Creature From Jekyll Island by G. Edward

troops into Canada, 1. Bruce Catton, author; Richard M. Ketchum, ed., The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 249.

2. This statement was quoted by Conrad Siem, a German who became a U.S.

citizen and who wrote about the lifeand views of Bismark. It was published in La Vieille France, No. 216, March 17-24, 1921, pp. 13-16. The reader should be cautioned that Bismarck was no paragon of virtue and, as the father of modern socialism, his political views should be taken with a healthy degree of caution. All that aside, there is little doubt that this quotation represents an accurate appraisal of the machinations of the European Cabal at that time.

LOAVES AND FISHES AND CIVIL WAR

375

positioned them menacingly along the Union's northern flank, and placed the British fleet onto war-time alert.1

The European powers were closing in for a checkmate.

SUMMARY

The Second Bank of the United States was dead, but banking was very much alive. Many of the old problems continued, and new ones arrived. The issuance of banknotes had been severely limited, but that was largely offset by the increasing use of checkbook money, which had no limits at all on its issue.

When the Bank of the U.S. slipped into history, the nation was nearing the end of the boom phase of a boom/bust cycle. When the inevitable contraction of the money supply came, politicians began to offer proposals on how to infuse stability into the banking system. None dealt with the real problem, which was fractional-reserve banking itself. They concentrated instead on proposals on how to make it work. All of these proposals were tried and they failed.

These years are sometimes described as a period of free

banking, which is an insult to truth. All that happened was that banks were converted from corporations to private associations, a change in form, not substance. They continued to be burdened by government controls, regulations, supports, and other blocks against the free market.

The economic chaos and conflict of this period was a major cause of the Civil War. Lincoln made it clear during his public speeches that slavery was not the issue. The basic problem was the North and the South were dependent on each other for trade. The industrialized North sold its products to the South which sold its cotton to the North. The South also had a similar trade with Europe, and that was an annoyance to the North. Europe was selling many products at lower prices, and the North was losing market share. Northern politicians passed protectionist legislation putting import duties on industrial products. This all but stopped the importation of European goods and forced the South to buy from the North at higher prices. Europe retaliated by curtailing the purchase of American cotton. That hurt the South even more. It was a classic case of legalized plunder, and the South wanted out.

1. Catton and Ketchum, p. 250. Also Otto Eisenschiml, The Hidden Face of the Civil War (New York: Bobbs-Merril, 1961), p. 25.

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376 THE CREATURE FROM JEKYLL ISLAND

Meanwhile, there were powerful forces in Europe that wanted to see America embroiled in civil war. If she could be split into two hostile countries, there would be less obstacle to European expansion on the North American continent. France was eager to capture Mexico and graft it onto a new empire which would include many of the Southern states as well. England, on the other hand, had military forces poised along the Canadian border ready for action.

Political agitators, funded and organized from Europe, were active on both sides of the Mason-Dixon line. The issue of slavery was but a ploy. America had become the target in a ruthless game of world economics and politics.

Chapter Nineteen

GREENBACKS AND

OTHER CRIMES

The causes of the Civil War shown to be economic

and political, not the issue of freedom vs. slavery;

the manner in which both sides used fiat money to

finance the war; the important role played by

foreign powers.

In the previous chapter, we saw how the American continent had become a giant chess board in a game of global politics. The European powers had been anxious to see the United States become embroiled in a civil war and eventually break into two smaller and weaker nations. That would pave the way for their further colonization of Latin America without fear of the Americans being able to enforce the Monroe Doctrine. And so it was that, within a few months after the outbreak of war between North and South, France landed troops in Mexico and, by 1864, had installed Maximilian as her puppet monarch. Negotiations were begun immediately to bring Mexico into the war on the side of the Confederacy. England moved her troops to the Canadian border in a show of strength. America was facing what appeared to be a checkmate from the powers in Europe.

RUSSIA ALIGNS WITH THE NORTH

It was a masterful move that possibly could have won the game had not an unexpected event tipped the scale against it. Tsar Alexander II—who, incidentally, had never allowed a central bank to be established in Russia1— notified Lincoln that he stood ready to militarily align with the North. Although the Tsar had recently freed the serfs in his own country, his primary motivation for 1- His grandson, Tsar Nicholas, II, did accept loans from J.P. Morgan. In a classic application of the Rothschild Formula, Morgan also funded the Mensheviks and the Bolsheviks. The Mensheviks forced Nicholas to abdicate, and the Bolsheviks executed him. See Chernow, pp. 195, 211.