Friday, September 2

Age-Old Schemes Men Cannot Resist


Trent has been gone almost a year, and the need to clean out the house and get things in order is pressing upon me. A stack of file boxes containing books owned by my maternal grandfather Newton William Graham, looms up at me every time I walk through my sewing room. So, resolved, I open one of the boxes and come across a volume entitled The Man Who Built San Francisco by Julian Dana, New York, The Macmillan Co., 1936. Amazingly, chapter one entitled "Five Tons of Gold" begins with this story:

He had a way of doing the unexpected, the spectacular, had Ralston. Neither he nor the city he loved were formalists--theirs was a vital flavor, episodic and restless and unserene. Events, then, plucked by chance from the life of the man and the city may disregard pattern, may even seem to open a book's middle pages for beginning. Both the man and the city were like that--midway in sweeping action before their plans had well begun.

It was a late September afternoon of 1869 in San Francisco. In the Cashier's office of the Bank of California a handsome, slim-hipped, six-foot man sat at ease on a massive morocco-covered oak chair, his arms resting on a massive morocco-covered oak desk. His hazel eyes were smiling, his thick brown hair fell smoothly back over a broad forehead. Sensitive lips with an almost sensual fullness showed a whimsical upturn at the corners. His posture gave slight hint of the two hundred pounds of athlete's body that would bulk if he chose to rise.
Sitting before him, hunched forward in another oaken monstrosity, sat another man. He was lean, idea-driven Asbury Harpending, southern hotspur who had once planned to plunder U. S. gold-ships leaving San Francisco harbor during the Civil War. His too-handsome face was attent, puzzled. He was listening to the clipped yet flowing voice of the man behind the desk.
"If things go as they are," the slim-hipped man was saying, "every bank will be closed tomorrow afternoon. Not one of us can stand a half-day's run--we'd go down in a heap. Then we could look for hell to break loose." He paused.
Harpending nodded.
"But we can't let that happen." The smile never left the face of the man behind the desk. "But it will if I don't get a million in coin into the vaults tonight. That's where you come in, Harpending. I need you--you and Maurice Dore. To simplify matters I'll let you get in touch with him. Meet me here at one o'clock tonight. Wear old suits--you'll have plenty of hard work ahead of you!" His laugh had a boy's ringing spontaneity in it.
Harpending grinned in spite of his puzzlement. He asked no questions. "We'll be here," he promised briefly.
As he went out the California street entrance of the bank his thoughts held a question mark. "How did Billy Ralston do it this time?" Even as well as he knew the dynamic fellow of the oak chair he had doubts. . . .

