35-MEXICAN-AMERICAN WAR

Establishing the US-Mexican border was accomplished in two stages. The first stage was when the City helped the Mexicans achieve their independence from Spain in 1821 by having the Americans and English give them a helping 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, the English Loyalists, and the many disgruntled natives 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 had become a reality. America was now a predominantly white, English-speaking and Protestant country from coast to coast, with Canada to the north and Mexico to the south. Getting the Spanish speaking population on American soil to choose US citizenship instead of being sent south of the border and losing their property was a no-brainer,  and as for the recalcitrant natives they were forcefully 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-Mexicans were gone, Lionel in the City 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 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.

Advertisements

34-WILDCAT BANKING

Mayer created the Bank of North America in 1781, and when he sent his son, Nathan, to take over the Bank of England in 1798, the two banks necessarily merged under one roof. The City was henceforth the head office of world finance, and it was directed by Nathan. In 1810, he was already setting the price of gold for the whole world. As of that moment, the American monetary system and that of England were controlled by one man and his dynasty, and it remains so to this day.

There were, however, a few bumps in the road. When the 20-year charter for the 1st Bank of the United States was about to run out in 1811, hostility to private banking in the US was at a peak. Under the influence of hot-heads like Andrew Jackson, James Madison, the President, agreed not to renew the bank’s charter. A year before, in 1810, Nathan 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 ‘international moneylenders’ had that kind of power, 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.

In early 1812, the English Navy started harassing the American merchant marine by impressing 10000 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 the bank created by Nathan’s father, the Bank of North America-cum-1st Bank of the United States, no longer officially 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, English troops 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. 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, of course. If the dynasty of bankers in 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, they would let ambitious men open banks, claim land, prospect for gold, drill for oil, and do all the ground work so to speak. 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 1836 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 required his attention. The most pressing one was getting the Spanish-Mexicans to move south of the Rio Grande 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 the Spaniards’ 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 be sure, globalization was very much on Nathan’s mind when he officially 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.

25-REAL ESTATE SCAM

 

In 1789, upon hearing that Benjamin was feeling poorly, Mayer decided to go to America with his three teenage sons, Amschel, Salomon and Nathan. The last time he had travelled to the new world was in 1785, following Haym’s death. On this trip, he wanted the boys to get a feeling for this wondrous new country, but above all, he wanted the boys to meet Benjamin Franklin. Unfortunately, Benjamin being old and in poor health, they arrived too late.

But business went on. Mayer met with Moses Hayes in Boston, Ephraim Hart in New York and the Gratz Brothers in Philadelphia. Robert Morris who had done such a superb job as head of the Bank of North America and Superintendent of Finance had passed on the torch to his young protégé, Alexander Hamilton, who was now Secretary of the Treasury. Alexander was a true prodigy and was handling the young nation’s finances brilliantly. When Mayer met with Robert Morris, he told him how satisfied he was with their work and that he was henceforth free to use his own good judgment in the running of the country’s finance. Of course, Robert was expected to consult with Alexander, Moses, Ephraim and the Gratz Brothers if urgent matters came up, and directly with Mayer in Frankfurt if he deemed it necessary.

He then met with Washington in his magnificent renovated Mount Vernon estate and congratulated him on his election victory. He assured him that since trade and commerce was developing at breakneck speed, he and his political supporters would continue receiving unlimited funding in order to carry out their mandates as they saw fit.

Next, he met with Alexander Hamilton and congratulated him on getting George Washington elected. He also told him how impressed he was with the work he and Robert Morris were doing. He then brought up the subject of the Bank of North America charter that was expiring in 1791. Hamilton was way ahead of him on that one, for a first draft of the 1st Bank of the United States of America charter that was to run for another twenty years was already being circulated and was meeting with very little opposition. Mayer was indeed impressed by this young man.

The states were developing by leaps and bounds, Mayer’s people were rich and getting richer, and his bank’s charter was about to be renewed for another twenty years. There was absolutely nothing for Mayer to worry about. He always treated his collaborators as equals, and always made sure they had enough money to reach any goal or satisfy any whim without their having to ask Mayer. People don’t necessarily like being on a string, but severing a link to such bounty is unthinkable, especially when it’s so easy to forget the string exists. One thing was certain, America and his bank could look forward to twenty years of peace and prosperity.

The only matter that needed immediate attention was getting permanent residences for the President and Congress. Mayer agreed that having the federal capital at the head of the Potomac River was the best choice since the area was slightly in the southern portion of the new nation, and strategically well-protected. Having an executive building for the President and his staff separate from that of the people’s representatives was deemed important as well. However, although the constitution, drafted by Hamilton, Madison, and Jefferson who had just come back from Paris, had been submitted the year before, some states were still holding back. Nonetheless, Alexander was certain the US Constitution and the Compromise of 1790 would be accepted, and would lead the way in the creation of a strong federal state.

