Birth of the E.T.

Unfortunately for us, E.T. is the not the cute and cuddly little extra-terrestrial visitor who wouldn't hurt a parasitic insect made famous by Steven Spielberg. No, E.T. is a much more malevolent creature, more like the Sigourney Weaver's nemesis in "Aliens". In fact, they are two evil creatures, together capable of unlimited financial destruction.

The Federal Reserve and the Federal Income Tax Code were born in 1913. They are referred to here as the EVIL TWINS, E.T. for short, because that is what they are.

The Evil Twins

The Federal Reserve Act and the 16th Amendment to the United States Constitution both occurred in 1913. These malicious entities are wreaking havoc on our society today. It may seem like a stretch to blame our problems on something that happened a century ago, but sometimes it takes a while to figure things out. Like the water torture that drips a drop of liquid on your forehead every 5 seconds, at first it may feel great, maybe even refreshing - especially if you are hot, but eventually it gets annoying. If enough time passes, a hole starts to wear and maybe a scar forms. Finally a hole opens up right there in your brain.

Capitalism is the best system for an economy to flourish. It is the only way to ensure opportunity and prosperity. Though some rules and regulations are necessary, generally the more governmental regulation the more expense to everyone, and the worse the economy. A freer capitalist society tends to regulate itself. An over-regulated economy first slows, then atrophies in fear of movement, and eventually dies.

Most of the problems we have with capitalism arise from governmental over-regulation restricting businesses to the point that companies begin to look for protectionist solutions for themselves. They seek governmental favors to interfere with the other guy. Regulation may actually cure some business ills in moderation, but excessive business rules choke economic growth. Favoring one group over another with regulatory requirements tends to stifle, reduce and eliminate competition, and is not true capitalism. Regulation is the progressive method used to contain capitalism for their own greedy purpose, which is to grow government at the expense of private business.

Our financial persecution began a hundred years ago with the birth of the “Evil Twins” and has gotten “progressively” worse ever since.

The Robber Baron Influence

The late nineteenth century established the foundation of the economy upon which we live in today. Several very wealthy and influential men managed to alter our country's direction, abandon our forefather's constitutional beliefs and initiate the slaughter of our Constitution and Bill of Rights. They established a society in which they could profiteer without personal risk of loss while at the same time being praised as economic saviors. They intentionally sabotaged and worsened the already widespread public fear about banking safety and were praised for their efforts. They then took great advantage of that apprehension by promising and implementing “safety” measures through eternal financial regulation. They promised intelligent, impartial economic oversight and management, which they never intended to deliver.

Our Constitution and Bill of Rights have been tossed out the proverbial window by the creation of the Federal Reserve and the engineering and subsequent (many argue illegal) passage of the 16th Amendment (income tax laws) to which we all are now nearly completely enslaved.

Some of the most well known financiers of the time were involved in this nation-altering program. John D. Rockefeller, Andrew Mellon, Andrew Carnegie, J.P. Morgan, Henry Frick, Paul Warburg, and J. Rothschild. These few men among others were the catalysts behind our century long national demise.

Senator Nelson Aldrich of Rhode Island, co sponsor of both the Federal Reserve Act and the 16th amendment was coincidentally, the father-in-law of Robber Baron John D. Rockefeller, Jr., and namesake and godfather of Nelson A. Rockefeller, future vice-president of the United States. He orchestrated these laws and benefited tremendously from their passage. He was an important political tool of the wealthy, not that they couldn't have bought anyone they selected, but he was already in a powerful political position, agreed happily with the plan, and profited greatly from the economic changes.


Philander Chase Knox

With all of the famous and powerful robber barons to discuss, why start with Philander Knox? Without him, they may have been just some arrogant rich guys who died long ago. Because of him, their power and influence lives on.

Knox was a renowned and powerful Northeast attorney at the end of the nineteenth century, who's private clients included the Morgans, Vanderbilts, Carnagies and Rockefellers. He handled the huge merger of railroads, iron, coal and steel interests of Carnage, Morgan and Rockefeller into the largest conglomerate in history, U. S. Steel. He was a big guy sympathizer and highly paid connected agent.

Knox later (1909) orchestrated huge Federal loans be granted to Honduras and Nicaragua to help "save" them from their poverty. These loans were initiated and funded by his wealthy clients, and somehow backed by the assurance of the U. S. Government. There was at the time no legitimate method of guaranteeing these loans, because the federal budget was not large enough to absorb them, and oh yes, there was no income tax at the time to guarantee the repayments.

Clearly something had to be done to protect their interests.

Now, where do you suppose the U. S. Government might go for the money to guarantee these lenders before there was an income tax? Coincidentally, in 1909, the 16th Amendment to the Constitution was initially proposed by the Aldrich committee and sent to the states for formal ratification.

Knox was instrumental in Andrew Carnegie's big victory in a crucial patent case in which the most important invention for the manufacture of crude steel was at stake. In 1892, he defended Henry Frick, Carnegie's steel plant manager, who was being sued by the steel workers who had been beaten up by Pinkertons brought in by Frick during the infamous Homestead strike in 1892.

