The Secret of Oz
Written, directed and narrated by Bill Still
http://www.billstill.com
The yellow brick, the emerald city of Oz, even Dorothy’s silver slippers (changed to ruby slippers for the
movie version) were powerful symbols of author L. Frank Baum’s belief that the people – not the big banks - should control the quantity of a nation’s money. The bottom line: No More National Debt. All our money is
created out of debt. But nations don't have to borrow money from banks. Sovereign nations can create their
own money -- debt free -- just as Abraham Lincoln did to win the Civil War. This is the secret that’s been
hidden from us for over 100 years
Introduction - The Problem
What's going on with the American economy, foreclosures are everywhere, unemployment is skyrocketing
and it looks like this may only be the beginning. As a result most Americans fear that our cherished basic
freedoms and way of life are under direct attack as our standard of living sinks like a stone. But could it be
that all these problems were foreseen a hundred years ago by L. Frank Baum, the author of 'The Wonderful
Wizard of Oz'? Why is this just coming out? Because when the MGM movie 'The Wizard of Oz' was made in
1939 significant changes were made from L. Frank Baum's original book version written 40 years earlier in
1899.
Dr. Quentin Taylor (Asst. Prof. Of History & Political Science): In the book version of 'The Wizard of Oz'
Dorothy's slippers are made of silver, as opposed to in the film version where Dorothy's slipper are made of
ruby. You take away the silver slippers on the gold or yellow brick road and all of the other symbolism tends
to be lost.
The 1890s was a terrible time, America was going through its worst depression ever. Those who tried to
break the grip the big bankers had on congress had just lost the presidential election of 1896. There are many
things different in the film than in the book, if you want to see the full blown allegory all you have to do is
read the book version and if you have some understanding of the politics of that age, particularly the
monetary politics, you will see some unmistakable parallels that can only lead to one conclusion: that L.
Frank Baum was engaged in a deliberate effort to not only entertain children with this delightful story but
also to make a broader point about the politics of the time and particularly the politics of gold and silver
which became the central political issue in the elections of 1896.
Bill Still: Now let's see what the experts say about our current problem then look at our history so we can
understand what L. Frank Baum was trying to say in his book 'The Wonderful Wizard of Oz'.
Joseph Farah (Founder - www.WorldNetDaily.com): Well, it's no secret to any American that we're living in
very precarious times. Americans are being robbed blind and they don't even know who's doing the robbing.
Peter Schiff (Author – Crashproof): I mean we clearly are, you know, in a bus and we're headed for the edge
of a cliff and there's still probably time to change course. the only problem is the people driving the bus don't
realize that there's a cliff there yet.
Dr. Michael Hudson (Prof. of Economics, Univ. of Missouri/KC): If the problem is that's bringing the
economy to a halt is too much debt and if nobody in the government, in either party, is looking at solving the
debt problem, then the answer is: it's going to go into a depression as far as the eye can see.
Peter Schiff: And so we're going to have a massive recession, well let's call it a depression, while the
economy rebalances away from a service sector economy towards a goods producing economy. Away from a
borrow & spend economy to a save & produce economy. That's what we need to do, we can't get from where
we are to where we need to be without a severe depression.
Bill Still: What the government can do? The sad answer is: under our current monetary system nothing. It's
not going to get any better until the root cause of the problem is understood and addressed. There isn't enough
stimulus money in the entire world to get us out of this hole. Why? Debt. The national debt is just like our
consumer debt, it's the interest that's killing us.
Byron Dale (Author – Modern Money Secrets): You must understand that every penny, every dollar that we
have in circulation is created as an interest-bearing debt.
The Debt Money System
Bill Still: So what is the national debt? When government spends more than it collects in taxes it has to
borrow the difference by selling interest-bearing IOUs such as US bonds. When a US bank buys a 100 dollar
bond it gets to loan out ten times that amount so the bank not only gets back the 100 dollars plus interest from
the federal government, it gets to loan out another 1000 dollars it doesn't have and charge additional interest.
Banks are allowed to create this extra money out of thin air. So banks aren't making only 6% interest for
example, they are really making over 1000% interest. That's why bank buildings are the biggest in every
town on the planet.
The system of lending way more than you have is called 'Fractional Reserve Lending'. Almost all our money
is created by banks lending it to people to companies or to government. As we'll see there is a better way for a
government to get money, simply issued without debt for the benefit of all citizens equally. Abraham Lincoln
did it, Ben Franklin did it, Jefferson wanted to do it. Honest Americans have fought against this bank
controlled debt money system throughout American history. But unless we change it soon, most of our
freedoms will soon be lost in a tidal wave of debt. This was the central message hidden in 'The Wonderful
Wizard of Oz'.
75 years ago an employee of the Atlanta Federal Reserve explained the importance of the debt money system
and how it can strangle our economy: 'Someone has to borrow every dollar we have in circulation. If the
banks create ample money we are prosperous; if not, we starve. When one gets a complete grasp of the
picture, the tragic absurdity of our hopeless position is incredible. It is the most important subject intelligent
persons can investigate and reflect upon.' (1934, Robert H. Hemphill, Credit Manager of the Federal
Reesrve Bank of Atlanta)
Ellen Brown, Esq. (Author – Web of Debt): The government should never go into debt. It doesn't need to go
into debt, the government can issue the money it needs.
Bill Still: That's absolutely right, under our current money system the government has to borrow our money
into existence then pay interest on it. That's why they call it the national debt: all our money is created out of
debt. Politicians who focus on reducing the national debt without trying to actually fix the underlying cause
probably don't understand what the national debt really is. To reduce the national debt would be to reduce our
money and there's already not enough money for the average person.
Why haven't we heard this before? Because most of the media and congress are beholding to the big banks
for loans. Yes, congress still appropriates money but where do they get it? Again, what they can't raise from
taxes they borrow from banks. In 2009 congress will spend over 4 trillion dollars but they will have to
borrow half of it. But on top of that in 2008-2009, congress bailed out the biggest banks by giving them
nearly a trillion dollars. ($1,000,000,000,000)
The worst part is we aren't just giving the money away, we're borrowing it to give it away. As Patrick Byrne
CEO of Overstock.com recently said: 'This is rich bankers bailing out rich bankers on your credit card. It's
called an oligarchy - a group of powerful folks who have basically hijacked the government.'
Karl Denningers (Market Ticker): If we don't do something about the fact that we are now in a situation
where the additional debt we are taking on is actually depressing GDP, we are going to have a major problem
here in the very near future. You can't keep doing that forever, sooner or later people that loan us that money
are going to say: 'no we are not going to loan you anymore.'
Joseph Farah: One of the things I think that's difficult to figure out from the political side of this thing it's
clear that they're making a lot of mistakes and the question in my mind is: are these mistakes? Could people
in Washington, the highest officials in the land, really be ignorant about what they're doing? Because I can't
look at what the politicians are doing in Washington, I can't look at that and say there's any hope of that
working. And these guys have to face election. Now, when the next election rolls around they're not going to
politically popular figures. There are going to be consequences for the politicians, so what makes them push
the wrong buttons?
Byron Dale: The other day I heard a senator say on TV: the trouble with General Motors is they have too
much debt. And so the so the solution is to give them another big loan. Well you can't borrow yourself out of
debt. General motors can't, you and I can't, the federal government can't, nobody can borrow themselves out
of debt. No more than like I said before: you cannot drink yourself sober. And that's what we're all trying to
do. So it don't make any difference what kind of stimulus... and Obama he had a right idea - we're going to
build a lot of new roads - but he's going to borrow the money. Well we can't even pay the debt now. I mean,
we can't even pay the interest on it.
Dr. Michael Hudson: Nobody is even talking about the debt problem as such, they're talking about the fact
bankers aren't making enough money to live in the way that they're accustomed to.
Bill Still: Until politicians begin to understand where the root of the problem lies, we're never going to fix
this. But the good news is that the solution isn't new or radical: America used to do it long before L. Frank
Baum wrote about it. Throughout American history politicians have fought with big bankers over it, but this
aspect of our history has now been erased from history books.
Dr. Quentin Taylor: I think we need to reconsider and re-think perhaps the very foundations of our economic
and monetary system.
James Robertson: The government, the government agency or some agency of some kind should take charge
of the money supply
- But that's not the way it is now in the Great Britain
- No, not in any country. It's almost all over the world, it's that the bulk of the money supply are now created
by commercial banks. As debt. If we were starting as people that were at the start of the constitution of a
society and someone suggested: well the best way of creating the money and putting it in is to combine it
with a function of providing a competitive profit-making market for borrowing and lending, it would be
regarded as idiotic.
Bill Still: You want a new cause to embrace? You want to do something good for humanity? How about one
simple reform that will fix most of the bad things in this world like: hunger, poverty, disease and misery. This
is the ultimate civil rights struggle human kinds escaped from serfdom.
As president Obama put it: 'Due to the ongoing recession the number of chronically hungry people will climb
to over one billion worldwide.' (Barack Obama, July 2009)
But this is completely unnecessary. Yes, we could eliminate world hunger in a few years. But how? The
solution is the secret that's been hidden from us for over a hundred years, ever since the time when author L.
Frank Baum wrote The Wonderful Wizard of Oz. But before we show you what these symbols were, we've
got to understand some history, otherwise 'The Wizard of Oz' connection just won't make sense to you.
Monetary History
[11:00] So let's take a journey down the yellow brick road through monetary history, our first stop will be
Rome. [100 B.C. – 401 A.D.]
The problem with money is that, like many other things in life, people fight over who gets to be in control of
it. In fact the only time Jesus became violent was when he chased the money changers from the temple: 'He
made a whip out of cords and he scattered the coins of the money changers and overturned their tables'.
(John 2:15 The Holy Bible)
What was that all about? The money changers were the bankers of that day, they had created a special silver
coin called the 'half-shekel' or 'shekel of the sanctuary'. Even the poor had to have some of these coins to pay
their temple tax. So the money changers could charge whatever the market would bear. This monopoly on
money was nothing less than stealing from the poorest Jews, on their holiest ground. This outraged Jesus just
as it would outrage the senators of the Roman republic a few years later. Although we will never know for
sure, fighting over the control of money may have been the cause of the most famous assassinations in
history.
What made Rome great? There were many factors but certainly the most overlooked was the money system
of the Roman republic. About 300 B.C. the Roman republic supplied the people with a plentiful forms of
cheap money, money made from copper and bronze. Then they spent this cheap money into the economy - it
was a revolutionary idea. Today opponents of this money system call it 'fiat money', money not backed by
precious metals. But what the Roman republicans had discovered was that it doesn't matter what backs the
money, all that matters is who controls its quantity. Did it work back then? It was amazingly effective. Unlike
today it was a money system created without debt to the government.