Before setting sail for the trip home, Mayer and his boys decided it would be a good idea to go by way of Paris, in order to see what was happening in France. Mayer was anxious to know how much gold bullion his real estate operations were generating. When they arrived in Amsterdam, they took a Thurn and Taxis mail coach in order to avoid problems with the French authorities. Mayer had written ahead to David Schiff, Moses Montefiore, Gabriel Julien Ouvrard, and the Goldsmid Bros. convening them to a meeting in Paris.

The meeting took place in Gabriel’s mansion in Paris, and since it wasn’t a good idea to display wealth at that time, they kept the meeting low key which suited everybody. Mayer and the boys listened with the greatest attention as they were briefed on the state of the real estate sales and on the latest developments of the ongoing revolution.

The counterfeit assignats printed by Johannot were being circulated undetected, and Ouvrard’s agents, Huguenots working out of the lodges of the Grand Orient of France, were having no trouble buying the prodigious properties as they were put up on the auction block. Ouvrard and his agents flipped the properties to anxiously waiting French buyers with the help of Cambacérès’ law firm that was always on hand to do the necessary legal work. The word had gotten around that gold could be used to buy the properties at a reduced price, and the wealthy buyers were queuing up. For instance, if a buyer personally purchased confiscated Church property at auction, he had to use assignats which he had to buy at face value from the government. By purchasing a property worth a 100 million pounds at auction, he needed to buy 100 million pounds’ worth of assignats at face value. But if he bought the same property from Ouvrard, he would only need to have 50 million pounds in gold.

As the sales were completed, Ouvrard had the gold transported to Paris by Thurn and Taxis. The gold was then shipped down the Seine to Le Havre where a waiting Baring ship from the East India Company took it to London where it was deposited in the Goldsmid Bros. vaults in the City. Montefiore in London made sure everything went smoothly at that end. So far, there had been no hitches and the elite group assembled in Paris didn’t foresee any. Mayer’s boys were in admiration of their father who had set up such a marvelous scam where no one was harmed that hadn’t been already.

Mayer and the three boys left Paris in good spirits, except for Nathan who was complaining about not being allowed to go and witness the demolition of the Bastille prison. In order to humor Nathan, Mayer talked about plans for the family as it pertained to London. Soon, he would need to have one of his sons take charge of family affairs in the City. It was a foregone conclusion that Amschel, the eldest son, would be the future head of the family and remain in charge in Frankfurt, and that Salomon was to go to Vienna to supervise the massive banking operations in the loosely united Holy German Empire. As for London, since Nathan spoke English best, he would be sent to the City when he reached 21. That definitely took Nathan’s mind off the Bastille.

When Mayer got back to Frankfurt, the first thing he did was sit down with his wife Gutle and acquaint her with the latest American and French developments. All was going as planned in America, and there wasn’t much to add to what she already knew. Though Benjamin’s passing had been deeply felt by Mayer, business carried on as usual. The 1st Bank of the USA was about to receive a 20-year charter, and the buildings housing the President and Congress were to be built at the head of the Potomac River. With Morris and Hamilton at the helm, things were going fabulously well.

In France, however, it was another matter. The year before, in 1789, the Illuminati had financed a meeting of provincial representatives who had been either named or elected in order to draw up lists of grievances in view of bringing them to the King’s attention. When they congregated in Versailles, the clergy and nobility refused to sit in the same room with them, and the King cancelled the meeting. Mirabeau, a great orator, then convinced the people’s representatives to hold a meeting of their own. Naturally, when they declared their body to be the official government of France, the King sent in the National Guard to disband them. Mirabeau then seized the moment, stood up to the sergeants, and the assembly refused to disperse.

Planned famines continued to undermine major French cities, and the Illuminati were using the Palais Royal, the Paris residence of the King’s cousin, the Grand Master of the Orient of France, Louis Philippe d’Orléans, as their center of operations. The courtyard was a meeting place for all the hotheads, lowlifes and unsavory characters attracted by the firebrand speeches. In July of that year, a throng assembled in the courtyard, fired up by the speeches, went and stormed the Bastille, the much hated royal prison. The prison governor was decapitated and his head was paraded through the streets of Paris.

