawrence Laughlin, a professor of economics at the University of Chicago.
01:30:53.600 --> 01:30:59.600
Congressman Lindberg commented on the school's connection to the Money Trust.
01:30:59.600 --> 01:31:10.600
The University of Chicago is an institution endowed by John D. Rockefeller with nearly $50 million. It may truly be said to be the Rockefeller University.
01:31:11.600 --> 01:31:23.600
Another academic called in to defend the central bank concept of the Aldrich bill was the president of Princeton University, Woodrow Wilson, who is also a trustee of the Carnegie Foundation.
01:31:24.600 --> 01:31:32.600
Wilson embraced John D. Rockefeller's maxim, competition is sin, along with the idea of a central bank.
01:31:32.600 --> 01:31:41.600
Anti-Money Trust members of Congress impaneled a committee to investigate the 1907 panic. It was called the Pujo Committee.
01:31:42.600 --> 01:31:48.600
In December 1912, J.P. Morgan was called by the Pujo Committee to testify for two days.
01:31:49.600 --> 01:32:00.600
Morgan had been rehearsing for his appearance for weeks before. Some family members say that the stress of that preparation actually killed him when he was vacationing in Rome four months later.
01:32:02.600 --> 01:32:12.600
Also summoned before the Pujo Committee was William Rockefeller, but Rockefeller evaded the U.S. Marshals trying to serve the congressional subpoena in July of 1912.
01:32:12.600 --> 01:32:18.600
They staked out his house in New York City and eventually gained entry and searched the place to no avail.
01:32:19.600 --> 01:32:28.600
Then they headed for Rockwood Hall, his 204-room country mansion above New York City on the Hudson River in Tarrytown, New York.
01:32:29.600 --> 01:32:39.600
Four U.S. Marshals staked out the mansion 24-7. Rockefeller saw them coming, however, and disguised himself in the back of a car wearing earmuffs and goggles
01:32:39.600 --> 01:32:45.600
so that even those who knew him well couldn't recognize him and silently slipped away.
01:32:46.600 --> 01:32:56.600
Where did he go? Jekyll Island. By the end of December, 40 U.S. Marshals had joined in the hunt reinforced by Burns and Pinkerton detectives,
01:32:57.600 --> 01:33:02.600
as well as the Sergeant-at-Arms for the United States House of Representatives, Charles F. Riddle.
01:33:03.600 --> 01:33:10.600
The press followed the hunt eagerly. Rockefeller proudly stayed in his apartment here at San Suci. He was never caught.
01:33:11.600 --> 01:33:20.600
He stayed on Jekyll Island for a number of weeks and then slipped out to sea on the yacht Venatus, belonging to fellow Jekyll Island club member Cornelius K. Billings.
01:33:21.600 --> 01:33:26.600
Rockefeller's lawyer finally accepted the subpoena, ordering him to testify on January 13.
01:33:27.600 --> 01:33:38.600
Rockefeller had endured several throat operations and his attorney claimed testifying might kill him, so the committee agreed to come to Jekyll Island to take the testimony.
01:33:39.600 --> 01:33:49.600
The inquiry started on February 7, 1913, here in his apartment in San Suci, situated on the second floor between the Jekyll Island clubhouse on the north side
01:33:50.600 --> 01:33:54.600
and his 12,000-square-foot cottage Indian Mound to the south.
01:33:55.600 --> 01:34:04.600
But his testimony didn't last long. A few minutes into his testimony, after only four preliminary questions, Rockefeller started coughing violently
01:34:05.600 --> 01:34:10.600
and his physician insisted on a halt to the proceedings, lest his life be jeopardized.
01:34:11.600 --> 01:34:15.600
The committee bought it and left with zero information.
01:34:15.600 --> 01:34:25.600
So in the end, the Pugio Committee accomplished very little other than to whip up public support for the very reform that the bankers actually wanted,
01:34:26.600 --> 01:34:31.600
the passage of the Federal Reserve Act on December 23, 1913.
01:34:32.600 --> 01:34:42.600
Although the bill passed by an overwhelming majority, only 22% of the House members actually remained in Washington to vote on the final bill.
