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Lessons From Wall Street’s First Crash... In 1792

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The New York Fed's historical appreciation society has looked back at what was likely the US' first crash and foud that Alexander Hamilton's actions in 1792 which they claim "appears to have effectively managed the crisis with little or no long-term spillover to the economy," has now become the blueprint for manipulative intervention until this day by the central planners who know far better than 'us' collectively...

 

Authored by James Narron and David Skeie of Liberty Street Economics.

As we observed in our last post on the Continental Currency Crisis, the finances of the United States remained chaotic through the 1780s as the young government moved to establish its credit. U.S. Congress was finally given the power of taxation in 1787 and, in 1789, Alexander Hamilton was appointed as the first Secretary of the Treasury. Hamilton moved quickly to begin paying off war debts and to establish a national bank—the Bank of the United States. But in 1791, a burst of financial speculation in subscription rights to shares in the new bank caused a tangential rally and fall in public debt securities prices. In this edition of Crisis Chronicles, we describe how Hamilton invented central bank crisis management techniques eight decades before Walter Bagehot described them in Lombard Street.
 

From Political to Financial Revolution
Although the American political revolution ended in 1783, it was soon followed by a financial revolution as the United States implemented a number of key reforms common to modern financial systems. The first American mint was established in Philadelphia in 1786 in a move to create a more stable currency. In 1787, Congress was given the power of taxation to pay off the debt, which helped the United States make significant progress toward more stable public finances. And after Hamilton was appointed Treasury Secretary, he worked to pay off war debts, in the process creating an active securities market in what were called U.S. Sixes—the U.S. 6 percent bond that the Treasury issued in 1790. But it was Hamilton’s second Report on Public Credit, delivered to Congress in December 1790, in which he called for a national bank, headquartered in Philadelphia.

The Bank Scrip Bubble of 1791
Congress approved the Bank of the United States in early 1791, and the subscription rights—called “scrips”—to the July 1791 public offering were heavily oversubscribed. The $25 scrips were a down payment on the $400 per share bank stock, with the balance due over the course of the next two years. But only a quarter of the $400 due was in gold or silver specie; the remaining 75 percent was to be paid in Treasury securities.

From the oversubscription, it was clear that demand for shares in the Bank was strong and the price of bank scrips in the secondary market initially doubled, before going even higher. And because investors needed U.S. Treasury securities for a substantial portion of the future payments, the price of securities rose as well. But just as rapidly as the prices had run up in July, they fell just a month later in August. Fortunately, the Treasury had previously set aside a cash surplus, in what was called a sinking fund, to buy securities in the open market in the hopes of retiring some of the national debt early. So as the securities market fell and credit became constrained, Hamilton used the sinking fund to purchase securities in the open market, and the mini-panic came to an end by September. Hamilton’s early use of “open market operations” had effectively stabilized interest rates.

Panic of 1792Wall Street’s First Crash
In late 1791, a former Treasury Department assistant and later speculator and businessman William Duer conspired to corner U.S. securities.  Duer and his co-conspirators borrowed heavily to do so. At the same time, the Bank of the United States opened in December 1791 and began making loans and issuing banknotes. So as Duer borrowed heavily to finance his securities purchases, and as the Bank expanded credit, the price of U.S. Sixes rose from 110 to 125 from early December 1791 to mid-January 1792. But by February 1792, depositors began returning liabilities for gold and silver specie and the Bank slowed its credit expansion, as did other banks, creating another credit crunch.

By early March 1792, U.S. Sixes fell back to nearly 115, but because Duer was long U.S. securities, he was unable to pay his debts. By early March, Duer defaulted. Duer’s debt was overwhelming and his default caused a selloff in the securities market. By March, U.S. Sixes fell to 95. But once again, Hamilton moved quickly to calm the markets. By mid-March, in coordination with the Bank of New York, Hamilton began a series of lender-of-last-resort operations in the Treasury market, authorizing open market purchases of securities at a penalty rate of 7 percent, but against all good collateral in the form of Sixes presented. By April, the panic had subsided.

Eighty Years Before Bagehot and the Seeds of the New York Stock Exchange
The Panic of 1792 appears to have been effectively managed with little or no long-term spillover to the economy. And most importantly, it didn’t derail the financial and economic revolution taking place. What’s more, key features of Hamilton’s market intervention predate Walter Bagehot’s famous rules for central bank crisis management by nearly a century. For example, Hamilton instructs Bank of New York to lend on good collateral, in this case U.S. Treasury securities, at a penalty rate of 7 percent on the U.S. Sixes. This action was coordinated with the bond dealers in New York so as not to drain gold and silver specie from the banks. And this coordination ultimately led to a May 1792 meeting of twenty-four broker-dealers under a buttonwood tree on Wall Street, who signed an agreement of cooperation, an act many historians view as the origin of the New York Stock Exchange.

