The Switch From Wealth to Debt
ince 1792, our money has been
"switched' from wealth to debt. By changing our money back to wealth, we can reverse
the tide of ever increasing prices, taxes, debt , bankruptcies and economic ills that are
destroying America and her people. How money is put into circulation is the most important
principle. The real issue is not gold and silver vs. paper, not commodity money vs. fiat
money, but wealth vs. debt, honesty vs. fraud. Let's follow the trail of United States
money, from when it was gold and silver commodity money, put into circulation as a wealth
to the people, by the people, to what it has become - a monetized debt, put into
circulation by the banks, as interest bearing debts to the people, for the personal profit
of bankowners.
The real reason gold and silver coinage initially worked well as money for the people,
is that the people produced the gold and silver, a raw resource of the earth, through
their labor. The 1792 Coinage Act allowed anyone to take that
resource to the United States mint and have it monetized (coined) free of charge. We, the
people, furnished our own money, based on our production, as a wealth to ourselves and
spent it into circulation as a benefit to all of society with no debt attached to it.
Gold and silver are very heavy metals and not as convenient to carry as paper money. If we
didn't want to carry the gold and silver coins around with us we could take them to the
United States Treasury's National Bank and store/deposit the coins. The Treasury would
issue depositors gold and silver certificates as receipts. They stated on their face that
there was X amount of gold or silver coin on deposit in the Treasury, payable to the
bearer on demand. Now, we had paper money. As long as just this principle was followed you
still had good, honest, wealth money with no debt, no excessive profit, nor excessive
purchasing power to anyone.
This 1922 series ten dollar gold certificate is a good example of honest money. The
note states on it's face "THIS CERTIFIES THAT THERE HAS BEEN DEPOSITED IN THE
TREASURY OF THE UNITED STATES OF AMERICA TEN DOLLARS IN GOLD COIN PAYABLE TO THE BEARER ON
DEMAND" Fully backed and redeemable paper money that was as good as gold.
However, when someone deposited their gold and silver coins in private non-governmental
reserve banks, a totally different principle went into action. The private banks held the
coins as a reserve for making new paper money to issue as loans, expanding the paper money
supply. Making the new paper money loans equal to 10 times the face value of the coins
deposited. This fractional reserve system seemed well and good as the banks raked in huge
sums of interest and shared some of the earned interest with depositors. At that point,
money switched from wealth to debt. The expanded money supply now had a fiat backing (only
a fraction of the paper money was really backed by gold or silver coin).
Private Bank Note Money. Click on the images to enlarge.
Because of the popularity and tactics of these private non-governmental banks the United States National Bank established in 1791 by congress was unable to compete and had to be shut down in 1832. From the beginning private banks have been lobbing congress and congress has been deceived into making laws allowing private banks to take control of our money.
Americans have lacked this understanding. Lack of understanding is why America is the
world's greatest debtor nation with over $26 Trillion in public and private debt at the
end of 1990.
On January 24, 1939, Robert H. Hemphill, credit Manager of the Federal Reserve Bank of
Atlanta stated:
"If all the bank loans were paid no one would have a bank deposit and there would not
be a dollar of coin or currency in circulation. This is a staggering thought. We are
completely dependent on the commercial banks. Someone has to borrow every dollar we have
in circulation, cash or credit. If the banks create ample synthetic money we are
prosperous: if not, we starve. We are absolutely without a permanent money system. When
one gets a complete grasp of the picture the tragic absurdity of our hopeless position is
almost incredible, but there it is. It (the banking problem) is the most important subject
intelligent persons can investigate and reflect upon. It is so important that our present
civilization may collapse unless it becomes widely understood and the defects remedied
very soon."
At first glance, private non-governmental banking looks like a good deal for everyone. The
banks get more profit. The people can get quicker and easier loans. More capital is
available to engage in commerce. Production picks up. But, sooner or later, more and more
people can not make their loan payments. An unseen by-product of fractional reserve
banking is: it makes a few people very rich, and leaves everyone else constantly in debt
(even if you are personally out of debt the taxes you pay are your interest payments on an
unpayable public debt). Fractional reserve banking creates compounding, unpayable public
and private debt, which causes the cost of living to constantly go up for all Americans.
Throughout the nineteenth century, larger banks worked to get laws passed that would
consolidate all paper money issuance under the control of just a few. They did so under
the guise of a standardized national money. They were successful in 1863 with the passage
of the National Banking Act. It allowed newly chartered national banks to create a new
uniform national bank currency. A few years later the federal government taxed state bank
notes out of existence. In 1873, the government stopped all free coinage of metals. To
enact this newly nationalized form of fiat (fraud) money it's creators began switching
paper money from gold and silver backing to the use of United States Certificates of
indebtedness "United States Bonds" (Government Debt) as security for this
currency distributed by the privately owned Federal Reserve Bank.
This 1912 series one dollar note is a good example of fiat (fraud) money. The note states
on it's face "THE FEDERAL RESERVE BANK (A private banking corporation) WILL PAY TO
THE BEARER ON DEMAND ONE DOLLAR" However, it does not say what this dollar when
demanded will be made of, if anything. It also says "SECURED BY UNITED STATES
CERTIFICATES OF INDEBTEDNESS" You can now clearly understand why our government and
private sector are so deeply in debt. All we use for money is (monetized) DEBTS.
The switch from wealth based money to debt-based money was in the final stage of
completion. All that was left was to remove all gold and silver based currency out of
circulation.
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Last Updated on 04/21/98 by Darren Perkins 