The Fed versions 1.0 and 2.0

For a while now I’ve been meaning to write a thread on the first two Bank of the United States as well as other key events in history. I’ve even mentioned this a few times in other threads in passing (usually in reference to trying to get a dedicated history forum *hint hint mods*). Well recently, Wrabbit wrote a thread on Napoleon Bonaparte and it got me motivated to FINALLY do the full research on this topic and post my thread on these banks.

As you may be aware, the Federal Reserve isn’t the first privately owned bank that has owned and distributed our currency. It’s been tried twice before under different names, The First Bank of the United States and The Second Bank of the United States (which will hereafter be referred to as FBUS and SBUS respectively). To anyone who was unaware of this, well now you know.

Before I begin, I want to preface by saying that I do not intend to put my own spin or add any conspiracy theories. This is all mainstream history as presented through biographies, Wikipedia, and other sources. This will also apply to any other historic threads I may present. The reason for this is that I want to show that even the mainstream account of history can be just as dark and sinister as many of the craziest conspiracies on this site. If you want as a reader and responder to this thread want to make your own connections, feel free, it is after all a conspiracy forum. One more thing, I will list my sources at the end of the thread like a traditional research paper. So now onto the thread.

The First Bank of the United States

Supported and enacted by Alexander Hamilton through the expansion of executive powers as the Secretary of the Treasury in 1791 through the argument that the government needed a national bank to pay its debts. The bank was part of a three part fiscal revamping of our government. However the bank came with some conditions:

-The Bank would be a private company (only 20% or 1/5 of the company was owned by the government)
-The Bank would have a twenty year charter (1791 – 1811)
-The Bank, to avoid any appearance of impropriety, was required to do the following: forbidden to buy government bonds, have a mandatory rotation of directors, and neither issue notes nor incur any debts beyond its capitalization
-Foreign stockholders could hold stocks but not vote
-The Secretary of the Treasury would be free to audit the books as frequently as once a week.

The Bank also needed an additional amount of funding to support it, so Hamilton suggested implementing a tariff on imported spirits and a duty on domestic whiskey. This of course resulted in the Whiskey Rebellion. This isn’t surprising since the whole spirit of the Revolution was anti-taxation, therefore the federal government imposing a tax on whiskey upset many distillers in West Pennsylvania. In any case the federal government under the command of Hamilton squashed the Whiskey Rebellion and forced the distillers to pay the tax.

There was barely any objection to the bank in Congress. It did raise some concerns about Constitutionality, mostly from Thomas Jefferson who argued that the Bank violated traditional property laws and that its relevance to Constitutional powers was rather weak. If the Constitution meant for there to be a national bank, it would have been explicitly written in. James Madison, cited the tenth amendment saying that this was a matter of states’ rights. However, despite the objections, the decision to pass the bill making this Bank legal, fell on President George Washington, who Hamilton just happened to be his personal confident so much so that it could be said that Washington thought of Hamilton as a son. You can guess how he voted.

The bank persisted for 20 years before Congress let its charter expire right before the War of 1812 (also called the Adams’ War or the Banker War, I wonder why…). Five years later, another bank was chartered, and we like to say that the Americans won the war of 1812… Yea right.

(cont.)

The Second Bank of the United States

Following the aftermath of the War of 1812, the country was left in financial disarray. Instead of letting the market correct itself, the government decided to charter a second BUS. Support for the SBUS was led by John C. Calhoun and Henry Clay. Of course the south opposed this second bank on unconstitutional grounds. They argued that if the government could enact a bank without Constitutional authority then it could also emancipate a slave as well, which as we all know, the government did acquire that power.

The BUS was chartered despite oppositions and immediately fell prey to corruption. The bank was charged with restraining uninhibited private bank note issuance, which failed to happen as the credit bubble expanded anyways. As well as this, the bank was engaged in promoting democratized expansion of credit for laissez-faire impulses among eastern business owners and credit hungry farmers in the west and south. All this sounding familiar?

Naturally, the Bank failed to live up to expectations and instead caused a massive land speculation bubble. This all resulted in a crash and the Panic of 1819 (as well as the Baltimore managers being found out for fraud and larceny). The BUS’ answer to the Panic was a further contraction of credit which exasperated the situation and highlighted the bank’s weaknesses rather than its strengths.

However, despite this, throughout the 20’s the bank grew soundly and was later affirmed its Constitutionality in the landmark case: McCulloch v. Maryland. Though one man was unconvinced and this man would prove to be the bank’s downfall (which would keep it out of the government for a good 80 years). This man’s name was Andrew Jackson.

Jackson argued that the bank was failing to live up to its charter. This prompted investigations by Congress (which failed to produce any results). Jackson went rogue and personally declared the bank corrupt and made it his personal mission to kill this bank, this would become part of his running platform when he would be up for reelection (he easily won based on that platform). And carry out his mission he did. After firing two Secretaries of the Treasury for failing to follow his orders to funnel all government funds out of the bank, the third SoT played ball and defunded the SBUS in 1833.

It would be nice if the story ended there, but Nicholas Biddle, the current president of the SBUS, caused a new Panic in 1833. Fortunately public backlash forced Biddle to halt his childish scheme and in 1834 the panic was stopped.

In conclusion, we have briefly reviewed and highlight the important parts of the first two times the government sold our national currency to the highest bidder. As has been shown through the actions of the SBUS (and possibly the FBUS, but I did not find any sources to corroborate the corruption, though I imagine it existed since the charter wasn’t renewed), corruption inundated the banks and they literally decided when our country would be hit with recessions and panics. Is it any surprise that the current incarnation of the BUS is exactly the same as its two predecessors and just as corrupt and uncaring?

Sources:
FBUS
en.wikipedia.org...
www.ushistory.org...
www.let.rug.nl...(1791-1811).php
SBUS
en.wikipedia.org...
www.ushistory.org...
www.princeton.edu...

I guess this didn't get a lot of attention yesterday. Well ATS, the Federal Reserve is a real thing, and if we want to truly understand it, we need to study its origins. We all know the story of 1913 on Jekyll Island, but many people don't realize that that wasn't the beginning of the story. So let's try again.