The Epochal Consequences Of Woodrow Wilson’s War by David Stockman

Found at: David Stockman's Corner

The Epochal Consequences Of Woodrow Wilson’s War
Remarks by David Stockman
Committee for the Republic
Washington DC January 20, 2015

My humble thesis tonight is that the entire 20^th Century was a giant mistake.
And that you can put the blame for this monumental error squarely on Thomas Woodrow Wilson——-a megalomaniacal madman who was the very worst President in American history……..well, except for the last two.
His unforgiveable error was to put the United States into the Great War for utterly no good reason of national interest. The European war posed not an iota of threat to the safety and security of the citizens of Lincoln NE, or Worcester MA or Sacramento CA. In that respect, Wilson’s putative defense of “freedom of the seas” and the rights of neutrals was an empty shibboleth; his call to make the world safe for democracy, a preposterous pipe dream.
Actually, his thinly veiled reason for plunging the US into the cauldron of the Great War was to obtain a seat at the peace conference table——so that he could remake the world in response to god’s calling.
But this was a world about which he was blatantly ignorant; a task for which he was temperamentally unsuited; and an utter chimera based on 14 points that were so abstractly devoid of substance as to constitute mental play dough.
Or, as his alter-ego and sycophant, Colonel House, put it:  Intervention positioned Wilson to play “The noblest part that has ever come to the son of man”.  America thus plunged into Europe’s carnage, and forevermore shed its century-long Republican tradition of anti-militarism and non-intervention in the quarrels of the Old World.
Needless to say, there was absolutely nothing noble that came of Wilson’s intervention. It led to a peace of vengeful victors, triumphant nationalists and avaricious imperialists—-when the war would have otherwise ended in a bedraggled peace of mutually exhausted bankrupts and discredited war parties on both sides.
By so altering the course of history, Wilson’s war bankrupted Europe and midwifed 20^th century totalitarianism in Russia and Germany.
These developments, in turn, eventually led to the Great Depression, the Welfare State and Keynesian economics, World War II, the holocaust, the Cold War, the permanent Warfare State and its military-industrial complex.
They also spawned Nixon’s 1971 destruction of sound money, Reagan’s failure to tame Big Government and Greenspan’s destructive cult of monetary central planning.
So, too, flowed the Bush’s wars of intervention and occupation,  their fatal blow to the failed states in the lands of Islam foolishly created by the imperialist map-makers at Versailles and the resulting endless waves of blowback and terrorism now afflicting the world.
And not the least of the ills begotten in Wilson’s war is the modern rogue regime of central bank money printing, and the Bernanke-Yellen plague of bubble economics which never stops showering the 1% with the monumental windfalls from central bank enabled speculation.
Consider the building blocks of that lamentable edifice.
First, had the war ended in 1917 by a mutual withdrawal from the utterly stalemated trenches of the Western Front, as it was destined to, there would have been no disastrous summer offensive by the Kerensky government, or subsequent massive mutiny in Petrograd that enabled Lenin’s flukish seizure of power in November. That is, the 20^th century would not have been saddled with a Stalinist nightmare or with a Soviet state that poisoned the peace of nations for 75 years, while the nuclear sword of Damocles hung over the planet.
Likewise, there would have been no abomination known as the Versailles peace treaty; no “stab in the back” legends owing to the Weimar government’s forced signing of the “war guilt” clause; no continuance of England’s brutal post-armistice blockade that delivered Germany’s women and children into starvation and death and left a demobilized 3-million man army destitute, bitter and on a permanent political rampage of vengeance.
So too, there would have been no acquiescence in the dismemberment of Germany and the spreading of its parts and pieces to Poland, Czechoslovakia, Denmark, France, Austria and Italy—–with the consequent revanchist agitation that nourished the Nazi’s with patriotic public support in the rump of the fatherland.
Nor would there have materialized the French occupation of the Ruhr and the war reparations crisis that led to the destruction of the German middle class in the 1923 hyperinflation; and, finally, the history books would have never recorded the Hitlerian ascent to power and all the evils that flowed thereupon.
In short, on the approximate 100^th anniversary of Sarajevo, the world has been turned upside down.