Knox was an attorney for J.P. Morgan and Andrew Carnegie. He also whipped the prosecution in a civil suit against Andrew Carnegie in 1894 after it was shown to congress that Carnegie had defrauded the Navy with inferior armor plate for U.S. warships. J.P. Morgan bought him out in 1901. Morgan himself had previously defrauded the U.S. Army in arms sales during the Civil War, Carnegie in ship building, now Morgan owned the shipbuilding. And Knox kept Carnegie out of prison again when the president of the Morgan-controlled Pennsylvania Railroad testified that Carnegie had regularly received illegal kickbacks from the railroad. Knox's other big client at the time, the Vanderbilt family, was connected to Carnegie primarily through the railroad industry. (These connections are important as most of these men or their representatives met at Jekyl Island to hammer out details of the new world order)


Steel for Luxury Liners too

An interesting sidebar here about the RMS Titanic built in England. The ill fated ocean-liner owned by White Star Line Company, was a subsidiary of International Mercantile Marine, which coincidentally was owned by J. P. Morgan.

The construction of the ship was funded by J.P. himself and his International Mercantile Marine Company. Here’s guessing he probably had an idea about how it was built, and that maybe the hull might not have been manufactured from the best possible steel, since it was only a few years since the accusations of substandard naval warship hulls, and the same company built it.

J.P. had a reservation for that Atlantic crossing in April of 1912, but for some reason he didn’t make the trip. I wonder if he was apprehensive about the steel hulls, and that maybe those reservations trumped the one he held for his own luxury cabin? After all who knew more about steel manufacturing and ship plating than he did? To remind you, the Titanic went down in April 14, 1912 when an iceberg penetrated the steel hull plating with over 2,300 people on board. Nearly 1,500 lost their lives. Not J.P. though, he wasn’t there.

Another passenger who had a ticket but for some reason didn’t make the voyage was Henry Clay Frick. Frick was a wealthy robber baron primarily concentrating on railroads. Though not as legendary as the others, he certainly never missed a meal. He was closely tied to Carnegie Steel as chairmen for Andrew Carnegie, and deeply involved in the merger to the giant U.S. Steel. He was in the “club”. It makes one wonder why he didn’t make that trip. Maybe he was just lucky. Rich guys tend to get lucky sometimes.

Some say that there was a plan to intentionally sink that ship, for insurance purposes because it obviously wasn’t built as well as it was hyped to have been. Two other cruise liners of what was called the “Olympic Class Sisters”, needed more funding. One required major repair (The Olympic) and another was on the drawing board (The Britannica). The sinking would have injured no one, as there were to be plenty of rescue ships in the area. They didn’t want anyone to die. The conspiracy tale goes that it unfortunately sank before it was planned due to the manufacture of the hull, and a lot of unfortunate passengers and crew did die. Insurance was paid, but much of it went to the survivors and families of the deceased.

Was it a plan gone wrong? Who knows. We know J.P. Morgan funded it; we know the other ships needed serious cash; and we know Morgan bought the steel company from Carnegie who had been accused of manufacturing inferior steel plated hulls for giant warships; so perhaps it wasn’t constructed as well as had been advertised.

I guess if I were J.P. maybe I would have left my luxury cabin empty too. But we digress, back to Knox, defender of the Robber Barons.

President McKinley offered Knox the job of U.S. Attorney General in 1899, but Knox had to decline, because he was then and for two more years engaged in arranging the merger of the railroad, oil, coal, iron and steel interests of Carnegie, J.P. Morgan, Rockefeller, and other robber barons into the largest conglomerate in history - U.S. Steel. This immense corporation encompassed the interests of nearly all the robber barons in what Knox's new client, J.P. Morgan, referred to as a "community of interest."

Knox was eventually appointed A. G. of the United States by McKinley in 1901, and was kept on by Teddy Roosevelt after the formers’ assassination later that year. He became the buffer between Roosevelt’s trust busting agenda and the interests of his wealthy robber baron clients.

Ever wonder why that giant steel company was never targeted for anti-trust lawsuits after they purposely combined to form the huge conglomerate? Knox. He helped prosecute a few minor anti-trust suits, but only when they did not harm his clients. It was primarily a circus show for the people who did not understand that the actual busting of trusts never really accomplished anything financially significant – Never bothered the targeted barons a bit.

Knox moved to Secretary of State in 1909, appointed by Howard Taft. How this happened is a mystery, as Taft was the most conservative leader of the era. Knox wanted this change in occupation because although very powerful, an Attorney General is limited in the scope necessary for his ultimate goals. As A.G., he can only stop legal action against his friends, save them billions of dollars, keep them out of jail, basically protect their current interests - but that wasn’t enough.

You see, as Attorney General he can’t actually fraudulently pass previously unconstitutional amendments; that’s the specific duty of the Secretary of State. As SOS it would be his duty to pass or reject any amendments sent to the states for ratification. By 1913, the 16th Amendment, the power to lay and collect income tax, was returned by the states for ratification. Several state records clearly show that this amendment was not properly passed, and some states that rejected it were entered into the record as ratifying it in full. Still Knox, perhaps the most distinguished and powerful attorney in the country, declared that it was to become law in February 1913. A job well done.

