When a nation makes war, its government always states the reason for
the war. This is necessary if the people are to be united in the war effort.
But the reasons given for a war need not be the same as its causes. The causes
of war may be selfish, may be base, or even wicked. But the reasons stated are
usually lofty and noble. Is such the case today? Let us go back in history and
look at the possible correlation between the problems of a sagging economy and
war.
In early America,
say one hundred years before the Revolutionary War, in the mid 1600's, the
British government would not allow our colonies to mint coins. But Massachusetts built a
mint anyway, and from 1652 to 1683, several kinds of silver coins were minted.
Then came the paper money, even though most of the
early colonists used a barter system for trade. The colonial governments
printed paper money to pay the cost of military attacks against Canada.
In the 1700's, colonial governments continued to issue notes to pay their
debts. By 1750, the colonies had more paper money than they had gold or silver
for which to exchange it. As a result, many people found that the notes were
not worth the value printed on them. In 1751, the British parliament took steps
to curb the Colonial Script, supposedly to keep it from becoming worthless. It
prohibited Connecticut, Massachusetts,
New Hampshire, and Rhode Island from printing any more paper
money. In 1764, the British Parliament ordered the rest of the colonies to stop
issuing paper money. At the same time, the British government began to levy
taxes against the colonies.
THE BOSTON
TEA PARTY
On December 16, 1773, British ships lay in Boston harbor loaded with 340 chests of tea.
When the tea arrived in Boston, a committee,
called the Committee of Correspondence, protested its arrival and called on
Governor Thomas Hutchinson to order the loaded ships back to England. Hutchinson refused. About
seven thousand persons gathered at the Old South Church. They repeated the request to
Hutchinson, who refused again. At a signal from Samuel Adams, forty to fifty
men, dressed as Indians, boarded the unguarded ships, broke open the tea
chests, and dumped the tea into the harbor. It has been notoriously referred to
as the Boston Tea Party.
The incident lit the fuse to an explosive situation and helped to bring
on the Revolutionary War. During the years of 1775 to 1781, the Continental
Congress issued a great amount of notes, called "Continentals." The
value of these notes was stated in terms of Spanish silver coins called
"dollars." However, the Continentals quickly lost value because they
greatly outnumbered the supply of Spanish dollars. Americans began to describe
anything worthless as "not worth a Continental."
In October, 1781, General George Washington's army of about seventeen
thousand men surrounded Yorktown, and began
attacking British troops who were under the command of Major General Charles Cornwallace. The siege lasted for three weeks and ended in
the surrender of Cornwallace and his eight thousand
soldiers. This was the last major battle of the Revolutionary War.
One of the first acts of the Continental Congress at the close of the
war was to redeem all of the Colonial Script (the Continentals) at one hundred
cents on the dollar. Question: where did they get all that silver to redeem a
currency that was not worth a Continental?
At this point in history enters the story of an old professor in Durant, Oklahoma,
just after the turn of the century. I believe the date was somewhere around
1908. The gentleman had been a professor at Harvard
University, but had moved to Durant, Oklahoma,
and had taken a position in the local high school. He closed the history book
one day, sat down on the corner of his desk, and said to his class, "Now
let me tell you what really happened."
THE STORY OF A HARVARD PROFESSOR
According to his story, George Washington and his colonial troops were
getting weary of the war when word came from certain European bankers through
their agent, Alexander Hamilton, that a peace could be negotiated, provided a
central bank would be established, allowing the European bankers (primarily the
Bank of England) to control our currency. A private agreement was made,
bringing about the conclusion of the war.
When Thomas Jefferson heard of the negotiations, he was furious. He
said that to allow the European bankers to establish a central bank, thus
controlling our currency, was like "putting a British soldier in every
home."
Now, I do not know if the story is true. We have only the word of a
history professor long deceased. The story is not given in the history books.
But, if his story is not true, why was Cornwallace allowed
to leave the shores of the United
States with his eight thousand troops along
with their armaments, artillery, and ammunition? Another question: where did
the silver come from with which to redeem the worthless Continental? It was
redeemed at one hundred cents on the dollar. The Colonial Script had been so worthless, people were papering their walls with it.
Suddenly, several politicians became very wealthy men.
At the conclusion of the revolutionary war, Alexander Hamilton
established his central bank in New
York City. It is said that Thomas Jefferson was so
furious, he resigned Washington's
cabinet. History does declare that Jefferson opposed Hamilton in the establishment of the bank,
claiming it was unconstitutional. According to the World Book Encyclopedia,
volume 2, page 60, Alexander Hamilton's national bank handled the payments of
the public debt for the Treasury, received subscriptions for new issues of
government securities, and even paid the salaries of public officials.
Thomas Jefferson became president in 1801. He served until 1809.
During those years, he continued to oppose the bank, and evidently,
persuaded several congressmen to agree that the bank was unconstitutional. When
the twenty year charter for the central bank came up for renewal in 1811, it
was denied. Guess what happened in 1812? Yes, you guessed it - another war. It
was called the War of 1812, and again, the British were defeated, or were they?
For, in 1816, a new twenty year charter was issued to the central bank.
One of the heros of
the War of 1812 was Andrew Jackson. He was called "Old Hickory"
because of his toughness, and he became president in 1829. He hated the central
bank. He called them a bunch of snakes. In 1833, Jackson
ordered the Secretary of the Treasury to remove government deposits from the
bank of the United States
and place them in state banks. The withdrawal of the government's funds reduced
the power of the national bank. In 1836, when the twenty year charter for the
bank came up for renewal, Jackson
managed to get it defeated. On January 8, 1835, Andrew Jackson paid off the final
installment of the national debt. He was the only president ever to do so. The United States of America
was
at last out from under the
control of the European banking houses. What happened next? The
Civil War.