The war of victors made possible by Woodrow Wilson destroyed the liberal international economic order—that is, honest money, relatively free trade, rising international capital flows and rapidly growing global economic integration—-which had blossomed during the 40-year span between 1870 and 1914.
That golden age had brought rising living standards, stable prices, massive capital investment, prolific technological progress and pacific relations among the major nations——a condition that was never equaled, either before or since.
Now, owing to Wilson’s fetid patrimony, we have the opposite: A world of the Warfare State, the Welfare State, Central Bank omnipotence and a crushing burden of private and public debts. That is, a thoroughgoing statist regime that is fundamentally inimical to capitalist prosperity, free market governance of economic life and the flourishing of private liberty and constitutional safeguards against the encroachments of the state.
So Wilson has a lot to answer for—-and my allotted 30 minutes can hardly accommodate the full extent of the indictment. But let me try to summarize his own “war guilt” in eight major propositions——a couple of which my give rise to a disagreement or two.
Proposition #1:  Starting with the generic context——the Great War was about nothing worth dying for and engaged no recognizable principle of human betterment. There were many blackish hats, but no white ones.
Instead, it was an avoidable calamity issuing from a cacophony of political incompetence, cowardice, avarice and tomfoolery.
Blame the bombastic and impetuous Kaiser Wilhelm for setting the stage with his foolish dismissal of Bismarck in 1890, failure to renew the Russian reinsurance treaty shortly thereafter and his quixotic build-up of the German Navy after the turn of the century.
Blame the French for lashing themselves to a war declaration that could be triggered by the intrigues of a decadent court in St. Petersburg where the Czar still claimed divine rights and the Czarina ruled behind the scenes on the hideous advice of Rasputin.
Likewise, censure Russia’s foreign minister Sazonov for his delusions of greater Slavic grandeur that had encouraged Serbia’s provocations after Sarajevo; and castigate the doddering emperor Franz Joseph for hanging onto power into his 67^th year on the throne and thereby leaving his crumbling empire vulnerable to the suicidal impulses of General Conrad’s war party.
So too, indict the duplicitous German Chancellor, Bethmann-Hollweg, for allowing the Austrians to believe that the Kaiser endorsed their declaration of war on Serbia; and pillory Winston Churchill and London’s war party for failing to recognize that the Schlieffen Plan’s invasion through Belgium was no threat to England, but a unavoidable German defense against a two-front war.
But after all that—- most especially don’t talk about the defense of democracy, the vindication of liberalism or the thwarting of Prussian autocracy and militarism.
The British War party led by the likes of Churchill and Kitchener was all about the glory of empire, not the vindication of democracy; France’ principal war aim was the revanchist drive to recover Alsace-Lorrain—–mainly a German speaking territory for 600 years until it was conquered by Louis XIV.
In any event, German autocracy was already on its last leg as betokened by the arrival of universal social insurance and the election of a socialist-liberal majority in the Reichstag on the eve of the war; and the Austro-Hungarian, Balkan and Ottoman goulash of nationalities, respectively, would have erupted in interminable regional conflicts, regardless of who won the Great War.
In short, nothing of principle or higher morality was at stake in the outcome.
Proposition # 2:  The war posed no national security threat whatsoever to the US.  Presumably, of course, the danger was not the Entente powers—but Germany and its allies.
But how so?  After the Schlieffen Plan offensive failed on September 11, 1914, the German Army became incarcerated in a bloody, bankrupting, two-front land war that ensured its inexorable demise. Likewise, after the battle of Jutland in May 1916, the great German surface fleet was bottled up in its homeports—-an inert flotilla of steel that posed no threat to the American coast 4,000 miles away.
As for the rest of the central powers, the Ottoman and Hapsburg empires already had an appointment with the dustbin of history. Need we even bother with the fourth member—-that is, Bulgaria?
Proposition #3:  Wilson’s pretexts for war on Germany—–submarine warfare and the Zimmerman telegram—-are not half what they are cracked-up to be by Warfare State historians.
As to the so-called freedom of the seas and neutral shipping rights, the story is blatantly simple. In November 1914, England declared the North Sea to be a “war zone”; threatened neutral shipping with deadly sea mines; declared that anything which could conceivably be of use to the German army—directly or indirectly—-to be contraband that would be seized or destroyed; and announced that the resulting blockade of German ports was designed to starve it into submission.
