Monday, May 10, 2021

Part 7 : The Gods of Eden ... Funny Money ..Marching Saints..William and Mary Have a War...Knights' New Dawn

The Gods of Eden
by William Bramley
21 
Funny Money 
FEW TOPICS OCCUPY as many minds or stimulate as many emotions as money. This is largely because money is an overwhelming problem to a majority of people. One thing which causes modern money to be a problem is inflation, whether inflation is climbing at 3% annually or 300%. Inflation, of course, is the situation in which the costs of goods and services steadily rise due to the ever-decreasing value of money. This happens when the money supply becomes larger in proportion to the supply of valuable goods and services. 

Money itself is not valuable; only the goods and services that can be bought with it are. The wealth of any individual or nation, therefore, is ultimately determined by what it produces in terms of valuable products and services, not by how much money it prints, distributes or holds. A nation could actually survive without any currency at all as long as it was otherwise productive. 

The purpose of money is to facilitate the exchange of goods and services. Money is therefore an extension of  the barter system. Barter is the act of trading something one possesses or does for something of someone else's. Production and barter are the bases of all economy. 

Coins and paper money were originally created to assist in barter. They allowed people to barter without having to carry around actual goods or immediately deliver a service. This permitted individuals to trade more easily and to save the profits of their labors for the future. 

Paper money initially began as "promissory notes." A promissory note is a written promise to pay a debt. A person would write a note on a piece of paper promising the bearer of the note a certain quantity of goods or services that the notewriter could provide on demand. To illustrate, let us look at the following fictitious example: 

Let us pretend that a chicken farmer was in the village market and wanted to trade for a basket of apples. He did not have his chickens with him, so he might write a note to the apple seller entitling the bearer of the note to come up to the farm at any time to pick out two healthy chickens. The chicken farmer would be able to walk away with his basket of apples and it would be up to the apple grower to visit the farm one day to redeem the note by getting his two chickens. As long as people have faith in the chicken farmer's ability to honor his notes, he will be able to use them for barter. 

Let us now pretend that as the day draws to a close, the apple grower decides to have a look around the market. He comes across the cloth merchant. The apple grower's wife has been henpecking him for days to buy some of the new silk that just arrived on a caravan from the Far East. The apple grower's home life has been made miserable by her unceasing demands and her denial of wifely comforts, so he negotiates with the cloth merchant for some silk. The cloth merchant, however, does not need any more apples, so the apple grower, remembering that he has a note for two chickens, asks the merchant if the merchant needs poultry. The merchant says that he does, and the apple grower gives him the note for two chickens in exchange for silk. It is now up to the cloth merchant to trudge on up to the chicken farm to redeem the note. The chickens themselves have never left the coop, yet they have changed ownership twice in one day. This type of exchange was all that paper money was initially created for; but do you see the temptation that it can open up? 

If the chicken farmer knows that some time will pass before he must redeem his notes with actual chickens, or that some if his notes will circulate forever and never come in for redemption, he may be tempted to issue more notes than he has in actual chickens, thinking that he will be able to cover all the notes by the time they come back to him. 

Temptation now gets the best of the chicken farmer. 

The chicken farmer has a big family get-together coming up and he wants to impress his in-laws for once by putting on an opulent feast. Down to the market he goes where he writes notes for chickens not yet hatched and stocks up with an abundance of goods from other merchants. Several things can now happen. The chicken farmer will get away with it if he is always able to meet the demand for chickens when his notes come in for redemption. Another thing that may, and often will, occur is that he has so saturated the marketplace with his chicken notes that most people just do not want any more of them, so he must offer even more hens for each trade to make people feel that it is worth their while. He is now writing notes for two or three chickens in exchange for items for which he previously only had to issue single-chicken notes. As these chicken notes circulate, they become less and less valuable because there are so many of them. A vicious spiral ensues: the more notes the chicken farmer issues, the less valuable they become, and the more he has to issue in order to get what he wants. This is known as inflation. 

Now comes the worst part. With more and more notes outstanding, an increasing number of notes will start coming in for redemption. Soon the farmer will see that his true wealth, which is his supply of chickens, is becoming rapidly depleted even though only a small portion of his outstanding notes have come back. To preserve his chickens, he must decrease the value of his notes by declaring that the outstanding notes are now only good for half of what they say. This is called devaluation. Since the farmer may find it difficult to admit that he had issued many more notes than he had chickens, he may try to save his reputation by lying, such as by saying that a fierce chicken plague had wiped out half of his flock. That will probably not prevent him from becoming very unpopular. Public faith in his notes will be destroyed. He will either have to revert back to straight barter, or else he will need to acquire someone else's notes in order to continue trading in the market. 

As we can see, paper notes, or money, are rooted in actual commodities and are meant to be an expression that the creator of the notes has something valuable to trade. In contrast to notes are coins, which functioned somewhat differently. Metals have always been considered valuable, and so pieces of metal were convenient trading tools. Metal pieces were imprinted with various designs, thereby becoming coins, and their metallic purity was guaranteed by the imprinter. Coin values were initially determined by the quantity and purity of the metal contained within the coins. Gold was a rare and popular metal, so coins made from gold were more expensive and had a higher barter value than, for instance, copper coins. 

Metal coins became a popular tool of barter because they were durable and quantities could be controlled. They did create some problems, however. Realistically, people were only trading pieces of metal for other goods. This created a disproportionate emphasis on metals. The acquisition of coins and coin metals became an obsession to a great many people, and such obsessions tend to drain away energy better spent producing other valuable goods and services. The system also gave a disproportionate amount of power to those who possessed large quantities of coined metals, even though other commodities, such as food, are ultimately more valuable. The person with the coin metals could immediately acquire any good or service, but a farmer first had to go through the intermediate step of exchanging his product for a coin or coin metal before he could have the same spending flexibility. 

