Chapter II
ORIGINS OF OUR MONEY SYSTEM

The only thing a government can do to a problem
is to make it insoluble.
— AUTHOR

The problems of the world today are multifaceted, but if a single factor could be isolated which might be said to have contributed more to our dilemma than any other, it would probably have to be considered money.  We are beset by inflation, repressive and discriminatory taxes, wild and unchecked government spending, erosion of all values on the economic, educational, religious and social fronts.  Yet a single thread winds through these multiple woes.  It is the sinister manipulation of the nation’s economy by a small group of anti-American, privileged, multi-millionaires.  Many of our citizens have too little money, and a very few have too much.  In order for the government manipulators to continually increase their power, they remind the less affluent of their plight and promise solutions in the form of government spending.  This involves money which must be obtained somewhere.  This money is stolen from the productive working and middle classes and squandered on useless, unproductive programs which are only designed to increase government power.  If government spending were the solution, certainly some improvement would have been evident after so many decades of this pretended cure-all.  Government interference will never solve the problems of poverty, inflation, crime, poor education etc.  It only multiplies them.  Government intrusion in all these areas has only intensified problems and complicated matters.  Legislators are attempting to treat symptoms instead of the fundamental malady, which is an unconstitutional and archaic money system which permits the wealth of the nation to be controlled by a handful of monetary manipulators.

Although everybody uses money, very few people have any understanding of its nature.  Most people think of money in terms of coins and paper notes of varying denominations.  To call money a medium of exchange or measure of value is to define its function—not its nature.  Actually money is anything people will accept as money,—from coins to credit cards, from checks to trading stamps.  The subject of money has often been a source of confusion to people throughout history.  Because of this basic lack of understanding, a few wily money-wise manipulators were able to obtain control of its issuance for entire nations.  This group now controls the money-issuing power of all the large, industrial nations of the world and also directs the multiple banking organizations of the United Nations.  The chaos in our World’s monetary systems is a result of the lack of understanding by government officials of the nature, purpose and functions of money.  This lack of understanding enabled the money pool to bribe legislators, judges and government heads to do their unscrupulous bidding, always cloaking their activities in secrecy and an aura of legality.

Our modern money system has its origin in the Middle Ages.  It is for this reason that a brief review of this period is necessary in order to give us a better insight into how our present, privately-owned money cartel developed and what steps we can now take to correct these evils and restore the nation to a constitutional and sound money system.

Throughout all recorded history, some form of exchange has been used.  Everything from shells, animal teeth, stones, feathers, iron bars, wampum, tobacco, metal coins, commodities and even playing cards have been used.  The Romans used a form of metal coinage which was accepted through the ancient world.  Some of those Roman coins were still in use in the Middle Ages in Europe, although often they had been melted down and recast.

With the final disintegration of the Roman Empire, Europe reverted to a purely agricultural state.  The only wealth consisted of the land and its products, and everybody lived directly or indirectly off the land.  Roads fell into disrepair and the imposition of tolls on travelers by towns only tended to add to the burdens of the little commerce that existed.  At the end of the 15th century there were 64 tolls on the Rhine and 77 on the Danube in lower Austria alone.  Because of the bad condition of the roads, travel was mostly by horseback or light, two-wheeled wagons.  It is easy to see how transportation of large items was impossible as larger wagons became mired in mud or broke wheels in the deep ruts.  The difficulties of land travel led to the increased use of waterways, and it was along these routes that the great towns developed in later centuries.

Although towns did not completely disappear during feudal times, they lost their importance and remained largely centers for the administration of Church affairs.  A small local market existed within the town to which the peasants of the surrounding areas brought their produce.  This was largely consumed by the clergy of the cathedral and various churches and the serfs employed by them.  After the dissolution of the Carolingian Empire (768), the old city walls were no longer sufficient protection against the frequent raids and invasions.  This led to the construction of fortified castle;  to which the surrounding population fled during attacks.

