Reviewing Ellen Brown's "Web of Debt:" Part II

This is the second of several articles on Ellen Brown's remarkable book titled "Web of Debt....the shocking truth about our money system, (how it) trapped us in debt, and how we can break free." It's a multi-part snapshot. Reading the entire book is strongly recommended - easily obtainable through Amazon or Brown's webofdebt.com site.

Bankers Capture the Money Machine - Fighting for the Family Farm

In the 1890s, "keeping the family homestead was a key political issue" given that foreclosures and evictions "were occurring in record numbers," much like today. The "Bankers Manifesto of 1892" spelled it out - a willful plan "to disenfranchise farmers and laborers of their homes and property," again like today except that now our very freedom and futures are at stake as sinister forces aim to steal them by turning America into Guatemala and lock it down by police state repression.

The panic of 1893 caused an earlier depression - severe enough to establish a precedent of street protests, the result of the first ever march on Washington. Businessman/populist Jacob Coxey led his "Coxey's Army (of around 500) from Massilon, Ohio (beginning March 25, Easter Sunday) to the nation's capital to demand jobs and a return to debt and interest-free Greenbacks. Local police intervened. The marchers were disbanded. Coxey was arrested. He spent 20 days in jail for disturbing the peace and violating a local ordinance against walking on the grass. However, he was never charged, then released, and is now remembered for his heroics.

He began a tradition later sparking suffragist marches; unemployed WW I veterans for their "Bonus Bill" money; numerous anti-war and earlier civil rights protests; in 2004, one million in the nation's capital for women's rights, and the previous day thousands protesting IMF-World Bank policies.

The late 19th century Populist movement was the last serious challenge to private bankers' monopoly power over the nation's money. Journalist William Hope Harvey wrote a popular book titled "Coin's Financial School" that explained the problem in simple English - that restricting silver coinage was a conspiracy to enrich "London-controlled Eastern financiers at the expense of farmers and debtors." He called England "a money power that can dictate the money of the world, and thereby create world misery."

He referred to the "Crime of 73" that limited free silver coinage and replaced it with British gold. It forced America to pay England $200 million annually in gold in interest on its bonds and inspired William Jennings Bryan's "Cross of Gold" speech. He nearly became president, but lost in a close (big-monied financed) race to William McKinley, but he, too, paid a price. He was later assassinated, likely for his protectionism, very much disadvantaging British bankers. With him gone, the Morgans and Rockefellers dominated US banking, and arranged for friendly leaders to run the country, Teddy Roosevelt included, a man with more bark than bite.

"The trusts and cartels remained the puppeteers with real power, pulling the strings of puppet politicians" who were bought and paid for like today.

The Secret Government

Various presidents suggested the worst of what's now clear. By signing the Federal Reserve Act, Woodrow Wilson was a tool of big money. Yet he belatedly expressed regret, said "I have unwittingly ruined my country," and called America "one of the worst ruled....most completely controlled governments in the civilized world (run by) a small group of dominant men."

Franklin Roosevelt was as clear in saying "The real truth (is that) a financial element in the large centers has owned the government since the days of Andrew Jackson." Other officials said the same thing, and so did Matthew Josephson (in his 1934 book) calling bankers and business titans "Robber Barons" - men who "lived for market conquest, and plotted takeovers like military strategy."

They sought monopolies for market dominance and trusts - concentrated wealth in a few hands to be manipulated for maximum profits and power. During the Gilded Age, trusts became strong enough to plant "their own agents in the federal commissions, (use) government regulation (for) greater control....protect themselves from competition," and keep prices high.

Four names (among others) stand out - Andrew Carnegie, John D. Rockefeller, Henry Ford, and JP Morgan running finance with the power of a potentate. "He didn't build, he bought. He took over other people's businesses, and he hated competition" so he eliminated it. Together with Rockefeller, they dominated business and finance through interlocking directorates, the same way as today throughout industry, commerce and finance.

For his part, Morgan was so dominant, financial writer John Moody called him "the greatest financial power in the history of the world" even before the establishment of the Federal Reserve. Morgan died months before its creation, but his influence made it possible.

His long arm favored the fortunate - with enough funding to monopolize their industries. "But where did (he and other bankers get their money)?" Congressman Wright Patman explained that they created it "out of an empty hat." They held the ultimate credit card, limitless accounting-entries to buy out competitors, corner raw materials markets, control politicians, and after the birth of public relations, popular opinion the way distinguished author/psychogist and activist Alex Carey explained in his seminal book titled "Taking the Risk out of Democracy:"

"The 20th century has been characterized by three developments of great political importance: The growth of democracy, the growth of corporate power, and the growth of propaganda as a means of protecting corporate power against democracy." It came into its own during WW I, then grew, became dominant, and remains near-omnipotent today, even with fissures appearing with enough promise to challenge it.

The Jekyll Island Affair - Establishing the Federal Reserve

In 1910, seven financial titans met secretly on this privately-owned island off the coast of Georgia and created the Federal Reserve:

"The bill was so obscurely worded that no one really understood its provisions." The nation's money would be printed by the US Bureau of Engraving and Printing, then issued as a government obligation (or debt) to the private Federal Reserve with interest.

