Title : Chapter Six ABRAHAM LINCOLN: LAST PRESIDENT TO FIGHT THE MONEY POWER: The Federal Reserve Conspiracy by Antony C. Sutton from archive.org
link : Chapter Six ABRAHAM LINCOLN: LAST PRESIDENT TO FIGHT THE MONEY POWER: The Federal Reserve Conspiracy by Antony C. Sutton from archive.org
Chapter Six ABRAHAM LINCOLN: LAST PRESIDENT TO FIGHT THE MONEY POWER: The Federal Reserve Conspiracy by Antony C. Sutton from archive.org
Chapter Six Abraham Lincoln: Last President to fight the money Power
Abraham Lincoln was the last of several populist presidents
to fight against the money monopoly. Lincoln from the very
beginning of his Administration faced a heavy burden of
financing the Civil War with a monetary system under private
control. During the Civil War the Union government was
hardpressed to raise sufficient funds to pay troops, there was a
shortage of coin and the private banking system was unwilling to
meet the needs of the Union Army without personal gain.
Lincoln was in the Jeffersonian-Jacksonian tradition. This
tradition reserved the right to issue currency to the Federal
Government and argued that this right could not lawfully be
transferred to a private monopoly. In 1862 Lincoln presented to
Congress a bill to make United States notes full legal tender and
so enable the Federal Government to print sufficient paper money
to finance the Civil War. Presumably while Lincoln did not
envisage the inflationary potential in expanding the government's
spending power there is little question that his financial program
was intended as a means of paying off debts and
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The Federal Reserve Conspiracy
government expense without allowing the private money monopoly to
profit from the public purse.
Unfortunately, Lincoln's Secretary of the Treasury, Samuel
Portland Chase, was an ally of the banking interests. During the Civil
War Chase supported Lincoln's monetary policy but later presented
legislation to Congress favorable to the banking interests. Similarly
Senator John Sherman, responsible for Senate passage of financial
legislation, added even more financial power to that already granted the
money monopoly in the form of National Bank legislation.
Lincoln's legal tender bill was reported on February 25, 1862.
This was to issue $150 million of legal tender United States notes. At
that time Secretary Chase commented:
I have a greater aversion to making anything but coin a
legal tender in payment of debt;. ..it is however at present
impossible in consequence of the large expenditure entailed by the
war to procure sufficient coin for disbursements: And it has
therefore become indispensably necessary that we should resort
to the issue of United States notes. (1>
In similar manner Senator John Sherman of Ohio advocated the
measure on the grounds, "in no other way could the payment of the
troops and the satisfaction of other just demands be so economically or
so well provided for."
However this program of a national currency was opposed by the
New York banking interests and Senator John Sherman's advocation did
not, as we shall see later, reflect his true intent. (To be repeated in 1913
by Senator Owen and Congressman Glass who misrepresented their
true positions to the public on the Federal Reserve Act.)
The idea of a national currency was opposed by banking interests,
the money power, because it would obviously remove from bankers the
privilege of issuing an effective
50
Abraham Lincoln: Last President to Fight the Money Power
substitute for money (defined in the Constitution as gold and silver).
What bankers wanted the government to undertake was transfer the
right to issue money to banking interests, i.e., to allow bankers to act as
agents of the Federal Government. The U.S. Government would then
be a perpetual borrower required to borrow funds at interest from a
private money monopoly - which had obtained the monopoly power
from the government itself. Given the restrictions of the Constitution,
banking interests had to tread carefully.
The Clinton Roosevelt (Bank of New York) proposal was to
remove the Constitution, shadowed in the late 20th century by the
Trilateral Commission pleas that the Constitution is outdated.
Moreover the public itself, apart from Constitutional limits, would
hardly agree to a private money monopoly if the truth were to be widely
known. So we find from the time of Jefferson to the 1990s that any
discussion of a private money monopoly is quickly and thoroughly
suppressed. Nothing is more dangerous to the power of the elite than
the public discovery and understanding of the private control of money
supply.
What the bankers wanted in the 1860s was for the government to
issue interest-bearing bonds. These bonds were to be used as the basis
of bank credit. While Lincoln pushed his legal tender act the bankers
met to draft what became the National Bank Act of 1863.
The purpose of the National Bank Act was to give control of the
money issue to bankers. This monopoly could be used for profit and
with the Civil War, profits would be substantial.
The difference between Lincoln and the money power was
essentially whether the medium of exchange (convertible bank notes
and inconvertible bank credit transferred by check) was to be created
and issued by
51
The Federal Reserve Conspiracy _
private monopoly or government monopoly. In other words, whether
the power of government is subordinate to a banking elite or bankers
subject to the power of government which, if Congress did its job
honestly, also means subordinate to the power of the people.
