Civil War Origin of Banking’s Unholy Alliance

(October 29, 2019) Provided below is an article I wrote for American Spectator today about the origins of a symbiotic relationship between the U. S. Treasury and the banking industry that is forever fueling the growth of our national debt. It all began with the 1863 National Banking Act used to fund the Civil War.

Origins of Banking’s Unholy Alliance with the U. S. Treasury

A decade after the 2008 taxpayer bailout, Americans remained skeptical of banks. According to a 2018 survey, one-third of the public had “hardly any confidence in bank leaders” as compared to 10% before the bailout. In reality, the rescue was merely one symptom of a protracted alliance between banks and the federal government. It dated from the 1863 National Banking Act during the Civil War. Since nobody alive today can recall a time before the alliance was operative, a review banking theory will help illuminate its flaws.

Banking evolved among merchants in the mid-seventeenth century when shopkeepers normally stored their surplus gold in the King’s mint. But King Charles I temporarily confiscated the gold in 1638 to finance the English Civil War. Although the merchants were eventually repaid, they ever after preferred to deposit their gold with private goldsmiths who issued warehouse receipts to each depositor. Such receipts essentially became paper money and were preferred in many transactions in place of bulky coins. Even though the currency was paper, it could be redeemed on demand at the goldsmith for gold.

Soon the smiths realized that most of their receipts would remain in circulation and rarely be presented for redemption. Therefore, they could lend money in the form of newly issued receipts maintaining a gold inventory equal to only a fraction of the face value of receipts outstanding.  As long as the receipts presented for redemption never exceeded the smith’s gold inventory, there was no harm. But if ever a holder presented a receipt that could not be redeemed in gold, public confidence in the smith’s receipts would vanish and the paper would no longer be accepted in transactions, except perhaps at a discount.

Continue Reading at American Spectator

*

Learn more about the Civil War by reading:

The Confederacy at Flood Tide by Philip Leigh
Lee’s Lost Dispatch & Other Civil War Controversies by Philip Leigh

Here’s Who Removes Confederate Statues

(October 28, 2019) Two days ago the Washington Post published a story about Henry Herr who “is on a one-man quest to remove Confederate monuments wherever he finds them in Maryland. . .” Herr, who is white, 29-years-old and until last week unemployed, even wants to force the Antietam National Battlefield Park to take down a Robert E. Lee statue. Notwithstanding that a decade ago “he was hospitalized for mental illness, [and] then stayed in a homeless shelter,” The Post reports that Herr is “also very aware of his privilege as a white man,” which he hopes to use to his advantage on his quest.

Sherman’s March

Herr learned to hate Confederates from Anne Sarah Rubin, his history professor at the University of Maryland-Baltimore County. Rubin is a William T. Sherman arson apologist. She also leans toward accusing General Robert E. Lee’s Army of being war criminals as revealed in this lecture. An Amazon.com reviewer of her book on Sherman’s March had this to say about another of her lectures on that book:

The author laughed while reading some of the journal entries from the women of Georgia who were devastated and left in ruin from Sherman’s men. She could not understand why, [one Southern woman] wouldn’t be happy when left with the carcass of a hog in her family cemetery for food, when her neighbors were left in worse shape. [Rubin] read from a slave’s account. . . [that] “his uncle was took” by Sherman’s men. She explained this away [by] saying the uncle was probably happy and really was not “took” [but]. . .  left on his own accord. She then continued reading . . . [that] the uncle later ran away from the soldiers and returned to his family.

She spent most her time defending Sherman as he went through Georgia and praised him as he went through South Carolina, indicating “they got what they deserved.” And “. . . couldn’t understand why the audience at a South Carolina college was upset with me on this point.” . . .  Her views are openly biased towards the Union. She laughed at the woes that the women and children received in the South. . . [and] even giggled as she read accounts of Union soldiers desecrating gravestones in a Georgia cemetery.

Evidently, Rubin did not teach Mr. Herr that Maryland may well have joined the Confederacy if President Lincoln had not directed his Army to arrest selected members of the state legislature in order to prevent them from attending a General Assembly on September 17, 1861 where a secession vote might have passed. Thirty-one members deemed sympathetic to the South were arrested and others did not attend out of fear of arrest. Consequently, the Assembly was canceled for want of a quorum. None to the arrested members were charged with a crime. They were simply prevented from attending by way of habeas corpus suspension. The suspension allowed U.S. Marshals and Army personnel to arbitrarily incarcerate anyone.