This was the first great experiment in arresting the money power from the goldsmiths. This cheap form of
money circulated for the benefit of all citizens equally, not just the usual gold coins which always benefit the
rich. With this new plentiful supply of money real wealth flowed to the common man: 'Without use of either
gold or silver Rome became mistress of commerce of the world. Her people were the bravest, the most
prosperous, the most happy, for they knew no grinding poverty. Her money was issued directly to the people,
and was composed of a cheap material - copper and brass - based alone upon the faith and credit of the
nation with this abundant money supply she built her magnificent courts and temples. She distributed her
lands among the people in small holdings, and wealth poured into the coffers of Rome.' (Howard Milford –
The American Plutocracy, 1895)
But then suddenly Julius Caesar changed the Roman money supply drastically. He started minting gold coins
with his image on them. Then he declared himself emperor for life putting an end to Rome's great experiment
in elected government. The republicans and the senate hated gold money and the plutocracy rules by the rich
that it implied. Although the senators assassinated Julius Caesar gold money now had taken root empowered
by the very rich and the dictators they were able to buy with their gold.
After Caesar's assassination copper and brass were de-monetized, taken out of circulation. The quantity of
money was reduced by 90%. A deep depression set in: the average person had to sell his property just to buy
basic necessities. The wealth of the nation was quickly concentrated into the hands of the richest romans,
once again.
Gone was the incentive to work hard and build a great nation for the common good. By 401 A.D. Rome was
sacked by the Visigoths and humanity was plunged into the gloom of the dark ages.
The Rule of the Goldsmiths
[15:30] So in Rome we learned that with cheap government-issued money the. Roman republic flourished,
but under gold-money it perished. This controversy between cheap money and gold money continues
throughout history and as we'll see it's symbolized in part by the yellow brick road.
Flash forward 7 centuries to 1100 A.D. in England, there were no banks like we think of them today. What
served as banks were the goldsmiths, those who made their gold into gold coins. Although most people didn't
understand it, these goldsmiths controlled the economy of the nation and thereby even the politics, even in a
monarchy. By acting in concert goldsmiths could either make money scarce or plentiful. When they made
their gold money plentiful the economy of the nation flourished, when they made their gold coins scarce a
depression set in and they could buy up assets for pennies on the dollar.
Although most people didn't understand it, these goldsmiths controlled the economy of the nation and thereby
even the politics, even in a monarchy. By acting in concert goldsmiths could either make money scarce or
plentiful. When they made their gold money plentiful the economy of the nation flourished, when they made
their gold coins scarce a depression set in and they could buy up assets for pennies on the dollar.
About 1100 A.D. King Henry the 1st, the son of England's first Norman King William the Conqueror was
loaned gold money: a series of costly wars had depleted the royal treasury. So just as colonial Pennsylvania
would do hundreds of years later, Henry created a unique form of government-issued money called tallysticks. Tally-sticks did not represent any quantity of gold or any other commodity, they were simply tallysticks of wood, issued by the king, which he declared to be good for the payment of taxes. That made tallysticks just as good as any other form of money.
Alright here we are in the Bank of England's museum with curator John Keyworth and I'm holding in my
hands one of the oldest forms of British money - this is called the tally-stick - this is actually a very rare
example of a tally-stick because it has the two halves of the tally-stick.
John Keyworth: The idea with the tally-stick was that you got notches in a piece of wood - usually it was
hazel - and these notches were of the prescribed size dimension, and if you look at this is one, you can see it's
got thousand pound notches - so it's six notches times a thousand pounds each, is that the way it is? So that's
a 6-thousands pounds tally-stick.
This side is called the 'stock', this was kept by the person who made the loan, or paid the money in, and this is
the foil - so the foil would be spent into the existence, and the idea was that this splitting the stick down the
middle was to prevent counterfeiting because of course a stick splits uniquely down the middle - because
when the debt was repaid the two pieces were put together and if they didn't tally something was awry.
Bill Still: The longer half of a tally stick was called the 'stock', the root word for stocks and bonds of
stockholders. For centuries the supporters of gold-backed money had the tally-sticks as the unimportant form
of 'fiat money', one not backed by gold or silver, some authors even claim that tallies weren't a real money
system because they were only used for very large transactions, but that's just not the case.
Bill Still: And was this the common size of tally sticks?
John Keyworth: In the middle ages the averages size was reckoned to be the length from the man's tip of his
thumb to the tip of his fourth finger quite short - because if you think of it in terms of this, this is 6-thousands
pounds - I mean - it's a huge sum of money. So the wider the space the larger the amount - there was a
prescribed distance that was an inch - I think half an inch for hundreds and a portion of an inch for tens - and
then it became little lines drawn across with a sword.
Bill Still: So it is clear that tally-sticks were used for smaller denominations too and worked well as an
effective debt-free money system for 726 years. Without the crushing weight of debt-based money England
flourished into the greatest power on earth for many centuries.
At their peak it has been estimated that 95% of English money was in the form of tally-sticks. Compare that
to today where the only debt-free government-issued money is in the form of coins about 3% of the money
supply of the money supply in the UK, and far less in the US.
After democratizing the power of the nation with tally-sticks. King Henry then began decentralizing political
power as well. King Henry granted something called the 'Charter of Liberties', voluntarily stating what his
powers were under law. Before that, Kings had assumed unlimited power. This was followed in 1215 by the
Magna Carta, the basis of the US constitution. A new class began to develop, the merchant class.
Trade routes grew and new towns sprung up along them. These mercantile class needed stability and so they
supported the king, his strong central government and the rule of law. In 1265 the first parliamentary
elections were held, government by the people, in England, was born. As money poured into the middle class,
the small business persons of the day, feudalism began to break down and the English renaissance was born.
By the 1600s serfdom in England was legally banned, humanity at least in England was finally set free.
Literature flourished, now there was money to support artistic endeavors like the plays of William
Shakespeare, the nation was at ease due to a debt-free money. Although life in the middle ages was certainly
not easy by today's standards, once tally-sticks were killed and the nation became indebted to bankers, it got
worse.
After 600 years the money changers were finally able to begin to re-assert their control over English money,
when they convinced the parliament to create the Bank of England. This put the banking community back in
control of manipulating the quantity of English money. Now England had to borrow its money supply from
banks, and pay interest on it, instead of the government simply issuing its own money without such debt.
Colonial America
[22:00] So in England we learned that simple sticks of wood broke the monopoly of gold money. These debtfree money lasted for 7 centuries and allowed a small isle of nations to rule the waves and freedom to root
deeply in the new middle class.
With the goldsmiths back in control, England was now financing its wars with this bank-loaned money. In
just 75 years England's war debts consumed 75% of its budget, 3/4 of British taxes were spent just on paying
the interest on its war bonds.
As a result England needed to squeeze more and more money from all her colonies to pay the interest on this
new growing debt. America was no exception. Pre-revolutionary America was still relatively poor, there was
a severe shortage of precious metals coins to trade for goods, so the early colonists were increasingly forced
to experiment with printing their homegrown paper money. This paper money was called 'colonial scrip'.
'Colonial scrip' was a dangerous concept for bankers, it broke the colonies free of the privately-owned central
bank system were money had to be created by banks and then loaned to governments, as Franklin put it: 'In
the colonies we issue our own money. It is called Colonial Scrip, we control its purchasing power, and we
have no interest to pay to no one.' (Benjamin Franklin, quoted by Senator Robert L. Owen, National
Economy and the Banking System, Senate document #23)
In 1764 the British parliament passed the Currency Act. Again it ordered all Americans to pay their taxes in
gold or silver coins. For those who believe that a return to the gold-backed money is the answer for America's
current monetary problems, look what happened to America after Currency Act of 1764 was passed.
As Franklin put it: 'In one year the conditions were so reversed that the era of prosperity ended, and a
depression set in, to such an extent that the streets of the colonies were filled with unemployed. (Benjamin
Franklin, Pilote, Alain, “Country With Honest Money Would Defeat the Bankers”, Spotlight magazine, Dec.
12, 1994, p. 16)
To Ben Franklin this return to the gold money system was the basic cause for the American revolution: 'The
colonies would gladly have borne the little tax on tea and other matters had it not been that England took
away from the Colonies their money, which created unemployment and dissatisfaction.’ (Benjamin Franklin,
quoted by Senator Robert L. Owen, National Economy and the Banking System, Senate document #23)
Americans were mad and did everything they could to get around Britain's gold money system. In 1765
parliament passed the STAMP ACT, requiring that every item sold had to have a stamp placed on it indicating
that a tax had been paid on that item and paid in gold. This is what drove America to open revolt.
To understand what that means: without gold you could literally buy or sell or nothing. Why? Because the
British had successfully forced the colonies to pay for everything using only a precious commodity: gold.
This is the very definition of the word plutocracy - rule by the rich.
Byron Dale: These people that deal with gold and silver only had never spent one minute to actually try and
figure out how it worked in history, how it worked in real life, and the only way they could support their gold
theories is they just treat it as religion and say: we don't have to understand it we just know that that's god's
money and it will work - and that's not true.
Bill Still: By the outbreak of the revolution in April 1775 colonies started printing a new form of money to
finance the war. It was called 'Continental Currency' because unlike Colonial Scrip it was the first issued by
the new central government.
Continentals were great at first, but then the British started counterfeiting it massively, sending it to America
literally by the bail. By the end of the war the currency was virtually worthless. As George Washington
lamented: 'a wagon load of money will scarcely purchase a wagon load of provisions.'
Earlier, Colonial Scrip had worked because just enough was issued to facilitate trade and counterfeiting was
minimal. In other words, the quantity was controlled by the government that issued it.
Gold bugs today try to claim that because paper money didn't work during the revolutionary war, it shouldn't
be used today, but keep in mind it doesn't matter what backs your money. All that matters is who controls its
quantity. Will it be your elected officials, or will it be some unelectable banker?
Colonial paper money before the revolution had worked so well that the Bank of England had parliament
outlaw it and forced America to use only gold-money, gold which they controlled.
The Curse of the Privately Owned Central Bank
[27:00] In our next stop on the yellow brick road which represents the bankers' gold money system we find
how the curse of the privately-owned central banks first came to America.
In 1781 towards the end of the war the Continental Congress met here in Philadelphia; they pondered what to
do about their grave financial situation. The money was so worthless that people papered their walls with it.