Coin metals merged with paper notes to create the foundation of our modern monetary system in the 1600's. Those  who laid this foundation were reportedly the goldsmiths. Goldsmiths usually owned the strongest safes and lockboxes in town. For this reason, many people deposited their coin metals with the smiths for safekeeping. The smiths issued receipts to the depositors that promised to pay to the receipt holders on demand those quantities of gold or silver shown on the receipts. Every such receipt was actually a note which could be circulated as money until a holder of the note went back to the goldsmith to redeem it for the specified amount of metal. 

The goldsmiths made an important discovery. Under normal circumstances, only about 10% to 20% of their receipts ever came back for redemption at any given time. The rest circulated in the community as money, and for good reason. Paper was easier to carry than bulky coin and people felt safer holding receipts in lieu of actual gold and silver. The smiths realized that they could lend out the unredeemed metals and charge interest, and thereby earn money as lenders. In making such a loan, however, the smith would try to convince the borrower to accept the loan in the form of a receipt instead of actual metal. The borrower could then circulate that note as money. As we can see, the goldsmith has now created "money" (his receipts) for double the actual quantity of metal he has in his safe: first to the original depositor, and then to a borrower. The goldsmith did not even own the metal in his safe, yet by simply writing upon a piece of paper, someone now owes him money up to the full value of the gold in his safe. The smith could continue writing his notes as long as the notes coming in for redemption did not exceed his actual deposits of precious metals. Typically, a smith would issue notes four to five times in excess of his actual supply of gold. 

As profitable as this operation may have been, there were some pitfalls. If too many of the goldsmith's notes came back for redemption too rapidly, or the smith's borrowers were slow to repay, the smith would be wiped out. The credibility of his notes would be destroyed. If the smith ran his operation cautiously, however, he could become quite wealthy without ever producing anything of value. [parasites do not produce anything of value EVER, not then, not now! DC] 

The injustice of this system is obvious. If for every sack of gold the smith had on deposit people now owed him the equivalent of four sacks, someone had to lose. As public debt to the goldsmith increased, more and more true wealth and resources were owed to him. Since the goldsmith was not producing any true wealth or resources, but was demanding an ever-increasing share of them because of his paper notes, he easily became a parasite upon the economy. The inevitable result was the enrichment of the careful goldsmith-turned-banker at the cost of the impoverishment of other people in the community. That impoverishment was manifested either in the people's need to give up things of value or in their need to toil longer to create the wealth needed to repay the banker. If the goldsmith was not careful and his monetary bubble burst, the people around him suffered anyway due to the disruption caused by the collapse of his bank and the loss of the value of his notes still in circulation. 

Such was the birth of modern banking. Many people feel that it is an inherently dishonest system. It is. It is also socially and economically destabilizing, yet all of the world's major monetary and banking systems today operate on a close variation of the system I just described. 

By the 17th century, the Medici banking house of Italy had come up with the idea of using gold as the commodity upon which to base all paper currency. Gold was touted as the perfect basis for paper notes because of the scarcity and desirability of gold. This was the beginning of the "gold standard" in which all other goods and services are valued in relation to gold (and sometimes silver). The gold standard was certainly a terrific idea for those people who owned plenty of gold and silver, but it created an artificial reliance on a commodity that is not nearly as useful as many other products. To base an entire monetary system on a single commodity is better than basing it upon no commodities at all, but even under a gold standard paper notes will far exceed the metals used to back the notes. The best solution is to root a money supply firmly in a nation's entire valuable output so that the money acts as an accurate reflection of that output. 

Once the gold standard was created, paper notes were thought to be "as good as gold" because people could redeem the notes for actual gold. This created a false sense of security. As more and more gold notes entered the market, they gradually became worth less and less, resulting in a steady inflation. The gold owners/bankers had to keep issuing a constant stream of notes because that is how they earned their profits. As long as the bankers planned carefully and the people retained faith in the notes, the note writers could stay ahead of the inevitable inflation they created and make an enormous profit from it. If, on the other hand, they issued an overabundance and too many of their notes came back for redemption, they could, as a last resort, devalue the notes to save their gold. In this fashion, inflatable paper money, even under a gold standard, became a source of wealth and power to those entitled to create the money. It also generated indebtedness on an enormous scale because most of the "created-out-of-nothing" gold notes were released into the community as loans repayable to the bankers. If people did not borrow from the bankers, little new money would enter the market and the economy would slow down. 

This method of creating money clearly destroyed the true purpose of money: to represent the existence of actual tradable commodities. Inflatable paper money allows a handful of people to absorb and manipulate a great deal of true wealth, which are the valuable goods and services people produce, simply through the act of printing paper and then slowly destroying the value of that paper with inflation. It causes money to become its own commodity which can be manipulated on its own terms, usually to the detriment of the production-and-barter system. Money was meant to assist that system, not to dominate and control it. 

The inflatable paper money system described above was the new "science" of money being installed by Brotherhood revolutionaries. An early version of the system was established in Holland in 1609. That was the year in which Dutch and Spanish forces signed a truce suspending the hostilities of the Eighty Years War. The truce marked the birth of the independent Dutch Republic and the founding of the Bank of Amsterdam in the same year. 

The privately-owned Bank of Amsterdam operated on the inflatable paper money system described above. It was run by a group of financiers who pooled some of their precious metals to form the asset base of the Bank. By prior agreement with the new Dutch government, the Bank helped Dutch forces resume the wars against Spain by issuing notes four times in excess of the Bank's asset base. The Dutch magistrates were then able to draw on three quarters of the "created-out-of-nothing" money to finance the conflict. This reveals the primary reason why the inflatable paper money system was created: it enables nations to fight and prolong their wars. It also makes the human struggle for physical existence in a modern economy more difficult due to the massive debt and parasitic absorption of wealth that the system causes. Furthermore, steady inflation reduces the value of people's money so that their accumulated wealth is gradually eroded. The Custodial aims expressed in the Garden of Eden and Tower of Babel stories were greatly furthered by the new paper money system. 

