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AH Member Writings : Ron Last Updated: Mar 28, 2022 - 12:08:15 PM

'MONEY: NOW and LATER ' Part II (The Rise of US Fractional Reserve Banking)
By Ron Chapman
Apr 4, 2009 - 5:24:00 AM

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Ron: Repost from AHSupporters on 5 February 2008: Originally posted on the old AHS on 9 April 2007


'MONEY: NOW & LATER ' Part II (The Rise of US Fractional Reserve Banking)

G'day cobbers,

As promised here's a bit of history mostly garnered from the Phoenix Journals about the rise of US fractional reserve banking.

In 1100AD Henry I became king of England. Finding the treasury empty because of the cost of Crusades King Henry issued into circulation for payment of government debt, or as receipts for goods and services rendered, marked pieces of wood called tallies. These tallies represented a debt free medium of exchange and economic activity flourished accordingly.

For almost six centuries thereafter England experienced a glorious usury free period during which the working people experienced almost "utopian" conditions. Other European nations had a similar experience
for shorter periods during what is known as the "Renaissance". Although historians usually ascribe the Renaissance to the Crusaders' rediscovery of ancient Greek and Eastern knowledge its real economic
foundations lay in England's introduction of the "tally" stick money system and the development of similar usury free money systems elsewhere in Europe.

Usury was strictly prohibited by the Christian church and government in England. Eventually those who continued the practice of usury were banished from England in 1290 AD. Hatonn says that the honest and
convenient "tally" money system, enabled English workmen to supply their family's needs for a year by working for 14 weeks! As a result there was a great deal of leisure time available for intellectual,
religious and charitable pursuits. Hatonn says: `this is the reason that the incredible cathedrals of England and Europe were built completely with volunteer labor… What is really amazing is how this
information, essential to your freedom has been so successfully kept concealed from you.'
(Phoenix Journal 22, pp. 140-41).

Apparently England's tally money system continued to operate until 1783, when it was abolished by statute because of pressure from the AB's(Anti-God./Christ Bankers). But tallies continued to be issued in rural areas until 1826. The AB's secretly returned to England by providing finance to King William of Orange and in 1694 King William  granting a charter to William Paterson and his Rothschild banking associates to establish the Bank of England as a fractional reserve central bank. The charter gave monopoly power to issue bank notes at interest at a modest initial ratio of 2:1 as compared to ratios of 9:1 and more today. King Williams' treason (in respect of the interests of the people of England) marked the beginning of the end for the tally system AND for the freedom and prosperity of all coming under the influence of the Bank of England.

Knowing about England's tally system, the Massachusetts colony issued some 7,000 pounds of debt-free paper scrip into circulation in 1690. The absence of a standard of value caused problems but the economy
flourished with full employment. This system was then adopted to varying degrees, by other colonies and they also prospered. There was no official banking system and fewer than 30 private lending institutions in all 13 colonies. Later Benjamin Franklin said the colonies were prosperous because this "Colonial Scrip" was issued `…
in the proper proportion to the demands of trade and industry.'

Subsequently the Bank of England forced the English Parliament to pass a Bill prohibiting the Colonies from issuing their own money. Franklin said:
`Within one year from that date the streets of the Colonies were filled with the unemployed.'

This was the real cause of the War of Independence. Franklin said:

'The colonies would gladly have borne the little tax on tea and other matters had it not been that England took away from the Colonies their money, which created unemployment and dissatisfaction.'

In desperation the Continental Congress, although it had no authority to impose taxes or issue money began to issue debt-free money known as "Continentals". The English then brought in shiploads of counterfeit
Continentals which, because the Congress was unable to tax them out of circulation, depreciated Continentals to practically nothing by the end of the War. But by then they had served their purpose. As they were the means by which the colonies obtained their liberty "Continentals" should rank with the Declaration of Independence in US history.

Within 15 years of the establishment of the new nation Alexander Hamilton, a Khazarian Jew whose real name was "Levine", manipulated the new nation into granting a charter for the First Bank of the United States. Hatonn says:

`After Franklin's death in 1790, Hamilton succeeded in bribing enough Congressmen to have Congress grant a 20 year charter to the AB's in 1791 for "The first Bank of the United States.' Having lost this
battle against the AB's, Jefferson said:

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. The issuing power of money should be taken from the banks, and restored to Congress and to the people, to whom it belongs."

