Chapter
Six ABRAHAM LINCOLN: LAST PRESIDENT TO FIGHT THE MONEY POWER: The Federal
Reserve Conspiracy by Antony C. Sutton from archive.org
Chapter Six Abraham Lincoln: Last President to
fight the money Power
Abraham Lincoln was the last of several populist presidents to fight against the money monopoly. Lincoln
from the very beginning of his
Administration faced a heavy burden of financing the Civil War with a monetary system
under private
control. During the Civil
War the Union government was hardpressed
to raise sufficient funds to pay troops, there was a shortage of coin and the private banking
system was unwilling to meet the needs
of the Union Army without personal gain.
Lincoln was in the Jeffersonian-Jacksonian tradition. This tradition reserved the right to issue
currency to the Federal Government and
argued that this right could not lawfully be
transferred to a private monopoly. In 1862 Lincoln presented to Congress a bill to make United States notes
full legal tender and so enable the
Federal Government to print sufficient paper money to finance the Civil War. Presumably while
Lincoln did not envisage the
inflationary potential in expanding the government's spending power there is little question that
his financial program was intended as a
means of paying off debts and 49 The Federal Reserve Conspiracy government expense without allowing the
private money monopoly to profit from
the public purse. Unfortunately,
Lincoln's Secretary of the Treasury, Samuel Portland Chase, was an ally of the banking
interests. During the Civil War Chase
supported Lincoln's monetary policy but later presented legislation to Congress favorable to the
banking interests. Similarly Senator
John Sherman, responsible for Senate passage of financial legislation, added even more financial power
to that already granted the money
monopoly in the form of National Bank legislation. Lincoln's legal tender bill was reported on
February 25, 1862. This was to issue
$150 million of legal tender United States notes. At that time Secretary Chase commented: I have a greater aversion to making anything
but coin a legal tender in payment of
debt;. ..it is however at present
impossible in consequence of the large expenditure entailed by the war to procure sufficient coin for
disbursements: And it has therefore
become indispensably necessary that we should resort to the issue of United States notes.
(1> In similar manner Senator John
Sherman of Ohio advocated the measure on
the grounds, "in no other way could the payment of the troops and the satisfaction of other just
demands be so economically or so well
provided for." However this
program of a national currency was opposed by the New York banking interests and Senator John
Sherman's advocation did not, as we
shall see later, reflect his true intent. (To be repeated in 1913 by Senator Owen and Congressman Glass who
misrepresented their true positions to
the public on the Federal Reserve Act.)
The idea of a national currency was opposed by banking interests, the money power, because it would obviously
remove from bankers the privilege of
issuing an effective 50 Abraham Lincoln: Last President to Fight
the Money Power substitute for money
(defined in the Constitution as gold and silver). What bankers wanted the government to
undertake was transfer the right to
issue money to banking interests, i.e., to allow bankers to act as agents of the Federal Government. The U.S.
Government would then be a perpetual
borrower required to borrow funds at interest from a private money monopoly - which had obtained
the monopoly power from the government
itself. Given the restrictions of the Constitution, banking interests had to tread
carefully. The Clinton Roosevelt (Bank of
New York) proposal was to remove the
Constitution, shadowed in the late 20th century by the Trilateral Commission pleas that the
Constitution is outdated. Moreover the
public itself, apart from Constitutional limits, would hardly agree to a private money monopoly if
the truth were to be widely known. So we
find from the time of Jefferson to the 1990s that any discussion of a private money monopoly is
quickly and thoroughly suppressed.
Nothing is more dangerous to the power of the elite than the public discovery and understanding of the
private control of money supply. What the bankers wanted in the 1860s was for
the government to issue interest-bearing
bonds. These bonds were to be used as the basis
of bank credit. While Lincoln pushed his legal tender act the
bankers met to draft what became the
National Bank Act of 1863. The purpose
of the National Bank Act was to give control of the money issue to bankers. This monopoly could
be used for profit and with the Civil
War, profits would be substantial. The
difference between Lincoln and the money power was essentially whether the medium of exchange
(convertible bank notes and
inconvertible bank credit transferred by check) was to be created and issued by 51
The Federal Reserve Conspiracy _
private monopoly or government monopoly. In other words, whether the power of government is subordinate to a
banking elite or bankers subject to the
power of government which, if Congress did its job honestly, also means subordinate to the power
of the people. An extraordinary letter
from Senator John Sherman to Rothschild
Brothers in London dated June 25, 1863 (and leaked on Wall Street in 1863) demonstrates the double dealing of even
"prominent" and "well
regarded" politicians. Sherman
saw a chance to curry favor with the preeminent world bankers of the time and personally brought
the possibilities of the proposed
National Banking Act to the attention of international bankers. On the following pages we reproduce a letter
from Rothschild Brothers (London) to
Ikleheimer, Morton and Vandergould (Wall
Street, New York) acknowledging receipt of a Sherman letter and relaying its contents. These bankers reply to
Rothschild Brothers on July 6, 1863,
with details of the National Banking Act and some insights into the character of Senator John
Sherman. London, June 25, 1863; Messrs. Ikleheimer, Morton and Vandergould
No. 3, Wall St., New York, U.S.A. Dear Sirs:
A Mr. John Sherman has written us from a town in Ohio, U.S.A., as to the profit that may be made in
the National Banking business, under a
recent act of your Congress; a copy of this act
accompanies this letter.
