1866

The European central bankers wanted the re-institution of a central bank under their control and an American currency backed by gold. They chose gold as gold has always been relatively scarce and therefore a lot easier to monopolize, than, for example, silver, which was plentiful in the United States, and had been found in huge quantities with the opening of the American West.

So, on April 12th, Congress went back to work at the bidding of the European central bankers. It passed the, "Contraction Act," which authorized the Secretary of the Treasury to contract the money supply by retiring some of the Greenbacks in circulation.

This money contraction and it's disastrous results is explained by Theodore R. Thoren and Richard F. Walker, in their book, "The Truth In Money Book," in which they state the following,

"The hard times which occurred after the Civil War could have been avoided if the Greenback legislation had continued as President Lincoln had intended. Instead there were a series of money panics, what we call recessions, which put pressure on Congress to enact legislation to place the banking system under centralized control. Eventually the Federal Reserve Act was passed on December 23rd 1913."

This is how the, "Contraction Act," passed by Congress affected America (the money supply goes down purely because currency in circulation is being withdrawn):

Year In circulation Approximately per capita

1866 $1,800,000,000 $50.46

1867 $1,300,000,000 $44.00

1876 $600,000,000 $14.60

1886 $400,000,000 $6.67

Therefore in the twenty years since 1866 two thirds of the American money supply had been called in by the bankers, representing a 760% loss in buying power over this twenty years. The money became scarce simply because bank loans were called in and no new ones were given.