While mismanagement of one financial crisis may sow the seeds of the next, effective management by Hamilton prevailed and the United States was able to avoid another financial crisis until 1819. How should Hamilton’s early example of market crisis management be compared with the later, more famous “Bagehot’s dictum” for a central bank to lend freely to solvent banks during a banking crisis at a high interest rate against good collateral? Bagehot explained this strategy in this way:
 

First. That these loans should only be made at a very high rate of interest. This will operate as a heavy fine on unreasonable timidity, and will prevent the greatest number of applications by persons who do not require it. The rate should be raised early in the panic, so that the fine may be paid early; that no one may borrow out of idle precaution without paying well for it; that the Banking reserve may be protected as far as possible.

 

Secondly. That at this rate these advances should be made on all good banking securities, and as largely as the public ask for them. The reason is plain. The object is to stay alarm, and nothing therefore should be done to cause alarm. But the way to cause alarm is to refuse some one who has good security to offer . . . . No advances indeed need be made by which the Bank will ultimately lose. The amount of bad business in commercial countries is an infinitesimally small fraction of the whole business . . . . The great majority, the majority to be protected, are the “sound” people, the people who have good security to offer. If it is known that the Bank of England is freely advancing on what in ordinary times is reckoned a good security—on what is then commonly pledged and easily convertible—the alarm of the solvent merchants and bankers will be stayed. But if securities, really good and usually convertible, are refused by the Bank, the alarm will not abate, the other loans made will fail in obtaining their end, and the panic will become worse and worse. (Lombard Street, Chapter 7, paragraphs 57-58).

In fact, Hamilton’s actions even predated the predecessor to many of Bagehot’s principles contained in Henry Thornton’s 1802 An Enquiry into the Nature and Effects of the Paper Credit of Great Britain. So who deserves credit for the original doctrine of lender of last resort? Do Bagehot’s words speak louder than Hamilton’s actions? Tell us what you think.

 

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Fri, 05/09/2014 - 21:15 | 4745364 GOSPLAN HERO
GOSPLAN HERO's picture

Alexander Hamilton - America's original crony-capitalist and fascist.

Fri, 05/09/2014 - 21:22 | 4745395 Rusty Shorts
Rusty Shorts's picture

I think children should have to recite the pledge. However they should recite the pledge as written before 1954.

Fri, 05/09/2014 - 21:26 | 4745399 Zirpedge
Zirpedge's picture

I think Praise Obama should be in there somewhere...maybe right at the end. "with liberty and justice for all..Praise Obama" and then they courtsey or something.

Fri, 05/09/2014 - 21:47 | 4745428 Rusty Shorts
Rusty Shorts's picture

LMAO

 

Fri, 05/09/2014 - 21:58 | 4745433 Stackers
Stackers's picture

Hamilton was a Rothschild pawn. The Rothschild's invented the private central bank printer of last resort.

Fri, 05/09/2014 - 22:49 | 4745515 Arius
Arius's picture

exactly, funny to see how history is written though: "hamilton the first secretary and he moved quickly to establish the Bank, he foresaw what was to come and established the sinking fund, he manages the crisis quickly, nothing mentioned of the owners, only the investors interest ... funny thing a small details only 25% put down by the owners ... almost the same as Bank of England establishment  and all the others i would guess .... yeah well, just coincidental .... am sure Hamilton figured it all out on his own ....

Fri, 05/09/2014 - 23:50 | 4745595 w1LE.e
w1LE.e's picture

Have the mic or the heater but you can't hold both

Sat, 05/10/2014 - 03:15 | 4745727 Arius
Arius's picture

exactly. but, wait a minute ... why not?

Sat, 05/10/2014 - 06:30 | 4745777 negative rates
negative rates's picture

Odds are that you are not among the choosen ones, (And you know who you are), the mkt can remain sane longer than you can remain solvent.

Sat, 05/10/2014 - 07:08 | 4745794 The Blank Stare
The Blank Stare's picture

Certainly explains the long nose.

Sat, 05/10/2014 - 12:53 | 4745863 Arius
Arius's picture

the choosen ones ... hmmmm ....tricky isnt it? .... my understanding that's where the antichrist will come....

 

as far as "chosen ones" term in general, that includes the original tribes except one tribe and includes all the people who believe in GOD

 

it will happen as described by St. John of Patmos in the Book of Relevation.

 

The Apocalypse ("apocalupsis" in Greek, means revelation) of St. John the Theologian is the only prophetic book of the New Testament. 

 

Sat, 05/10/2014 - 09:44 | 4745902 Stoploss
Stoploss's picture

"U.S. Congress was finally given the power of taxation in 1787"  

No taxation without representation?  

We are still under Monarch rule. Always have been, since 1787.

The US everyone is so proud of, only lasted 11 years before it fell.

 

Sat, 05/10/2014 - 00:57 | 4745651 cowdiddly
cowdiddly's picture

A Burr got rid of the first cb scum. Where oh where are the statesmen today.

Sat, 05/10/2014 - 02:53 | 4745701 e_goldstein
e_goldstein's picture

In a sane world, the anniversary of the death of A. Hamilton would be celebrated as a national holiday.

Sat, 05/10/2014 - 03:02 | 4745722 weburke
weburke's picture

ever read federalist papes? he was killed because he opposed the old order.

washington obelisk goes 111 feet into the ground. "buttonwood tree" has interesting 911 storyline. 

