18. The Return of the Gold Standard

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Length: {10:41 minutes}

Summary of the Passage on the Return of the Gold Standard

Post-Lincoln Era Financial Control

  1. Objective of Money Changers:
    • After Lincoln’s assassination, money changers aimed to control America’s money.
    • Despite large silver discoveries and the popularity of greenbacks, European central bankers sought to undermine them.
  2. Legislation Against Greenbacks:
    • In 1866, Congress passed the Contraction Act, reducing greenbacks in circulation.
    • This caused financial hardship and economic instability, leading to the creation of the Federal Reserve in 1913.
  3. Gold Standard and Centralized Banking:
    • Money changers wanted a central bank and currency backed by gold.
    • They created financial panics to push for centralized control and reduced money supply to impoverish Americans, making them less resistant.
  4. Contraction of Money Supply:
    • From 1866 to 1876, America’s money supply drastically reduced, severely impacting per capita money availability and causing economic distress.
  5. Silver Demonetization:
    • Ernest Seyd bribed U.S. congressmen to demonetize silver, leading to the Coinage Act of 1873, which stopped minting silver dollars.
    • This move benefited the Bank of England and further reduced the money supply.
  6. Public and Congressional Reaction:
    • By 1876, with high unemployment and economic distress, there was a push to return to greenbacks or silver money.
    • The 1876 Silver Commission blamed monetary contraction on national bankers, comparing it to the fall of the Roman Empire.
  7. Bankers’ Countermeasures:
    • Despite public outcry, bankers maintained control.
    • The American Bankers Association (ABA) in 1877 encouraged subversion of Congress and the press to oppose greenback currency.
  8. Economic and Political Manipulation:
    • The ABA instructed banks to support media opposing greenbacks and to lobby Congress to protect banking interests.
    • The press and bankers collaborated to sway public opinion and legislation against a return to greenbacks.
  9. Conclusion:
    • The money supply manipulation by national bankers post-Civil War led to economic hardship, centralized banking control, and the establishment of the gold standard.

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