LPAC Weekly Report: The New Paradigm for Mankind 29 January


LIONA FAN-CHIANG:  Hello, today is Wednesday, Jan. 29, 2014.
You’re joining today at the New Paradigm for Mankind show, and
we’ve got Lyndon LaRouche here today; we’re also joined by
Michael Kirsch.  Today we’re going to discuss something that
Michael has worked on a lot, in unearthing, putting together and
disseminating how a new economy should function, how a proper
{human} economy should function.  And also, not only that, but
how the oligarchy tries everything it can to thwart the progress
of mankind.

MICHAEL KIRSCH:  Thank you for that introduction and the
subject today on that theme is Franklin Roosevelt’s
reconstruction of the U.S. economy, and the way that he did by
reorganizing the entire banking system, but instilling a
principle of credit which hadn’t been seen in full, in fact,
since the time John Quincy Adams; that even with Lincoln’s
National Banking Act and greenback system, it didn’t come as
close to a full approximation of Hamilton’s Bank of the United
States credit principle, as what Franklin Roosevelt had intended
to do and actually approximated.
Now, the reason why this is so important, of course, is
because there’s no way that the commercial banking system in the
United States would ever come back to any functional, useful
structure, unless the measures that Roosevelt took are actually
reenacted today.  But not simply the regulatory actions, the
preventative actions, but this principle of Federal credit
throughout the banking system.
Now, this is a story which is almost completely unknown:
You have some people who know about Roosevelt’s reconstruction
programs, but his actually fundamental attempt to transform the
entire Federal Reserve System into a Hamiltonian credit system is
something which almost nobody knows about, and in part because
the full reorganization into that system was thwarted by Wall
Street.  And while Roosevelt was able to regulate the banks,
reorganize them, and get certain government programs, he wasn’t
able to do what was essential for the historical legacy of the
United States.  Because what you had was a system set up by
Hamilton that was thwarted; a system that was then reorganized by
John Quincy Adams, which was destroyed by Jackson and company;
and then attempts to reestablish that by Lincoln, and then an
attempt to actually set up a new National Bank under McKinley —
and he was assassinated.  So this would have been something that
would have mad good upon this legacy of nation-builders had he
been able to achieve it.
Now, what I want to do is go a little bit into detail of the
problem, because to understand what Roosevelt was doing, in
reestablishing this, you have to understand just how rotten this
system is of the Federal Reserve, that was set up in 1913 in this
period of the wake of McKinley’s nation-building era.  So I want
to review some of this, so you can see what Roosevelt was
actually faced with; what were the fundamental problems?  So you
have this completely laisser-faire structure, which is the “let
it be” approach of Adam Smith:  mechanical, automated theory that
the universe works as this clock, you wind it up and spin it,
like a Newtonian universe, which is what Adam Smith’s views were
based upon.
And in 1913, you had this structure which bragged in its
establishment, that it would be the perfect regulation, there
would never be a banking crash ever again because now there would
be a reserve, the Federal Reserve:  It would be a reserve; all
the banks have to put into this reserve a little bit, in the case
of needing extra credit.  And then, also, it would only interface
with the most supply-and-demand part of the economy, which is
just the short-term, 90-day commercial paper, they call it, the
“securities.”  The evidences of business, buying and selling,
transporting goods, and only things that take 90 days.
So this is the act: To create an elastic currency, to
discount short-term commercial securities, and set up this
reserve. It was going to be an automatic adjustment.  And Senator
Carter Glass, who was a Jeffersonian, explicitly opposed to
Hamilton’s view, wanted this decentralized, privately controlled
banking system.  And so there was almost no control even of the
system from the top down.
And it had this mechanical structure to it.  So this was
claim that it would prevent any crisis from ever happening again,
so the way that they would control the system was changing the
discount rate, the interest rate, the cost of borrowing credit,
to change the reserve requirements of banks, and then to buy and
sell securities so there would be a little bit more or less
credit in the system, which is called the “open market
operations.” So those are the three things which they can do.
And fundamental problem here, is of course, is that right
away, this idea of a bank that’s not a commercial bank, that’s
your Federal national structure, is right there antithetical to
Hamilton’s system.  The Bank of the United States {was} a
commercial bank; it wasn’t a system of reserves.  It an actor on
the stage, it wasn’t the stage-hand sitting back, changing the
lighting, raising and lowering the curtains, but it was a
fundamental, creative player in the national economy as a whole.
On the other hand, the Federal Reserve System, this is
really the Raphael {School of Athens} painting, Aristotle versus
Plato: the Federal Reserve System, it doesn’t really intend
anything; if something happens, it will acknowledge that it
happened.  Okay, yeah, something has happened, and we will now
monetize this thing that has happened.  But it’s not going to,
itself, going to serve as a purpose of action.  It’s not going to
engage in directing any purposes, as the theory went.  So this
was the structure of it.
Now the real problem of this came into view, and I’ll just
say that that structure that they said was needed, was a case of
misdiagnosing the illness of the patient.  These crises that came
about, had never come about because of a lack of some reserve
structure that would just passively regulate.  All the crashes
came about through the lack of a nation-building effort; I’ll say
more about that later.
But this cage, as I want to paint the view of it, here’s
