Following Reconstruction, the majority of southern farming communities fell into deep economic crisis stemming from the Long Depression (1873-1876).
Ayers links the Long Depression to US banks’ demand for a return to the gold standard (after years on relying on government-issued Greenbacks). However he fails to make clear that this move was accompanied by bank lobbying to withdraw Lincoln’s Civil War greenbacks from circulation. This, in essence, returned the function of money creation to private banks.* They, in turn, responded by drastically shrinking the money supply, sinking the country into deep depression.
Ayers also describes how farmers (nationwide) began organizing in the 1870s to try to improve their living conditions. The first groups they formed were greenbackers groups and farming cooperatives. The latter allowed them to buy seed, animals and equipment in bulk, and to cut out middlemen by running their own gins, stores, and warehouses.
America’s first populist movement started in Texas in 1878 as the Farmers Alliance, which sent out farmer-lecturers throughout Texas and other parts of the South, Midwest and West to educate farmers and workers about bank corruption. When banks, railroads, grain elevators and supply merchants secretly conspired to bankrupt the farmers cooperatives, the Alliance formed the People’s Party.
Although Ayers neglects to mention it, the main platform of the People’s Party was a call to end the ability of private banks to create money.
In 1892, the Populist candidate for president won 1 million votes. In the 1894 election, the party elected state officials in a number of states, including South Carolina.
In 1896, the Populist Party essentially self-destructed by joining with the Democratic Party to support Free Silver candidate William Jennings Bryan. He was defeated by William McKinley.
*Contrary to popular belief, money used to run the global economy isn’t issued by governments but by private banks. Although most people think banks only loan out money they hold on deposit, loans are actually created out of thin air via a bookkeeping entry. Because this is where roughly 97% of money comes from, private banks have ultimate control over the amount of money in circulation. They exert enormous political power by shrinking the money supply to cause depression and expanding it to cause inflation. See How Banks Invent Money Out of Thin Air, Stripping Banks of Their Power to Issue Money and 97% Owned
**Free silver advocates called for expanding the money supply by through unlimited production of silver coinage (by the government), reducing the monopoly private banks enjoyed via money creation. Even before the world went off the gold standard in 1971, banks generally issued far more money than they held in gold reserves (by law, they issued $9 for every $1 they held in gold).
Just to let people know I’m moving to Substack and Telegram after several readers informed me I’ve been censored from WordPress Reader feed. The link to my Substack account is https://stuartbramhall.substack.com/. The link to my Telegram channel is https://t.me/themostrevolutionaryact I’ll continue to publish on WordPress as long as I’m able, but if my blog suddenly disappears you’ll know where to find me.
Rather than describing specific battles, Ayers limits this lecture to a brief overview of the Civil War, beginning with the stalemate reached by 1862. By this point, Union ships controlled the entire coast along the periphery of the Confederacy. The latter, in turn, still controlled nearly all South’s productive farmland.
As the North pushed into Confederate territory, slaves fled their plantations to seek Union Army protection. Some Union officers returned slaves to their owners while others retained them as guides in unfamiliar Confederate territory. In August 1861, Congress passed a law classifying slaves crossing Union lines as “contraband of war” and banning their return to their owners. Instead they were housed in overcrowded, hastily constructed “contraband” camps, where they experienced tragically high mortality rates.
Meanwhile internal divisions in both North and South continued to hamper the war effort. While northern “Copperhead” Democrats openly opposed emancipation, Lincoln fought with other Republicans seeking to grant former slaves the right to enlist in the Union army. In April 1862, Washington DC officially ended slavery, issuing compensation to former slave owners.
In mid 1862 Lincoln pushed a law through Congress authorizing Union generals to confiscate or destroy southern plantations as. He also issued the Emancipation Proclamation, an Executive Order that took effect on January 1, 1863 that freed all slaves in Confederate states.
Convinced speculators were hoarding flour, in early 1863 poor southern women staged bread riots in Salisbury (North Carolina), Atlanta, Columbus and Augusta. After southern farmers rebelled against “impressment” of their crops by Confederate troops without adequate compensation, Confederate vice president Alexander Stephens openly lambasted the tyrannical policies of Jefferson Davis.