When the charter expired in 1811, a wiser or more honest Congress refused to renew it. What followed … was the War of 1812, in an effort to re-establish the rule of the Bank of England over you, as was the case prior to the War of Independence.

… the real causes of historical events were most carefully and fully omitted from your history books – if you never heard it, it does not exist. But it does, you simply did not hear of it… it is indeed complicated in the orchestration but most simple in concept, and if you can defraud three generations you have achieved your goal!
… To gain a comprehensive overall understanding of how this criminal system developed requires again looking at an overview of history … YOU ARE REPEATING HISTORY TO EVERY HEINOUS DETAIL, FRIENDS, WHICH INDICATES THAT YOU STILL DO NOT UNDERSTAND!

Let us look again at the set-up of how this criminal system developed and worked—the mechanics of how the criminal scam called "fractional reserve banking" works to enslave the people caught in its insidious
In the first place most Americans STILL believe that your government creates your money in accordance with Article 1, Section 1 of the Constitution which states: `The Congress shall have Power ….To coin money, regulate the Value thereof, and of foreign Coin, …."This most important power of government was again surrendered by Congress, in 1913, to a PRIVATE CORPORATION CALLED `THE FEDERAL RESERVE". It is no more "FEDERAL" than Federal Express, Inc.or federal Thrift Shop of hospital for the sick, or Donald Trump. Neither is the Internal Revenue Service, Inc.—which is PRIVATE ENFORCEMENT AGENCY FOR THE FEDERAL RESERVE SYSTEM, INC IT IS NO MORE A RESERVE THAN A BUCKET WITHOUT A BOTTOM.

The process by which the AB's conquer nations economically is simply unbelievable because it is unbelievably simple. Here is how it works:
"First, they seduce the political authority to grant them monopoly power to issue the nation's money as debt at interest (usury).
Second, they create the money OTA (out of thin air) as a book or computer entry when they loan this bank credit to the government and corporations in exchange for the interest-bearing bonds, and to individuals in exchange for title to their property.
Third, when there is no unencumbered property remaining to collateralise more loans and there is insufficient money to repay the loans, the victims are foreclosed.

The reason that the above sequence is inevitable is the best kept economic secret in the world. Here it is. When the AB's and their associates (your friendly banker) create the money as a booking entry to make a loan, say $1,000 for one year, the interest (usury) on that loan, say 10%, or $100 is NOT created and, therefore, cannot be paid!

When the bank credit is put into circulation, it increases the money supply and generates increased economic activity throughout the society. When the principal is repaid, the bank credit is eliminated and economic activity is reduced accordingly. If it stopped there, we could have an honest and potentially stable money system. But then comes the rub, since the interest amount was not created, it remains in the economy as a bank claim on someone's property. Why? Because in order to pay the $100 interest (which was NOT created) on the first loan, someone had to borrow it into circulation. Thus, an unending cycle of debt is instituted with the inevitable eventual result being that title to all real wealth in the nation is owned by the AB's. This is the reason why your farms, homes and factories are being foreclosed by the thousands every week! It is also the reason for inflation, which has reduced the "dollar" to about 10% of its value 50 years ago.
[Ron: Today, 18 years later, it's probably less than 3% and declining more rapidly than ever as the US Congress and The Fed have just created 13 TRILLION USD out of thin air in the last year alone].

ALL of your money, except for your coins and the few remaining U.S. Notes, has been borrowed (OTA) (Out of thin air) into circulation as debt. About 95% of this debt exists as bank deposits (checkbook money) and about 5% exists as those Federal Reserve Notes that you call, bills

Furthermore, this debt exceeds the value of all the real estate in America, which is pledged to pay it. Therefore, you are now [in 1991] legally bankrupt!' … In the words of Robert Hemphill, for many years credit manager of the Federal Reserve Bank:

"If all bank loans were paid, no one would have a bank deposit, and there would be not a dollar of currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create amply synthetic money, we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp upon this picture, the tragic absurdity of our hopeless position is almost incredible—but there it is. It (the money problem) is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it is widely understood and the defects remedied very soon."'
[Ron: It isn't widely understood and the defects have not been remedied hence the current money meltdown is NOW morphing into a global economic collapse which will result in a Great Global Depression unless GF assistance arrives soon].
(Phoenix Journals ch 22 pp 99-104)

But I digress.