this structure which is saying, we’re only going to acknowledge
very short-term, 90-day actions in the economy.  Everything else,
we have nothing to do with; everything else, we’re going to
interface to the economy with this cage of member banks around
us.  We’ll interface with the banks, but everything else going
on, you don’t get any credit; any long-term building, there’s no
credit from the Federal Reserve, even things beyond 90 days.
So what happens?  Fifty percent of the banks of the country
were member banks, so right there, the rest of the banks aren’t
getting any Federal assistance in anything.  Then, of those 50%
of the member banks, by 1929, when the crash came, only 10% of
their assets were eligible for credit from the Federal Reserve
Bank, because only 10% of their assets had this short-term,
90-day commercial paper characteristic to it.  So when the crash
came, and I can say that this system of laisser-faire and this
philosophy of just this automatic machine, and lack of promoting
any real nation-building, contributed to the speculative bubble
of course, because you’re not promoting anything, and so it
didn’t promote something and create something good, so it
contributed to this bubble.  So when the bubble came down, this
system was completely incapacitated to anything about it.  And as
the people write at the time, here you had banks with only 10% of
their assets eligible for assistance from the Reserve.
So the crash is coming, banks are dissolving, and as one of
the writers of the times said, they were not authorized to make
advances on a wide range of assets that made up an important part
of the total earnings of the banks, because this was this
narrowly defined, eligible  paper that they could gain assistance
with.  So you had, of course, this massive deflation, and as I
say, this cage and then an inability to actually interface with
any of the other assets of the banks. So apparently, they had all
these industrial securities, things that were related to real
growth in the economy, but they couldn’t go to the bank and say,
“give me a loan on the basis of this asset I have that relates to
something real.”  The Federal Reserve said “no, we don’t
acknowledge those assets, because that’s not part of our theory.”
So needlessly, part of the crash of the banking system as I said,
only 5% of the actual economy had any relation to the Federal
Reserve, these short-term securities, so needlessly, you had this
great liquidation:  banks around the country had to sell, dumping
all their assets on a falling market, and this huge deflation and
all of the supposed theories of this 1913 Federal Reserve Act,
which said this is going to be the perfect edifice of free-market
economy, was shown in 1929, to be completely a sham.  And in
fact, caused the crash, in large part, and also then, was shown
to be completely erroneous because it was unable to do anything
to assist the banks.
So the banks were crashing, and of course the crash occurred
in 1929, but the banking crisis occurred in 1931 and ’32.  And it
was in ’32, when banks were really coming down at a rapid rate.
So in 1932, with all the banks unable to receive any relief
because of this lack of eligible assets which is just technical,
some of the Congress decided to finally try to emend something.
So of course, Herbert Hoover’s in there, and he’s got this
Emergency Reconstruction Finance Corp. but he vetoes a bill to
allow it to lend to industry, saying this is against the
Constitution.  But some of the Congress, they tried to amend the
Federal Reserve for the first time, to say, okay, we’ll put an
emergency action in, in 1932, which says, “we’ll give you credit
on this other stuff that you have.  We’ll give you just a little
bit.”  Again, you have this cage around the economy.  The
economy’s out here, 95% of the economy has no relation to your
Federal bank system; you have this ring of member banks and then
the Federal Reserve, which only acknowledges this 5% of the
economy.  And so everybody’s in a complete Depression,
everything’s collapsing, and the Congress under Wall Street says,
“Okay, we’ll just give you a little bit here, but, we’ll only
give you the credit if you’ve exhausted every possible asset in
your bank, and you have no eligible paper left, then we’ll
authorize a little bit of credit for you.  And we have to sign
off on it by five members of the Federal Reserve Board, and it
has to be for this period of time.”  Anyway, just about nothing
happened with these regulations, and these little changes that
they decided they were going to give.
And just to clarify, the Federal Reserve was unable to loan
to banks.  The Federal Reserve couldn’t even lend to its member
banks; it could only discount these short-term securities, 90
days, so they couldn’t even directly loan.
So this amendment in 1932 was to say, “okay, we’ll finally
loan to you something, a little bit.”  But as I said, both of
them were unused, and the crisis continued and accelerated.  And
the famous Henry Steagall said, “the credit machinery of the
country has drifted into unhappy days,” and he was for these
liberalized credit amendments, whereas on the other hand Carter
Glass was opposed to many of these things that took place.  There
were two little credit amendments that year.
Now, nothing happened for two reasons: One, you didn’t have
this national leadership that you needed to really reorganized
the whole banking system, because, for two things, one, the
limitations were so severe, there was no real intent to change
the nature of the banking system; number 2, the whole system was
rotten with speculative debt. So even if these member banks which
apparently had a lot of assets they could use to get the economy
going, were able to get assistance from the Federal Reserve under
these amendments, they weren’t reorganized.  They had to be taken
through bankruptcy.
And so, this is what Roosevelt does:  He comes into office,
the first day, he meets with everybody; the next day he declares
the bank holiday, on March 5th, 1933. And the bank conservators
go into the banks around the country under the March 9th
Emergency Banking Act, and they form trust funds to segregate all
the worthless assets from those which were valuable, and freeze
