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In the "1920s Turkey Shoot", over ill6,000 banks folded or wcre merged out of exis tence. This story begins more than 200 years ago. In 1780 the Unitcd Statcs had two interest banks. Prior to this time it had none. The !people didn't believe in'lnterest since ,it was forbidden by their Christian relig~on. By 1ROO perhaps 20 of these banks had come into existence. It was during this 20-year period that events occurred which shapcd the history of thc country. These events caused the War Between the States, the rapid settling of the West by bankrupt Easterners, and World War II. These two decades made inevitable every thing that has followed since. 1780 The forcible ejection of the British and their banking activities left a vacuum in America. Immediately a rush was underway to fill that vacuum. Alexandcr Hamilton presented three arguments for a central bank. He wanted to do to the brand new United States what the Bank of England had done to England, and he wanted it done by himsclf and his backcrs who were reputed to be the Rothschilds and their Bank of England. 178l! The private Bank of Pennsylvania' in Philadelphia was rcplaced by the Bank of North A.mcrica. It was later absorbed into the Pennsylvania Company for Insurance in 1923. Cornwallis surrendered the Brit,ish Army at Yorktown, Virginia. Events then moved! fast. 1784 Bank of New York founded-a Hamilton creation. Oldest existing commercial bank in the country. The Massachusetts Bank a1so formed. Virginia settled her counties of Ohio, Indiana, Illinois, Michigan and Wisconsin, and spun them off as statcs. Virginia, an unwilling slave-state, also saw that a law was passed prohibiting slavery in these new states. 1786 First major economic depression brought on by these new banks lending 10 and demanding 11 in payment. Banks foreclosed debtors, forcing ,them into poverty and debtors' prison. The state of Massachusetts had heavy debt and levied hcavy taxcs on its citizens to pay interest on this debt. This was exactly the same thing England! had been doing. It ruined many of her own farmers. Led by Ca.ptain Daniel Shay, 2,000 of .these desperate men se,ized Worcester, Massachusetts and other towns. This uprising threatened the establishment of interest banking in North America. The Governor of Massachusetts quickly took the field against the 'rebels'. "Shay's Rebellion" was suppressed on 27 February 1787. The interest system had won its first victory. 1187 The Constitution was fittingly put together in Philadelphia, the home of thc Bank of North America. Nex.t, New York City, the home of the Bank of New York, was pro claimed the temporary capitol of the country. 1789 Washington was elected President. In a move toward conciliation he appointed Alexander Hamilton Secretary of the Tre.asury. This put the fox in the ihen-house and it doomed Washington's beloved Virginia to be devastated by a war of assimiJlation 71 years later. 1791 First Bank of the United States was chartered. This was a private bank to which all the government's money was entrusted. Its charter was for 20 years and was afso Hamilton's creation. Rep. James Madison of Virginia on 2 February opposed the bank because he said that it would: 1) banish precious metals through inflation of the money supply, and 2) resuJt in runs on banks and bank failures. Whcn its SUCCeSSor, the Second Bank of the US, went bankrupt SO-odd years later, it was discovered! that 64% of the bank's 25,000 shares were owned by foreigners-mostly British. Friends of the Bank of England had been active in America. Madison had been right 30·NEXUS FEBRUARY -MARCH 1994