History of Money

The history of money and banking is rarely known by Americans at large.  Since 1864, we have been living under a debt based banking system, but what does this mean?  Our system is based on Fractional Reserve Banking, but what is that?  The system seems so complex at times that even politicians don’t fully understand how it works.  In order to understand our monetary system, one must dive into the history of banking.  It is only after analyzing history that someone can see clearly how the system works, and whose interests it protects.  Below are excerpts from probably the best documentary I’ve seen on the history of money and banking- entitled “The Money Masters.”  The documentary runs approximately 3 hours and 30 minutes, but is well worth your time.   It will take you through the beginning of money, and through the history of banking here in the United States.  This is a must see!

As said by James Madison:  “History Records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance”


Biblical times– Jesus drove the money changers from the temple in the only time Jesus used force during his ministry.  What were money changers doing in the temple?  When Jews came to Jerusalem to pay their temple tax, they could only pay it with a special coin the half shackle, of the sanctuary.  (A half oz of silver) it was the only coin at that time of assured weight, pure silver and without the image of a pagan emperor on it.  Therefore to the Jews the half shackle was the only coin acceptable to God.  But the coins were not plentiful; the money changers had cornered the market on them and then they raised the price just like any other commodity to whatever the market would bear.  In other words, money changers were making exorbitant profits because they had a virtual monopoly on the money.  The Jews had to pay whatever they demanded.  To Jesus this totally violated the sanctity of God’s house.

Roman Empire- 200BC– 200 years before Christ, Rome was having trouble with money changers.  Two early Roman emperors tried to diminish the power of the money changers by reforming usury laws and limiting land ownership to 500 acres.  They were both assassinated.  In 48 BC Julius Cesar took back the power to coin money from the money changers and minted coins for the benefit of all.  With this new plentiful supply of money he built great public works projects.  By making money plentiful he won the love of the common man but the money changers hated him.  Some believe this was an important factor in Caesar’s assassination.  One thing for sure, along with the death of Caesar, came the demise of plentiful money in Rome.  Taxes increased as did corruption.  Just as in the case of the US today usury and debased coin became the rule.  Eventually the Roman money supply was reduced by 90% and as a result, common people lost their lands and their homes just as is about to happen soon in America.  With the demise of plentiful money the Roman people lost confidence in the Roman government and refused to support it.  Rome plunged into the gloom of the Dark Ages.

The Goldsmiths- 1000AD– A thousand years after the death of Christ money changers, those who loan out and manipulate the quantity of money, were active in medieval England.  In fact they were so active that acting together they could manipulate the entire English economy.  These were not bankers per se, they were the goldsmiths.  They were the bankers because they were the people who started keeping peoples gold for safe keeping in their vaults.  The first paper money was merely a receipt for gold left at the goldsmiths.  Paper money caught on because it was more convenient and easier than carrying around a lot of gold and silver coins.  Eventually the goldsmiths noticed that only a small percentage of the depositors came in and asked for their gold at one time.  Goldsmiths started cheating on the system.  They discovered they could print more money than gold and nobody would be the wiser.  Then they could loan out this ‘extra’ money and collect interest on it.  This was the birth of fractional reserve banking- that is loaning out many more times the money than for which you have assets.  So if they had a thousand dollars in gold on deposit they could loan out about ten thousand dollars, collect the interest and nobody would be the wiser.  By this means, goldsmiths used this practice to accumulate more and more wealth and used this wealth to accumulate even more wealth.  Today, every bank in the US is allowed to loan out 10 times the amount of money they actually have, otherwise known as fractional reserve banking.  That is why they get rich at charging 8% interest on a loan because it is not 8% they are charging, it is 80%.  This is why bank buildings are always the largest in town. 

Middle Ages– In the Middle Ages cannon law, the law of the Catholic Church forbade charging interest on loans.  This concept was taught by Aristotle & St Thomas that the purpose of money was to serve the members of society, to facilitate the exchange of goods needed to lead a virtuous life.  Interest, in their belief, hindered this purpose by putting an unnecessary burden on the use of money.  In other words interest was contrary to reason and justice.  Reflecting church law in the Middle Ages Europe forbade charging interest on loans and made it a crime called usury.  As commerce grew and therefore the opportunities for investment arose in the late middle ages it came to be recognized that to loan money had a cost for the lender both in risk and lost opportunity, so some charges were allowed but not interest per se.  But all moralists, no matter what religion, condemned fraud, oppression of the poor, and injustice as clearly immoral.  As we still see- fractional reserve lending is rooted in fraud, results in widespread poverty, and reduces the value of everyone else’s money.  The ancient goldsmiths discovered that extra profits could be made by rowing the economy between easy money and tight money.  When they made money easier to borrow than the amount of money in circulation expanded, money was plentiful, people took out more loans to expand their business, but then the money changers would tighten the money supply, make it more difficult to get loans.  What would happen is just what happens today.  A certain percentage of people could not repay their previous loans, and could not take out new loans to repay the old ones.  Therefore they went bankrupt and had to sell their assets to the goldsmiths for pennies on the dollar.  The same thing is still going on today, only today we are calling this rowing of the economy, up and down “the business cycle.”

