The National Heist

In 1960, Dorchester Productions released their hit film Ocean's 11. The film featured an ensemble cast led by four of Hollywood's Rat Pack: Frank Sinatra, Dean Martin, Sammy Davis, Jr. and Peter Lawford. A crew of eleven was assembled around one objective: to mastermind an elaborate New Year's Eve heist, targeting five casinos on the Las Vegas Strip. As sophisticated as it was, the heist would ultimately fail in the end. Why? It wasn't that the team failed to get their hands on the cash, but that they couldn't dependably store it or keep the people from figuring out that they had been robbed. As impressive a heist as it was, Ocean's 11 looks like child's play compared to the frauds in government who've masterminded the greatest heist in history: the nationwide heist in the name of the national bank.

The concept of a national bank is one of the most insidious political devices ever conceived. Whether owned, operated, or strictly regulated by a nation's government, the consequences are the same: an enforced monopoly over the money supply and, thus, the form, function and fruits of the people's labor. Nathan Mayer Rothschild reportedly put it this way in 1815 after taking control of the Bank of England — whether apocryphal or authentic, the sentiment remains true: "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls Britain's money supply controls the British Empire, and I control the British money supply."

Whether regulated or directly owned and operated by the state, a national bank brings the people under the control and influence of government and political actors. Because those political actors have been so successful in exploiting economic crises, and because they have convinced the public of their political promises, the institution has been met with progressively more embrace; otherwise, because of its relative sophistication and complexity, it has been met with public indifference, left to be questioned and scrutinized only by a select minority who suspect foul play or truly understand its inner workings. Whether through embrace or indifference, the institution of the national bank has come to secure a foothold in the modern market economy.

The institution of the national bank has become so entrenched in modern thought that most students of the subject have come to respect it as a sort of unquestioned tradition, a testament to modern refinement, ingenuity and intellectual progress. One such example of the thoughtless reverence paid to this institution is available on a YouTube channel by the name Dollars and Debt: The Story of Money. According to one video titled Greenbacks and the National Bank Act, "The US absolutely needed a national bank." Of course, upon making this argument, the presenter proceeds without any further explanation. Whereas a student of logic and reason understands that a rational conclusion must proceed from reason and evidence, that an honest assessment must account for any and all assumptions, and that any cogent argument must enumerate the limitations of the study, as well as the tradeoffs and deficiencies of the conclusion, the presenter in this case allows his argument to stand alone, presuming it self-evident. At minimum, it is essential that an argument of "need" express the assumptions.

In this case, the presenter failed to offer any explanation as to why "the US absolutely needed a national bank"; moreover, he failed to even define "the US" in this particular context. In this case, does "the US" refer to the government of the United States, select or general commercial interests in the United States, the citizenry of the United States, the territory itself, or something else entirely? Consequently, the presenter failed to describe the methods used to determine the needs of any of those various entities. Needless to say, his "argument" is hardly an argument at all, instead sharing the characteristics of conjecture and rhetoric.

Fortunately, I can fill in the blanks: as stated before, "the US absolutely needed a national bank" only in the interest of government, political actors and their initiatives: namely to finance large war efforts and "internal improvements" in support of select enterprises, industries, persons, and locations. As the twentieth century would later reveal, such endeavors of scale (i.e. the two World Wars and the subsequent proxy wars) were possible only because of central banking. So that is why "the US absolutely needed a national bank": to circumvent the approval of the people by usurping authority over their resources. Put another way, the United States "absolutely needed a national bank" like a hole in the head. If by "the US", the presenter is referring to the general government, then he is correct insofar as its own interests are concerned; but "the US" is not the general government, but a union of states and their people, whose interests were not (and are not) served by the continuation of central or national banking.

Next, the presenter doubled down with another claim that is entirely unsupported by the facts: whereas he claims that "The US needed a central bank... in order to effectively and efficiently carry out governmental actions desired by a majority of the citizenry", there is scarcely any evidence which shows that the majority of the citizenry approved of the institution. More important than majority public opinion, however, are the safeguards instituted within the Constitution, specifically for the purpose of preventing the abuses attending political ambition and public opinion. Ultimately, his opinion on the matter is based not on "effectiveness" or "efficiency" but on the expediency of such institutions enabling the general government to circumvent the difficulties attending the administration of a constitutional federal republic.