Congress finally agreed to give a group of bankers a monopoly on creating US money by loaning it to the
government. It was the first privately-owned central bank. The plan of course was modeled on the Bank of
England.
The new bank would be called the Bank of North America it would be the first of a string of controversial
privately-owned central banks which congress would charter, then in the face of public outrage un-charter
over the years.
Four years later in 1785 the value of the new currency had plummeted, inflation was rampant, prices had
risen by 72%. So after a stiff battle congress killed this, the first privately-owned central bank in America.
Two years later when it came time to write the constitution in 1787 many of the delegates did not remember
how well America's government-issued paper money had worked in Pennsylvania. They were still stung by
the inflation of the Bank of North America and the hyperinflation during the revolution primarily caused by
British counterfeiting.
Strangely the constitution allows the federal government to borrow money but is silent on the federal role in
printing paper-money known in the language of the day as 'emitting bills of credit'.
This defect in constitution is at the root of all our economic problems today.
Two years after the US Constitution was signed, debt-free money was tried in Sweden in 1789 but with tragic
results. To pursue a war with Russia, King Gustav III persuaded the Swedish parliament to print debt-free
money called Riksdalers. This was very costly to the bankers, Sweden had learned the secret of simply
printing its own money without debt. In 1792 only three years into the experiment, King Gustav was
assassinated by money lender Jacob Johan Ankerstrom. As is frequently the case in time of war, too many
Riksdalers were printed, the quantity was not controlled. A nation was sacrificed, everything for survival
during time of war.
So inflation ruined the debt free money experiment in Sweden by 1834 just as it had a few years earlier
during the American revolution, again as the quantity was not controlled.
One mistake the constitution didn't make was to mandate that the federal government pay all his debts only in
gold, then we would have wound up with the same system that had caused the revolution in the first place. It
does mandate that for state governments, but that has never been adhered to. All the Constitution had to do is
to mandate that only Congress could issue the nation's money, debt-free, just like most people think happens
today.
This defect in the Constitution left the door wide open for bankers to ram a bill through congress in 1791, 4
years after the Constitution had been signed, to turn over creation of the nation's money to private bankers
once again.
Like all the privately-owned central banks that would follow, the new bank was given a name that would
deceive people into thinking it was part of the U.S. government but it was not: it was called the 1st Bank of
the United States - this is actually the original building here in Philadelphia.
After a contentious debate Congress finally granted the new bank a 20-year charter of private monopoly,
again the nation's money would be created out of thin air by the new bank and loaned to the government and
to private individuals, all at interest just as our money supply is created today.
So if there was one hundred million dollars’ worth of money in the economy there would be one hundred
million dollars’ worth of national debt. Debt the citizens and their children would have to pay interest on by
taxation. And so that is today, the national debt is roughly the same as the national money supply.
As Secretary of State, Jefferson watched the borrowing with sadness and frustration, unable to stop it: 'I wish
it were possible to obtain a single amendment to our Constitution, taking from the federal government the
power of borrowing.' (Thomas Jefferson)
Although Jefferson served two terms as president from 1801 to 1809 nothing was done until the bank's
charter came up for renewal in 1811. The press openly attacked the bank calling it a great swindle.
Some writers have claimed that the head of the Bank of England warned that the United States would find
itself involved in a most disastrous war if the bank's charter would not be renewed. After another contentious
debate the banks renewal bill was defeated by a single vote in congress, within 5 months the war of 1812 was
on.
In 1813 Jefferson wrote to a son in law John Eps: 'Although we have so foolishly allowed the [power of
issuing our own debt-free money] to be filched from us by private individuals, I think we may recover it. The
states should be asked to transfer the right of issuing the paper money to Congress, in perpetuity.' (Thomas
Jefferson)
Jefferson had it exactly right, Congress and only Congress should have the right to issue America's paper
money and at no interest to no one. In 1814 the British successfully attacked Washington and burned the
Whitehouse and the Capitol.
After the conclusion of the war of 1812, in 1815, in the last battle of the war, general Andrew Jackson
successfully defeated a British attack on New Orleans. After the conclusion of the war of 1812, the very next
year, the bankers were back trying to get Congress to reinstate their precious privately-owned central bank.
Jefferson lashed out in a letter to the then treasury secretary Gallatin: 'The treasury, lacking confidence in the
country, delivered itself bound hand and foot to bold and bankrupt bankers pretending to have money, whom
it could have crushed at any moment.' (Thomas Jefferson)
But despite Jefferson protests in 1816 Congress passed a bill giving another 20-years charter to a new
privately-owned central bank: the 2nd Bank of the United States.
The 2nd Bank of the United States
[34:00] Once again the English debt money-system was back in control of America. It was almost like the
revolution that never happened. But then the bankers ran head long into 'Old Hickory' Andrew Jackson.
By 1828 opponents of the bank nominated senator Andrew Jackson of Tennessee, the hero of the final battle
of the war of 1812 to run for president. The banks poured millions into Jackson's defeat but to no avail: the
American people were fed up with the privately-owned central bank and won it out. Jackson was swept into
office.
In 1832 with Jackson's re-election approaching the bank tried to have their charter renewed early in the hopes
that Jackson wouldn't want the controversy of a fight with bankers just before the election. They were wrong:
although Congress passed the renewal Bill, Jackson vetoed it.
His veto message drew a direct line between the bank and its masters and the Bank of England: 'It's easy to
conceive that great evils to our country and its institutions might flow from such a concentration of power in
the hands of a few [who are] irresponsible to the people. Controlling our currency, receiving our public
moneys, and holding thousands of our citizens in dependence would be more formidable and dangerous than
a military power of the enemy.' (1832, President Andrew Jackson)
Nicholas Biddle was head of the 2nd Bank of the United States. He was brazen with the financial power he
wielded it over the nation. He even threatened to cause a depression if Jackson veto were not overturned:
'Nothing but widespread suffering will produce any effect on Congress... Our only safety is in pursuing a
steady course of firm [monetary] restriction - and I have no doubt that such a course will ultimately lead to a
restoration of the currency and re-charter of the Bank.' (1832, Nicholas Biddle)
Biddle made good on his threat: America was quickly plunged into a deep depression; property was
foreclosed on for pennies on the dollar. Jackson responded forcefully: 'You are a den of vipers. I intend to
rout you out and by the Eternal God I will rout you out'. (1832, President Andrew Jackson)
Eventually the nation's newspapers sided with Jackson and the Bank was not re-chartered. Jackson then set
about paying off the national debt, a debt caused by the government borrowing the nation's money supply
into existence. Jackson was the only president who paid off the national debt.
A few weeks later an assassin tried to shoot president Jackson. He stuck two pistols in the stomach but both
misfired. Jackson solemnly warned the nation about any future attempts to establish another privately owned
central bank: 'The bold effort the present bank had made to control the government the distress it had
wantonly produced are but premonitions of the fate that awaits the American people should they be deluded
into a perpetuation of this institution or the establishment of another like it.' (President Andrew Jackson)
Karl Denninger (Market Ticker): Jackson went through essentially a multi-year war trying to get rid of the
2nd Bank of the United States. He ultimately won that war. He believed that the bankers of the time were
extremely destructive to the common wealth of the United States and that their policies were essentially to
cause inflation in various asset classes and then cause deflation and wipe out everybody who was in debt.
It is a pattern that is repeated throughout history, after the Revolutionary War Great Britain sent some of their
bankers over here trying to bribe Congress to get us onto a single metallic standard for the same purpose,
because they control the gold supply. And if you control the quantity of the money, nobody else cares about
anything else. You can cause depression, deflation and inflation anything you like, for your own political and
monetary benefit. And that if you can give people cheap credit that they cannot afford, human nature is that
people will take whatever you give them for free, whether it ultimately destroys them or not. So you can
create these boom and bust cycles that ultimately asset strip the wealth of average people.
The Greenbacks and the Emerald City of Oz
[38:23] Jackson got us out of debt, but 25 years later. Abraham Lincoln would do even more: return to
government-issued debt-free money. He called them green banks: the inspiration for the Emerald City of Oz.
The bankers were still angry about Jackson killing the 2nd Bank of the United States 25 years earlier. Since
then America's economy had boomed, a bad example for the rest of the world. America had to be stopped. So
they devised a plan to split the rich new nation, divide and conquer by war.
As chancellor of Germany Otto von Bismarck put it in 1876: 'I know of absolute certainty that the division of
the United States into two federations of equal force was decided long before the Civil War by the high
financial powers of Europe. These bankers were afraid that the United States, if they remained as one block
and were to develop as one nation, would attain economic and financial independence which would upset the
domination of Europe over the world.' (1876, Otto von Bismarck, Chancellor of Germany, Journal of the Bar
Association of the District of Columbia 1947)
President Jackson saw this coming as well. In his farewell address back on March 4 1837 he warned the
nations: 'Have designs already been formed to sever the Union? This great and glorious Republic would soon
be broken into a multitude of petty States, without commerce, without credit, loaded with taxes to pay armies,
trampled upon by the nations of Europe.' (1837, President Andrew Jackson)
The bankers figured that no matter what the outcome, a war between North and South would leave America
so financially strapped that the entire western hemisphere would be once again be opened to colonization.
Standing directly in the way was the newly elected president Abraham Lincoln. Lincoln evaded assassins in
Baltimore in February of 1861 on his way to his inauguration in Washington on March 4. The very next
month the first shots were fired at Fort Sumter, South Carolina after seven southern states seceded from the
Union. Soon thereafter France invaded Mexico and stationed troops along the southern border of the US;
Great Britain moved 11.000 troops into Canada and positioned them along America's northern border. The
two long-time European enemies were ready to fight over the scraps that their central bankers were about to
make of the American experiment in freedom.
Lincoln was in a classic double bind: no matter what he did he was being forced into a war by the hidden
hands behind the financial curtain. He agonized over the fate of the Union, sensing it was only through the
strength of union that the financial power-houses of Europe could be held at bay. In 1861 Lincoln went to
New York to apply for the necessary war loans from what he hoped were patriotic American bankers. But the
bankers saw him coming and knew that the plan was to split the country in two, and so there was a high
probability that Lincoln's government would default on any loans. Consequently they demanded an interest
rate of as much as 36%. Lincoln returned to Washington, depressed.
Then Lincoln came up with the most brilliant idea of his presidency, he decided to return to America's
colonial monetary roots: have the government issued their own money. In a letter to his friend Colonel
(Edmund) 'Dick' Taylor of Chicago Lincoln explained his plan to finance the war: 'Issue treasury notes
bearing no interest, printed on the best banking paper... [it will give] to the people of this Republic the
greatest blessing they ever had - their own paper to pay off their own debts.'