These castles, or burgs, were occupied by the noble family, and a garrison of knights and servants.  The villains were required to construct and maintain the castle fortifications.  Barns, graineries and bakeries were set up within the castle to receive the farm supplies which the peasants were required to bring in order to feed those who lived in the castle.  The main characteristic of the Feudal period was that the great estates now functioned as self-supporting units.^[1]

In the earlier Feudal period, life centered around the manor and most of the trading was carried on by barter.  Produce was traded on the spot for other needed items.  But as the towns began to grow in importance, more food and other items were needed.  This necessitated a modification in bartering habits and brought about an increased need for money.

The Crusades were responsible for the stimulation of trade, and a definite increase began around the second half of the 10th century.  Traders would make their appearances in towns or often stop at the castles along the water routes for supplies.  Often they would congregate in the towns and, when the limited space in the towns was overrun, they moved to the outskirts.  With this growing population artisans were attracted to the towns and it became the center for economic activity.  While the aristocracy remained on the land, the towns became the hub of activity for the mercantile class.

Bad roads and tolls were not the only hazards to be faced.  Bandits and highwaymen roamed throughout the countryside, and this caused many of the merchants to travel in caravans.  Packhorses and wagons were protected by men on horseback armed with bows and swords.  But in some areas, as the princes became stronger, they gave these merchants their protection and were pitiless in their punishment of robbers.  In later centuries it was not necessary for the trader to travel with his goods as he was now able to hire factors or agents.  It was also during this period that foreign branches were established for the large commercial and banking houses in the more important centers of Europe.

Another interesting aspect of the economy of the Middle Ages were the fairs.  Unlike the purely local markets, the fairs were conducted periodically and attracted professional merchants.  Articles of every description were brought to these fairs by merchants who traveled great distances.  The Champagne fairs of the 12th and 13th century were perhaps the most famous, and attracted traders from all over Europe.  The Champagne fairs took their name from the area in France where they originated.  By the 1120s the Champagne fairs were considered to be the money markets of Europe.  At these fairs such items as spices, wool, silk, silver jewelry and art objects, wine and foodstuffs were merchandised.

One of the most important developments resulting from the fairs was the establishment of a system of credit.  Debts were settled among the merchants—who often had done business with each other at other fairs.  It is from these simple hand-written promises to pay that a complicated system of bills of exchange was later developed.  A debt incurred at one fair could now be paid at another place.

As the towns grew in importance, the amount of money in circulation increased.  This caused a rise in prices of the commodities and brought about a higher standard of living.  As commerce spread, new articles were introduced and luxury items began to make their appearance.  For centuries it had been the custom for the peasants to pay their dues to the lord in kind, but with the advent of higher prices in the 12th and 13th century, many nobles could not maintain their previous standard of living.  Tradition would not permit a raising of the rent in proportion to the rising value of the land, and as a result, many nobles went into debt, and eventual ruin.  An interesting aspect of this economic squeeze was the modification of the serf system.  It had become too expensive to maintain numerous serfs on unproductive land, so many were enfranchised by paying for their freedom.  Furthermore, a few dozen serfs making textiles, farm tools or wine within the manor could not compete successfully with the artisans of the town, and the habit of attempting to maintain this inefficient method of production fell into disuse.

Another factor contributing to the decline of the seigniorial system was the small degree of specialization which developed during these centuries.  Since the manors no longer had to depend on themselves for all their food, they concentrated on growing the products best suited to the area.  Although the feudal population was largely non-mobile and illiterate, another effect of the growth of commerce was the necessity of keeping records.  In the 12th century some towns began to establish schools for the children of the bourgeoisie who were trained largely for commercial activities.  Latin was the language used for the commercial correspondence, and it is interesting to note that “the advance of education appears to have been intimately connected with that of credit, and the example of Italy shows that the further credit was developed, the more rapid was this advance.”^[2]

The position of the serf during feudal times did not differ greatly from that of people living under Socialist regimes today.

The Roman Empire had retained strict control over all money issues during its years in power and these coins were accepted in Asia, Africa and Europe.  Between the 9th and 12th century, most of the barbarian kingdoms used Constantine’s gold solidus as their monetary standard.  This coinage (stamped with their king’s imprint) was acceptable throughout Europe and even in North Africa.  The Norman and Saracen invasions, however, put an end to this ancient coinage and for several centuries trade virtually ceased.  Silver was substituted for gold during the reign of Pepin the Short (751-768) and has continued for centuries to be used as money.  It was only after the fractional reserve goldsmith bankers established their power over money issuance that silver and gold became used as “backing” for money rather than as a circulating medium in themselves.

