FEBRUARY 25 –1791 Hamilton charters the first Bank of the United States; 1836 Colt begins patenting his revolver; SPORTS: 1994 R.I.P. Jersey Joe Walcott, 1989 Jimmy Johnson becoms Dallas Cowboys head coach, 1964 Muhammad Ali beats Sonny Liston to win heavyweight championship
FEBRUARY 25
1791 – 1st BUS is chartered by Alexander Hamilton.
America was financially hurting after the Revolution; states still used their own unique form of currency. Hamilton proposed a central bank designed to last only twenty years to serve as a source for federal funds and the government’s fiscal manager.
So here we are with the same system we have to this day. First of all, the fact that a private bank is named the Bank of the United States gives it the impression, like the Federal Reserve, that it’s a government bank.
When it’s not.
So why Hamilton and his banker would buddies work to ram a bill through Congress that would create the nation’s money out of nothing by the new bank? Why so it could lend it to the federal government, all at debt-bearing interest. That means for every thousand dollars we have in the economy we have a thousand in national debt.
Sound familiar? Hamilton actually went so far as to call the national debt a blessing. Probably because the government would need to feed its bondholders. I’ll talk about the Spoils System another time.
And there it was, right there on 3rd street between Chestnut and Walnut Streets, a new building, now the oldest bank building in America. These days it’s actually the Civil War Museum of Philadelphia. That bank would in fact last 20 years. It had branches in 8 cities, was commercially successful as well as being a profitable agent to the government.
However state banks and entrepreneurs criticized the cautious bank for stifling economic development. The fact that 2/3 of the shareholders were British citizens didn’t help the bank’s image. Jeffersonian believed the bank gave preferential treatment towards commercial interests over agricultural. Within four years, by 1795, just before the Panic of 1797, the value of the new currency plummeted and inflation had risen 72%.
In 1811, the bank closed down, right on schedule. Of course the following year came the war of 1812, and more money was needed to fund a war effort, and I will get into the Second Bank of the United States another time. Meanwhile, oh! How was that Public Blessings working out for Hamilton?
As Thomas Jefferson himself said when he was Secretary of State, “As the doctrine is that a public debt is a public blessing, so they think a perpetual one is a perpetual blessing, and therefore wish to make it so large that we can never pay it off.”
Sound familiar?
1862 – Legal Tender Act is passed.
This made it possible for the government to finance the Civil War by authorizing the use of paper notes to pay the bills. The Confederate States of America had been using paper notes and it seemed to be working fine for them. The United States issued $150 million that was not backed by a similar amount of gold and silver.
They were known as greenbacks. B
y the end of the war, the government printed $500M, equivalent to $7B today. This laid down the groundwork for the creation of a permanent currency in the decades after the Civil War.
A year later…
1863 – national bank act passes in the Senate 23-21.
This would be the predecessor to the Federal Reserve! The United States in the North needed funding for its war against the Confederated States in the south, the Legal Tender Act of 1862 was passed to pump $400M in Greenbacks, the new system of paper money to be used in all debts, but folks had a hard time converting them into actual coinage. So, a reform was proposed to allow the Federal Government to control the banking system without coming up with a central bank.
It had three purposes: to create a system of national banks, a uniformed national currency, and create a secondary market for Treasury securities to financing the Civil War. These new national banks, which had nearly tax-free status, would buy government bonds at a discount with devalued Greenbacks, ten turn the bonds back to the Treasury and get a green light to to print an equal amount of their own money, called United States Bank Notes.
That’s what makes this this story so important is that we’re dealing with the consequences to this day, and so will our great children and possibly theirs as well, not to sound pessimistic or anything, but this is just how it works. The difference between the US Bank Notes and Abraham Lincoln’s Greenback US Notes, is that the Greenbacks were issued debt-free and in the public interest.
These days, the US Bank Notes, which is a debt based currency that was issued to make the banks rich, are called Federal Reserve Notes. Blips on a screen, folks. That’s all it is. Mic drop.
2004 – Passion of the Christ is released.
I believe this was about either the last 44 hours of Jesus’s life or the last 12, I don’t speak Latin so I couldn’t tell. Based on Catherine Emmerich’s diaries from the 1700s, the movie depicts the betrayel ofJudas, his trial in front of Pontious Pilate, his carrying of the cross to Golgotha with Roman soldiers bonstantly beats and then crucifies him. This was Mel Gibson’s first crack at a director, and he put his heart and soul into filming it. It was a huge box office hit, but Gibson would get the end of all the criiticsm. The Anti-Defamation League pointed out that this movie could fuel hatred, bigotryand anti-semitism, and that Jews should be blamed for Jesus’s death. Meanwhile, Christians criticized the movie byssaying it wasn’t even based on the New Testament. Mel Gibson would prove his anti-semitism in 2006 when he was pulled over for a driving under the influence and made anti-semitism remarks to his arresting officer. This came out in the press and Gibson had to acknowledge it.
1836 – Joice Heth gets an autopsy. She was a former slave who became, as her advertisement read, unquestionably the most astonishing and interesting curiosity in the world~! She was sold to PT Barnum, yes the greatest show on earth guy, and he marketed Joyce as being the slave of Augustine Washington, who was George’s daddy. Joice, you see was 161 years old and she put clothes on George when he was an infant, then led our heroic fathers to glory, to victory, to freedom! So there she was. Blind and almost paralyzed, except for her right arm. Rumor has it that Heth was raking in $1500 a week, and Barnum’s career was on full speed. She became sensationalized in the press and people began doubting her real age. Consequently, Barnam promised that upon her dead an autopsy would revlea her true age. So when she died, the dissection took place at New York’s City Saloon.
Over a thousand people showed up paying $.50 each. The autopsy revealed that she was a fraud and she was about 80 years old. Barnum accused the surgeon who performed the auto;sy as being incompetent, but later admitted to the hoax.
1994 Jersey Joe Walcott died – heavyweight boxing champion. 1989 Dallas Cowboys fire 29 year veteran Tom Landry – Jerry Jones bought the team and hired Jimmy Johnson. 1964 Cassius Clay (Muhammad Ali) beats Sonny Liston in seven rounds to win the heavyweight championship