the deposits; and then the Reconstruction Finance Corp. was given
the ability to come in and help the banks.  Which was what
Nicholas Biddle did in the crises of the 1820s.  You actually had
a Federal bank that would come in and help all the member banks.
But since the Federal Reserve was incapable of doing this,
Roosevelt had to use the RFC. And these credit amendments from
the previous year, which said, we’ll give you a little help,
Roosevelt stripped those of all of the limitations, and said, we
will now allow you to directly loan to individuals and we’ll
eliminate the restrictions.
Now, those amendments that Roosevelt put in, and he makes in
his Fireside Chat on March 12, 1933, he says that the essential
accomplishment of this new legislation would make it possible for
banks to convert their assets into cash; that a more liberal
provision has been made for banks to borrow on their assets, and
more liberal provision has been made to issue currency.  This is
not a fiat currency, this is a credit currency, that’s going to
be put into place on the real industrial assets of the country,
not this short-term stuff.  But even so, the banks wouldn’t lend.
So March 1933, there’s the bankruptcy reorganization. June
1933 is the Glass-Steagall Act which creates the separation of
investment and commercial banking, sets up the FDIC.  So he’s
secured the existence of the banking system from completely
dissolving, but, the banks still aren’t lending.  And this is
where, of course, this is where the real issue is, because you
have this image of Roosevelt shattering a cage, which is what
this system was, and this is what he tries to do, is that, in the
end of 1933, Jesse Jones of the RFC makes this point, the
authoritative view that every single day the RFC is getting
applications from industries, of sound loans that just need a
little more time. All of these amendments were very short term,
nothing was long term.  The banking system of the country had not
been involved in building an economy, that was the real issue at
stake.  So here you have people debating and making these
short-term amendments to the Reserve System, but the issue was,
how do you get the whole national banking back into
nation-building?  And that required a long-term view and
something that would bring into this national banking system for
the first time since Lincoln a real industrial view.
So this was what Roosevelt did. Is that he had a proposal in
1934, in the beginning of the year, to set up, which would be a
parallel structure to the Federal Reserve, what he called “The 12
Credit Banks for Industry Bill.”  So this bill would get the
banks back into nation-building, and this would be something that
would be solely devoted to industry.  Prior to this, the
Reconstruction Finance Corp., while it was doing things like
building highways and bridges and stuff like that, it wasn’t
actually lending to general industries, all your bankrupt
industries that couldn’t get any help from member banks, because
member banks couldn’t get any help from the Federal system.  The
first time that that happened, and the consequence of what I’m
going to tell you now, which nobody knows about, that his actual
intention was not to have a “special exception,”  — this is the
government’s institution, the rest of the economy and the bank
system is over here.  Roosevelt wanted to instill throughout the
whole banking system, like Hamilton, this principle of
nation-building and industrial development.  The way he was going
to do that, was that, for the first time, the actual Federal
credit of the government, and the Federal credit of the banking
system would be able to back up any bank that wanted to loan for
long term, five years, ten years for actual industry.
So you’re taking the commitment of an industry to make good
on and build new wealth, because for 20 years of course, the real
economy had been looted; after McKinley’s death there had been
nothing going on as far as big projects, real investment, as you
had had under Lincoln and McKinley.  You had the speculative
mortgage bubble that was created in the ’20s.  Agriculture was in
a depression in the ’20s!  The real Depression of the ’30s was
general, but agriculture was in a {terrible} depression in the
’20s.  So the nation was actually stagnant.
So the point is, Roosevelt says in 1934, we have to build a
new economy, and we have to build new industries.  And we need
banks to be able to make these loans for this kind of wealth
development, and have the backing of a Federal system; because,
how is a national bank out there, in the middle of the country
going to put its assets into real long-term wealth and new
growth, new industries, if it has no backing of a Federal system?
If it doesn’t have something that can take that loan off its
books, because it needs the credit, then why is it going to tie
up its assets like this?
So the bill, the “12 Credit Banks for Industries” was that
there would be in every Federal Reserve District, a credit bank
solely devoted to this purpose.  Meaning it would be just
gangbusters loaning for this type of activity.  It would go in,
and that would be its only {raison d’être}, so to speak, whereas
if you gave this power to the Federal Reserve Bank in the
district, it would tie up all this stuff with regulations and
limitations and board authorization and all this.  So instead,
you were going to have a Federal Reserve Bank in the district,
and you’ve got the credit bank:  And the credit bank is not
laisser-faire, the credit bank is not passively monetizing
securities.  It would be an actor on the stage in every part of
the country, and all the members banks in that Federal Reserve
district could get assistance, backing, to make these types of
loans.  And if they didn’t want to do it, the credit bank
themselves, would for the first time, as I say, directly lend.
So this action of direct lending, which is the Bank of the
United States principle of Hamilton, what Lincoln did with the
greenbacks; Lincoln said the greenbacks were basically like the
Bank of the United States notes, and that’s what Henry Carey
said, that was his form of direct lending, since he couldn’t get
a full national bank.  So you would have direct lending
throughout {for} industry.

