Journey to Jekyll Island Part IV The RothschildSubmitted by Goldspan on Fri, 10/25/2013 - 22:34
Knowing how the stage was set for what became the Federal Reserve gives you the narrative you need to make a decision for yourself as to what to believe. There are so many stories out there that are based on nothing more the ambiguity, but told with authority that it is hard to dispel. Let’s look at a few of the innuendos.
What about the Rothschild being in control of the banking interest and taking over this country. Well to believe this you would have to establish the connection between the interested parties.
1. The way the story is told the true demon of the Federal Reserve is the Mandrake Mechanism for which the USG goes deeper in debt to feed the beast of free money and wealth generation of a private bank. But the reality is the beast that is the basis of the Federal Reserve was created by the Lincoln Administration to fund the War Between the States. The Mandrake Mechanism was in place for close to 50 years before the Federal Reserve existed. The thing that the Federal Reserve Act did…… finally was to socialization the losses while the gains remained private…..exactly what a cartel would want. But the general partner of the cartel, The USG, was more than happy to engage in this symbiotic relationship as a means to an end.... which is Imperial Control.
2. The relationships between the Rothschild (BTW the Rothschild closed its only bank in Germany in 1901 a full decade before the train trip to Jekyll Island) and the agents in this country can be narrowed to one person, Jacob Schiff. His father was a successful broker for the Rothschild’s and Jacob Schiff once worked for his father. But in his mid-twenties Jacob Schiff, no longer wanting to live is his father’s shadow came to America and became very successful on his own. Jacob Schiff personal drive towards a central bank was one of association rather than intermediation. Jacob Schiff’s close associate Paul Warburg, who is thought to be the real architect of the Federal Reserve System, is who boarded that train in Hoboken. His main contribution were more mechanical then theoretical on two major points, the discounting of paper and the appearance of centralization. When Nelson Aldridge took his trips to study, what was thought to be at the time the Great Central Banks of Europe, Aldridge returned believing that the system should be just as the Reichbank and made no apologies for it, with no attempt to cloak it in a decentralized manner. Warburg was more of an astute Politian then the Politian and convinced the group on the train to go with the more decentralize appearance with real control centered at the New York Fed were the big banks were located. The other major point was the discounting of paper. The group argued between the commercial paper arrangement that currently existed and a more European style of a bankers acceptance formula. The Aldridge Bill that was the result of the Jekyll Island trip included the acceptance paper system, but it was all for naught because the bill that passed was the Glass Owen Bill contained neither system…..they revised the bill and created the open market operations. So to my point if the Rothschild were behind the creation of the Fed…..how did they do it?
3. The Rothschild’s were merchant bankers (Loan) and not commercial bankers (Deposit). To understand the difference you need to know that loan banking…. investment banks, finance companies,are just some of the institutions that have engaged in loan banking. In the ancient world, and in medieval and pre-modern Europe, most of these institutions were forms of “moneylending proper,” in which owners loaned out their own saved money. Loan banks, in the sense of intermediaries, borrowing from savers to lend to borrowers, began only in Venice in the late Middle Ages. Deposit banking began as a totally different institution from loan banking. Hence it was unfortunate that the same name, bank, became attached to both. If loan banking was a way of channeling savings into productive loans to earn interest, deposit banking arose to serve the convenience of the holders of gold and silver. These deposit banks functioned very much as safe-deposit boxes do today: as safe “money warehouses.” All men are subject to the temptation to commit theft or fraud, and the warehousing profession is no exception. In warehousing, one form of this temptation is to steal the stored products outright— to skip the country, so to speak, with the stored gold and jewels. Short of this thievery, the warehouse man is subject to a more subtle form of the same temptation: to steal or “borrow” the valuables “temporarily” and to profit by speculation or whatever, returning the valuables before they are redeemed so that no one will be the wiser. This form of theft is known as embezzlement, which the dictionary defines as “appropriating fraudulently to one’s own use, as money or property entrusted to one’s care.” Why, then, were the banks and goldsmiths not cracked down on as defrauders and embezzlers? Because deposit banking law was in even worse shape than overall warehouse law and moved in the opposite direction to declare money deposits not a bailment but a debt. The carte blanche for deposit banks to issue counterfeit warehouse receipts for gold had many fateful consequences. Thus, fractional reserve banking, like government fiat paper or technical counterfeiting, is inflationary, and aids some at the expense of others. But there are even more problems here. Because unlike government paper and unlike counterfeiting (unless the counterfeit is detected), the bank credit is subject to contraction as well as expansion. Throughout the centuries, there have been two basic forms of money warehouse receipts. The first, the most obvious, is the written receipt, a piece of paper on which the deposit bank promises to pay to the bearer a certain amount of cash in gold or silver (or in government paper money). This written form of warehouse receipt is called the bank note. Thus, in the United States before the Civil War, hundreds if not thousands of banks issued their own notes, some in response to gold deposited, others in the course of extending fractional reserve loans. The bank note has always been the basic form of warehouse receipt used by the mass of the public. Later, however, there emerged another form of warehouse receipt used by large merchants and other sophisticated depositors. Instead of a tangible receipt, the bank simply opened a deposit account on its books. Confusingly, these open book accounts came to be called demand deposits, even though the tangible bank note was just as much a demand deposit from an economic or a legal point of view. When used in exchange, instead of being transferred physically as in the case of a bank note, the depositor would write out an order, directing the bank to transfer his book to another person or account. This written instrument is, of course, called a check. Note that the check itself is not functioning as a money surrogate here. The check is simply a written order transferring the demand deposit from one person to another. The demand deposit, not the check, functions as money, for the former is a warehouse receipt (albeit unwritten) for money or cash. In the case of bank credit, what comes up, can later come down, and generally does. The expansion of bank credit makes the banks shaky and leaves them open, in various ways, to a contraction of their credit.