Sat, 05/10/2014 - 11:32 | 4746045 Zirpedge
Zirpedge's picture

Arron Burr was a British hired assasin acting on bealf of the money power. He represented himself as defending "States Rights", this hoax still works on the sound bite "Tea Party" today.

Fri, 05/09/2014 - 22:31 | 4745486 bonin006
bonin006's picture

Perhaps this could go alomg with the pledge:

http://www.muldrake.com/glennbeckhailobama.html

 

Sat, 05/10/2014 - 11:15 | 4746014 Zirpedge
Zirpedge's picture

Common core should evaluate schools based on this new pledge. Those kids were rusty and the fear of god needs to be put in them.

Sat, 05/10/2014 - 11:37 | 4746063 The Wizard
The Wizard's picture

 

A historical analysis of the Pledge will reveal it was proposed and written by Socialists with a desire to assist in building a strong central government. Just one step closer to bringing on the New World Odor.

Through statist education, we learn and accept without question what we are fed as long as it is seasoned with sugar-coated treats. In the midst of America's present cultural war, it is imperative that we re-examine all of our "traditions" that have been accepted as part of American "patriotism." This we shall attempt to do with the "PLEDGE OF ALLEGIANCE," which was born out of the concepts of political liberalism and "Christian Socialism."

During the nineteenth century, America became deeply involved in a social, political, religious and philosophical warfare that was equivalent to the French Revolution. The opposing forces in this warfare were Biblical Christianity and constitutional government on one side and liberal Christianity and socialistic government on the other side. Among those who became proponents of the liberal and socialistic views were many prominent northern poets, philosophers, educators, editors and even Christian ministers. A Baptist minister of Boston, named Francis Bellamy (1855-1931) was one of those ministers.

Sat, 05/10/2014 - 11:30 | 4746042 Zirpedge
Zirpedge's picture

"Alexander Hamilton - America's original crony-capitalist and fascist." No my good man, Arron Burr was a professional hit man hired by Britain in the interest of the money power. He represented the hoax of "States Rights" which continues to dazzle a poorly misguided "teaparty" today.

Sat, 05/10/2014 - 11:43 | 4746075 Jumbotron
Jumbotron's picture

Hamilton was indeed the godfather of The Federal Reserve.  Jefferson hated the man and vowed to destroy the First Bank of The United States and did during his term as President.  As a Federalist...Hamilton wanted more power concentrated at the top...including matters concerning money.  He erroniously thought the key to America's survival and vitality was to have the money available through issuance of debt from a federally controlled bank in order to protect the young country from attack as had just been repelled during the revolution.  Also Hamilton wanted America to be an empire one day as well.

 

I would suggest "The Whiskey Rebels" by David Liss as a very good historical novel that really gives you a feel for the mindset and the machinations of the real characters involved in "The Duer Affair" which was this country's first financial collapse....and sadly....for all the reasons we have seen for all our financial.collapses since then.

 

 

 

 

Fri, 05/09/2014 - 21:11 | 4745368 navy62802
navy62802's picture

Who shot Alexander Hamilton in that famous duel??

http://www.youtube.com/watch?v=pQs-cqIsBD4

Got milk?

Fri, 05/09/2014 - 21:25 | 4745396 navy62802
navy62802's picture

By the way (and this is totally off-topic) has anyone realized that the action of commanding someone to do something is built into the English language? Of course, we are all taught the imperative mood in grammar class, but do people really comprehend the implications of it? Why does our language include an entire verbal structure dedicated to orders and commandments? Isn't that perverse? It's like totalitarianism is built into our very language in the West.

Fri, 05/09/2014 - 21:41 | 4745420 Uber Vandal
Uber Vandal's picture

Our whole language is also built on deceit.

One only need read the terms of a software, cell phone, or credit card "agreement".

 

 

Fri, 05/09/2014 - 22:28 | 4745479 navy62802
navy62802's picture

Yeah, but what I'm talking about is more basic than a legal construct. I think the legal profession could take a collection of random scrawlings and come up with a document that restricts your freedom as a human being.

What I'm talking about is something more sub-conscious than that. The concept of having authority over another human is built into the English language. It's probably built into other Indo-European languages.

If the thoughts that you have are built out of the base language that you learn as a child, and the base language that you learn incorporates the subjugation of one person to another (as a linguistic construct), then how can anyone be surprised that we have arbitrary conflict in the modern world?

Sat, 05/10/2014 - 07:09 | 4745796 BigJim
BigJim's picture

Interesting point. I'm guessing most languages have this; after all, parents use language to teach their kids how to survive and sometimes the kids need to just 'do it'... or they're dead.

Sat, 05/10/2014 - 10:04 | 4745914 sessinpo
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navy62802      What I'm talking about is something more sub-conscious than that. The concept of having authority over another human is built into the English language. It's probably built into other Indo-European languages.

If the thoughts that you have are built out of the base language that you learn as a child,

---

Think about that. As a parent, is the child on equal standing with you as the parent? When your child throws a fit in the grocery store because the child wants the candy, are you going to debate with them on equal standings? More then likely, you are going to show some authority (without being abusive), move on and hopefully teach the child something.

