Legend of the Greenbacks
Lincoln was re-elected President in 1864 and, according to many over the years, had made it plain that when the war was finished, his next war would be with the power of the banks and that these Banking Acts would not stand. There is a smattering of quotes that go around that seem to make this clear. The trouble is, not one of the utterings of Lincoln on this subject can be authenticated, and some can be shown to be fraudulent. And when all these marvellous killer quotes are removed, along with colourful corroborative killer quotes from other great figures that have also been fabricated, there’s not much that we could find that indicates that these were Lincoln’s intentions. There’s a wonderful editorial from The London Times viciously attacking Lincoln’s interest-free money, but it just doesn’t exist.
Search as we have done in a surfing, skimming sort of way, but with some persistence, we can’t find a single satisfactory quote from Lincoln that even suggests that he really did see matters the way people think he did.
But it is darned difficult, because if someone says that a quote isn’t true, that can’t necessarily be trusted either. And with recent rules about material being removed from the Web, we can’t help wondering if such rules can and have been used to remove references from the Net.
We saw Webster Kehr say this:
The passage appears in a letter from Lincoln to Col. William F. Elkins, Nov. 21, 1864, Hertz II, 954, in Archer H. Shaw, The Lincoln Encyclopedia (New York: Macmillan, 1950), p. 40
(Note: There is a web site that claims this is not a valid quote, so I looked it up myself – it is valid)
The money powers prey upon the nation in times of peace and conspire against it in times of adversity. The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies all who question their methods or throw light upon their crimes. I have two great enemies, the Southern Army in front of me and the bankers in the rear. Of the two, the one at my rear is my greatest foe.
That’s well said and would really be a killer quote. Colonel Elkins? The Lincoln Encyclopaedia? We’ve heard that the credible sounding Col. Elkins is a dud, maybe The Lincoln Encyclopadia is wrong.
The clincher in all this for many theorists – fitting with the whole narrative that Lincoln was intending to repeal these Acts at the end of the war and run the nation on debt-free greenbacks - is that when the war ended in 1865, Lincoln was shot dead just five days later.
Lincoln’s killer shouted out something about avenging the South, but that was a cunning ruse; banking interests had Lincoln killed, to kill the greenbacks and preserve their own power.
There’s actually quite a story to support the idea, involving a certain unguarded bridge, known associates of banks, and even the anguished cries of Mrs Lincoln on hearing of her husband’s murder provide a clue. This site offers some arguments for the case.
But we were confused and sceptical about the whole Lincoln thing now. We had read this page and it blew a hole in the reading of events, this article is called Lincoln and his Dick invented greenbacks -- like Colonel Saunders invented fried chicken. Colonel Sanders, of course.
But, anyway, we got around to looking at some big statements about it all from a figure who held senior political office and was to have a major influence on the political economy of his own country, Canada.
Gerald Grattan McGeer was a monetary reformer who entered the Canadian Parliament, served as Mayor of Vancouver and was later appointed to the Senate. Gerry McGeer became a very big draw in Canada, attracting crowds to hear his arguments for public debt-free money, Canadian greenbacks or whatever.
In 1934 he made a five hour speech to the Canadian House of Commons, savaging the debt-based money system of Canada in great detail. No doubt McGeer had heard of Louis McFadden’s address to the US House of Representatives in 1932 (more later.) This was all in the midst of the Great Depression, another time when people were angry and suspicious of the banking world, and at these times, questions about the whole business are more vividly visible.
During this marathon, he confronted the House with his claim that Lincoln’s murderer, John Wilkes Booth, was a hitman on the payroll of bankers, American and international.
McGeer produced a lot of evidence from his study of the complete uncensored evidence from Booth’s trial, particularly the evidence given by secret service agents. Obviously, we haven’t seen that evidence. But here’s someone addressing the country’s parliament and people had come to listen to him for five hours! Unlike McFadden, he was very well received and became a national figure.
The Vancouver Sun of May 2nd, 1934 actually reported that:
Abraham Lincoln, the murdered emancipator of the slaves, was assassinated through the machinations of a group representative of the international bankers, who feared the United States President’s national credit ambitions. There was only one group in the world at that time who had any reason to desire the death of Lincoln, they were the men opposed to his national currency programme, and who had fought him throughout the whole Civil War on his policy of greenback currency.