So that is exactly what Lincoln did: from 1862 to 1865 he printed 450 million dollars of the new bills which
he called 'US Notes'. To distinguish them from debt-based money he had them printed in green ink on the
back with a red seal on the front - that's why the notes were called greenbacks. Since congress had declared
greenbacks to be legal tender for all debts, Lincoln was able to pay his troops and buy their supplies with this
new money, all created at no interest to the federal government.
As MIT professor Dr. Davis Rich Dewey would write 40 years later in his 'Financial History of The United
States': 'The underlying idea in the greenback philosophy is that the issue of currency is a function of the
government, a sovereign right which ought not to be delegated to corporations.' (1902, Dr. Davis Rich
Dewey, Professor of Economics and Statistics, Massachusetts Institute of Technology)
By now Lincoln realized who was really pulling the strings and what was at stake for the American people.
Lincoln understood the matter better than even Jackson apparently had. This is how he explained his
monetary views according to some sources: 'The government should create, issue, and circulate all the
currency and credit needed to satisfy the spending power of the Government and the buying power of
consumers... The privilege of creating and issuing money is not only the supreme prerogative of Government,
but it is the Government's greatest creative opportunity... By the adoption of these principles the taxpayers
will be saved immense sums of interest. The financing of all public enterprises will become matters of
practical administration. Money will cease to be master and become the servant of humanity.'
Meanwhile in Britain a truly incredible editorial in the London Times explained the Bank of England's
attitude towards Lincoln's greenbacks: 'If this mischievous financial policy, which has its origin in North
America, shall become [permanent], then the Government will furnish its own money without cost. It will
pay off debts and be without debt. It will have all the money necessary to carry on its commerce. It will
become prosperous without precedent in the history of the world. The brains, and wealth of all countries will
go to North America.'
On April 14, 1865, forty-one days after his second inauguration and five days after the end of the civil war
Lincoln was shot by John Wilkes Booth at Ford’s Theatre. The chancellor of Germany Otto von Bismarck
lamented the death of Abraham Lincoln: 'The death of Lincoln was a disaster for [the world]. There was no
man great enough to wear his boots. I fear that foreign bankers with their tortuous tricks will entirely control
the exuberant riches of America and use it systematically to corrupt modern civilization. They will not
hesitate to plunge the whole [world] into wars and chaos in order that the earth should become their
inheritance.' (Otto von Bismarck, Chancellor of Germany)
Ten years after Lincoln's death, Bismarck himself narrowly escaped an assassination attempt in 1875. After
the death of President Lincoln the bankers began to re-assert their control over America's money.
This was no easy task: Lincoln's greenbacks, just like Rome's plentiful debt-free coins and England's debtfree tally-sticks, were generally popular and their existence had let the genie out of the bottle. The public was
becoming accustomed to debt-free money - popular songs sang the greenbacks praises.
On April 12, 1866 Congress passed the Contraction Act, authorizing the secretary of the treasury to begin to
retire the greenbacks in circulation and to contract the money supply. Authors Ted Thorne and Richard
Warner explain the results of the money contraction in their book on the subject 'The truth in money book':
'The hard times which occurred after the Civil War could have been avoided if the Greenback legislation had
continued as President Lincoln had intended. 'Instead there were a series of 'money panics' - what we call
'recessions' - which put pressure on Congress to enact legislation to place the banking system under
centralized control.' (The Truth in Money Book, 1980, p. 123-4)
In 1866 there was 1.8 billion dollars in currency in circulation in the United States, about $50.46 per capita.
In 1867 alone, 500 million dollars was removed from the US money supply. Ten years later, in 1876,
America's money supply was reduced to only 600 million dollars - in other words, 2/3 of America’s money
had been called in by the bankers. Incredibly only $14.60 per capita remained in circulation.
What's so important about how money was withdrawn from the U.S. money supply? Because this is the real
cause of depressions. Deliberate manipulation of the money supply by big bankers to get what they want
politically. The very thing King Henry was trying to put a stop to when he created the tally-sticks in 1100
A.D.
What were the bankers after? Again, a return to their beloved privately-owned central bank that Jackson had
killed, something they were not able to achieve until the passage of the Federal Reserve Act in 1913. But it
gets worse.
Ten years later the money supply had been further reduced to only 400 million dollars even though the
population had boomed. The result was that only $6 and 67 cents per capita remained in circulation. An 84%
decline in just 20 years. The people suffered terribly in a protracted severe depression.
Now let's put these percentage figures into perspective: on January 28 2009 the world's business and
government leaders met in Davos, Switzerland at annual the World Economic Forum which they
optimistically titled: 'Shaping the Post-Crisis World' as if someone had already fixed the problem. According
to Reuters, the world's largest news service, the world's money supply had nearly been cut in half in the
previous 15 months.
'Forty percent of the world's wealth was destroyed in the last five quarters. It is an almost incomprehensible
number.' (Stephen Schwarzman, Chairman, Blackstone Group, January 28, 2009, Reuters)
And how does that compare to the great depression of the 1930's? Nobel prize winning economist Milton
Friedman put it this way in this 1996 interview with the national public radio: 'The Federal Reserve definitely
caused the Great Depression by contracting the amount of currency in circulation by one-third from 1929 to
1933.' (1996, Professor Milton Friedman)
In other words, by January of 2009 the world's money supply had been contracted more than that which
caused the great depression in America in the 1930s.
Some believe the economic crisis that began in 2008 is still being completely manipulated by the big banks,
but it is more likely that their debt-money system has finally spiraled out of even their control. In 2008 and
2009 nations poured unprecedented money into the system to prevent its collapse. At the very least
unprecedented inflation will surely follow.
Returning to the Yellow Brick Road of Financial Serfdom
[48:30] After Lincoln's death the big bankers began returning America to the yellow brick road of financial
serfdom. But first they had to get rid of the silver slippers.
But the bankers were not done bringing post-civil war America to its knees. They wanted to take all silver
money out of the system making only gold be money. In 1872 a British banker named Earnest Seyd was
given a hundred thousand pounds, about 5 million dollars in today's money, by the Bank of England, and sent
to America to bribe the necessary congressmen to get silver demonetized to further reduce the money supply.
The Bank Of England wanted America’s money in their control and what better way to achieve that than
mandating a gold-only money system? The next year the Congress passed The Coinage Act of 1873 and the
minting of silver dollars abruptly stopped. In 1874 Seyd himself admitted who was behind the scheme: 'I
went to America in the winter of 1872-1873, authorized to secure, if I could, the passage of a bill
demonetizing silver. It was in the interest of those I represented the governors of the Bank of England - to
have it done.' (1874, Earnest Seyd)
Newspapers derided at the act as 'The Crime of '73', everybody knew about it, the average American hated it.
Demonetizing silver made money even more scarce: it put the bankers who were the primary holders of gold
in even greater control of America.
Dr. Quentin Taylor: It's been a puzzle to a lot of economic historians this obsession with keeping the amount
of currency so strictly limited. It didn't seem to comport with the expanding economy of the time, you know,
this rapidly expanding economy you have immigration that imparts fueling, and you have westwards
expansion and you have new industries, new technologies, and yet you have a restricted money supply which
makes it increasingly difficult for people to engage in consumption and purchases and other types of
economic activity.
Bill Still: By 1873 L. Frank Baum was just 17 years old but he was already publishing a local newspaper in
his hometown of Chittenango, New York. By 1877 the nation was in a uproar over the hated 'Crime of '73',
riots broke out from Pittsburgh to Chicago, the torches of starving vandals lit up the sky. The bankers huddled
to decide their next move. They decided to hang tough. At the 1877 meeting of the American Bankers
Association - the ABA - they urged their membership to do everything in their power to put down the notion
of a return to greenbacks.
The ABA secretary James Buel authored a letter to the members that blightingly called on the banks to
subvert not only Congress but the press: 'It is advisable to do all in your power to sustain such prominent
daily and weekly newspapers, especially the Agricultural and Religious press, as will oppose the greenback
issue of paper money and that you will also withhold patronage from all applicants who are not willing to
oppose the government issue of money. To repeal the Act creating bank notes, or to restore to circulation the
government issue of money will be to provide the people with money and will therefore seriously affect our
individual profits as bankers and lenders. See your Congressman at once and engage him to support our
interests that we may control legislation.' (1877, letter by James Buel, Secretary American Bankers’
Association)
Political parties advocating a return to greenback money sprung up and ran candidates for Congress and
President. In the 1878 elections 21 independents were swept into Congress, mostly Greenbackers. Two years
later on 1880 the American people elected general James Garfield president. Garfield understood how the
economy was being manipulated. As a congressman he had been chairman of the Appropriations Committee
and was a member of the Banking and Currency Committee.
Garfield understood the ability of the very wealthy to manipulate gold money. He investigated it because of
the Black Friday Gold-Market Scandal of 1869 when financier. Jay Gould and others cornered the gold
market causing wild fluctuations in the price. This is a photograph of the actual quote-board from the New
York Gold Trading Room which Garfield introduced as evidence during a congressional investigation the
following year. This is Garfield's handwriting.
After his inauguration he slammed the money changers publicly in 1881: 'Whoever controls the volume of
money in any country is absolute master of all industry and commerce....and when you realize that the entire
system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be
told how periods of inflation and depression originate.' (1881, President James Garfield)
Garfield understood. Perhaps only coincidentally however, within a few weeks of making this statement on
July 2nd 1881, president Garfield was assassinated.
‘After Garfield's assassination, the depression deepened, leaving the unemployed to face poverty and
starvation. Produce was left to rot in the fields. The country was facing poverty amidst plenty, because there
was insufficient money in circulation to keep the wheels of trade turning. The country sorely needed the sort
of liquidity urged by Lincoln and the Greenbackers; but the bankers insisted that allowing the government to
print its own money would be dangerously inflationary. That was their argument but critics called it
“humbuggery”...’ (2007, Ellen H. Brown in 'The Web of Debt', p.96)
The Rising Anger of America
[54:19] The big bankers finally had complete control of the money supply again by killing off the last
competitor to their yellow brick road. Now they had to hold on against the rising anger of the average
America.
In 1888 L. Frank Baum moved his family to Aberdeen, Dakota territory to open a general store. Baum
sympathized with the local farmers hard hit by the combination of scarce money and severe drought.
Unfortunately he got so deeply in debt that the bank foreclosed on the store.
