Demonetization of Silver, An Act of War & The Consolidation of the United States by J.P. Morgan
History is just that: HIS-STORY. It is a play conjured by entrenched interests who have time and history on their side. The macro-events of daily life are not the effect of democratic processes or chance, but, instead, the execution of all things by powers-that-be, with 24 hour think-tanks and the bloodline of civilization, rule of money, to their advantage.
The 1873 Coinage Act listed all the coins to be minted under the legislation. It omitted the silver dollar, and because there was much demand for silver beyond monetary, as well as its strength through tradition, not much was changed – at first.
The act was sprung from London. As silver was demonetized in France, England and Holland in 1872, capital—approximately $500,000—was raised so that Ernest Seyd could head to United States, as an agent of foreign bond holders, finance capitalists and elitists centered on the Rothschild Empire, to achieve the same: the demonetization of silver. This was stated in the Congressional Globe of April 9, 1872, page 2304:
Ernest Seyd of London, a distinguished writer and bullionist, who is now here, has given great attention to the subject of mint and coinage. After having examined the first draft of this bill (for the demonetization of silver) he made various sensible suggestions, which the committee adopted and embodied in the bill.
Injury inflicted upon the people of the United States as silver was demonetized was critical. What ensued in the form of The Panic of 1873 represented one of the most disastrous episodes in U.S history. The years of 1873 until silver remonetization in 1878 brought bankruptcies and financial disaster to millions. The economic distress, as concluded by prominent statesmen of the time, and many analysts since, was caused by “the shrinkage in the volume of money.”
This was an effect of the departing of a flexible bimetallic standard in favor of a monometallic standard, a gold standard.
For background, throughout most the course of American history, leading up to the demonetization of silver in the year 1873, the dollar was defined in monetary context as composed of either 22.5 grains of gold or 270 grains of silver. This meant that, in practice, the legal price of silver in comparison with gold was 16 ounces of silver to 1 ounce of gold.
And so, in the late nineteenth century silver, alongside gold, took center-stage in American politics, though few understood the issue. The issue, however, was so key to the running of the United States, that everybody since has been affected by it.
The problem arose with the question of what monetary standard to adopt and implement. The national debate around the issue was a focal point in the last two presidential elections of the century.
In Populist circles called the Crime of 1873, the event itself was the demonetization of silver under the Coinage Act of the same year. In 1792, Alexander Hamilton had set the United States on a bimetallic standard, meaning the country had the flexibility of favoring either metal depending on economic circumstances.
When silver was demonetized, millions of individuals and families lost their savings overnight. The argument could then be made that the demonetization of silver was clearly economic war and, perhaps, genocide on those who saved through the metal; namely peasants, farmers and workers.
As numerous countries, in concert, moved from the prior bimetallic standard to a gold standard, they sold their silver in favor of gold. The market silver price of gold increased from the standard 16:1 to 40:1.
For almost 100 years, from 1792 onwards, the United States practiced a gold/silver bimetallic standard at a ratio of 15:1 and 16:1, except for the Greenback period of the Civil War. Despite considerable gold and silver discoveries in the 1850s, the policy pursued by policy makers was one of contraction. See, while gold and silver supplies were expanding alongside the growing economy, setting the stage for their continued use as monetary elements, Northern bankers and internationalists were anticipating a massive consolidation of the economy.
The years 1873 to 1896 were years of worldwide deflation, especially in the United States. The money stock was outpaced, partially due to demonetization, but also by by the rise in output during the period and the monetization of the economy through increasingly centralized banking power. So, as the amount of money in circulation was contracting, the amount of concentration of the money was intensifying as well.
Producers of silver, the peasants and other classes injured by the new monetary dictum favored the Populist Party and William Jennings Bryan, who was a candidate for the Democrats during the election cycle of 1896. He rallied his supporters behind a bimetallist and progressive platform, which included women vote, the income tax, and an end to American imperialism.
Urban voters, bondholders, bankers and financiers united behind the Republicans and their nominee William Mckinley. Such characters generally preferred gold to silver, and so were therefore referred to as gold bugs. These gold bugs benefited greatly from the demonetization of silver, since bonds then could only be paid for in gold, of which they held millions of dollars worth.