01:34:42.600 --> 01:34:55.600
And it was just before Christmas, as you know, and the congressmen, senators had visions of sugar plum fairies and they were off to their Christmas parties
01:34:56.600 --> 01:35:10.600
and didn't take time to even try to understand the ramifications of the legislation, which was the biggest heist in the history of humanity.
01:35:11.600 --> 01:35:25.600
Although the bill appeared to spread out power through 12 regional Federal Reserve banks, the bill as passed left significant issues to be settled after the Fed actually began operations.
01:35:26.600 --> 01:35:30.600
In reality, the bill created just another privately owned central bank.
01:35:31.600 --> 01:35:38.600
The stock would be owned by all the national banks in the country, which in turn would be owned by their private stockholders.
01:35:39.600 --> 01:35:43.600
The Fed would be no more federal than Federal Express.
01:35:44.600 --> 01:35:48.600
Furthermore, Federal courts have ruled that the Fed is a private corporation.
01:35:49.600 --> 01:35:58.600
So how did it work out? Did this private corporation, cleverly disguised to look like a public institution pretending to operate in the public interest,
01:35:59.600 --> 01:36:04.600
save America from the painful booms and busts of the dreaded business cycle?
01:36:05.600 --> 01:36:15.600
Well, less than 16 years after the passage of the Federal Reserve Act, on October 29, 1929, the New York stock market crashed,
01:36:16.600 --> 01:36:22.600
dragging the rest of the world into the deepest, most long-lasting depression of the 20th century.
01:36:23.600 --> 01:36:34.600
International trade decreased by 50 percent, unemployment in the U.S. rose to 25 percent, and in some countries as high as 33 percent.
01:36:35.600 --> 01:36:41.600
So was it an accident, or was it just that old, waskily business cycle acting up again?
01:36:42.600 --> 01:36:46.600
According to Nobel Prize-winning economist Milton Friedman, it was deliberate.
01:36:47.600 --> 01:36:52.600
The Fed could have stopped the Depression at any time by pumping money into the system,
01:36:53.600 --> 01:36:59.600
but instead they let the money supply decline by 33 percent, sending most banks into bankruptcy.
01:37:00.600 --> 01:37:04.600
Friedman put it this way in his 1996 interview with National Public Radio.
01:37:05.600 --> 01:37:13.600
The Federal Reserve definitely caused the Great Depression by contracting the amount of currency in circulation by one-third
01:37:13.600 --> 01:37:16.600
from 1929 to 1933.
01:37:19.600 --> 01:37:22.600
I don't think there's ever been a recession or a depression that was necessary.
01:37:23.600 --> 01:37:29.600
It is because the current system where nearly all of the money is created as debt,
01:37:30.600 --> 01:37:41.600
and as debt on which interest has to be paid, is like a system where the bankers blow debt into a balloon.
01:37:41.600 --> 01:37:47.600
And it keeps getting bigger and bigger and bigger, and things are quite prosperous when they're still blowing the debt in the balloon.
01:37:48.600 --> 01:37:55.600
And then all of a sudden, the debt burden becomes so great that the system won't carry it.
01:37:56.600 --> 01:38:02.600
And then it's like a balloon with a pin stuck in it, and things crash, asset values drop,
01:38:03.600 --> 01:38:08.600
a lot of people lose their homes, their farms, and their jobs, and all unnecessarily.
01:38:08.600 --> 01:38:15.600
So long as the Fed is owned by the banks, and the banks are in complete control over the quantity of a national money,
01:38:16.600 --> 01:38:21.600
and that national money is lent into existence by the banks, guess what?
01:38:22.600 --> 01:38:31.600
Money can never serve the public interest, and only a system of debt serfdom, worldwide debt serfdom, can possibly result.
01:38:32.600 --> 01:38:39.600
This is what we have today, and unless we break its stranglehold over the nations of the world,
01:38:40.600 --> 01:38:48.600
humankind's cherished vision of freedom will be lost forever, and the very existence of humanity itself may be threatened.
01:38:49.600 --> 01:38:54.600
Today's Fed is nothing but a private monopoly over the nations money.