In 1890 Baum at age 34 started a local newspaper. It was an election year and politics was a hot topic in the
mid-west. The 1890 Congressional Elections were a landslide for democratic party; only 3 miles south of
Aberdeen South Dakota in Omaha, Nebraska, one of the newly elected congressmen was William Jennings
Bryan, the man who would become known as the lion of the Free Silver movement.
A few years later L. Frank Baum would closely follow the mediocre career of Bryan and even create the
character of the cowardly Lion to symbolize his political career. The year of 1890 saw no economic relief in
Dakota territory, so Baum's newspaper folded at the end of the year. In 1891 Baum moved his family to
Chicago where he took a job at the Chicago Evening post.
Meanwhile back on the national front the bankers were ready to unleash additional monetary restrictions:
their methods and motives were laid out with shocking clarity in a memo sent out by the American Bankers
Association, the ABA, in 1891. Notice that this memo calls for bankers to create a depression on a certain
date three years in the future.
Here's how it read in part, note the telling reference to England, home of the mother bank: 'On Sept. 1, 1894
we will not renew our loans under any consideration. On Sept. 1st we will demand our money. We will
foreclose and become mortgagees in possession. We can take two-thirds of the farms west of the Mississippi,
and thousands of them east of the Mississippi as well at our own price. Then the farmers will become tenants
as in England.' (1891, American Bankers’ Association, as printed in The Congressional Record of April 29,
1913)
The next year a leaflet known as 'The Panic Circular' was issued by the American Bankers Association, and
was subsequently published in many newspapers it urged all national banks throughout the United States to
help deepen the money panic: 'Silver, silver certificates, and treasury bonds (that is to say, all the
Government's money) must be retired and [interest bearing]. National Bank Notes made the only money. You
will at once retire one-third of your circulation (your paper money) and call in one-half of your loans. Be
careful to make a monetary [emergency] among your patrons, especially among influential businessmen. The
future [of our debt-based money system] depends upon immediate action, as there is an increasing sentiment
in favor of Government legal-tender notes and silver coinage.' (Banking and Currency and The Money Trust,
by congressman Charles A. Lindbergh, RMinn 6th, The American Journal of Politics, 1894)
The depression actually began in 1893 with what historians now call 'The Panic of 1893'. It all started when
European investors demanded payment only in gold, draining gold reserves in the US.
Again, America was being forced by the Europeans into a gold-only money system. The results were as
inevitable as before: a deep depression quickly set in as the major holders of gold in Europe choked the life
out of the American economy.
In total over 15,000 companies and 500 banks failed, most of them in the west. Unemployment sky-rocketed,
600% up to over 18% nation-wide by 1894. Farmers in the mid-west were mad and the first of many
significant marches on Washington to come, farmers assembled in Ohio and marched peacefully to the
nation’s capital. Called Coxey's Army, after the leader Jacob Coxey, they demanded a return to the system of
debt-free government-issued greenback money. With the winter of 1894 coming on untold thousands of farms
were foreclosed on. As a result many families had to walk away from recently built homes. It's sad that the
image of the vacant Victorian haunted house originated from this era.
These depressions could be controlled fairly easily with America on the gold-standard and the banks own
most of the gold. Since gold is scarce it's one of the easiest commodities to manipulate. People wanted silver
money legalized again so they could escape the stranglehold the money changers on gold-backed money.
People wanted silver money re-instated, reversing Mr. Syed's act of 1873 by then called 'The Crime of '73'.
Dr. Quentin Taylor: Bankers and financial institutions tended to oppose silver as part of the backing of the
currency, they didn't have control over the mining and production of silver in the west, and without that
control they couldn't have the overall control they liked over the currency.
Bill Still: Most monetary reform advocates today argue that the solution to our current economic woes is a
return to a gold standard. This would require that our money be backed by a certain percentage of gold.
Interestingly they use the same term that bankers of the late 19th century used, they call gold-backed money
'Honest Money' and 'Constitutional Money'.
Byron Dale: I worked for a gold dealer for a short time, and I would sit there in a room with forty people
calling and trying to sell gold all day long, on the phone, and everyone was telling them: 'get rid of that
worthless money and buy the good money'. Then it comes to the end of the month and everyone who had
walked into the office wanted the bad money for their pay.
The Lion of Nebraska
[1:00:00] As the depression deepened and big banks continued to buy up farmers' foreclosed properties, a lion
emerged out of Nebraska to try to break their deadly chokehold on the American economy. 1896 was a
pivotal year in American history. L. Frank. Baum was now living in Chicago and deeply interested in politics,
but to make a living for his wife and for the children he worked as a travelling salesman. When he was home
he was writing his first children story.
On the political front the presidential campaign of 1896 would see the explosive money issue dominate the
election. The farmers of the west were sick and tired of the bankers not lending out their gold money. In fact
most of the money that was still in circulation was about 300 million dollars’ worth of Lincoln's old
greenbacks.
A virtually unknown former congressman from Nebraska, William Jennings Brian, ran for president as a
democrat and embraced the free silver issue which the populist party had unsuccessfully tried earlier. Bryan's
father had been an ardent Greenbacker.
The New York bankers were well aware of the anger and tried to control the 1896 democratic convention. An
article said to have been published in a bankers´ magazine in 1892 shows not only their attempts to
manipulate the politics of the day but also their deep contempt for the average American voter, whom they
referred to as the ‘inferior social stratum of society.’
'We must go forward cautiously and consolidate each acquired position, because already the inferior social
stratum of society is giving unceasing signs of agitation. Let us make use of the courts. When, through the
law's intervention, the common people shall have lost their homes, they will be more easy to control and more
easy to govern, and they shall not be able to resist the strong hand of the Government acting in accordance
with the leaders of finance.' (United States Bankers magazine, 1892, as quoted in the Michael Journal, Jan.Feb., 2003)
As the quote continues notice how they try to manipulate the population into focusing on diversionary
political issues.
'We must keep the people busy with political antagonisms. We'll therefore speed up the question of reform [of
tariffs within] the Democratic Party; and we'll put the spotlight on the question of protection [for] the
Republican Party. By dividing the electorate this way we'll be able to have them spend their energies at
struggling amongst themselves on questions that, for us, have no importance whatsoever.'
Now let's return to the 1896 democratic convention, the issues are remarkably similar. William Jennings
Bryan represented the embodiment of all the democrats' wrath against the gold money system. At the
democratic national convention in Chicago, in 1896, Bryan made an emotional speech entitled 'Crown of
thorns ad Cross of gold'. Bryan's speech was so powerful that it propelled him from relative obscurity to the
presidential nomination on the fifth ballot at a tender age of 36.
Amazingly we have Bryan's actual voice recreating portions of his famous speech recorded years later with
the advent of recording technology. Although the recording does not capture the power of the original
moment, it does allow us to hear Bryan's voice:
'I come to speak to you in defense of a cause as holy as the cause of liberty - the cause of humanity. Never
before in the history of this country has there been witnessed such a contest as that through which we have
just passed.' (William Jennings Bryan)
Bill Still: Bryan's recreation recording then skips significant portions of the original speech. According to the
official proceedings of the democratic national convention, Bryan continued with these important references
to America's monetary history:
'What we need is an Andrew Jackson to stand as Jackson stood, against the encroachments of aggregated
wealth. We say in our platform that we believe that the right to coin money and issue money is a function of
government. We believe it. We believe it is a part of sovereignty. Those who are opposed to this proposition
tell us that the issue of paper money is a function of the bank and that the government ought to go out of the
banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of
money is a function of the government and that the banks should go out of the governing business.'
Remember the 1892 memo from the bankers' magazine which bragged that they would try to busy the
democrats with the tariff issue? Here's how Bryan refers to that very issue:
'They ask why it is we say more on the money question than we say upon the tariff question. I reply that if
protection has slain its thousands, the gold standard has slain its tens of thousands. When we have restored
the money of the Constitution, all other necessary reforms will be possible, and that until that is done there is
no reform that can be accomplished.'
However the gold standard and its thirty-year restriction on the money supply had become so unpopular that
even most Republicans had come out against it. Now Bryan's recording picks back up:
'If they tell us that the gold standard is the standard of civilization, we reply to them that this, the most
enlightened of all the nations of the earth, has never declared for a gold standard, and that both the great
parties this year are declaring against it. More than that, they will search the pages of history in vain to find
a single instance where the common people of any land have ever declared themselves in favor of the gold
standard. They can find where the holders of fixed investments have declared for a gold standard, but not for
the masses have.
‘If they dare to come out in the open field and defend the gold standard as a good thing, we will fight them to
the uttermost, having behind us the producing masses of this nation and the world, supported by the
commercial interests, the laboring interests and the toilers everywhere, we will answer the demands for a
gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You
shall not crucify mankind upon a cross of gold.' (-- William Jennings Bryan, Democratic National
Convention, July 9, 1896)
The response, wrote one reporter, 'came like one great burst of artillery. Men and women screamed and
waved their hats and canes.' Some, wrote another reporter '[acted] like demented things divested themselves
of their coats and flung them high in the air.' The next day the convention nominated Bryan for president on
the fifth ballot.
The bankers were scared: the average American farmer was mad about the lack of a plentiful money supply,
now it looked like they had finally gained sufficient political force to win the highest office in the land and
disrupt all the bankers' plans. As a result the 1896 campaign was amongst the most fiercely contested
presidential races in American history. Though Bryan was only 36 years old at the time his speech is widely
regarded as the most famous orations ever made before a political convention. The McKinley campaign
outspent Bryan by a 5:1 margin. Bryan's strategy was to take his political campaign on the road. Bryan
invented the national stomping tour. He made over 500 speeches in 27 states during the 4 month campaign,
an average of 4 a day, and many of them lasting over 2 hours.
Across the nations tens of thousands of Americans rallied around Bryan's appearances with torchlight in
parades. L. Frank Baum's own son wrote that Baum marched in more than one torchlight parade for Bryan.
The battle became so heated that thousands of miles away in Alaska, the highest mountain in North America
Mount McKinley was even named for Bryan's opponent, Republican William McKinley. It seems that the
first gold miner on the mountain, a man named William Dickey named the mountain in honor of the goldmoney candidate in retaliation because his many silver-money friends so zealously supported William
Jennings Bryan.
McKinley got manufacturers and industrialists to inform their employees that if Bryan were elected all
factories and plants would close and there would be no work. The ruse succeeded, McKinley beat Bryan by a
small margin. Bryan ran for president again in 1900 and in 1908 but fell short each time. But the threat his
presence presented to the national bankers afforded the republican alternatives, Roosevelt and Taft, a measure
of independence from the bankers. Roosevelt mildly opposed their monopolies and Taft was an
unenthusiastic about their proposed central bank legislation that would finally be passed in 1913 as the
Federal Reserve Act.