Thus, after winning the War of 1812 Congress again turned victory into defeat by chartering the Second Bank of the United States, which was virtually a clone of the first Bank of the United States and the Bank of England. President Andrew Jackson vetoed renewal of the Bank's charter in 1829 and removed US funds from it, placing them in state banks. He also eliminated the national debt. He survived an assassination attempt on 30 January 1835. But the AB's didn't give up. They plotted to create a civil war to gain their objective. And they got that war.

During the American Civil War – which was instigated by Rothschild bankers who funded both sides (London backed the Union and Paris backed the South) – the banksters demanded 28% interest on loans sought by the Union. Lincoln rejected such usury and he had Congress authorize, in three issues, a total of $450,000,000 in US debt free Notes called "Lincoln greenbacks" which were used to pay for goods and services needed for the war. This debt-free money saved the Union.

In July 1862, in the middle of the War, the Hazard circular was sent by London banksters to US banksters. It said:

`Slavery is likely to be abolished by the war power and chattels lavery destroyed. This I and my European friends are in favor of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital [the AB's] shall control labor by controlling wages. This can be done by controlling the money. The great debt (national) that capitalists will see to it is made out of the war, must be used as a means to control the volume of money. To accomplish this the war bonds must be used as a banking basis. We are now waiting for the Secretary of the Treasury to make this recommendation to Congress.'

THERE IT IS FOLKS, ALL IN ONE PARAGRAPH! Through the imposition of fractional reserve banking the "free" human workforce was destined by the AB's to replace the negro *chattel* slaves of the 19th century:
AND THEY HAVE! Welcome to wage slavery.

Congress passed the National Bank Act of 1863 giving the banksters power to create money as debt, but not exclusively. In 1872 Horace Greeley said of the Act:
`We have stricken the shackles from four million beings and brought all laborers to a common level, not so much by the elevation of the former slaves as by practically reducing the whole working population, white and black, to a condition of serfdom. While boasting of our noble deeds we are careful to conceal the ugly fact that by our iniquitous money system we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery.'

Hatonn notes that:
`In order to protect their money monopoly and prevent the expansion of the honest, debt-free money system instituted by Lincoln, he had to be eliminated. And so he was. JOHM WILKES BOOTH WAS A MEMBER OF "THE KNIGHTS OF THE GOLDEN CIRCLE", A SECRET SOCIETY WHICH WAS CONTROLLED BY THE AB's. AS ARE VIRTUALLY ALL SECRET SOCIETIES TODAY!'

Bismarck, Chancellor (and political architect of the German nation state), said of Lincoln's death:

`The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots, and the bankers went anew to grab the riches of the world. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America, and use it to systematically corrupt modern civilization. They will not hesitate to plunge the whole of Christendom into wars and chaos in order that the earth should become their inheritance.'

The Coinage Act of 1873 provided for mintage of a new silver "trade dollar" of 420 grains of standard silver but it was made "legal tender' for payments not greater than five dollars. That limitation effectively demonetized silver and destroyed the Constitutional bi-metallic standard. The ensuing monetary crisis forced Congress to remonetize the dollar of 412.5 grains of standard (.90) silver by repealing (in the Band-Allison Silver Act of 1878) its legal tender limitation of five dollars. The infusion of the resultant debt-free money caused the US economy to flourish.

People could now pay the otherwise unpayable interest on their mortgages. The AB's hit back with the Gold Standard Act on 14 March 1900 which stated: `the dollar consisting of twenty-five and eight-tenths grains of gold nine-tenths fine … shall be the standard unit of value.' Thus was enshrined the golden rule: "He who owns the gold, RULES!"

The Banksters then created the panic of 1907. Congressman Charles Lindberg, Sr. said:

`The money trust caused the 1907 panic and thereby forced the Congress to create a National Monetary Commission.'
The Commission chairman, Senator Nelson Aldrich called a secret meeting of Rothschild agents. They met on 22 November 1910 and plotted the establishment of the Federal Reserve Bank at JEKYLL ISLAND Ga.

The Federal Reserve was established by the Owen-Glass Bill passed by the Senate on 22 December, 1913 and by the House of Representatives on 23 December, 1913. [Notice the dates – just before Christmas!] It was IMMEDIATELY signed into Law by President Woodrow Wilson. When the Bill passed Congressman Charles Lindbergh, Sr. said:

`This Federal Reserve Act established the most gigantic trust on Earth. When the President signs this bill the invisible government of the monetary Power will be legalized'.

Twenty years later, Congressman Mc Fadden said:
`The sack of the United States by the Fed is the greatest crime in history.'

