The pre-Revolutionary United States enjoyed a prosperous and growing economy. Benjamin Franklin captured the economic essence of his time with succinct and memorable lines: “a penny saved is a penny earned,” and “he who goes a-borrowing goes a-sorrowing.” Franklin provided more in-depth analysis in his autobiography: “In the Colonies we issue our own money. It is called Colonial Script. We issue it in proper proportion to the demands of trade and industry to make the products pass easily from the producers to the consumers. In this manner, creating for ourselves our own paper money, we control its purchasing power, and we have no interest to pay to no one." – Benjamin Franklin.

Colonial Script was made illegal by the Currency Act of 1764. The Bank of England assumed control of currency for the colonies, and the Bank of England imposed usury, and the crown imposed taxes. Economic depression resulted. Franklin explained what happened next: "In one year, the conditions were so reversed that the era of prosperity ended, and a depression set in, to such an extent that the streets of the Colonies were filled with unemployed.  The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction. The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the prime reason for the Revolutionary War."

This is a remarkable quote from one of America’s founding fathers. School kids are taught the story of the Boston Tea Party and the rallying cry for the American Revolution was taxation without representation; true but incomplete. There never would have been a problem with taxation without the loss of control of the Colonial currency. The “little tax on tea” was nothing compared to the usury of the Bank of England.  Inflation and the debasement of currency destroy economies; taxation can slow an economy but it can also provide necessary governmental services. Modern day tax protesters don’t see the big picture. They will never control taxation without first controlling the currency. The loss of control of a currency is the gaping, oozing wound; taxation is the salt on the wound.

"Let me issue and control a nation's money and I care not who writes the laws." - Mayer Amschel Rothschild, founder of the Rothschild international banking dynasty.

Many of the founding fathers and leading statesmen were pronounced in their opposition to central banking and usury and debt.

"History records that the money changers have used every form of abuse, intrigue, deceit and violent means possible, to maintain their control over governments, by controlling money and its issuance." – James Madison, on the First Central Bank. Madison was the fourth President of the United States and considered the Father of the Constitution. Two centuries later his words hold true.

“The banking system concentrates and places the power in the hands of those who control it. Never was an engine invented better calculated to place the destinies of the many in the hands of the few, or less favorable to that equality and independence which lies at the bottom of out free institutions.” – John C. Calhoun, two time Vice President, Senator, and Secretary of State. Calhoun understood the power of banks to centralize power and concentrate wealth in the hands of oligarchs.

“I object to the continuance of this bank because its tendencies are dangerous and pernicious to the government and the people. It tends to aggravate the inequalities of fortunes; to make the rich richer, and the poor poorer; to multiply the nabobs and paupers, and to deepen and widen the gulf that separates Dives from Lazarus.” – Thomas H. Benton, US Senator. The income gap and wealth disparity was a concern in the early days of the Republic and those gaps have now grown to extremes.

"If the American people ever allow private banks to control the issue of their currency, the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered." - Thomas Jefferson: “The Debate Over The Recharter Of The Bank Bill”, 1809.

“And I sincerely believe with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale” – Thomas Jefferson in a letter to John Taylor, 1816.

We can’t say the Founding Fathers didn’t warn us.

The first bank of the United States was incorporated in 1781; it failed. The second official First Bank of the United States was incorporated in 1791; despite fierce opposition from several of the Founding Fathers, a charter was granted for twenty years.

When the charter expired in 1811, attempts to renew the charter were defeated. The bankers were persistent and in 1816 a new charter was granted, expiring in 1836. In 1832, President Andrew Jackson ordered funds removed from the Second Bank of the United States and held in safes. Nicholas Biddle, the head of the Second Bank and backed by the House of Rothschild, threatened to throw the country into a depression if the bank’s charter was not renewed. There was a depression, but the charter was revoked by Jackson’s veto. For almost thirty years the United States had no public debt.

 “Events have satisfied my mind, and I think the minds of the American people, that the mischief and dangers which flow from a national bank far overbalance all its advantages.” – Andrew Jackson, seventh President of US.

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal God, I will rout you out!" – Andrew Jackson, speaking to bankers in the White House.

Jackson’s battle against the bank was long and dangerous. There was an assassination attempt that failed. When Andrew Jackson was asked what he considered the greatest achievement of his career he answered without hesitation, “I killed the bank.”

