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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