Chapter
Two THOMAS JEFFERSON AND THE MONEY POWER: The Federal Reserve Conspiracy by
Antomy C. Sutton from archive.org
Chapter
Two THOMAS JEFFERSON AND THE
MONEY POWER
It is fashionable in our contemporary
academic world to ignore the
powerful arguments of the Founding Fathers: the arguments of Presidents Thomas Jefferson, James Madison,
and Andrew Jackson in particular.
These arguments are that the Republic and the Constitution are always in danger from the
so- called "money
power," a group of autocrats, an elite we would call them today, who have manipulated the political power of
the state to gain a monopoly over
money issue. Our modern
academics even ignore Thomas Jefferson's chief reason for remaining in politics, i.e., to save the newly
born United States from those
elitists Jefferson called "monocrats" and "monopolists." It was the banking monopoly that
Jefferson considered to be the
greatest danger to the survival of the
Republic. The
Jeffersonian ideal, one that contemporary elitists and Marxists sneer at, was a Republic
comprising small property owning
citizens (Marx would later call them bourgeoisie and Nelson Rockefeller used to call them "peasants")
with a sense of civic awareness
and a regard for the rights of their neighbors. The best government for Jefferson was the least government, where individual The Federal Reserve
Conspiracy citizens take it
upon themselves to protect the rights of neighbors. While Jefferson rejected socialist ideas he equally rejected
the monopoly power of banking
interests and feared what elitist banking
power would do to American liberties. Said Jefferson: If the American people ever allow
the banks to control the issuance
of their currency, first by inflation and then by deflation, the banks and corporations that will
grow up around them will deprive
the people of all property until their children will wake up homeless on the continent their fathers
occupied. The issuing power of
money should be taken from the banks and restored to Congress and the people to whom it belongs. I sincerely
believe the banking institutions
are more dangerous to liberty than
standing armies. (1)
The First Private Banking Monopoly The Founding Fathers' discussion of banks and the money
power reflect the clash of
political philosophies among early Americans with Alexander Hamilton on one side and Jefferson, Madison and
Franklin on the Jeffersonian side.
Hamilton represented the autocratic tradition prominent in Europe that figured on winning through a
banking monopoly what could not be
won politically. It was Hamilton who
introduced a bill in December, 1790 into the House of Representatives to grant a charter for the privately
owned Bank of the United States,
thus creating the first private money monopoly in the U.S., a predecessor to the privately owned
Federal Reserve System. And it was
Alexander Hamilton who just a few years before wrote the charter
for the Bank of New York, the
first bank in New York City. Isaac
Roosevelt, great-great-grandfather Thomas Jefferson and the Money Power of Franklin Delano Roosevelt, was
its second president, from 1796-
1791. The Hamiltonian
proposal for a national bank was a charter for private monopoly, a Congressional grant for a privileged
few. The Bank of the U.S. had the
sole right to issue currency, it was exempt from taxation, and the U.S. government was ultimately
responsible for its actions and
debts. As described by George Bancroft: Hamilton recommended a National Bank with a capital
of ten or fifteen million dollars,
to be paid one-third in hard money
and the other two-thirds in European funds or landed security. It was to be erected into a legal
corporation for thirty years, during
which no other bank, public or private, was to be permitted. Its capital and deposits were to be exempt
from taxation, and the United
States, collectively and particularly, were to become conjointly responsible for all its transactions. Its sources
of profit were to be the sole
right of issuing a currency for the United States equal in amount to the whole capital stock of the
bank. (2) Public reaction to
Congressional grant of a private banking
monopoly for a group of private citizens was caustic. Declared
James Madison: In case of a universal
circulation of the notes of the proposed
bank, the profits will be so great that the government ought to receive a very considerable sum for
granting the charter. There
are other defects. ..and the right to establish subordinate banks ought not to be delegated to any set of
men under Heaven. (3) In the Senate, William McClay
made a strong denunciation:
The Federal Reserve Conspiracy Jan. 17 (1790) Monday. I told them plainly that I was
no advocate of the banking system;
that I considered them machines
for promoting the profits of unproductive Men;. ..that the whole profit of the bank ought to belong to
the public, provided it was
possible to advance the whole stock on her account. But I must remark that the public
was grossly imposed upon in the
present instances. While she (Ed: the public,) advanced all specie; individuals (Ed: the bank
organizers) advanced three-
fourths in certificates, which were of no more value in the support of the bank than so much stubble.
Besides, the certificates were all
under interest already, and it was highly unjust that other paper (money) should be issued on their
credit which bore a premium and
operated as a further tax on the country. (4) Hamilton's proposal was referred to a Senate Committee.
