The Journal of HistoryFall 2009TABLE OF CONTENTS


Honest Money Part VI: The European Connection

By Douglas V. Gnazzo


Although Greenbacks are believed to be the main source of financing for the Civil War, they were not - government bonds were. The total emission of Greenbacks was under $850 million, while Treasury Bonds were issued in the amount of almost $2 billion.

Jay Cooke and his brother Henry were close friends with Salmon Chase. The Cooke brothers supplied the money and backing that got Chase elected as Secretary of the Treasury. Henry owned one of the leading newspapers in Philadelphia, and he used it as a powerful forum to lobby for Chase. A letter from Cooke's father stated that his sons planned to get Chase into the cabinet and Sherman into the Senate "to make money out of government contracts."

The new Secretary of the Treasury responded by granting Jay Cooke the exclusive authority to underwrite all government bonds. Cooke retained the coveted monopoly from 1862 to 1873, for all but one year during which time he underwrote bonds totaling $2 billion. The competition of a free market is a wonder to behold, an enigma that baffles the most penetrating minds.

Visions of conquest inspired the brother's next move. They convinced Senator Sherman to sponsor the National Currency Acts, which he readily pushed through Congress, creating the first national banking system.


Under the direction of Senator Sherman, Congress passed two National Currency Acts, one in 1863, another in 1864. The acts were intended to further the relationship between the government and the private banks, forming a symbiotic partnership capable of issuing a national paper currency.

At first the national banks were allowed to issue notes up to 90 per cent of the value of their government bond reserves. In 1900, the limit was raised to 100 per cent. Cooke already controlled the selling of all bonds. By creating a national banking system to purchase them with, he and his cronies gained complete dominance of the market.

A heavy tax was levied on state bank notes, causing them to essentially disappear. The Federal government now issued national banking charters. The National Currency Acts did not require national banks to redeem their notes in gold and silver. United States bonds provided the security, which meant that government debt was backing the currency. National bank notes were forced into use as the circulating currency, by declaring them to be legal tender for almost all payments to and from the government.

A more profitable scheme would be hard to come by, but the elite collectivists would find yet other ways to turn their dreams of wealth into the people's nightmares: of debt, taxation, bondage, and servitude. A society divided into the haves - and the haves not, subjects to the whims of fortune.


Andrew Jackson has been quoted as saying the following to a group of bankers as they approached him in the drawing room of the White House:

    "Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentleman, but that is your sin! Should I let you go on you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal God, I will rout you out!"

Who were the vipers and thieves Jackson was referring to? Were they the elite banking interests fighting for control of our monetary system? In 1862, while Senator Sherman was heading the Finance Committee, a most startling publication appeared: The Hazard Circular of 1862, which stated:

    "Slavery is likely to be abolished by the war power and all chattel slavery abolished. 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 laborers, while the European plan, led on by England, is that capital shall control labor by controlling wages. The great debt that the capitalists will see to it is made out of the war, must be used as a means 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 this recommendation to Congress. It will not do to allow the Greenback, as it is called, to circulate as money any length of time, as we cannot control that. But we can control the bonds and through them the bank issues."

Was it possible that Congress, although unknown to all but a select few elite, could pass legislation so similar to the above European plan to control America's money? Recall the Coinage Act of 1878 that authorized the President to meet with foreign dignitaries to discuss an international monetary system; and the words of Senator Bate in regards to the Coinage Act of 1900: "It is the renewal and extension of the life of the bonds they are after, so that the national banks may flourish under existing laws."

But many will dismiss The Hazard Circular, questioning its credibility and source of origin. Perhaps we should look to a more well-established and respected publication such as the London Times, which had the following to say:

    "If that mischievous financial policy which had its origin in the North American Republic [i.e. honest Constitutionally authorized non debt money] should become indurated down to a fixture, then that government will furnish its own money without cost. It will pay off its debts and be without a debt [to the international bankers]. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe."