The initial success of the Bank of Amsterdam encouraged similar banking arrangements in other nations. The most notable offspring was the Bank of England, founded in 1694. The Bank of England established the pattern for our modern-day central banks by refining the inflatable paper money system of Holland. The Bank of England system was subsequently spread from nation to nation, often on the backs of revolutions led by prominent Brotherhood network members. The worldwide reformation announced in the Fama Fraternitis was well underway by the end of the 17th century, and the "new money" was a big part of it, as we shall see more of later

22 
Marching Saints 
ONE OF THE most important leaders of the Reformation was John Calvin. Calvin was only ten years old when Luther broke from the Catholic Church, but as an adult, Calvin became one of Protestantism's most zealous advocates. 

Calvin published his first religious tract in 1536 in Basel, Switzerland—a city by the Swiss-German border. Calvin spent his adult life writing and teaching his own unique interpretations of Protestant doctrine. The result was the creation of a Protestant denomination named after him, "Calvinism," which was headquartered in Geneva. 

Calvin continued in the mystical vein of Martin Luther. As we recall, Luther said that spiritual salvation was not something that a human being could achieve through his or her own labors. Instead, salvation required an act of belief. The same idea was promulgated by Calvin, but with a harsher twist. According' to Calvin's doctrine, not even an act of faith or belief would ensure a person's spiritual survival. Calvin proclaimed instead that a person's spiritual salvation, or lack of it, was already predetermined before birth by God. Not only had God decided in advance who would achieve spiritual salvation and who would not, but there was absolutely nothing a person could do about God's decision. This unhappy doctrine is known as "predestination." Calvin's predestination teachings offered people little comfort because they stressed that most human beings were spiritually condemned. Those humans favored by God before birth were known as the "Elect." The Elect were few in number and could do nothing to share their good fortune with others. The Elect had only one real duty on Earth, proclaimed Calvin, and that was to suppress the sin of others as a service to "God." Calvin, of course, was one of the Elect. 

One might ask: why would "God" condemn nearly every soul before birth and then continue to punish them after birth? It seems rather cruel. According to Calvin, the human race was still being punished for the "original sin" of Adam and Eve. As we recall, the "original sin" was early man's attempt to gain knowledge of ethics and spiritual immortality. 

Calvin did not attempt to justify predestination, despite its obvious unfairness. He preached instead that predestination was a mystery to which all people should be humbled. Many things of "God" were never meant to be understood by human beings, he said. 

Calvinism was more than a Sunday religion. It was a way of life. It demanded of its adherents a pragmatic and austere lifestyle in which a person's highest duty was to glorify God in his or her daily actions. People were taught that their positions in life, no matter what those positions happened to be, were their "callings" by God. A life should be lived as though it were a Supreme Being's will that a person was where he or she was. Calvinism was clearly a philosophy of feudalism for the modern age. 

On religious grounds, Calvin forbade drunkenness, gambling, dancing, and singing flippant tunes. Those were among the sins that the Elect had been put on Earth to stamp out. To no one's surprise, Calvinists quickly developed a reputation for being dour and colorless. They also grew violent. Calvin was not a man of tolerance and  he adopted some of the vicious practices of the East Roman emperors. For example, Calvin encouraged the death penalty for heresy against his new doctrines and he demanded that "witches" be burned to death at the stake. 

Calvinism traveled from its stronghold in Switzerland to other countries. In the Netherlands, Calvinists had played a very large role in agitating and bringing about the Eighty Years War, which gave us the Bank of Amsterdam. In Great Britain, Calvinism was the basis of the Puritan religion. 

Like their Calvinist brethren in Holland, some English Puritans decided to assert their gloomy beliefs and material self-interests through violent revolution. In the year 1642, a group of wealthy and prominent British Puritans led a full-scale civil war against the English king, Charles I. In Puritan eyes, Charles had committed crimes against God by marrying a Catholic and by being tolerant of Catholicism. After winning the civil war and beheading Charles, the victorious Puritan armies placed their own dictator in charge of Britain: Oliver Cromwell. 

Under Cromwell, the Puritans were able to assert their religious beliefs into the arena of foreign policy. English Puritans believed strongly in the concept of Armageddon, i.e., the Final Battle. They believed that the great Final Battle had begun and would climax in the latter 17th century, and that the Puritans' civil war against Charles I was a part of that Battle. The Pope was labeled the anti-Christ and Catholicism was considered Satan's tool. Cromwell tried to shape English foreign policy around these beliefs by working to solidify international Protestant unity and by waging war against Catholics in various parts of Europe. Cromwell believed that the English Puritans were God's "second chosen" people* and that his actions were all part of Biblical prophecy. 
*The Hebrews were considered God's "first chosen," but they had fallen out of favor. 

