"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by a deluge of bank paper, as we were formerly by the old Continental paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs. Prudent men must be on their guard in this game of Robin’s alive, and take care that the spark does not extinguish in their hands. I am an enemy to all banks discounting bills or notes for anything but coin. But our whole country is so fascinated by this Jack o’ lantern wealth, that they will not stop short of its total and fatal explosion." Thomas Jefferson to John W. Eppes, 1814
"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." Andrew Jackson, addressing the private banking interests visiting him at the White House.
The history of the 19th century is pivotal to our understanding of the present situation. As the above quotes amply demonstrate, it is the history of the struggle between the defenders of a free, constitutional republic and the private banking interests, a struggle that reached its apex between the presidencies of Andrew Jackson and Abraham Lincoln.
Jackson’s explanation of his veto regarding the renewal of the Bank of the United States’s charter is well worth reading and includes the following passages:
"Is there no danger to our liberty and independence in a bank that in its nature has so little to bind it to our country? The president of the bank has told us that most of the State banks exist by its forbearance. Should its influence become concentered, as it may under the operation of such an act as this, in the hands of a self-elected directory whose interests are identified with those of the foreign stockholders, will there not be cause to tremble for the purity of our elections in peace and for the independence of our country in war? Their power would be great whenever they might choose to exert it; but if this monopoly were regularly renewed every fifteen or twenty years on terms proposed by themselves, they might seldom in peace put forth their strength to influence elections or control the affairs of the nation. But if any private citizen or public functionary should interpose to curtail its powers or prevent a renewal of its privileges, it can not be doubted that he would be made to feel its influence.
There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing. In the act before me there seems to be a wide and unnecessary departure from these just principles".
But seemingly unbeknownst to Jackson, moves were already afoot behind his back. The European House of Rothschild was making quiet inroads into US infrastructure. From Rothschild’s own archives:
"The first established links between N. M. Rothschild and the United States date back to 1821 when the bankers R. & J. Phillips in Philadelphia became agents for NMR business in the USA. Phillips were the first in a series of agents who were used to develop NMR’s business interests in the country and correspondence from them can be found among the records of the Correspondence Department.
From the Bank’s accounts it is clear that by the end of the 1830s substantial and wide-ranging investments had been made in municipal and State stock, in canal and mining shares and in finance houses. The main activities carried on through the agents were in the fields of bullion and bills of exchange.
In 1833 NMR entrusted the New York banking house of J. L. & S. Josephs & Co. with the representation of its business interests in that city. The firm worked in conjunction with R. & J. Phillips.
In the following year, 1834, NMR succeeded in obtaining the business of undertaking the United States Government’s banking interests in Europe, hitherto in the hands of Barings.".
Slowly, quietly and surely, the European banking interests continued to set up their agents in various industries and financial houses. But was this part of a long-term plan – or simply business?
next: – Civil War, Greenbacks and the rise of corporate government.