Taken together, the above statements provide a most revealing portrait of the elite money interests; and the sickness of a demented mind - itself deluded, while deluding others. Such disdain of freedom and liberty can only be equaled by their appalling view of world order. President Abraham Lincoln made a speech that was eerily similar to the above quoted Times article. It read as follows:

    "Yes, we may all congratulate ourselves that this cruel war is nearing its close. It has cost a vast amount of treasure and blood. The best blood of the flower of American youth has been freely offered upon our country's altar that the Nation might live. It has been, indeed a trying hour for the Republic; but I see in the future a crisis approaching that unnerves me and causes me to tremble for the safety of my country.

    As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war."

Considering the fact that one half of one per cent of the world's population own 95 per cent of everything, Lincoln's fears have proved to be well grounded - a prescient warning of things to come.


In 1884, the Supreme Court heard the case of Julliard v. Greenman, which reaffirmed the earlier Knox ruling on the constitutionality of paper currency as legal tender; but now it was applied to United States Notes issued during peace, as opposed to the duress of war. Supportive of Honest Money was the dissenting opinion of Justice Fields, who correctly said:

    "If there be anything in the history of the constitution which can be established with moral certainty, it is that the framers of that instrument intended to prohibit the issue of legal-tender notes both by the general government and by the states..." [110 U.S. 421 at 451]

    "We all know that the value of the notes of the government in the market, and in the commercial world generally, depends upon their convertibility on demand into coin; and as confidence in such convertibility increases or diminishes, so does the exchangeable value of the notes vary. So far from becoming themselves standards of value by reason of the legislative declaration to that effect, their own value is measured by the facility with which they can be exchanged into that which alone is regarded as money by the commercial world. They are promises of money, but they are not money in the sense of the constitution." [110 U.S. 421 at 464]

    "But beyond and above all the objections which I have stated to the decision recognizing a power in congress to impart the legal-tender quality to the notes of the government, is my objection to the rule of construction, adopted by the court to reach its conclusions, a rule which, fully carried out, would change the whole nature of our constitution, and break down the barriers which separate a government of limited from one of unlimited powers...The framers of the constitution, as I have said, were profoundly impressed with the evils which had resulted from the vicious legislation of the states making notes a legal tender, and they determined that such a power should not exist any longer. They, therefore, prohibited the states from exercising it, and they refused to grant it to the new government which they created. Of what purpose is it, then, to refer to the exercise of the power by the absolute or the limited governments of Europe, or by the states previous to our constitution? Congress can exercise no power by virtue of any supposed inherent sovereignty in the general government...The power to commit violence, perpetrate injustice, take private property by force without compensation to the owner, and compel the receipt of promises to pay in place of money, may be exercised, as it often has been, by irresponsible authority, but it cannot be considered as belonging to a government founded upon law. But be that as it may, there is no such thing as a power of inherent sovereignty in the government of the United States. It is a government of delegated powers, supreme within its prescribed sphere, but powerless outside of it. In this country, sovereignty resides in the people, and congress can exercise no power which they have not, by their constitution, intrusted to it; all else is withheld." [110 U.S. 421 at 466-7]

    "The doctrine that a power not expressly forbidden may be exercised would, as I have observed, change the character of our government. If I have read the constitution alright...the true doctrine is the very opposite of this. If the power is not in terms granted, and is not necessary and proper for the exercise of a power which is thus granted, it does not exist." [110 U.S. 421 at 467-8]

Our current Supreme Court Justices and elected representatives would do well to heed the words of Justice Field, and to emulate his moral courage, knowledge, and understanding of our Constitution, and to act accordingly.


