So How Does the Federal Reserve Work

George Peabody in Salem MA

How is Your Money Made….

 Do You Know Jack ….?

  The U.S. Treasury looks for loans by selling Treasury Bonds Bills, Notes, and Securities. They sell these to primary dealers. A primary dealer is a bank or securities broker-dealer who can  trade directly with the Federal Reserve after purchasing Treasury Bonds or Securities or sell them to the public. They also make bids or offers on open market operations and provide information to the Fed’s open market trading desk. They consult with U.S. Treasury and the Fed about the budget deficit and implementing monetary policy. Primary dealers can work at the Treasury because of their expertise in the government debt markets, but the Federal Reserve avoids a similar revolving door policy.

  The trading between primary dealers, called inter-dealer trading.  Located on floors 101 to 105 of One World Trade Center was Cantor Fitzgerald, the single largest inter-dealer broker, who alone controlled 25% of the volume in securities. On 9-11 $500 billion in repos and $80 billion in securities had been traded but the settlement instructions were burned Fed regulators worked many long, over-time hours to accomplish to salvage records of these sales.

   All of the top ten dealers in the foreign exchange market are also primary dealers, and between them account for almost 73% of foreign exchange trading volume. Who are the primary dealers whose job is to distribute U.S. Debt? Daiwa Securities and Mizuho Securities distribute the debt to Japanese buyers. BNP Paribas, Barclays, Deutsche Bank, and RBS Greenwich Capital (a division of the Royal Bank of Scotland) distribute the debt to European buyers. Goldman Sachs, and Citigroup account for many American buyers. Most of these firms compete internationally and in all major financial centers. Citigroup was First City National Bank which was influential in the early formation of the Federal Reserve during the period of Stillman and Fifi’s divorce years. After the 2008 Financial Collapse the Federal Reserve set up the Primary Dealers Credit Facility (PDCF), whereby primary dealers could borrow at the Fed’s discount window using several forms of collateral including mortgage-backed loans.

  The Primary Dealers today are:

  • Bank of Nova Scotia, New York Agency
  • BMO Capital Markets Corp.
  • BNP Paribas Securities Corp.
  • Barclays Capital Inc.
  • Cantor Fitzgerald & Co.
  • Citigroup Global Markets Inc.
  • Credit Suisse Securities (USA) LLC
  • Daiwa Capital Markets America Inc.
  • Deutsche Bank Securities Inc.
  • Goldman, Sachs & Co.
  • HSBC Securities (USA) Inc.
  • Jefferies LLC
  • J.P. Morgan Securities LLC
  • Merrill Lynch, Pierce, Fenner & Smith Incorporated
  • Mizuho Securities USA Inc.
  • Morgan Stanley & Co. LLC
  • Nomura Securities International, Inc.
  • RBC Capital Markets, LLC
  • RBS Securities Inc.
  • SG Americas Securities, LLC
  • TD Securities (USA) LLC
  • UBS Securities LLC
  • Wells Fargo Securities LLC

   J.P. Morgan and Morgan Stanley & Co. continue George Peabody’s tradition today selling state securities abroad. They also follow his steps to make a perfect panic. Both corporations were fined for orchestrating the 2008 Financial Scandal among other crimes recently. The largest fine only equaled about 13% what they could make in one year.

  The Bank of Nova Scotia is rumored to have been robbed after September 11th when World Trade Center Building 4 was compromised. The long tunnel that was converted over from a PATH way that serves as its entrance was in the film Die Hard 3. Although in the film it was the Federal Reserve NY branch and New York City Water Tunnel #3.

  Wells Fargo is owned by Kuhn, Loeb & Co. and linked by the Schiffs  to N.M. Rothschild & Sons.

  Who prints the Federal Reserve notes? Crane & Company. Winthrop Murray Crane was an advisor to Presidents Theodore Roosevelt and William Howard Taft, and served as a political mentor to Calvin Coolidge who gave his firm the contract.

  Stephen Crane was the first in the Crane family to make paper. “The Liberty Paper Mill” opened  in 1770. They sold currency-type paper to engraver Paul Revere, who printed the American Colonies’ first paper money.  Crane embed parallel silk threads in banknote paper to denominate notes and prevent counterfeiting in 1844. In 1879, Crane grew when Winthrop M. Crane won a contract to deliver U.S. currency paper to the Bureau of Engraving and Printing in Washington, D.C. In 1922, Crane & Co. incorporated, with Frederick G. Crane elected as president. Dixon also came up with an anti counterfeiting practice.

  What is the discount window and how do banks profit?

  When the government needs money for their budget they print Treasury Bonds, Bills, and Notes. The Primary Dealers buy them and sell them to the Federal Reserve, other nations, and large corporations.  At other times the Federal Reserve sells the securities to the Primary Dealers.  The Primary Dealers buy them from Treasury Automated Auction Processing System (TAAPS).  The dealers who bid on the largest amount of the debt with the lowest yield wins the portion they bid on. They then sell these to the Federal Reserve at a higher yield.

   Then the Federal Reserve prints new money and digitally increase their accounts. They then lend this money to banks throughout the nation at a higher yield. On top of that they hold 10% of all the money they sell to the banks. Example…The Federal Reserve prints up $10 billion in new bills, and they credit an additional $90 billion in readily liquefiable accounts. So you think it stops there with $100 billion, but you would be wrong…

  Now all of that extra $100 billion enters banking reserves. So your bank borrows a million. They now have $900,000 to lend out. Ten percent of what they borrowed is held by the fed who pays them 2.5% interest. Yes the Fed pays your bank 2.5% interest for borrowing money. Now your bank makes more money that enters circulation. They can lend out $10 million. So if they issue you a loan and you make a purchase, the buyer receives the money from the bank and now it enters circulation when they make purchases. So, in a fractional reserve banking system, like the Fed, new loans actually create even more new money. With a legally reserve ratio of 10%, the new $100 billion in bank reserves could potentially result in a nominal monetary increase of $1 trillion by all the banks lending out 10 times the money they borrowed.