01:38:54.600 --> 01:39:00.600
It pretends to be able to control how much money banks create out of nothing as loans.
01:39:01.600 --> 01:39:08.600
But as we found out during the 2008 Congressional hearings, instead of lending out only ten times as much money as they actually had,
01:39:09.600 --> 01:39:13.600
the biggest banks were lending out fifty times as much or more.
01:39:14.600 --> 01:39:18.600
Why haven't we heard this before? Why isn't this common knowledge?
01:39:18.600 --> 01:39:24.600
Why isn't the root of our economic problems taught in every classroom around the world?
01:39:25.600 --> 01:39:34.600
Because the three major pathways of truthfully informing the public have been blocked by those who make money off the debt money system.
01:39:38.600 --> 01:39:42.600
There is now no penalty for a politician selling his soul to bankers.
01:39:43.600 --> 01:39:48.600
The vast majority of President Obama's top campaign contributors were the biggest banks.
01:39:49.600 --> 01:39:53.600
The same goes for the Republican nominee in 2012, Mitt Romney.
01:39:54.600 --> 01:40:02.600
So we need a new crop of politicians who will tell us the truth about how money is created and in whose benefit.
01:40:03.600 --> 01:40:10.600
So when it comes to the national debt, you would not have had a national debt if we had not given the power to create money to the banking sector.
01:40:10.600 --> 01:40:14.600
You need to take that power to create money back to a public body.
01:40:15.600 --> 01:40:19.600
So you don't give that power to politicians because they'll abuse it in the same way that the banks have done.
01:40:20.600 --> 01:40:32.600
Yesterday a judge approved the settlement with SAC Capital, a $602 million fine for civil insider trading.
01:40:33.600 --> 01:40:38.600
One asks whether a $602 million fine is likely to have much effect.
01:40:38.600 --> 01:40:49.600
Of course, the owner and CEO of SAC Capital took home last year in compensation $1.4 billion personally.
01:40:50.600 --> 01:41:01.600
So I checked what Stephen A. Cohen, his political engagement this past year, and he gave $217,000 in campaign contributions.
01:41:01.600 --> 01:41:08.600
Now this is a pittance from the point of view of his wealth, obviously, as a share of $1.4 billion paycheck.
01:41:09.600 --> 01:41:24.600
But $217,000 with our cheapskate politicians actually goes a long way to making sure that Mr. Cohen will be very well treated by his senators and by others who are giving ample protection.
01:41:24.600 --> 01:41:31.600
The financial markets are the number one campaign contributors in the U.S. system now.
01:41:32.600 --> 01:41:36.600
We have a corrupt politics to the core, I'm afraid to say.
01:41:37.600 --> 01:41:43.600
The final point, of course, is separating the politicians from the crooks.
01:41:44.600 --> 01:41:51.600
But maybe that's so close together that they can't actually be separated. Maybe it's just the same community.
01:41:51.600 --> 01:41:56.600
What happens is that ultimately the one who creates money controls the political structure.
01:41:57.600 --> 01:42:11.600
So if you let the bank to create money for the nation, so over time you will find the bank will be ultimately controlling the resources and the political structure or power in the country.
01:42:11.600 --> 01:42:22.600
It seems strange that that community will stand for that when, with a bit of political will, it could issue its own debt-free money supply.
01:42:23.600 --> 01:42:27.600
So how about the economics academic community in the United States?
01:42:28.600 --> 01:42:35.600
Surely professors of economics have their academic freedom, the continual search for the truth, protected by what's called tenure.
01:42:36.600 --> 01:42:41.600
Tenure is where a professor can't be fired for their political opinions.
01:42:42.600 --> 01:42:51.600
Tenure started around 1900 and worked well for the first 70 years or so. But by the mid-1990s, things had changed.
01:42:51.600 --> 01:43:20.600
In order to hide the upcoming failings of the old debt-money system, the Federal Reserve began a substantial program of consultants, visiting scholars, alumni, and staff economists that today so thoroughly dominates the field of economics that real criticism of the central bank and its debt-money system has become a career liability, or when it comes to a reputable economics journal, an impossibility.
