Forum Post: Alexander Hamilton, unwitting Pandora of American Capitalism, on the first Wall Street bubble in US history
Posted 12 years ago on Jan. 4, 2012, 7:27 p.m. EST by Bloom
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“I observe that certain characters continue to sport with the Market & with the distresses of their fellow Citizens. ‘Tis time there should be a line of separation between honest Men & knaves; between respectable stockholders and dealers in the funds, and mere unprincipled Gamblers. Public infamy must restrain what the law cannot.
This spirit must be cultivated among the friends of good government and good principles. The relaxations in a just system of thinking, which have been produced by an excess of the spirit of speculation must be corrected. And Contempt and Neglect must attend those who manifest that they have no principle but to get money."
— Alexander Hamilton to Philip Livingston, April 2, 1792, in which he justifies keeping his cousin William Duer - who caused an economic bubble through speculation activities - in prison.
Thanks. I always like quotes from the founding fathers that concern the general welfare of the American people.
Hamilton also developed the idea of a national bank which could make credit available for economic development at low interest rates to be paid back over decades.
This was possible because a national bank did not have to pay profits to private owners, and instead benefited the entire society through economic development and job creation.
The First National Bank of the United States was privately owned - just like the Federal Reserve. These banksters are clever . . .
In 1790, Alexander Hamilton who favored Central Banking urged the Congress to charter a privately owned company to have the sole responsibility of issuing currency in order to handle the country's financial situation. His plan called for Congress to create a Central Banking system with a main office in Philadelphia and smaller branches located in important cities throughout the country. It would be used to deposit government funds and tax collections and to issue bank notes to increase the money supply needed to finance the country's growth. This Bank of the United States would have a capital stock plan of $10 million, with 4/5's (80%) to be owned by private investors and 1/5 (20%) by the U.S. Government. It would be administered by a President and a 25 member Board of Directors, with 20 to be elected by the stockholders and 5 appointed by the government.
Central banking was initiated by international banker William Paterson in 1691 when he obtained the Charter for the Bank of England which put the control of England's money in a privately owned company which had the right to issue notes payable on demand against the security of bank loans to the crown. One of their first transactions was to loan 1.2 million pounds at 8% interest to William of Orange to help the King pay the cost of his war with Louis XIV of France. Paterson said: "The bank hath benefit of interest on all monies which it creates out of nothing." Reginald McKenna, British Chancellor of the Exchequer (or Treasury), said 230 years later:
"The banks can and do create money ... And they who control the credit of the nation direct the policy of governments and hold in the hollow of their hands the destiny of the people."
Hamilton's elitist views and real purpose for wanting Central Banking came to light, when he wrote:
"All communities divide themselves into the few and the many. The first are rich and well-born, the other the mass of the people. The people are turbulent and changing; they seldom judge or determine right."
In 1791, Thomas Jefferson said:
"To preserve our independence, we must not let our rulers load us with perpetual debt. If we run into such debts, we (will then) be taxed in our meat and our drink, in our necessities and in our comforts, in our labor and in our amusements. If we can prevent the government from wasting the labor of the people under the pretense of caring for them, they (will) be happy."
Even though Thomas Jefferson and James Madison (later to be our 4th President, 1809-17) opposed the Bill, George Washington signed it into law on February 25, 1791. Alexander Hamilton became a very rich man. He and Aaron Burr helped establish the Manhattan Company in New York City, which developed into a very prosperous banking institution. It would later be controlled by the Warburg-Kuhn-Loeb interests, and in 1955 it merged with Rockefeller's Chase Bank to create the Chase Manhattan Bank.
Hamilton WAS an elitist in the sense that he thought very little of public opinion. He thought the government should be run by experts, and that uninformed regular people should vote, and then shut up and let their leaders, who would supposedly be more intelligent and virtuous than them, do the job of leading.
However, at no point in his entire life was Hamilton "a very rich man." Nor did he have much to do with the Manhattan Company. He promoted the bank because he was an ideologue who truly believed in strong central government and industry, not because he was personally profiting from it.
Alexander Hamilton, an agent of European bankers, had immigrated to the colonies in 1772 from the British colony of Nevis on the Leeward Islands in the British West Indies. He married the daughter of Gen. Philip Schuyler, one of the most influential families of New York. In 1789 he was appointed Secretary of the Treasury [by Washington]. Hamilton and Robert Morris successfully convinced the new Congress not to take this power literally, enabling the Bank of North America to be established in 1781 which was similar to the Bank of England. At the time, America had a foreign debt of $12,000 (in money borrowed from Spain, France, Holland, and private interests in Germany) and a domestic debt of $42,000.
Central banking was initiated by international banker William Paterson in 1691 when he obtained the Charter for the Bank of England which put the control of England's money in a privately owned company which had the right to issue notes payable on demand against the security of bank loans to the crown. One of their first transactions was to loan 1.2 million pounds at 8% interest to William of Orange to help the King pay the cost of his war with Louis XIV of France. Paterson said: "The bank hath benefit of interest on all monies which it creates out of nothing." Reginald McKenna, British Chancellor of the Exchequer (or Treasury), said 230 years later:
"The banks can and do create money ... And they who control the credit of the nation direct the policy of governments and hold in the hollow of their hands the destiny of the people."
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You need to send this quote to the guy saying greed is good, and let him be informed by a real American thinker. This is a very good statement, and it illustrates that there is nothing new under the sun. I just wish our politicians would take his advice.
nice find !
William Duer created a 1792 speculative bubble in bank stocks prompted the first federal financial system bailout.
A TRUE GEM!
It reminds me of a quotation by Thomas Jefferson:
"I hope we shall CRUSH in its birth the aristocracy of our moneyed corporations which dare already to challenge our government to a trial by strength, and bid defiance to the laws of our country." (Excerpt from a letter to George Logan, Nov. 12th, 1816.)
These kinds of quotations - and there are many, many more, all the way down to Eisenhower's farewell speech - demonstrats rather eloquently how concerned our forefathers were about the POWER OF BIG MONEY.
http://www.youtube.com/watch?v=EewGMBOB4Gg
http://www.youtube.com/watch?v=4Z9WVZddH9w
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