FAN-CHIANG:  Is he intending these 12 banks which are
parallel, which sit in parallel to the Federal Reserve Banks,
does he intend them to replace them? To replace the Federal
Reserve Banks.

KIRSCH:  Well, the Federal Reserve was related to about 5%
of the real economy, with this limitation of eligibility, what it
could actually discount.

FAN-CHIANG: So they were filling in the hole that existed…

KIRSCH:  And the Federal Reserve had regulations of the
banks, the reserve requirements and all that, and the discount
rate, but of course, this bank would have taken up a much more
important role, building a new economy.  It would have ended up
superseding much of the economy.  It’s like today, if we set up
what we need to with a 21st century version of the North American
Water and Power Alliance, we’d have a Federal authority, and that
would end up taking up more of the new, real economy.
But this 12-credit bank structure, was going to have a
majority of the directors of each bank as industrialists.  And
Roosevelt said, you can’t let these bankers… these bankers in
the Federal Reserve are too bank-minded; we need the majority of
the board of directors of these banks to be involved in some
industrial pursuit in the direct.  And these banks could accept
the deposits of the U.S. government.  So now the credit of the
U.S. government could be used to also lend out, until
appropriated, like Hamilton’s bank, like Biddle’s bank, and they
could increase their stock if other people wanted to get involved
in this national lending structure, they would sell preferred
stock, meaning, just like the Bank of the U.S., they could keep
increasing their capital to whoever wanted to be involved, right?
So it wouldn’t just be the initial government/joint Federal
Reserve thing.
So this was sabotaged.  And Carter Glass, who when offered
the position of Treasury Secretary by Roosevelt in ’32 — you
know, he had served as Treasury Secretary under Woodrow Wilson;
he was one of the key authors of the Federal Reserve Act, and a
Jeffersonian; he made this compromise to secure the Morgan
control of the bank system!  They were taken over the barrel by
Roosevelt and the Pecora hearings.  But the Glass-Steagall Act
which said separation of securities and commercial banks, it
regulated the structure, but it did in no way completely take
them out of control of all the banks, because they still owned
all the member banks.
So for whatever reason, there’s more to figure out why
Glass, knowing who he is, would have done that, in this case and
all of the March 9th Emergency Bank Act credit measures, he
screamed!  He said that the “Emergency Bank Act provisions were
so broad, so liberal, that no friend of the Federal Reserve in
ordinary times would tolerate them for a moment.  That under this
bill member banks might bring their cats and dogs to the Federal
Reserve Bank and have them discounted.  This broadens in a degree
that it’s almost shocking to me the currency and credit
facilities” of the Fed system to non-members.
So he was not at all for that structure, and in this case,
within a week of Roosevelt giving the Credit Banks for Industry
bill to Duncan Fletcher, the head of the Senate Banking
Committee, who was the guy who authorized Ferdinand Pecora to
come out and expose Morgan — he was a Roosevelt ally;  and Henry
Steagall in the House, within a week, Senator Glass put in an
alternative amendment, which said, this is completely unnecessary
“to set up another banking system of 12 banks to do what might be
readily done by the Federal Reserve.”  Well, he’s completely
wrong, because it wouldn’t readily be done by the Federal
Reserve; they might do a little bit, but that wouldn’t be their
sole purpose of existing and it had all the problems with it.  So
he just said, well, let’s just give these powers to the Federal
And I didn’t finish telling that story:  He wanted to bring
two J.P. Morgan guys in with him as his advisors, if he would
accept Roosevelt’s Treasury post.  So that’s the kind of guy he
Wall Street moved really into damage control at this point,
because you were fundamentally now going to put all the bank
system into long-term growth.  And so they came up with a
“compromise,” which was, we’ll give these powers of direct
lending to industry to the Federal Reserve Banks, and we know
they won’t really get out of control.  So Roosevelt’s allies
said, all right, we’re for the intention, we’re for the
rebuilding of the country, we’ll just give these powers to the
RFC.  So there were bills giving these powers to the RFC, which
as I say, did not have these before this time.  It was
Roosevelt’s intention in ’34, which led to what became the RFC.
So the RFC was really “Plan B,” it was not what he wanted.  It
was a compromise.  He wanted a full Hamiltonian system, and he
had a bill to basically bring that about.
They ended up having to compromise, and instead the powers
were given to both the Federal Reserve and the RFC, and the RFC
ended up loaning to industry and building this new economy, and
by ’36, Roosevelt could really brag that as represented in the
budget, the activity of the country now, all the tax receipts
from all the industry, and all of the credit institutions that he
had set up that were loaning and backing up commercial banks to
make these kinds of loans, this stuff was working, and it became
an exception, it redefined the meaning of credit in the country:
Instead of this crappy Federal Reserve discounting through member
banks, and this idea of this passive credit for short-term market
stuff, the RFC really defined the meaning of “credit.”  And by
’35, actually the Banking Act of ’35 liberalized and made
permanent a lot of this exceptional stuff that the Federal
Reserve could do, even though they never really used it.  They
did use the industrial lending powers for a while, but RFC became
the main vehicle.  And it continued to be amended throughout the
’30s.  But the Banking Act of 1935 also then transformed
permanently the Federal Reserve from this automatic machine to
having some type of management.
And in 1940, there was a still proposal, to put the capstone
on this story, by another Roosevelt ally in the Senate, Sen.
James Mead, to set up a permanent — the bill to “Set Up
Permanent Industrial Loan Corporation” in the Federal Reserve
System.  So again, it was basically the same thing, and it would
have the ability to set up an office in each district, and it
would be a permanent structure {in} the Federal Reserve, not over
here, the RFC, and it would also, again, accept deposits of the
Federal government and basically be what the bank system should
be and do all this direct lending and so forth.
And 1941, Pearl Harbor, everything went into motion,
everything that Roosevelt had wanted to do through the Federal
Reserve System, he was authorized to do with the Emergency
Lending Act of 1941.  And now, the Federal government and the
Federal Reserve would back any contract, because member banks
couldn’t afford all of the huge contracts for World War II.  You
know, someone would go to the bank with a contract from the
government, and the member bank would say, “I can’t help you
out.”  So the government would just come in and guarantee that
the member bank could loan for this.
So all of these emergency powers, which were completely
Constitutional that Roosevelt did during World War II, should
have been done throughout the ’30s, should have been continued.
And even the 1950 Defense Act, which authorized government credit
behind contracts, all that showed that this type of structure
should not an exception; this should be the nature of the system.
And this is actually what was needed, and was the purpose of
the National Bank, that you have the Federal Reserve System,
these special amendments that are given, it’s completely upside
down.  Hamilton’s system was solely for commerce and industry,
manufacturing and agriculture:  That’s the purpose of that kind
of a credit system.  And instead, of course, this was completely
upside down.
Anyway, there’s more to say about it, but this shows what
Roosevelt had actually intended to do, and while this Wall Street
crowd and Morgan said, we’ll do just enough to maintain our
control of the bank system; we’ll accept that you’re going to
reorganize it, we’ll accept — not that we want Glass-Steagall
— we’ll resist everything.  Whereas Roosevelt saw that as a
first step: 1933, bankruptcy reorganization, Glass-Steagall was
only a first step.
And I’ll just say that today, of course, there’s no way that
we’ll ever get what we need, the massive investment in nuclear
power, space, fusion, everything like that, by just reorganizing
the bank system.  And on Capitol Hill you have people talking
about regulating the bank system, Elizabeth Warren, and others,
but what we really need is, how are we going to authorize credit
facilities and how do we create the ability for long-term credit?
So that’s what this story is.