01:43:22.600 --> 01:43:32.600
At the prestigious Journal of Monetary Economics, more than half of the editorial board members are currently on the Fed payroll, and the rest have been in the past.
01:43:33.600 --> 01:43:43.600
The Fed's Board of Governors in Washington, D.C. employs 220 Ph.D. economists. The 12 regional banks employ scores more.
01:43:44.600 --> 01:43:55.600
Roger Auerbach, a former investigator with the House Banking Committee, found out that there are only 1,000 to 1,500 monetary economists working in the U.S. today.
01:43:56.600 --> 01:44:08.600
In 2009, the last year figures were available. The Fed spent $433 million on experts researching monetary and economic policy.
01:44:08.600 --> 01:44:16.600
If that isn't bad enough, the Fed has all the pathways to all the major economics journals blocked as well.
01:44:17.600 --> 01:44:28.600
In a recent survey of the seven top journals, 84 of the 190 editorial board members were affiliated with the Federal Reserve in one way or another.
01:44:29.600 --> 01:44:35.600
According to Joshua Rosner, a Wall Street analyst who correctly called the 2008 meltdown,
01:44:36.600 --> 01:44:47.600
The Fed has a lock on the economics world. There is no room for other views. The only way you can actually get in a journal is by subscribing to the views of one of the journals.
01:44:48.600 --> 01:45:02.600
But it's not all about the money either. When you are an up-and-coming economist trying to gain tenure at a university, the prestige of being associated with the Fed in one way or another is an absolute necessity.
01:45:02.600 --> 01:45:12.600
According to Jane Darista, a Fed critic and an economist with the Political Economy Research Institute at the University of Massachusetts Amherst,
01:45:13.600 --> 01:45:22.600
It's very important if you are on a tenure track and don't have tenure to show that you are valued by the Federal Reserve.
01:45:23.600 --> 01:45:33.600
Academics that do research, warning of a banking crisis, get told, well we may have to fire you because our funding was cut by 80% and professors' jobs aren't safe.
01:45:34.600 --> 01:45:40.600
You have to change your research or we can't have you anymore at the university. And that's quite shocking, isn't it?
01:45:41.600 --> 01:45:57.600
There is a reluctance or even a denial that there is a problem with the monetary system. And at the time it's only a few academic experts who are willing to concede that there might be some problem with the money system.
01:45:58.600 --> 01:46:08.600
So what is the media message? What is the media telling the public? The media tells the public that the problem is that the government is printing too much money.
01:46:09.600 --> 01:46:17.600
You hear it over and over every day on the news. But it's not. It would not be nearly so bad if that was really the problem.
01:46:18.600 --> 01:46:26.600
We aren't printing money. We are borrowing every dollar into existence. And worse, borrowing it at interest.
01:46:28.600 --> 01:46:37.600
So isn't the media supposed to be the keepers of the public interest, the fourth estate? Not anymore. Here's a story I was told a couple of years ago.
01:46:38.600 --> 01:46:45.600
When I released my last documentary, The Secret of Oz, at the end of 2009, I sent it to two friends of mine in the media.
01:46:46.600 --> 01:46:55.600
They worked at one of the big three U.S. networks. One was the president of the network and the other, my oldest friend in the media business, was his executive producer.
01:46:56.600 --> 01:47:05.600
After viewing the film, they called me and said, this is great. I was puzzled. I'd expected that they would dismiss it as some sort of economic conspiracy theory.
01:47:05.600 --> 01:47:12.600
But they told me that they had just been laid off with 100 other network executives because of J.P. Morgan.
01:47:13.600 --> 01:47:23.600
I asked what J.P. Morgan had to do with the network, and they said that the networks are so heavily in debt to Morgan that every time loans come due,
01:47:24.600 --> 01:47:30.600
J.P. Morgan efficiency experts make demands on what the network has to do to have its loans renewed.
01:47:30.600 --> 01:47:36.600
What would be the price for noncompliance? The network would be out of business in a single week.
01:47:37.600 --> 01:47:46.600
So it's just like the average American homeowner. They are all mortgaged to the max to banks. Anything the bank says, they have to do.