Additionally, relationships between adults have generally been between one dominate and one submissive partner. This goes with heterosexual and homosexual relationships. I am not surprised of having a world in conflict. But it is not arbitrary. It does mean something. The problem is that the leaders of the world take this conflict to extreme and violent directions that result in death of the regular folks or all religions, all sexes, and all races.

Fri, 05/09/2014 - 22:10 | 4745446 OC Sure
OC Sure's picture

 

 

"Why does our language include an entire verbal structure dedicated to orders and commandments?"

Because of remnants of admonitory hallucinations from when before humans invented an introspective, conscious dialogue? See The Origin of Consciousness in the Breakdown of the Bicameral Mind by Julian Jaynes:

http://www.julianjaynes.org/julian-jaynes-theory-overview.php

Fri, 05/09/2014 - 22:54 | 4745520 blindman
blindman's picture

there is a dynamic, powerful and troubled relationship
between the nouns and the verbs to begin with and it gets worse
when you add to the mix the long maturation process
required by humans and our long dependence on nurturing,
mother culture and associated technology, the commandments
and the father figure and the long childhood etc...
somehow advancing technology might keep the population,
in general, at a permanent state or stage like childhood?
nouns and verbes comporting to the designs of them who
have mastered fire or becoming burn victims, moaning lo.
.
"The real menace of our republic is this invisible government which like a giant octopus sprawls its slimy length over city, state and nation. Like the octopus of real life, it operates under cover of a self created screen....At the head of this octopus are the Rockefeller Standard Oil interests and a small group of powerful banking houses generally referred to as international bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes. They practically control both political parties."
-- New York City Mayor John F. Hylan, 1922

"Fifty men have run America, and that's a high figure."
-- Joseph Kennedy, father of JFK, in the July 26th, l936 issue of The New York Times.
.
February 27, 2013
Waiting to Die
http://verbewarp.blogspot.com/search?updated-max=2013-04-11T11:12:00%2B0...

Fri, 05/09/2014 - 23:23 | 4745560 navy62802
navy62802's picture

What I'm talking about is even more insidious than any of the things you have mentioned. If you are formulating thoughts from a basic language that incorporates the subjugation of one person to another, then you have already been corrupted. It is the English language, itself, which plants the seed of subjugation. Sub-consciously, all English speakers feel that they may command another human through the Imperative mood of a verb. Because this linguistic structure is the construct of thoughts in the nascent human mind, it carries through to maturation. And the mature human retains the thought construct, however sub-conscious it may be, that it is always possible to subjugate one human to another.

Fri, 05/09/2014 - 23:44 | 4745587 blindman
blindman's picture

i think my point was that, perhaps, the language
has this feature you point out because it actually
works given the nature of the beings that use it to
survive in the cultures as they are. i make no claim
that they are perfect, efficient or just tools of
survival or communication, just that the vernacular/s
do get an infant into adolescence in one piece more
often than not. then you are on your own to refine
utterances or make up your own if you like, ....
i think life was simpler when people lived to be 34
and then died of old age. just a bad joke ....
.
Tom Waits First Kiss Orphans (Bastards)
https://www.youtube.com/watch?v=ShwfvV8T5j0

Fri, 05/09/2014 - 23:53 | 4745600 navy62802
navy62802's picture

I can certainly understand what you're saying here. And just to be clear, I am no linguist or historian or anything like that. I just wanted to ask the question, as this is something that only recently dawned on me. I'm pretty much as clueless as anyone else on the subject. But it surely can't hurt to raise the question and get people to think about it.

Sat, 05/10/2014 - 00:13 | 4745619 blindman
blindman's picture

don't get me wrong, i think it is a brilliant
insight, question and topic of inquiry that
everyone would learn a great deal from contemplating
and discussing. you may not be clueless at all
but may have arrived at the key line of sight to
comprehending this human experience, motivations
and like that?

Sat, 05/10/2014 - 08:39 | 4745853 shovelhead
shovelhead's picture

Because the language of command exists, it doesn't follow that that the compulsion to comply also is present.

My wife and kids are a living testimony to the veracity of this observation.

Sat, 05/10/2014 - 08:31 | 4745816 OC Sure
OC Sure's picture

 

 

 

"Because this linguistic structure is the construct of thoughts in the nascent human mind, it carries through to maturation. And the mature human retains the thought construct, however sub-conscious it may be, that it is always possible to subjugate one human to another."

You are correct. This is why adults use a certain admonitory tone and choice words with children and likewise as does authority with adults.

However, as one matures they must recognize the power of language by harnessing it rather than receiving it as a whip.

This is also why I point out not to accept the Terms-of-Tyranny. As tyranny, unearned authority, controls the language thus it controls the thought thus it controls the action; what people do is a result of what they think.

Emperor Popes 1,500 years ago grew wise to this and institutionalized Plato's  theory of Forms as the new means of controlling the masses not by brute force but instead verbal sedation.

Please do not accept the terms of tyranny; resist the sedation and tell two friends to tell two friends the same.

 

 

Fri, 05/09/2014 - 23:02 | 4745529 A Nanny Moose
A Nanny Moose's picture

NVC - Non-Violent Communication.

http://www.youtube.com/watch?v=-dpk5Z7GIFs

Sat, 05/10/2014 - 01:20 | 4745671 SilverRhino
SilverRhino's picture

Imperative form is in all Indo - European languages. English is not all that special.