LYNDON LAROUCHE:  You have two things.  You have the problem
with the assassination in 1901, and that was the last time we
really had a coherent approach, and therefore McKinley was
assassinated, and his Vice President, Theodore Roosevelt, took
over.  And Theodore Roosevelt was implicated in the

KIRSCH:  Yeah.  This settlement house, where this…

LAROUCHE:  Yeah, the settlement house based in New York
City, and this was the key for organizing the assassination.  But
this was under the Vice President that this was done.  That’s how
it was done, and that is crucial to understand.
Then you have the next phase, really after all the nonsense
going on: 1913.  The accountants’ law, the accounting system as
we know it today, had not existed prior to 1913.  So that in
1913, the Institute of Financial Accounting destroyed,
systematically, like an acid, destroyed the U.S. economy.
Because you had an anarchic thing, which became as a group of
accounting accountants {tied} to the banking system, and this
accounting system under the control of the private banking system
in effect, added to the whole operation you’re describing.
So this was the force of corruption, {then and now.}

KIRSCH:  The mathematicians took over.

LAROUCHE:  Yeah.  And this is death, this is psychological
death. And that, still, is the underlying legacy in this fight to
get back to Hamilton.  Because the Hamilton conception was save
the United States from destruction at its inception.  And
therefore, everything was done — and the key to it, as you know,
the key was the setting up, around New York City and to some
degree some of the Boston banks, which were really scoundrels and
have maintained that good scoundrel tradition up to the present
day:  State Street Bank is really an intestate bank, for example.
But what the key to this thing was, which had been actually
earlier, before the formation of the United States, had been in
Boston area, for example, New England area, especially up around
Newburyport, and the area from Newburyport down to Salem,
Massachusetts was the key in this rot.  So this problem had
continued to exist.
And Hamilton’s solution was a solution, because he did not
believe in a monetarist system.  He believed in a physical
economic system, and therefore you had to learn how to use credit
and money, under the conditions of this kind of Hamiltonian
system.  The United States would have disintegrated, even when it
had been established and its Constitution established, it would
not have worked without Hamilton’s intervention!
And you have, then, after that, you had a period, contrary
to Jefferson who ruined the whole thing; well, Adams was no good,
himself.  He and his wife, who dominated him, and {hated}
Hamilton, and ran campaigns against him, gossiping which

KIRSCH:  Well, Jefferson actually went up and met with Aaron
Burr, to figure out how to slander Hamilton, during 1792!

LAROUCHE: Yeah, right.  But this is well known.  And I have
the actual report by Hamilton on this, which is in the file.  And
so, what happened was, how did this work?  What had happened, and
it came up with Jackson and company in particular.  The key thing
about Jackson was not Jackson.  Jackson was a meaningless piece
of crap.  An evil one, but meaningless, totally incompetent.  And
he was not actually running the government as President for the
two terms.  He was simply a loud-mouthed thug who was bleating
around.  And you had other people, including his Vice President,
who was the real guy who was controlling this operation.
The control was exerted from the vicinity of New York City,
which is the same location, from which the assassination of
Hamilton had occurred.

KIRSCH:  Yeah and Van Buren had actually, as a young lawyer,
written the legal bail of one of the co-assassins of Hamilton two
days before!

LAROUCHE:  That’s why he was called in because it was known
that Jackson was a loud-mouthed lout, with no real competence.
He was just a brute.  He hated, he wanted to destroy, destroy,
destroy!  He was an evil bastard.  But Van Buren was a real
agency, of what?  That’s the interesting question:  While he was
located in the New York City area, and if you go back to the
history of New York City, it’s not a very pretty one; because
that was the center for the assassination of Hamilton.  That’s
how it worked.  Aaron Burr was simply the instrument used, who
had to flee to Canada in order to avoid reprisals for the
assassination of Hamilton.
But the key thing was that in this process, British banking
interests took over the New York area banking system.  The
control of the New York banking system {from then to the present
day}, continues to be this swindle:  And it’s run from London!

KIRSCH:  Yeah, and another point to say about that is that,
this severing of the government of the United States, its real
powers in Art. I, Section 8 to regulate the currency, to create
an industrial currency, not this monetarist crap, that this
relation was severed by the Jackson crowd, and that was what they
really achieved.

LAROUCHE:  And who did it?  Aaron Burr!  Aaron Burr, apart
from being a professional assassin, he was the one who brought
the Jackson/Van Buren administration into existence!

KIRSCH:  Aaron Burr was the one who came up with the idea of
him being President, of course, in 1814, and the guy that he hung
out with at Jeremy Bentham’s house, in 1808-1812, became
Jackson’s controller!  When he got back in 1812.