Indeed, a battle for control of money continued. Absent a central bank, the fractional reserve system migrated to state chartered banks. In times of peace there was little need for a central bank; costs could be controlled, but wars are expensive. Wars require huge expenditures, and a central bank can finance those expenditures by producing money out of thin air and then charging interest on the debt. Bankers and war go hand in hand through history; from the Venetians to William and Mary, to the Napoleonic Wars, to the American Revolution, to the Civil War.

Abraham Lincoln addressed the problem of financing the Civil War, and how little control government actually had over the bankers, whom he described as his “greatest foe”. Faced with the bankers’ excessive rates of up to 36% to finance the war, Lincoln opted to print script to pay soldiers. The script was printed with green ink on the back to differentiate it from earlier notes, and was known as greenbacks. By 1863, Congress balked at printing more script and the bankers swooped in. The declaration to establish a central bank to issue debt passed as an emergency war measure. The National Bank Act, first adopted in 1863, provides for the establishment and regulation of national banks. For more than 100 years, that law was interpreted to require that even national banks can only charge interest at the rate allowed by the state in which its customer is located. The loan was confined to war debt and the time of payment was restricted to twenty years. Once debt is established it is difficult to break free. The war debt was extended, or re-funded, and charters were renewed. Bonds were no longer limited to covering war expenses, but were issued in times of peace.

Lincoln’s opposition to the central bank’s financial control was well documented: "Right after the Civil War there was considerable talk about reviving Lincoln's brief experiment with the Constitutional monetary system. Had not the European money-trust intervened, it would have no doubt become an established institution." - W. Cleon Skousen, author.

The Civil War had raised the national debt 25 times over. Lincoln’s second term campaign included promises to repeal the central bank charter and return to the gold standard. Of course, Lincoln was assassinated less than 2 months after his re-election.

The United States suffered through a terrible Depression in the 1870’s as the bankers contracted money supply. When James Garfield was elected president in 1980, he knew the economy was a top priority and he also knew that he would not be in control of the economy. Garfield geared up for a Jacksonian fight against the central bank: "Whosoever controls the volume of money in any country is absolute master of all industry and commerce... And when you realise that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." The fight never got started, as Garfield was assassinated shortly after his inauguration.

While wars are expensive and profitable for financiers, boom and bust cycles can also be profitable; first the prices get pushed higher – all financed – and then the banks can contract the money supply and acquire assets on the cheap: "On Sept 1st, 1894, we will not renew our loans under any consideration. On Sept 1st we will demand our money. We will foreclose and become mortgagees in possession. 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... Then the farmers will become tenants as in England..." – 1891, American Bankers Association, as printed in the Congressional Record of April 29, 1913.

If this tactic seems familiar, it is because it was repeated 117 years later.

The Panic of 1907 was fed by “bucket shops,” where people made bets on a security, commodity or whatever without actually buying or selling it. Unlike their customers, the shops actually owned blocks of stock. If customers were betting that a stock would go up, the shops would sell it and the price would plunge; if bettors were bearish, the shops would buy. In this way, they cleaned out their customers. New York State outlawed bucket shops in 1909, and other states followed suit. It is mentioned here because this is yet another scheme that bankers would resurrect some 90 years later, under the new name “derivatives”.

It was Woodrow Wilson who finally conceded to the demands for a central bank by signing the Federal Reserve Act into law in 1913, a maneuver that effectively passed control of the American monetary system to private interests, the Federal Reserve Bank. The Federal Reserve Bank that currently issues the currency of the United States of America is a private institution whose shareholders are the member banks.  The United States of America does not issue its own currency.

President Wilson broke his campaign promises and signed into law the Federal Reserve Act, with some remorse: "I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation therefore, and all our activities, are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world. No longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men."

And so, with the creation of the Federal Reserve banking system in the United States, usury became the accepted and normal condition. The bankers could now create and lend money. They could appropriate interest and capital. The power of usury now came, not just from charging interest, but creating new claims and appropriating those claims. The bank could create money out of thin air and charge interest:  "The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it. The process by which banks create money is so simple the mind is repelled. With something so important, a deeper mystery seems only decent." - John Kenneth Galbraith, former professor of economics at Harvard, writing in “Money: Whence it came, where it went”.

Most people were not even aware of the change that was coming: "It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning." Henry Ford, founder of the Ford Motor Company.

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