01:47:47.600 --> 01:47:49.600
Just as the Bible says in Proverbs,
01:47:49.600 --> 01:47:55.600
Just as the rich rule over the poor, so the borrower is servant to the lender.
01:47:56.600 --> 01:48:06.600
So do you really have to ask why the general public is confused? If our politicians can't tell us the truth and the media can't dare to tell us the truth,
01:48:07.600 --> 01:48:18.600
then even the professors can't tell us the truth. What is the average person supposed to believe and how can they ever discover the truth, much less sorted out from the conflicting diversions?
01:48:19.600 --> 01:48:24.600
What I found though, when you talk about things like monetary policy, economic policies,
01:48:25.600 --> 01:48:36.600
yes, you can state the truth, the public will understand it, but you immediately get an official expert come out and say, oh, it's not so simple. It's more complex than that.
01:48:37.600 --> 01:48:45.600
And clearly there seems to be this belief among economists that a complex theory, lots of abstract mathematics,
01:48:45.600 --> 01:48:50.600
because it must be cleverer, is intellectually superior to a simple argument.
01:48:51.600 --> 01:49:00.600
The truth couldn't be further from it because it's a fundamental principle in logic known to Aristotle and William of Ockham,
01:49:01.600 --> 01:49:07.600
who said very truthfully that a simple argument beats a complex argument.
01:49:08.600 --> 01:49:18.600
So what do we do about this? Fortunately, the solution is easy to understand, and it's basically the same for every nation on earth.
01:49:19.600 --> 01:49:25.600
All monetary reformers agree that fractional reserve lending is nothing but outright theft and must be stopped.
01:49:26.600 --> 01:49:36.600
Some believe that no interest is justified at all, that all interest is usury and has been condemned for centuries by both the Christian and the Muslim faiths.
01:49:37.600 --> 01:49:47.600
The Quran uses the term riba for what Western people would have understood as usury,
01:49:48.600 --> 01:49:56.600
except that sometimes the definition of usury would be exorbitant usury,
01:49:57.600 --> 01:50:03.600
and that there was an acceptable amount of usury that would not be condemned, but not in Islam.
01:50:03.600 --> 01:50:08.600
I cannot see why the banking sector should have the privilege of creating money
01:50:09.600 --> 01:50:15.600
and the government being forced to borrow from the banks at interest.
01:50:16.600 --> 01:50:22.600
Remember, the bank isn't actually loaning real money. It is simply adding some numbers to an account.
01:50:23.600 --> 01:50:29.600
In exchange, the borrower agrees to repay this loan with compounding interest.
01:50:29.600 --> 01:50:32.600
But where does the interest money come from?
01:50:33.600 --> 01:50:39.600
Well, you either have to take it from someone else, reducing their ability to service their interest-bearing loans,
01:50:40.600 --> 01:50:44.600
or you have to take out another loan to repay your existing loan.
01:50:45.600 --> 01:50:52.600
In other words, this system creates a global Ponzi scheme based on ever-increasing levels of debt.
01:50:53.600 --> 01:50:58.600
The mountain of debt is worldwide. It can't be serviced.
01:50:59.600 --> 01:51:04.600
I think that we're on the verge of a very, very serious trauma.
01:51:05.600 --> 01:51:10.600
In 2007, just before the crisis started, the UK national debt was about £500 billion.
01:51:11.600 --> 01:51:16.600
And in that time, we'd already spent £700 billion on paying the interest.
01:51:17.600 --> 01:51:20.600
So we paid more interest than was actually outstanding, than we'd ever borrowed.
01:51:21.600 --> 01:51:26.600
We have a financial and monetary system where taxpayers will be on the hook
01:51:26.600 --> 01:51:31.600
for the mistakes of the banking sector, even though the system was designed so badly
01:51:32.600 --> 01:51:34.600
that those mistakes are inevitable.
01:51:35.600 --> 01:51:39.600
The supply chain is going to break down. The real economy is going to break down.
01:51:40.600 --> 01:51:44.600
And there's going to be scarcities. It's going to be horrible.
