Posts Tagged ‘Sarah Emery’

A small-sized 1953 $2 note, displaying the sma...

Monetary reform activist, Kirk Mackenzie, was on Radio Liberty with Dr. Stan Monteith on August 17, 2011, and outlined a temporary transition period toward a free-market monetary system that involves the federal government issuing debt-free and interest-free currency over 10 years to make up for the intentional contraction of the money supply that would ensue by the banksters resisting true monetary reform, as history indicates with President Andrew Jackson’s war on the Second Bank of the United States.

He was asked about inflation under such a scenario, and it’s important to outline the historical experience with Greenbacks that goes almost completely unreported these days, and how he is right about it being a model where inflation shouldn’t present much of a problem, if at all.

From Sarah Emery’s 1894 book, Seven Financial Conspiracies, she points out how the first $60 million in Greenbacks, a large sum in 1861-62, traded at par with gold, and it wasn’t overprinting that resulted in their decline, but it was two banker-engineered actions in Congress that did so.

First, with the inclusion of the exception clause, which said that the Greenbacks were no longer valid for payment of duties on imports and interest on the public debt, back when duties on imports accounted for a substantial portion of government revenue, unlike today.

Then, the so-called Credit Strengthening Act was passed, which further depressed the value of the Greenbacks, in requiring payment in gold for the interest on particular long-term Treasury bonds, which created an artificial demand for gold.

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Thomas DiLorenzo, professor of economics at Loyola University, associate at the Ludwig von Mises Institute, and frequent writer for LewRockwell.com, makes an incredibly misinformed statement about the Bank of England and Lincoln’s issuance of money to fund the Civil War, in a May 17, 2010 Daily Bell interview.

He states (emphasis mine):

Lincoln was almost exclusively devoted to Hamiltonian mercantilism – high protectionist tariffs, other forms of corporate welfare, a central bank modeled after the Bank of England to pay for it all, and political patronage and matching politics.

From the Bank of England’s own website, its founding document, the Bank of England Act 1694, states:

19 Their Majesties may appoint Rules for transferring: and may make the Subscribers a corporation, subject to Redemption

The Bank of England, from its inception, was a private central bank, that issued money at interest.

Lincoln, however, issued interest-free money through the public U.S. treasury, as documented in Sarah Emery’s 1887 book, “Seven Financial Conspiracies Which Have Enslaved the American People.”

In the first chapter, she writes (emphasis mine):

Following this declaration came the enactments of July 17, 1861, and February 12, 1862, authorizing the issue of $60,000,000 treasury notes, not bearing interest and payable for all debts, public and private.

Therefore, in no way did Lincoln create any central bank, let alone a private one like the Bank of England, as DiLorenzo asserts. The money was issued interest-free through the public U.S. treasury, as appropriated by Congressional legislation signed by Lincoln.

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The Federal Reserve first starts off by telling the truth about United States Notes:

U.S. notes, the first national currency, began circulating during the civil war; they were authorized by the Legal Tender Act of 1862. The Department of the Treasury issued these notes directly. Issuance was subject to limitations; the Congress established a statutory limitation of $300 million on the amount of U.S. notes outstanding and in circulation. Although this amount was significant in Civil War days, it is a very small fraction of the total currency now in circulation in the United States.

Then, they tell a big lie:

“U.S. notes serve no function that is not already served by Federal Reserve notes.”

Completely false! U.S. Notes were issued interest-free by the government. The purpose they served was to not bankrupt the American people in funding the Civil War, by not subjecting them to an unpayable, interest-accruing debt, from the moment of creation, as Federal Reserve notes do.

They lie, not only mislead, since they give so many accurate details, only to lie about the most important distinguishing function of U.S. Notes from Federal Reserve notes — their interest-free issuance. Sarah Emery, in her 1887 work, Seven Financial Conspiracies Which Have Enslaved the American People, states: “the enactments of July 17, 1861, and February 12, 1862, authorizing the issue of $60,000,000 treasury notes, not bearing interest and payable for all debts, public and private.

The function they serve that isn’t already served by Federal Reserve notes is that not a single penny of interest was ever due on them, nor will ever be due, by the American people to the bankers or the government.

Furthermore, Federal Reserve member banks are unable to draw United States Notes whenever they please, unlike Federal Reserve notes. As the U.S. Treasury states,

A commercial bank belonging to the Federal Reserve System can obtain Federal Reserve notes from the Federal Reserve Bank in its district whenever it wishes. It must pay for them in full, dollar for dollar, by drawing down its account with its district Federal Reserve Bank.

While the Federal Reserve gives some very factual information on its website, such as the fact that they don’t ‘print’ any money, in this case, however, they told a lie about U.S. Notes — their interest-free competitor.

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