The bankers therefore shifted their support to democrat Woodrow Wilson in 1912. Although William
Jennings Bryan never gained the presidency his efforts delayed the money changers for 20 years from
attaining their next goal. A new privately-owned central bank for America, the Federal Reserve.
The Wonderful Wizard of Oz
[1:10:00] Bryan's defeat in 1896 was a great victory for big bankers, their yellow brick gold had effectively
controlled the politics of the nation by squeezing the life out of the money system. Now with the history of
money explained, let's take a look at L. Frank Baum, the author of 'The Wonderful Wizard of Oz'.
So who was L. Frank Baum? Lyman Frank Baum was born to wealthy parents right here in this house, in
Chittenango, New York in 1856. This is the house where L. Frank was born. His family lived in this area,
they had a barrel factory here across the road from the house - it's over here - yes.
His father made his fortune in the oil fields of Pennsylvania. In 1880 at age 24 his father built him a theatre in
Richburg New York and Baum set about writing and acting in plays.
Baum's political awakening came in 1882 when he married Maud Gage, a daughter of Matilda Gage, a
famous women's suffrage activist. This was her house in Fayetteville New York, about 6 miles from where
Baum himself was born. Matilda Gage was widely considered to be the most radical women's rights advocate
of her generation. Matilda Gage deeply influenced Frank Baum who claimed that she was the most gifted and
educated woman of her age. Matilda even spent six months of every year with Maud and Frank and died in
their home in 1898. Critics of the Baum monetary reform theory say that Baum was way too conservative,
too republican, to support such populists idea. Not the case, Matilda Gage was clearly one of the most
populist women of her age.
Baum's theatrical career met with little success so in 1888 he and his wife Maud moved to Aberdeen, Dakota
Territory where he opened a store known as Baum's Bazaar. These were tough times in the mid-west: Baum
was in the habit of giving credit to his former clients and this eventually bankrupted his store.
Baum turned to editing local newspaper, the Aberdeen Saturday Pioneer. Baum however was not the owner
of this republican newspaper, jobs were scarce, and Baum was forced to write for his republican audience
despite his family's liberal to populist political leanings.
By 1891 times had grown so tough in Dakota Territory that even Baum's newspaper failed. So he moved
Maud and their 4 sons to Chicago where he took a job reporting for the Evening Post. Like most writers he
had to work multiple jobs to feed his growing family.
In 1897 Baum wrote and published 'Mother Goose in prose' illustrated Maxfield Parrish. Two years later
Baum partnered with W.W. Denslow to publish Father Goose his book of nonsense poetry.
In 1900 Baum and Denslow published 'The Wonderful Wizard Of Oz'. The book was the bestselling
children's book for two years after its initial publication. Baum and Denslow teamed up to produce a musical
staged version of the book that was also a huge financial success.
Early film versions were produced in 1910 and 1925 but the MGM classic movie starring Judy Garland as
Dorothy was produced in 1939. This version included many changes that largely obscured the monetary
reform symbology: Dorothy's silver slippers were changed to ruby slippers to take advantage of the new
Technicolor process.
Now with the history of money in America laid out, let's take a look at 'The Wizard of Oz', to see if these
symbols make sense.
Dr. Quentin Taylor: Well the principal and most powerful symbolic reference is of course the yellow brick
road and the silver slippers. In the book version of 'The Wizard of Oz', Dorothy's slippers are made of Silver
as opposed to in the film version where Dorothy's slippers are made of ruby. You take away the silver slippers
on the gold or yellow brick road and all of the other symbolism tends to be lost.
Bill Still: The original populist solution was government-issued money called greenbacks. But the
Greenbacker movement had failed, so the populists had switched to expanding the money supply with
government-issued silver coins. The underlying dispute however was not how money was made of, but who
should issue it: private bankers or the people themselves through their representative government.
The first person Dorothy meets along the way is the Scarecrow representing the supposedly ignorant western
farmer. Although he thinks he doesn't have a brain, the Scarecrow proves to be very clever at figuring things
out on the track to Washington.
Dr. Quentin Taylor: And this was Baum's way perhaps of saying that the farmer in fact did understand the
basics of economics and that an expansion of currency was in fact a legitimate way of improving the
condition not only of the farmer but of the economy as a whole.
Bill Still: Next Dorothy and the scarecrow meet with the Tin Woodman, Baum's symbol for the factory
worker.
Ellen Brown: And what he needed was some oil or liquidity, he needed the liquidity of more money in the
system.
Bill Still: As professor Hugh Rockoff of Rutgers university put it in his 1990 article in the Journal of Political
Economy: 'The Tin woodman was unhappy for he had lost his heart. A powerful representation of the populist
idea that industrialization had [turned] the independent artisan into a mere cog in a giant machine. [The Tin
Woodman had] joined the ranks of those unemployed in the depression of the 1890s, a victim of the
unwillingness of the eastern gold bugs to countenance an increase in the stock of money through the addition
of silver. After his joints are oiled, the Tin Woodman wants to join the group to see if the Wizard can give him
a heart. He, too, will learn that the answer is not to be found at the end of the yellow brick road [but within
himself].'
Ellen Brown: And then there was the Lion who represented. William Jennings Bryan - Bryan was actually
called the lion of the silver movement he was the leader.
Bill Still: Bryan was considered a coward because after his loss in 1896 he backed away from the free silver
movement.
According to professor Rockoff: 'The last character to join the group is the Cowardly Lion. This is Bryan
himself. The sequence is not accidental. Baum is following history in suggesting that the movement was
started first by the western farmers, was joined by the workingman, and then, once it was well under way,
was joined by Bryan. The roaring lion is a good choice for one of the greatest American orators.' (The
Wizard of Oz as Monetary Allegory, Hugh Rockoff, The Journal of Political Economy, Vol. 90, No. 4 (Aug.,
1990), pp. 747-748, The University of Chicago Press.)
The Trek to Oz
[1:15:35] So off go the foreign likely companions headed for Oz along the dangerous yellow brick road in
hopes that a powerful wizard will grant their requests. Some experts view this as symbolic of the very first
march on. Washington, that of Coxey's Army in 1894, to try to break the depression.
Dr. Quentin Taylor: Jacob Coxey was a successful businessman who led a march from the mid-west to
Washington D.C. to seek redress from the economic plight of millions at the time who were suffering during
the crisis, the depression of 1893. He marched with his so called 'industrial army' - these were just
unemployed men - so this track is often seen as inspiration behind Dorothy and her group's track to the
emerald city to seek redress from the Oz, or the president of the United States. Coxey was hoping to meet
with president Cleveland, however he was arrested for trespassing, jailed, and his movement was dispersed.
'Coxey was a Greenbacker, and his idea was simple: the federal government should build public works and
pay for them by printing money. At the time the idea seemed to be the wildest kind of extremism. But given
unemployment of 18.4% few modern economists would be prepared to dismiss such a proposal out of hand.'
(The Wizard of Oz as Monetary Allegory, Professor Hugh Rockoff, The Journal of Political Economy, Vol 90,
No 4, Aug 1990, University of Chicago Press.)
On the track to Oz the cowardly lion falls asleep in a field of poppies. But why poppies?
Ellen Brown: The poppies were representative of the opium wars that Bryan was opposed to. 'Poppies are a
source of opium, and falling asleep in the field of poppies symbolizes the populist fear that Bryan would fall
asleep in the midst of these new issues.' (The Wizard of Oz as Monetary Allegory, Hugh Rockoff)
Ellen Brown: The Lion was rescued from this field where he was sleeping by a bunch of little field mice who,
it's said in the book, alone of course they wouldn't have been able to move this giant lion but when they all
got together they were able to move him together. So this is like an excellent image of the populist
movement, how a lot of people who had no power in themselves, if they knew the direction in which they
wanted to go, could move mountains, you know, could actually have a major impact.
There's a great deal of symbolism in the book that was lost in the movie that there's just so much of it that
there's just so much of it that there's just no way that it couldn't have been reflective of this monetary reform
movement. And some of it is just very pointed, like it couldn't mean anything else: for instance there's one
passage, it's when they get to Oz and she's shown through a room in a palace, she goes through seven
passages and up three flights of stairs; well it just means nothing unless it means the Crime of '73 which to all
populists meant...that statute which had revoked the ability of the people to bring their own silver to the mint:
'It is not surprising that the layout of the. Emerald Palace should reflect the numbers seven and three. The
Crime of '73 was a crucial event in populist monetary history.' (The Wizard of Oz as Monetary Allegory)
The two wicked witches were the east and the west, the two banking powers at that time were Rockefeller
and Morgan and J.P. Morgan headed the wall-street bankers in New York and ultimately got his funding from
Europe.
Dr. Quentin Taylor: The wicked witch of the west could represent the Rockefeller interest based in Cleveland,
based in the Mid-West, Rockefeller was dominant in the west and Morgan was dominant in the east.
Ellen Brown: So when Dorothy first lands in her house and kills the witch she gets the slippers which are the
power; actually the power of the witch. 'They're no used to you. Give them back to me. Give them back. Keep
staying inside of them. Their magic must be powerful. Or she wouldn't want them so badly.' (Movie quote)
So the power of the witch is the power to create money, Dorothy doesn't realize that she now has that power
in her own feet, the power to create money.
Bill Still: Dorothy and her troop are then told that they must go kill the wicked witch of the west. 'Bring me
the broom stick of the witch of the west. But if we do that we'll have to kill her to get it.' (Movie Quote)
She hurls near biblical plagues with the group: wolves, and crows, and black bees, all of which they defeat.
Finally she's forced to use her golden cap, another symbol of the gold standard to call the winged monkeys
which capture the group. Dorothy eventually kills the witch by pouring a bucket of water on her, suggesting
the liquidity that silver money would add to the economy, breaking the stranglehold of the bankers’ gold
money system.
Dr. Quentin Taylor: With additional liquidity the economic fortune of those people could be improved.
Bill Still: People wanted government-issued money, silver in this case. The banks had forced America onto a
gold money standard, then they could cause a depression any time they wanted to merely by reducing the
supply of gold money.
When they return victorious to the wizard Dorothy is asked to sew the wizard's getaway balloon out of green
cloth. Then the wizard accidentally leaves without her. Fortunately Dorothy is able to seek out Glenda, the
Good Witch of the North: 'Oh will you help me? Can you help me?' (Movie quote)
Dorothy is then told that the power to solve the problems has been with her all along, she only needs to click
the heels of her silver shoes together three times. Like Dorothy, America itself had the power to solve its
problems simply by expanding the money supply government-issued silver money.