A few weeks later a procession of very odd masculine ladies accompanied by Lafayette’s National Guard went to fetch the royal family in Versailles. Oddly, the royals were brought back to Paris without any intervention on the part of Lafayette and his guard. The royals were put under house arrest, and the newly formed National Constituent Assembly had followed them to Les Tuileries in order to be at the center of power. Because the National Assembly had no source of revenue, its members immediately voted to confiscate and sell church property as planned. They voted to have assignats printed and sold for hard currency, and only those with assignats were to be allowed to buy the confiscated Church property put up at auction throughout France.

When the auctions got going Ouvrard’s agents were already in place and Johannot’s high quality counterfeit bills were being circulated. A number of prestigious properties had already been bought. Ouvrard’s agents having unlimited amounts of assignats had no problem outbidding the French who were quite willing to wait and buy the properties for gold at a discounted price. Ouvrard was directed to ship the gold bullion to the Goldsmid Bros. in the City, in London. Francis Baring, the Chairman of the East India Company in Amsterdam, was charged with conveying the bullion to the Goldsmids, and always had a ship at the ready in Le Havre. The Goldmids were soon the most powerful bankers in England.

Gutle was greatly troubled by the counterfeiting operations, but was happy to hear that the bullion was being stockpiled in the City, as planned by Mayer. She was relieved that nobody knew what Mayer was really worth, for most people didn’t even know he existed. Some knew he was rich, but since he lived in a ghetto, they didn’t know what to make of it. It would have been a far reach for anybody to even think that Mayer controlled the monetary system of the United States of America. In time, the American politicians would question the bank’s origins and wonder who the owners were, but Mayer would maintain total anonymity. People didn’t know that what was best for the bankers was also what was best for the people, and they tended to envy and even revile the bankers. But since there was not much they could do if they didn’t know where to point the finger, that’s the way it would continue to be. As long as everybody was kept guessing concerning the working of the monetary system, and as long as Mayer did what was best for the country, the people would eventually and grudgingly accept the fact that it was the only way democracy could work without ever really understanding what democracy was.

16-WINE AND DENIM

By the end of June, 1773, David in Rotterdam had received and sold several shipments of tobacco and realized a bigger return than anticipated, Jean-Baptiste Willermoz and François Johannot and their wives had come back from the south of France with interesting information along with several bottles of Burgundy wine and several meters of ‘de Nîmes’ cloth.

After debriefing Jean and François in his Farhgasse office, Mayer decided to give Gretel, his one and only confident, a full account of their trip. They sat down at the kitchen table, and Mayer started relating the great news Jean-Baptiste Willermoz and François Johannot were bringing back from France.

He first showed her a sample of the cloth. It had one weave of blue thread crossed with a weave of white thread, and the double-weave not only made for an interesting design, but gave it extra durability. Gretel thought the indigo colored cloth was beyond belief and wondered if poor people could afford it.

Mayer answered that it would sell for the same price as Indian or English cotton and last many times longer, so people would flock to buy it. And before Gretel had a chance to make a comment, Mayer reached for a bottle of burgundy wine, one of the many samples brought back by François. He picked up a funny curly piece of metal, drove it into the cork with a screwing motion and pulled the cork out of the bottle neck. He took two glasses, half-filled them, and they drank to their growing family.

Gretel thought the wine was too good to be true, but her mouth dropped upon learning how much money the wine and cloth was going to bring in. Mayer started by explaining that Bouchard in Beaune was to receive a letter of exchange in the amount of £2500, or 1 shilling per bottle of wine once delivered in Rotterdam where David would presell it for 1/6 per bottle. David would give the new willing owners a letter of exchange guaranteeing them 3 shillings per bottle if delivered in New York where Haym would presell it for 4 shillings per bottle. 250000 bottles, or half a shipload, would thus generate a profit of £6000 in Rotterdam and another £12500 in New York City.

With regards to cloth, Dollfus was to receive a letter of exchange in the amount of £12000, or £10 per bolt of denim once delivered in Rotterdam where David would presell it for £12 per bolt. David would then give the new willing owners a letter of exchange guaranteeing them £15 per bolt if delivered in America where Haym would presell it for £17 per bolt. 6000 bolts of cotton, or half a shipload, would generate a profit of £12000 in Rotterdam and another £12000 in New York.

He concludes by repeating that since a work outfit made with denim cloth in America will cost less than one made with English or Indian cotton but last ten times longer, everybody will be fighting to buy it. Likewise, since the best wine in the world will only keep getting better in a bottle, all the bourgeois in America and England will want to fill their cellars with it. He then adds that though the profits appear to be huge, the price for these superb new products is well below what people will be willing to pay.