Although Jackson had vetoed the renewal of the charter of the Bank of the United States, he was probably unaware that a few months earlier, in 1835, the House of Rothschild had signed an agreement with the United States Government, superseding the firm of Baring Brothers as the financial agent of the Department of State. Considering Jackson's loathing of the money powers, any knowledge concerning such an agreement with the Rothschilds would have elicited his considerable wrath. The following is from the Rothschild's Journal Records:

    "The first established links between N. M. Rothschild and the United States date back to 1821 when the bankers R. & J. Phillips in Philadelphia became agents for NMR business in the USA. Phillips were the first in a series of agents who were used to develop NMR's business interests in the country and correspondence from them can be found among the records of the Correspondence Department.

    From the Bank's accounts it is clear that by the end of the 1830s substantial and wide-ranging investments had been made in municipal and State stock, in canal and mining shares and in finance houses. The main activities carried on through the agents were in the fields of bullion and bills of exchange.

    In 1833 NMR entrusted the New York banking house of J. L. & S. Josephs & Company with the representation of its business interests in that city. The firm worked in conjunction with R. & J. Phillips.

    In the following year, 1834, NMR succeeded in obtaining the business of undertaking the United States Government's banking interests in Europe, hitherto in the hands of Barings. The Rothschilds represented the U. S. Government until 1843, when John Tyler became President and Barings' ally Daniel Webster was appointed Secretary of State. Webster promptly restored the accounts from Rothschilds to Barings.

    The disastrous New York banking crisis of 1837 saw the failure, along with many other banks, of the Rothschild's New York agents J. L. & S. Josephs. This coincided with the arrival in New York of August Belmont, a confidential clerk employed by the Frankfurt Rothschilds.

    Though on his way to Havana on behalf of the London and Paris Rothschilds, to investigate the affairs of the Spanish Government, on discovering the crisis in New York, Belmont turned his attention to sorting out Rothschild interests there. He quickly realized the potential of New York's growing economy and suggested that the Rothschilds appoint him as their agent in New York. The firm of August Belmont & Company acted in this capacity until 1925.

    The discovery of gold in California in 1848 awakened NMR interest, given the Bank's substantial involvement in bullion trading. A second important Rothschild agency in the USA was rapidly established in San Francisco in 1849 by Benjamin Davidson and John May. The connection persisted until the impact of the gold rush had diminished. Letters from the American agents are mainly filed within the Correspondence Department.

    As far back as 1839, NMR had been involved in the business of raising finance for the U. S. Federal Government and its institutions. In that year, NMR, together with the Paris house of de Rothschild Frères, contracted for a £900,000 loan to the U. S. Bank.

    It was, however, in the 1870s that the Bank's involvement in this area was at its fullest. In 1872, NMR raised a $15 million bond issue for the City of New York to finance municipal improvements and in the following year, with Baring Brothers, raised a 5 per cent funded loan for the US Government for a massive$300 million. A loan of equal size was raised in 1876, this time in conjunction with J. S. Morgan & Co. and Seligman Brothers and in 1877 a further $700 million, with these same partners, together with Rose & Company.

    The last major issue raised on behalf of the Federal Government was for $62 million, in 1895, with J. S. Morgan. The scope of the records in the American Department is wider then the name suggests. Rothschilds' non-European business interests, in Australia, Mexico, China, and India, were dealt with by the American Department."

Most writers on this subject believe that the Rothschilds did not have much interest in American finance; yet we find them intricately involved in huge deals with the Philadelphian moneychangers, the New York and Wall Street financiers, and a West Coast connection as well. Perhaps compared to their all-encompassing dealings of global conquest, this was just a drop in the till [bucket].

George Wheeler, in Pierpont Morgan and Friends, the Anatomy of a Myth says:

    "But there were steps being taken even now to bring him out of the financial backwaters, and they were not being taken by Pierpont Morgan himself. The first suggestion of his name for a role in the recharging of the reserve originated with the London branch of the House of Rothschild, Belmont's employers."

Considering the various banking houses that we have seen directly influence our monetary policy; and the many financial deals with these establishments; the House of Rothschild looms large as one of the guiding hands, lurking in the shadows.