But this Committee included Philip
Schyler (Hamilton's father-in-law) and all its members shared Hamilton's political views. In brief, the
Committee was stacked. President Washington then
referred the bill to Thomas Jefferson
(Secretary of State) and Edmund Randolph (Attorney General). Both found it to be unconstitutional.
Jefferson's opinion on the
unconstitutionality of the bank included the following powerful argument: I consider the foundation of the Constitution as laid
on this ground; That "all
powers not delegated to the United States by the Constitution nor prohibited by it to the states, are
reserved to the states, or to the
people. "
Thomas Jefferson and the Money Power To take a single step beyond the boundaries thus specifically drawn around the powers of Congress is
to take possession of a boundless
field of power no longer susceptible of any definition. The Bill delivers us up bound to
the National Bank, who are free to
refuse all arrangements, but on their own terms, and the public not free, on such refusal, to
employ any other bank. (5)
The Bank of New York
This was not Alexander Hamilton's first proposal for a self- interested bank charter: five years
earlier, in 1784, Hamilton joined
with Isaac Roosevelt and others to create the Bank of New York. It is remarkable that academics
have not emphasized the
association of the Roosevelt family with the Bank of New York, the first bank founded in New York City and
New York State and also one of the
very first banks founded in the United States. Only the Bank of North America and the Pennsylvania Bank
organized during the Revolutionary
War preceded the Bank of New York.
The initial meeting of the Bank of New York was held March 15, 1784 and the following directors were
present: (6) Alexander
McDougal (President) Wlliam Maxwell
Samuel Franklin Nicholas Low
Robert Bowne Daniel McCormick Comfort Sands Isaac Roosevelt Alexander Hamilton John
Vanderbilt Joshua Waddington
Thomas Randall Thomas B. Stoughton Alexander Hamilton, who as we
have seen, staunchly opposed
Thomas Jefferson and the Jeff ersonian democratic tradition in American politics, was connected with the Bank
of New York from the start. The
constitution of the Bank of The Federal Reserve Conspiracy, New York was in fact
written by Alexander Hamilton. And as
most of the newly elected officers of the bank were not familiar with banking business it was Alexander
Hamilton who provided a letter of
introduction to the Bank of North America which supplied the necessary information and guidance. The first president of the Bank
of New York was Jeremiah
Wadsworth. His tenure was brief and in May, 1786 Isaac Roosevelt was elected president, with
William Maxwell as vice president.
The bank offices were in the old Walton House with the Roosevelt sugar refinery just across the street at
number 159 Quinn Street. Conflict of interest is more than
obvious on the part of Alexander
Hamilton, who became Secretary of the Treasury when the Constitution of the United States went into effect in
1789. While Hamilton did not take
a daily active part as director of the
Bank of New York, Hamilton advised its cashier William Seaton, and in 1790 the bank of New York was
made an agent of the United States
government for the sale of 200,000 guilders. Simultaneously Hamilton laid before Congress the idea of
the Bank of the United States -a
private banking monopoly.
Furthermore Hamilton used his cabinet influence to prevent the Bank of the United States from
establishing a branch in the City
of New York, in competition with the Bank of New York. It also appears that Hamilton
tried to make the Bank of New York
the exclusive agent of the United States government in New York. In January, 1791 Alexander
Hamilton wrote to William Seaton
as follows: I shall labor to
give what has taken place a turn
favorable to another union the propriety of which is to say clearly illustrated by the present
state of things. It is my wish
that the Bank of New 10 Thomas Jefferson and the Money Power York may by all means continue to
receive deposits from the
collection in the paper of the Bank of the United States and that they may also receive payment for
the Dutch bills in the same paper.
™ Later in the same letter,
Hamilton writes as follows:
Be confidential with me if you are pressed whatever support may be in my power shall be
afforded. I consider the public
interest as materially involved in aiding a valuable institution like yours to withstand the attacks of a confederated host of frantic and I fear
in too many instances unprincipled
gamblers. Alexander Hamilton
was also overly protective when in
1791 a rival bank was proposed for New York City. When Hamilton heard of the project he
expressed strong disapproval in a
letter to William Seaton dated January 18, 1791: I have learned with infinite pain the circumstance of
a new bank having started up in
your city. Its effects cannot but
be in every way pernicious. I sincerely hope that the Bank of New York will listen to no coalition with this
newly engendered monster, a better
alliance I am strongly persuaded
will be brought about for it and the joint force of two solid institutions will without effort or violence
remove the excrescence just
appeared. I express myself in these
strong terms to you confidentially not that I have any objection to my opinion in being known
as to the natural tendency of the
thing. (8) According to
Myers' History of the Great American
Fortunes^ the Bank of New York "injected itself virulently
into politics and fought the
spread of democratic ideas with sordid but effective weapons." It is Myers' contention that the
bank and its founders in the
Hamiltonian tradition fully 11 The Federal Reserve Conspiracy understood the danger to their
financial interests in the Jeffersonian
principle. Even in
1930 the Bank of New York contained a representative of the Roosevelt interests - W. Emlen
Roosevelt was on the 1930 board as
was Cleveland Dodge, the backer of Woodrow Wilson for president (see below), and Allen Wardwell, the J.
