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II
Bank Money—A Time to Sow, and a Time to Reap
The Republic being recognized by England gave the citizens the impression they had gained their independence. But as William Pitt said ". . .It will do them no good because they have adopted the private banking system."
—T. W. Bridges, in God or Mammon
Depressions triggered by alternate expansion and contraction of money (inflation and deflation) are as old as banking. Early American statesmen and the Founding Fathers understood it well, and provided for its eradication in the first article of the Constitution. Adams, Jefferson, Madison, Jackson, Franklin, Webster, Clay, and, later, Lincoln fought it to the last ditch, but to no avail.
Ironically, public education and the press (both dominated by the private creators of money) ignore the role played by these valiant man, only to deify a scoundrel (Alexander Hamilton) who, with the help of avaricious politicians and foreign bankers, gave us inflation.
Hamilton established for himself and his successors a private mint where imaginary money was created and loaned for private profit.—Gertrude Coogan, in Money Creators [p. 11]
Benjamin Franklin declared that the outlawing of our Colonial script, and the enforced use of British money (not the Boston Tea Party) precipitated the Revolutionary War.
Contrary to common belief, banks do not lend money, or, more correctly stated, they create the money which they lend. Since comparatively little money ever leaves the bank, bankers may—and do—continue to extend credit against a fixed percentage of funds remaining in their possession.
Again, contrary to common belief, the depositor's money (yours and mine) is not used for loans, but placed in reserve. Credit is extended against it in varying multiples, depending on the nature of the deposit.
For demand deposits (checking accounts), the bank may extend six times the amount in loans. On time deposits—where the reserve requirement runs as low as 3%, the multiple is 33 1/3 times the deposit. And, by the way, a bank deposit is not what you might think it is. It is not the money that the bank actually has, but the money that the bank is privileged to create.
Thus, for every dollar in your time deposit, which may pay you from 5% to 6%, the bank may lend 33 1/3 dollars for all the traffic will bear (which will account for the lavish banking establishments that dominate the downtown areas of our larger cities). Repeating, bank loans create money. Until they are repaid, they function as the currency of the land.
Where, then, does one draw the line between such money and counterfeit, except that the former has been legalized?
This proliferation of bank-created money, in competition with your hard-earned wages, is the mysterious entity known as inflation. It robs you in broad daylight, and that's not the half of it.
One of the most brazen examples of extortion is that cyclical expansion and contraction of credit. The operation is simple, and is accomplished in two steps: a time to sow, and a time to reap.
Step one, a time to sow: Beginning with low interest rates, the public is urged to borrow and spend for any and every conceivable purpose. Business booms. Interest rates rise. Banks [p. 12] create money wholesale, and redouble their promotions to lend it. Investment enthusiasm becomes madness; prices, wages, and interest rates spiral upward until life becomes near intolerable for the lower- and middle-income groups. Unrest follows. Democrats, Republicans, Industry, and Labor share the blame, while the real culprit goes unscathed and unsuspected.
Step two, the harvest is ripe; it is a time to reap: The Federal Reserve must intervene to "cool the economy." Interest rates are raised further; loans are called; new loans restricted. Money becomes scarce; work forces are cut, and smaller payrolls are soon felt throughout the economy. The recession feeds on itself, and hardship prevails—striking hardest at the unhedged and underprivileged. In due time, they are shorn of their homes, farms, and possessions. When the last drop of "blood" has been extracted, money once more becomes plentiful, interest rates return to normal, and the vicious cycle is complete. A breathing spell must intervene between cycles—allowing people an opportunity to re-earn their possessions in preparation for the next raid. Will they never learn?
By what manner of hypnosis are people convinced that production of goods and services is enhanced by an upward spiral of money, prices, and wages; or that obligations can be passed—via inflation—from father to son in a never-ending process; or that we, or our government, can borrow ourselves out of debt?
By a simple stroke of a pen, our debts—personal and national—are monetized. We go our merry way spending debts, enjoying ourselves to the hilt—unaware that we are bankrupt. If the party seems to go on as usual, it is simply that our creditors (the Federal Reserve Banks) are not quite ready to foreclose. Or perhaps they fear the debacle that might ensue. Whatever the cause, if we sit idly by while the ridiculous performance continues, we shall deserve the consequences.
Following is an excerpt from the 1939 edition of The Federal Reserve System: Its Purposes and Functions:
. . . The Federal Reserve Bank's promises are recognized by law as having a particular monetary utility not possessed by the promises of individuals or private [p. 13] institutions. That is, Federal Reserve Bank promises—or "liabilities" as they are commonly called—serve in the form of Federal Reserve deposit. . . .
Translated, the Federal Reserve System—through its Open Market Committee—can purchase government bonds or stock in American corporations with checks against no funds (with money they create). These securities are then sold to the public for hard-earned cash. Government bonds, prime victims of inflation, are offered to patriotic young couples as security for the education of their prospective progeny. Such falsification by a private corporation would be severely prosecuted, and deservedly so.
Proponents of the money system would cover their tracks by referring to honest money of the people as "rubber dollars." This is a vicious lie, and they know it. The only money that is sound, fair, and compatible with the Constitution is created and value-controlled by the government.
With the facts of money creation and inflation so evident, the vast majority in Congress must be either mentally or morally bankrupt not to see it. The widespread implications of Watergate would indicate both.