A few months later, Germany announced its submarine warfare policy designed to the stem the flow of food, raw materials and armaments to England in retaliation.  It was the desperate antidote of a land power to England’s crushing sea-borne blockade.
Accordingly, there existed a state of total warfare in the northern European waters—-and the traditional “rights” of neutrals were irrelevant and disregarded by both sides. In arming merchantmen and stowing munitions on passenger liners, England was hypocritical and utterly cavalier about the resulting mortal danger to innocent civilians—–as exemplified by the 4.3 million rifle cartridges and hundreds of tons of other munitions carried in the hull of the Lusitania.
Likewise, German resort to so-called “unrestricted submarine warfare” in February 1917 was brutal and stupid, but came in response to massive domestic political pressure during what was known as the “turnip winter” in Germany.  By then, the country was starving from the English blockade—literally.
Before he resigned on principle in June 1915, Secretary William Jennings Bryan got it right. Had he been less diplomatic he would have said never should American boys be crucified on the cross of Cunard liner state room so that a few thousand wealthy plutocrat could exercise a putative “right” to wallow in luxury while knowingly cruising into in harm’s way.
As to the Zimmerman telegram, it was never delivered to Mexico, but was sent from Berlin as an internal diplomatic communique to the German ambassador in Washington, who had labored mightily to keep his country out of war with the US, and was intercepted by British intelligence, which sat on it for more than a month waiting for an opportune moment to incite America into war hysteria.
In fact, this so-called bombshell was actually just an internal foreign ministry rumination about a possible plan to approach the Mexican president regarding an alliance in the event that the US first went to war with Germany.
Why is this surprising or a casus belli?  Did not the entente bribe Italy into the war with promises of large chunks of Austria? Did not the hapless Rumanians finally join the entente when they were promised Transylvania?  Did not the Greeks bargain endlessly over the Turkish territories they were to be awarded for joining the allies?  Did  not Lawrence of Arabia bribe the Sherif of Mecca with the promise of vast Arabian lands to be extracted from the Turks?
Why, then, would the German’s—-if at war with the USA—- not promise the return of Texas?
Proposition #4:  Europe had expected a short war, and actually got one when the Schlieffen plan offensive bogged down 30 miles outside of Paris on the Marne River in mid-September 1914.  Within three months, the Western Front had formed and coagulated into blood and mud——a ghastly 400 mile corridor of senseless carnage, unspeakable slaughter and incessant military stupidity that stretched from the Flanders coast across Belgium and northern France to the Swiss frontier.
The next four years witnessed an undulating line of trenches,  barbed wire entanglements, tunnels, artillery emplacements and shell-pocked scorched earth that rarely moved more than a few miles in either direction, and which ultimately claimed more than 4 million casualties on the Allied side and 3.5 million on the German side.
If there was any doubt that Wilson’s catastrophic intervention converted a war of attrition, stalemate and eventual mutual exhaustion into Pyrrhic victory for the allies, it was memorialized in four developments during 1916.
In the first, the Germans wagered everything on a massive offensive designed to overrun the fortresses of Verdun——the historic defensive battlements on France’s northeast border that had stood since Roman times, and which had been massively reinforced after the France’s humiliating defeat in Franco-Prussian War of 1870.
But notwithstanding the mobilization of 100 divisions, the greatest artillery bombardment campaign every recorded until then, and repeated infantry offensives from February through November that resulted in upwards of 400,000 German casualties, the Verdun offensive failed.
The second event was its mirror image—-the massive British and French offensive known as the battle of the Somme, which commenced with equally destructive artillery barrages on July 1, 1916 and then for three month sent waves of infantry into the maws of German machine guns and artillery. It too ended in colossal failure, but only after more than 600,000 English and French casualties including a quarter million dead.
In between these bloodbaths, the stalemate was reinforced by the naval showdown at Jutland that cost the British far more sunken ships and drowned sailors than the Germans, but also caused the Germans to retire their surface fleet to port and never again challenge the Royal Navy in open water combat.