The Vancouver Sun has full confidence here that its readers would understand what’s meant by the policy of greenback currency, this idea was obviously in the pool of public knowledge.
But here’s the thing – really, here’s the thing – McGeer’s arguments were heard, by politicians with the power to act. Soon to be Prime Minister William Mackenzie King said in 1934:
Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talks of the sovereignty of Parliament and of democracy is idle and futile.
And when he did become Prime Minister he did just that, in 1938, the privately founded Bank of Canada was taken into government ownership with the governor appointed by cabinet. The private banks were given ten years to remove their currency from circulation, and Canada had public debt-free currency, a situation that persisted in Canada until the 1970s, and all inspired by the belief in a narrative about Lincoln and the Greenbacks.
McGeer had published The Conquest of Poverty, in 1936, in which he said:
Ever since the passage of the English Bank Act of 1844 the creation, issuance and the regulation of the circulation of the current medium of exchange, though being duties that constitute the most conspicuous and sacred responsibilities of government, have been in large measure delegated in blind faith and absolute confidence to bankers and financiers.
McGeer had a central part in changing that situation in Canada for a long time. A full story of this era is A Power Unto Itself, The Bank of Canada by William Krehm (1993)
But, dismayingly, the whole Lincoln greenback mythology further unravelled for us – illusions shattered - when we discovered that Lincoln’s interest-free, debt-free greenback was actually not at all that it seemed; greenbacks were actually backed by bonds bearing interest at 6%, and later converted into gold bonds (more about gold soon.) Greenbacks were not public debt-free money at all?
But actually, really, it doesn’t matter, because the Greenback legend was established, the understanding became established that money is properly debt-free in its creation, the cat was out of the bag again.
In a way, it doesn’t matter what Lincoln really thought, and, in a way, those misquotes are almost valid to include, because it certainly seems what was popularly believed at the time. It's like people managed to put those words into Lincoln’s mouth because they demanded that these words be heard, and his was the best voice to speak them.
The narrative of what is supposed to have happened seems to fall apart, but how much can history ever be trusted, in a world where history can be distorted enough to have successfully erased the memory of Henry George and what he was saying?
Whatever Lincoln’s intentions actually were and whatever Greenbacks actually were, Lincoln inspired a whole movement about what he was believed to have been doing with Greenbacks, and who busily penned and pinned some banker-damning quotes on Lincoln which are still with us.
The Greenbackers of the following generation conjured the myth of Lincoln the bank slayer, people like Sarah Emery, who, in 1887, wrote a book with the title Seven Financial Conspiracies Which Have Enslaved the American People
We’ve certainly realised by this point that it’s actually very difficult to understand history, even for historians. You really do need to have been there at the time. Stephen Zarlenga makes this salient point:
- the Greenback movement, which grew out of our good experience with government Greenbacks during the Civil War, had a literature and understanding of this concept in the 1860’s through 1880’s that is unknown today.
Stephen Zarlenga is director of the American Monetary Institute, and the quote above was taken from a speech he made following an exhaustive study which the AMI made supported by a grant from the Robert Schalkenbach Foundation, a study of Henry George’s Concept of Money - And Its Implications For 21st Century Reform
And Zarlenga’s research concluded that Henry George . . . was a greenbacker, which certainly seems right to us. In fact, after reading The Science of Political Economy, this seems clear enough.
Henry George says:
It is evidently the business of government to issue money. Yet instead of doing what every public consideration impels them to, and assuming wholly and fully as the exclusive function of the general government the power to issue paper money, the private interests of bankers have compelled the people of the Untied States to the use of a hybrid currency, of which a large part, though guaranteed by the government, is issued and made profitable to corporations. The legitimate business of banking — the safekeeping and loaning of money, and the making and exchange of credits, is properly left to individuals and associations; but by leaving to them, even in part and under restrictions and guaranties, the issuance of money, the people of the United States suffer an increase in the influences which exert a corrupting effect upon their government.
And people vaguely suspect that this corrupting effect has got a lot to do with their pain. The issuance of money is a buried question now that is very rarely raised.
There was a huge Greenbacker movement active in American politics for decades to come, mingling with the later Single Taxers and the Progressive movement. Ideas about money are in the public consciousness to the degree that there were popular songs praising and also some denigrating the greenback (sometimes associating them with freed slaves.)