The Carolingian dynasty used a silver monometalism, although they allowed some occasional striking of gold coins.  The state reserved for itself the sole right of coinage in order to keep the weight and alloy of its coins standard.  After the collapse of the Carolingian Empire in the second half of the 9th century, silver was retained except in the lands under Byzantine rule, which retained gold.

During this period of confusion, many feudal lords quickly usurped the right of coinage, and the weak kings occasionally granted this sovereign function to some of the churches.  The whole business of government was essentially in the hands of the Church from the 9th to the 11th century.  As a result of the confusion, the number of coins multiplied and there was no effective control over their weight and fineness.  Often the money was “called down” and the princes would remelt the coins and add an alloy which would reduce its value.  Any money made by the transaction was pocketed by the prince.  At one time there were over 300 Capetian vassals (feudal lords) who were issuing their own coins.  By the 13th century, the Charlemagne pennies had been so debauched that they were no longer silver but almost black in color.  The discovery of silver mines in Freiburg in the 12th century relieved some of the shortage of silver, but it was not until the 15th century, with the production of silver in Saxony, Bohemia and other areas, that silver coins appeared in greater quantities.

The right of coinage had been retained by the king in England and they enjoyed a relatively better quality of money than on the Continent.  While the kings considered the coinage privilege a sovereign right, they also considered it a source of revenue and never hesitated to debase it for their own gain.  It seemed that the more important money became to the economic life of the community, the more frequently the king would resort to these tactics.

By the latter part of the 12th century the currency problem was so disorganized that reform became imperative.  It was in 1192 that the doge of Venice issued an entirely new kind of coin called the groat.  The new groat was equivalent to the Carolingian sou and the rest of the system retained the scale of coinage, but with an altered value.  The groat was quickly accepted by the mercantile class.  As a result France then followed suit by issuing a coin which had a higher value than the groat.  This gros tournois circulated along with the groat throughout Europe and achieved the rank of an international currency.

Spain began to coin gold in 1312, followed by Bohemia in 1325 and England in 1344.  With the use of the groat, the gold coins and the gros tournois, monetary circulation became more stable than previously.  But even with these reforms, the general tendency on the part of ruling princes was to devalue the money by debasing it and giving it an arbitrary value.

Banking operations in the Middle Ages largely consisted of loans made by merchants.  Many of the great banking empires of later centuries had their origins in these early money-lending merchants.  The Church also provided another source of revenue.  During periods of economic hardship and famine, the Church permitted the local goldsmith to melt down some of its treasures in order to make a circulating medium available.  The Church, however, was always scrupulous to faithfully obey the laws of usury.  Loans could also be obtained from pawnbrokers, but they charged extremely high rates of interest and were usually resorted to only if other sources for money proved unavailable.  By the 13th century, the Italian bankers had gotten a virtual monopoly on banking in areas north of the Alps.  Their interest rates were often astronomical—often running as high as 50 to 100 per cent, if they felt a client was very risky.  The general interest rate for solvent clients, however, was about 10 per cent.

Evidences of borrowing from the merchants has been recorded as early as 1160, but by the 13th century many of the nobility were deeply in debt to these individuals.  Towns also borrowed from the merchants, and even on occasion the Church made loans from them.

The confusion of the Middle Ages regarding money persisted into the 16th and 17th centuries.  In 1492 America was discovered by Columbus and this opened up a new area of trade and commerce.  The Spanish were mainly concerned in the exploitation of the gold treasure which they found, with the Crown always retaining a substantial portion of the spoils for itself.  With the opening up and settling of the colonies in North America, trading companies developed and prospered—the East India Company being one of the most important.

It has been estimated that the amount of coin in Europe at about the time of the discovery of America “did not much exceed in value one pound, or $5.00 per capita.”^[3]  Although there was little money in actual circulation, the invention of coining machinery increased the output of coins greatly.  If a workman turned out coins by hand, only 40 or 50 per day could be produced, but with the invention of the laminating-mill and screw-press, several thousand coins could be turned out per day.  These machines were used in Spain as early as 1548 and in Italy during the latter decades of that century.