Finally, by year-end 1916 the German generals who had destroyed the Russian armies in the East with only a tiny one-ninth fraction of the German army—Generals Hindenburg and Ludendorff —were given command of the Western Front. Presently, they radically changed Germany’s war strategy by recognizing that the growing allied superiority in manpower, owing to the British homeland draft of 1916 and mobilization of forces from throughout the empire, made a German offensive breakthrough will nigh impossible.
The result was the Hindenburg Line—a military marvel based on a checkerboard array of hardened pillbox machine gunners and maneuver forces rather than mass infantry on the front lines, and an intricate labyrinth of highly engineered tunnels, deep earth shelters, rail connections, heavy artillery and flexible reserves in the rear. It was also augmented by the transfer of Germany’s eastern armies to the western front—-giving it 200 divisions and 4 million men on the Hindenburg Line.
This precluded any hope of Entente victory. By 1917 there were not enough able-bodied draft age men left in France and England to overcome the Hindenburg Line, which, in turn,  was designed to bleed white the entente armies led by butchers like Generals Haig and Joffre until their governments sued for peace.
Thus, with the Russian army’s disintegration in the east and the stalemate frozen indefinitely in the west by early 1917, it was only a matter of months before mutinies among the French lines, demoralization in London, mass starvation and privation in Germany and bankruptcy all around would have led to a peace of exhaustion and a European-wide political revolt against the war makers.
Wilson’s intervention thus did not remake the world. But it did radically re-channel the contours of 20^th century history. And, as they say, not in a good way.
Proposition #5:  Wilson’s epochal error not only produced the abomination of Versailles and all its progeny, but also the transformation of the Federal Reserve from a passive “banker’s bank” to an interventionist central bank knee-deep in Wall Street, government finance and macroeconomic management.
This, too, was a crucial historical hinge point because Carter Glass’ 1913 act forbid the new Reserve banks to even own government bonds; empowered them only to passively discount for cash good commercial credits and receivables brought to the rediscount window by member banks; and contemplated no open market interventions in debt markets or any remit with respect to GDP growth, jobs, inflation, housing or all the rest of modern day monetary central planning targets.
In fact, Carter Glass’ “banker’s bank” didn’t care whether the growth rate was positive 4%, negative 4% or anything in-between; its modest job was to channel liquidity into the banking system in response to the ebb and flow of commerce and production.
Jobs, growth and prosperity were to remain the unplanned outcome of millions of producers, consumers, investors, savers, entrepreneurs and speculators operating on the free market, not the business of the state.
But Wilson’s war took the national debt from about $1 billion or $11 per capita—–a level which had been maintained since the Battle of Gettysburg—-to $27 billion, including upwards of $10 billion re-loaned to the allies to enable them to continue the war. There is not a chance that this massive eruption of Federal borrowing could have been financed out of domestic savings in the private market.
So the Fed charter was changed owing to the exigencies of war to permit it to own government debt and to discount private loans collateralized by Treasury paper.
In due course, the famous and massive Liberty Bond drives became a glorified Ponzi scheme. Patriotic Americans borrowed money from their banks and pledged their war bonds; the banks borrowed money from the Fed, and re-pledged their customer’s collateral.  The Reserve banks, in turn, created the billions they loaned to the commercial banks out of thin air, thereby pegging interest rates low for the duration of the war.
When Wilson was done saving the world, America had an interventionist central bank schooled in the art of interest rate pegging and rampant expansion of fiat credit not anchored in the real bills of commerce and trade; and its incipient Warfare and Welfare states had an agency of public debt monetization that could permit massive government spending without the inconvenience of high taxes on the people or the crowding out of business investment by high interest rates on the private market for savings.
Proposition # 6:   By prolonging the war and massively increasing the level of debt and money printing on all sides, Wilson’s folly prevented a proper post-war resumption of the classical gold standard at the pre-war parities.