Calvinist cosmology did much to shape Puritan ideas about war. Engaging in war was glorified. The Puritans believed that tension and struggle were permanent elements of the cosmic scheme because of the eternal struggle between God and Satan. Professor Michael Walzer, in his intriguing book, Revolution of the Saints: A Study in the Origins of Radical Politics, explains their belief this way: 

As there is permanent opposition and conflict in the cosmos, so there is permanent warfare on earth . .. This tension was itself an aspect of salvation: a man at ease was a man lost.1 

It is vital to understand this Puritan idea because it exalts war as a necessary step to spiritual salvation. It was also one of the seeds which gave us the Marxist philosophy of "dialectical materialism."2 This Puritan belief is one of the most pernicious ideas ever taught by the Custodial religions. It caused Puritans to view peace as an affront to God because peace meant that the struggle against "Satan" had ceased! "The world's peace is the keenest war against God," wrote Thomas Taylor in 1630.* The highest calling of a Puritan man was to march off to war for the glory of God. When there were (heaven forbid) no wars in progress, men were encouraged to attend military drills for recreation: * Dialectical materialism is the philosophy which states that conflicts between social classes are inevitable and that such conflicts are the first stage of a process that will ultimately bring about a classless Utopia on Earth. 

And in religious respects, since every man will have recreations, that be best which is freest from sin, that best which strengtheneth a man . .. then abandon your carding, dicing, chambering, wantonness, dalliance, scurrilous discoursing and vain raveling out of time, to frequent these exercises [military drills] .. .3 

The Puritans' ennoblement of war, coupled with their austere pragmatism, helped bring about major changes in the manner of fighting wars. Generations earlier, the Renaissance had had a very interesting effect on warfare in Europe. War had become a "gentleman's" activity—ornate and full of bluster. European rulers expended considerable sums of money to create aesthetic and colorful armies. Bright uniforms, flapping banners, and fancy armor were the order of the day. Significantly, pageantry replaced combat on the battlefield. More often than not, the dazzling Renaissance armies engaged in endless maneuverings against one another with little actual contact. After a great deal of pomp and show, a military stalemate would often occur followed by an elegant cavalry maneuver known as the caracole. Each side could then declare itself the winner with few or no casualties, and march colorfully home to the adulation of its people. Young male soldiers survived to quicken their lovers' pulses with noble tales of gallantry and honor in the field. 

In today's jaded, ultra pragmatic world, the above activities might seem rather silly, like something from The Wizard of Oz. They were, however, an exceptionally important phenomenon because the Renaissance style of warfare revealed the true nature of the human spirit. The majority of people will gravitate away from war when given the chance. They will turn arenas of conflict into theatres of pageantry. They will choose life, color, and artistry over death, pallor, and decay. The Renaissance was a short period of history revealing that when repression is eased, when intolerance and war-inducing philosophies diminish in importance, and when people are able to think and act more freely, human beings as a whole will naturally and automatically move away from war. 

Puritan austerity and glorification of war helped make European wars bloodier. Puritan armies operated on the idea that wars were meant to be fought effectively, not colorfully. With that in mind, Puritans eliminated military glitter and developed efficient fighting units through rigorous drilling. This pragmatic way of fighting quickly spread when other nations discovered that a beautifully embroidered banner could not win against an effectively pointed cannon. While most military organizations today still engage in some pageantry, it is noticeably absent in , 226 William Bramley the actual conduct of war. We observe instead austere fighting uniforms, curt efficiency, and military strategists who coldly calculate nuclear megadeath with percentage points and probability factors. They are all reflections of the pragmatism reintroduced into war by the Puritans and other Protestants. As we survey the war-mangled bodies of our fellow humans who have been killed more efficiently and more pragmatically, perhaps we realize that Renaissance pageantry was not so silly after all. 

Despite its early successes, the new Puritan government under Cromwell did not last very long. The Stuart dynasty regained the British throne in 1660 with the crowning of Charles II (son of the beheaded Charles I). Charles II died 25 years later in 1685 without an heir, and so his brother, James II, took the throne. James ruled a mere three years, after which a second English revolution was launched in 1688 known as the "Glorious Revolution." Although a big issue was still Protestantism versus Catholicism, the Puritans did not lead the Glorious Revolution. In fact, a great many Puritans had fled England to establish colonies in North America after Charles II assumed the throne. The Glorious Revolution was led, in part, by none other than the House of Orange-Nassau. By the time of the Glorious Revolution, the House of Orange was firmly seated on the Dutch throne. How Orange also came to take the British throne and reign over three nations at once is a fascinating story of political intrigue. 

23 
William and Mary Have a War 
KING CHARLES II of England and his brother/successor, James II, had a sister, Mary, who had married the Dutch Prince of Orange. This marriage created a family tie between the royal houses of Britain and Holland. This tie was further strengthened by the marriage of James II's daughter, Mary II, to the son of the Prince of Orange, William III. Royal marriages in those times were not only matters of "breeding," they were also designed to secure political advantages and were often arranged with all of the sophistication and cunning of an espionage coup. Several German royal families were masters at the game. They were notorious for marrying into foreign royal families as a stepping stone to seizing power in those other nations. The House of Orange-Nassau was a member of that treacherous German clique. The Stuart family, after its hard-won struggle to regain the English throne, fell into the trap. Its marriages into the House of Orange helped bring the Stuart monarchy to a permanent end during the Glorious Revolution of 1688. To understand how this happened, and why all of  this is important to us, let us briefly review the Glorious Revolution. 

A powerful group of Englishmen and Scots had formed a Protestant political faction in England known as the Whigs. The Whigs were actually headquartered in Holland which, of course, was under the monarchy of the House of Orange. From their Dutch base, the Whigs launched the Glorious Revolution of 1688 and quickly unseated James II in a bloodless coup. The Whigs then placed James II's son-in-law, William III of Orange, on the British throne. The House of Orange now reigned over both Holland and England, as well as over their original German homeland. 

Behind this intrigue we see the shadow of the Brotherhood. William III is reported to have been a Freemason.1 In fact, in 1688, a militant secret society was formed to support William III. It was called the Order of Orange after William Ill's family, and it patterned itself after Freemasonry. The Orange Order was anti-Catholic and its purpose was to ensure that Protestantism remained the dominant Christian religion of England. The Orange Order has survived the centuries and is today strongest in Ireland where it has over 100,000 members. It is perhaps best known for its annual public parade to commemorate the successes of William III in England. 