To help Gretel get over her choc, he starts relating the adventures of François’ party to France. They had started off by taking a river coach to Mainz. After spending a delightful night in a well-appointed inn, they set off the next day for Basel. River coaches were much more comfortable and a faster means of transportation, but only when going downriver, the rest of the time it was best to travel by stage coach. It took them five days by stage coach to reach Basel where friends were waiting for them.

After a day’s rest, they travelled by stage coach to Montbeliard , and from there they continued on by river coach to Chalon-sur-Saone, a town south of Beaune. Having made prior arrangements, a local winemaker whom they hadn’t seen in years welcomed them in his beautiful country estate. The next day, their host introduced Jean-Baptiste and François to Joseph Bouchard, a wine merchant from Beaune. They were told the Givors factory on the outskirts of Lyon was making glass using ovens fired by ground coal. And because glass made with coal as a fuel instead of charcoal was much stronger, and because the glassblowers had started using handheld molds, they now made less fragile and more uniformly shaped bottles more quickly. Because the bottle necks were thickened and had a standard diameter, it was now possible to use a one-size-fits-all cork stopper. Bouchard told them there was plenty of wine available, but getting fifty thousand glass bottles at a time might be a problem. He told them it was best to check with Michel Robichon who was the glassmaker in Givors. As for the corks, the cork slabs could be bought in quantity in Arles, transported to Beaune where they could be suitably shaped. All in all, he thought it was quite a feasible operation, and it would be no problem to fill the bottles with the best wine of the region and cork the bottles in a matter of days. Bouchard was already experimenting with the bottles, and he promised to give them wine samples on their return trip home. If Givors supplied bottles in sufficient quantity and at the expected price, he stated he could get the wine to Rotterdam via Basel for around nine pennies a bottle.

Jean-Baptiste and François were quite excited and were anxious to go to Givors to visit the glass factory and interview Michel Robichon, the owner. They left their wives with family in Lyon and continued on to Givors the following day when they reached the glass factory, they acquainted Robichon with Mayer’s idea of financing regular shipments of bottled wine using the services of Joseph Bouchard in Beaune. They told Michel they had talked to Joseph, and that his only concern was having enough bottles. Naturally, they wanted to see if his factory could supply lots of fifty thousand bottles on an ongoing basis.

Jean-Baptiste and François were happy to hear Michel say that he had just put in a second oven and that a third was on the way. Since one oven supplied enough glass to accommodate four glass masters, and since each master could turn out five hundred bottles a day, it meant that the production would soon be six thousand bottles a day, thirty-six thousand a week or some two million a year.

Michel added one cautionary note. The factory was presently getting its high quality ground coal from Rive-de-Gier, a mine situated fifteen kilometers from Givors. The canal that was meant to transport the coal by barge was not yet completed, and the mine owners had to use mules to bring the coal to Givors. They had some twelve hundred mules in all, with two trains of four hundred mules making a daily turnaround while the remainder rested. With each mule carrying eighty kilograms of coal, it averaged out to a daily supply of around sixty tons. But since most of the coal was destined for the south of France, if he was to add extra ovens, he might not be able to get enough coal. However, he would put a little pressure on the coal mine owners by reminding them that his factory was operating under the Royal Seal, and was to be supplied in priority. But that was down the road. For now, there was more than enough coal to fire up the second oven, and it would take less than two weeks to produce the fifty thousand bottles. He could have molds made with logo indentations in order to identify the wine, and before shipping the bottles to Joseph Bouchard in Chalon-sur-Saone, he would package them in fifty bottle capacity wicker baskets.

Jean-Baptiste and François were happy and wasted no time getting back to Lyon where their wives were waiting. They spent a few days visiting family and friends, but they couldn’t wait to carry on downriver to Arles by water coach. It took them only three days to reach Arles under very comfortable conditions, and from there, it was a very short day trip by land coach to Nîmes where they had written ahead to Jean André, the owner of the cloth factory in Genoa, Italy.

When they finally met with Jean, Jean-Baptiste and François were pleasantly surprised to hear that he had every intention of going ahead with the production of the double-weave indigo cloth. They couldn’t believe it when Jean added that he was planning to move the production of this very promising cloth from Genoa to Mulhouse which was not far from Basel on the Rhine. It was a Huguenot city-state bordering France and the thousands of jobs being created were needed to help the growing economy. It didn’t cost much more to bring the raw cotton and indigo from the Americas up the Rhone instead of to Genoa, and because one of the two rivers that ran through Mulhouse had soft water and was perfect for dyeing cloth, the savings would more than offset the added transportation cost.