Sat, 05/10/2014 - 03:14 | 4745726 tulip_permabull
tulip_permabull's picture

"It's like totalitarianism is built into our very language in the West."

Bizarre comment. You've got to be trolling. The ability to make requests/give orders is built into every natural language as far as I am aware, including non-Western languages, of which I speak two. Nonetheless, if you think that being able to say "Pass the butter" is opening the door to totalitarianism, remember, you can always mitigate the authority of your request by adding the word "please".

There. Problem fixed. 

Fri, 05/09/2014 - 21:18 | 4745378 Zirpedge
Zirpedge's picture

Cue the Tricorn Hat wearin and Fife playing teatards coming in to discredit Hamilton and say that central banks aren't federal institutions with an interest for the common good of the nation.

Fri, 05/09/2014 - 23:21 | 4745554 A Nanny Moose
A Nanny Moose's picture

So you are against those who are against an abstraction? Define common good? Who exactly, benefits from the "common good," because it sure as shit ain't the "commons."

Sat, 05/10/2014 - 10:29 | 4745933 disabledvet
disabledvet's picture

If Washington and Hamilton were alive today they'd be preparing the plans for attack while Von Stueben drills the fanatical battle hardened of the New Republic for a final the the final push on the Capital.

I mean you can't even begin to compare the Byzantine tax and bureaucratic structure of today with what existed in Colonial times....let alone the sense of honor and how a man's reputation was over and above all else His only concern.

Now it's just "who's the biggest slime ball who can shakedown the entire tax structure itself for their personal benefit."

Sat, 05/10/2014 - 11:20 | 4746022 Zirpedge
Zirpedge's picture

@nannymoose: Re: Who are "The Commons". Re-read the Declaration of Independence...particularly the last line.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

 

Fri, 05/09/2014 - 23:22 | 4745557 NickVegas
NickVegas's picture

Ad Hominen, party foul. Sit in the paid stooge corner until summoned.

Sat, 05/10/2014 - 01:03 | 4745660 AccreditedEYE
AccreditedEYE's picture

You are a very, very, VERY good troll. You've done your homework on how to piss off ZH readers. Maybe you should take 1/2 that energy and do some research. The Fed stands in stark contrast to everything the Founders of the United States stood for... Most of them anyway. So much deception can be accomplished under the banner of "doing the common good for the nation". Common good is when everyone plays by the same rules. Royalty and privilege was never intended for the U.S. There's plenty of it across the Atlantic already. Wake. Up.

Sat, 05/10/2014 - 11:24 | 4746032 Zirpedge
Zirpedge's picture

The question is who is "trolling" and "being trolled" here in ZH land. One would be keen to observe the inflammatory articles and hyperbolic headlines presented for our consumption.

Off topic, it's like who is a "terrorist" or "being terrorized". It requires a special group to claim victim status, this war on trolling ahem terror.

 

Sat, 05/10/2014 - 19:57 | 4746989 Ckierst1
Ckierst1's picture

Hey, Zirp, congrats on your recent one month anniversary as a ZHer!  It's amazing the way you pegged the ZH community after only a month of membership.  You must be a mensa or sumpin'!

Sat, 05/10/2014 - 11:43 | 4745887 Sean7k
Sean7k's picture

Perhaps, but the FED IS a private corporation, therefore, it is ultimately not subject to the peversions of government, but by its' owners. Two, if it was interested in the common good, it would never have institutionalized fractional reserve banking. Three, that First National Bank had only one investor whom actually paid their tenth share- the US Government, however, all ten shares profited in its' operations- until it failed- because of paper money.

Fourth, and most important, the money of the Constitution is gold and silver, with silver being the ONLY dollar by definition of 371 1/4 grans of pure silver. No other money is allowed to be legal tender. It was one of the first bastardizations of the Constitution that led to its' complete failure (after judicial review). See, "Pieces of Eight". 

While I am not a teatard, I am a pretty decent historian. Hamilton was a Rothschild agent and in collusion with Morris, opened the path the for the re-taking of America by financial means with the First National Bank. You could consult, "The Creature from Jekyll Island" or Rothbards', "Concepts in Liberty". 

 

Fri, 05/09/2014 - 21:17 | 4745380 Aussiekiwi
Aussiekiwi's picture

Its always manipulation of the money supply that starts everything,

Fri, 05/09/2014 - 23:30 | 4745571 KickIce
KickIce's picture

And always a Rothschild behind the manipulation.

Sat, 05/10/2014 - 10:16 | 4745923 sessinpo
sessinpo's picture

Aussiekiwi      Its always manipulation of the money supply that starts everything,

----

KickIce     And always a Rothschild behind the manipulation.

----

Very intereting opintion KickIce . Explain to me the various monetary manipulations before the Rothchilds?

For example : In 48 BC, Caesar took back from the money changers the power to coin money and then minted coins for the benefit of all. With this new, plentiful supply of money, he established many massive construction projects and built great public works. By making money plentiful, Caesar won the love of the common people.

Or how about Jesus throwing out the money changers from the Temple in about 30 AD?