This failure of resumption, in turn, paved the way for the breakdown of monetary order and world trade in 1931—–a break which turned a standard post-war economic cleansing into the Great Depression, and a decade of protectionism, beggar-thy-neighbor currency manipulation and ultimately rearmament and statist dirigisme.
In essence, the English and French governments had raised billions from their citizens on the solemn promise that it would be repaid at the pre-war parities; that the war bonds were money good in gold.
But the combatant governments had printed too much fiat currency and inflation during the war, and through domestic regimentation, heavy taxation and unfathomable combat destruction of economic life in northern France had drastically impaired their private economies.
Accordingly, under Churchill’s foolish leadership England re-pegged to gold at the old parity in 1925, but had no political will or capacity to reduce bloated war-time wages, costs and prices in a commensurate manner, or to live with the austerity and shrunken living standards that honest liquidation of its war debts required.
At the same time, France ended up betraying its war time lenders, and re-pegged the Franc two years later at a drastically depreciated level. This resulted in a spurt of beggar-thy-neighbor prosperity and the accumulation of pound sterling claims that would eventually blow-up the London money market and the sterling based “gold exchange standard” that the Bank of England and British Treasury had peddled as a poor man’s way back on gold.
Yet under this “gold lite” contraption, France, Holland, Sweden and other surplus countries accumulated huge amounts of sterling liabilities in lieu of settling their accounts in bullion—–that is, they loaned billions to the British. They did this on the promise and the confidence that the pound sterling would remain at $4.87 per dollar come hell or high water—-just as it had for 200 years of peacetime before.
But British politicians betrayed their promises and their central bank creditors September 1931 by suspending redemption and floating the pound——-shattering the parity and causing the decade-long struggle for resumption of an honest gold standard to fail.  Depressionary contraction of world trade, capital flows and capitalist enterprise inherently followed.
Proposition # 7:  By turning America overnight into the granary, arsenal and banker of the Entente, the US economy was distorted, bloated and deformed into a giant, but unstable and unsustainable global exporter and creditor.
During the war years, for example, US exports increased by 4X and GDP soared from $40 billion to $90 billion.  Incomes and land prices soared in the farm belt, and steel, chemical, machinery, munitions and ship construction boomed like never before—–in substantial part because Uncle Sam essentially provided vendor finance to the bankrupt allies in desperate need of both military and civilian goods.
Under classic rules, there should have been a nasty correction after the war—-as the world got back to honest money and sound finance.  But it didn’t happen because the newly unleashed Fed fueled an incredible boom on Wall Street and a massive junk bond market in foreign loans.
In today economic scale, the latter amounted to upwards of $2 trillion and, in effect, kept the war boom in exports and capital spending going right up until 1929. Accordingly, the great collapse of 1929-1932 was not a mysterious failure of capitalism; it was the delayed liquidation of Wilson’s war boom.
After the crash, exports and capital spending plunged by 80% when the foreign junk bond binge ended in the face of massive defaults abroad; and that, in turn, led to a traumatic liquidation of industrial inventories and a collapse of credit fueled purchases of consumer durables like refrigerators and autos. The latter, for example, dropped from 5 million to 1.5 million units per year after 1929.
Proposition # 8:  In short, the Great Depression was a unique historical event owing to the vast financial deformations of the Great War——deformations which were drastically exaggerated by its prolongation from Wilson’s intervention and the massive credit expansion unleashed by the Fed and Bank of England during and after the war.
Stated differently, the trauma of the 1930s was not the result of the inherent flaws or purported cyclical instabilities of free market capitalism; it was, instead, the delayed legacy of the financial carnage of the Great War and the failed 1920s efforts to restore the liberal order of sound money, open trade and unimpeded money and capital flows.
But this trauma was thoroughly misunderstood, and therefore did give rise to the curse of Keynesian economics and did unleash the politicians to meddle in virtually every aspect of economic life, culminating in the statist and crony capitalist dystopia that has emerged in this century.
Needless to say, that is Thomas Woodrow Wilson’s worst sin of all.