In his book Pawns In The Game, William Guy Carr clearly illustrates the sphere of influence the Rothschilds cast:

    "In 1899, J.P. Morgan and Drexel went to England to attend the International Bankers Convention. When they returned, J.P. Morgan had been appointed head representative of the Rothschild interests in the United States. As the result of the London Conference, J.P. Morgan and Company of New York, Drexel and Company of Philadelphia, Grenfell and Company of London, and Morgan Harjes Cie of Paris, M.M. Warburg Company of Germany and America, and the House of Rothschild were all affiliated."

Congressman Charles Lindbergh was one of the few individuals who knew and understood, not only the workings of our government, but of the elite money powers as well. In his book The Money Trust, Congressman Lindbergh had this to say:

    "Ever since the Civil War, Congress has allowed the bankers to control financial legislation. The membership of the Finance Committee in the Senate (now the Banking and Currency Committee) and the Committee on Banking and Currency in the House have been made up chiefly of bankers, their agents, and their attorneys. ...In this way the committees have been able to control legislation in the interests of the few."


The sinews of war are money. All wars require huge financial sums. But where does all the money come from? Has it been saved up and stored somewhere in a war chest, awaiting the call to arms? Or does the start of hostilities suddenly require the raising of funds? By what art is war financed?

War requires soldiers, weapons, food, water, and other necessities; all of which must be paid for with money. Without money, there can be no war - which means that war makes money for those who finance it. So who are the merchants of death? War is the business of the elite international collectivists who loan money to nations, not to individuals. And of the self-same global industrialists who build and produce the war machine.

Frederick Morton, in The Rothschilds says:

    "For the last one hundred and fifty years the history of the House of Rothschild has been to an amazing extent the backstage history of Western Europe.... Because of their success in making loans not to individuals, but to nations, they reaped huge profits… Someone once said that the wealth of Rothschild consists of the bankruptcy of nations."

In The Great Soviet Encyclopedia we find:

    "The clearest example of a personal linkup (international directorates) on a Western European scale is the Rothschild family. The London and Paris branches of the Rothschilds are bound not just by family ties but also by personal link-ups in jointly controlled companies."

A past professor of history at Georgetown University, Dr. Carrol Quigley, has written about an international association of powerbrokers, who formed The Round Table Group in London. The first members of the group were: Cecil Rhodes, Lord Rothschild, Lord Rosebery (who was a Rothschild in-law), and Lord Curzon.

Dr. Quigley mentions that this European Group was affiliated with another group in the United States, as he writes in his famous work Tragedy and Hope:

    "The chief backbone of this organization grew up along the already existing financial cooperation running from the Morgan Bank in New York to a group of international financiers in London led by Lazard Brothers."

A mighty breed these merchants of death, that have the wealth and power to mobilize the entire armies of nations; and if the possession of the wealth temporarily eludes them, they always have recourse to the King's Prerogative: the lending of that which they do not have, so succinctly stated by William Patterson, founder of the Bank of England: "Hath benefit of interest on all the moneys which it, the bank, creates out of nothing."

Such are the powers of magic, wielded by the money wizards, which forge the heavy shackles of credit and debt: the cost much greater than a pound of flesh; the cost of the soul - forever lost, to the evil art.

But even the Gods must answer to the twice times three Sisters of Fury and Fate. They would do well to heed the warning given from ages past:

    "We claim to be just and upright. No wrath from us will come stealthily to the one who holds out clean hands, and he will go through life unharmed; but whoever sins and hides his blood-stained hands, as avengers of bloodshed we appear against him to the end, presenting ourselves as upright witnesses for the dead." [The ERINYES. Aeschylus, Eumenides 310]

And yet, the Sisters pay tribute to Necessity, the goddess that bore them life. Prometheus himself was humbled by Her awesome power:

"I must bear my allotted doom as lightly as I can,
knowing that the might of Necessity permits no resistance."
[Aeschylus, Prometheus Bound 104]




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