With the refusal of the Congress in 1836, to renew the charter for the
central bank, there arose a dissension between the North and the South. The
issue was slavery. But was it the cause? We cannot say with certainty! that the Civil War was fomented by the European banking
houses, but immediately the question comes - who backed the Confederate money
used to fight the war? The answer: the European banking houses.
Originally, the war was not to be a "civil" war. In 1836, the
year the charter was denied to the national bank, Mexico
invaded Texas.
I am sure you have heard of the fall of the Alamo
on March 5, 1836. It is believed that the Mexican troops intended to push
northward to the Mason-Dixon line
and eastward to the Atlantic coast. Thus, the South would be ruled by Mexico.
Other troops were stationed in Canada
during those days, in an effort to invade all of the territory north of the Mason-Dixon line. When those two
attempted invasions failed, certain politicians began to stir up strife between
the North and the South.
The matter was somewhat complicated in 1849, when gold was discovered
in San Francisco, California,
and in 1859, when the Comstock lode was discovered in Colorado. Suddenly the
European banking houses were left out in the cold. Real money, gold and silver,
provided a new potential prosperity for the United States. This, obviously,
would keep the United States
from the control of the international bankers. Two years later, in 1861, the
Civil War had begun.
THE TWO DOLLAR BILL
Abraham Lincoln refused to borrow money from the European bankers with
which to fight the war. Instead, he printed the "greenback," a two
dollar bill, with which he financed the war. When the war was over, I am told,
he refused to honor the two dollar bill at face value. He intended to pay only
fifty cents on the dollar. Somehow, he ended up dead. And strangely enough, the
two dollar bill was honored at face value.
In the years that followed, there was a continual struggle in America's
economy. The economy sagged in the mid-1870's. There
was a depression in 1884 and a panic in 1893. There was another panic in 1907.
Each recession seemed to be an effort by the international bankers to cripple
our economy in hopes of convincing Congress to allow a central bank. Thus ends
the story of an old college professor from Harvard
University to a group of high school
students in Durant, Oklahoma, back in 1908.
During the years after the Civil War, Congress refused to turn our
nation's economy over to the European bankers, and though we suffered economic
recession, that was the period of America's greatest growth. The
industrial age flourished. Free enterprise had its hay-day. In 1876, the
telephone was invented, and from it came our modem means of communication. From
those days came the automobile and the airplane.
On March 4, 1913, Woodrow Wilson was inaugurated as the twenty-eighth
president of the United
States. During his campaign he had promised
to clean up those "wolves of Wall Street." Immediately after his
election, however, he set about to establish a central bank. He turned out to
be one of those wolves in sheep's clothing. The bill was introduced on June 23,
of that year. It was hotly debated for some six months, but finally was passed
in December of 1913 (during the Christmas recess while most congressmen were
out of town), thus establishing the Federal Reserve System. Guess what happened
the next year? Yes, you guessed it - World War I.
Shortly before noon on June 28, 1914, crowds gathered in the capital of
the Austrian province
of Bosnia. They came to
see the archduke, Francis Ferdinand and his wife, Sophie. Suddenly, a man
jumped on the running board of the royal touring car and fired a pistol. Two
shots struck Ferdinand and one hit Sophie, who was trying to shield him. They
both died almost immediately. As a result, war was declared on July 28.
On July 30, Russia
ordered general mobilization. On August 1, Germany
declared war on Russia.
On August 3, Germany
declared war on France.
On August 4, Germany invaded
Belgium
... and on the story goes. There were many reasons for the war, but what was
the cause? The economy of the United States
and Europe had been upset. There had been a
change, and change always brings on uncertainty.
THE CRASH OF '29
Then came the depression that rocked America.
The fateful day came on October 18, 1929. Our economy was devastated.
Millionaires became paupers, while others lost their life savings. Many
committed suicide. They just could not take sudden poverty. President Hoover was
blamed for the depression and, as a result, lost the election in 1932.
A new president came to power at that time, Franklin D. Roosevelt, and
on March 6, 1933, immediately after his inauguration, he called for a bank
holiday. All banks were closed in an effort to help stop the money panic that
was spreading in the nation. Depositors had been withdrawing their funds at
such speed that many banks ran out of money with which to pay over the counter.
The following year, in 1934, Congress passed the Gold Reserve Act. The
government stopped minting gold coins and persons could no longer hold gold
money. President Roosevelt called in all the gold held by citizens throughout
the United States
and redeemed it for $20.67 an ounce. Immediately after the gold was ... shall
we say, confiscated, the value of it was set at $35.00 an ounce. It seems
obvious that somebody became rich overnight. Guess what happened next? Yes, you
guessed it, another war. World War II was another "money war."
On September 1, 1939, Germany
attacked Poland,
thus beginning the most devastating war in the history of the human race. World
War II killed more people, cost more money, damaged more property, affected
more lives, and probably caused more far-reaching changes than any other war of
history. Many were the reasons, but what was the cause? Obviously, the world's
economy was affected when the United
States went off the gold standard.
I am reminded of the prophecy in James 5:
Go to now, ye rich men, weep and howl for your
miseries that shall come upon you. Your riches are corrupted, and your garments
are moth-eaten. Your gold and silver is cankered; and the rust of them shall be
a witness against you, and shall eat your flesh as it were fire. Ye have heaped
treasure together for the last days. Behold, the hire of the laborers, who have
reaped down your fields, which is of you kept back by
fraud, crieth: and the cries of them which have
reaped are entered into the ears of the Lord of Saboath.
Ye have lived in pleasure on the earth, and been wanton; ye have nourished your
hearts, as in a day of slaughter. Ye have condemned and killed the just; and he
doth not resist you.
James 5:1-6 Going off of the
gold standard may well have begun the fulfillment of that prophecy.