  Then you have inflation. It only starts with the government spending more than they receive in taxes and other funds. They are like the fleas on Norwegian Brown Mice that bite you, the Federal Reserve and the bankers are the ones who really spread the plague.

  It is a slight of hand. The government didn’t raise your taxes, it just stripped your buying power of every dollar. Every year it gives you an invisible pay cut. Crafty fingers are no longer needed to pick pocket you.

   So who owns the debt? Well there is public debt and intergovernmental holdings. On November 7, 2016, debt held by the public was $14.3 trillion or about 76% of the previous 12 months of GDP.  Of that debt 55% is held by state and local pensions and mutual funds. The remaining 24% is held by foreign government and investors. $1.5 Trillion is held by China and $1.25 Trillion is held by Japan. Third is Ireland who owns $271 million. Go figure the Cayman Islands is fourth. Brazil is Fifth and the United Kingdom is 8th.

  The Bank of England’s plan escaped them? The nation they fought during the Opium War usurp them in holdings of our national bank.  Well Americans sold a lot of Opium to them too, but in truth it probably was the old New England shipping families and bankers who continued their trade of shipping goods over manufacturing that have did us in.

  The yield on 10 year Treasury Notes set the Federal Fund Rate that sets the PRI or Primary Rate Interest for banks. Also there is overnight and 9 month lending through the Discount Window. Depending on a bank’s liquidity and trust they can borrow at the primary or secondary credit rate. The Primary Rate is 1% higher than the Federal Fund Rate. A bank borrows from the Federal Reserve overnight to remain liquid during internal or external disturbances like transferring money between their internal accounts and external accounts with other banks. So say a bank borrows $10 million overnight the Federal Reserve can create $100 million more until the debt is paid.  Also banks can borrow at a seasonal rate which is closer to the Federal Fund Rate for a week or 30 days. Plus the Discount Window can act as lender of last resort during emergencies to prevent bank runs.

   Repos? The Federal Reserve buys $1 billion repo to inject reserves today from a bank to pay back tomorrow. Under such arrangement the bank promises to buy it back. So imagine they borrow $1 Billion, another one tomorrow and an additional one the next day, $3 billion will have been injected, but $2 billion will have expired by the third day.  Bank reserves are only $1 billion above previous levels, since the first repurchase agreement expired on the second day, the second one expired on the third day and so on.

  So in short that is how money is created out of thin air.

To find out more and other fabulous stories about how Salem, MA shaped American History read Sub Rosa by Christopher Jon Luke Dowgin published by Salem House Press.

Limited Collector’s Preview Edition

Sub Rosa The Sequel to Salem Secret Underground: The History of the Tunnels in the City

 

Don’t miss your opportunity to get these rare copies. Be the first to find a typo, a smudge, or a section of type that might not make it to the final copy of the book. Strange as it sounds, people love the books in which they can find a flaw.

Do know any copies bought on Amazon.com within the next two weeks will be the Advance Readers Editions which would have these limited errors. Then after the next two weeks, everyone gets the same book. The next million copies will be the same. Yes I did say Advance Reader’s Editions!  In the next two weeks, I might upload three or four revisions. So you might get lucky and purchase the one and only printing of that revision…

It is the luck of the draw and you only have two weeks from the date this post was…posted. Read the latest posts in our blog to get a taste of the stories in the book. So Good Luck and enjoy the book!

Click Here to Get Your Copy Now!

Cover to the book Sub Rosa which is about Tunnels in Salem and those who built them.

How the Federal Reserve Work? I Bet You Don’t Know…

Federal Reserve

So how does the Federal Reserve work?

The U.S. Treasury looks for loans by selling Treasury Bonds Bills, Notes, and Securities. They sell these to primary dealers. A primary dealer is a bank or securities broker-dealer who can trade directly with the Federal Reserve after purchasing Treasury Bonds or Securities or sell them to the public. They also make bids or offers on open market operations and provide information to the Fed’s open market trading desk. They consult with U.S. Treasury and the Fed about the budget deficit and implementing monetary policy. Primary dealers can work at the Treasury because of their expertise in the government debt markets, but the Federal Reserve avoids a similar revolving door policy.

The trading between primary dealers, called inter-dealer trading. Located on floors 101 to 105 of One World Trade Center was Cantor Fitzgerald, the single largest inter-dealer broker, who alone controlled 25% of the volume in securities. On 9-11 $500 billion in repos and $80 billion in securities had been traded but the settlement instructions were burned Fed regulators worked many long, over-time hours to accomplish to salvage records of these sales.

All of the top ten dealers in the foreign exchange market are also primary dealers, and between them account for almost 73% of foreign exchange trading volume. Who are the primary dealers whose job is to distribute U.S. Debt? Daiwa Securities and Mizuho Securities distribute the debt to Japanese buyers. BNP Paribas, Barclays, Deutsche Bank, and RBS Greenwich Capital (a division of the Royal Bank of Scotland) distribute the debt to European buyers. Goldman Sachs, and Citigroup account for many American buyers. Most of these firms compete internationally and in all major financial centers. Citigroup was First City National Bank which was influential in the early formation of the Federal Reserve during the period of Stillman and Fifi’s divorce years. After the 2008 Financial Collapse the Federal Reserve set up the Primary Dealers Credit Facility (PDCF), whereby primary dealers could borrow at the Fed’s discount window using several forms of collateral including mortgage-backed loans.