The Civil War is still the most costly US war ever, in terms of lives lost. The North lost 365,000 men to wounds and disease and the South (with a smaller population) 260,000. 37,000 Black men serving in the Union army died, and 10,000 Black men, women and children died in contraband camps.
By the end of the war, the southern economy was virtually destroyed, with many cities reduced to rabble, and many acres of farmland abandoned. In contrast, the northern economy was growing robustly with Lincoln’s greenbacks* spurring rapid expansion in business investment and manufacturing.
Congress passed the 13th Amendment (banning slavery in the US) in January 1865, though the war wouldn’t end until May. It would be ratified by 27 of the required 36 states by December.
With the formal status of former slaves uncertain, some former slave owners fled to Latin America, some chained them up to keep them from leaving and others let slaves continued to live in their cabins and work for wages or for a share of crops they produced.
The Freedmen’s Bureau, formed in March 1865 as a US government agency, dispensed free medicine, food and clothing to poor whites and blacks. It also created courts to settle disputes between landowners and former slaves, drew up contracts, and set up public schools.
Southern Blacks themselves were politically divided. More wealthy black teachers, ministers and artisans merely sought equality before the law and the right to vote. In contrast impoverished former slaves were mainly interested in acquiring their own land.
As Congress was in recess (until December 1865) when Vice-president Andrew Johnson assumed the presidency (following Lincoln’s assassination in April 1865) they had virtually no influence over his policies. Under the so-called Presidential Reconstruction program he launched he granted amnesty to former Confederate leaders who signed a loyalty oath, protecting them from seizure of their property and prosecution for treason. He made no provision for Blacks to vote and refused to intervene when former Confederate states enacted Black Codes restricting the rights of former slaves. While allowing them to marry, own (non-real estate) property and sue and be sued, these laws forbade them to change jobs, own or rent land, testify in court or practice certain occupations.
*Greenbacks were emergency paper currency Lincoln issued during the Civil War when both US and European banks refused to grant his government loans at a reasonable rate of interest.
Film can be viewed free with a library card on Kanopy.
Just to let people know I’m moving to Substack and Telegram after several readers informed me I’ve been censored from WordPress Reader feed. The link to my Substack account is https://stuartbramhall.substack.com/. The link to my Telegram channel is https://t.me/themostrevolutionaryact I’ll continue to publish on WordPress as long as I’m able, but if my blog suddenly disappears you’ll know where to find me.
Episode 11 Misconceptions About the Original Populists
By Gerald Stoler PhD (2012)
Film Review
In this lecture (in my view the least accurate), Stoler traces the history of America’s original populists, ie The People’s Party (aka The Populist Party). The latter flourished in the 1890s.
Stoler incorrectly states the Populists’ primary demand during the 1892 presidential election was to increase the money supply via unlimited silver coinage. According to Lawrence Goodwyn in The Populist Moment, this was only a secondary campaign issue. According to Goodwyn, the Populists main demand was to end the creation of money by private banks by abolishing the national banks created under the National Banking Acts of 1863 and 1864.*
Had they captured the presidency and congress, they would have directed the US Treasury (as stipulated in the US Constitution) to take over from private banks in issuing legal tender treasury notes.
The Populist Party grew out of a period in which most of the US population still lived on farms, and in which most farmers borrowed in the spring to pay for fertilizer, seed and farm machinery and repaid their loans after the fall harvest. The 1880s and 1890s were a period of severe deflation (ie inadequate money in circulation), in which a drop in crop prices made it extremely difficult for farmers to repay their debts.
Stoler also fails to correctly identify the cause of this historic deflation, namely a sudden contraction of the money supply triggered by a demand from Eastern banks that the post Civil War government retire $450 million in treasury notes that Lincoln issued to pay for the Civil War.
The Populist Party received one million popular votes in the 1892 election, as well as capturing numerous senate and congressional seats, governorships and state legislative seats.
In 1896, the Populist Party endorsed the Democrat’s Free Silver candidate William Jennings Bryan for president. Bryan would lose in a landslide to William McKinley.