Apparently this act has been drawn up on the plan formulated here by the British Bankers
Association, and by that Association
recommended 52 Abraham Lincoln: Last President to Fight
the Money Power to our American
friends, as one that if enacted into law, would prove highly profitable to the banking fraternity
throughout the world. Mr. Sherman
declares that there has never been such an
opportunity for capitalists to accumulate money as that presented
by this act. It gives the National Bank
almost complete control of the National
finance. "The few who understand the system," he says, "will either be so interested in its profits, or so
dependent on its favors that there will
be no opposition from that class, while on the other hand, the great body of people, mentally incapable of
comprehending the tremendous advantages
that Capital derives from the system, will bear
its burden without complaint, and perhaps without even suspecting
that the system is inimical to their
interests.... Your respectful servants
Rothschild Brothers New York City July 6, 1863 Messrs. Rothschild Brothers, London, England. Dear Sirs:
We beg to acknowledge receipt of your letter of June 25, in which you refer to a communication received of
Honorable John Sherman of Ohio, with
reference to the advantages and profits of an American investment under the provisions of the
National Banking Act. Mr. Sherman
possesses in a marked degree the distinguishing
characteristics of a successful
53 The Federal Reserve
Conspiracy financier. His temperament
is such that whatever his feelings may
be they never cause him to lose sight of the main chance. He is young, shrewd and ambitious. He has
fixed his eyes upon the Presidency of
the United States and is already a member
of Congress (he has financial ambitions, too). He rightfully thinks that he has everything to gain by being
friendly with men and institutions
having large financial resources, and which at times are not too particular in their methods,
either of obtaining government aid, or
protecting themselves against unfriendly
legislation. As to the
organization of the National Bank here and the
nature and profits of such investment we beg leave to refer to our printed circulars enclosed herein, vis: "Any number of persons not less than
five may organize a National Banking
Corporation. "Except in cities
having 6000 inhabitants or less, a National
Bank cannot have less than $1,000,000 capital. "They are private corporations
organized for private gain, and select
their own officers and employees.
"They are not subject to control of State Laws, except as Congress may from time to time provide. "They may receive deposits and loan the
same for their own benefit. They can buy
and sell bonds and discount paper and do a
general banking business.
54 Abraham Lincoln: Last President
to Fight the Money Power "To start
a National Bank on the scale of $1,000,000 will require purchase of that amount (par value) of U. S.
Government Bonds. "U. S.
Government Bonds can now be purchased at 50%
discount, so that a bank of $1,000,000 capital can be started at
this time for only $500,000. "These bonds must be deposited in the
U.$. Treasury at Washington as security
for the National Bank currency, that will be
furnished by the government to the bank. "The United $tates Government will pay
6% interest on the bonds in gold, the
interest being paid semi-annually. It will be seen that at the present price of bonds the interest paid by
the government itself is 12% in gold on
all money invested. "The U.$.
Government on having the bonds aforesaid deposited with the Treasurer, on the strength of such
security will furnish National currency
to the bank depositing the bonds, at an annual
interest of only one per cent per annum. "The currency is printed by the U.$.