The Primary Dealers today are:

  • Bank of Nova Scotia, New York Agency
  • BMO Capital Markets Corp.
  • BNP Paribas Securities Corp.
  • Barclays Capital Inc.
  • Cantor Fitzgerald & Co.
  • Citigroup Global Markets Inc.
  • Credit Suisse Securities (USA) LLC
  • Daiwa Capital Markets America Inc.
  • Deutsche Bank Securities Inc.
  • Goldman, Sachs & Co.
  • HSBC Securities (USA) Inc.
  • Jefferies LLC
  • J.P. Morgan Securities LLC
  • Merrill Lynch, Pierce, Fenner & Smith Incorporated
  • Mizuho Securities USA Inc.
  • Morgan Stanley & Co. LLC
  • Nomura Securities International, Inc.
  • RBC Capital Markets, LLC
  • RBS Securities Inc.
  • SG Americas Securities, LLC
  • TD Securities (USA) LLC
  • UBS Securities LLC.
  • Wells Fargo Securities LLC.

J.P. Morgan and Morgan Stanley & Co. continue George Peabody’s tradition today selling state securities abroad. They also follow his steps to make a perfect panic. Both corporations were fined for orchestrating the 2008 Financial Scandal among other crimes recently. The largest fine only equalled about 12% what they could make in one year.

The Bank of Nova Scotia is rumored to have been robbed after September 11th when World Trade Center Building 4 was compromised. The long tunnel that was converted over from a PATH way that serves as its entrance was in the film Die Hard 3. Although in the film it was the Federal Reserve NY branch and New York City Water Tunnel #3.

Wells Fargo is owned by Kuhn, Loeb & Co. and linked by the Schiffs to N.M. Rothschild & Sons.
Who prints the Federal Reserve notes? Crane & Co. Winthrop Murray Crane was an advisor to Presidents Theodore Roosevelt and William Howard Taft, and served as a political mentor to Calvin Coolidge received the contract to print them.

Stephen Crane was the first in the Crane family to make paper. “The Liberty Paper Mill” opened in 1770. They sold currency-type paper to engraver Paul Revere, who printed the American Colonies’ first paper money. Crane embed parallel silk threads in banknote paper to denominate notes and prevent counterfeiting in 1844. In 1879, Crane grew when Winthrop M. Crane won a contract to deliver U.S. currency paper to the Bureau of Engraving and Printing in Washington, D.C. In 1922, Crane & Co. incorporated, with Frederick G. Crane elected as president. Dixon also came up with an anti counterfeiting practice.

What is the discount window and how do banks profit?

When the government needs money for their budget they print Treasury Bonds, Bills, and Notes. The Primary Dealers buy them and sell them to the Federal Reserve, other nations, and large corporations. At other times the Federal Reserve sells the securities to the Primary Dealers. The Primary Dealers buy them from Treasury Automated Auction Processing System (TAAPS). The dealers who bid on the largest amount of the debt with the lowest yield wins the portion they bid on. They then sell these to the Federal Reserve at a higher yield.

Then the Federal Reserve prints new money and digitally increase their accounts. They then lend this money to banks throughout the nation at a higher yield. On top of that they hold 10% of all the money they sell to the banks. Example…The initial expansion of deposits and reserves will lead to an expansion of 10 times $10 million because each dollar of reserves will support roughly 10 times that amount in deposits. So now there is $100 million more in circulation.
When your bank receives the other 90% of the money ($90 million) they borrowed they lend it to you at a higher yield. They credit your account and when you make a purchase the money is circulated. So in this example the Federal Reserve has made magical money that grows on trees. They start with $10 million they owe interest on and turn it into more than $100 million. Impressive…

Well now your bank can lend 90% of what they borrowed to other banks and those banks can lend 90% of that amount, and so on….

Then you have inflation. It only starts with the government spending more than they receive in taxes and other funds. They are like the fleas on Norwegian Brown Mice that bite you, the Federal Reserve and the bankers are the ones who really spread the plague.
It is a slight of hand. The government didn’t raise your taxes, it just stripped your buying power of every dollar. Every year it gives you an invisible pay cut. Crafty fingers are no longer needed to pick pocket you.

So who owns the debt? Well there is public debt and intergovernmental holdings. On November 7, 2016, debt held by the public was $14.3 trillion or about 76% of the previous 12 months of GDP. Of that debt 55% is held by state and local pensions and mutual funds. The remaining 24% is held by foreign government and investors. $1.5 Trillion is held by China and $1.25 Trillion is held by Japan. Third is Ireland who owns $271 million. Go figure the Cayman Islands is fourth. Brazil is Fifth and the United Kingdom is 8th.

To find out more and other great stories from Salem and how that little city shaped America read Sub Rosa which is available at Barnes & Noble, Amazon.com, and your local bookseller!

Salem Secret Underground and The Salem Smugglers’ Tour

Chocolate and Peanut Butter

Chris Dowgin Leading the Salem Smugglers' Tour

So what is down there? Within the pages of the book Salem Secret Underground: The History of the Tunnels in the City I tell you. The book is filled with pictures of the tunnels in the city. On the Salem Smugglers’ Tour I take you where the photos were taken and show you them on my tablet while going over the history of the people who built them.