On March 3, 1913 just a few weeks after the passage of the 16th Amendment, Knox abandoned the office of Secretary of State, his term expired. Little wonder why he didn’t send it back to the states for proper bullet-proof ratification, it may never have happened. No, claim passage now and his work there was done. He had guaranteed centuries of wealth to those for whom he had worked. He was the Robber Baron maga-power-tool.

So What Now?

We have what many to believe is an illegal tax law, arranged purposely and likely financed by the super-wealthy robber barons of the early 20th century to line their own pockets and those of their heirs for generations to come. They've created a debtor society backed by the Federal Reserve Act and the income tax laws. These evil twins were both enacted coincidentally in 1913 under the socialist president, Woodrow Wilson, legally elected by our misguided voters.

The Rise of the Charitable Foundation

Another interesting coincidence occurred that year; the J.D. Rockefeller (tax deductible) Foundation was formed. Andrew Carnegie was a little ahead of the curve and had founded his in 1906. Several others soon followed (nearly 100 were created by 1920) because these wealthy industrialists and financiers, who so desired a progressive income tax didn't particularly care to actually pay much of the tax they had managed to impose upon the rest of us.

These foundations generated for their creators the appearance of great benevolence, but were actually formed (and many are still in existence today) to expand power and influence over the masses. How would you like a cash grant? Free heating oil? How about some food? Would a college education guarantee your support for us?

The generosity towards the people was evidently a ruse with two primary purposes. First, it enabled them to avoid the soon to be heavy taxation they, themselves created to guarantee their own interests, as the foundations are tax deductible. They designed the needed escape routes from their own tax law, as without them, they would have had to pay considerably.

Second, it altered the public perception of their activities 180 degrees. Their public impression was miraculously transformed from that of wealthy greedy capitalist robber barons to one of benevolent, generous, philanthropic caretakers of the downtrodden. Now they really didn’t care what the people thought of them, but that new positive perception did allow them to run amuck financially; that was the primary goal. Not a bad plan.

What the peasants thought of them personally was of no concern. The public is seen only as consumers, a revenue source. If enough of them believed that their existence was for the good of all, they could run their businesses with less annoying interference as the little people could now be counted upon for support and patronage of their ventures. This end was achieved.

Although the charitable foundation is technically not "owned" by the donor, it can be controlled by him. Much as the federal and state and local governments do not own a great deal of real estate, they control its use through regulation and taxes.

The grantor to the charity no longer owns the donated property, but as do the governments above, he can firmly control it. The charitable founder can hire whomever he pleases and may benefit nearly any kind of "public good" he sees fit. He can purchase property for the foundation and build up its assets and influence. Those who might otherwise mount an offensive against his unfair business practices would likely support him if they were rewarded well enough in other ways. This offers opportunity for wielding a great deal of power. This point was not missed by the brilliant robber barons.

John D. Rockefeller

John D. Rockefeller had earned himself an extremely poor reputation. He was vilified by the public for profiteering and found through investigative hearings to have been in violation of the illegal competition laws outlined in the Sherman Anti-Trust Act. This law was designed to ensure fair business competition, and eliminate monopolistic practices, which discourage and undermine competitive challengers, leading to unfettered price gouging. The goal of the law was noble indeed. Consumers were entitled to have a fair ability to obtain honest prices for various goods and services, which would be available in an honest, free and openly competitive marketplace.

Rockefeller, (among others) seemed to believe that a fair and honest system was not as profitable to them as complete monopolistic control, and therefore was not good for the country since naturally, they knew best. These men realized that these new anti-trust laws, if really enforced were obvious hindrances to their objective of all-encompassing control through financial manipulation. Naturally, they would place themselves at the helm of the economic ship if opportunity allowed.

Though considered a progressive at the time, it was clear that Teddy Roosevelt believed in regulation more than most, it is not clear whether he would have allowed the birth of the Federal Reserve and the income tax law to happen the way they did. Certainly he was in favor of government control, more economic rules and regulations, but likely not oversight or authority by the robber barons themselves.

Before the Federal Reserve Act and the Income tax amendment, we had anti-trust laws designed to curtail unfair and illegal profiteering. Teddy Roosevelt was the first to really take the Sherman Anti-Trust Act of 1890 seriously and attack the offending companies. Those wealthy capitalists did not enjoy the prospect of being forced to split up giant monopolistic conglomerates into smaller more competitively vulnerable companies. The reality though is that these impositions were not very damaging, if at all. They were mostly for show, to demonstrate to the people that something was being done, when in reality, it was not harmful to the barons; as AG at the time, Philander Knox saw to that

Still, the possibility of damage these laws might cause when in the “wrong hands” angered them and provided some of the necessary motivation for the formation of their new world order. Enough was enough. They knew that although they weren’t injured yet, the potential was there. Who was the federal government to charge them with monopolistic practices? How dare they interfere with their profit making strategies? Did they not realize with whom they were dealing? They would be sorry.


Next: The Plan