44-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 used it to create 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, Alexander Hamilton drafted a constitution for the 1st Bank of the United States, and all of Mayer’s people agreed on the rules and regulations that were to govern it. During the time the bank was headquartered in Philadelphia, eight branches were created, one in each of Baltimore, Boston, Charleston, and New York in 1792, and four more in each of Norfolk in 1800, of Washington in 1802, of Savannah in 1802 and of New Orleans in 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. As we have seen in a previous blog, 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 26 more branches were opened almost immediately 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)

 

When members of Congress again refused to renew the bank’s charter in 1836, it no longer mattered, for it was the perfect excuse to open the West at breakneck speed. The 2nd Bank of the United States with all its branches remained the unofficial national bank, while many ruthless individuals sought wealth and power by creating banks 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 unofficial 2nd Bank branches. These banks 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, or perhaps more accurately, because of the Wildcat Banking years.

In the 1860’s, the South was out of economic sync with the rest of the country, and that had to be put right if the Manifest Destiny dream was to become a reality. Before the Civil War, huge amounts of credit from the City and its affiliates in Holland and Germany started flowing into the country in order to give the North and the South the means to wage war. 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 proceeded to do. War ensued as planned, and the South was completely destroyed. Thereafter, the carpetbaggers loaded with cash invaded the South, while railroads were being built in a frenzy from coast to coast. Soon, Congress, tired of financial bedlam, signed the National Bank Act in 1863. Congress had had no choice but to seek loans from the well-established unofficial 2nd Bank network whose currency was the US dollar which was tied to the gold in the City, thus re-instating the dollar as the national currency in the process. Although businessmen and politicians continued to ignore the reality of international financial control by the City, and to distrust bankers, they just knew it was the most reliable and sound financial arrangement possible.

In 1913, the Federal Reserve Bank was created by Congress. Its shareholders were the Rothschild Bank of London, the Rothschild Bank of Berlin, the Warburg Bank of Hamburg, the Warburg Bank of Amsterdam, the Lazard Brothers of Paris, the Israel Moses Seif Banks of Italy, the Chase Manhattan Bank of New York, the Goldman Sachs Group of New York, the Lehman Brothers of New York, and the Kuhn Loeb Bank of New York.

All these banks were privately owned or backed by the City bankers who held huge quantities of gold bullion in its vaults. Although the FED became the executive arm of world financial power, that power remained in the hands of those who had all the gold, the City bankers. Since 1810, the daily price of gold has been fixed by the Rothschild Bank in the City, in London. In 1913, when the gold price started being fixed in US currency, the dollar became as good as gold.

Democracy is a system that encourages elected representatives of the people to borrow from the private central bank of their country in order to get things done before taxes are collected. Democracy is based on this human foible, for if a country is not indebted, control is lost, and democracy can’t exist. 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 his son Nathan who overpowered the Bank of England in the City in 1810 and laid the groundwork for universal credit as we know it today. Since then, the secret has been to buy all the gold bullion being mined around the world, in complete anonymity, and then putting it to good use by just letting it sit in a nice neat pile in a secret place.

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