So are any of these smugglers important today, or even then? Well lets take a look…

Joseph Story Smuggler in Salem MA

Man who shaped the Constitution, Associate Supreme Court Justice Joseph Story.

George Peabody in Salem MA

George Peabody orchestrated several economic panics with Rothschild in England. His bank is now called JP Morgan which orchestrated the 2008 Financial Collapse.

 

Timothy Pickering in Salem MA

Timothy Pickering was Secretary of State for Washington and Adams. He wrote the Alien & Sedition Acts which are now very similar to Homeland Security and the Patriot Act.

So these men were the politicians who shaped our country. Pickering was Washington’s general and Secretary of State who helped ratify the Constitution. Joseph Story shaped the Constitution with Daniel Webster. Both were in Stephen White’s pocket defending the Second Bank of the United States and their attempts to create what we call the Federal Reserve today. George Peabody founded the Rockefeller Foundation, sold the majority of shares in our national bank to foreign investors, collapsed our economy several times, founded what became JP Morgan bank, and bailed out the local museum which was renamed after him. He owned the Eastern Railroad that built the Gothic railroad station in town.

Elias Hasket Derby Jr.

Elias Hasket Derby Jr. spent the 10th Largest fortune in American history and extended 3 miles of tunnels in town.

 

Elias Hasket Derby

Elias Hasket Derby America’s first millionaire and tenth richest man in American history.

Who else? Elias Hasket Derby was America’s first millionaire and the tenth richest man in American history to this day. Beyond Gates and Buffet put together. He built a tunnel from his wharf, to his home, and to his cousin’s Hodges house who founded the Peabody Essex Museum. His son Eias Hasket Derby Jr. who extended the tunnels so 159 politicians and businessmen could avoid paying Jefferson’s duties. Thomas Perkins who’s opium empire spurred on the wealth of the Forbes, Russells, and Sturgis families. In fact the Russells purchase his land in New Haven and erect the Skull & Bones crypt on it. Russell will create the fraternity with Alphonso Taft who is President Taft’s grandfather.

How do I know these tunnels exist? Because I have been in them!

Chris Dowgin in Tunnel in Salem MA

Chris Dowgin in Tunnel in Salem MA

Chris Dowgin in Tunnel in Salem MA

Chris Dowgin in Tunnel in Salem MA

Chris Dowgin in Tunnel in Salem MA

Can I get you in…no! One day though so keep checking back, but for now there is so much more about this tour than witches. Stuff that still effects you today! Plus the tour is filled with vintage photos of town from the 1800’s, old car crashes, comedy, ghost stories and a famous murder!!!

40731 10202387671025682 East_India_Marine_Hall_3 Essex_Street_Mud_Puddle_Toys Original Almy's next to Pamplemousse 10202387802188961

Also you will learn how Stephen White who had the East India Marine Hall in the Peabody Essex built got away with murdering his uncle with the involvement of Supreme Court Justice Joseph Story and Secretary of State Daniel Webster. A murder that empowered them to murder presidents Harrison and Taylor to secure the Third Bank of the United States so George Peabody could sell more of our country away to the Rothschilds.

President Taylor. Second to president to be murdered because of the Third Bank of the United States.

President Taylor. Second president to be murdered because of the Third Bank of the United States.

 

President Harrison. Murdered by people in Salem.

President Harrison. The first president murdered by people in Salem.

Daniel Webster Murdered Two Presidents.

Daniel Webster who murdered two presidents in a failed attempt to create the Third Bank of the United States.

Here are some of the cool tunnels in Salem you will see in the book and on the tablet on the tour.

Crypts

Green-House-Tunnel-Stairs2

DSCN0255

From_Street

Registry_Tunnel

20140801_181704

Downing_Block_Me_Jail_Cell_Door2

Door that led to compartments runaway slaves could sleep in on the tunnel route in Salem, MA.

13.Downing_Block_Jail_Cell_Door2

Joshua_Ward_House_Far_Left_Tunnel_edited

Tunnel_Between_Buildings_Front

So book a tour today at http://www.salemtunneltour.com and head over to Barnes & Noble to buy Salem Secret Underground: The History of the Tunnels in the City. If you buy the book on the tour you will save $5 and will have it signed and doodled in by the author for no extra cost! What a deal!!

Parker Brother’s Clue and the Murder of Two Presidents

Daniel Webster Murdered Two Presidents.

Daniel Webster. The inspiration of Sam the Eagle from the Muppets.

Re-branding and the Importance of History Today!

OK, what would you say if I can connect re-branding the game Cluedo, the First National Bank of the United States, George Peabody & Co.,  Panic of 1837, cherries and milk, and the 1841 Bankruptcy Act to Clue, The Federal Reserve, JP Morgan Chase, 2008 Financial Collapse, three presidential assassinations, and The Capital Purchase Program? Why do I ask, if you do not know the answer to this question history only repeats itself. Now let me show you…

 

In Salem the ghastly murder of Captain Joseph White is still remembered. Every time you go buy a tour on Essex Street you can catch a guide telling the tale once more. For most of us we only know of the story from the popular Parker Brothers game Clue which incorporates a Mrs. White and basis the rooms on the board on the house Mr. White was murdered in. Yes, another house attached to tunnels. This was the re-branding of an English game called Cluedo.

A little background. Joseph White was insulted throughout his life by two business partners, Joseph Knapp Sr. and Richard Crowninshield Sr. One had lost his favorite ship called the Revenge to the Pirate Philips and had his namesake marry his niece he was trying to have a child with. The second gentleman had insulted him publicly after the Embargo Act was lifted when three ships were captured by the French general Marat in Naples. Richard’s I told you so did not go over to well.