Whether the Assembly would have voted to secede is unknowable. Nonetheless, one participating federal leader, Fred Seward, believed that Maryland would have left the Union.* As an Assistant Secretary of State and son Secretary of State William Seward, Fred’s opinion cannot be casually dismissed. Rubin may have also failed to inform Mr. Herr of the audacious methods Lincoln used to discover potential Southern sympathizers among the legislators. About a week after the opening shots at Fort Sumter back in April, for example, he ordered that federal representatives ransack commercial telegraph offices for copies of all telegrams sent in the last year. He was looking for correspondence that would reveal potential Southern sympathizers.

*

To learn more facts about the Civil War that professors like Anne Sarah Rubin apparently ignore, consider:

The Confederacy at Flood Tide by Philip Leigh
Lee’s Lost Dispatch & Other Civil War Controversies by Philip Leigh

*Frederick William Seward, Reminiscences of a Wartime Statesman and Diplomat: 1830-1915, (Boston: G. P. Putnam & Sons, 1916 ), 176

 

Lincoln’s Telegram Raid

(October 26, 2019) Most Civil War buffs realize that President Abraham Lincoln suspended some civil liberties (e.g. habeas corpus) and shut down opposition newspapers promptly after the shooting started on April 12, 1861. Fewer, however, are aware that eight days later he ordered the Army to ransack commercial telegraph offices for copies of all telegrams sent during the preceding year.* Such conduct was comparable to a hypothetical directive from President Trump ordering the National Security Agency to provide him the identities of all persons who spoke critically of him in telephone conversations, emails, or texts during the past year. Lincoln’s purpose was as to identify Southern sympathizers, including state and local office-holders. Once identified, habeas corpus suspension meant the suspects could be imprisoned indefinitely without ever being charged with a crime and given a court trial to free themselves. In this manner the affected border state legislators might be prevented from voting on secession resolutions.

Maryland was the most affected state, partly because it almost completely surrounded the District of Columbia. If Maryland seceded, federal troops would need to fight their way into the nation’s capital in order to garrison it. The ensuing delay might have enabled Confederate soldiers to occupy the Union capital first,  thereby either capturing Lincoln or forcing him to flee. On April 26, 1861 the state General Assembly met in Frederick instead of the capital at Annapolis. A Union-leaning governor chose Frederick because the eastern part to the state was pro-Secession, whereas Frederick was pro-Union.

The Assembly adjourned on 7 August without seceding, although it agreed to reconvene again in Frederick on 17 September. However, the April-to-August session approved two resolutions hostile to the federal government. First, it declined to reopen railroad connections to the Northern states that were cut on 19 April when bridges north of Baltimore were destroyed four days after Lincoln’s call for Union volunteers to invade the South. Second, it passed and delivered a resolution to President Lincoln protesting Union occupation of the state. The General Assembly wanted Union troops to leave Maryland.

After the Confederate victory at First Bull Run on 21 July, Southern sentiment gained potency in the state. Another Confederate victory at Wilson’s Creek in Missouri the following month strengthened the impression that the Confederacy might win its independence. Lincoln worried that Maryland’s 17 September General Assembly might either pass resolutions to aid the Confederacy or even vote to secede, notwithstanding a first-session resolution claiming that the Assembly lacked the authority to secede.

Although Maryland voters had previously chosen their legislators in free elections, Lincoln concluded that the Union Army should prevent the selected representatives it suspected of holding Confederate sympathies from attending. His habeas corpus suspension enabled the Army to arrest, and hold, legislators thought to be pro-Confederate. Although they may have been identified by their conduct at the prior session, the April telegram raid may also have revealed others with Confederate sympathies who had otherwise kept their opinions secret.

Thirty-one legislators were arrested. Others were prevented from attending because they realized that if they journeyed to Frederick they too might be arrested. Consequently, the 17 September session collapsed for want of a quorum.

While nobody can know whether Lincoln’s intervention (usurpation?) prevented Maryland’s secession, at least one authoritative participant concluded that it did. Specifically, Assistant Secretary of State Fred Seward later wrote that he believed Maryland’s September General Assembly would have seceded without the arrests. He not only participated in the arrest program, but was also well-connected to top officials in Lincoln’s Administration. Fred was the son of Secretary of State William H. Seward.

*

To learn how the South nearly won its independence read:

The Confederacy at Flood Tide, by Philip Leigh

*Henry T. Raymond, Lincoln: His Life and Times: Volume 1, (New York: Hurst & Company, 1891), 181

How The South Has Already Paid Reparations

(October 25, 2019) American Spectator released my “The South Has Already Paid Reparations” article earlier today. It documents how Southerners, black and white, paid taxes to fund Northern costs of the Civil War for more than a hundred years after the war.