Upon his assumption of the British throne, William III quickly undertook to erect the same institutions in England as those which had been established by his dynasty in Holland: a strong parliament with a weakened monarchy and a central bank operating on an inflatable paper currency. William and his queen, Mary II, also promptly launched England into expensive wars against Catholic France. 

The man chosen to organize the English central bank under William III was a mysterious Scottish adventurer named William Paterson, of whom very little was apparently known. The British House of Commons (parliament) was at first reluctant to accept Paterson's central bank scheme, but relented as the British national debt continued to skyrocket from the conflicts launched by the very warlike William III. The paper money system with its built-in inflation was touted as the way to finance the costly wars. Taxes were already as high as they could reasonably go and so the House of Commons felt that it had no alternative but to institute the scheme. The Bank of England was thereby born and warfare could continue, just as war could continue in Holland after the Bank of Amsterdam had been created there. 

The Bank of England has been labeled by some economists the "Mother of Central Banks." It became the model for all central banks which followed it, including the central banks of today. Under the Bank of England scheme, the central bank was to be the nation's primary bank, and it would lend exclusively to the national government. The central bank's entire purpose was to put the government into debt and to be the government's major creditor. The central bank's notes would be lent to the government and those notes would then circulate as a national currency. This would cause the nation and its people to rely on those notes as money. The establishment of the Bank of England caused Britain to go deeply into debt to a monetary elite (the "paper aristocracy") which could then influence the use of the nation's resources. This is the modus operandi of every central bank today.

Like most modern central banks, the Bank of England was a privately-owned or privately-operated bank with quasi-governmental status. In accordance with Paterson's plan, the financiers who pooled their resources to create the Bank of England received approval from the government to issue gold and silver notes in a quantity many times exceeding the financiers' pooled holdings. The standard practice of bankers during that period was to issue notes four to five times in excess of their precious metals. The Bank of England, however, issued an incredible multiplication of 16 2/3. The British government agreed to borrow those notes and honor them as legal money for use in its purchases. The government accepted this plan because the government was not required to repay the initial loan, only the interest on the loan. Would not the Bank of England lose money on such a deal? 

Not at all. The face value of the loan notes were many times in excess of the value of the actual assets on which the notes were based. The interest on the loan in just one year surpassed the total value of the precious metals of  Specifically, the financiers had put together a total base of 72,000 pounds of actual gold and silver. By issuing notes valued at 16 2/3 times the base, the bank was able to make a loan to England of 1,200,000 Pounds in paper money. The yearly interest rate was 8 1/3%, which equaled 100,000 Pounds. This amounted to a profit of 28,000 Pounds, or 39% in just one year! 119s

Twenty-two years after the Bank of England was established, an identical bank was set up in France in 1716. The founder of the French version was John Law, who became the Finance Minister of France. Law has been dubbed the "Father of Inflation" for his efforts. This title is not accurate, of course, because the practice of inflation had begun earlier. However, the spectacular inflation which occurred in France after Law's central bank was nationalized gave Law the dubious, honor of the title. 

As the son of a goldsmith-turned-banker, John Law was an interesting character in many ways. He was deeply devoted to the schools of Brotherhood mysticism that were behind many of the important social changes occurring in his time. Biographer Hans Wantoch, writing in his book Magnificent Money-Makers, describes Law as "one of the last of the alchemist-mystics, of the astrologers who were dying out in the time of Voltaire, but in his pursuit of the stone of wisdom he invented inflation."2 Another interesting fact is that Law was a Scotsman with an obscure background, just like his earlier counterpart in England, William Paterson. The Scottish link between Law and Patterson may be significant when we later review evidence that Scotland was an important center of secret, but far-reaching, Brotherhood activity in Europe. 

Law had played upon France's justifiable paranoia of England in order to convince the French government to establish a central bank identical to that of Britain. The warfare which had earlier been instigated by William III was causing a serious drain on the French treasury. Law's proposal seemed an attractive solution and so it was finally adopted. 

At first, the new French currency issued under Law's plan appeared to revitalize the French economy. This  happened because the banknotes could be redeemed for coins in which the people had faith. After the Bank of France became nationalized, however, it issued a severe overabundance of notes, not just a careful and gradual increase. People quickly realized that there were far more paper notes in circulation than there were coins to back them up. The result was a shattering of popular confidence in the notes and a consequent upheaval of the French economy. 

The Glorious Revolution of 1688 not only gave us the Bank of England, which is still Great Britain's central bank today, it also gave us England's current royal family: the House of Windsor. The House of Windsor is directly descended from the royal family of German Hannover*, which had intimate ties to the House of Orange and to other German principalities in the treacherous marry-and-overthrow clique. After William III of Orange/England died, his sister Anne was seated on the British throne. By prior arrangement, upon Anne's death, the British throne was relinquished by the Orange family to the rulers of the German state of Hannover, who had also earlier married into the British Stuart family. Hannover's first elector [prince], Duke Ernest Augustus (1629-1698), had married a granddaughter of England's King James I. As was true with the House of Orange, the Hanoverian nuptials to the Stuart family did not legally entitle any of the Hanoverians to sit on the British throne, but with the overthrow of James II by the Whigs and House of Orange, the rules were changed to suit the victors. * In Germany, Hannover was spelled with two "n's." In Britain, the spelling had only one "n." I will use the British spelling "Hanover" when referring to the family in Britain, and the German spelling "Hannover" when specifically referring to the German state. 