*These laws allowed private banks to issue paper money backed (and printed) by the US Treasury “proportionate” to capital (usually US Treasury bonds) banks had on deposit with the Comptroller of Currency at the Treasury. As a general rule, these banks were allowed to issue nine times as much money as they held on deposit. This essentially granted them total control of the amount of money in circulation. See (The Populist Moment by Lawrence Goodwyn https://stuartbramhall.wordpress.com/2017/01/27/populism-americas-largest-mass-democratic-movement/)
This documentary examines various argument, pro and con, for a Universal (Unconditional) Basic Income.
Britain’s highest profile UBI advocates are journalist George Monbiot and the late anthropologist David Graeber. The main arguments they (and others) offer are
Britain’s extremely high levels of extreme poverty and destitution, despite being the fifth richest country in the world.
The systematic dismantling of Britain’s welfare system (over the last four decades).
Growing food poverty levels among Britain’s working poor.
An aggressive speculative property market,* a major driver of inequality.
The need to free up working class Brits to perform work not considered “employment” (child and elder care, higher education, and voluntary work).
The protection a UBI provides against exploitative treatment by employers (employers are forced to provide better working conditions when employees have the freedom to say no.
Ongoing loss of jobs do to automation and offshoring and relocation of manufacturers overs.
Although the documentary was released prior to the 2020 COVID crisis, the economic crisis triggered by global lockdowns has only accentuated the dismal working conditions of the world’s working poor.
The main arguments used against UBI are that that it’s “too expensive” (meaning it would lead to higher taxes and/or debt); that would encourage laziness by removing the incentive to work); and that it would cause inflation.
David Graeber (author of the History of Debt) points out that that the “too expensive” argument stems from a misunderstanding of where money comes from in modern society. At present, in most countries other than China, governments allow private banks to issue 98% of the money in circulation as loans. This includes loans to government to cover budget deficits.
Graeber stresses that allowing banks to create and control our money supply is a politicalchoice. There is nothing to stop government from issuing their own funds to cover their deficits (as both Lincoln and Roosevelt did).
Ironically (as becomes clear in the film), people who endorse the “laziness” argument assure us they would continue working despite receiving a UBI – it’s just other people who would quit working.
Prior experiments with UBI in Indian and African communities produced decreased a decrease, rather than increase, in inflation. The additional community income caused an increase in goods and services in the economy. This, in turn, tended to drive prices down.
*A Universal (Unconditional) Basic Income is a system under which government provides regular, permanent cash payments to each citizen, regardless of their income or work status.
**In the UK, as in the US and New Zealand, the primary cause of housing inflation is a monetary system that allow banks to focus most of their money creation in the housing market (rather than the productive economy) without any effort to regulate the amount created.
Public library members can view the film free at Kanopy. Type Kanopy and the name of your library into your search engine.
The first video is a 2015 presentation by William Engdahl about his 2010 book The Gods of Money. It focuses on the use of US economic and military warfare to maintain the supremacy of the US dollar as the global reserve currency.
As his point of departure, he begins with the 1944 Bretton Woods agreement, in which the Allied powers agreed to use the gold-backed US dollar as the world’s reserve currency. In 1971 when Nixon was forced to end the gold standard,* the gold-backed US dollar was replaced by the “petrodollar.” According to Engdahl, it was so named because of a secret agreement the US made with Saudi Arabia – in return for a guarantee that OPEC would only trade oil in US dollars, the US guaranteed the Saudis unlimited military hardware.
In this way, oil importing nations (most of the world) were forced to retain substantial US dollar reserves. This was the only way they could provide their economies with a continuous supply of oil.
The petrodollar remained supreme until the mid-1980s, when the collapse of the US Savings and Loan industry (a pre-cursor of the 2007 banking collapse) raised concerns in Europe that the US was failing as a super power. Fearing the US economy was collapsing, they created the euro and the Eurozone, to prevent the Soviet Union or China from filling the power vacuum.
The financial warfare unit of the US treasury responded by feeding hedge fund manager and currency speculator George Soros secret information that enabled him to lead an attack on the British pound. This, in turn, destabilized the British economy to the point the UK no longer qualified to join the euro.