All before Rothchilds.

---

My point is that it is not about Rothchilds. It is about evil and wrong doing. If the Rothchilds didn't exist today, it would be someone else doing it just as it was someone else BEFORE the Rothchilds.

 

 

Fri, 05/09/2014 - 21:17 | 4745382 Yen Cross
Yen Cross's picture

  I'll leave this one to the thespians.

 Eighty Years Before Bagehot and the Seeds of the New York Stock Exchange
The Panic of 1792 appears to have been effectively managed with little or no long-term spillover to the economy. And most importantly, it didn’t derail the financial and economic revolution taking place. What’s more, key features of Hamilton’s market intervention predate Walter Bagehot’s famous rules for central bank crisis management by nearly a century. For example, Hamilton instructs Bank of New York to lend on good collateral, in this case U.S. Treasury securities,

Fri, 05/09/2014 - 21:23 | 4745398 Platinum
Platinum's picture

Resurrect Aaron Burr!

Fri, 05/09/2014 - 21:34 | 4745412 nmewn
nmewn's picture

I was thinking the same thing ;-)

Fri, 05/09/2014 - 21:29 | 4745403 ebworthen
ebworthen's picture

There have to be losers.

The currency must be backed by tangibles, and "bailouts" of whatever form using the public treasury must be forbidden.

Once it is known that the Government will backstop speculators:  the individual, their labor, and their savings - are thrown to the wolves.

As long as that is the case you do not have capitalism nor a sound financial system.

Fri, 05/09/2014 - 22:04 | 4745445 Yen Cross
Yen Cross's picture

 Ebbie? Currency trading is liquid, and huge.

     LOP is wrong, bless his soul.

Fri, 05/09/2014 - 23:40 | 4745582 KickIce
KickIce's picture

Yeah but that doesn't stop the MSM from blaming capitalism for our current problems.  If we had any semblance of capitalism left Wall Street would be out in the street in 2008 where they deserve to be and we would probably be well on our way to a real recovery by now.

Fri, 05/09/2014 - 22:16 | 4745457 blindman
blindman's picture

@.."who deserves credit for the original doctrine of lender of last resort?"
that is a good one. "credit", get it?
the one who deserves the credit is the original
borrower for without that one there would be no need for an extension of
credit. so who was the original borrower? the original debtor?
that be the one who got the credit presumedly deserved, what they did with
it was, every 7 years, defaulted on it. then they became less original
and received more credit.
.
one might ask "who is to blame as the originator of the doctrine of
lender of last resort?" i understand that is not your question.
.
" Deuteronomy 23:19-20
"You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest. "You may charge interest to a foreigner, but to your countrymen you shall not charge interest, so that the LORD your God may bless you in all that you undertake in the land which you are about to enter to possess. " ...
( this must be the feds guiding doctrine )
it all gets even more tragic from here but i have to go.

Fri, 05/09/2014 - 22:26 | 4745476 OC Sure
OC Sure's picture

 

 

"You shall not charge interest to your countrymen: interest on money, food, or anything that may be loaned at interest. "You may charge interest to a foreigner, but..."

Thanks to Noah Webster and Jeremy Bentham for their pro-Usury movement capital formation accrued.

Fri, 05/09/2014 - 23:01 | 4745527 blindman
blindman's picture

and possession is 9/10ths of the law even if possession
is accomplished by usury and treachery? not a system
that results in capital formation by any means. this
type of system destroys capital faster than technology
can replace that which is lost. i think they call it
deflation?

Sat, 05/10/2014 - 09:33 | 4745892 Sean7k
Sean7k's picture

Foreigner should be translated as gentile, for that is the meaning here. It also appears in the Quoran. 

Fri, 05/09/2014 - 22:18 | 4745465 Seek_Truth
Seek_Truth's picture

A History of the Money changers including Alexander Hamilton:

http://www.iamthewitness.com/DarylBradfordSmith_Bankers.htm

Fri, 05/09/2014 - 22:26 | 4745477 Seize Mars
Seize Mars's picture

Hamilton: the original Rothschild plant. Yep, I said it.

Fri, 05/09/2014 - 23:29 | 4745570 NickVegas
NickVegas's picture

War debt, inflation, private banking interests. Nothing new under the sun. It's multigenerational evil incarnate enslaving all of humanity.

 

 http://www.iamthewitness.com/DarylBradfordSmith_Bankers.htm

1796

The First Bank of the United States has been controlling the American money supply for 5 years.  During this time the American Government has borrowed $8,200,000 from this Central Bank, and prices in the country have increased by 72%.  In relation to this, Thomas Jefferson, then Secretary of State stated,

"I wish it were possible to obtain a single amendment to our constitution taking from the Federal Government their power of borrowing."

 

 

 

 

 

Sat, 05/10/2014 - 00:50 | 4745653 AccreditedEYE
AccreditedEYE's picture

He also supported "healthy rebellion" from time to time.. To "show government where the true power lie". We need to get back to this. Reverse the very heavy tide.