So to get his Revenge, Joseph White had his nephew Stephen White murder him while he was on his death bed and blame the children of those two business partners who he thought had done him wrong. Stephen White who had lost his wife and mother in 1827, the same year Joseph Knapp Jr. had married his cousin away from his uncle. Stephen White would have 27 men hunt down the murderer and proposed a $2,700 reward for their apprehension. Also 3 months after the murder State Superior Court Justice Parker, the Parker Brothers uncle, would die mysteriously before presiding on the case. It was three years since the deaths of Stephen White’s mother and wife.

Stephen White will pay Daniel Webster $1,000 to try not only Joseph Knapp Jr. and Richard Crowninshield Jr. but also Joseph’s brother Frank. Richard would die by his own silk handkerchiefs from a low window with his knees almost touching the ground in his cell and the other two Webster would see hanged.  White’s daughter married Webster’s first wife’s half brother and his other daughter had married Webster’s son. Daniel Webster the drunken gambler would always be in the debt of Stephen White who who was on the board of the Salem Savings Bank and owned the Asiatic Bank. Webster would also be in the debt of Riggs in Washington who was an agent for George Peabody. Lincoln and many other politicians would owe Riggs a fortune.

Henry-Clay

Henry Clay.

Daniel Webster who along with Henry Clay was the head of the Whig Party and the opposition to President Jackson. The Whigs originally called the National Republicans were a re-branding of the Federalists who dug tunnels in Salem in opposition to Jefferson’s custom duties, and painted their chimneys white and black. White and black chimneys at one time were a sign of loyal Tories supporting England. The major goal of the Federalists were the creation of the First Bank of the United States a private bank that was heavily invested into by London bankers who cashed in on securities or bonds given to the soldiers in lieu of pay that defeated them during the Revolutionary War they had gained by purchasing them for pennies on the dollar.

The Whigs were in a battle over the Second Bank of the United States. Daniel Webster was on the board of the Boston Branch of The Second Bank of the United States did not appreciate Jackson’s refusal to renew the bank’s charter in 1836. Jackson claimed the bank took money away from the Common Man and had placed too much of our capital and debt into the hands of English bankers. Rothschild who was heavily invested in state securities in which George Peabody sold him approved of several loans in America and then reversed direction by stopping the flow of currency and then called in many of those debts prematurely. The combination of events created the Panic of 1837.

In response many of the states reneged on payments of their debts to London bankers. In hopes of having the states pay back these securities Daniel Webster had hoped war hero Benjamin Harrison once in office would bring forth the Third Bank of the United States. This was not to happen.

William_Henry_Harrison_daguerreotype_edit

President William Harrison

Whigs like Henry Clay and Daniel Webster had hoped Harrison would be their puppet. But this was not going to be so. Daniel Webster had wrote an inaugural address for Harrison in March of 1841, which he rejected for his own that lasted an hour and forty five minutes, which is the longest in history, during a snow storm. This irked Webster. It irked him so much that he used it as the cause of death of the president a month later.

Harrison also shunned Clay telling him that all future correspondences should be done in writing since he banned Clay from the White House. A few days later, however, Treasury Secretary Thomas Ewing reported to Harrison that federal funds were in such trouble that the government could not continue to operate until Congress’ regularly scheduled session in December; Harrison thus relented, and on March 17 proclaimed the special session in the interests of  “the condition of the revenue and finance of the country”. The session was scheduled to begin on May 31.

At the session, Clay offered six resolutions as a plan of work for Congress. These proposed putting an end to the independent treasury, the establishment of a new national bank, and a tax increase on imports. They also included a new plan to give the states the money received by the federal government from the sale of public lands. Clay represented an agrarian elite that was at odds not only with Harrison, but also Webster and his clan of seaboard New England merchants. The tax increase on imports was to pull on Webster’s beard. His political base in Massachusetts were the same people who built three miles of tunnels to avoid paying Jefferson’s duties on imports. Clay knew full well about this, especially after conversations and walks he shared with Webster and John Quincy Adams through Joseph Bonaparte’s tunnels in Bordentown, NJ.  Harrison would have nothing to do with any of them. Four days later Harrison would be dead.

On March 26th, Harrison would begin to feel ill. Webster would blame this on his long speech during the snow storm, but Harrison did not show signs of a being sick till 3 weeks later. Harrison started to complain about a stomach bug. He had been dealing with dyspepsia for years and thought it was another outbreak and nothing more. Although we have no record of how he managed his dyspepsia, the standard treatment in the 1840s was carbonated alkali, which would have neutralized the gastric acid that otherwise kills harmful bacteria. In the absence of the gastric acid barrier, gastroenteritis can be caused by as few as one ten-thousandth the number of bacteria usually needed. By April 4th Harrison was dead.

Dr. Thomas Miller had given  him a host of toxic medications that were then considered the standard of care — including opium, which retards the intestine’s ability to rid itself of microbial pathogens, facilitating their invasion into the bloodstream. Enemas, which Miller repeatedly gave to Harrison, are also potentially dangerous in such patients. They can perforate ulcers produced by S. typhi and S. paratyphi in the ileum, the lower end of the small intestine, through which the bacteria would be able to  escape from the intestine into the bloodstream, resulting in sepsis. In 2014 a medical analysis had determined that Harrison had died of Typhoid which brought about pneumonia and not from his long speech during a snow storm 3 weeks prior.