AND, given all its ramifications for the rest of the world, SO IT IS.

NB One of the main reasons for President John F Kennedy's assassination is said to be that he was going to get rid of the Federal Reserve through Executive Order 11101 which is said to have never been rescinded*
Apparently the order had already been written, and the money printed to put the US back on the gold and silver standard before the assassination.



However, I note that Ed Griffin disputes this view saying that Executive Order 11110 said:
`Executive Order No. 10289 of September 19, 1951, as amended, is hereby further amended (a) By adding at the end of paragraph 1 thereof the following subparagraph (j): (1) "The authority to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury.'

Griffin also says that:
` EO 11110 did not order the printing of Silver Certificates. It ordered the amendment of a previous executive order so that the United States Code would authorize or "empower" the Secretary of the Treasury to issue Silver Certificates if the occasion should arise.

The occasion did arise between January 1963 and October 1964 with the issuance of 768 million of the 1957B Series, which carried the signatures of Kathryn O'Hay Granahan and C. Douglas Dillon. This was the smallest issuance since 1935, and it was the last. (See "Silver Certificate" at Please remember, however; that, EO11110 did not order the issuance of these certificates. It merely authorized the Secretary of the Treasury to do so, which is what happened.

The following additional explanation was contained in a 1996 report from the Congressional Research Service at the Library of Congress:

What E.O. 11110 did was to modify previous Executive Order 10289, delegating to the Secretary of the Treasury various powers of the President. To these delegated powers, E.O. 11110 added the power to alter the supply of Silver Certificates in circulation. Executive Order 11110, therefore, did not create any new authority for the Treasury to issue notes; it only affected who could give the order, the Secretary or the President.

The reason for the move was that the President had just signed legislation repealing the Silver Purchase Act. With this repeal, the Treasury Secretary could no longer control the issue of Silver Certificates on his own authority. However, the issuance of certificates could be controlled under the President's authority. Hence, for administrative convenience, President Kennedy issued Executive Order 11110.

Ironically, the purpose of the order and the legislation was to decrease the circulation of Silver Certificates, with Federal Reserve Notes taking their place. As economic activity grew and prices rose in the 1950s and early 1960s, the need for small-denomination currency grew at the same time that the price of silver increased. The Treasury required silver for the increasing number of Silver Certificates and coins needed for transactions. But the price of silver was rapidly approaching the point that the silver in the coins and in reserve for the certificates was worth more than the face value of the money.

To conserve on the silver needs of the Treasury, President Kennedy requested legislation needed to bring the issuance of Silver Certificates to an end and to authorize the Fed to issue small denomination notes (which it could not at that time). The Fed began issuing small denomination notes almost immediately after the legislation was passed. And in October 1964, the Treasury ceased issuing Silver Certificates altogether. If anything, E.O. 11110 enhanced Federal Reserve power and did not in any way reduce it." (See "Money and the Federal Reserve System: Myth and Reality," by G. Thomas Woodward, Specialist in Macroeconomics, Economics Division, Congressional Research Services, Library of Congress, CRS Report for Congress, No. 96-672 E, July 31, 1996.)

Let's put this issue into perspective. The proponents of the JFK Myth assert that Kennedy was assassinated because he was about to issue Silver Certificates, thereby denying the bankers their customary interest payments on the nation's currency. However, the reality was just the opposite. Previously, the President could have issued Silver Certificates on his own authority; but, with the signing of EO 11110, he delegated that authority to the Secretary of the Treasury. At that time, the Secretary of the Treasury was Douglas Dillon from a well-known and powerful banking family. That means Kennedy surrendered the power to issue Silver Certificates and gave it to a member of the banking fraternity who could do with it as he pleased "without the approval, ratification, or other action of the President." Dillon, of course, would have strong motive to preserve the dominance of Federal Reserve Notes. The theory that Kennedy was getting ready to issue Silver Certificates is without evidence or logic…
The power granted to the Secretary of Treasury to issue Silver Certificates was rescinded on September 9, 1987, by Executive Order 12608, signed by President Reagan. The official purpose of the Order was stated as "Elimination of unnecessary Executive orders and technical amendments to others." It did not affect EO 11110 directly but did affect the parent EO 10289 - along with 62 other executive orders. That is how paragraph (j) was amended to remove the power in question. This Order can be found in its entirety in the Federal Register 52 FR 34617'. See:

I have not checked Griffin's sources but assume he is accurate on this issue.


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