The first Hanoverian king to take the British throne was George Louis, who became George I of England. George I could not speak English and he viewed England as a temporary possession. He continued to devote most of his attention and care to his German homeland. As generations of Hanoverians ascended to the British throne, they became permanently entrenched in British society. The Hanoverians provided England with all of its monarchs through 1901, and Hanoverian descendants from Queen Victoria's side have furnished the rest all the way up until today. During all of that time, the dynasty continued to maintain strong ties to other German noble families. During the first century and a half of Hanoverian rule in England, for example, the British Hanoverian kings married only the daughters of other German royal families.

Not surprisingly, there was widespread opposition in England to the Hanoverians after they took over. Many Englishmen understandably felt that German monarchs had no business reigning over British subjects. Anti-Hanoverian factions arose seeking to put the Stuarts back on the throne of England. Because of this, the Hanoverians decided not to allow a large standing army of native Britons, fearing they might stage a coup. Instead, whenever England required a large number of troops, the Hanoverians used money from the British treasury to rent mercenaries from their German friends and from their own German principality of Hannover, all at a most handsome fee. The greatest number of mercenaries were provided by the royal family of Hesse, which had close and friendly ties to the German House of Hannover. A curious aspect of the mercenary arrangement is that some important members of those German families, especially from Hesse, later emerged as leaders of a new type of Freemasonry which had been created to topple the Hanoverians from the English throne! 

Before we study this remarkable situation, we should look to see what was happening with Freemasonry at that time. Major changes were unfolding that were about to make Freemasonry the single largest branch of the Brotherhood network.

24 
Knights' New Dawn 
As HUMAN HISTORY entered the eighteenth century, changes were occurring. The Inquisition was almost dead and the Bubonic Plague was dying with it. 

Students of Masonic history know that the early 1700's were an important period for Freemasonry. Masonic lodges in England had attracted many members who were not masons or builders by trade. This happened because Freemasonry was evolving into something other than a trade guild. It was becoming a fraternal society with a secret mystical tradition. Many lodges were quietly opening their doors to non-masons, especially to local aristocrats and men of influence. By the year 1700, an estimated 70% of all Freemasons were people from other occupations. They were called "Accepted Masons" because they were accepted into the lodges even though they were not masons by trade. 

On June 24, 1717, representatives from four British lodges met at the Goose and Gridiron Alehouse in London and created a new Grand Lodge. The new Grand Lodge,  which was called by some "The Mother Grand Lodge of the World," officially dropped the guild aspect of Freemasonry ("operative Freemasonry") and replaced it with a type of Freemasonry that was strictly mystical and fraternal ("speculative Freemasonry"). The titles, tools and products of the mason's trade were no longer addressed as objects that members would use in their livelihoods. Instead, the items were transformed entirely into mystical and fraternal symbols. These changes were not made suddenly, but were the result of a trend which had already begun well before 1717. 

A number of histories incorrectly state that the Mother Grand Lodge of 1717 was the beginning of Freemasonry itself. As we have seen, Freemasonry's roots were firmly established long before then, even in England. For example, one Masonic legend relates that Prince Edwin of England had invited guilds of Freemasons into his country as early as 926 A.D. to assist the construction of several cathedrals and stone buildings. Masonic manuscripts dating from 1390 and 1410 have been reported. Handwritten minutes from a Masonic meeting from the year 1599 are reproduced in Albert Mackey's History of Freemasonry. Freemasonry was so well-established in England by the 16th century that a well-documented schism in 1567 is on record. The schism divided English Freemasons into two major factions: the "York" and "London" Masons. 

The new Grand Lodge system established at the Goose and Gridiron Alehouse in 1717 consisted at first of only one level (degree) of initiation. Within five years of the Lodge's founding, two additional degrees were added so that the system consisted of three steps: Entered Apprentice, Fellow Craft, and Master Mason. These steps are commonly called the "Blue Degrees" because the color blue is symbolically important in them. The three Blue Degrees have remained the first three steps of nearly all Masonic systems ever since. 

The Mother Grand Lodge issued charters to men in England, Europe and the British Empire authorizing them to establish lodges practicing the Blue Degrees. The colorful fraternal activities of the lodges provided a popular way for men to spend their time and Freemasonry soon became quite  the rage. Many lodge meetings were held in taverns where robust drinking was a featured attraction. Of course, many members were also drawn into the lodges by promises of fraternity and spiritual enlightenment. 

The new Mother Grand Lodge was reportedly very strict in its rule forbidding political controversy within the lodges. Ideally, Freemasonry was to be independent of political issues and problems. In practice, however, the Mother Grand Lodge, which was established only three years after the coronation of the first Hanoverian king, supported the new German monarchy at a time when many Englishmen were strongly opposed to it. One of the earliest and most influential Grand Masters of the Mother Lodge system was the Rev. John T. Desaguliers, who was elected Grand Master in 1719. Desaguliers had earlier written a tract stating that the Hanoverians were the only legitimate sovereigns of England under the "laws of nature." On November 5, 1737, he conferred the first two Masonic degrees on Frederic, Prince of Wales—a Hanoverian. During the ensuing generations, members of the Hanoverian royal family even became Grand Masters.* The English Grand Lodge was decidedly pro-Hanoverian and its proscription against political controversy really amounted to a support of the Hanoverian status quo. *Augustus Frederick (1773-1843), the ninth son of George III, was Grand Master for the thirty years before his death. Prior to that, his older brother, who became King George IV, had held the Grand Master position. A later royal Grand Master was King Edward VII, son of Queen Victoria; Edward served as Grand Master for 27 years while he was the Prince of Wales. The most recent royal Grand Master to become a king was the Duke of York, who afterwards became King George VI (r. 1936-1952). 