What greenbacks represented to its supporters is the same idea about money as that used by the very first Americans. In the greenbacks’ legendary form, it’s the same idea as Colonial Scrip, as described by Benjamin Franklin’s observations that the wealth of society is the sum of economic activity and the currency is there just to facilitate that, not too much, not too little, and then money isn’t an issue, it’s simple. All the best things are. Greenbacks were seen as the people’s money, that restricted the concentration of wealth and power and the corruption that comes with that.
And, as we’ve seen, a reception of this narrative about Lincoln and greenbacks was enough to persuade Canada to genuinely institute public debt-free money for decades. They actually did have the debt-free money that greenbacks represent the idea of. But, come on, did they really? It seems that they did.
This is from a piece by economist Jack Biddell, an expert in receiverships and bankruptcies and holder of various government positions like Chair of the Ontario Inflation Restraint Board, who must be in a position to make - and wouldn’t get away with fabricating - this simple statement. He lists a large and impressive list of public programmes over a period of decades and then says:
State funding from the Nationalized Bank of Canada made all this possible. And, amazingly no great national debt was created.
(see the graph.) (CANADA'S NATIONAL DEBT 1940 to 1987.)
Canada's wealth continued to grow through the 1940s and on into the mid-1970s.
And there’s the graph and more details about it all on this website about the Canadian experience.
So, there it is, we think; debt-free, interest-free money by the inspiration of President Lincoln did exist, in Canada 70 years later, and endured for half a century. Economic growth, significant programmes of public investment, the utility of currency, but no interest-bearing bonds, no significant public debt. It looks like something was going right there.
And why did it cease in Canada in the 1970s? And why were Georgist practices abandoned in places like Australia and Denmark after huge and demonstrable success? We may be getting closer to understanding. It probably goes without saying that when Canada’s interest-free money era ended in the 70s, an explosion in public debt followed.
Maybe one more false Lincoln quote to round this off, it’s really the best one:
The money power preys upon the nation in times of peace, and it conspires against it in times of adversity. It’s more despotic than monarchy. It’s more insolent than autocracy. It’s more selfish than bureaucracy. . . . Corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working on the prejudices of the people until all wealth is aggregated in a few hands, and the republic is destroyed.
A bold, unblushing forger
Matthew Pinsker says:
That’s a powerful indictment, but you won’t find it anywhere in Lincoln’s collected works or certified recollected words. His official biographer called the statement, which began appearing during the Populist era and played a minor role in the 1896 campaign, a bold, unblushing forgery.
This site uses a nice quote from Jefferson:
A morsel of genuine history is a thing so rare as to be always valuable.
And now for something that Abraham Lincoln definitely did say, the opening line of his Gettysburg Address:
Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.
In case we haven’t said it enough, there really is a galaxy more to say about the history than our skim. If you’re interested, read the orthodox history books, but do remember not to trust those, either.
So, we’ve had confusion. It was very good to read money reform campaigner and film maker Bill Still writing about the problems of this kind of study and traps he’d fallen into. Bill offers this site as a clearing house for Fake Quotes: Obviously, it’s very important now that sites everywhere interested in these historical questions clean this up because there’s a very important story here, it needs to be got right.
Obviously, a lot of people writing stuff on the Net are not academics, as Henry George wasn’t and as we certainly aren't. It’s not unfair to say that, in the main, many who are academics badly let the world down - throughout history and increasingly these days - and look only at where their bread is generously buttered rather than to seek the truth, as we were reminded here.
It’s mind-blowing that there’s all these people seeking answers, asking questions, and doing all this writing on the Net, and what the commons of the W3 has made visible and possible. But it’s essential to be truthful, or anything valid that’s being said will be easily discredited and dismissed. And we can say that Henry George’s books, apart from everything else they are, are wonderful primers in how to approach all questions rationally and rigorously.
Henry George was making his living as a printer during the years of Lincoln and, being around at the time, would have a marked advantage on a modern historian in understanding the age. Lincoln’s death grieved George profoundly, and kept him awake all that night pouring his heart into an obituary, which he dropped into his editor’s in-tray. The editor read it and made it the newspaper’s lead piece the next morning. Henry George would from that morning make whatever living he made, as a writer.