By the 16th century the goldsmith had become a leading factor in his community.  In addition to his duties as a skilled artisan, he could offer safekeeping for jewelry and other valuables.  When these valuables were deposited, a receipt was issued to the depositor.  These receipts now began to circulate in the community as they were more convenient to use than coins.

Since the goldsmith was the craftsman who created beautiful jewelry and expensive art objects out of precious metals and stones, his importance in the community became greatly enhanced.  As time went by, the goldsmiths became financial advisors and court bankers to the king.  They were also willing to perform many functions which would increase power and control within the court circles.  They assisted the king in the collection of taxes and also assumed many duties in connection with the contracting and paying for goods and services utilized by the court.  Additionally, the prince was usually short of money, so a new relationship developed-that of debtor prince and creditor banker.

It was inevitable that the more dependent the king became on the banker for money, the more control these financial advisors were able to exercise.  The court banker was also aware of the aristocratic snobbishness on the part of the ranking nobility, and their disdain for intrusions on their time by either tasks or ideas which did not come within their courtly circle of approval.  Thus the court banker made certain that the king would have only misinformation on the subject of money.  He was made to believe that money could not be issued without gold or other metals acting as collateral and that only the goldsmith—who controlled the gold—could issue money.  The king was too busy with his courtly duties to review the lessons of history or to study the money issuance of previous civilizations, which had reached a high degree of success, all without benefit of gold backing or a fractional reserve method of issuing only a certain percentage of notes against the gold in the bankers vault.

The goldsmith was the custodian, not the owner, of the valuables left in his possession.  The receipts which he issued for this property consisted of a promise to return these valuables to the owners upon demand and surrender of the receipt.  But the goldsmith bankers found that only about ten per cent of the people redeemed their valuables, so they now began to issue up to ten times more receipts than there were valuables on hand.  This gave them added lending power and also enabled them to earn high rates of interest on nonexistent property.  Loans were also made to other borrowers, and collateral was demanded for all receipts (money) which were loaned.  This is where the idea of fractional reserve banking began.  And this is why the idea of “gold backing” has been so dear to the heart of the goldsmiths and fractional reserve bankers everywhere.  It enabled them to issue and loan money (receipts) on property which he did not own and often which did not exist.  Additionally, he now demanded collateral of those borrowing from him and if payment were not made, he wound up owning the property which had been used as collateral.  He started out with property which was not his own, issued receipts (money) in amounts larger than the valuables in his possession, and received huge amounts of interest thereon.

Unfortunately, the sovereign usually had little knowledge of money and relied heavily upon these same men who posed as experts.  The idea of the sovereign right to issue money was forgotten and the king now became dependent upon a private citizen who issued money for the government.  The king was led to believe that no money could be issued without gold or other metals acting as collateral, despite the fact that only ten percent of the money circulating was actually covered by the deposits of other people’s property.

When we analyze the method whereby the goldsmith bankers were able to pyramid profits we can see how outrageous this fractional reserve method of banking is.  Let us suppose that the more conservative goldsmith only loaned out receipts (money) to the extent of five times the gold or valuables left in his possession.  (Most of them preferred the ten to one ratio.)  Let us presume Mr. Five Percenter would issue receipts against 5,000 ounces of gold, taking collateral from the borrower and also charging six per cent interest (or six ounces of gold) per year.  At six per cent interest on every one hundred ounces of gold against which paper currency was issued, he would receive three hundred per cent return (300 ounces of gold) per year.  “Thus in three years and four months, the debt money which he owned would amount to as much as the total value of the gold which people had stored with him !”^[4]

The same situation persists today.  Not only are we confronted with the outrage of the private issuance of money by the octopus Federal Reserve Bank, but we face the further privateering engaged in by commercial banks which literally create money out of nothing.  When Mr. Average Citizen wants to borrow money from a bank, he is usually given a credit to his account.  This is merely a bookkeeping entry by the bank and does not represent actual money.  It was created out of thin air and when the loan is repaid, that particular money is destroyed.  It is this fractional reserve goldsmith type of banking which is causing the American people to groan under our present tyranny of debt and interest payments.