In 1997 the US Treasury and Soros made a a similar attack on economies of Southeast Asia (Thailand, South Korea, Indonesia, Hong Kong, Laos, Malaysia, Philippines) that attempted to use currencies other than the dollar as their reserve currencies.
In 2010, after the US government had run three years of $1 trillion deficits, China, Russia and Japan announced their intention of selling US Treasury bonds (which the US government sells to finance its debt) to increase their euro reserves. Concerned this placed the US dollar on the brink of catastrophic collapse, the US Treasury and Soros attacked the Euro directly by collapsing the Greek economy. The mechanism Soros used was to direct his hedge funds to dump the sovereign treasury bonds that financed Greek debt.** When the European Central Bank announced its commitment to a Greek bail-out, the US Treasury and Soros followed up with an attack on Irish, Spanish and Portuguese sovereign bonds.
*A US economic crisis led to massive foreign demand for US dollar redemption that threatened to deplete US gold reserves.
** The immediate effect of bondholders dumping Greek bonds raised interest rates on Greek debt to a level that threatened to bankrupt their government.
The second clip is a Guns and Butter radio interview with Engdahl. It focuses on a second area the Gods of Money covers, namely the long US battle to abolish their private central bank (aka the Federal Reserve) and end the ability of private banks to create money out of thin air (see How Banks Create Money Out of Thin Air).
After a brief explanation of fractional reserve banking, whereby 97% of our money is created by private banks, Engdahl traces the history of the First Bank of the United States, created by Alexander Hamilton in 1791. The latter was the first US central bank, 80% owned by private (mostly Rothschild-controlled) banks in the City of London and 20% owned by the US government. President James Madison’s refusal to renew the bank’s charter in 1811 would result in Britain and the US going to war in 1812.
When the war ended in 1815, the American war debt was so substantial, the US had no choice but to charter the Second Bank of the United States, which once again was 80% controlled by London banks.
In 1832, Andrew Jackson refused to renew the bank’s charter, and the US had no central bank between 1832 and 1913. In 1913 when President Woodrow Wilson secretly colluded with the global banking establishment to create the Federal Reserve.
Both Lincoln and Kennedy challenged the exclusive role private banks play in creating the US money supply – Lincoln by issuing greenbacks (rather than borrowing money from private banks) to pay for the civil war and Kennedy by issuing silver certificates directly redeemable by the US Treasury. In both cases, Engdahl feels their defiance of the international banking establishment played a role in the decision to assassinate them.
The Populist Moment: A Short History of the Agrarian Revolt in America
by Lawrence Goodwyn
Oxford University Press (1978)
Book Review
The Populist Moment describes the rise and fall of the 19th century populist movement, the largest mass democratic movement in US history. At its zenith during the 1896 election, the populist People’s Party had two million members.
Author Lawrence Goodwyn credits the rise of the agrarian populist movement to two major factors: 1) the unwillingness of the Eastern banking establishment to issue adequate credit to small family farmers and 2) the sudden contraction of the money supply caused by pressure on the post-Civil War government to repay bonds it floated for $450 million of treasury notes (aka Greenbacks) Lincoln used to pay for the Civil War.
Goodwyn also blames the systematic failure of commercial banks to issue adequate credit for the ultimate consolidation and centralization of farming in the US, leading to the eventual rise of industrial agriculture.
The Call to Prohibit Private Banks from Issuing Money
The populist movement started in Texas in 1878 as the Alliance. At first the group focused on forming cooperative buying committees, trade stores and crop insurance schemes to circumvent the crop-lien system that caused so many farmers to lose their land. Their chief organizing strategy was to send farmer-lecturers throughout Texas and eventually other parts of the South, Midwest and West. The banks, railroads, grain elevators and supply merchants responded by secretly conspiring to freeze them out. In turn the Alliance formed the People’s Party, whose main platform called for ending commercial banks’ ability to issue money.*
Goodwyn provides a detailed state-by-state history of the leadership struggles in the Alliance and in the People’s Party. Both made concerted efforts to reach out to Negro farmers and tenant farmers and to industrial workers, represented by the Knights of Labor and the American Federation of Labor, in the cities.
