The Watershed Moment
A Trajectory of Ruination and How to Undo It
Except the Reflecting Pool I can think of no monument that looms greater in our nation’s capitol than the Lincoln Memorial of which the Reflecting Pool was originally a part. Personally, I like the pool better than the memorial and am delighted that the Washington Monument makes far better use of the Pool’s long rectangular power of reflection. Unlike many Americans, who view Lincoln as the savior of our nation — the man who prevented our nation’s severance and brought plantation slavery to an end —, I view him pretty much as one might view any politician driven by a desire to impose his own world view on his countrymen through the use of force.
It is argued in the most generous of terms that had Lincoln not prevented the separation, North America would have been devoured by our European adversaries and that slavery would still be with us today. Unfortunately, slavery in the form of human trafficking and the enormous debt generated by the corrupt nature of our nation’s money supply and the consequential perverse effect that it has had on private household savings and student education is still with us. And, while the American state is now struggling to maintain its military supremacy and global political hegemony, more than half of all Americans live from paycheck to paycheck unable to promise their children a tomorrow better than their own present. Indeed, nearly half — some 48 percent in 2019 — of all Americans above the age of 18 make no claim to parenthood. More than half of all American children suffer from some sort of chronic illness. And, as the life-expectancy of the average American has declined for the past ten years, one out of every 18 boys today suffers from autism. Now, if you are so foolish to think that these social and health problems have little to do with our corrupt money supply, then you are truly asleep and need to be awakened. Soft money corrupts, and the facts speak for themselves. America is devouring itself.
Yes, you may argue that much has occurred since Lincoln started, led, and concluded a war that resulted in the death of 1 out of every 50 Americans — including freemen, women, and slaves alike. And, you may further argue that one man at a pivotal time in our nation’s history cannot be blamed for all of our nation’s current woes.1 Surely, I would not attempt to dispute this.
Then too, we should take note of the many other memorials that have been constructed around the Reflecting Pool since the Lincoln Memorial was first dedicated in 1922. By the way construction of the memorial began in 1914 — the same year in which Great Britain declared war on Germany.2 The many other memorials around the pool include the two Vietnam War Memorials, the Korean War Memorial, and the World War II Memorial. It would appear that the Reflecting Pool has been dedicated to our nation’s reflection on war — war being a principle constitutional role of our federal (national) government, and accordingly and unfortunately, an endless source of recurring debt.
Though defense of the nation is the only truly noble justification for war, since the close of the World War II other more controversial provocations for war — such as the prevention of the spread of Communism and Islamic terror, maintaining America’s global hegemony, control of key world resources, defense of the NATO alliance, and the seemingly relentless and inexplicable defense of the theocratic and apartheid state of Israel — have all loomed many times larger.
Alas, World War II would never have taken place had we not allowed our leaders to drag our nation into World War I. Defending the British Empire against the 2nd German Reich was a truly stupid thing to have done, but by that time we had turned the Philippine Islands into an American colony, and our government’s colonial and imperial aspirations were already, perhaps not yet firmly, in place.
Until the Spanish-American War in 1898 which resulted in the US possession of the Philippine Islands the United States Government had not fought in any wars that were not tribal in nature and designed — with the exception of Hawaii — to assert America’s sovereignty over those parts of the North American continent that had already been claimed, but were not yet settled by American citizens. Indeed, by ending the controversy between slave and non-slave US territories and their potential statehood, Lincoln opened the door to America’s settlement of the “Wild West”. This was Lincoln’s territorial legacy.
There is, however, much more to heading a sovereign state than maintaining and expanding its borders in the name of state security — something which the current American government is very poor at doing. Just what business do we have in the Ukraine, anyway? And, why are we seeking to expand NATO in Europe while our own borders are being flooded with unvetted, illegal aliens here at home? From the point of view of sound state management, the American state is currently run by fools. The “safety and happiness” of the American people is obviously not their motivation.3 But, let us not be led astray.