We can immediately hear the hue and cry of the people who have unwittingly accepted the argument of the fractional reserve goldsmith money pool that the only good money we can have in the United States is that backed up by gold.  At one time the Federal Reserve Notes were backed by 60 per cent gold and 40 per cent commercial paper.  Later this ratio was inverted to become 40 per cent gold and 60 per cent commercial paper.  In more recent years the gold requirement for the domestic dollar has been removed completely, while an alleged gold backing remained for international creditors who might prefer the yellow metal to the dollar.  If we accept the idea that gold or silver may function as money, we are simply following a practice used for centuries.  But in this situation, the gold or silver itself was the money.  Gold or silver coins may still be an acceptable form of money and there is no reason why the Mint cannot manufacture them for those citizens who wish to use this form of currency.  But the idea of having gold buried in a vault represented by circulating paper is one which developed in the 13th and 14th centuries with the goldsmith bankers.  By accepting the idea that money must be “backed by gold” we must agree on a percentage ratio of gold versus circulating paper.  If we adopt the goldsmith’s traditional 10 per cent reserves, we can immediately see that 90 per cent of the circulating medium is unbacked.  Thus the cry that we will have fiat money (e.g. money unbacked by metallic specie) applies not only to the constitutional issuance of money but to gold-backed money itself.  Ninety per cent of the “backed” money is in reality unbacked by gold and, therefore, unredeemable (or fiat money).  Thus 90 per cent of such a currency is valueless from the standpoint of the redemptionists.  Do we want such a situation to represent our national currency ?  Our money should be 100 per cent good and should not be redeemable in anything at all.  Money is a circulating medium and is merely a representation of the total wealth of the nation.  When we describe money as a medium of exchange we are really defining its function but not the nature of money itself.  Because of the wide variety of things which have been or can be used as money, it might be defined as anything that people will accept as money.  It need have no intrinsic value in itself but must be readily acceptable by all members of the community or nation.  It should be issued into circulation by the government (not borrowed from private individuals or corporations) and should be totally debt (interest) free.  If a worker contributes $200 per week toward the gross national product through his labors, he should be entitled to $200 worth of pay, with no interest deducted payable to the privileged plunderers who have extracted the money-issuing power from the government.  With the issuance of money tied to the productivity of the nation, there could never be a shortage of this necessary item.  This is one of the most sinister of the powers of the money manipulators and one which has caused centuries of poverty, wars and panics.  When enough people understand the total simplicity of money, they will no longer tolerate political hacks who pass legislation favorable to the money manipulators.  When the traditional sovereign right of a nation to issue its own money is restored, our world will have made the right pivot into a new realm of productivity and prosperity undreamed of at the moment except in the imagination of the science fiction writers.  This can be our inheritance.  Are we to continue to let the predatory criminals, who wish to enslave all mankind through their control of the world’s money, continue to misrule our planet Earth ?

The power which the banking cartel now wields grew out of this era of goldsmith and merchant banking.  Because all the crowned heads in Europe continued generation after generation to borrow their money into circulation from these private interests, the base was broadened into North America, Asia, Africa and South America.  We now face the unhappy prospect of continuing to pay more and more tribute in the form of bonded indebtedness and taxation to this small group of monetary vampires.

The most notorious of the goldsmith bankers was Meyer Amschel Bauer, who later changed his name to Rothschild, meaning Red Shield.  He was born in Frankfurt-am-Main, Germany in 1743, the son of a merchant.  Meyer was a shrewd money manipulator, and before long he had become financial agent for many wealthy nobles.  He also became the court banker for Frederick II, as well as his business agent.  He had five sons and each one of them followed the father’s footsteps in the banking business.  The eldest, Anselm Mayer remained with the Frankfurt house.  Solomon Rothschild went to Vienna, Nathan to Liverpool, Karl to Naples and Jacob to Paris.  The Naples branch was discontinued after the annexation of Naples by Italy in 1860 and the Frankfurt branch was closed for a time by Hitler during World War II.  However, it is again functioning, and has been since shortly after the end of World War II.