P. Morgan partner influential in
the Bolshevik Revolution of 1917. (10) The Second Bank of the United States On March 4, 1809 James Madison, a
quiet, unassuming man, entered the
office of President. In 1776 Madison was a member of the Virginia Convention and served on the
committee which framed the
Constitution and the Bill of Rights. In 1787 Madison became a
member of the Virginia delegation
to the Philadelphia Convention and made
specific constitutional suggestions, assembled in the so-called
'Virginia Plan." In many ways
Madison can be termed the "master builder of the Constitution." Consequently Madison's views on the
constitutionality of private
banking monopolies are fundamental. The charter of the First Bank expired in 1811 and Congress
refused to grant a new charter on
the grounds of unconstitutionality. President Madison's message repeated the argument on the
unconstitutionality of the bank and made
the following comment:
On the whole it is considered that the proposed establishments will: 1. enjoy a monopoly of the
profits of a National Bank for a
period of twenty years; 2.
that the monopolized profits will be continually growing with the progress of the national population and
wealth; 3. and that the
nation will, during the same period, be
dependent on the notes of the bank for the 12 Thomas Jefferson and the Money Power species of
circulating medium whenever the precious
metals may be wanted; and
4. at all times (will the nation be dependent on the notes of the bank) for so much thereof as may
be an eligible substitute for a
specie medium; and 5. that
the extensive employment of the notes (bank) in the collection of the augmented taxes will, moreover, enable the
banks greatly to extend its
profitable issues of them (bank notes) without the expense of specie capital to support their
circulation; It is as
reasonable as it is requisite that the government, in return for these extraordinary concessions to the bank,
should have a greater security for
attaining the public objects of the
institution than is presented in this Bill.... (11) The War of 1812 presented bank
supporters with a new argument -
financial distress brought about by the war required financial relief
in the form of a new national
bank. Under these pressing
circumstances the House and Senate passed a bill creating the Second Bank of the United States. James
Madison signed the bill into law
April 10, 1816.
13 The
Federal Reserve Conspiracy The Money Trust Honors Woodrow Wilson Federal Reserve Notes have a
curious matchup of denominations with
Presidents. The highest value Federal Reserve Note of $100,000 bears
the portrait of Woodrow Wilson, a
real friend of the money trust. The next highest value of $10,000 bears the portrait of Samuel Chase,
Lincoln's Treasury Secretary who
pushed through the National Bank bill for the money interest. Ben Franklin gets the $100 bill
and Abe Lincoln the $5.00 bill. The only
note in the 1934 Series that bears the inscription "payable in
gold" is the $100,000 note
which is only used for transfers between the various Federal Reserve regional banks. B ^m to "im»
yEE 14 Thomas Jefferson and the Money Power Endnotes to Chapter
Two (1) The
Writings of Jefferson, vol. 7 (Autobiography, Correspondence, Reports, Messages, Addresses and other
Writings) (Committee of Congress:
Washington, D.C., 1861) p. 685. (2) The History of the Constitution of the United
States, (D. Appleton & Co.,
New York, 1893) p. 31. (3)
Gaillard Hunt, Writings of James Madison, (Geo. P. Putnam's Sons, New York) vol. 6, p. 371. (4) Journal ofWm. McClay, United
States Senator from Pennsylvania,
1789. Edited by Edgar S. McClay, (D. Appleton & Co., New York, 1890) p. 371. (5) The Writings of Jefferson,
vol. 7, Joint Committee of Congress, op
cit. (6) Henry W.
Dommett, Bank of New York 1784-1884, (Putnam's Sons, New York, 1884) p. 9. (7) H. W. Dommett, op. cit, p. 41. (8) Ibid., p. 43. (9) Ibid., p. 125. (10) Antony Sutton, Wall Street
and the Bolshevik Revolution, (New
York, Arlington House, 1974). (11) Gaillard Hunt, The Life and Writings of James
Madison, (New York, Putnam's Sons,
1908), vol. 8, p. 327.
15
Chapter Three: ANDREW
JACKSON: THE LAST ANTI- ELITIST
PRESIDENT 
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