*

The South Has Already Paid Reparations

Ignored among current reparations discussions is the fact the South has already paid them — if not for slavery, then for losing the Civil War. For at least 25 years after the war, over half of the federal budget was devoted to three items: interest on federal debt; budget surpluses applied to debt retirements; and Union veterans’ pensions. None benefitted former Confederates even though they had to pay their share of taxes to fund them. If the Confederacy had been an independent defeated foe, such payments would have constituted reparations.

American Spectator Logo

The budget surpluses were used to pay down the federal war debts, which had increased 40-fold from $65 million at the start of the Civil War to $2.7 billion at the end. Southerners did not hold any of the bonds. National banks held some, which bought them for monetary reserves as mandated by the 1863 National Banking Act, but many Northern civilians also owned them.

Bond policies also penalized Southerners (black and white) another way. Specifically, the 1869 Public Credit Act required that the bonds be redeemed in gold even though Northern investors bought them during the war with Greenback paper money, which traded at a fluctuating discount to gold. Less than a year before the war ended, Greenback dollars traded at a 65 percent discount to gold in July 1864. Since the bond redemptions and interest had to be paid in gold, the value of paper money required to make such payments was larger than the face amount of the bonds and their associated interest coupons. The difference was an extra cost to the taxpayer but a bonus to the Northern bondholder.

Continue Reading at American Spectator

*

To learn more about how the South was impacted by the aftermath of the Civil War consider reading:

Southern Reconstruction by Philip Leigh
U. S. Grant’s Failed Presidency by Philip Leigh

 

Combating Nurse Ratchet Mind Control

(October 24, 2019) Andrew Klavan’s video below interprets Ken Kesey’s 1962 novel, One Flew Over the Cuckoo’s Nest, as a metaphor for America’s current politics. Convict Randle McMurphy is the central character who gets himself transferred out of prison and into the Oregon state insane asylum by pretending to be crazy. Upon arrival he is assigned to a group of male inmates ruled by Nurse Ratchet. Although Ratchet is a presumably well-meaning expert she exercises her authority tyrannically. She drugs the men in order to emotionally castrate them. Then she manipulates them until they conform to her beliefs of proper conduct and attitudes.

Since McMurphy is not really insane he proves to be a challenge for Nurse Ratchet to manage. He only pretends to take the mind-numbing medication.  He also encourages fellow inmates to express their own opinions, especially when such opinions have been censored by Ratchet. The inmates, he argues, should not be forever by trying to seek Nurse Ratchet’s approval because her perspectives are not always valid. Moreover, her motives may be more about holding onto power than truly helping the inmates. Thus, he tries to help the men discover that Ratchet has robbed them of their individuality, the essence of being human.

As McMurphy evolves into a group leader, Ratchet perceives him only as an unruly inmate, threatening to inject a little freedom into her totalitarian society. Confident in her own supposedly superior knowledge about how her wards should be managed, she concludes that McMurphy must the silenced. But every attempt to control him fails. Eventually she rationalizes that the thoroughly discredited lobotomy operation should be used to transform McMurphy into a human vegetable, incapable of thinking for himself.

President Trump is the metaphorical McMurphy. The college-indoctrinated Americans of the last thirty years represent the castrated inmates. Nurse Ratchet represents the cultural elite, who feel justified in imposing their beliefs on all Americans because the elite think they are morally superior and better qualified to run the country. The lobotomy is an Impeachment metaphor.

American attitudes toward the Civil War and Reconstruction are similarly controlled by a Nurse Ratchet. But in that case the academic teachers collectively are the Nurse. They teach a hatred of Confederate Heritage and feel justified in doing so because they believe themselves to be better informed and morally superior to those who come to different conclusions. Students who disagree pay a price. Few, for example, will be admitted to American History PhD programs.

Few academic elites are individually driven by evil, or even unfair, intent. But collectively they have become victims of a mob mentality. Since there are few voices within their community expressing contrary opinions, the typical elite is not open to new interpretations. To correct the problem, colleges should begin adding professors with minority opinions. Let the ideas be debated in order to discover which is best.

*

To learn “McMurphy” revelations about Southern Reconstruction consider reading:

Southern Reconstruction by Philip Leigh
U.S. Grant’s Failed Presidency by Philip Leigh