1863
The bankers struck back. With President Lincoln needing further congressional authority to issue more Greenbacks, Lincoln was forced into allowing the bankers to push their, "National Banking Act," through Congress.
The most important part of this Act was that from now on, the entire United States money supply would be created out of debt by the National Banks buying United States Government Bonds and issuing them for reserves for banknotes. On top of this monopoly, the National Banks were allowed to operate under a virtual tax free status. This banking scam is best explained by historian, John Kenneth Galbraith, who stated,
"In numerous years following the war, the Federal Government ran a heavy surplus. It could not however pay off its debt, retire its securities, because to do so meant there would be no bonds to back the national bank notes. To pay off the debt was to destroy the money supply."
Later this year, Tsar Alexander II gave President Lincoln some unexpected help. The Tsar issued orders that if either England or France actively intervened in the American Civil War, and help the South, Russia would consider such action a declaration of war. To show that he wasn't messing about, he sent part of his Pacific Fleet to port in San Francisco.This wasn't because the Tsar was benevolent towards America, instead he was very clever. He, like Otto Von Bismarck in Germany, could clearly see what the money changers were up to, indeed he had already refused to let them set up a Central Bank in Russia.
He understood if America was to come under the control of Britain or France, then America would be under the control of Central Bankers once again, and such an expansion of the bankers empire, would mean they would eventually threaten Russia.