LAROUCHE:  That’s right.  But Aaron Burr and the British
government, the British Empire, controlled the United States!
And if you look at the term of the term, Zeussian, as against
Promethean, the founding of the government of the United States,
the Federal government was a {Promethean act}! The colonization
of Massachusetts under the initial Massachusetts Bay Colony,
which was actually a quasi-republic, this was crushed by the
Dutch.  It was called the British crushing, but it was actually
done by the Dutch.  And it waited for the time when the Dutch
invaded the British Isles, and committed the slaughter against
the Irish.  This incumbency meant that the Dutch evil, which had
been an evil which dominated the entire century, the entirety of
the 17th century was dominated by the evil of the Dutch system,
which had come into power because  they had defeated the Spanish
in the great contest which developed during the course of the
16th century.
So that became the basis for this thing.

KIRSCH:  And they imposed the same model, the same
monetarist view, that there’s a monetary system, and nations and
governments can’t regulate that system….

LAROUCHE:  You got the same thing:  Go back now to an
earlier century.  Go back to the Golden Renaissance, and Nicholas
of Cusa, now you’re getting really into the meat!  Nicholas of
Cusa was the person who was responsible for the organization
which created the development in North America and beyond, but
particularly in North America, as the alternative to escape from
the inherent corruption of Europe.  And that was the secret of
So therefore, as a result of the overthrowing of the Golden
Renaissance movement, which had come to the point that the leader
was Nicholas of Cusa, who was the greatest intellect of that
century.  And it was the group which had been headed by Cusa even
after his death, and this was what Columbus came into.  Columbus
was actually approached; he went into northern Portugal, which
was then a big trading area of the whole Atlantic Ocean region;
and when Columbus went on a visit to the capital area today of
Portugal, and he was then educated by a bishop who had been a
leading figure of the entire Golden Renaissance group.  They
trained, informed and guided Christopher Columbus, as a
navigator, and Columbus was ready to go with the whole plan
immediately, even while Cusa had been recently dead.
But in this new period, Columbus was ready to go.  And he
got financing from the Spanish ruling family.
So, in 1492, at that point, he acted, but what was already
happening was the crushing of the faction of the Golden
Renaissance.  So this resulted in a period of the most savage
warfare imaginable, a return to the conditions of the previous
century, prior to the Renaissance. So this thing ended up, in the
whole process of bloody, evil, ugly warfare, very much like the
Venetian system earlier, and this ugly process dominated that
whole century.  And what emerged from that was the victory of the
Dutch over the Spanish monarchy, created a system, from the time
— from the 1580s, this process, which was the death of Queen
Elizabeth I, this process led to a whole century, the whole 17th
century was already dominated by a process of butchery,
controlled by the Dutch!
What happened then, is the crushing of the last remnant of
the English power, the whole system was crushed, and the general
slaughter of the Irish was launched.  And this process then led
to the Dutch taking over the United Kingdom.  This then, the
Dutch played a nice trick and they called it the British Empire.
It was actually the {Dutch} hand and the British Empire was
merely the name of the glove:  but it was the fist inside the
glove, which created the British Empire, as a {deliberately
designed copy of the Roman imperial system.}
So this is what you’re up against, and therefore, to defeat
this process, the intention had been of Columbus’ voyages, was to
say, the situation in Europe is hopeless.  And you take the
greatest things that had happened in that whole previous period,
the great development of water systems, and  everything else,
which suddenly, after one kind of leadership, a command in France
and Germany, this whole area of France and Germany was one area,
and all the great things that were done in progress, in that
whole period, were done under this one single Charlemagne.
Charlemagne actually created a system that worked.
But the minute he died, the crap went out, and it came out
from a corruption of the Vatican!  A real corruption.  And it was
run by people who were running the kitchen in the Vatican.  And
what they did is they went to a system of assassinations of
Popes, who no sooner would they be installed, because the kitchen
would poison the Popes!  And therefore, this led to an SOB, the
real SOB, who led this whole change and so-called reform of the
Catholic Church.  And everything including the celibacy rule, all
this kind of nonsense, all came then, from that time.
And so this led to all kinds of things, but this was a
process, from Charlemagne on, a continuous process where
Charlemagne represented a revolution; he had united forces
against the most evil things, the whole feudal system as such.
But when he died, then even his own children were sucked into
playing this new kind of role.
So you got a situation as a result of this particular
history, it came to a point that people in Europe who knew this
history, and knew it very well from the carnage of the earlier
century, to the period of the Golden Renaissance, they knew this!
They is what they understood they had to do.  And they were
fighting against the Normans, like the great assassination that
occurred in that period.  So this was a Norman action against
France, and the King of France was a traitor to this cause.  He
was a complete opportunist piece of crap.
So in this process, then, as a result the Golden Renaissance
was then fully launched.  The assassination actually led to a
change in the reform of the whole Catholic apparatus.  This
became the Golden Renaissance, and the Golden Renaissance was
going to the Classical Greek legacy, which still lived in some of
part of Greek speaking areas, and the relationship between the
archives of the old Eastern empire, this became the germ of
support for the creation of the Golden Renaissance in which
Nicholas of Cusa played a key role.
This began the whole process.  Then, toward the period when
Cusa died, and the effort to kill him was already there, but when
he died then there was a weakness.  But the inertia of what had
been done in the Golden Renaissance still existed.  But then in
the immediate period in the beginning of the next century, this
transformed again, so you had a duality:  Columbus’s work in
crossing the oceans, after his meeting with people in Portugal,
in Lisbon, that this formed the transport of Europeans, across
the water, into North America.  It also went into the Central
America area, but there was a good colonization there, but it was
destroyed, by the Armada:  The Armada went in there to kill all
the people who had been the real founders of attempt to find a
civilization in Central American and Caribbean area.
So this led to a process, and you have to see that it’s not
that one generation when it dies out sets up a new policy than
the previous one.  Because the principle of immortality, human
immortality, was the idea of the creative principle:  No living
species is capable of creativity, except biologically.  When the
human mind, on the basis of things which we call physical
scientific principles an things which correspond to that
implicitly, these are the processes which distinguish the human
species away from the animal species.
So it is not physical experience, it’s pleasure/pain, which
is the British idea, the so-called British Empire idea; it is the
fact that the young people when they die, if they’re creative,
create an impetus for qualitative change in the characteristic of
the human species.  This goes to the principle of humanity.  That
the human species is the only known species, which is able to
create willfully.  All other species can only react
circumstantially, while they are still alive.  They have
influence over their children, their scions, but they don’t have
any creative influence over their offspring.
The human species is unique, in the ability of true human
beings, to be able to create a new future.  And this is typified
by great works in physical science, for example, it’s the
discovery of an actually {new principle} which acts throughout
society in a different way than just simply accidents.  There’s
no animal-type evolution.  The difference between mankind, and
the difference between {me} and the British and Wall Street, they
don’t believe in progress!  Look at the Green policy which is
destroying the United States from within!  The British Green
policy — no!  This is the oligarchical system!  There must be no
progress! You must bring the popular people under control, you
must beat them into pump, crush them, reduce their population!
Don’t let them prosper.  We want to control there.  {We don’t
want any progress!}