In Washington D.C. the “night soil” from chamber pots and other collections of sewage was within range of leaking into the cities water supply. These situations would of resulted in cholera and typhoid deaths in the region that Miller had access to. The first time in recorded American history disease was used to kill an enemy can be recorded in 1764 at the Siege of Fort Pitt when the British purposefully gave members of the Delaware tribe blankets and a handkerchief infected by smallpox. It would not be beyond Harrison’s contemporaries to use typhoid or cholera infected food or water along with his dyspepsia complicated with the enema, opium, and carbonated alkali. It is said that typhoid takes 3 to 4 weeks to run its course and then either you survived or your dead. Cholera would take 1 to five days. Harrison had died within a month of taking office and 8 days after reporting to Miller his sickness.

Is there a history of people being murdered by typhoid? In antiquity it was rumored Alexander the Great was poisoned by typhoid in his food. Dr. Hyde Benet Clark would use a mixture of cyanide, strychnine, and typhoid to wipe out his wife’s relatives to he her aunt’s fortune. Lydia Southard in 1915 would kill 4 husbands and some of their relatives with Typhoid. Arthur Warren Waite in 1916 spiked a can of tuna fish with typhoid to kill his mother-in-law and used barbital to help her along.

Did Harrison’s death do Webster and Clay any good in the restoration of a semi private bank of the United States? No. In a turn of events that was not going to be seen until Theodore Roosevelt would succeed after McKinley’s assassination, Tyler would go on to veto the creation of the Third Bank of the United States on August 16th which led to riots by Whig members on the White House. After this it was seen as prudent to create the first police force in the capital. The Second Bank of the United States which had been acting as a totally private organization run by bankers in London finally gave up its ghost soon afterward.  Webster’s position as director of the Boston branch came to an end as well.

President-Tyler

President Tyler.

After the second veto by Tyler on September 11th, Henry Clay in hopes of having Tyler resign had the majority of Tyler’s cabinet, not including Webster who he was quarreling with, remove themselves. Tyler then gained support with the Democrats who were promising him the next election. Andrew Jackson writes a letter applauding Tyler in his decision. In modern history September 11th can be seen as the crowning moment of George W. Bush’s presidency which culminated in the successful re-branding of his father’s and brother’s Saving and Loan Scandal and its bail out in 2008.

But what was gained was the distribution to the states of the proceeds of public-land sales for a short period before repealed which netted the states $600,000. This would of provided the states the money needed to pay back their securities they defaulted on that the Second Bank of the United States and London bankers like George Peabody and Nathan Rothschild held. Also Tyler enacted the Bankruptcy Act of 1841 that bailed out the banks and investors who suffered after Jackson’s veto of the Second Bank of the United States in 1836 which led to the panic the next year. 33,000 cases were heard during a short period of time, which flooded docket courts, before it was repealed. Edgar Allan Poe tried to use his minor connections to Tyler to to be declared bankrupt which failed. Judge Story, Webster’s wife’s uncle defended it in the Superior Court. It was the grandfather party of the Whigs, the Federalists, in 1800 that secured the first bail out or Bankruptcy bill which Jefferson repealed in 1803.

Also in the year of 1841 Stephen White’s brother-in-law and father-in-law to his son Daniel Fletcher White had died.  Stephen White, the financier behind Webster and the man who brought him into conspiracies of murder has died. How much did Stephen White have to do with the assassination of Harrison is to be further pursued in the new book Subrosa. Is it a coincidence that the man openly who presided over Webster had no true power and the man behind the scenes who pulled his strings for so many years would die in the same year?

Now in 1850 Webster would be called away from his lucrative law practice in Boston to be once more Secretary of State. This time for another Whig president, Millard Filmore. To offset his losses from leaving behind his law practice a cohort of international bankers, and probably some from Massachusetts, had set up a fund of $20,000 for Webster to draw from.

Another reason Webster took the position was that he ruined his career with his northern supporters after his “Seventh of March Speech” which lasted three and a half hours, quite short for a man who once spoke for five hours after an extra special dinner. In that speech in March he called for the preservation of the union at all costs, rallied against his abolitionist supporters, and said that the slaves in the south experienced better working conditions than free workers in the north. Webster also contended that there is no cause to complain about the continuation of slavery where it already existed and he believed there was no fear of extending slavery into the parched areas of  the southwest. In fact most people who ventured west had given up before the five year mark of obtaining a title grant out west because they could not meet the necessary yield in farming needed due to the lack of rain.  He also said that the south deserved protection of their property and he urged for stronger slave fugitive laws. We are called to mention once more that his adviser Stephen White had practiced within his uncle’s slave trade. Captain Joseph White had once said that he would sell anyone no matter what color they were. Horace Mann and Ralph Waldo Emerson levied abuse to him in New England papers and helped ruin any future political career in New England he had at one time. In spite of this he looked forward to winning the presidency after Taylor…

Taylor

President Zachary Taylor

His opposition against Taylor had cost him his career. There were plenty of others who wished the president dead. Taylor had threatened to hang anyone who would go after secession on the slavery issue in the new territories. On July 4th during the dedication of the Washington Monument Taylor got overheated and then shocked his system by consuming copious quantities of iced milk and cold cherries which would bring about his death on the 7th. Gastroenteritis again, just like what Harrison suffered, caused by the highly acidic cherries combined with fresh milk (I know in my case milk coats my stomach when I have indigestion..) Supposedly the milk and cherries brought on a bilious fever, typhoid, and cholera morbus (a general term for bacterial infection of the lower colon.) resulting in debilitating diarrhea which is a nutritive expulsion and dehydration coupled with  a buildup of excretive acids in bowels and intestines.  Typhoid or cholera poisoning once again. Taylor lasted 16 months in office. Fifteen months longer than Harrison his Whig compatriot.