The purpose of this essay is to reflect on the legacy of Lincoln beyond the question of territorial consolidation and the eradication of plantation slavery and look beneath the ever-so-polished surface of these notable accomplishments. For example, the Revolutionary War (1775-1781) and War of 1812 were fought by paid, and often unpaid, volunteers. Lincoln’s War, though at first voluntary, soon became mandatory, because most Americans had no desire to destroy the lives and livelihoods of other Americans.4
Obviously slavery was an important economic issue for the South, but it would be foolish to believe that the moral issue that it had become in the North was anything more than popular political cover for more considerable political and economic interests lurking beneath the surface. Letting the South go its own way would have provided a safe haven for those slaves who found their lack of freedom intolerable, and it would have spared the lives of many more than half a million Americans on both sides of the divide — those who lost their lives, both for and against an institution that in the spirit of the Declaration of Independence never should have been, and that would have experienced a natural death with the advancement of the industrial revolution.5
If Lincoln’s presidency were a watershed moment in American history — what it surely was — then the liberation of the slaves was, but a bright moment among a much darker series of events. Indeed, Lincoln did far more than change “the face” of America, he set our once hallowed republic on a trajectory of imperial ruination.
Despite his fine praise for American liberty and the US Constitution Lincoln’s War of Consolidation and Liberation devoured the US Constitution. He eliminated the right to habeas corpus, he reintroduced statutory counterfeit at the national level, he instituted military conscription, and he destroyed the free, sovereign spirit of the covenant of States.
Looking back he fought a war that he started under the guise of suppressing an insurrection, and used that war to declare martial law and suspend the Constitution. More important for the discussion at hand is what remained in place after the martial law was lifted, for during his administration Lincoln signed into law the National Banking Acts of 1862 and 1863 that established a national currency and institutionalized statutory counterfeit for a fourth time in our nation’s history at the national level.6
In 1816 James Madison signed into law the legislation that created the second Bank of the United States (2nd BUS). He rightly understood the need for a national currency, but like many before him, had fallen prey to the deception of bankers — including the likes of Alexander Hamilton (ca 1756-1804) — who promoted statutory counterfeit as a solution to chronic money shortages brought about by war, government’s insatiable habit to consume the wealth of others “for their own benefit”, and a desire for easy credit on the part of US merchants, on the one hand, and the general failure of most legislators and congressmen to understand the true character of money, on the other hand.
The national charter approved by Congress and that created the 2nd BUS was due to expire in 1836.7 In July of 1832 Andrew Jackson, our nation’s 7th President, vetoed the Bank Recharter Bill that sought to renew the bank’s 20-year national charter. Despite every effort in the US Senate to override the President’s veto, the charter was not renewed, and its renewal became a heavily contested issue of the 1932 general election. In a four-way presidential race — there were four political parties at the time — President Jackson secured 54% of the popular vote, and his next closest contender, the illustrious Senator Henry Clay, won only 37%. In addition, President Jackson won the electoral vote overwhelmingly with 219 of the 276 votes cast. As a result of his success at the polls, the charter of the 2nd BUS expired in 1836, and the US Government and the control of America’s banking industry parted ways for a third time.
It should be noted that Lincoln’s National Banking Acts of 1862 and 1863 did not create a 3rd BUS, but they did reintroduce statutory counterfeit at the federal (national) level in an effort to reintroduce a national currency and fund Lincoln’s war. In the end, however, it is not the level at which statutory counterfeit is implemented that is the problem; rather, it is that the institution exists at all. Statutory counterfeit is a thoroughly corrupt institution. Nationalizing it merely worsens matters. Hence the cries for “End the Fed!” shouted at a Ron Paul rally in 2012 — a cry that was heard around the nation, but was quickly muffled by the financial and political establishment that controls much of what occurs on Wall Street and in the halls of Congress.
The first of the aforementioned two banking acts was called the Legal Tender Act of 1862. It introduced the so-called Greenback — a form of statutory counterfeit that was spent into existence by the US Government and declared on par with the hard currency of the day. It was, in fact, our nation’s first fiat currency — money by decree. It was government authorized counterfeit — hence, the term statutory counterfeit — that increased the money supply as it transferred real wealth from the people into the hands of the US Government. It worked because Greenbacks could be used in a court of law — hence, the name legal tender — to settle all debts payable in gold and silver coin. In brief, the government simply printed money and offered it to American entrepreneurs who believed in Lincoln’s war and were willing to support it through the supply of arms, munitions, and other war supplies. Once received, this money was used by these entrepreneurs in trade with others entrepreneurs and for the purpose of hiring new labor as the old labor was conscripted into war. It was thus that the Greenback entered into circulation as money. Accordingly, this new “money” was spent into existence.