Dr.T's Response

I liked this response at There Are No Socialists - June 25, 2011 - 6:56 pm - by Victor Davis Hanson

Found through The socialisthistorical end game - Vox Popoli(VoxDay)

Here is Dr. T's fairly decent summary of how the US condition got to where it is today:

Dr. T's response(click for link to original):

“This country has been through some pretty tough times…. In all instances we’ve come through pretty well.”

Not in my opinion. We fight the British in a revolution about taxation without representation and form a new nation. Less than 15 years later the federal government imposes a tax solely on whiskey (and not on any other beverages, alcoholic or not, in violation of the equal taxation clause in our Constitution). Those who opposed the tax were met with federal force.

Our nation supposedly was formed as a federation of sovreign states. Sovreignty includes the right to make or break alliances. However, Lincoln and others decided that not only was secession bad, but that it called for war to force those states back into the USA. During that war, we violated the Constitution some more by suspending habeas corpus and initiating a federal military draft, which is not one of the federal government’s enumerated powers.

We had no business getting involved in the Great War, but we hadn’t had any action since the Spanish-American War (that we caused), and so we drafted some more men to get killed in trenches in Europe.

We experienced the Great Depression that Hoover and Roosevelt made worse with their multiple rounds of stimulus spending. Roosevelt repeatedly violated the Constitution, tried to pack the Supreme Court, and began the welfare state that plagues us today and that may sink us soon.

Roosevelt desperately wished to help the British in WWII, but he couldn’t get Congress or the people behind that idea. Instead, he provoked Japan at every opportunity, knowing that if Japan and the US went to war, Japan’s treaty with Germany would result in Germany declaring war on the US. Once that happened, the vast majority of our war effort went towards Europe despite the fact that the Japanese were the ones who had attacked us and who were capturing American territories, protectorates, and allies in the Pacific. We violated the Constitution again and took the homes of Japanese-American citizens and forced them to live in camps. We did not do the same to German-Americans or Italian-Americans.

The Vietnam conflict showed that we don’t have to declare war to draft men and send them halfway around the world to fight and die. More than fifty thousand died to delay the fall of South Vietnam to the communist North. The only good to come from this war was the realization that a smaller volunteer military works better than a military comprised mostly of conscripts. (Note that we still haven’t given up on the draft. It is only suspended.)

Johnson decided to distract us from racial conflict and anti-war sentiment by creating Great Society Ponzi schemes. The full effects of that will be felt within the next twenty years as we follow the course taken by Greece.

The 1960s featured free love and mind-altering drugs. We decided to address the latter by starting a War on Drugs in the 1970s that has not ended. It has given us the largest prison population (in both raw numbers and percentage of adults imprisoned) of any nation. The War on Drugs also featured further degradation of the Bill of Rights, with the 4th Amendment now almost worthless as your property can be seized without a warrant or without you being charged with a crime.

We follow all that with the massive overresponse to the terrorist attacks of 9/11/2001, the loss of more liberties, the further trashing of the Bill of Rights, the massive expansion of government, and the deliberate infliction of public indignities and sexual molestations that provide no security benefits but show the public that our massive federal government can do almost it wants.

Yep, we’ve weathered our troubles so well that I’m emigrating as soon as possible.

FIAT Money is the Root of All Evil

HT/Link:Hawaiian libertarian

Of the innumerable evils which usually brings the decadence of kingdoms, principalities, and republics, the four greatest are, in my opinion: war, immorality, infertility of the land, and the debasement of money. For the first three, the evidence is obvious. But for the fourth, which concerns money, except for a few men of intellect, few people ever see it. Why? Because it is not in one fell swoop, but gradually, by a somewhat latent character, it ruins the state.
–Copernicus


If the Nation can issue a dollar bond it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the People.
–Thomas Alva Edison

Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.
–George Washington

No state shall emit bills of credit, make any thing but gold and silver coin a tender in payment of debts, coin money.
–Article One, Section Ten, United States Constitution

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.
— Frederic Bastiat, The Law

Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money.
–Daniel Webster

You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.
–George Bernard Shaw

The directors of such companies (joint-stock corporations), however, being the managers rather of other people’s money than of their own, it cannot well be expected, that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own …. Negligence and profusion, therefore, must always prevail, more or less in the management of the affairs of such a company?
–Adam Smith, The Wealth on Nations, 1776

If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered. –Thoms Jefferson in 1802 in a letter to then Secretary of the Treasury, Albert Gallatin