Our money system cannot function unless we spend more than we earn—unless debt (personal and national) outpaces income at a progressively rising rate. Any grade school pupil could readily appraise the ultimate end of such folly. Why not our "economists," our politicians? The latter have established for themselves wages, pensions, and special benefits that dwarf the wildest dreams of Utopian socialism—all chargeable to their constituent taxpayers who must deprive themselves to foot the bill.
Unless the debt-financing, debt-compounding system is eliminated, we will have master and slave, robber and robbed, booms, depressions, bankruptcies, panics, and wars. These conditions are vital in order to keep in operation a barbaric money system.
—T. W. Bridges, Postscript to God or Mammon [p. 14]
We can fight Communism and be damned. We will never conquer it until we conquer the forces that create it—the Free World money system, and our own Federal Reserve in particular. The rank injustice and oppression of this money-creating colossus is driving the poor and lower-income brackets into the arms of godless dictatorship. It exists in direct defiance of the Constitution of the United States, which was framed to provide equality and well-being for all. Yet we accept this wholesale creation of money (out of thin air), and build fortunes around it.
Are we deaf, dumb, and blind to all sense of equity, to the law of inevitable retribution?
By accepting inflation, we accept its guilt as well as its spoils. Impressive structures of worship and learning will never atone for the plunder of Christ's poor. All efforts toward their development and rehabilitation avail nothing so long as we continue to rob them. Ironically, church and synagogue remain silent in the face of this ruthless pillage—seemingly unaware that therein lies the seed of their own destruction.
Churchmen will protest: "We are not economists; we do not understand inflation." And, with a precious few exceptions, they are dead right; but, do these grounds absolve them? They have the Bible—the Ten Commandments, the Sermon on the Mount; they know that the crucifixion of Jesus followed on the heels of his forceful eviction of the money-changers from the temple; they know that inflation (whatever it might be) robs the poor and concentrates the nation's wealth, unearned, in the upper brackets of society. History and simple logic should finger the culprit— "counterfeit" money. Ironically, the money system is dominated by Christians and Jews.
Laborer and merchant both insist that the price-wage spiral is requisite to their existence. Under our larcenous money system, this is indeed true. Both are surreptitiously robbed by an enemy they neither see nor comprehend. But, they also know that the spiral is vicious and immoral, that the strong—by extraordinary privilege—are hedging inflation, passing its burden down in double dose to those least able to bear it. They find it simpler to join the robbers than to confront them, to finance their deficits by [p. 15] preying on their lesser privileged fellow men.
History and simple logic should convince these as well that their methods will not hold water, that they too must inevitably be caught up and enslaved by their own devices. Neither are they in any way to be excused. They too have the Bible and the Ten Commandments. They have the Constitution which—if invoked—will secure justice and equal rights for themselves and "other Americans" alike.
But no, living by the Bible and the Constitution places necessary curbs on our passions that we are unwilling to accept; it requires an effort we are unwilling to expend.
Blind fools, hypocrites"—thus did Jesus censure churchmen of his day—and mostly over money. How would He say of them (Jews and Christians) today?
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You are a den of vipers and thieves. I intend to rout you out; and by the eternal God I will rout you out.
—Andrew Jackson (to the bankers—1811)
I voted against the Federal Reserve Act because it completed the banker's title to the earth.
—Congressman Callaway of Texas
Government, possessing power to create and issue currency as money and enjoying the right to withdraw currency and credit from circulation by taxation and otherwise, need not and should not borrow capital at interest as a means of financing government work and public enterprise. The government should create, issue and circulate all currency and credit needed to satisfy [p. 16] the spending power of the government and the buying power of the consumers. The privilege of creating and issuing money is not only the supreme prerogative of the government, but it is the government's greatest creative opportunity.
—Abraham Lincoln
If two parties, instead of being a bank and an individual, were an individual and an individual, they could not inflate the circulating medium by a loan transaction, for the simple reason that the lender could not lend what he did not have, as banks do.
—Prof. Irving Fisher of Yale
Money, credit, finance, international banking knows no boundaries, no flag, no creed, no color, no tongue, and no ethics. It is the universal language of exploitation and tyranny.
—Siegfried
Whoever controls the volume of money in a country is absolute master of industry and commerce.
—James A. Garfield
Under the Federal Reserve Act, panics are scientifically created: the present (1920) is the first scientifically created one, worked out as we figure a mathematical problem.
—Hon. Charles A. Lindbergh [p. 17]
If people knew the truth about money there would be a revolution before morning.
—Henry Ford, Sr.
There is not a man within the sound of my voice who does not know that this nation is run by the international bankers.
—Hon. Louis T. McFadden
(For over ten years, chairman of the House Banking Committee, from a speech before the House of Representatives)
The death of Lincoln was a disaster to Christendom. I do fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America, and use it to corrupt modern civilization.
—Bismark
Banking was conceived in iniquity and born in sin. Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with the flick of a pen they will create enough money to buy it back.
—Sir Josiah Stamp
(Former President, Bank of England)
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One of the worst side effects of our independent money system is its fellow-traveling beneficiaries of inflation. [p. 18] They have contributed mightily in reducing the masses to virtual slavery. With a surplus of unearned money at their command, they vie with each other in the accumulation of choice land, city property, and other assets necessary for the common weal.
Be it a home for a young couple, or a school site for the education of their children, they must spend the best years of their lives paying tribute to the speculator.
A properly educated people could easily alleviate such abuse. Without violating the precept of neighborly love, we would do well to recognize parasites for what they are, rather than paragons of "success." Our benighted esteem spurs them on to greater heights of infamy. [p. 19]
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