The National Currency Act of 1863, in contrast, introduced a system of nationally chartered private banks that lent, as opposed to spend, statutory counterfeit into existence. Unlike the Greenbacks, these government issued notes were backed in part by gold and silver specie. In effect, the 1863 legislation reintroduced fractional reserve banking at the federal (national) level through the sale of federally issued bonds controlled by the US government.
An already formed or newly forming private bank would voluntarily apply for the right to lend into existence this federally approved, government-issued, counterfeit paper. In order to obtain this right the applicant had to do three things: one, purchase with hard money (gold or silver species) some minimum number of US Government-issued bonds; two, maintain in the form of hard money a government-determined fraction (reserve ratio) of what it lent out; and three, agree to, and implement a set of operating rules that would “insure the integrity” of the government-issued counterfeit.
Although the bonds would collect interest that would be paid into an associated member bank’s newly created government account, the bonds would be retained by the government to insure good behavior on the part of each chartered bank. Upon receipt of the bank’s hard money, the US government would issue to the bank an amount of government-issued, counterfeit paper corresponding to the total market value of the bonds purchased by the bank. Whereupon the bank would be permitted to place its own insignia on the paper and lend it into existence. If the bank upheld the prescriptions of its federal (national) charter, the government would come to the bank’s aid, were it one day unable to make good on its customer’s demand for hard (real) money.8
In summary, then, hard money was transferred to the US Government in exchange for bonds and government approved banknotes. These banknotes were then lent into existence in the form of statutory counterfeit that could be redeemed for hard (real) money on demand. The hard money received by the US Government was then used to pay down its overseas and domestic bank debt that it used to fund the war. The effect of this new system was: one, a transfer of control of the nation’s money supply from State-chartered, independently run, private banks to federally (nationally) chartered, independently run, private banks; and two, a net increase in the overall supply of money composed of a combination of hard money (gold and silver specie) and statutory counterfeit (government fiat spent, and counterfeit banknotes lent into existence). The number of these counterfeit banknotes could be expanded or contracted with a change in the number of outstanding US government bonds.
It was this same corrupt system created of 1863 that remained in place until it was replaced with the Federal Reserve System in 1913 by the system’s own participants in cooperation with the US Government. Indeed, this was Lincoln’s financial legacy.
In conclusion, Abraham Lincoln’s territorial and financial legacy sewed the seed that would grow into a global empire that has greatly diminished the republican character of our nation and now threatens our continued existence as a nation state. Soft money is evil, and the problem is so easy to fix, if only there were the will.
Become informed. Pay attention. Find those candidates who understand the true character of money and vote them into office. We must, and we can, take our money supply and country back!
In liberty,
Roddy A. Stegemann, First Hill, Seattle 98104
Author of Mount Cambitas - The Story of Real Money and more recently “A Call for the Restoration of Monetary Order”.
Although South Carolina fired on the Union Navy at Fort Sumpter, it was Lincoln who invaded the State of Virginia without provocation from its residents.
There was nothing in the US Constitution that prohibited a State from seceding from the Union at the time, and there is nothing in the document that prohibits secession today. The United States Government had refused to abandon its fortifications in Charleston Harbor after repeated polite requests from the government of the seceded State of South Carolina. A warning was given. There were no casualties that resulted from the incident.
The US Constitution gives the US Government the right to call forth the militia in order to “execute the Laws of the Union, suppress Insurrections, and repel Invasions” (Article I, Section 8, § 15). Although Lincoln justified his attack on US Government property located within the territorial boundaries of South Carolina as an insurrection, it could only be considered such, if the president refused to acknowledge the State’s right of secession.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
US Constitution, Xth Amendment, 1789.