Overcoming Cultural Oppression
The book concludes by tracing the rise of the liberal and progressive movements that followed the demise of the People’s Party. The primary focus of these later movements has been to “humanize” industrial capitalism – as opposed to attacking the fundamental structure of capitalism (like populist movement). Goodwyn blames the absence of comparable mass movements in the twentieth century on the profound psychological oppression that occurs in modern industrialized society.
According to Goodwyn, the values of the corporate state totally dominates modern American intellectual life, as citizens of industrialized society are taught rules of conduct (in schools, churches and the media) that intimidate them and condition them not to rebel. The Alliance overcame these cultural barriers by training and dispatching farmer-lecturers to teach farmers collective self-confidence and self-assertion – ie that the banks, rather than farmers themselves, were responsible for their predicament. Up to this point in time, no democratic mass movement has attempted a similar program of mass education.
*Contrary to popular belief, money used to run the global economy isn’t issued by governments but by private banks. Although most people think banks only loan out money they hold on deposit, loans are actually created out of thin air via a bookkeeping entry. Because this is where roughly 97% of money comes from, private banks have ultimate control over the amount of money in circulation. They exert enormous political power by shrinking the money supply to cause recessions and expanding it to cause inflation. See How Banks Invent Money Out of Thin Air , Stripping Banks of Their Power to Issue Money and 97% Owned
The purpose of war, according to this brief documentary by radio host Michael Rivero, is to force central banks on countries that try to issue their own money.He makes a compelling argument, illustrated by numerous historical examples. The film’s main value, in my view, is in dispelling common misconceptions about where money comes from. Contrary to popular belief, western democracies don’t issue the money they use to run government services. They borrow the money at interest from privately owned central banks. In the US, this private central bank is called the Federal Reserve.
The American Revolution
Rivero begins by quoting Benjamin Franklin, who saw George III’s Currency Act as the main trigger for the American Revolution. The Currency Act prohibited colonists from using colony-issued currency. Instead they were required to use English bank notes. The latter were borrowed at interest from the England’s private central bank, the Bank of England. This interest payment amounted to a de facto tax on each and every financial transaction.
After the Revolution, the new American government returned to issuing its own currency. This ended in 1791, when Alexander Hamilton persuaded Congress to appoint a private central bank to finance government services. The First Bank of the United States was funded (at interest) by the Bank of England, which was controlled by Nathan Mayer Rothschild.
The War of 1812
Plagued by inefficiency and corruption, the First Bank of the United States was so unpopular that Congress ignored Rothschild’s threats and refused to renew its charter in 1811. Rothschild, whose control over British money enabled him to control both the economy and Parliament, had warned that Britain would declare war to re-colonize the US unless Congress renewed the charter. Although the US won the War of 1812, they were forced to charter the Second Bank of the United State in 1816 to repay their massive war debt. American’s second central bank lasted until 1832, when voters returned Andrew Jackson to a second term based on a campaign promise to shut it down.
The Civil War
From 1832-1862, the so-called “free banking era,” all banks were state charted. In 1862 Lincoln created a national system of banks to fund the federal government and issue currency. When he authorized the US Treasury to issue $150 million in interest-free “greenbacks,” the London Times called for the destruction of the US because of the major threat this posed to the global economy (i.e. international bankers). To punish Lincoln, England and (and France) would provide financial and material support to the southern Confederacy.
Government-issued currency ended for good in when the Wall Street banks conspired with Woodrow Wilson to create a permanent (private) central bank. The Federal Reserve Act was written in secret by the US banking establishment and rammed through Congress during the 1913 Christmas recess.
World War I and II
According to Rivero, World War I was also a banker’s war, intended to punish Germany for the strict limitations it imposed on its central bank. At the end of World War I, the Treaty of Versailles forced Germany to repay all the war debts of the other European countries, even though Germany hadn’t started the war.
Crushed by this war debt, the only way Hitler could salvage the German economy was to abolish Germany’s central bank and return to interest-free government-issued currency. This move, which infuriated international bankers, resulted in rapid Germany re-industrialization when the rest of the developed world was mired in deep economic depression. It was lauded internationally as the “German miracle.”