Government in a form so like greenbacks,
that the people do not detect the difference although the currency is but a promise of the bank to
pay. "The demand for money is so
great that this money can be readily
loaned to the people across the counter of the bank at a discount at
the rate of 10% at thirty to sixty days
time, making it about 12% interest on
the currency. "The interest
on the bonds, plus the interest on the currency which the bonds secure, plus inciden- 55
The Federal Reserve Conspiracy
tals of the business, ought to make the gross earnings of the bank amount to from 28% to 33-1/3%. "National Banks are privileged to
increase and contract their currency at
will and, of course, can grant or withhold loans as they may see fit. As the banks have a
National organization and can easily act
together in withholding loans or extending them, it follows that they can by united action in
refusing to make loans cause a
stringency in the money market, and in a single week or even a single day cause a decline in all
products of the country. "National
Banks pay no taxes on their bonds, nor on their
capital, nor on their deposits. "
Requesting that you will regard this as strictly confidential.... Most respectfully yours, Ikelheimer, Morton and Vandergould (3) It was particularly important to
international bankers that they succeed
with Lincoln. If Lincoln implemented public control of finance in the United States then other nations would
pluck up courage to strip financial
power from their bankers. European
bankers, especially those in England, organized against Abraham Lincoln and used commercial banking
channels to pressure bankers in the U.S.
for support. The Legal Tender Bill wanted by
Lincoln was subjected to intense lobbying in Washington and so
loaded with amendments as to become
useless. One amendment required that
interest on bonds and notes - mere pieces of paper - was to be paid twice a year in gold coin. Suffocation by
ridiculous amendments was successful.
Defeat of the Legal Tender Bill was followed in 1862 by a bill to allow banks to issue private bank
notes less than $5.00 within the
56 Abraham Lincoln: Last
President to Fight the Money Power
pistrict of Columbia, a first step towards a privately controlled
fiat money supply. On July 23, 1862 Lincoln vetoed the Private
Bank Note Bill on grounds that it was
the responsibility of the Federal Government to
provide a circulating medium and that United States notes could equally fulfill the function of small private
notes. This veto was Lincoln's challenge
to the banking interests. Lincoln was a
caustic critic of bankers. A delegation of New York bankers came to Washington to lobby in favor
of the Legal Tender Bill. The Secretary
of the Treasury introduced the delegation as follows: These gentlemen from New York have come to
see the Secretary of the Treasury about
our new loan. As bankers they are
obliged to hold our national securities. I can vouch for their patriotism and loyalty, for, as the Good Book
says, "for where the treasure is,
there will the heart be also. "
Lincoln replied: There is another test that I might apply, "Wherever the carcass is, there will the
eagles be gathered together."^;
Lincoln's national currency scheme was in direct opposition to the international bankers who at that time
planned to extend the Bank of England
gold standard private money to the United States. Later in the 20th century bankers went for fiat money not
backed by gold but in the mid- 19th
century the gold-silver system offered more opportunities for personal gain. Lincoln was proposing that instead of the
Federal Government borrowing paper or
created money from the bankers that the bankers
borrow coin or gold from the Treasury. In this way the banking
interest would be unable to create
fictional wealth from the printing press.
57 The Federal Reserve
Conspiracy The National Bank Act was
presented to the United States as a
device to raise money to run the Civil War and achieve financial stability. Under the Act any five
persons could form a bank with a capital
of $50,000 or more. After deposit in the
United States Treasury of interest-bearing bonds equal to one- third of the paid-in capital, the Government
would print National Bank certificates
on behalf of the bank to the amount of 90
percent of the part value of the bonds printed. These National Bank certificates could then
be used by the bank to carry on banking
business and receive full profit on them
as though they were the bank's own notes. Furthermore the bank received from the Federal Government interest
payments in gold coin on bonds deposited
in the Treasury. In other words the
bankers had a double profit. First, interest
on government guaranteed money issues and second, interest paid on bonds in gold. The National Banking Act
was a guaranteed profit making machine
for anyone who wanted to get into
banking. Once again the
Jeffersonian-Jacksonian tradition raised its
voice. It claimed that the National banking system would create an even greater centralization of the money
power than the Bank of the United States
- which Andrew Jackson had vetoed. This
time around the money power was much more
organized. The National Banking Bill was in the Senate only three or four days and in the House only two days
before it was rushed through at a
particularly critical time in the Civil War. The Bill was signed into law by President Lincoln on
February 25, 1863. 58 Abraham Lincoln: Last President to Fight the
Money Power Endnotes to Chapter
Six (1) Letter from Secretary of the
Treasury Chase to Elbridge, G.
Spaulding, January 29, 1862. Quoted in American Nation History Series, 1861-1863 by Hosmer, vol. 20, pg.
169. (2) John R. Elsom, Lightning Over
the Treasury Building (or an expose of
our banking and currency monstrosity, Americas most reprehensible and un-American racket),
(Boston: Meador Publishing Co., 1941),
pp. 51-52. (3) Op. cit. pp. 53-55. (4) Ibid.
59 Chapter Seven: THE MONEY TRUST CREATES THE FED 
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