01:51:45.600 --> 01:51:53.600
At some point, the system absolutely must collapse into a titanic pile of bankruptcies and poverty
01:51:53.600 --> 01:51:58.600
for the masses and all the real assets will be owned by the banks and their stockholders.
01:51:59.600 --> 01:52:01.600
How should money be created?
01:52:02.600 --> 01:52:06.600
First of all, government should create all the money it needs to operate debt-free.
01:52:07.600 --> 01:52:12.600
Inflation should be monitored closely, just as is done today in Guernsey.
01:52:13.600 --> 01:52:16.600
And if too much money is created and prices start to edge up,
01:52:17.600 --> 01:52:20.600
then money is taken out of the system by taxation.
01:52:20.600 --> 01:52:25.600
Taxation should no longer be seen as a source of government revenue.
01:52:26.600 --> 01:52:30.600
The government can create all the money it needs to fund its spending requirements.
01:52:31.600 --> 01:52:34.600
Millions of people die worldwide from hunger.
01:52:35.600 --> 01:52:37.600
These deaths could be eliminated in a single year.
01:52:38.600 --> 01:52:41.600
More millions die of contaminated water supplies.
01:52:42.600 --> 01:52:45.600
All of these deaths could be eliminated in a few years.
01:52:45.600 --> 01:52:49.600
Millions more die of lack of simple medical care.
01:52:50.600 --> 01:52:53.600
Most of these deaths could be eliminated in a decade,
01:52:54.600 --> 01:52:59.600
once the proper medical infrastructure was built and physicians were trained in every nation.
01:53:00.600 --> 01:53:05.600
So then the question is, are we trying to create some impossible social utopia?
01:53:06.600 --> 01:53:13.600
No. Another responsibility of government, once basic needs are met, is to stimulate individual productivity.
01:53:13.600 --> 01:53:17.600
This can be done by making sufficient money available to the banking section,
01:53:18.600 --> 01:53:23.600
so that they can lend money to anyone who works hard, repays their debts, and has a good idea.
01:53:24.600 --> 01:53:28.600
Then each person can decide whether they wish to live modestly,
01:53:29.600 --> 01:53:32.600
or whether they want to try to better themselves through working hard
01:53:33.600 --> 01:53:36.600
and creating products and services the world needs.
01:53:37.600 --> 01:53:41.600
The question is, should the National Treasury lend out to the people directly,
01:53:41.600 --> 01:53:48.600
probably not. You probably want to create competition among commercial banks for the commercial lending business.
01:53:49.600 --> 01:53:56.600
That will foster competition and ensure that Treasury cannot deny a person a loan because they don't like their politics.
01:53:57.600 --> 01:54:03.600
National money would be sold by the nation's Treasury to banks, or states, or cities.
01:54:04.600 --> 01:54:06.600
It would be a simple transaction.
01:54:06.600 --> 01:54:10.600
Let's say $100 would be sold to a bank for $101.
01:54:11.600 --> 01:54:16.600
Banks would then tack on their own initiation fee and lend it out to people.
01:54:17.600 --> 01:54:24.600
If you have banks lending to individuals, then there will be liberal-leaning banks and conservative-leaning banks.
01:54:25.600 --> 01:54:30.600
Power will be split up. That ensures a more stable, democratic environment.
01:54:31.600 --> 01:54:36.600
Of course, private lenders could also form banks and use their own money instead of buying it from the government.
01:54:37.600 --> 01:54:48.600
In the new organization, due to the monetary reform, the money creation is no longer in the hands of the banks.
01:54:49.600 --> 01:54:54.600
Although there are differing opinions over the precise implementation of monetary reform,
01:54:55.600 --> 01:54:58.600
all money reformers agree on certain basic principles.
01:54:58.600 --> 01:55:01.600
Number one, forbid national borrowing.
01:55:05.600 --> 01:55:18.600
It doesn't make any sense at all that a government should have to borrow something for which they own the patent and have the right to produce themselves.
01:55:19.600 --> 01:55:24.600
It's in their own domain. They have the power. The problem is they just don't use it.
01:55:24.600 --> 01:55:27.600
Why is the $64 trillion question?
