The death of debt-free money
This is the fourth and final episode in a series of articles about America's absurd debt money currency. We have seen that our nation's entire money supply has been borrowed from private bankers, who loan us dollars they create out of thin air; that we must provide the Federal Reserve with collateral for their loans and pay interest on every dollar in circulation; that this system of debt money is the only reason why we have our national debt; and last week we saw how we have been continually paying interest on debts incurred since before the Civil War.
Last week, we also saw that our U.S. Treasury Department issued debt-free currency (greenbacks) at the beginning of the Civil War rather than borrow paper money from the bankers at sky-high rates. The bankers, as you might imagine, were not happy with this arrangement because they were missing out on their cut of the war profits. What's the point of having a war if you can't make money?
In 1862, bowing to the pressure of big city bankers, Congress halted the production of debt-free greenbacks and degraded them from being legal tender, good for all debts, to being legal tender except for duty on imports and interest on government debts. This "exemption clause" broke the back of the greenback dollar and from then on, its value was always less than a dollar and floated with the tides of war. The bankers then used the exigencies of war to force Congress to pass the National Banking Acts, ensuring they would be able to exchange their colorful little paper rectangles for United States Treasury Bonds, which paid the bankers both interest and principal in gold. That legacy of infamy survives to this very day. This system of money creation, with currency issued by private bankers out of thin air, in return for U.S. Treasury Bonds, was codified again in 1913 when President Woodrow Wilson signed the bill allowing bankers to form their Federal Reserve cartel.
For more than eighty years, bankers traded their pretty pieces paper for U.S. Treasury Bonds and kept the billions of dollars that they received as interest and principal. But during World War II, Texas Representative Wright Patman and California Representative Jerry Voorhis argued in Congress that the U.S. Government should purchase the Federal Reserve Banks. In order to appease these stalwart adversaries and stop their battle to terminate the bankers' magic money machine, the Federal Reserve began a policy of refunding "most" of the interest money they collected from the U.S. Treasury, back to the Treasury. This made a significant portion of our national debt, moot. When you consider the fact that the privately-owned Federal Reserve currently holds about $2 trillion in U.S. Treasury Bonds, Notes, and Bills, the enormity of that concession should hit home.
Maybe someday, on this site, we can discuss the remarkable story of how the bankers took their revenge on Representative Voorhis and how those actions fundamentally altered our nation's destiny, adversely affecting us even today. For now, as you watch the evening news or read here of the endless arguments in Congress, about whether or not they should pay their bills or raise the debt ceiling, you will understand that these battles are absolutely unnecessary. Very few people understand that our nation can move forward to a better and brighter future by simply having our U.S. Treasury issue our nation's money without debt, rather than continuing to "borrow" it from bankers who create it out of thin air. Please, spread the word.