There were already fifteen cotton factories and more than two thousand cotton workers in Mulhouse, and with the advent of the flying shuttle, the spinning carding frame powered by a water wheel, two recent inventions developed in England, the cost of producing cotton cloth had dropped while the quality and production had increased dramatically. With the added planned production, Mulhouse would become the biggest cotton manufacturing center in continental Europe, and because the city was independent of France, they weren’t affected by the embargo imposed by France on the production of cotton fabrics. Understandably, since the demand for cotton cloth was exploding, the fabric would no doubt attract high prices for years to come.

Jean told them that his cotton mills would be operational within a few months. He had already bought an existing factory on the Mulhouse riverfront, and the equipment being fabricated by local artisans was likely finished by now. Jean told them his director in Mulhouse would soon be able to deliver twelve hundred bolts of the finished indigo double-weave product to Basel on a regular basis for around £10 per bolt. They confirmed that with Jean-Henri Dollfus, the man running the Mulhouse factory, on their way back to Frankfurt. Dollfus had already received several barges of raw cotton from the French West Indies along with indigo.

Before Gretel had a chance to give vent to her unbelief, Mayer sat down at his desk to write to Joseph Bouchard in Beaune and Jean André in Nîmes telling them he was willing to buy as much product as possible at the agreed price. There was no time to lose for the letters had to be translated by François before being sent on. He was telling Joseph Bouchard to deliver all the grand cru Burgundy wine he could bottle. Mayer would give him a letter of exchange redeemable upon delivery in Rotterdam. He then addressed a letter to Jean André asking him if he would agree to the same financial conditions. Just like with the wine, Mayer would buy all the cloth that could be delivered to David in Rotterdam where the letter of exchange would be redeemed.

Soon, it would be possible to redeem Mayer’s bills of exchange, and even use them as currency, in Frankfurt, Rotterdam and the 13 Colonies, not including the counting houses that would soon open in London and Basel. He had contacted Moses Haim Montefiore in Rotterdam, the friend who had helped David Schiff get settled, asking him if he was interested in running a counting house in London. Moses had replied by return mail that he had been thinking of settling permanently in London, and running a counting house for Mayer in that city was more than he could have hoped for.

By the end of 1773, David was receiving tobacco on a regular basis and he had dispatched the first shipments of Burgundy wine and denim cloth. In both Rotterdam and New York, everything always presold at a price better than anticipated, and Mayer’s counting houses were becoming financial institutions of note. He was now ready for his next venture.

He wrote to Haym asking him to come to Frankfurt as soon as possible. Haym was to first go to Williamsburg in Virginia and introduce himself to as many members of the House of Burgesses as possible in order to see what the political climate was in that very important southern colony. Virginia was the most democratic colony, and its leaders had always been stalwart supporters of the Crown. Nonetheless, die-hard loyalists had started being upset with the English Parliament just like in the colonies up north, and Mayer wanted to confirm that. Haym was to identify any leader who stood out in his opposition to the Crown, preferably someone who was imposing, ambitious and vain.

The very powerful Bank of England, by way of the English Parliament, was treating the 13 Colonies as a parent would a child. Although the pound was the official currency, the Bank of England supplied very little sterling in order to facilitate trade. The colonials were reduced to using tobacco, wampum and the like when they couldn’t get their hands on Spanish dollars. The lack of credit, the unjust rate of exchange between the Spanish dollar and the Pound, the lack of representation in decision making, and the unjust taxes forced upon the colonials by the Mother Country was making for an explosive situation.

Mayer was honest and had enough specie to redeem all the paper he was issuing, and because his counting houses on both sides of the Atlantic used the same conversion rates, his paper was in high demand. In all his counting houses one pound was worth 1 oz. of silver or 1 Piece of Eight, and 1oz of gold was worth 15 oz. of silver. And since the British insisted on a colonial conversion rate of 4 Pieces of Eight to the Pound, it gave Mayer’s counting houses a serious edge over the English. Necessarily, all bills originating from the colonies were expressed in Spanish Dollars, whereas all merchandise coming from Rotterdam was valued in Pounds, as this greatly advantaged the American colonials. Since Mayer’s counting houses only accepted gold and silver as payment, and since Haym was instructed to never exchange Dollars for Pounds, the great disparity in the English exchange rate didn’t affect his counting house.

Mayer’s counting houses were gaining in international status, and he had more than he needed to finance a meeting of the 13 Colonies. The colonies’ representatives would not question the help of Haym Salomon, for it was only natural for a rich friend who profited so much from colonial trade to help out. The Americans would surely gain their independence, and they would look upon Mayer’s counting house as an honest, dependable source of credit, and Mayer would take control of the 13 Colonies’ monetary system just like the Bank of England bankers had done with that of England a century before, but he would do it anonymously through Haym Salomon and Robert Morris.