An extraordinary letter from Senator John Sherman to Rothschild
Brothers in London dated June 25, 1863 (and leaked on Wall Street in
1863) demonstrates the double dealing of even "prominent" and "well
regarded" politicians.
Sherman saw a chance to curry favor with the preeminent world
bankers of the time and personally brought the possibilities of the
proposed National Banking Act to the attention of international bankers.
On the following pages we reproduce a letter from Rothschild
Brothers (London) to Ikleheimer, Morton and Vandergould (Wall
Street, New York) acknowledging receipt of a Sherman letter and
relaying its contents. These bankers reply to Rothschild Brothers on
July 6, 1863, with details of the National Banking Act and some
insights into the character of Senator John Sherman.
London, June 25, 1863;
Messrs. Ikleheimer, Morton and Vandergould No. 3, Wall St., New
York, U.S.A.
Dear Sirs:
A Mr. John Sherman has written us from a town in Ohio,
U.S.A., as to the profit that may be made in the National Banking
business, under a recent act of your Congress; a copy of this act
accompanies this letter.
Apparently this act has been drawn up on the plan
formulated here by the British Bankers Association, and by that
Association recommended
52
Abraham Lincoln: Last President to Fight the Money Power
to our American friends, as one that if enacted into law, would prove
highly profitable to the banking fraternity throughout the world.
Mr. Sherman declares that there has never been such an
opportunity for capitalists to accumulate money as that presented by
this act. It gives the National Bank almost complete control of the
National finance. "The few who understand the system," he says, "will
either be so interested in its profits, or so dependent on its favors that
there will be no opposition from that class, while on the other hand, the
great body of people, mentally incapable of comprehending the
tremendous advantages that Capital derives from the system, will bear
its burden without complaint, and perhaps without even suspecting that
the system is inimical to their interests....
Your respectful servants Rothschild
Brothers
New York City
July 6, 1863
Messrs. Rothschild Brothers,
London, England.
Dear Sirs:
We beg to acknowledge receipt of your letter of June 25, in which
you refer to a communication received of Honorable John Sherman of
Ohio, with reference to the advantages and profits of an American
investment under the provisions of the National Banking Act.
Mr. Sherman possesses in a marked degree the distinguishing
characteristics of a successful
53
The Federal Reserve Conspiracy
financier. His temperament is such that whatever his feelings may
be they never cause him to lose sight of the main chance.
He is young, shrewd and ambitious. He has fixed his eyes
upon the Presidency of the United States and is already a member
of Congress (he has financial ambitions, too). He rightfully thinks
that he has everything to gain by being friendly with men and
institutions having large financial resources, and which at times
are not too particular in their methods, either of obtaining
government aid, or protecting themselves against unfriendly
legislation.
As to the organization of the National Bank here and the
nature and profits of such investment we beg leave to refer to our
printed circulars enclosed herein, vis:
"Any number of persons not less than five may organize a
National Banking Corporation.
"Except in cities having 6000 inhabitants or less, a National
Bank cannot have less than $1,000,000 capital.
"They are private corporations organized for private gain,
and select their own officers and employees.
"They are not subject to control of State Laws, except as
Congress may from time to time provide.
"They may receive deposits and loan the same for their own
benefit. They can buy and sell bonds and discount paper and do a
general banking business.
54
Abraham Lincoln: Last President to Fight the Money Power
"To start a National Bank on the scale of $1,000,000 will require
purchase of that amount (par value) of U. S. Government Bonds.
"U. S. Government Bonds can now be purchased at 50%
discount, so that a bank of $1,000,000 capital can be started at this
time for only $500,000.
"These bonds must be deposited in the U.$. Treasury at
Washington as security for the National Bank currency, that will be
furnished by the government to the bank.
"The United $tates Government will pay 6% interest on the bonds
in gold, the interest being paid semi-annually. It will be seen that at the
present price of bonds the interest paid by the government itself is 12%
in gold on all money invested.
"The U.$. Government on having the bonds aforesaid deposited
with the Treasurer, on the strength of such security will furnish
National currency to the bank depositing the bonds, at an annual
interest of only one per cent per annum.
"The currency is printed by the U.$. Government in a form so like
greenbacks, that the people do not detect the difference although the
currency is but a promise of the bank to pay.
"The demand for money is so great that this money can be readily
loaned to the people across the counter of the bank at a discount at the
rate of 10% at thirty to sixty days time, making it about 12% interest on
the currency.
"The interest on the bonds, plus the interest on the currency which
the bonds secure, plus inciden-
55
The Federal Reserve Conspiracy
tals of the business, ought to make the gross earnings of the bank
amount to from 28% to 33-1/3%.