The midnight stars were bright over the city, so bright indeed that the gas-lamps showed half-lidded eyes, weary of watching a more lustrous display. Tang of the sea was in the breeze that wandered through the town. Footfalls were few, noises infrequent. Indecorous echoes from bagnios on Pacific and Dupont streets were muffled in the inertia of the night. Through the sheen and shadow marched Harpending and Dore to their rendezvous. They were full of an awareness of crisis, of imminent hazard in the city's existence. Paunchy, swift-spoken Maurice Dore was puffing at his companion's side before they had traversed three blocks.
A few feet from the northwest corner of California and Sansome they halted. They were standing before the imposing Italian bulk of the Bank of California, heavy-walled financial dictator of the Pacific Coast.
"We're early," said Harpending, "I hope Billy's about."
Inside, at this unbusinesslike moment, they caught a glimmer of advancing light, saw its pin-point come to a pause, blot out. Then the great door swung open and two shadows came out, their boot-heels clicking down the bluestone steps to the level way.
"Bully for you, gentlemen," said Ralston. "You're more than prompt. Let us see what an early morning walk will do for us."
Harpending fell into step with the banker; Dore and the more deliberate bank Secretary, Stephen Franklin, brought up the rear. Dore noticed that the immaculate Franklin's usual black silk hat, silk stock, and ivory-headed cane were missing. The Secretary was dressed for the nameless task ahead.
They walked briskly. No one followed or passed them, not even an inquisitive policeman (!!!!-editor's comment).
"Somebody could put this town in a hack and cart it off," grumbled Dore. "What a police force!" (!!!!-imagine that!!!-editor's comment)
Ralston's eyes rode over the silvered outlines of the town. "They have their instructions tonight, Morry," he said.
The walk was short. Their course led them to Montgomery, between Sacramento and California streets. The outlines of the U. S. Sub-Treasury loomed before them, the Federal treasure house where Uncle Sam's hoard of golden coin lay in security (indeed!!!-editor's comment).
"The Sub-Treasury!" Harpending gulped. He had only suspected before. "But listen, Billy! General Grant has ignored your telegrams--he's forbidden an Sub-Treasury exchange of coin for gold bars! How in Solomon's name do you expect--"
They had halted before the grilled door. "There's fourteen million idle dollars in here," said Ralston easily. "We need some of it to protect public and private interest--right now. And I think we'll get it."
Inside, at that moment, a light glimmered.
"I'll only be a moment." Ralston stepped to the door, put out his hand, swung the barrier inward. The trio stared with a certain expectancy. Then the door closed. . . .
If the watchers gave a fleeting thought to Jay Gould's fantastic "gold corner" premium on California gold--yellow metal that had lately fled to New York as if it had wings--no one put the thought into speech.
In two minutes the banker came out, his erect figure almost stooped under the weight of several canvas sacks.
"Take them to the bank," he ordered. He was chuckling. "The clerks there will give you something to bring back." Behind him, in the darkened doorway, unseen by the outside three, stood General O. H. La Grange, superintendent of both the branch U. S. Mint and the U. S. Sub-Treasury.
Back through the night toiled the soon-perspiring carriers. No mistake about it, the sacks were heavy. Dore was soft; he grunted and puffed with each step. Harpending was under thirty and hard as nails physically. Even the older Franklin stood the ordeal much better than Dore.
Each time the laden three returned to the Sub-Treasury with an exchange offering they found a jovial Ralston mounting guard over a seemingly inexhaustible supply of sacks lying on the sidewalk. . . .
The hours had hesitant feet. Each trip from Sub-Treasury to bank, and return, became a test to the exhausted trio. Dore could hardly stand--in fact, in later years, he remarked ruefully that he never fully recovered from the strain of "carrying gold around". Harpending recalls Dore "as having a swayback appearance for a month."
No one interrupted them. They met or passed no one. It seemed as if they were, in those hours, the only inhabitants of the town.
Five tons of the precious stuff they transported. Dawn came before Ralston was entirely satisfied--it was a grudging gesture when he signaled a halt to his tottering aides.
A bully night's work, gentlemen!" he congratulated. "Now for breakfast at the Old Owl Cafe."
The thankful three plodded creakingly away after him. After the meal he sent them home in hacks. Still fresh, Ralston went back to the bank.
It opened promptly at the usual hour, a mob in front of its metal portals continually growing more noisy. Long, loud lines began to string out from the tellers' counters. Rumor had it that Ralston had loaned large sums to the Central Pacific to aid its cross-country mileage race with the Union Pacific--other whispers spoke of the millions he was "throwing into worked-out holes on the Comstock." Certainly other millions had been prodigally loaned to merchants and corporations of the Pacific Coast, none of them too solvent, the grapevine muttered. That Jay Gould had already celebrated his "Black Friday" in New York meant little in cause and effect to the milling depositors about the Bank of California counters.
As the lines grew almost abusive, Ralston appeared, looked displeased.
He frowned at his clerks, some of them sleepy and dull-eyed. "Why are so many of our customers kept waiting on a busy day?" he demanded. "Put more tellers on duty and have your coin on hand!"
More tellers rushed up to the line of counters. Miraculous trays heaped with new-minted U. S. Sub-Treasury coins came sweeping up from the vaults, ten porters carrying heavy loads. The noisy serpentines of money-seekers looked their fill upon the sight, began to fade sheepishly away. In thirty minutes deposits were being made, only ordinary withdrawals being visible.
A breathless man rushed up to Ralston as he was about to enter his office, "There's a run across the street!" he yelled. Then bolted out. Ralston was on his heels.
In one minute he was mounted on a discarded drygoods box, his ringing voice catching the attention of the crowd fighting its way into the other bank.
"This bank is sound, gentlemen!" he called. Then sank his tones conversationally, all the Ralston magnetism in his smile. "If you doubt its ability to pay bring your books across to the Bank of California and I will pay you off there."
The crowd listened, melted away. "If Billy Ralston says the bank's all right, it's all right," ran through the subsiding gathering.
Off the wooden box stepped the speaker, went back to his office.



End of a story which took place in 1869. . . . . . .


Let's flash-forward to the gold antics of 2011. . . . . . . Does all this make Banker Billy Ralston's machinations look like child's play?

And you thought fractional reserve banking was practiced only with paper money????

Here are some posts from the Gold Anti Trust Action Committee website and a few links off from them that I thought fit nicely with the above story. Seems somehow, bankers just can't get over the idea, stated so beautifully transparently by Billy, "There's fourteen million idle dollars in here. We need some of it, to protect public and private interest--right now." Yo!!!! Foxy Billy!!

"There's a vault with gold somewhere---but whose vault and whose gold----"
http://www.gata.org/node/10372

"How Exchange-Traded Fund GLD lets you pretend to own"
http://www.gata.org/node/10366

James Turk-Free Gold Money Report--"The Fractional Reserve Aspects of Gold ETFs"
http://www.fgmr.com/fractional-reserve-aspects-of-gold-etfs.html

Murray Rothbard on Fractional Reserve Banking
http://www.lewrockwell.com/rothbard/frb.html

I am particularly interested in Murray's reference to the moral or ethical questions raised in this practice of fractional reserve banking. And the ignorance and/or complicity of the American people in this scheme, which is most likely taking us, nationally and worldwide, into a very bad situation.

If we are talking moral or ethical questions, my question would be is fractional reserve banking against the standards of the Bible?---Is it against Biblical law? If it is how can we expect not to be judged for it?






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