The State of Virginia had committed no act of violence against the US Government when Lincoln invaded the State and occupied the Virginian city of Alexandria. What is more, the State of Virginia only seceded after Lincoln had called up 75,000 US troops to impose his will on those States that had already seceded. Virginia’s secession, like the secession of all other seceded Southern States with the exception of South Carolina was peaceful — nothing that could be considered an insurrection!
What Lincoln had done was redefine the word secession to mean insurrection — what is reminiscent of what the US Congress did, when the Speaker of the House, Nancy Pelosi, called for the formation in 2021 of the now defunct United States House Select Committee on the January 6 Attack to “try” President Trump for treason on the grounds of insurrection. The January 6th riot was far more peaceful than the so-called “peaceful protests” of the 2020 lockdowns that raged across the nation in the wake of the George Floyd incident. The presidential rally that turned sour on January 6, 2021 has still not been fully explained — this despite Congress’s shabby attempt to shift the blame for the incident on Donald Trump.
Construction of the Memorial began on February 12, 1914 shortly after Woodrow Wilson, our nation’s 28th president, signed into law the Federal Reserve System on December 23, 1913. Great Britain declared war on Germany on August 4, 1914. The United States officially entered the war on April 6, 1917.
… that whenever any form of government becomes destructive of these ends, it is the right of the people to alter or to abolish it, and to institute new government laying its foundation on such principles, and organizing its powers in such form as to them shall seem most likely to effect their safety and happiness.“ Thomas Jefferson, et. al., Declaration of Independence, 1776.
Although Lincoln soundly defeated General George McClellan in electoral votes, he managed to secure no more that 55% of the Northern vote count in the middle of a war! And, the case can easily be made that this slim popular margin was only achieved because of Sherman’s capture of Atlanta, Georgia — what appeared as a great military victory to the unknowing voter in the North, but in reality was the culmination of Tecumseh Sherman’s “March to the Sea”, an economic scorch earth policy undertaken to destroy everything in its wake.
Am I defending slavery? No, I do not believe that anyone — voluntarily or involuntarily —should be the property of another another. But, certainly the standard of living for the average American slave was generally superior to that of the average industrial worker in any of the heavily industrialized cities of northern England at the time. What is more, the wound of war take many generations to heal and the scars that they leave on a nation’s history are indelible.
The three times before include the Bank of North America (BNA) founded in 1781, and the 1st and 2nd Banks of the United States between 1791-1811 and 1816-1836, respectively. Though having started out as a congressionally chartered, public-private bank in 1781, the Congress of the Confederation later sold its shares back to the bank and cancelled the bank’s congressional charter. Whereupon the bank was rechartered by the Commonwealth of Pennsylvania. Through a series of mergers the BNA exists today as part of the Wells Fargo Bank. It should also be noted that statutory counterfeit has been with us in the private sector since the creation of the Bank of New York (BNY) in 1785 — a bank that was not chartered by the State of New York until 1791, the same year in which the 1st BUS came into being. The BNY was modeled after the BNA.
Like the 1st BUS promoted by Alexander Hamilton and signed into law by George Washington in 1791 — despite vehement protest from Thomas Jefferson, the President’s Secretary of State — the 2nd BUS was chartered for twenty years. President Madison was initially against the creation of the 2nd BUS, but his objection was not financial in nature; rather, he saw the bank’s creation, as did many before him, as an affront to the US Constitution that makes no room for the US Government to charter privately-run, liability-limited corporations. Unlike President Jackson, James Madison caved into political pressure and the overwhelming attraction of the creation of a national currency.
Unlike today, where everyone deals in counterfeit paper that is lent into existence by governments around the world, and where gold and silver are traded as a hedge, in special markets whose prices are manipulated through commodity future contracts and option buying reserved for the wealthy and specially educated, against the ever-diminishing purchasing power of this statutory counterfeit, there was a time when everyone could share in the rent obtained from setting aside hard money in the form of real savings and watching it grow in value with the passage of time. No interest was required and still its value would grow. This was real money, sound money, hard money, true money. It is the money that we should be using today. This was gold and silver before our money supply became corrupted, as it was stolen by bankers and their government cronies who permitted the theft, because those who recognized and rejected the theft did not have the knowledge required to overcome the economic consequences of an ever shrinking money supply.