The presenter then proceeds still further from the facts with an indirect reference to the United States Constitution. Instead of outlining a coherent argument based on the Constitution, he leans on the interpretation of a political actor, Salmon Chase, the former Treasury Secretary of the United States in the administration of President Abraham Lincoln: "[Chase] actually had a pretty good argument for it, based on Congress's power to regulate the money supply." The presenter specifically references Chase when, as Chief Justice of the United States, he issued the opinion of the court in the 1869 case Veazie Bank v. Fenno, supporting Congress's 1869 act imposing taxes on notes of private pensions, state banks, and state banking associations:

"Congress may restrain, by suitable enactments, the circulation as money of any notes not issued under its own authority. Without this power, indeed, its attempts to secure a sound and uniform currency for the country must be futile."

Not surprisingly, these are still more baseless claims and unfounded opinions.

Here are the facts: Article I, Section 8, of the United States Constitution confers upon Congress the power "To coin Money, regulate the Value thereof." It does not empower Congress (or the general government) to "restrain the circulation of money" or "to secure a sound and uniform currency" at the exclusion or discouragement of others. In fact, there is no enumerated power in the Constitution which authorizes Congress (or the general government) to tax wealth, or to effect any direct tax not apportioned according to population. There is also a distinct lack of authority in Congress (and in the general government) to assume a monopoly over the total money supply or the industry of banking. This is a most essential fact, as a monopoly over one is necessarily a monopoly over the other. This is where it is important to remember the general government’s distinct lack of authority to secure a sound and uniform currency at the exclusion or discouragement of others.

On the subject of Congress's power to "regulate the Value [of Money]", the term regulate appears in this context as it does throughout the document: to make regular or uniform in quality, payment of debts, and court of law. In the case of Clause 5, this extends exclusively to the regulation (or uniformity) of weights and measures in the issuance of coined money. Remember, the term appears twice in Article I, Section 8, which affords us clear insight into its meaning. The first of its appearances applies to the power "To regulate commerce with foreign Nations, and among the several States, and with the Indian Tribes". In this particular context, it is important to note that this clause was never intended to authorize the federal government to regulate business or industry, nor to determine the bounds of allowable production, pricing or trade. This is made plain by the fact that the federal government has no jurisdiction in foreign Nations nor within the Indian Tribes; likewise, the federal government is equally powerless within the several States (inclusive of commerce, industry, and banking within those States, respectively), by the deliberate designs of the US Constitution and the preceding Articles of Confederation.

Those who are desperate to find Constitutional bases for such extraneous regulations, limitations or prohibitions predicate their assertions on the Commerce Clause, which is described above as the power to regulate commerce with foreign Nations, and among the several States, and with the Indian Tribes. It is important to note that this clause was never intended to authorize the federal government to regulate business or industry, or to determine the bounds of allowable production, pricing or trade. As written and as intended, the Commerce Clause applies exclusively to the regulation of commerce; in the language of the period, regulation is synonymous with regularization. As such, the Commerce Clause served only to ensure that interstate commerce (commerce among the several States) would be subject to uniform laws, rules and customs; that no artificial barriers (i.e. taxes, duties or tariffs) nor special privileges in trade or contract enforcement would be implemented between the several States. This means that any related dispute between the several States would not be left to the States independently, but that they would instead be adjudicated by the federal government in accordance with the law.

Remember, government's adjudication or regulation extends not to the industry nor to the enterprise, but explicitly to the commerce among the several States; not to the business of banking nor to the total supply of money, but to the money specifically coined by that government. The lone objective of the commerce clause was the interest of free trade between the several States; and that, consistent with the character of free trade, commerce between the several States would enjoy the protection of rights under a uniform rule of law. It is important to note that the term regulate has evolved in its contemporary uses; however, where it appears in the Constitution it refers explicitly to the maintenance of the cited associations. In the case of commerce, regulation thereof was meant only to facilitate free trade among the several states by preventing the institution of artificial barriers between them; and to adjudicate interstate disputes through an impartial judicial system. The same rings true for the militias, which were meant, when employed in the Service of the United States, to serve in cooperation with the several states in order to execute the Laws of the Union, suppress Insurrections and repel Invasions. The same rings true for the issue of money.