That seventh decade of the eighteenth century, the rest of the century was decided. Totalitarian measures in the United States would be expanded and all races would be tightly controlled, when possible. Financial and political elites, supported by their brothers in London, would organize the country under their lead and roll out the “greatest march of economic growth in human history.” The labored classes toiled under this program. All labor was exploited, including black, white, Chinese, European, female who were often setup in a racial caste system, “in such a way as to create separate levels of oppression-a skillful terracing to stabilize the pyramid of wealth.”
By 1895 the gold reserve of the United States was non-existent, and twenty-six New York City banks held $129 million in gold in their vaults. The cartel of bankers headed by J.P. Morgan & Company, August Belmont & Company, the National City Bank, and others offered the government gold for bonds. President Grover Cleveland obeyed and the bankers turned around and resold the bonds for $18 million profit..
A journalist wrote: “If a man wants to buy beef, he must go to the butcher…. If Mr. Cleveland wants much gold, he must go to the big banker.”
Morgan said: “We do not want financial convulsions and have one thing one day and another thing another day.” He had tied the railroads together, all of them to banks, and banks to insurance companies. By 1900, he controlled 100,000 miles of railroad, half of the mileage in the country.
The consolidation was done, mostly, legally, as the courts and government played along. The control of industry by finance became more acute during the period, as illustrated by the control of railroads by the House of Morgan and bankers Kuhn, Loeb, and Company. J.P. Morgan had played a role in the Civil War. A son of a banker who first sold stocks for the railroads and luxurious commissions, his entrepreneurial spirit was made clear when he, during the Civil War, bought five thousand rifles for $3.50 and sold them for $22 each to a general in the field. The rifles, defective, shot off the thumbs of soldiers. Whilst congressional committee made note of this in a report, a federal judge upheld the deal as valid and legal.
Morgan did not serve in the Civil War; instead, he avoided it by paying $300 to a substitute. The same is true of John D. Rockefeller, Andrew Carnegie, Philip Armour, Jay Gould, and James Mellon.
A billion dollars in assets had three insurance companies dominated by the Morgan cartel. Loius Brandeis, in his book Other People’s Money, before his days as a Supreme Court Justice, wrote: “They control the people through the people’s own money.”
As a bookkeeper in Cleveland, John D. Rockefeller started. He then became a merchant, accumulated money, and decided that if he could control oil refineries, he could control the industry. By 1870 he had set up Standard Oil Company out of Ohio, and made esoteric agreements with railroads to ship his oil with them if they allowed him rebates on their prices.
By 1899, The Standard Oil Company was a holding company with the stock of many, many companies. The capital equated to $110 million, with a profit of $45 million annually. John D. Rockefeller was worth $200. He had a stake not before long in iron, copper, coal, shipping, and banking (Chase Manhattan Bank). Profits would be $81 million a year, and the Rockefeller fortune would quickly total two billion dollars.
According to a Senate report of the early twentieth century, Morgan sat on the board of forty-eight corporations; Rockefeller, thirty-seven corporations. Their reign meant pain and suffering for most individuals.
I have a little boy at home,
A pretty little son;
I think sometimes the world is mine
In him, my only one. . . .
‘Ere dawn my labor drives me forth;
Tis night when I am free;
A stranger am I to my child;
And stranger my child to me.
The demonetization of silver paralleled a time in United States history of deep wealth re-allocation. Powerful interests with the support of international power brokers managed to restructure the landscape of the U.S economy and its politics. Forty years after demonetization, the Federal Reserve was set up and the First World War was beginning.
Power plays like demonetization of silver happen swiftly and can leave lasting effects over decades and centuries. With one decree, the course of the future can be forever remapped and a new world can come into view. What happened to silver in 1873 is the same thing that is happening to the U.S Dollar, The Federal Reserve Note, in this, the twenty-first century.
Just as the so-called “silver fish” awoke one morning in 1873 without savings, so too will their progeny of today, one day wake up having saved in a money no longer money.