Geithner's Notes

Breaking a moment from the histories of American banking and fiscal policy, I caught this gem on the Internet. Someone snapped a photo of Timothy Geithner, banker extraordinaire, as he testified before congress. For those of you that may be unaware, Geithner oversaw the New York Federal Reserve before he was whisked away to D.C. to replace Hank Paulson as treasury secretary. What is interesting about this photograph is, among the barely decipherable scrawl are three clearly legible letters.

C.F.R.

Geithner may have been distracted thinking about his address to America's real government, or maybe he needed to consult with the CFR on how to answer untidy questions posed to him by Congressional representatives who represent their constituents and not the empire. Regardless, if you follow the link above, you'll arrive at the CFR's main page and their coverage of the oratory address this private club received from someone who can hardly be said to have something better to do than write speeches and day-dream about them during Congressional Committee hearings. That someone, Tim Geithner.

Founders

"I sincerely believe... that Banking Establishments are More Dangerous than Standing Armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale."

-Thomas Jefferson, 1816, American Revolutionary

Thomas Jefferson distilled the spirit of America in a single document, our Declaration of Independence. As the framework of the nation emerged from the ashes of the civil war, Jefferson saw the United State adopt their first Central Bank, and opposed the policy vigorously within the cabinet of President George Washington. He would later write of the Bank:

"[The] Bank of the United States... is one of the most deadly hostility existing, against the principles and form of our Constitution... An institution like this, penetrating by its branches every part of the Union, acting by command and in phalanx, may, in a critical moment, upset the government. I deem no government safe which is under the vassalage of any self-constituted authorities, or any other authority than that of the nation, or its regular functionaries. What an obstruction could not this bank of the United States, with all its branch banks, be in time of war! It might dictate to us the peace we should accept, or withdraw its aids. Ought we then to give further growth to an institution so powerful, so hostile?"

-Thomas Jefferson to Albert Gallatin, 1803

He then went on to propose abolition of the Central Bank, in favor of allowing the people's Department of the Treasury to offer the nation the same services as the banks:

"In order to be able to meet a general combination of the banks against us in a critical emergency, could we not make a beginning towards an independent use of our own money, towards holding our own bank in all the deposits where it is received, and letting the treasurer give his draft or note for payment at any particular place, which, in a well-conducted government, ought to have as much credit as any private draft or bank note or bill, and would give us the same facilities which we derive from the banks?"

-Thomas Jefferson to Albert Gallatin, 1803

Years later, when the nation was embattled in another war with Britain, Jefferson observed the private central banks bringing the nation to the brink of disaster. A year after the British captured Washington D.C. Jefferson told Virginia Senator John W. Eppes:

"Bank paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs. It is the only fund on which they can rely for loans; it is the only resource which can never fail them, and it is an abundant one for every necessary purpose. Treasury bills, bottomed on taxes, bearing or not bearing interest, as may be found necessary, thrown into circulation will take the place of so much gold and silver, which last, when crowded, will find an efflux into other countries, and thus keep the quantum of medium at its salutary level. Let banks continue if they please, but let them discount for cash alone or for treasury notes."

-Thomas Jefferson to John W. Eppes, 1813.

Worried by the Government's interest being usurped again by the Banks he went on to write:

"Instead of funding issues of paper on the hypothecation of specific redeeming taxes (the only method of anticipating, in a time of war, the resources of times of peace, tested by the experience of nations), we are trusting to tricks of jugglers on the cards, to the illusions of banking schemes for the resources of the war, and for the cure of colic to inflations of more wind."

-Thomas Jefferson to M. Correa de Serra, 1814

Jefferson knew that financial sovereignty was necessary for the success of a functioning democracy. The Treasury should not borrow money from private banks to print money, it should simply print money, and allow the representatives of the people to control the economy for the common good, and not for the private interests of bankers.