One of Meyer Rothschild’s most profitable early non-banking activities yielded him a profit of $3 million which he received from George III of England for supplying mercenary troops at 8 pounds each who were sent to the Colonies to slaughter the colonists during the American Revolution.  In fact, “The Earl of Chatham and his son William Pitt (1759-1806) both denounced the policy of the international Money-Barons in regard to the Colonies prior to 1783.  Young William Pitt was chosen by King George III to be Prime Minister because he convinced the King the money-lenders were involving European countries in wars to serve their own selfish purposes.”^[5]  Wars have always been a favorite source of revenue for the Rothschilds, and they made a fortune out of the Napoleonic wars.  They also made a financial killing on the peace by getting advance information on the outcome of the Battle of Waterloo through the use of carrier pigeons.

The merchant bankers really began in Genoa, Venice and Florence, where banking had become a relatively sophisticated business by the 14th century.  The Medicis and Fuggers were among the early merchant bankers of this period.  During subsequent centuries merchant bankers began to make their appearance in other areas of Continental Europe.  One of the earliest of these were the Barings who established a London branch in 1763.  These early merchant bankers had usually been merchants long before they became bankers.  They had traded in endless varieties of merchandise throughout the world for decades and gradually evolved into the more specialized field of financing the trading.  At first the early merchant bankers handled the entire transaction themselves, but later they found it more profitable to use factors and agents who carried on the actual trading.  Many of these early transactions were handled through the use of bills of exchange.  These merchants took some risks but they also made enormous profits.  “They financed the Napoleonic Wars and later financed the peace;  they were both war and peace profiteers.”^[6]  They developed an espionage system throughout Europe and often knew more about the events within a nation than the king or cabinet.

Projects which have been financed by these banking houses have been varied—from the financing of American railroads in the 1840s to the 4 million pound loan to the British government to enable it to buy the Khedive’s stock in the French Suez Canal Company.  Cities and nations came to borrow from these money lenders and the fate of many a crowned head often rested in their hands.  King’s and their representatives fawned over the bankers to curry their favor in order to obtain a loan.

Among such other exotic enterprises which have been financed over the years were spices, gold shipments, cotton, tobacco and silk trading.  However, it was not until after the Napoleonic Wars that The City (London) became the financial center of the world.  The early role of money lender had now evolved into a complex system of international finance.  So powerful was the influence of these banking houses that they were even able to force several nations on the gold standard.  Naturally, they controlled the gold.

The Barings opened their London bank in 1763, but before that time they had operated a smaller place which had been established in Exeter in 1717.  Other powerful banking institutions included the Hambros, the Rothschilds and S.G. Warburg & Company.  London has now been replaced by New York as the banking center, but it still exercises great influence in international banking circles.

In 1783 Francis Baring began business operations in Philadelphia.  In 1802 when the United States decided to purchase Louisiana, the Barings financed the deal.  The price of the land was $15 million, of which $11,250,000 was represented by bonds issued by the United States Government.

As the trade routes of Europe expanded, cities began to flourish, and in their wake followed not only new industries but banks and new methods of financing trade.  By the end of the 15th century Frankfurt had become one of the main centers of economic activity in Europe.  As trade expanded, it became necessary to expand credit.  The merchant financiers established banks in all the mercantile centers.  Between 1550 and 1600 massive numbers of bills of credit were circulating and more sophisticated techniques were evolving, such as the practice of endorsing bills of exchange and using short-term credit measures.  The practice of keeping large bullion supplies as a fractional reserve of a greater amount of notes outstanding was now well established.  This was merely a giant extension of the traditional goldsmith trick of reaping huge profits on loans “covered” by only a fraction of the amount of reserves on hand.  Our present-day system of creating something out of nothing is a sophisticated device to refine the practice of usury into one of actual legalized robbery.

It was also during this period that the large trading and joint stock companies originated.  Public banks were also established in various cities.  For example, the Banco della Piazza di Rialto was established in Venice in 1587 and a similar bank was organized in France in 1604.

By the 17th century, the patterns of credit and commerce had been clearly established and brought a continuing increase in the use of bills of exchange.  Another problem was that frequent shortages of coin and bullion occurred.

