40-THE FED

In 1768, Haym Salomon, Mayer’s right hand man in America, with the help of another great collaborator, Robert Morris, took charge of the French gold given as an aid package to America and created the Bank of North America in 1781. That sealed the destiny of America, and what a great one it turned out to be.

In 1791, the official and officious stockholders met in Philadelphia to choose board members and decide on rules and regulations for the 1st Bank of the United States. While the Bank was to be headquartered in Philadelphia, it created eight branches, four in Baltimore, Boston, Charleston, and New York in 1792, and four more in Norfolk (1800), Washington (1802), Savannah (1802) and New Orleans (1805).

Its largest customer was the government, and one of the highlights of that relationship was the Bank’s efficient managing of the government’s fiscal affairs with respect to the Louisiana Purchase in 1803. The bank’s notes circulated countrywide and infused a safe medium of paper money into the economy for business transactions. Although the relationship between Mayer’s bank and the government wouldn’t always be a smooth one, due to those who didn’t want a strong Federal Government and who thought bankers were crooks, it would remain steadfast, today’s Federal Reserve Bank being the ultimate proof.

Nonetheless, in 1811, American politicians who opposed Mayer’s bank refused to renew the charter of the 1st Bank of the United States. In retaliation, Nathan, who had by now taken control of the Bank of England in the City, proceeded to ‘teach the impudent Americans a lesson’ by forcing them, in 1812, to wage a costly war. Shortly after the British troops burned down the President’s Residence in 1815, Congress signed a 20-year charter for the 2nd Bank of the United States in 1816, and the latter immediately proceeded to open 26 branches across the country.

 

Augusta, Georgia (1817, closed 1817) – Baltimore, Maryland (1817)

Boston, Massachusetts (1817) – Charleston, South Carolina (1817)

Chillicothe, Ohio (1817) – Cincinnati, Ohio (1817)

Fayetteville, North Carolina (1817) – Lexington, Kentucky (1817)

Louisville, Kentucky (1817) – Middletown, Connecticut (1817)

New Orleans, Louisiana (1817) – New York City (1817)

Norfolk, Virginia (1817) – Portsmouth, New Hampshire (1817)

Providence, Rhode Island (1817) – Richmond, Virginia (1817)

Savannah, Georgia (1817) – Washington, D.C. (1817)

Mobile, Alabama (1826) – Nashville, Tennessee (1827)

Portland, Maine (1828) – Buffalo, New York (1829)

St. Louis, Missouri (1829) – Burlington, Vermont (1830)

Utica, New York (1830) – Natchez, Mississippi (1830)

 

Members of Congress again refused to renew the bank’s charter in 1836, but by this time it didn’t matter. Though the 2nd Bank of the United States was no longer the official national bank, its branches were still very much operational while everyone fought for wealth and position in the new states being created. All the shinplaster money issued by the state banks didn’t in the least affect the banks that constituted the backbone of American finance, the ex-2nd Bank branches. The ex-2nd Bank continued to work as a unit using the dollar that continued to be fixed to the price of gold in the City. It was a standard that the country could depend on, and all the funny money printing state banks had no choice but to stay within range of that standard. So, industrial America developed by leaps and bounds in spite of the Wildcat Banking years.

In the 1860’s, coast to coast railway travel was no longer just a dream, and it was time to bring the south into the Manifest Destiny project, for it had remained completely out of sync with the rest of the country. That’s when huge amounts of credit started coming into the country from the City and its affiliates in Holland and Germany. The cotton economy was on the wane, and the political and financial pressures on the south were great. Pushed to the wall, the south’s only option was to secede, which it did, but the war that ensued completely destroyed it. Thereafter, the carpetbaggers loaded with cash revamped the south, railroads were built in a frenzy from coast to coast, and Congress, tired of financial bedlam, signed the National Bank Act in 1863. During the war, Congress had had no choice but to seek loans from the well-established national banking network, and at the first opportunity, it re-instated the dollar as the national currency. The Bank of North America, a voluntary misnomer on my part, and the Bank of England have been welded together since 1810, and although businessmen and politicians still don’t face up to the reality of international financial control by the City, and though they distrust bankers, they just know it is the most reliable and sound financial arrangement possible.

In 1913, the Federal Reserve Bank was created by Congress. Its shareholders were the Rothschild Bank in the City, in London, the Lazard Brothers Bank of Paris, the Israel Moses Seif Bank in Italy, the Warburg Bank of Hamburg and Amsterdam, the Lehman Brothers of NY, the Kuhn, Loeb Bank of NY, the Goldman, Sachs of NY, the National Bank of Commerce /Morgan Guaranty Trust of NY, the William and David Rockefeller & Chase National Bank of NY. All these banks were privately owned and tied to the huge quantities of gold bullion that Mayer’s banking dynasty in the City had accumulated.

Democracy is a system whereby elected representatives of the people borrow from the private central bank of their country. The system has worked flawlessly since 1694, giving mankind order and prosperity in the process. However, we should be especially grateful to Mayer who created the Bank of North America in 1781 and established international banking. He did it by accumulating gold bullion in great quantity and in complete anonymity, and then putting it to good use by just letting it sit in a neat static pile for all time.

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