In the real world, as fractional reserve banking was allowed to develop, the rigid separation between deposit banking and loan banking was no longer maintained in what came to be known as commercial banks. The bank accepted deposits, loaned out its equity and the money it borrowed, and also created notes or deposits out of thin air which it loaned out to its own borrowers. But the Merchant bank ( or investment bank) did stay separate from this process and maintained its principal of underwriting the business ventures of the world, which is where the Rothscild’s remained in business. There were two primary functions of a merchant banker, underwriting the debt of governments and providing a service for international business. Both of these functions would require a stable or deflationary manner to remain profitable. When purchasing bonds from the government you are becoming a creditor…..inflation favors the debtor, conversely a creditor would prefer stable or deflationary policies. In the process of providing the service as a risk-taker in international business you would also be an advocate for sound money. Think of it this way, A farmer in Georgia grows cotton and a clothing manufacturer in Europe needs cotton, but doesn’t like the uncertainty of his deliveries. Rothschild learns of this and goes to the manufacturer and says he can deliver X amount of cotton but for a premium…..he goes to the farmer in Georgia and says I will buy your entire crop at a discount…..farmer says ….done. The farmer benefits because he knows exactly how much he will get and that he will not have to wait for his crop to sell and settle upon delivery in the open market. The manufacturer will benefit because he know exactly how much and when his raw material will arrive……reduces the uncertainly to both parties….and the Rothschild will make a nice profit……sounds like good business to me.
The Rothschild were accordingly fanatical devotees of deflation (which they called “sound money” from its close associations with high interest rates and a high value of money) and of the gold standard, which symbolized and ensured value.
By now you must at least have some serious questions regarding the Rothschild role in the “International Banking Conspiracy”…..I would say if you don’t than objectivity isn’t your motive. Here is an excerpt from a book that describes some fallacies that the conspiracies theorist espouse.The fallacy is represented in a batch of fairy tales that three generations have been repeated over and over about the Rothschilds:
It was their guess about Napoleon that set them on their unique pedestal. The five brothers were clever enough to realize that for all his genius, for all his victories, Napoleon could not last. On that intuition they staked every penny. Nathan's fabled advance news of the Battle of Waterloo gave the Rothschild’s an opportunity to buy depressed securities in London. Even without that coup the day after Waterloo was tofind all the established governments of Europe deeply in their debt.
They, especially Solomon Rothschild, guessed right about railroads, became the railroad builders of Europe. While Calvinist clergymen thundered against the steam engine and country squires complained that the filthy little teakettles on wheels were ruining the countryside, the Rothschild’s
and their sons were pouring out gold to lay tracks.
It would be difficult to find anywhere in history so many insupportable statements packed into so few sentences. Literally every statement is wrong. Yet the writer can hardly be censured since he was repeating what is to be found in innumerable biographies, histories, and essays, having their origin at least in part in the industry of inspired writers beginning with Gentz. The Rothschild’s did not realize that Napoleon could not last and did not stake their all on this conviction. On the contrary, they took excellent care to protect themselves against any eventuality.
Nathan in England worked with the English ministry, but Anselm and Solomon in Frankfort worked on equally friendly terms with Napoleon's rulers in Germany. They loaned nothing to the English government. They did make loans to Dalberg, head of Napoleon's Confederation of the Rhine, both personally and to his state. James went to Paris where, while operating in collusion with Nathan, he maintained the friendliest relations with Count Mollien, Napoleon's finance minister, and established
an excellent reputation as a banker. Nathan, in London, observed the greatest caution in keeping under cover so that his activities would not injure his brothers on the Continent. They played game safe and were in a position to capitalize on victory for either side. It was not until after the disaster at Leipzig and when Napoleon's star was definitely setting and all Europe was betting against
him that the Rothschilds became openly opposed.
Of course the story of Nathan's Waterloo coup is pure fiction. And equally fictitious is the statement that the day after Waterloo found all the governments of Europe deeply in debt to the Rothschilds.
No government owed them anything, unless perhaps the small government of Denmark, which is doubtful. Up to the defeat of Napoleon they played no part in the flotation of loans by European states.
I encourage everyone to read the chapter regarding the Rothschild’s from Men of Wealth.