​The origin of the tax system, government bonds and the stock market

In the course of the historical development of the economy the credit demands by customers reached proportions far in excess of the financial resources of individual banking concerns. This was especially the case in all business transactions where credit was sought not by individual concerns, but by .larger corporate bodies. In feudal times it was the territorial overlords who needed credit on a large scale. Road building and other provisions for traffic required great capital outlays, even in peacetime. But it was especially preparations for and campaigns of war which required more money than was readily available. Here the solution was to raise loans the repayment of which was spread over a great many years.
As a result of this development the banker ceased to be a money lender with his own capital and became a money dealer, money transmitter and money lender handling the capital of others, who helped his customers to obtain money from third persons. The retinue of nearly all the larger Ducal courts included a so-called Court factor, whose duty it was to raise money for the Court and the State. In time these factors became permanent advisers and managers in matters concerning money. They did much of value, but at times their advice led to taxes which were hard on the underdog. Not a few amongst them earned the hatred of the populace.

The princes made every endeavor to retain the services of their Court factors, and, in addition to making profits by way of interest and commission, they were protected from persecution, and often also rewarded with external honors, such as elevation to the nobility, permission to own land and similar privileges. The procurement of money by means of large loans led to the sub-division of the amount of the loan into smaller segments which were then sold to the general public. This method of raising money involved considerable risks because the borrower demanded a firm undertaking that he would be granted the loan, but the banker could not sell the segments until after the loan had been granted. This led to the formation of consortiums which undertook the acceptance of loans, and thereby spread the risks over a number of banking firms. This method was facilitated by making the loan segments (bonds) negotiable, so that the individual purchaser of such bonds could resell them at any time. This negotiability provided the impetus for the creation of the stock exchanges.

In addition to the demand for credit by public bodies, the development of the modern economy led to a massive need for credit in production and trade, a need which could no longer be met by the private banking firms. The formation of consortiums soon proved to be an inadequate answer to the great increase in private industrial credit. This led to the development of other forms of industrial enterprise, such as joint-stock banks, limited companies, and savings banks, which existed side-by-side with the private individual banking concerns.

4 thoughts on “​The origin of the tax system, government bonds and the stock market

  1. The Federal Reserve Act of 1913 created the insidiously corrupt and secretive corporation, The Federal Reserve. This heartless business endeavor has given virtually complete control of the economy of the United States to a small network of immoral business executives who’s money originated in the war, slavery, weapons and illegal drug industries – European Economic Royalty, for the most part. People like J.P. Morgan, John D. Rockeller and Nelson Aldrich were given the blessings of the financial leaders of the European powers of the early 20th century, primarily Paul Warburg of the infamous Rothschild Banking Empire. This new privately owned central bank gave them the funding they needed to finance World War I. It’s no coincidence that after the creation of “The Fed” in December 1913, the Income Tax Amendment was passed and World War I was started, in1914.

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  2. Wow I love this truth. Where were the Americans when all this historical moments happened? Where were your parliamentarian? Where were the great American philosophers, professors and thinkers when all this happened? And what have the Americans done from then to turn around that act?

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  3. The passing of The Federal Reserve Act is one the most horrifically treasonous pieces of legislature ever perpetrated against the citizens of the United States. It is known as “The Christmas Massacre” because it was signed into law by the corrupt President Woodrow Wilson in December of 1913. It was an extremely well thought out plan of secret machinations behind closed doors.

    The planning was done on an island off the coast of Georgia over the course of a few years, 1910-1913. Representatives of the most powerful bankers in the world devised a plan to create a central bank for the emerging world power, the U.S., that was a privately owned corporation which would have a name and the appearance of being a governmental agency. It also was legally given the right to keep the names of the shareholders secret from the public. There were two pieces of legislation, the Glass Bill in the House of Representatives and the Owens Bill in the Senate.

    As the Christmas holiday was approaching, the insiders, led by Paul Warburg of the Rothschild Banking Empire, knew they had a substantial number of votes in support of their currency bill, but not enough to pass it. The members of Congress were officially told they would recess over the holidays and pick up the issue in January of 1914. Secretly, the Congressional members supporting the legislation were told to stay in Washington. Once a large number of Congressional members left to spend Christmas with family and others were asleep, a session was called at 1:30 AM. The total number of members present was enough to meet the minimum required to vote, but all in support were present while all the missing members were critical of the idea of giving the power to print the nation’s currency to private bankers. In the meeting, differences between the two bills were worked out and a combined bill was negotiated. The Owens-Glass Bill was voted on the next day. Many dissenting members had no time to get back to Washington and many others had insufficient time to read the bill and be aware of its contents. It passed the House by a vote of 298-60 and the Senate by a vote of 43-25 (less than an actual majority). President Wilson signed it into law.

    To this day, the “old money” financiers have held so much power in the corporate-owned media and kept this as a virtually untouchable subject that tens of millions of intellectually lazy Americans believe The Fed is part of the government and that it holds “reserves” of gold and silver to back U.S. currency. The reality is that they “create” money out of thin air and charge interest on it. This means that the people of the United States pay interest on their own currency before it even goes into circulation. The national debt is bloated due to this and every time The Fed prints more money, the value of the U.S. dollar shrinks.

    This is the biggest monetary scam in history. The United States economy is based completely on debt and speculation. It could be collapsed quite easily.

    This is a link to an essay which discusses this disaster in more detail: https://ashiftinconsciousness.wordpress.com/2013/09/25/the-illusionists/

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  4. Thank you so much for the detailed explanation. I recognize the “Jekyll Island” very well, and the SLEIGHT OF HAND used in “coining” money. This is a universal problem- it affects us all.

    But you have not answered my basic questions. Why is the average citizen such an ignoramus? Why are the smartest guys not able to fathom this mystery. What is the vested interest of the lowest man on the food chain (pyramid) in all this? Why does superstition reign supreme, in the minds of the ordinary man and woman instead of reason???

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