Historical Error #19: The International Bankers Defeated Lincoln in 1863 With the National Bank Act.

Gary North

Ellen Brown told the story of the National Bank Act in Chapter 9: "Lincoln Loses the Battle with the Masters of European Finance." The problem is this: Lincoln told Congress in January 1863 that he wanted the Bank Act, which he signed into law a month later. Brown wrote:

The European financiers had failed to trap Lincoln's government with usurious war loans, but they achieved their ends by other means. While one faction in Congress was busy getting the Greenbacks issued to fund the war, another faction was preparing a National Banking Act that would deliver a monopoly over the power to create the nation's money supply to the Wall Street bankers and their European affiliates. The National Banking Act was promoted as establishing safeguards for the new national banking system; but while it was an important first step toward a truly national bank, it was only a compromise with the bankers, and buried in the fine print, it gave them exactly what they wanted. A private communication from a Rothschild investment house in London to an associate banking firm in New York dated June 25, 1863, confided:

The few who understand the system will either be so interested in its profits or so dependent upon its favors that there will be no opposition from that class while, on the other hand, the great body of people, mentally incapable of comprehending . . . will bear its burdens without complaint. [Web of Debt, p. 93]

First, "The European financiers had failed to trap Lincoln's government with usurious war loans." No war loans? She admitted on page 88,

Greenbacks were not the only source of funding for the Civil War. Bonds (government I.O.U.s) were also issued, and these too increased the money supply, since the banks that bought the bonds were also short of gold and had no other way of paying for the bonds than with their own newly-issued banknotes.

We know from the record that the total debt of the Union for the war was $2.7 billion.

Second, Lincoln sent a message to Congress in January of 1863, when he signed into law the third issue of greenbacks. Lincoln hated fiat money -- the greenbacks. In his letter, he expressed his "sincere regret that it has been found necessary to authorize an additional issue of United States notes." He called on Congress to pass his solution, the National Bank Act, which Congress did a month later. This is recorded in the definitive historical book on the greenbacks, Wesley C. Mitchell's A History of the Greenbacks (1903), page 109. You can download it for free here.

Congress responded one month later. Lincoln signed the National Bank Act into law. It was his bill. It was consistent with the Clay-Whig view of banking.

Third, the quotation from the unnamed Rothschild investment house in London is bogus. She cited U.S. Senator Robert Owen, National Economy and the Banking System (1939). It took me 30 seconds to find this on Google, from Wikiquotes.

Attributed to Senator John Sherman in a letter supposedly sent from the Rothschild Bros. of London to New York bankers Ikleheimer, Morton, and Vandergould, June 25, 1863. The letters are forgeries that could not have been written before 1876. Further, no evidence of a firm with the name "Ikleheimer, Morton, and Vandergould" has been found.

Ellen Brown refused to do even the most cursory research to verify the quotation she inserted into her text.

For my reply to her response, click here:

http://www.garynorth.com/public/7197.cfm

For a detailed critique of Ellen Brown's economics, go here:

http://www.garynorth.com/public/department141.cfm