When Dorothy finally gets back to Aunt Em and Uncle Henry in Kansas, she finds that the silver shoes have
fallen off her feet just as the silver issue was vanishing in the late 1890s. And Baum was right: the silver
cause would become a distant memory once the United States became firmly committed to the gold standard
with the passage of the gold standard act in 1900, the same year The Wonderful Wizard of Oz was published.
L. Frank Baum never admitted embedding the symbols of monetary reform in 'The Wizard of Oz',
consequently some fans vehemently denied that there is any connection. However the period immediately
after the book's release may offer some helpful clues regarding his motives.
References to current affairs appear in a number of Baum's later works. In 1901 Baum worked on a comic
opera 'The octopus or the tidal trust', this was why he was still trying to break away from writing any
additional Oz books. However, the public pressure became too great as 'The Wizard of Oz' continued to grow
in popularity. Eventually Baum appeared to lose all interest in politics as he became wealthy from having
written what would become the most popular children's story in history.
Solutions
[1:23:00] So what can we do about this? There are several alternatives they fall into two general categories:
actions at the federal level, and actions at the state level.
There are three basic federal level solutions all of which have at their core that government should issue and
control the quantity of money, and commercial banks can only lend out the money they actually have. British
citizen James Robertson splits up the money power between two competing governmental bodies: the British
government would publish monetary objectives approved by parliament - for example an inflation range of 2
to 3 percent - then the Bank of England would create just enough debt-free money to achieve those
objectives; it would then give this money to the government to spend in the economy by the normal
budgetary process.
James Robertson: This is an agency of society, it's a public agency acting in the public interest, and it's acting
in the public interest to achieve objectives given to it by the elected government. It should be at professional
arms-length from the elected people themselves, because the legislators are going to try and get as much
money as they can into their local economy, and if it's a question of a national election they will want to
manipulate decisions about the money supply in favor of keeping them in power. It seems to me you can't
ignore that. It's a fact, a fact of life.
Bill Still: Commercial banks would still be in operation but could only lend out the money they have, then
they would have to compete for additional money on the open market just as other corporations have to
compete in the market to buy the materials they use. Lending out extra money that the bank didn't have
would be considered a form of counterfeiting.
James Robertson: They would be prohibited from creating new money at all, and they would be competing,
absolutely competing without subsidy as they have now, competing with other banks to provide a better deal.
And what this would do, it would make the banks truly competitive which they are certainly not at the
moment - they're about the only huge industry that is subsidized to the level that they are - and also a
competitive market for borrowing and lending would encourage new entrants to come in, you know much
more than they can get in now when the existing license pegs are so highly subsidized by their permission
that they are given to create new money.
-- In other words banks could only lend money they actually had.
-- Absolutely. And I think that's the situation that the central money authority should be in: it should create
the money debt-free and it should give it to the government to spend into circulation.
Bill Still: In Ellen Brown's solution the government would create all the money debt-free, some of it would
be simply spent into the economy but most of it would be lent into the economy at low interest or no interest,
to local governments or individuals. In her model money lent into the economy minimized the inflationary
effect of new money.
Ellen Brown: The solution to all this is to return to the government-issued money of the American colonists,
and particularly the colony of Pennsylvania which had its own bank and issued government credit. Congress
feels that the they have to bail out of the banking system and the real reason is that we think that we're
dependent on this banking system for the credit, but we're not.
Like Dorothy and all the characters in 'The Wizard of Oz' we have the power to create our own money and
our own credit, the government's mentality in general seems to be 'we'll do what we have to do and we'll
worry about paying for it later', but what you could do is 'pay for it now.', in other words you don't have to
pay for it later, you don't have to pay for it later, you don't have to pay for it with that, you can just pay for it
with money.
Bill Still: In the Money Master's solution the government creates all the money in the form of debt-free US
notes or their electronic equivalents and then spends that money into existence through normal budgetary
process. Existing money is of course replaced one for one with the new debt-free money. The national debt is
paid off with this new money as well, but to prevent inflation reserve requirements are gradually raised on the
commercial banks requiring them to maintain 100% reserves; in other words bank could then only loan out
money they actually have.
Karl Dennings: I think the solution is what I call One Dollar Accounting. Which is simply that you have to
have one dollar in capital against every unsecured asset you lend against. So if you are going to loan against
credit card, you have to have a dollar capital for every dollar that is outstanding in balance. If you are going
to write loans against houses or against cars, you can write all loans you want against the value of that asset,
whatever that is. And as long as you do that, there is never a banking safety or soundness issue.
Bill Still: Solutions at the state level would be easier to achieve initially before reform at the federal level is
politically possible. An interesting fact is you don't have to have a federal charter to create a bank. States can
charter banks as well. All it takes is a bill passed by the state legislature. Many states already allow state
charted banks. The state then deposits all their funds into their new bank and can then utilize the fractional
reserve principle to their advantage by making loans to themselves for roads, bridges etc. at no interest. When
the loans are repaid the money is extinguished from the system. The beauty of this system is you create
wealth without creating a permanent increase in the money supply and the consequent inflation.
During the civil war Virginia authorized counties to issue their own debt-free money. Since there was no gold
there would have been no money in circulation to maintain commerce. These surviving bills are tissue paper
thin.
Minnesota monetary reform expert Byron Dale has proposed legislation for Minnesota to charter a state bank
which would be empowered to give the state government all the money necessary to provide infrastructure
funding such as road building and repair without debt or interest.
Byron Dale: My concept of money reform is just a little bit different but it's only based upon the fact that for
me personally it's easier to work on my state legislators than it is on my federal legislators, and of course the
solution to our problem is clearly money put into circulation without debt. Now it really doesn't make any
difference how you do it just as long the money comes into circulation without debt to anybody and as a
payment. The very concept of the bill is to simply have the banks create the money and spend it into
circulation to build the infrastructure for the state.
What got me into the state solution was: a friend called me and told me I should watch TV because
Minnesota senate of transportation here was being heard on television and during that hearing at least 50% of
the senators said on that committee that they had defined a new and innovative way to fund the transportation
because they just couldn't do it the way they'd been currently doing it. And that made me start thinking and I
said, now I know how we could do it on the federal level, how could we work it out so we could do the same
thing at the state level some way. And knowing that banks can create money, my theory was: well if you can
create money and loan it you can surely create money and spend it.
So I contacted the FDIC and asked them if banks could create money for investments the same way they
could create money for loans, and they said 'absolutely'. And so then I started working up a concept of a bill
how that could be done. The very concept to the bill is to simply have the banks create the money and spend
it into circulation to build infrastructures for the state.
[State Bank of North Dakota]
Bill Still: This proposal is currently working its way through the Minnesota legislator with several bankers as
sponsors. Actually the state-owned bank idea is nothing new. The Bank of North Dakota is the only stateowned bank in America, it was created in 1919 as a populists movement swept through the debt-ridden
farmers of the northern plains.
Even in these worst of times the Bank of North Dakota is earning record profits and helping fund their state.
It's been doing this for the last 90 years, hardly a radical start-up idea.
According to the bank's president Eric Hardmeyer: 'We are the depository for all state tax collections and
fees. We plow those deposits back into the state in the form of [low-interest] loans. Over the last 10-12 years,
we've turned back a third of a billion dollars just to the general fund to offset taxes or to aid in funding public
sector needs. Not bad for a state with a population of 600,000. [In 2009] the State of North Dakota does not
have any funding issues at all. We, in fact, are dealing with the largest surplus we've ever had.' (2009, Eric
Hardmeyer, President, Bank of North Dakota)
Interestingly, the Bank of North Dakota idea was initiated by a group of Swedish immigrants to North Dakota
in the early nineteen hundreds. Community banking had been going on in Sweden for at least a century
before that. Around 1820 the Swedes came up with the idea of the savings bank.
These full reserve banks only lend out money they actually had. They decentralized the money power and
were encouraged by the government as a way for municipalities to fight poverty. These operated as what was
known as the Church Steeple Principle, where the bank could only make loans to customers who's houses
could be seen from the highest church steeple in town.
These community banks increased the commonwealth instead of the big bankers wealth. This helped Sweden
grow rich, which helped Stockholm to grown into the magnificent Venice of Scandinavia that we see here
today. But then the debt based bankers attacked the savings banks. They first convinced most of them to
consolidate into bigger and bigger banks. Then the Swedish parliament was convinced to pass a law allowing
the non-profit savings banks to be bought up by the commercial banks. After a series of mergers these banks
are now called Swedbank.
Niklas Hogberg (Chairman, Sound Banking Ethics Foundation - Stockholm): They were under severe attack
during the '80s, but many of the savings banks still remain in the country and they are very effective and
especially because they decentralized the power and give it back into the hands of the citizens. They
empowered the local communities and in times of crisis, they have proven to be more profitable than the big
banks.
Bill Still: Now there are only about 50 savings banks left. A small remnant of a great idea for publicly owned
banking that shows that communities or even nations can operate debt-free.
Iceland’s Tiny Economy
Iceland's tiny economy and sparse resources were also nurtured by a series of public interest savings banks.
Despite a population of a little over 300,000 people, and a gross domestic product (GDP) of around 12 billion
($12,000,000,000), Iceland is one of the most civilized nations on earth. But then the government privatized
the savings banks similar to the Swedish savings banks 20 years earlier. But in Iceland's case, even the
Landsbanki, which essentially was the Bank of Iceland was privatized as well.
For the first few years things looked good, the economy doubled, but under the surface the private bankers
were creating a huge financial bubble. They opened a new off shore internet bank called Icesave, targeting
depositors in the UK and Holland by offering attractive interest rates for new depositors. Hundreds of
thousands of new accounts were opened. Entire towns and police department pension funds put their money
into Icesave, as did charities such as cancer relieve funds. Using fractional reserve lending Icesave fanned
that into billions for questionable new loans.
Icesave started investing in European ventures, especially in Russia. Many now believe that Icesave actually
became a money laundering operation for the Russian mafia, all the while trading on the good reputation of
solid banking Iceland had built up over the previous decades.
Birgitta Jónsdóttir (Member of the Icelandic Parliament, Parliamentary Group Chairman): However when the
banks were privatized, it still used the good reputation of Iceland to grow huge and to, you know, lots of
criminal activity. And the owner became one of the rich boys of the world pretty quickly, one of the
billionaires. I've seen documents linking him to the Russian mafia, and his father. One oligarch that fled to
the UK confirmed that Iceland was used as a money laundering machine for the Russian mafia.