Regardless of the preferred interpretations, the facts stand on their own, and the Constitution is to speak for itself through the “few and defined” powers enumerated therein. For the government, the Constitution is an exhaustive enumeration of powers, whereby any omitted powers are reserved to the States respectively, or to the people. As for the people, relative to the Bill of Rights, that enumeration in the Constitution was not to be construed in any way to deny or disparage others retained by the people. All of this is to illustrate the point that the Constitution is explicit on the powers of the general government; that there is no allowance for reading between the lines or reimagining any clause. In the case of Congress's coinage power, that power is limited to (1) coining money, not monopolizing the total money supply or securing a sound and uniform currency at the exclusion or discouragement of others; (2) regulating the value of said coinage, not restraining the circulation of money, subjecting its value to political expedience, or interfering in commercial exchanges; and (3) fixing the standard of weights and measures (per ounce, as it were) for coinage, not to set the standards for all forms of money or the whole industry of banking.

In response to these criticisms, the presenter makes an effort to modify a previous opinion, one which is less subjective than misunderstanding of the principles enshrined within the Constitution. On the first part of his revised claim, he then asserts that "The US needed a central bank in order to effectively and efficiently carry out its duties under the US Constitution", but this is patently untrue.

Not only did the United States long function without a central or national bank, history shows that industry actually flourished in its absence. What's more, a proper understanding of the US Constitution invariably exposes the unconstitutionality of national (or central) banking; and a proper understanding of economics reveals its metastasizing and exacerbating effects on business cycles. The first is made clear not only through a proper reading of the Constitution, but by a proper understanding of the Constitutional Conventions and opinions from such luminaries as James Madison and Thomas Jefferson, both of whom stridently opposed the institution on the fear that such centralization of power was anathema not only to sound money, but to the federal republic as a whole; that the institution would invariably operate to the benefit of select business interests in the North, at the expense of broader agricultural interests in the South; that its effect would be to circumvent the Constitution and, as Jefferson put it, "to exclude popular understanding and inquiry... and [to effect the] corruption of the legislature" for the aggrandizement of the general government. Madison and Jefferson protested vehemently against the institution, that such a bank was not just superfluous but destructive to the "general welfare" and any republic.

Not surprisingly, a more political James Madison would eventually become more accepting of the institution, but only (1) upon being elected President; (2) upon, per his 30 January 1815 letter to the Senate, "Waving the question of the Constitutional authority of the Legislature to establish an incorporated Bank"; (3) by appealing to "repeated recognitions, under varied circumstances, of the validity of such an Institution, in acts of the Legislative, Executive, and Judicial branches of the Government"; and (4) admitting to its specific use to government "during the war, the period particularly requiring such a medium and such a resource for loans and advances to the Government". Indeed, concerns about the national bank were numerous, pertaining to both its efficacy and its legitimacy. One such admission is found in correspondence with President Madison dated 2 January 1815, in which one James Williams expressed his own concerns that “there may be some doubt of [the national bank's] Constitutionality…”.

The chief concern about the national bank is not in its effect on specific interests, but in the sweeping consequences of centralized banking. Indeed, the issues are manifold: among them, that national banks serve specific interests, Northern industry over Southern agriculture, and select regional and state interests over the "general welfare"; that they are unconstitutional; that they impose upon the viability of state banks; that they not only fail to serve the "general welfare" but in fact undermine it. The value of decentralized banking, on the other hand, is that it affords the people options between competing banks and banknotes, thereby enabling a true market for creditors and issuers, and a true market rate of interest while imposing discipline on the issuers of legal tender.

The final takeaway is this: the Constitution grants no positive authority for the establishment of a national bank, and that, as Jefferson put it, “… banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”