Sat, 05/10/2014 - 03:09 | 4745724 Boomberg
Boomberg's picture

and Jefferson died something like $100,000 in debt, a massive sum in those days. He lived well beyond his means even in the glory years. Only reason lenders didn't foreclose on Monticello and put him in the fields was pity. Don't get me wrong, I'm an admirer of Jefferson. He got the most out of his long life. He lived well. 

Sat, 05/10/2014 - 10:19 | 4745925 sessinpo
sessinpo's picture

NickVegas       War debt, inflation, private banking interests. Nothing new under the sun. It's multigenerational evil incarnate enslaving all of humanity.

---

Yep. All those things occurred in the past before the Rothchilds were even thought of. We see in in past empires that rose and fell over a thousand years ago.

Sat, 05/10/2014 - 00:48 | 4745650 AccreditedEYE
AccreditedEYE's picture

Jefferson's arch enemy was Hamilton. The same Hamilton that clowns like Geithner & Co idolize. Hamilton was such a sad excuse for torch bearer of American democracy. Every single fear Jefferson had of the strengths of democracy being turned against it have happened.

Sat, 05/10/2014 - 08:37 | 4745852 Ckierst1
Ckierst1's picture

These central bankers are real assholes and just like ticks.  Andrew Jackson had a devil of a time getting shed of the 2nd Bank of the United States (actually, really the 3rd! - they never give up, NEVER). Biddle, the notorious and treasonous Chairman of that central bank actually began to induce a crash simply to prevent the nation from terminating the parasitic institution, thereby protecting its international bankster shareholders and TPTB such as the Rothschilds, who have been bleeding the people of the US since BEFORE the Constitution was ratified, playing BOTH sides of the revolution.  Our drones are incorrectly targeted.

Sat, 05/10/2014 - 10:22 | 4745928 sessinpo
sessinpo's picture

Ckierst1   These central bankers are real assholes and just like ticks.

---

No, actually the CBs are just like serpents, cold blooded. Politicians are the ticks (politics or poly ticks). It is the serpents (the bankers) that direct and help the politicans to find the blood they desire. That blood comes from us, the populace.

Sat, 05/10/2014 - 09:14 | 4745873 Ckierst1
Ckierst1's picture

Actually, droning is too good for them.  They need to be hung from lampposts for all to see, like Mussolini or Bahamian pirates strung up after Woodes Rogers caught up with them.  The damage they intentionally do to society and the misery they cause good, innocent, vulnerable people is horrendous but only poorly reported and hardly protested at all.  When you yoyo markets, manipulating them with bursting bubbles and render fiat currency savings nearly worthless via inflation in order to transfer wealth to mercantilistic first receiving elites, you are killing and bleeding the middle class.  With malice afterthought, you are intentionally impoverishing a whole societal class of hundreds of millions of citizens, obliterating their savings, denying them adequate health care, exposing them as defenceless prey to criminal elements in poor neighborhoods, disrupting and fragmenting families while exposing vulnerable members to unsavory predators and, among other things, preventing that social strata from properly educationally improving and informing themselves, you are knowingly rending the fabric of society.  FWIW, Hamilton KNEW what he was doing and that is why he assiduously peddled the FLAWED Constitution in the US to attain ratification over the bodies of the antifederalists like George Mason and Patrick Henry.  Jefferson was serving abroad at that time and unable to actively join that fight.

Sat, 05/10/2014 - 09:48 | 4745905 Chuck Knoblauch
Chuck Knoblauch's picture

Hamilton is the heo of Redoubt #10 (Battle of Yorktown).

A good guy turned bad by the promises of the European banks.

Jefferson never touched a musket during the RW.

Sat, 05/10/2014 - 09:42 | 4745900 Chuck Knoblauch
Chuck Knoblauch's picture

The Wall Street gambling casinos should have burned to the ground.

This is organized crime.

Sat, 05/10/2014 - 09:44 | 4745903 shovelhead
shovelhead's picture

Hmmm,

No doubt there is a learned criticism of Hamilton's policies by the 'economists' and historians that breed like flies in our institutions of higher learning and I will definitely  come under the dreaded down vote for a defense of Hamilton, but consider this:

The new United States after the War is flat broke, heavily in debt, their Continental Script is worthless, no creditors in sight and State banks are not lending because nobody knows who is solvent or not. All claims to property as collateral are cloudy at best and there is no appreciable specie to conduct business.

Picture the worse fiscal crises that could exist and you are looking at a new nation founded on a principle of self governance that has never existed before and most seemed to think was doomed to failure from the start.

I'd have to say that young orphan from the Caribbean, a fledgling lawyer who's bravery at Yorktown played a key role in it's surrender, took on a role that would daunt more experienced men twice his age and kept this new experiment in self governance not only alive but would honor all debts and become prosperous in a remarkably short time.

Without Hamilton's tenacity and patriotic zeal to convince wealthy landowners, businessmen and flinty-eyed bankers to part with enormous sums on a very weak proposition of return, the sickly new-born country would die in it's crib.

One can argue about subsequent events, roads not taken and unforeseen circumstances of his actions, but the fact remains that without Hamilton, there would be no United States at all.

We should be mindful, excusing the pun, to give credit where credit is due.