Bill Still: When the crash came in 2008 the big Icelandic banks quickly failed
Birgitta Jónsdóttir: In the five years’ time they were privatized before the collapse, they actually grew ten
times the Icelandic GDP, and when it collapsed you can imagine how huge the collapse was because they
collapsed onto the shoulders of the nation of the taxpayers.
Bill Still: The Icelandic parliament at first poured enormous amounts of taxpayer money into them to try to
save them but they still failed. Then the government bailed out all the Icelandic depositors but the Icesave
accounts were not in Iceland and were never insured by the Icelandic government and so they were not bailed
out. However in the face of tremendous political pressure at home, the British and Dutch governments bailed
out the Icesave accounts of their citizens, and then tried to make Iceland pay for it at terms that had
decimated Iceland's fragile economy.
Birgitta Jónsdóttir: The income tax of more than half of the nation, just the interest of this particular loan.
And then you have other loans, we have gotten from in 2007 being the most developed nation in the world,
into a nation spending all its GDP just paying interest of foreign loans.
Bill Still: Inflation shot up. Icelanders soon discovered that even the principal on their home mortgage loan
was indexed to inflation. Many Icelanders saw the principal on their home mortgages double and their
payments triple. This despite rising unemployment.
Birgitta Jónsdóttir: The way the loan system is in Iceland is completely outrageous, i mean it is, you are right,
the consumers are zero.
Bill Still: Foreclosures mounted and the citizens rioted, they call it their revolution, they stormed the
parliament square. The president was forced to call for a referendum. 93% of the people voted not to bail out
the bankers.
'Brits aren't exactly a shining light here about how to handle internationals relations. -- No, it is one of the
worst conducted most absurd things I've seen in a long time. It is obvious that the Icelandics cannot afford to
pay this money back. All we have seen is the first anti-bailout tax-vote here.' (MSNBC TV-show quote)
Now the ruling party is trying to convince to join the European Union to be eligible for loans to save its
economy. The people however been unconvinced that more and more debt is the solution. Iceland now seems
determined to take back their money power and not take on more national debt.
Birgitta Jónsdóttir: What I want to implement here is a healthy banking system where you don't have
fractional reserve, where you don't have high interest, the banks should not serve as mafia outlets, it should
be something that is important for the community.
Bill Still: Over 70% of Iceland now opposes joining the EU and some are now supporting proposals for cities
to start up savings banks based on North Dakota model, to provide local credit and stop the rising wave of
housing foreclosures.
Birgitta Jónsdóttir: We are not part of EU yet, they are trying to put us in it with the 70% of us don't want to
join the EU, but the social democrats are in power and that is their sole mission to get us into the EU.
Bill Still: Iceland is proud of its democratic heritage. Iceland is the home of the oldest parliament in Europe,
having met annually for over one thousand years. For the first 800 years the Icelandic parliament met at this
site, where the North American tectonic plate meets the European plate. Called Thingvellir, Icelanders call
this a holy site where elected government was born.
Today Iceland is the new battle ground as it attempts to become the first nation in modern times to escape the
serfdom of the debt money system. If Iceland escapes the rest of the world will be watching.
Hans Lysglimt (Editor of Farmann, a business magazine in Oslo, Norway): If you end up paying this money,
entering into the EU, to try to find salvation that way, it will only get worse. What has happened in Iceland is
going to happen on a world wide scale in our lifetime. There won't be enough money to cover all the debts.
Birgitta Jónsdóttir: Why are governments pumping money into private banks? Why are they not letting them
roll? Just like any other. And then the excuse is: they are too big to fail. Pff! Let them fail, please!
Summary
[1:40:55] So what this all boils down to is whether America, still the freest nation in history, will once again
break free of the privately-owned central bank as it has six times in the past.
What's at stake? Will we continue to be able to own our own homes, will both parents continue to have to
work, will the average American be able once again to actually have a positive net-worth and be able to save
money. Why don't we have any money? Because there is no debt-free U.S. money supply so there's no extra
money in the system. It all goes to interest payments in this debt-based economy.
Our money is not issued by the government, even though they make it look like it is. It doesn't have to be this
way. This system has got to go.
Some will say, well those crooks in congress will create too much money once they get the money power. But
Congress now creates all the money it wants, it just creates it as debt which never gets paid back and which
we the people have to continually pay interest on. Instead of creating bonds or debt, the government could
and should be creating dollars. Interest free.
Karl Denninger: Even though the federal government is out there borrowing and spending three trillion
dollars, 10% percent of GDP, 9.4 or something like that, for the last two years. Even though they have done
that, the total amount of debt outstanding in the system since the beginning of 2008 has actually contracted,
including the federal government. That comes directly of the federal reserve on Z.1.
You cannot grow an economy in a debt based monetary system, for real, when the outstanding credit is
becoming smaller. It can't be done. Because all money is debt, in one form or another. But more importantly,
the treasury could solve this. The treasury has authority to issue non-debt-backed currency. They do it every
day in the quarters that are in your pocket, they are not debt backed.
Bill Still: As the inventor of the electric light, Thomas Edison put it: 'If our nation can issue a dollar bond it
can issue a dollar bill. Both are promises to pay, but one promise fattens the usurers and the other helps the
people.' (Thomas Edison, The New York Times, Dec 6, 1921, “Ford Sees Wealth in Muscle Shoals”)
Edison was friends with carmaker Henry Ford. Ford understood how the monetary system depended on
keeping the average American confused: 'It is well that the people of the nation do not understand our
banking and monetary system, for if they did, I believe there would be a revolution before tomorrow
morning.' (Henry Ford)
Under this system we can never get out of debt, it's just impossible. Nor is gold-backed money the solution,
that was the most important symbol in 'The Wizard of Oz'. You think international manipulation is easy now?
Just wait until we return to a gold-money system.
As Thomas Edison told the New York Times: 'Gold and money are separate things. Gold is the trick
mechanism by which you can control money... that is the root of all evil.' (Thomas Edison, The New York
Times, Dec 6, 1921, “Ford Sees Wealth in Muscle Shoals”)
The solution is government-issued money. That's the most democratic form of money system. It maximizes
freedom in a republic instead of the centralized control of the international plutocracy we are rapidly
devolving into. But be prepared to deal with the modern day gold bugs, their arguments divert us from the
real question.
James Robertson: They say: this money that is created by the state, or by society, is not real money, it may
represent real money, but it isn't real money.
Bill Still: It's not what backs our money, it's who controls its quantity. That's what 'The Wizard of. Oz' was all
about. Big bankers were controlling the quantity of American money, gold money. Others will say Congress
isn't responsive to the people as it is. Well of course not. Politicians are responsive to those with the power.
Right now the banks have the power. We have to take back the ultimate power of any nation, the power over
its money. With the power of banks diminished, politicians will become responsive to the voters once again.
If we value the founding fathers' dream of freedom and escape from serfdom by political self-determination,
we have to conclude that creating our money is too important of a function to be put into private hands.
History has shown, time and time again, that leads only to plutocracy ruled by the rich, and ultimately
slavery.
But what about the banks? They're already failing. Let the big banks fail. No bank is too big to fail.
Government can issue its own money, we don't need their hyper-expensive compounding interest system.
Don't worry banks or banking won't go away, you'll still go down to your corner bank to deposit your check.
Your bank will still be there. Only the guts, the banks' accounting system, the part you will never see anyway
will change.
Reed Simpson, Midwestern Banker: It does not mean the banks will be unable to be prosperous. They would
have a slightly different business model than they enjoy now, but not even all the banks have that model
today. You have savings and loans, credit unions, loan companies that historically don't create new money,
but yet they do intermediate money, they do loan it out, they do take deposits and they're careful with the
investments they make. And they do make money on fees and on being intermediaries between these sources
of funds and the investments they make and that would not end. It would not. Banks would still have, in my
opinion, they would still have a very prosperous future.
Bill Still: There is hope. Especially here in America. History has shown that America has fought to create its
own money for the last 300 years. In fact in no other nation on earth has the population fought for it as
successfully and with such determination over the centuries as America.
All we need in the face of this oncoming first depression of the 21st century is a little education. We can
make this the new civil rights movement, the new human rights movement.
Nations of the world: the same applies to you. Virtually every nation now labors under the same monetary
system. All money is created at interest, as a debt. Once again, we're falling for the bankers threats of
economic collapse just like when Andrew Jackson tried to kill the 2nd Bank of The United States. It's nothing
but pure extortion. World extortion. Let them fail.
Remember: All this money we're giving them is at interest. Money we are borrowing to give to the banks,
then these very same banks have the audacity to loan this money back to us at more interest. This system has
got to go.
In 2009 the interest we paid on the national debt in one year was more than we spent totally on the Iraq war.
This system has got to go. In 2009 interest payments on the national debt will exceed 700 billion dollars.
Compare that to the 18 billion dollars from NASA, 23 billion for the entire department of justice, or 65
billion for the entire department of Education.
James Robertson: I think it will a very big change, I think it will be actually the central change, looking
towards say the next hundred years or so in the survival of our species to get these things straight.
Bill Still: That's the secret that can set humanity free. Our children won't be settled with any more national
debt. That's right. No more national debt. That term will cease to exist. And don't fall for the argument that
those rascals in Congress will spend too much money if they get the power to create money. Look at what
they are doing now, they aren't spending it, they're just borrowing it, then giving it away. It can't get any
worse.
The questions raised by the study of the symbolism embedded in ‘The Wonderful Wizard of Oz’ are even
more important when you understand that this is not just an American problem. It's totally international. This
privately-owned money system is worldwide and is literally the primary cause of most of the world's hunger,
poverty, misery and disease.
After William Jennings Bryan loss in 1896 their cause started weakening, their ship started to sink. In 1900 L.
Frank Baum's Wonderful Wizard of Oz was like a desperate flare, fired into the night of history, hoping that
someone across the centuries would notice, would pay attention to the greatest issue of their era and
ultimately ours. Humankind's escape from the debt-money system.
Let's follow the example of Abraham Lincoln when he issued greenbacks in 1862 to save the nation from
permanent division.
‘I wish it were possible to obtain a single amendment to our Constitution... Taking from the federal
government the power of borrowing.’ -- Thomas Jefferson
‘Money was intended to be used in exchange, but not to increase at interest. And this term interest, which
means the birth of money from money, is applied to the breeding of money ... of all modes of getting wealth
this is the most unnatural.’ -- Aristotle, 325 B.C. As quoted by Will Durant in "The Story of Philosophy
(I,1258b4) contributed by Andrew Camarillo.