In light of the Machiavellian nature of Brotherhood activity, if we were to view the Mother Grand Lodge as a Brotherhood faction designed to keep alive a controversial political cause (i.e., Hanoverian rule in Britain), we would expect the Brotherhood network to be the source of a faction supporting the opposition. That is precisely what happened. Shortly after the founding of the Mother Grand Lodge, another system of Freemasonry was launched that directly opposed the Hanoverians! 

When James II was unseated by the Glorious Revolution of 1688, he fled England. His followers promptly formed organizations to help him recover the British throne. The most effective and militant group was the Jacobite organization. Headquartered in Scotland and Catholic Ireland, the Jacobites were able to rally widespread support for the Stuarts. They staged many uprisings and military campaigns against the Hanoverians, although they were ultimately unsuccessful in recrowning the Stuarts. When the unsuccessful James II died in 1701, his son, the self proclaimed James III, continued the family struggle to regain the British throne. A new branch of Freemasonry was created to assist him. That branch was patterned after the old Knights Templar. 

The man who reportedly founded Knights Templar Freemasonry was one of James Ill's loyal supporters, Michael Ramsey. Ramsey was a Scottish mystic who had been hired by James III to tutor James' two sons in France. 

Ramsey's goal was to re-establish the disgraced Templar Knights in Europe. To accomplish this, Ramsey adopted the same approach used by the Mother Grand Lodge system of London: the resurrected Knights Templar were to be a secret mystical/fraternal society open to men of varied occupations. The old knightly titles, uniforms, and "tools of the trade" were to be used for symbolic, fraternal and ritual purposes within a Masonic context. In keeping with these aims, Ramsey dubbed himself the Chevalier [Knight] Ramsey. 

Ramsey did not work alone. He was assisted by other Stuart supporters. Among them was the English aristocrat, Charles Radcliffe. Radcliffe was a zealous Jacobite who had been arrested with his brother, the Earl of Derwentwater, for their actions in connection with the failed rebellion of 1715 to place James III on the British throne. Both brothers were sentenced to death. The Earl was beheaded, but Radcliffe escaped to France. 

In France, Radcliffe assumed the title of Earl of Derwentwater. He presided over a meeting in 1725 to organize a new Masonic lodge based on the Templar format  being revealed by Ramsey. The Derwentwater lodge was instrumental in getting the new Templar system of Freemasonry going in Europe. Derwentwater claimed that the authority to establish his Lodge came from the Kilwinning Lodge of Scotland-—Scotland's oldest and most famous lodge.* Templar Freemasonry is therefore often called Scottish Freemasonry because of its reputed Scottish origin. * There is some debate as to whether Lord Derwentwater had also received a charter from the Mother Grand Lodge of England to start his new French lodge. Many histories state that he did, but some Masonic scholars aver that no record of such a charter exists and that Lord Derwentwater's lodge was an unofficial ("clandestine") lodge. It has been argued that the Mother Grand Lodge of England would not have granted Derwentwater a charter because his pro-Stuart political leanings were well known. As a footnote, Lord Derwentwater "continued to remain politically active and he tried to join Charles Edward during the Jacobite rebellion of 1745. The ship on which Derwentwater sailed was captured by an English cruiser. The Earl was taken to London where he was beheaded in December 1746. 

Ramsey's Scottish Masonry attracted many members by claiming that the Templar Knights had actually secretly created the Mother Grand Lodge system. According to Ramsey, the Knights Templar had rediscovered the "lost" teachings of Freemasonry centuries earlier in the Holy Land during the Crusades. They brought the teachings back to Europe and, after their disgrace and banishment, secretly kept the teachings alive for hundreds of years in France, England, and Scotland. After centuries of living in the shadows, the Templars cautiously re-emerged by releasing only the Blue Degrees through the vehicle of the Mother Grand Lodge. Ramsey claimed that the three Blue Degrees were issued only to test the loyalty of Freemasons. Once a Freemason proved his loyalty by reaching the third degree, he was entitled to advance to the "true" degrees: the fourth, fifth, and higher degrees released by Ramsey. Ramsey stated that he was authorized to release the higher degrees by a secret Templar headquarters in Scotland. According to his story, the Scottish Templars were secretly working through the lodge at Kilwinning. 

To effect their pro-Stuart political aims, the Scottish lodges changed the Biblical symbolism of the third Blue Degree into political symbolism to represent the House of Stuart. Ramsey's "higher" degrees contained additional symbolism "revealing" why Freemasons had a duty to help the Stuarts regain the throne of England. Because of this, many people viewed Scottish Freemasonry as a clever attempt to lure Freemasons away from the Mother Grand Lodge system which supported the Hanoverian monarchy and turn the new converts into pro-Stuart Masons. 

The Stuarts themselves joined Ramsey's organization. James III adopted the Templar title "Chevalier St. George." His son, Charles Edward, was initiated into the Order of Knights Templar on September 24, 1745, the same year in which he led a major Jacobite invasion of Scotland. Two years later, on April 15, 1747, Charles Edward established a masonic "Scottish Jacobite Chapter" in the French city of Arras. Charles Edward later denied ever having been a Freemason in order to squelch damaging rumors that Scottish Masonry was nothing more than a front for the Stuart cause (which it largely was), even though he had been a Grand Master in the Scottish system. Proof of his Grand Mastership was discovered in 1853 when someone found the charter issued by Charles Edward to establish the above-mentioned lodge at Arras. The charter states in part: 

We, Charles Edward, King of England, France, Scotland, and Ireland, and as such Substitute Grand Master of the Chapter of H., known by the title of Knight of the Eagle and .. * * "Chapter of H" is believed to have been the Scottish lodge at Heredon. Charles Edward is denoted as the "Substitute" Grand Master because his father, as King of Scotland, was considered the "hereditary" Grand Master. 