KIRSCH:  Well, you know, you were just describing this whole
historical process, which is the fight of the nation-state system
versus this oligarchy and what happened in Europe.  Well, one of
the greatest creative actions you’re talking about, the principle
of creativity in young people that has to occur, would be how do
we overthrow that oligarchical system?
And this is something like Hamilton:  Hamilton, as a young,
creative genius, that was his role.  And he figured out the way
at that time…

LAROUCHE:  That was his legacy!  That was his personality!
He was a creative personality, which is the normal condition
under favorable circumstances, for {every} human being, from
birth to death, and to succession!  All great scientists, and
people of really creative capability, {never die} simply because
their body has died!  Because they have contributed into society,
a {factor which is novel}, for which there was no direct
formation.  But a reaction for freedom, to enable them to achieve
a functional immortality, so that within their lifetime, people
would make changes which were {qualitative} changes, not
adaptations, but qualitative innovations of principle.  This
leads to what we call in physical science, {unique creativity},
such as that of Max Planck, for example; such as that of
Einstein, in the 1890s, these cases.  These are people whose
discoveries were not deductions.  They were in the form of
inspirations:  All advances of mankind are based, not on
deduction, but on inspiration.
But inspiration is not a random thing, it actually confirms
to, in the realm of chemistry, it means the increase, the
evolution of chemistry, which is an evolution which has occurred
how?  Through the agency of the noetic powers of the human mind.
And the issue here, the fundamental issue, is the question
of, do you honor the noetic principle of the human mind?  Is that
the basis for your meaning?  Because if you make discoveries or
contribute to the process of making a {true discovery}, not an
interpretation, but an actual {creation of an idea which had
never existed before!}  That’s a discovery!  Everything else is
an approximation.
And animals can approximate.  Animals can adapt.  {They
can’t create!}  Only human beings can create.  And the proper
person, the intentions of any person, any human being, is to
devote their life to creating or participating in the process of
creating a creation!
And that’s what we should be.  That my conviction.  And
that’s the Promethean principle, against the Zeussian.

FAN-CHIANG:  It’s very important that this idea of
creativity is not counterposed, but linked with the idea of
having a legacy.  Because having creativity doesn’t just mean
you’re making something new.  But it’s new as a development.