01:55:28.600 --> 01:55:42.600
So a nation state, why should it not, in the public interest, in the interest of its citizens, create its own debt-free, persistently circulating money supply? Why not?
01:55:43.600 --> 01:55:48.600
Instead of having to borrow it from commercial bankers?
01:55:49.600 --> 01:55:54.600
So instead of allowing banks to create money and put it into the property markets and financial speculation,
01:55:55.600 --> 01:56:04.600
we have the state creating money in the public interest and making sure that money gets into the real economy, where it can create jobs and actually create wealth.
01:56:05.600 --> 01:56:11.600
So once you understand what money is, that is your natural resources, you need something to measure it. It's just information.
01:56:12.600 --> 01:56:16.600
You see? So you don't borrow information and pay interest on that.
01:56:17.600 --> 01:56:22.600
Sovereign nations do not have to borrow. The borrower becomes servant to the lender.
01:56:23.600 --> 01:56:29.600
And in the case of nations, the lenders are usually the biggest banks or related financial institutions.
01:56:30.600 --> 01:56:45.600
If we continue with business as usual and so to say small modifications, as it is done today, that will end up, over and over again, that will end up in some sort of financial crisis.
01:56:46.600 --> 01:56:56.600
Number two. All nations need to issue their own debt-free sovereign currency once again and put an end to consolidated currencies like the euro.
01:56:57.600 --> 01:57:05.600
Nations can create enough of their own national money to serve the public interest. The argument against this is that it will cause hyperinflation.
01:57:05.600 --> 01:57:15.600
My answer? Not if you control the quantity. If controlling the quantity is the only thing we have to do to get out of this mess, don't you think we can find somebody to do that?
01:57:17.600 --> 01:57:29.600
As to the German experience of hyperinflation in the early 20s, it's not true that was caused by the government because the government had no say at all in monetary policy at the time.
01:57:29.600 --> 01:57:39.600
That was actually an elite commission and the people who had the say in that commission were private bankers, particularly from the United Kingdom and from the United States.
01:57:42.600 --> 01:57:46.600
And the government had no say in it. So this is a myth.
01:57:46.600 --> 01:57:56.600
Here's my axiom. It matters not what backs the money. All that matters is who controls the quantity. Will you be in control of the quantity in the public interest or will you give that power up again to bankers who will, by definition, have to maximize profits for their corporation?
01:57:57.600 --> 01:58:01.600
Another argument is that government is too corrupt to control the money.
01:58:01.600 --> 01:58:11.600
My response is government is all we have. You can't elect a banker in any nation on this planet. Right now the money power has taken over government. The solution is not to give the money to the bankers who will, by definition, have to maximize profits for their corporation.
01:58:11.600 --> 01:58:17.600
Our only option is to fight to take government back, to make it serve the public interest.
01:58:18.600 --> 01:58:23.600
And that's what we're doing. We're not going to let the government take over the money.
01:58:24.600 --> 01:58:28.600
We're going to let the government take over the money.
01:58:29.600 --> 01:58:34.600
And that's what we're doing. We're going to let the government take over the money.
01:58:34.600 --> 01:58:40.600
The argument against debt-free national money is that it will reduce the standard of living through debased currency.
01:58:41.600 --> 01:58:46.600
But history is full of the folly of trying to tie the money supply to gold.
01:58:47.600 --> 01:58:50.600
Let the government take over the money.
01:58:51.600 --> 01:58:54.600
Let the government take over the money.
01:58:55.600 --> 01:58:58.600
Let the government take over the money.
01:58:58.600 --> 01:59:03.600
But history is full of the folly of trying to tie the money supply to gold.
01:59:04.600 --> 01:59:07.600
Let the value of a nation's currency float on the international market.
01:59:08.600 --> 01:59:11.600
That's the natural, truly free market solution.
01:59:12.600 --> 01:59:19.600
Each nation's sovereign money will find its own level, and that should be based solely on that nation's productivity.
01:59:20.600 --> 01:59:26.600
The only reduction in the standard of living will be a reduction in a nation's ability to import products.
01:59:27.600 --> 01:59:34.600
But the upside will be to massively stimulate internal production of every product a nation needs.
