35-MEXICAN-AMERICAN WAR, 1846

Establishing the US-Mexican border was done in two stages. The City first helped the Mexicans achieve their independence from Spain in 1821 by having the US and England give them a hand. The Mexican-American War of 1846 was the second stage. That’s when Lionel, Head of Mayer’s dynasty in the City, decided to get the US Congress to send an expedition of US troops to Mexico. It was a simple plan. Congress would send US troops to occupy Mexico City in order to force Mexico to relinquish its claims with regards to Texas and other parts of the south. The troops would remain there until the Mexicans cried uncle, and signed the Treaty of Guadalupe Hidalgo.

The treaty called for the U.S. to pay $15 million to Mexico and to pay off the claims of American citizens against Mexico up to $3.25 million. It gave the United States the Rio Grande as a boundary for Texas, and gave the U.S. ownership of California and a large area comprising roughly half of New Mexico, most of Arizona, Nevada, and Utah, and parts of Wyoming and Colorado. Mexicans in those annexed areas were ordered to be removed from their homeland unless they declared loyalty to the US government. Over 90% chose to pledge loyalty in exchange for not losing their homes.

The border keeping the French Catholics and the English Loyalists north of the 49th parallel was defined by the Oregon Treaty of 1846. After drawing a straight line along the 49th parallel in the north, and another along the Rio Grande extending to the Pacific Ocean in the south, the Manifest Destiny concept became a reality. America was a white, English-speaking and Protestant country from coast to coast, with Canada to the north and Mexico to the south. The US Spanish speaking population chose to become Americans, and the recalcitrant Indians were relocated on reserves.

In America, the first locomotive was built in 1830, but transportation remained limited to steam boats, canals, rudimentary roads and short rail systems east of the Mississippi. The Oregon Trail had become a very primitive way to go west after the Louisiana Purchase, but that didn’t favor California. Now that the Spanish administration and troops were on their way back to Spain, Lionel, head of the City banking dynasty, found the ideal way to populate California with ‘Americans’. He had been waiting for this moment to start a gold rush. He had known there was gold in California, and since the telegraph had been clicking away throughout America and Europe since 1844, it was just a matter of letting everybody know there was a lot of gold waiting to be picked up off the ground in California. Some 300 000 individuals moved in, easily displacing, when not massacring, the native populations, and overwhelming the Catholic Spanish speaking population. California went straight into statehood. As a bonus, close to 4000t of gold was produced, bought up, and stockpiled in the City’s vaults.

34-WAR OF 1812

The media did prove to be the powerful force that it was meant to be, but it wouldn’t have happened as quickly and worked as efficiently if the City had not consistently maintained its control of the American monetary system.

When Mayer’s son, Nathan, opened his bank in the City in 1810 and started setting the price of gold for the whole world, that’s when the seeds of globalization were sown. As of that moment, the American monetary system and that of England were controlled by one man, notwithstanding the fact that there was a lot of opposition to central banking in America.

In 1810, the year before the charter for the 1st Bank of the United States was to run out, hostility to private banking in the US was on the rise. Under the influence of hot-heads like Andrew Jackson, James Madison finally agreed not to renew the bank’s charter in 1811. Back in 1810, Nathan Rothschild had seen the problem coming and had issued an ultimatum: “Either the application for the renewal of the charter is granted, or the United States will find itself involved in a most disastrous war.” Madison and Jackson did not realize that the power of the ‘international moneylenders’ could extend that far, and they didn’t alter course. After declaring that he would teach the impudent Americans a lesson and bring them back to colonial status if they didn’t renew the bank charter, he proceeded to do just that.

Around 1812, the English Navy started harassing the American merchant marine by impressing 10 000 American sailors into her Majesty’s service. It was an intolerable situation, and President James Madison was forced to declare war on the English, a war he could ill afford, especially, since officially, Nathan’s bank, the 1st Bank of the United States, no longer existed. Nathan’s plan was to force the United States to fight a war and sink them deeply into debt. After the US declared war against England on June 18, 1812, the English military forces moved into Canada.

The English kept close to the waterways. They went up the St. Lawrence and the great lakes right up to Fort Erie and Detroit. They went up the Richelieu River to Lake Champlain, and blockaded all the ports they could along the Atlantic coast as well. All in all, it was a small war of attrition that cost the Americans dearly. When the English burned down Washington DC on August 24, 1814, it was a determining moment. The Treaty of Ghent was signed on December 24, 1814, and the US Senate ratified it on February 16, 1815. All territory went back to its original owners, and there wasn’t much mention of anything else of importance. The real results were unofficial and never linked with that treaty. The 20-year charter for the 2nd Bank of the United States was signed on April 10, 1816. And since the President’s residence in Washington DC had been burned down, it would now be known as the White House because of the white paint used to cover the traces of the recent fire. Lastly, the people of Upper and Lower Canada had a new sense of identity.

When the second charter for the 1st Bank of the United States came up for renewal in 1836, President Andrew Jackson vetoed it. If the City, contrary to 1812, didn’t insist on getting the charter renewed at this time, it was because of the possibility of making a silk purse out of a sow’s ear. After completing the Louisiana Purchase in 1803, the West had naturally opened up. Now, in 1836, thirty years later, the City bankers decided it was time to let America expand at breakneck speed, a period that would become known as the Wildcat Banking Years.

The modus operandi was simple. During the period of 1836 to 1863, ambitious men of all kinds would open banks, claim land, prospect for gold, drill for oil, and do all the hard work generally. The frenetic development that ensued was like riding a bronco, it was definitely wild, but it was OK because the rodeo was taking place in a controlled corral. In other words, the dollar used by the defunct but still operating 1st Bank of the United States and its affiliates on the east coast was tied to the English pound which was tied to gold, and all the funny money being printed in the emerging American States had to be more or less pegged to the dollar. The shinplasters, as the state currencies were called, were meant to fail just like the Continental currency had during the War of Independence. When the time came and everybody cried for more financial stability, the dollar would again be officially re-instated throughout the country.

In 1863, Congress passed the Banking Laws Act, and the dollar became the official currency in all the States. Key industries working in the US dollar financial zone had prospered, and their tentacles reached across the entire nation. The oil industry, the railroads, the steel industry and industrial America generally, were run by men like Westinghouse, Carnegie, Morgan, Rockefeller, while the Lehmans, the Kuhns, the Loebs, etc. ran the branches of the defunct 2nd Bank of the United States. The Federal Reserve Board would have to wait until 1913.

During the Wildcat banking years, from 1936 onwards, Lionel, Nathan’s son, who had become head of the family dynasty in the City, was satisfied to let the American West open up in a free-wheeling manner. He had three other worldly matters that more attention. The most pressing one was getting the last European power, Spain, to leave America in order to establish a permanent southern US border. The French administration along with its military had left America in 1763, that of England in 1783, and now it was Spain’s turn. Once that was accomplished, the Manifest Destiny concept would be realized. Lionel would then populate California with Americans, and he already had an idea on how to do it.

The other two matters were opening Japan and getting it to help unite China by invading it and getting rid of the Chinese warlords, and the other was to give France political stability by bulldozing its center of power, Paris, and transforming it into the City of Lights. The building of democracies in the ancient lands of Europe with old political regimes would not happen overnight, and it was best to get started as soon as possible. The Chinese and Indian democracies would be easy enough to establish, but Europe would take a very long time to unite. To be sure, globalization was very much on Nathan’s mind when he established the family dynasty in the City, in 1810, and took control of international finance, but it didn’t get going until Lionel took charge in 1836.