By the way, Webster served out the rest of his life as Secretary of State till 1852 and dies the same year as Henry Clay.

Some history books still mention the deaths of the only two elected presidents from the Whig party as one got too cold and died and the other got to hot and died from drinking milk and eating cherries. A third would  include Lincoln who was a Whig that joined the newly formed Republican Party.

By the way Polk would also die 3 months after leaving office from cholera in 1849, 13 months before Taylor.

During Polk’s presidency he restored the Independent Treasury System that Harrison disbanded for the Whigs before his death. This ran up against their constant desire to establish the Third Bank of the United States.  It also stood up for Jackson’s  hard money stance against the Whigs. It lasted until 1913 when the Federal Reserve was created.

The Fiscal Bank of the United States was passed by Congress in 1841. Tyler vetoed it believing it was an vague attempt of re-branding the Third Bank of the United States under a new name.  It is a miracle what re-branding can do. You take a pile of horse shit and re-brand it manure and you can make a fortune. In 1913 this is what many think the London bankers did when they help institute the private bank called the Federal Reserve.

At the beginning of this article I had said I could show you the importance of history by showing you how  the tunnel digging Federalist in Salem who supported strong ties to London and their bankers through Peabody, Morgan & Co. re-branded themselves Republicans, to be called Whigs, and Republicans once again had conspired in the creation of a series of National Banks of the United States through the murder of 3 presidents, engineered by the director of their Boston Branch and his financier,  within their own party to have the majority of the nation’s finance in the hands of English banks that have engineered panics, depressions, financial collapses, and bailouts.

Financial collapse? JP Morgan Chase and Morgan Stanley have been fined recently for engineering the 2008 Financial Collapse. George Peabody, the friend of Nathan Rothschild, the man that bailed out the Brown Brothers who have been influential in the Republican presidencies of both Bushes, the person who rescued Stephen White’s failing museum is re-branded today as JP Morgan Chase and Morgan Stanley.

Bail Out? In 1841 the Bankruptcy Act rescued those merchants working for London bankers in America after Jackson refusal to renew the Second Bank of the United States charter in 1836 which led to the  plan in which Nathan Rothschild and Peabody bankrupted America during the Panic of 1837. Bankruptcy Act was re-branded the 2008 Bail Out that rescued JP Morgan Chase, Morgan Stanley, Bank of New York (Alexander Hamilton’s bank who created the First Bank of the United States.), and a bank now called Bank of America (no relation).

So history is important, for it keeps repeating itself if we are not careful through re-branding. So remember my statement of manure; no matter what you call it, it still smells like a honey pot.

p.s. If you think this ending is grasping at straws, well it is intended to leave you wanting more. A more thorough explanation will be given within the new book “Subrosa” which is the sequel to “Salem Secret Underground: The History of the Tunnels in the City” which is available on Amazon and soon Barnes & Noble.

 

 

George Peabody: Panics and Financial Collapses

George_Peabody

George Peabody

George Peabody born in South Danvers in what is now Peabody in 1795. He was born into a large poor family he struggled throughout his life to keep up with. His first business foray was with his brother David in a dry goods shop in Newburyport. Then he traveled to Georgetown in Washington D.C. with his Uncle John in 1812 to set up another dry goods company. In 1814 he partners with Elisha Riggs to form Riggs, Peabody, & Co. wholesale dry good dealers. In 1815 they move to Baltimore to get closer to the slave market. Riggs retired in 1829, and the firm became Peabody, Riggs & Co., with the names reversed as Peabody became the senior partner. There stock entailed prizes from American privateers.  They also ventured heavily in slaves, wool, and garment goods from Europe sailed in from the north. They remained in partnership till 1835.

In 1827 Peabody would start sailing to Liverpool in England to introduce American wool to new markets. Through his connection with his two friends from Baltimore, William and James, he finds many doors open for him. The Brown Brothers were managing their father’s Liverpool office at the time of Alex. Brown & Sons. The bank that would in time become Brown Brothers, Hairrman, & Co.  Another influential friend would be Lord Nathan Mayer Rothschild.

East_India_Marine_hall_B

Peabody Essex Museum an Institute Filled with Tunnels and secrets.

In 1837 Peabody became a citizen living in London. In between that year and the next he ventured into merchant banking conducting business on his own account. Prior to then he also started selling state securities within Europe. George Peabody was in “High Finance” which consisted to catering to governments, wealthy individuals, and large companies. His entree into the field was to be the mouth piece for Rothschild who was despised by the other lords. It was no secret that Nathan ran the Bank of England along with Barings Brothers & Co., but his Jewish heritage limited him from doing more. So he established Peabody in high fashion as a lavish host whose entertainments would soon be the talk of London. Rothschild would, of course, pay all the bills. Peabody accepted the offer, and soon became known as the most popular host in London. His annual Fourth of July dinner, celebrating American Independence, became extremely popular with the English aristocracy, many of whom, while drinking Peabody’s wine, regaled each other with jokes about Rothschild’s crudities and bad manners, without realizing that every drop they drank had been paid for by Rothschild.

Kinsman Block secret train station tunnel entrance.

Tunnel leaving a building built by the superintendent of the Eastern Railroad to a secret train station. Peabody owned the railroad and some mills in Lowell in which good were smuggled to.