Meanwhile in 1933, American bankers and industrialists plotted a “Bankers’ Putsch,” an attempted military coup against Roosevelt. Their goal was to install corporate fascism in the US, along the lines of Mussolini’s government in Italy. General Smedley Butler, the war hero they enlisted to lead the coup, foiled it by exposing it to the House McCormick-Dirkson Committee. The largely pro-business committee instituted a cover-up, until journalist John Spivac uncovered their secret report in 1967.
Breton Woods
In 1946, following World War II, forty-four nations signed an agreement at Breton Woods New Hampshire for the US dollar to replace the British pound as the world’s reserve currency. This was done with two stipulations: 1) that the US dollar would be redeemable for gold at a price of $35 an ounce and 2) that the Federal Reserve wouldn’t issue more dollars than they could redeem in gold.
Because the Federal Reserve is a private banking network, the federal government has no control whatsoever over the quantity of US dollars they issue. In 1971, it became obvious that the Fed was issuing far more dollars than it could redeem (the vast majority of money the Fed creates is electronic money – only about 3% is in notes and coins*). When France asked to redeem its dollar reserves for gold, Nixon unilaterally suspended the gold standard agreed at Breton Woods.
The Birth of the Petrodollar
At this point the US dollar became a “fiat” currency, theoretically back by nothing. In reality, it was backed by oil, through a complex agreement whereby the US agreed to “defend” countries (i.e. not destabilize or declare war on them) if they committed to buying and selling oil in dollars, aka “petrodollars.”
According to Rivero, the US invasion against a long list of Muslim countries is an indirect result of this agreement. Islam prohibits lending money at interest. As Rivero points out, none of seven Muslim countries retired General Wesley Clark has identified as targets for US military aggression (Iraq, Iran, Syria, Libya, Sudan, Somalia, Lebanon) had private central banks prior to US invasion and occupation.**
Historical Inaccuracies
Apart from several minorhistorical inaccuracies (eg the purpose of Executive Order 11110 that John Kennedy signed in 1961 and Nixon’s alleged pledge of the National Park system as security on US debt), the film serves as an excellent introduction to the hidden role played by private banks in issuing and controlling the global money supply.
*See 97% owned
**Retired General Wesley Clark first revealed the existence of this campaign to conquer the Middle East and North Africa during a Democracy Now interview in 2007.
(This is the second of a series of posts about ending the right of private banks to issue money.)
The Secret of Oz (William Still 2009) primarily addresses the long battle to strip banks of their power to issue money. In the US, this struggle dates back to the Revolutionary War.
The title refers to socialist writer L. Frank Baum’s 1900 The Wonderful Wizard of Oz. According to numerous scholars, the book is loaded with symbols related to monetary reform, the core demand of the Populist movement and the 1896 and 1900 presidential bids of Populist Democrat William Jennings Bryan.
The yellow brick road represented the gold standard, the Scarecrow represented farmers and the Tin Man represented industrial workers. The Wicked Witch of the West was Cleveland banker J.D. Rockefeller and the Wicked Witch of the East New York banker J.P. Morgan. The Cowardly Lion depicted William Jennings Bryan, who abandoned the call for monetary reform. The Emerald City represented (government issued) greenback money and Dorothy’s silver slippers (changed to ruby slippers in the movie) represented Bryan’s call to introduce silver coins to ease the money shortage during the 1890s depression.
Still traces the politics of monetary reform back to 30 AD, when a Nazarene carpenter engaged in violent direct action in a Jerusalem synagogue to evict the private bankers who sold silver coins which were used to pay a compulsory temple tax.
He also explores the use of state-controlled money in the American colonies and the early United States. He focuses particular attention on periods in which private banks deliberately shrank the money supply to trigger depressions (to increase profits or achieve specific political objectives), as well as efforts by Presidents Thomas Jefferson and Andrew Jackson to end private corporate control of money.
Both Jackson and Lincoln oversaw periods in which federal and/or state government issued debt-free money.
The Most Revolutionary Act 