[Below is an excerpt from pages 46 to 59 of the book that was written in 1899
and is found at http://www.apfn.org/APFN/comingbattle.htm ]
M. W. WALBERT
In 1861, the money in
circulation in the
By the acts of July 17th, and August 8, 1861, the Secretary of the Treasury was authorized to issue demand notes to the amount of fifty millions of dollars, and these notes were made full legal tender for all debts and demands, both public and private. This was net the first time that the Federal Government had issued its notes to circulate as money. It will be remembered that during the war of 1812, the Government had resorted to this means, a precedent followed by the administrations of Van Buren, Polk, and Buchanan.
These notes so issued at these various times were maintained at a parity with gold and silver coin, and were a favorite money of the people. History records the fact that no less than twenty issues of paper money were emitted by the general Government prior to the year 1862; that the people never questioned its value and efficiency as a medium of exchange. These various issues of currency were uniformly receivable by the government in payment of its taxes and revenues.
During the perilous times of the nation, when bankers and financiers refused to loan money to it, the issue of full legal tender paper money never failed to come to the rescue, while cowardly gold fled to the rear.
Therefore, the fifty
millions of demand notes issued under the authority of the acts of July 17th
Subsequent to the passage of this act, a bill was introduced in Congress providing for the issue of non-interest bearing treasury notes to the amount of $150,000,000 with full legal tender power for the payment of all debts and demands, public and private. Immediately, from the leading cities of the country, a horde of bankers, or as Hon. Thaddeus Stevens aptly termed them, "A delegation of bankers and coin venders," hastened to Washington, organized themselves, and requested the Committee on Ways and Means of the House, and the Finance Committee of the Senate to meet with them at the office of the Secretary of the Treasury. Their request was complied with on the 11th day of February, 1862.
Owing to some peculiar and powerful influence, then and there exerted by these organized bankers on these committees, the legal tender clause was modified to read as follows:
the amount of the two kinds of notes together shall at no time exceed the sum
of $150,000,000, and such notes herein authorized shall be receivable in
payment of taxes, internal duties, excises, debts, and demand of every kind due
This proposed amendment was
severely criticized by Mr. Stevens, of
"A doleful sound came up from the caverns of the bullion brokers and the saloons of the associated banks. Their cashiers and agents were soon on the ground, and persuaded the Senate with but little deliberation to mangle and destroy what it had cost the House months to digest, consider and pass.
"Instead of being a beneficent and invigorating measure, it is now positively mischievous. It has all the bad qualities which its enemies charged on the original bill and none of its benefits. It now creates money and by its very terms declares it a depreciated currency. It makes two classes of money - one for banks and brokers and another for the people. It discriminates between the rights of different classes of creditors; allowing the rich capitalist to demand gold and compelling the ordinary lender of money on individual security to receive notes which the Government had purposely discredited."
Mr. Stevens further said:
is this favored class? The bankers and brokers and nobody
else. But how is this gold to be raised? The duties and public lands are
to be paid for in
While on his death bed, the Great Commoner, as his friends loved to call him, recalled the action of Congress in demonetizing the greenback at the instigation of the banks. In speaking of the bankers he said:
"We were foolish to grant them gold interest, and now they unblushingly demand further advantages. The truth is we can never satisfy their appetite for money."
The amendment of Mr. Stevens to place officers and soldiers of the army and navy, and those who should furnish them with provisions upon the same standing as the bankers and brokers, was defeated by a vote of 72 to 67.
In denouncing the amendment striking out the legal tender clause, Senator John Sherman spoke as follows;
"If you strike out this legal tender clause you do it with the knowledge that these notes will fall dead upon the money market of the world; that they will be refused by the banks; that they will be a disgraced currency that will not pass from hand to hand; that they will have no legal sanction; that any man may decline to receive them, and thus discredit the obligations of the Government. I ask again if that is just to the men to whom you have contracted to pay debts? When yon issue demand notes and announce your purpose not to pay any more gold and silver coin, you tender to these who have furnished provisions and services this paper money. What can they do? They can not pay their debts with it, they can not support their families with it, without a depreciation."
He further said in this
much prefer the credit of the
This language of Senator Sherman was that of undoubted patriotism, and it is strongly condemnatory of his subsequent public career, during which he became the active ally of the national banks.
Mr. Kellogg, of
"I am pained to sit in my place in the House and hear members talk about 'the sacredness of capital, that the interests of money must not be touched. Yes, sir, they will vote six hundred thousand of the flower of the American youth for the army to be sacrificed without a blush, but the great interests of capital, of currency, must not be touched. "
In referring to the grand struggle made by Mr. Stevens for full legal tender currency, Judge Kelley said:
"I remember the grand old Commoner with his hat in his hand and his cane under his arm, when he returned to the House from the final conference, shedding bitter tears over the result 'Yes, said he, we have had to yield. The Senate was stubborn. We did not yield until we found that the country must be lost or the banks be gratified; and we have sought to save the country in spite of the cupidity of its wealthiest citizens."