Sat, 05/10/2014 - 10:29 | 4745935 Ckierst1
Ckierst1's picture

Actually, those "learned" academics and economists breeding like flies would most likely defend Hamilton as a proto Keynesian savant.  To find real criticism you need to go to the Revisionist economic historians like Tom Woods and Tom DiLorenzo and to folks at the von Mises Institute, like Lew Rockwell for a good modern critique.

Sat, 05/10/2014 - 11:10 | 4745940 Sean7k
Sean7k's picture

Of course, his actions had nothing to do with "who" held those debts and whom had been buying them up on the discount to cash in later, at full value, when the First National Bank opened its' doors? You would think, as Treasury secretary, he would have demanded those other shares be paid in full? 

What mght America have become without a government? We wouldn't want to consider that, no, let's lift a glass to fractional reserve banking and the debt slavery that indebts us all and future generations , still unrepresented but burdened by the debts of their forefathers. For all the works of Andrew Jackson, many of which were abhorrent in every detail, the destruction of the Second National Bank freed America from the worst of the Rothschild's machinations, until they could engineer a civil war, gave America a chance at freedom from paper money. The nature of greed continues to rot the core of the apple of liberty.

If a man works so hard to destroy the founding document of his republic, he is to be seen a hero? Because he bailed out the TBTF from the merchant class of 1790?

Hamilton was a tool of international bankers and therefore, a traitor to all the sacrifices of the people. History always attempts to dress the actions of evil men in cloaks of respectability. This is why winners write history and teach it to those which are ignorant of life itself. 

Sun, 05/11/2014 - 19:48 | 4749249 The Old Man
The Old Man's picture

Well history does repeat itself. Hamilton did what he had to do under the influence of those bankers regardless of what he is called today. Somebody gave him a job, and he did it. Okay, so it's not the most honorable and wise thing to do, but, for then, it worked. Jefferson knew what was going on before he got back from France but had little influence to do anything about it. Debts were still piling up and little rebelions about military pay and so forth were sprouting here and there. The fact that the interest was the demon in this scenario was the one thing which spurred Jackson to do what he had to do to kill the bank. He wound up not really killing it because the persistant bastards just kept lobbying beyond his terms in office until they had the new excuse of the civil war for usury of the worst kind. 

Today, with the central bank, we have the same scenario. They electronically add dollars to an overinflated money supply which does no person on the street any real good but to raise the cost of living and shorten the long term finances of the govenrment. Not to mention the unregulated earnings of the richest people involved with the benefit of the money printed and possessed. Bonuses have to be umpteen BILLIONS of dollars to make sure that when the SHTF they have their asses covered. Where have we seen this before? Oh, they're buying art. Bullshit. They're buying property. They are buying long term assets like FARMS, WATER and OIL.

Not unknown to us all is the fact that these people are writing the finacial history of the world, themselves and the USA. When will we the people come to totally understand that we are the ones who are to be sacrificed for the greater grandure of the elite and the world bankers. And when we do, are we to just watch the process start over again and the cycle be repeated.

How much bullshit rhetoric can the people of the United States take until they realize they are being fucked big time by these controlling, usurist manipulators. We have to get some people in this government who are not takers and who can hold their ground. Long term thinkers and doers who, if they have to, will shut it down until reasonable results occur.

We are in the midst of what I would call a new ideology of, for and by the people. The world be damned. We are the United States of America. We should take care of our "business" first.

Sat, 05/10/2014 - 10:36 | 4745943 Shed Boy
Shed Boy's picture

Actually, it goes beyond language. It's part of our genes to want to control other people. Weve been doing that long before we could talk. Humans first desire is to control whats around them, it's in our DNA.

Sat, 05/10/2014 - 15:07 | 4746455 withglee
withglee's picture

Knowing what money really is (and always has been), "a promise to complete a trade"; knowing that money is created by traders getting their trading promises freely certified; knowing that money then circulates as a valued item of simple barter because under proper management INFLATION is guaranteed to be zero; knowing that when the trader delivers on his promise, he returns the certificates which are extinguished (guaranteeing a perfect balance between supply and demand for money); knowing that broken certified trading promises are DEFAULTs and that INTEREST collections must exactly match DEFAULTs to guarantee zero INFLATION by the relation: INFLATION = DEFAULT - INTEREST;

Now then go back and read the article and see how an obvious ignorance of proper management of an MOE leads to very bad results ... except maybe for those manipulating the MOE.

Sat, 05/10/2014 - 16:12 | 4746668 Vin
Vin's picture

It's hard to say anything good about Hamilton as he sold us out very early on to the banking families.  If he managed to do one good thing before he became a traitor, fine, but he was still a traitor.

Tue, 05/13/2014 - 08:38 | 4754077 realWhiteNight123129
realWhiteNight123129's picture

Henry Thornton kicks ass in 1802 AND in 1810.

In 1802 Thornton:

  • Explains real velocity of money (not to confuse with credit multiplier)
  • Explains why it is ok to backstop good credit
  • Explains the difference between currency and money
  • Every other sound principles of credit, currency and money that have been adultered by Keynes and Friedman since...

In 1810 Thornton is explaining

  • price bifurcation because of excessive printing
  • Explains how repressed interest rates lead to credit bubbles

THORTON hands down against BAGEHOT.

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