01:59:35.600 --> 01:59:43.600
For example, Greece would start building television sets and refrigerators because it couldn't afford to buy them off ships from China.
01:59:44.600 --> 01:59:55.600
In other words, within a single year, every nation that reissues debt-free sovereign money will be well on their way to a robust recovery and a sustainable recovery,
01:59:56.600 --> 02:00:01.600
because then their internal production of everything the nation consumes will be stimulated massively.
02:00:02.600 --> 02:00:08.600
The result? The accumulation of real national wealth through national production.
02:00:09.600 --> 02:00:12.600
This is the only escape from the bankers' debt money system.
02:00:13.600 --> 02:00:16.600
Number three, forbid fractional reserve lending.
02:00:17.600 --> 02:00:22.600
Under prevailing circumstances of fractional reserve banking, there is no smooth way out.
02:00:22.600 --> 02:00:29.600
We have had more than 400 systemic financial crises across the world throughout the last 30 years,
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and very certainly there will be a next crisis and another one.
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And so I can't imagine it will go on forever like this.
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It develops into such a heavy debt load that it reaches the point where the system and the people just can't bear it.
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Having a system where there is so much debt on which they have to spend such a large proportion of their income to pay the interest.
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As Milton Friedman rightly said, it is inherently a fragile institution that is subject to self-fulfilling collapse.
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We need banks. They provide useful services that people need and are willing to pay for.
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We don't need to nationalize banks. We do need a healthy competition between them to ensure our future economic freedom
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and a robust competitive environment for those who wish to compete to better themselves and their families.
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The money masters have ruled this planet for thousands of years through serfdom and slavery.
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Humanity's answer to this problem has been to institute self-governance.
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That's been the cornerstone of humans' march into freedom.
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The problem is that the money masters have learned how to recapture the most important power of self-governance
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while leaving the shell to make it look like we are still free, but we're not.
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What we're new to do is to give back the power back to the people.
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So that's why, as you can see, it's an undo. We have to undo the effects of the Rebabi system.
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The important thing is to regain control. And to regain control of the creation of money.
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And in that way also to regain the benefit from creating money, which is a privilege.
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Until we learn that the root of our freedom problem is governance.
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Until we learn that the root of our freedom problem is government borrowing,
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we will never return to true government of, by, and for the people.
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The truth is simple enough for the average person out there to understand.
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And that's especially true when it comes to things like money.
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The situation today is unusual.
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There are solutions and trust people who have different ideas.
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Don't be afraid of people who are suggesting something you've never heard before.
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Why should a government borrow when it can create? Create its own money.
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And don't fall into the false solution that becoming involved in massive transnational governments
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will solve the problems that just make self-governance even more impossible.
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It puts you farther away from being able to fix this problem.
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Remember, that's what the money masters want. They want you to feel like you don't have a voice.
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They want you to give up. They want total control.
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It is really important for the general public to be aware that actually the truth is simple.
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And they shouldn't give up. They should look into it.
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Personally, I'm convinced that such a reform that will happen sooner or later,
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it's clearly one of the next steps to be taken.
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In the United States, this is the 100th anniversary of that Federal Reserve System,
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which has been nothing but trouble since it was first passed into law 100 years ago.
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And this is a year when the American people could give themselves the most wonderful present ever.
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To get rid of it. To repeal the legislation and to establish a proper bank of the United States
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owned not by the banks, but by the people.
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And I found very often discussing with experts, discussing with taxi drivers and people from all sorts of walks of life,
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usually the experts are very confused.
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And the common sense of the people is in my experience actually far closer to the truth
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than the complex arguments of the experts. So don't give up, I would say.
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It's just that simple. You can understand this problem and fix it.
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In conclusion, it has become painfully obvious, even for me, a 12-year-old Canadian,
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that we are being defrauded and robbed by the banking system and a composite government.
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What will we do to stop this crime?
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What will we do to ensure that the next generation will have free and clear of the debt-based economy that enslaves them to the banks?
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Margaret Mead said the following, and I hope that all of you remember this.
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Never doubt that a small group of people can change the world. Indeed, it is the only thing that ever has. Thank you.
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Thank you.