"National Banks are privileged to increase and contract
their currency at will and, of course, can grant or withhold loans
as they may see fit. As the banks have a National organization and
can easily act together in withholding loans or extending them, it
follows that they can by united action in refusing to make loans
cause a stringency in the money market, and in a single week or
even a single day cause a decline in all products of the country.
"National Banks pay no taxes on their bonds, nor on their
capital, nor on their deposits. "
Requesting that you will regard this as strictly
confidential....
Most respectfully yours,
Ikelheimer, Morton and Vandergould (3)
It was particularly important to international bankers that they
succeed with Lincoln. If Lincoln implemented public control of finance
in the United States then other nations would pluck up courage to strip
financial power from their bankers.
European bankers, especially those in England, organized against
Abraham Lincoln and used commercial banking channels to pressure
bankers in the U.S. for support. The Legal Tender Bill wanted by
Lincoln was subjected to intense lobbying in Washington and so loaded
with amendments as to become useless. One amendment required that
interest on bonds and notes - mere pieces of paper - was to be paid
twice a year in gold coin. Suffocation by ridiculous amendments was
successful. Defeat of the Legal Tender Bill was followed in 1862 by a
bill to allow banks to issue private bank notes less than $5.00 within the
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Abraham Lincoln: Last President to Fight the Money Power
pistrict of Columbia, a first step towards a privately controlled fiat
money supply.
On July 23, 1862 Lincoln vetoed the Private Bank Note Bill on
grounds that it was the responsibility of the Federal Government to
provide a circulating medium and that United States notes could
equally fulfill the function of small private notes. This veto was
Lincoln's challenge to the banking interests.
Lincoln was a caustic critic of bankers. A delegation of New York
bankers came to Washington to lobby in favor of the Legal Tender Bill.
The Secretary of the Treasury introduced the delegation as follows:
These gentlemen from New York have come to see the
Secretary of the Treasury about our new loan. As bankers they are
obliged to hold our national securities. I can vouch for their
patriotism and loyalty, for, as the Good Book says, "for where the
treasure is, there will the heart be also. "
Lincoln replied: There is another test that I might apply,
"Wherever the carcass is, there will the eagles be gathered together."^;
Lincoln's national currency scheme was in direct opposition to the
international bankers who at that time planned to extend the Bank of
England gold standard private money to the United States. Later in the
20th century bankers went for fiat money not backed by gold but in the
mid- 19th century the gold-silver system offered more opportunities for
personal gain.
Lincoln was proposing that instead of the Federal Government
borrowing paper or created money from the bankers that the bankers
borrow coin or gold from the Treasury. In this way the banking interest
would be unable to create fictional wealth from the printing press.
57
The Federal Reserve Conspiracy
The National Bank Act was presented to the United States
as a device to raise money to run the Civil War and achieve
financial stability. Under the Act any five persons could form a
bank with a capital of $50,000 or more. After deposit in the
United States Treasury of interest-bearing bonds equal to one-
third of the paid-in capital, the Government would print National
Bank certificates on behalf of the bank to the amount of 90
percent of the part value of the bonds printed.
These National Bank certificates could then be used by the
bank to carry on banking business and receive full profit on them
as though they were the bank's own notes. Furthermore the bank
received from the Federal Government interest payments in gold
coin on bonds deposited in the Treasury.
In other words the bankers had a double profit. First, interest
on government guaranteed money issues and second, interest paid
on bonds in gold. The National Banking Act was a guaranteed
profit making machine for anyone who wanted to get into
banking.
Once again the Jeffersonian-Jacksonian tradition raised its
voice. It claimed that the National banking system would create
an even greater centralization of the money power than the Bank
of the United States - which Andrew Jackson had vetoed.
This time around the money power was much more
organized. The National Banking Bill was in the Senate only three
or four days and in the House only two days before it was rushed
through at a particularly critical time in the Civil War. The Bill
was signed into law by President Lincoln on February 25, 1863.
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Abraham Lincoln: Last President to Fight the Money Power
Endnotes to Chapter Six
(1) Letter from Secretary of the Treasury Chase to Elbridge, G.
Spaulding, January 29, 1862. Quoted in American Nation History
Series, 1861-1863 by Hosmer, vol. 20, pg. 169.
(2) John R. Elsom, Lightning Over the Treasury Building (or an
expose of our banking and currency monstrosity, Americas most
reprehensible and un-American racket), (Boston: Meador
Publishing Co., 1941), pp. 51-52.
(3) Op. cit. pp. 53-55.
(4) Ibid.
59
Chapter Seven:
THE MONEY TRUST CREATES THE FED
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