Nominally, Congress and the president appoint Fed governors, but they operate secretly with no government oversight or control. As a privately owned banking cartel, they're a power unto themselves. The chairman sits at its helm, but he's a mere tool of the bankers who control him.

The 1913 Federal Reserve Act "was a major coup" for them. The Fed exists to serve them, not the government or public interest. Therein lies its problem and why it must be abolished.

For over a century, powerful international bankers wanted a private central bank giving them "the exclusive right to 'monetize' the government's debt (that is, print their own money and exchange it for government securities or IOUs.)" The entire Act was written in obscure Fedspeak so no one but its creators knew its purpose.

"In plain English, the Federal Reserve Act authorized a private central bank to create money out of nothing, lend it to the government at interest, and control the national money supply, expanding or contracting it at will." Nothing has been the same since.

Who Owns the Federal Reserve?

Contrary to common belief, it's a private banking cartel owned by its member banks in each of its 12 Fed districts. "The amount of Federal Reserve stock" each one holds "is proportional to its size." The New York Fed is most dominant (like a mother bank) owning 53% of the System's shares because the nation's largest commercial banks are located there, on Wall Street, of course, with names like JP Morgan Chase, Citigroup, Goldman Sachs, and Morgan Stanley prominent and familiar. Bank of America was founded in California and remains concentrated heavily in Western and Southwestern states, yet operates globally like the others.

The largest banks are financial superpowers with interests in commercial and investment banking, insurance, real estate, home mortgages, credit cards, and virtually all things financial - nationally and globally.

Financial commentator Hans Schicht refers to Wall Street's "master spider" controlling a powerful inner circle of men, headed by him. Their business is done secretly behind closed doors by what he calls "spider webbing." It exercises "tight personal management and control, with a minimum of insiders and front-men who themselves have only partial knowledge of the game. They also have "leverage" over mergers, takeovers, chain store holdings where one company holds shares of others, conditions annexed to loans, and so forth.

Further, they make concentrated wealth "invisible. The master spider studiously avoids close scrutiny by maintaining anonymity, taking a back seat, and appearing to be a philanthropist."

Post-WW II, the center of power shifted from the House of Rothschild to Wall Street with David Rockefeller Sr. (John D's grandson) becoming "master spider," a sort of boss of bosses, much like the underworld but much more deadly and powerful.

All the more so because "the Robber Barons (used) their monopoly over money to buy up the major media, educational institutions," and other means of communications. They got all this but Morgan wanted more - to "secure the banks' loans to the government with a reliable source of taxes, (gotten directly from) the incomes of the people. There was just one snag." The Supreme Court "consistently" declared federal income taxes unconstitutional. So how were they instituted and why are they willingly paid?

The Federal Income Tax

The Constitution omits any mention of a federal income tax because the Founders "considered the taxation of private income, the ultimate source of productivity, to be economic folly." They also decided that the States and federal government shouldn't impose the same tax at the same time. Congress was to have responsibility "for collecting national taxes from the States' " tax revenues.

Direct taxes were to be apportioned according to each State's population. "Income taxes were considered unapportioned direct taxes in violation of this provision of the Constitution."

Except in times of war, no federal income tax existed until the 16th Amendment was ratified on February 13, 1913 empowering Congress to levy one - unapportioned among the states. Even without one, the economy grew impressively for nearly a century and a half, adequately funded by customs and excise taxes.

For a brief period, Congress enacted an income tax in 1894 when the nation was at peace. On April 8, 1895, in Pollock v. Farmers' Loan and Trust Company, the Supreme Court held that unapportioned income taxes were unconstitutional. "That ruling has never been overturned." To get around it, Wall Street packaged the 16th Amendment with the Federal Reserve Act, both in 1913. It applied only to annual incomes over $4000, well above the average level at the time.

The original tax code was simple enough to be covered in 14 pages. It's now a 17,000 page monster, filled with obscure provisions professionals struggle to understand or even know about. It also has "whole pages devoted to private interests," including loopholes exempting powerful corporations from paying rightfully owed taxes.

Before WW II, income taxes affected few people. However, from 1939 - 1944, Congress passed various ones, including to fund the war effort, and began letting workers (voluntarily) pay them in installments. Thereafter, "withholding" became mandatory.

"Today the federal income tax has acquired the standing of a legitimate tax enforceable by law, despite longstanding (Supreme Court rulings) strictly limiting its constitutional scope." Numerous other taxes were also added, including on capital gains, real estate, corporate income, FICA, sales, luxury, and IRS interest and penalties. With all hidden ones included (dozens in all), up to 40% of an average worker's income goes for taxes.

Enough for some tax protesters to challenge the 16th Amendment's legitimacy on grounds that it was improperly ratified. However, US courts rejected the argument and now it's "beyond review" - even though no tax would be needed if the federal government printed its own money interest-free instead of taking ours to defray banker-imposed charges.

After signing the Federal Reserve Act, Woodrow Wilson called himself "a most unhappy man. I have unwittingly ruined my country." Yet he knew precisely what he did. He was a lawyer, a Ph. D, a historian and political scientist, and former Princeton University president before entering politics.