The bankers thus succeeded
in limiting the legal tender power of the Treasury note, or as it is commonly
called, the greenback, and from this time on the bankers, brokers, and
speculators have, with few exceptions, dictated the financial legislation in
This amendment, by which the debt paying power of the Treasury note was restricted within such narrow limits, was a most dishonest act on the part of the government.
It drew distinctions
between the various kinds of money issued by the
By force of this amendment, coin went to a premium, thereby greatly enhancing the wealth of the bankers and bullion brokers.
Moreover, the principle involved in that act greatly weakened the most powerful element of sovereignty that can reside in a nation, by placing the control of the value of money in the hands of organized greed, in this case the gold gamblers of Wall street.
It laid the foundation of a stupendous public debt, which the holders thereof would strive to perpetuate by every means in their power, and it was the first step to fasten on the people the most powerful and merciless tyranny that ever cursed a free people - the centralized money power known as the national banking system.
The bill, as amended,
became a law on
The banking power, which had succeeded in inducing Congress and the President to cripple that currency, which eventually saved the Union, afterward pointed the finger of scorn at this money as a debased currency, and they, therefore, impliedly damned their own nefarious conduct by denouncing it as "rag-baby" money.
As a result of this act as amended, the merchant who paid duties on merchandise imported from abroad was compelled to pay the taxes levied thereon, in coin. To obtain that kind of money he must proceed to the bullion broker, and pay him a large premium for the coin to mate his payment of the customs levied on his merchandise. The bond holder was paid his interest on government bonds in gold, which was afterward sold by him to the importer, at a high premium.
This legislation was the result toward which the bullion brokers and gold gamblers of Wall Street bent all their energies to procure, when they induced the government to rob the greenback of its full legal tender debt-paying power. It was the consummation of the most dishonest financial scheme ever perpetrated upon a heavily taxed and patriotic people.
Immediately following the
visit of these bankers to
The contents of this famous circular are as follows:
"Slavery is likely to be abolished by the war power and chattel slavery destroyed. This I and my European friends are in favor of; for slavery is but the owning of labor and carries with it the care of the laborer, while the European plan, led on by England, is capital control of labor by controlling wages. This can be done by controlling the money. The debt, that capitalists will see is to be made out of the war, must be used as a measure to control the volume of money. To accomplish this the bonds must be used as a banking basis. We are now waiting for the Secretary of the Treasury to make his recommendation to Congress. It will not do to allow the greenback (as it is called) to circulate as money any length of time, for we cannot control it."
The existence of this remarkable circular has been strenuously denied time and again by the national banking money power. Notwithstanding these denials, the line of action indicated in that circular has been consistently pursued from that day to this.
The advice of said Hazard was at once acted upon by the organized banks, and they proceeded to mate known their demands to Congress.
Therefore, a bill was speedily brought forward by Senator Sherman in the United States Senate, providing for the incorporation and organization of the present system of national banks as banks of issue - a bill whose passage meant the creation of moneyed institutions, whose interests would be, or could be made, antagonistic to the nation.
Is it not exceedingly strange, that Senator Sherman, who, in his able speech of February 13, 1862, advanced powerful arguments in behalf of Government legal tender currency, or greenbacks, in which he stated that he preferred the credit of the United States, based, as it was, upon all the productions and property of the people, to the issue of any corporation however well guarded and managed, would thus suddenly change his position?
In less than a year from the time he so ably defended legal tender greenback currency; he reversed his position, and fathered a financial measure which brought into being a dangerous rival to the Government when it was engaged in a death struggle.
In substance, this act provided for the incorporation of banking companies, by which not less than five persons could, under certain restrictions, organize a bank, by depositing with the Secretary of the Treasury
The capitalists thus organizing themselves into a national bank association were required to enter into articles of association which should specify, in general terms, the object for which the association was formed.
These articles were to be signed by the persons uniting to form the association, and a copy of them was to be forwarded to the Comptroller of the Currency to be filed and preserved in his office.
No association could be organized as a national bank with a less capital than one hundred thousand dollars; except that banks with a capital of not less than fifty thousand dollars could, with the approval of the Secretary of the Treasury, be organized in any place having a population not exceeding six thousand inhabitants.
Upon a deposit of United States bonds, the banking associations were entitled to receive from the Comptroller of the Currency, circulating notes, of different denominations, in blank, registered or countersigned, equal in amount to ninety per centum of the amount of the current market value of the bonds so deposited by the association with the Comptroller, but in any case the circulating notes were not to exceed ninety per centum of the par value of the said bonds, if bearing interest at a rate of not less than five per cent per annum; and the amount of circulating notes to be furnished to each association shall be in proportion to its paid-up capital as follows, and no more:
To each association whose capital does not exceed five hundred thousand dollars, ninety per centum of such capital.
To each association whose capital exceeds five hundred thousand, but not exceed one million of dollars, eighty per centum of such capital.