LAROUCHE:  You change the universe.  You see, if you didn’t
have human beings, you wouldn’t have anything significant on
Earth. The animals could never do it.  The animal species evolve,
actually with actual evolution, from one species to what you
actually classify as biologically a different species, higher or
sometimes worse.  But the human being volunteers {intellectually,
not physically}, in any other sense.  But only noetically,
creates states of existence, by the introduction of principles
which had never existed before!
And the whole history of chemistry is a history of
discovery, not of chemicals, though that’s an effect, but a
discovery of the principle of creativity.  Only the human
species, known to us today, certainly throughout this planet,
only the human species is truly a creative species.  The rest,
including most of our liberals, are {animals}!  Why are they
animals?  Biologically, no.  They’re animals, because the
creative impulse, inherent in all human beings who are not
biologically damaged; all human beings are intrinsically
creative.  The problem of society can be attributed chiefly to
the suppression of creativity in the human.  And therefore,
people are distorted and reduced to being animals of a special
kind:  {human animals}.
Look at the Green policy in the United States, or as its
extended in Europe, what’s that?  It’s the same thing.  Green
people are dead people!  Because they no longer have in them,
they no longer permit themselves, anything which is actually
proximate to creativity!  You have people who are creative,
actively creative, show themselves like the case of the close
relationship with Max Planck and Einstein, during the 1890s.
Then you look at the {death} of creativity, which was the great
orgy, of the year 1900:  1900 was a great celebration in
mathematics and other things, the attempt at the launching of
{destruction} of scientific progress!  And this was done, by
Bertrand Russell.  Bertrand Russell became the paragon of {moral
degeneracy and pure evil!}
So when you look at these processes that you’re describing,
for example, these processes are a reflection of this.  Franklin
Roosevelt was a true creative genius.  And what he did, he
personally, with people around him who would accept his
influence, because of the difficulties of the time; everything
had failed, the whole Hoover system, everything from accession to
power, in the beginning of that century, that was the problem.
And Roosevelt reacted {against that}, just like Douglas
MacArthur’s father, who had been an upstart general in the Civil
War.  And Douglas MacArthur was the son of this guy, and then, he
had been fighting in the context of Grant.
And so, this process, coming into the century, you had a
revolt, with the assassination of the greatest President we had
in that period, which cleared the gates for the British invasion,
the British corruption which destroyed the entire system.  Like
the accounting system:  The accountants did not {exist} until
1913. They were created as a product of the Act, which set up the
new banking system, the reformed banking system.  And  this was
done essentially by a President who was the nephew, of the man
who led the Confederacy as an intelligence operative.
So the point is, this whole problem can be made
comprehensible, only if you look at this phenomenon.  And the
phenomenon of human beings which are not human, which are the
ones we call “Zeussians.”  As against what the Americans are,
really, when they’re patriots, they’re Prometheans.  And you want
to educate the Prometheans to realize the heritage they have of
creativity, which other people don’t have.
The purpose of education is not to educate, but to create
creative powers in the students.
And the whole education system is created on making students
{stupid}!  Because the way that society runs, you are {taught}.
And if you’re not {taught}, and if you are not accepted as
following these rules, your grades drop down to zero, or less!
If you answer the questions and accept the rules — I had this,
you know, with my reaction, about the age of 14, when I really,
the first time I was in this class; I was thrown into this
Euclidean geometry.  I didn’t really know what the problem was,
but when I was asked, you know, in this opening class of this
geometry class, I was asked “does anyone want to say what
geometry is about?”  I said, “Oh, yeah.”
Because I had been, as a young squirt, my father and family
used to take me to the Navy Yard in Boston, in Charlestown side;
and I would, after seeing all the boats, and the {U.S.S.
Constitution} and so forth, and all these things, I would go
roaming into other areas of that Navy Yard.  And here was high
rise construction, as opposed to the old iron bar construction,
where you would have bricks and iron pulled together to make a
building maybe three or four stories high.  Now, in this period,
we were going into high rise construction, and you would have to
have steel beams, not iron beams, but steel beams, and you would
punch holes in these steel beams in order to have a structured
strength/mass ratio.  And that was a demonstration in that
period, to me, that’s why I said, “Oh!  How does this work?”  I
would go back there every time we would get back to the Navy Yard
after that point, like a weekend visit, my family would go off to
Charlestown to see the Navy Yard.  It was cheap entertainment,
for my father who was a tight-wad to a certain degree.
So, I went off on these things, and I kept studying this
thing, and I understand why they appeared to be holes in the
steel beams for high rise construction: And so I walked into this
first class in geometry in secondary school, and I just said,
“this is geometry.”  And it’s what you call the holes in the
steel, which indicates a physical principle which explains

FAN-CHIANG: Right. It’s the [inaud] ratio.

LAROUCHE:  Yeah.  So then, everyone was horrified that I’d
made this terrible boo-boo!  That I had violated Euclid!  And my
whole view on science then, at that time, was immediately, when I
saw the reaction, I knew:  {This is crap! This is stupidity!}  I
don’t want it!
And from then on, I was in trouble, because I had insulted
the gods of Olympus!  By attacking Euclid, the sacred Euclid, the
great genius Euclid, who was fraud and a hoaxster!
And therefore, the problem in society today, is that when
you get that factor in society, which I hit in the university
system later, the university systems had the {same crap}
predominated.  And the people who had any real capability in any
university were {exceptions} to the rule! They were not typical
of the educational institutions, but they were exceptions to
people who worked within corrupted institutions called
And therefore, only when you look at this kind of phenomenon
and understand it, do you understand what the problem is!  From
what is purely childish masturbatory entertainments, to actual
scientific progress, and that is really what the issue is which
you’re discussing.  You want a system, which is what Hamilton
helped to perfect, a system of man’s relationship to productivity
and the future of mankind, which is based on this consideration
and a free expression of that principle, to hope that new
generations will make new discoveries, {but in the same
Promethean direction}, as opposed to the alternative.
And that’s really what we’re dealing with.  We’re dealing
with the fact that we will not succeed as a society, we may
become even extinguished as a species, if we don’t change the
policy from the predominant reductionist point of view, to the
actually noetic point of view, a noetic point of view which is
demonstrated to everyone who wants to listen or see!  The
principle of creativity, which is reflected as a shadow in the
successive development of chemistry.  Because mankind is actually
an agent of chemistry, and chemistry is an agent of mankind.
And when you understand that, you now know something about
science.  When you go with the usual stuff that’s thrown at you
in schools, from childhood on, and it’s getting worse all the
time, we are now breeding stupid Americans of the future.  And
because they believe, at root, they believe and accept things
like Euclidean geometry.  Anyone who accepts Euclidean geometry
is systemically incompetent in science, because the very factor
of creativity {doesn’t exist in their minds}.  They are
deductive, not creative.

FAN-CHIANG:  Sounds like we needs scientists to be in the
Banking Committee.

LAROUCHE:  Yes!  If you’re not a competent scientist, you’re
not qualified to be a financial director of the United States.

FAN-CHIANG:  Yeah.  I don’t think most people in the Banking
Committee think of themselves as defending the immortality of
mankind.  They should.


KIRSCH:  Well, a nation can’t continue to exist without
using the powers which led to its establishment and promotion of
its national interest.

LAROUCHE: That’s one way of saying it.

FAN-CHIANG:  Okay.  Thank you for joining us.  Join us next

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