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Zeitgeist: Addendum - Part One - Page 7

Author: Edward L Winston
Added: August 16th, 2009

This is page seven of part one of four in my series of articles on Zeitgeist: Addendum. Please refer to the introduction if you were lead to this page.


And this brings us to the ultimate question: why?

During the American Civil War president Lincoln bypassed the high-interest loans offered by the European banks and decided to do what the founding fathers advocated, which was to create an independent and inherently debt-free currency. It was called the Greenback. Shortly after this measure was taken, an internal document circulated between private British and American banking interests stated,

The Greenback was a fiat paper currency that was in circulation between 1862 and January 21, 1971 when placing new bills into circulation ended. After this the Federal Reserve Note began to be only only note in circulation[17] - I mention this because it seemed to me that the film implied this ended at the start of the Federal Reserve. While the greenback was "inherently debt free", like most fiat based systems, it was not expandable, in fact a statutory limitation of $346.7 million dollars was put on the maximum amount in circulation[18].

Some founding fathers did oppose central banking, however some were very much in favor of it; Alexander Hamilton and James Madison are notable as two of several well known founding fathers that were in favor of the central bank[19][20]. Contrary to popular belief, Thomas Jefferson was questioning of the legality of the United States owning a bank, not of the central banking concept[21].

Important Issues

What's left out by the film is that the greenback literally existed out of nothing - there was no tender behind it and it was not redeemable in gold, silver, or even tin cans. The reason why greenbacks were debt free is because they had a static value and were not expandable. This was only meant to be a temporary solution to the massive debt being incurred by the Union due to the Civil War, and was not meant to be anything except temporary. Also not taken into account was the massive inflation caused by greenback - in the end making it really less than paper[22].

The Hazard Circular

", slavery is but the owning of labor and carries with it the care of laborers, while the European plan, is that capital shall control labor by controlling wages. This can be done by controlling the money. It will not do to allow the Greenback, as we cannot control that."
-"The Hazard Circular"
July, 1862

The movie quotes from a document called "The Hazard Circular", and I cannot find an original source for this. In fact, it is only mentioned, as far as I can tell, one conspiracy web sites or web sites where people are discussing others who believe in conspiracies. Regardless, a full quote is available and shows more than the movie did[18]:

"Slavery is likely to be abolished by the war power and all chattel slavery abolished. This I and my European friends are in favor of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led on by England, is that capital shall control labor by controlling wages. The great debt that the capitalists will see to it is made out of the war, must be used as a means to control the volume of money. To accomplish this the bonds must be used as a banking basis. We are now waiting for the Secretary of the Treasury to make this recommendation to Congress. It will not do to allow the Greenback, as it is called, to circulate as money any length of time, as we cannot control that. But we can control the bonds and through them the bank issues."

The first part seems to me to be talking about how slavery works vs. wages, specifically in Europe where slavery had already been illegal for some time. As for the final two sentences, it seems as though the author(s) was referring to investments more than anything else. Regardless if my opinion here, an original document of this cannot be found, so it's probable it is not real at all, or highly edited.

The fractional reserve policy perpetrated by the Federal Reserve, which has spread in practice to the great majority of banks in the world is, in fact, a system of modern slavery. Think about it,  money is created out of debt. And what do people do when in debt? They submit to employment to pay it off. But if money can only be created out of loans, how can society ever be debt free? It can't. And that's the point.

The central banking concept and the federal reserve concept are two linked ideas, but not one in the same as the film implies. Central banking has existed for hundreds of years outside of the United States. As I've explained the money is not created out of debt, and people must be employed regardless of whether or not they are in debt.

Remember my argument about Andrew Jackson, the central bank, and the "null" debt of the US? Well it applies here - people still had to work then, it's inherit in capitalism regardless of debt, central banking, loans.

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