In 1836 Andrew Jackson let the charter of the Second Bank of the United States to lapse complaining that it was a private institution and foreign buyers purchased ownership shares of the bank until the 70 percent of the bank was owned outside our borders. This was worrisome to American politicians but this high share of foreign ownership was not unusual in the American financial system. Britain had been supplying capital to the U.S. economy for some time. Much of the financing was from Rothschild who helped charter the bank through his American agents the Phillip Brothers.  In fact oversight was real lax, especially in the Baltimore branch that came under the control of individuals who looted it of a million dollars before they were caught. The Baltimore branch went into receivership and the whole Bank was close to bankruptcy. This was the branch where Peabody and the Alex. Brown & Sons worked out of. Also the branch director was the future president James Buchanan. In Washington the branch director was Elisha Riggs son, Peabody’s old partner. In Boston the board was filled with Peabody’s Salem friends Daniel Webster and Benjamin Crowninshield. If it was not private institution before 1836 the Second Bank of the Untied States and its remaining 24 branches did indeed run as a private venture afterward until its failure in 1841.

The Bank of England responds to Jackson through Rothschild’s order. The Second Bank of the United States is now a private company. The bank instituted a 2 part plan. First they issued an order to extend almost unlimited credit for good security, placing plenty of money into circulation. Creating the fear of too much gold flowing to America in June 1836 by the Bank of England. Then when enough people took the bait, orders were issued to restrict credit, call in outstanding loans, and reduce the overall money supply. Then the Second Bank of the United States owned by foreigners bought up depreciated stocks for pennies on the dollar. One of which was George Peabody working for Nathan Mayer Rothschild.

Ben_Crowninshield_House

Secretary of the Navy and board member of the Second Bank of the United States home in Salem. One of many connected to the tunnels in town.

By October a run on the banks in Ireland occurs. Then in August The Bank of England refused to discount bills drawn on houses active in American trading In one day The Bank of England threw out all the paper connected with the United States. Rothschild divested itself of all its American holdings. The purpose of this action was to create an immediate financial panic in the United States, cause a complete contraction of credit, halt further issues of stocks and bonds, and ruin those seeking to turn United States securities into cash. Why? Not only did President Jackson promptly withdraw government funds from The Second Bank of the United States when he refused its charter, but he deposited these funds, $10 million, in state banks. The immediate result was that the country began to enjoy great prosperity. This sudden flow of cash caused an immediate expansion of the national economy, and the government paid off the entire national debt, leaving a surplus of $50 million in the Treasury.

The Panic of 1837 was to begin affecting America as well as Europe. In fact George Peabody through Rothschild finds guarantees so his friends Brown Brothers & Co. are ensured of $10 million pounds to keep them from defaulting on their loans. Others in England will feel the bite as well.  By 1842 eight states and one territory defaulted or repudiated their debts on state securities they had sold into the European Market. Many of these state securities are ones Peabody had sold. By 1861 Peabody will be the largest seller of state securities. To put pressure on the Lincoln government during the Civil War, he began unloading them and driving prices down. At the same time, his future business partner, Junius Morgan was depleting the American gold supply by shipping it to England. Morgan and Peabody were also brokering cotton sales to Europe to buy weapons and supplies for the South. The Panic of 1837 would last through to 1845 with several bubbles along the way.

Now what about future panics? In the 1848 Panic Corcoran & Riggs took a $16 million loan to by $14 million of the $18 million bond issued by America to pay for the Mexican War. The deficit was $30 Million. They received an advance on proceeds by sharing the debt with Barings, Peabody, Overend, Gurney & Co., and Rothschild; with Rothschild handling the majority. In 1844 Tyler had turned their firm into a federal depository and they handled a majority of influential politicians including James Polk, Henry Clay, Stephen Douglas, James Buchanan, Daniel Webster, and young Congressman Abraham Washington. Its safe to say that Peabody had a hand in the profit and control of the son of his old partner. Riggs told Peabody, “Our position and standing with the Executive heads of departments gives us advantages in transactions with the government not enjoyed by others. Also he told him,“Our position and standing here gives us many advantages, having the earliest information in relations to matters and things.” In the Panic of 1857 they pulled the same plan from the 1837 Panic from the old playbook.

Train Tunnel heading toward Station. Just long enough to hide one train.

Train tunnel heading toward secret station built by Peabody’s railroad. Just long enough to hide one train.

In the panic of 1857, when depreciated securities had been thrown on the market by distressed investors in America, Peabody and the elder Morgan, being in possession of cash, had purchased such bonds as possessed real value freely, and then resold them at a large advance when sanity was restored. After the panic had been engineered, one firm came into the market with one million pounds in cash, purchased securities from distressed investors at panic prices, and later resold them at an enormous profit. That firm was the Morgan firm, and behind it was the clever maneuvering of Baron Nathan Mayer Rothschild. George Peabody & Co. was founded in 1851. By 1854 it will become Peabody, Morgan, & Co. after recruiting Junius Spencer Morgan. 1864 J.S Morgan & Co. upon Peabody’s retirement.

The Great Depression? Sir Montagu Norman, Governor of the Bank of England for many years, was a partner of Brown, Shipley & Company. Sir Montagu Norman was organizer of “informal talks” between heads of central banks in 1927, which led directly to the Great Stockmarket Crash of 1929.  Brown, Shipley & Co. formed by Peabody’ friends the Browns of Baltimore.  2008 Financial Scandal? “JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the government of known problems with those loans and leaving the government to cover the losses when the loans defaulted,” as the New York Times quotes Preet Bharara, the United States Attorney in Manhattan. They have been fined the most for their engineering this current depression, $4 Billion. In their second quarter of 2015 JP Morgan and Chase made $6.3 Billion with an overall worth of $24.5 Billion. Its about time we slapped the hand that George Peabody fostered…