Fair dealing leads to greater profit in the end.
–Homer’s Odyssey

Thou shalt not steal.
–Moses, Exodus

The boom produces impoverishment. But still more disastrous are its moral ravages. It makes people despondent and dispirited. The more optimistic they were under the illusory prosperity of the boom, the greater is their despair and their feeling of frustration.
–Ludwig von Mises

The authors of the Constitution were very much aware of the dangers of inflation and the need for commodity money. Destruction of the continental dollar was vivid in their minds. The journals of the Continental Congress noted that “paper currency… is multiplied beyond the rules of good policy. No truth being more evident, than that where the quantity of money. . . exceeds what is useful as a medium of commerce, its comparative value must be proportionately reduced.” Further, inflations “tend to the depravity of morals, and decay of the public faith, injustice to individuals, and the destruction of the honor, safety, and independence of the United States.”
–R. Paul, End The Fed, The Constitutional Case, p. 165

If you are in debt, you are a slave to that debt.
–Benjamin Franklin

The second vice is lying, the first is running in debt. . . Lying rides upon debt’s back.
–Benjamin Franklin

Paper money eventually returns to its intrinsic value—zero.
—Voltaire

The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.
–Ernest Hemingway

If ever again our nation stumbles upon unfunded paper, it shall surely be like death to our body politic. This country will crash.
–George Washington

To emit an unfunded paper as the sign of value ought not to continue a formal part of the Constitution, nor even hereafter to be employed; being, in its nature, pregnant with abuses, and liable to be made the engine of imposition and fraud; holding out temptations equally pernicious to the integrity of government and to the morals of the people.
–Alexander Hamilton

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. This issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered. I hope we shall crush in its birth the aristocracy of the moneyed corporations which already dare to challenge our Government to a trial of strength and bid defiance to the laws of our country.
–Thomas Jefferson

The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.
–John Kenneth Galbraith, Money: Whence it came, where it went – 1975, p15

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. . . This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.
–Alan Greenspan, Gold and Economic Freedom

The bold effort the present (central) bank had made to control the government … are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it. –Andrew Jackson

I am one of those who do not believe that a national debt is a national blessing, but rather a curse to a republic; inasmuch as it is calculated to raise around the administration a moneyed aristocracy dangerous to the liberties of the country. –Andrew Jackson

Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves.
–Andrew Jackson

The process by which banks create money is so simple that the mind is repelled. –John Kenneth Galbraith, Money: Whence it came, where it went – 1975, p29

Is there any reason why the American people should be taxed to guarantee the debts of banks, any more than they should be taxed to guarantee the debts of other institutions, including merchants, the industries, and the mills of the country? –Senator Carter Glass,
Author of the Banking Act of 1933

I see in the near future a crisis approach which unnerves me and cause me to tremble for the safety of my country. Corporations (of banking) have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic destroyed.
–Abraham Lincoln

History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance.
–James Madison

All the perplexities, confusion and distresses in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from downright ignorance of the nature of coin, credit, and circulation.
–John Adams

The gold standard has one tremendous virtue: the quantity of the money supply, under the gold standard, is independent of the policies of governments and political parties. This is its advantage. It is a form of protection against spendthrift governments. . . The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard. –Ludwig von Mises

I’ll tell you what I think about the way
This city treats her soundest men today;
By a coincidence more sad than funny,
It’s very like the way we treat our money.
The noble silver drachma that of old we were
So proud of, and the recent gold coins that
Rang true, clean-stamped and worth their weight
Throughout the world, have ceased to circulate.
Instead the purses of Athenian shoppers
Are full of shoddy silver-plated coppers
Just so, when men are needed by the nation,
The best have been withdrawn from circulation.
—Aristophanes, The Frogs, 400 BC

Give me control of a nation’s currency and I care not who makes the laws.
–Baron Rothschild

With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.
–F.A. Hayek

Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency. . . Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose. –John Maynard Keynes

We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver; no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.
–Daniel Webster, speech in the Senate, 1833

You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out.
–Daniel Webster (upon evicting from the Oval Office a delegation of international bankers discussing the Bank Renewal Bill, 1832)