Tally Stick System- 1100AD– Like Julius Caesar, King Henry of England tried to take away the power of the money changers in about 1100 AD.  He could have used anything for money, – – even yak dung as is often in remote Tibetan provinces.  But he invented one of the most unique money systems ever invented- called the Tally Stick System.  This form of money lasted 726 years, until 1826.  The Tally system was adopted to avoid the money manipulation of the goldsmiths.  One of the original bank holders of the bank of England purchased his position in the bank with a tally stick.  It is ironic that after its inception in 1694 the Bank of England attacked the Tally Stick system because it was money outside the power of the money changers just as King Henry had wanted it to be.  The secret is that money is only what people agree on to use for money.  The trick was the King demanded that Tally Sticks be used to pay for taxes.  And they worked well.  As a matter of fact nothing else has worked so well for so long as Tally Sticks.  Finally in the 1500’s King Henry VIII relaxed the laws concerning usury and the money changers wasted no time reasserting themselves.  They quickly made their gold and silver money plentiful for a few decades.  But when Queen Mary took the thrown and tightened the usury laws again the money changers renewed the hoarding of gold and silver coins, forcing the economy to plummet.  When Queen Mary’s sister, Queen Elizabeth took the thrown she was determined to regain control of English money.  Her solution was to issue gold and silver coins from the public treasury and take away control of the money supply from the money changers.  Although control over money was not the only cause of the English revolution of 1642, religious differences fueled this conflict, but monetary policy played a major role.  Financed by the money changers Oliver Cromwell finally overthrew King Charles, purged the parliament and put the king to death.  The money changers were immediately allowed to consolidate their financial power.  The result was for the next 50 years the money changers plunged Great Britain into a series of costly wars.  They took over a square mile of property in London known as the “City of London.”  This area is still known today as one of the three predominant financial centers of the world.  Conflicts with the steward kings led the money changers in England with those in the Netherlands to finance the invasion of William of Orange who overthrew the stewards in 1688 and took the English throne.

The Bank of England– By the end of the 1600 England was in financial ruin.  Fifty years of more or less continuous wars with France and Holland had exhausted her.  Frantic government officials met with the money changers to beg for the loans necessary to pursue their political purposes.  The price was high- a government sanctioned privately owned bank which could issue money created out of nothing.  It was to be the modern worlds privately owned central bank, the Bank of England.  Although it was deceptively called “The Bank of England” to make the general population believe that it was part of the government it was not.  Like any other corporation it sold shares to get started.  The investors, whose names were never revealed, were supposed to put up one and a quarter million British pounds in gold coin to buy their shares in the bank, but only 750 thousand pounds were ever received.  Despite that, the bank was duly chartered in 1694 and started out in the business of loaning several times the money it was supposed to have in reserves all at interest.  In exchange the new bank would lend the British politicians as much new money as they wanted as long as they secured the debt by direct taxation of the people.  So legalization of the Bank of England was little more than legal counterfeiting of a national currency for private gain.  Unfortunately almost every nation now has a privately owned central bank using the bank of England as the basic model.  Such is the power of these central banks that they take over control of a nation’s economy.  It soon amounts to nothing more than a Plutocracy, ruled by the rich.  It would be like putting the Mafia in control of the Army, the danger of tyranny would be extreme. 

….More to come on the History of the United States banking systems…

The above is from the documentary- “The Money Masters”

See the following link to read “History of Money Part 2”– which covers:

-Andrew Jackson’s fight with the bankers

-Abraham Lincoln and the Civil War- 1861-1865

-The National Banking Act of 1864

-The Return to the Gold Standard- 1866-1881

-Free Silver- 1891-1912

-The J.P. Morgan crash of 1907

-War and Money

See the following link to read “History of Money Part 3”– which covers:

-World War I 1914-1918

-World Domination

-The Depression of 1929

-How the Fed Creates Money

-Adolf Hitler’s Bankers

-Fort Knox

-World War II 1939-1945

-The World Central Bank 1948-Present

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