His ideas lost to the incorruptible avarice of the Bankers, and America followed the disastrous Bank of the United States by establishing quickly the Second Bank of the United States. The scourge of the central banks would continue to cripple the interests of the people of the United States for generations, and eventually a champion emerged, to battle the evils of the Banking establishments on behalf of the people of the United States. That Champion, and the subject of our next post, was Andrew Jackson.

*Quotes taken from The Writings of Thomas Jefferson. Memorial Edition (Lipscomb and Bergh, editors) 20 Vols., Washington, D.C., 1903-04.

Our Economic Revolution

"The Refusal of George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the PRIME CAUSE OF THE REVOLUTION."

-Benjamin Franklin, American Revolutionary

in 1763, stunned by the exploding wealth of the British Empire's New World colonies, the administrators of the Bank of England, the true Monarch's of Britain, summoned the American diplomat Benjamin Franklin. Asked how the colonies had achieved such unprecedented economic success, Franklin answered:

"That is simple. In the Colonies we issue our own money.
It is called Colonial Scrip. We issue it in proper proportion
to the demands of trade and industry to make the products
pass easily from the producers to the consumers. In this manner,
creating for ourselves our own paper money, we control its
purchasing power, and we have no interest to pay no one."

The idea of this wealth escaping the taxation of the Crown and its coffers, became too much for the Empire to bear. Colonial Scrip was a truly revolutionary idea. It escaped the practice of usury that central banks had employed to usurp the sovereignty of European powers. In printing currency for the benefit of its citizenry, and guaranteeing that currency through the government itself, as opposed to guaranteeing it based on banking debt, the colonial governments were able to manage their economies independently for the public benefit, and the economies of the American colonies experienced wide-spread wealth unparalleled by their contemporary European societies.

Franklin himself oversaw the government program that issued Pennsylvania Scrip. Below is an example of Pennsylvania's Five Pound note, printed under the Auspices of Franklin and his business partner David Hall in 1760. (David Hall served in Delaware's Colonial Assembly from 1753 until the Revolution. His son David Hall Jr. fought in the Revolutionary War before becoming Governor of Delaware in 1802.)

These notes were printed by the government, six to sheet, 49,500 Pennsylvania Pounds in all. These were printed, debt free, and could be carefully disseminated to prevent the effects of inflation while fulfilling the financial needs of a sustainably growing economy. While the implementation of Colonial Scrip was imperfect, and the practice was swiftly crushed thoroughly by the Empire, this was the key to our revolution. Our wealth would parallel our abilities. Our intellect would become our primary resource. We were a nation with the potential to be free at last from the vestiges of European tribalism. A nation state to embody the Age of Reason. A Democracy with aspirations of a government for the people, by the people.

This money WAS the revolution. America had escaped the banks. Money, had escaped its archaic framework in notes issued by goldsmiths. Fractional Reserve Lending had led to a theoretical framework that enabled currency to be divorced from material standards, and developed currency into a utility to be employed by governments for internal and external relations. America, if not financially dependent, would inevitable become politically independent.

The American Nation was built on Revolutionary Ideas. Chief among these was liberty from tyrants, political and economic. The Bank of England was as perverse and tyrannical as George III. When the Government is in Debt to a Bank, that Bank is in Control of the Government.

Our Founding Fathers learned this lesson the Hard Way. America was born to free its people from control of the banks. The American dream was sold in the 50's as home ownership, and in a way, this is the true essence of the American dream. Our National Debt, owed to our Central Bank the Federal Reserve, means that what we in America call public, is not in fact public, but owned by our private bankers. Ownership of property is meaningless in a mortgaged country. The American dream is freedom and independence, not National Debt.

We have to reassert our control of our country's economy. To do this adequately, we should examine our history. Apocalypse Rex will begin its coverage of this global financial calamity, by remembering the words of America's founding fathers. The philosophy that crafted our nation state remains the grandest on Earth, and by returning to our nation's greatest political and economic philosophers, we can contextualize and begin to address the crisis facing both America and the World.

Next the wisdom of Thomas Jefferson...