To each association whose capital exceeds one million of dollars, but not exceed three millions of dollars, seventy-five per centum of such capital.
To each association whose capital exceeds three millions of dollars, sixty per centum of such capital.
The law further provided that after any association receiving circulating notes under this act, and has caused its promise to pay such notes on demand to be signed by the president, or vice-president, and cashier thereof in such manner as to make them obligatory promissory notes payable on demand, at its place of business, such association may issue and circulate the same as money. And such notes shall bc received at par in all parts of the United States in payment of taxes, excises, public lands, and all other dues to the United States, except duties on imports, and also for all salaries and other debts and demands owing by the United States to individuals, corporations, and associations within the United States, except interest on the public debt, and in redemption of the national currency.
This act also provided that, in lieu of all existing taxes, each association should pay a duty of one per cent per annum upon the average amount of its notes in circulation, and one-half of one per cent per annum upon the average amount of its deposits, and a duty of one-half of one per cent per annum on the average amount of its capital stock beyond the amount invested in United States bonds.
Furthermore, these national
banking associations were authorized to institute suits at law in the
This provision gave the national banks an advantage over the ordinary citizen, and placed these associations beyond the jurisdiction of the State courts; in other words, these banks could select whatever court their interest dictated.
It will at once be ascertained, from a study of the national banking law, that the capital of the associations was nearly doubled by act of Congress.
In the first place, bonds,
deposited by them to secure their circulation drew interest payable in gold, at
this time at a high premium. Second, the circulating notes issued to them by
The United States Government gave the wealthiest men of the country, in the time of its greatest peril and distress, a gratuity equal to ninety per centum of their banking capital.
This scheme engineered
through Congress by the money power, greatly tended to centralize the currency
in the large cities, and, therefore, made it master of the productive energies
of the American people, as the vast majority of the bonds were held in
It made the circulating notes of these banks a rival to the greenback currency, and it would bc to the interest of the national bankers, by every means in their power, to drive out and destroy the paper money issued by the Government.
placed it in the hands of the money power to contract or expand the volume of
money at its pleasure, and, therefore, enhance or depreciate the value of stocks,
bonds, and all other forms of property in the
The far-reaching influence of this act of Congress, chartering national banks, becomes apparent, when the true principles and functions of Government are considered in all their relations to the people.
Pre-eminent among the various powers conferred upon, or assumed by a sovereign state, are those of taxation, of raising armies, and of coining, issuing, and controlling the volume of money.
The first named power, that of taxation, is only limited by the necessities of the State, and of the amount of property upon which it operates.
A citizen of a state may become the owner of a home through arduous toil and life-long rigid economy, yet, the state, when invoking the power of levying and collecting taxes, may sweep away this property, not leaving a vestige for the man whose labor and privations created a shelter for himself and family.
In a great case before the highest tribunal of the nation, Justice Samuel P, Miller said that "The power of taxation is the power to destroy."
No man who is endowed with a modicum of intelligence would advocate a transfer of this immense power to a private corporation for its gain.
It would amount to the self-destruction of a nation.
The power of raising and maintaining armies is inherent in a sovereign state, and is absolutely necessary for its self-defense, and therefore its self-preservation.
The strong arm of the Government can reach every fireside in the land, and can drag from thence the father, husband, or son, tear him away from the family circle, force him to don the national uniform, to bear arms, and to lay down his life for his country.
No citizen can resist the imperative call of his country when involved in war.
No sane man would advocate the delegation of this high attribute of sovereignty to a corporation for its individual gain, as such transfer of power would inevitably result in frightful oppression.
The power of coining, issuing, and controlling the volume of money is a far more important function of government than the foregoing.
All commerce, exchange, the existence of Government, of civilization itself, hinges upon this mighty function of Government. The power of issuing and controlling money exercises an imperial sway over all productive industry as universal as the law of gravitation upon all matter.
The value of all property, whether of the present time, or of that resulting from the earnings and accumulations of all past generations, depends upon the control of the volume of money,
The power of levying and collecting taxes for the support of the nation, of raising and maintaining armies for its preservation, is dependent upon the control of the currency.
The former is subordinate to the last named power, and consequently involves the very life of the nation.
Yet, in time of the greatest need of the nation, when everything most valuable to man was at stake, this necessary power of Government was delegated to the most traitorous and rapacious system of corporations that ever cursed the people.
By this transfer of
sovereign power to the national banking system, the Federal Government divested
itself of that never failing resource which secured the independence of the
colonies, and which successfully enabled the administration of James Madison to
chastise the overweening pride of
The alienation of this
highest function of the nation to the national banking money power was a high
crime against the welfare of the country, and it created a powerful moneyed
interest antagonistic to the
More than one hundred years
ago, the illustrious
The extreme danger of a sovereign power, in transferring its absolute right of coining and issuing money in whole, or in part, to a private individual, or corporation, has been clearly pointed out by the ablest thinkers of all ages. Such transfers of the powers of a state have universally resulted in extortion and oppression by those to whom this privilege is granted.
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