Among the other difficulties facing the people of Europe during these centuries were recurring famines, plagues, disease and epidemics.  It is estimated that during the plague of 1576-1577, 17,000 deaths occurred in Milan;  16,000 in Venice.  In 1580 it was reported that 120,000 people died in Paris, and in 1565 Hamburg lost a quarter of its population.^[7]

Another method used by the spendthrift kings to realize revenue was to cede large tracts of land in colonial areas in exchange for money.  An interesting sidelight to this is found in the fact that between 1600 and 1700 thousands of acres of land in North America were assigned by the English Crown.  The area which is now Pennsylvania was ceded by Charles I to William Penn for a loan of 16,000 pounds.  The kings also obtained huge quantities of money from the moneylenders—to whom many favors and privileges were often granted in exchange for the money.

An example of the barren state of the royal treasury occurred when James II ascended to the throne of England.  Almost everything that the Crown could round up had been offered as security for the loan.  Prince William of Orange was the pretender to the British throne and his wife, Mary (who was James II daughter) were funded by the Amsterdam money pool with a loan of $2 million guilders.  William and Mary went to England to claim the throne.  They landed in December 1688 with an army to depose James.  The English commander defected to the William and Mary camp and after a battle of sorts, James managed to escape to France.  One month later, in January of 1689, Prince William of Orange and his wife, Mary, were declared King and Queen, joint sovereigns.  The “Revolution of 1688” was designed by the moneylenders to rid themselves of an insolvent ruler and replace him with rulers of their choice who would be indebted to the money pool for their position.

While wars have always been a part of the strategy of the moneylenders, there is always a more subtle aspect to their intrigue.  Prior to the ascent of William and Mary to the English throne, borrowings had been made on the faith and credit of the Crown.  A new feature was now added.  The debts of an insolvent king were to be transferred directly to the people.  They would now be responsible for the debts of the spendthrift government—with or without their consent.  Preparations for this event had been carefully planned by the British East India Company.  In 1666 they persuaded Charles II to sell the coinage privilege to the East India Company, which was owned by the goldsmiths and the money pool.  The “free coinage” of silver act abolished seigniorage charges levied by the mint.  Thus another source of royal revenue was ended.  It also laid the foundation for the metallic theory of money which was responsible for virtually altering the monetary systems of the world.  It enabled the manipulators to destroy the royal prerogative of coinage and they were now in a position to create commercial panics which were unknown up to that time.  After the passage of the act, the mint now only accepted large deposits of bullion and coin which were then shipped to the Orient or India to be exchanged for gold.  It has been estimated that the usual profit on these trips amounted to over 30 per cent.  Even in those days that was a handsome profit.

The stage was now being prepared for the big coup.  In 1694 the Bank of England was established.  It was organized originally with a 12 year charter (which has never been renewed).  Now the king was encouraged to borrow as much money as he needed, and the Bank of England now made loans to the government by establishing a national debt.  The Bank of England was a deceptive title as it was not officially a part of the government.  The Bank now established the precedent of giving the government money in exchange for its bonded debt.  This identical practice is used today in the United States by the privately-owned Federal Reserve Bank.  When the national debt system was started in England it was 1.5 million pounds.  One hundred years later it had skyrocketed to 848 million pounds.  One can see why the Amsterdam moneylenders were so anxious to put their puppets on the throne.  And one can also see how these same moneylenders have become the real rulers of the world—through the monopolistic and ruthless control of a nation’s money.

1. Henri Pirenne describes this as “closed estate economy ... which was really simply an economy without markets.”  Economic and Social History of Medieval Europe (New York : Harcourt, Brace & World, Inc., 1937), p. 9.

2. Henri Pirenne, Economic and Social History of Medieval Europe (New York : Harcourt, Brace and World, Inc.. 1937), p. 124.

3. Alexander del Mar, History of Money in America (Hawthorne, California : Omni Publications, 1966), p. 2. (First published 1899).

4. Felix J. Frazer, The A.B.C. of Money (Hawthorne, California : Omni Publications).

5. William Guy Carr, Pawns in the Game, (Glendale, California. St. George Press, 1966), p. 50.

6. Joseph Weschberg, The Merchant Bankers (New York : Pocket Books, Div. of Simon & Schuster, Inc., 1968), p. 8.

7. “The Counter Reformation and Price Revolution, 1559-1610.”  The New Cambridge Modern History, Volume III (Cambridge University Press, 1965), p. 23.