We have just discussed the founding of two systems of Freemasonry. Each one supported the opposite side of an important political conflict going on in England—a conflict which affected other European nations, as well. Both systems of Freemasonry were launched within less than five years of one another. Ramsey's story of how the two systems came into existence therefore contains some rather stunning implications. His story implies that a small hidden group of people belonging to the Brotherhood network in Scotland deliberately created two opposing types of Freemasonry to encourage and support both sides of a violent political controversy. This would be a startlingly clear example of Machiavellianism. 

How true is Ramsey's story? 

To answer this question, we must first take a brief look at the history of Freemasonry in Scotland. 

Scotland has long been an important center of masonic activity. The earliest of the old masonic guilds in Scotland had been founded at Kilwinning in 1120 A.D. By 1670, the Kilwinning Lodge was already practicing speculative Freemasonry (although, in name, it was still an operative lodge). 

The Scottish lodges were unique in that they were independent of, and were never chartered by, the English Grand Lodge even after they began to practice the Blue Degrees of the English Grand Lodge system. The Kilwinning Lodge itself had been granting charters since the early 15th century. It ceased doing so only in 1736 when it joined other Scottish lodges in elevating the Edinburgh Lodge to the position of Grand Lodge of Scotland. The new Grand Lodge of Scotland at Edinburgh adopted the speculative system of the English Grand Lodge, yet it still remained independent of the English Grand Lodge and issued its own charters. About seven years later, in 1743, the Kilwinning Lodge broke away from the Grand Lodge of Scotland over a seemingly trivial dispute. Kilwinning set itself up as an independent Masonic body ("Mother Lodge of Kilwinning") and once again issued its own charters. In 1807, the Kilwinning Lodge renounced all right of granting charters and rejoined the Grand Lodge of Scotland. We therefore see substantial periods of time in which the Kilwinning Lodge was independent of all other Lodges and when it could very well have granted charters to Templar Freemasons. It was independent at the time Ramsey  and Derwentwater claimed to have received authorization from Kilwinning to establish Templar degrees in Europe. 

Some masonic historians argue that the Kilwinning Lodge and other Scottish lodges still had nothing to do with creating the so-called "Scottish" degrees. They state that the Scottish degrees were all created in France by Ramsey and his Jacobite cohorts. Some Masonic writers contend that Templarism did not even reach Scotland until the year 1798—decades after it had already caught on in Europe. Those writers further claim that the Kilwinning Lodge had never practiced anything but the Blue Degrees of the English system. Others believe that Ramsey, who was born in the vicinity of Kilwinning, claimed a Scottish origin to his degrees out of nationalistic pride and to help build a base of political support for the Stuarts in Scotland. These arguments sound persuasive, but historical documentation proves that they are all false. 

First of all, we have already seen that Scotland was providing this era with important historical figures contributing to some of the changes being wrought by Brotherhood revolutionaries. Michael Ramsey is the third mysterious Scotsman of obscure origin we have seen help bring important changes to Europe. The other two were discussed earlier: William Paterson, who helped German rulers set up a central bank in England, and John Law, who was the architect of the central bank of France. 

Secondly, the Scottish masonic lodges were a natural place for pro-Stuart Templar degrees to arise. Scotland was strongly pro-Stuart and the Jacobites were headquartered there. Decades before the English Grand Lodge was created, many Masons in Scotland were already known to be helping the Stuarts. These Scottish loyalists used their lodges as secret meeting places in which to hatch political intrigues. Pro-Stuart Masonic activity may go as far back as 1660—the year of the Stuart Restoration (when the Stuarts took the throne back from the Puritans). According to some early Masons, the Restoration was largely a Masonic feat. General Monk, who played such a pivotal role in the Restoration, was reported to be a Freemason.  

Finally, there is incontrovertible evidence that the Scottish lodges, including the one at Kilwinning, were involved with Templarism decades before 1798. Masonic historian Albert Mackey reports in his History of Freemasonry that in 1779, the Kilwinning Lodge had issued a charter to some Irish Masons who called themselves the "Lodge of High Knights Templars." More than a decade earlier, in 1762, St. Andrew's Lodge of Boston had applied to the Grand Lodge of Scotland for a warrant (which it later received) by which the Boston lodge could confer the "Royal Arch" and Knight Templar degrees at its August 28, 1769 meeting. It is significant that St. Andrew's Lodge had applied to the Grand Lodge of Scotland for the right to confer the Templar degree, not to any French lodge. 

We have thus confirmed two elements of Ramsey's story: 1) that Scottish lodges practiced Templar Freemasonry, and 2) that a Scottish Grand Lodge was granting Templar charters at least as early as 1762. We can safely assume that the Scottish Grand Lodge was involved with Templarism before that year because the Lodge would have had to establish the Templar degree before another lodge could apply for it. Unfortunately, there are no apparent records surviving to indicate just when Templarism began in the Scottish lodges. Ramsey and Derwentwater, of course, claim that the Templar degrees already existed in the early 1720's. The Scottish lodges may well have been involved with some form of Templarism at that time. 

Understandably, the Scottish lodges were highly secretive about their Templar activities. We only know about the 1762 Templar charter to St. Andrew's Lodge from records found in Boston. One need only consider the fates of the two Earls of Derwentwater to appreciate the dangers awaiting those people, including Freemasons, who engaged in pro-Stuart political activity. 

Not every element of Ramsey's Templar story was backed by evidence. For example, Freemasonry itself was not started by the Templar Knights as Ramsey implied. The masonic guilds which gave birth to Freemasonry existed long before the Templar Knights were founded. On the other hand, there is circumstantial evidence that Templar Knights may  indeed have been the ones who brought the Blue Degrees to England. 

As mentioned in Chapter 15, it is thought that the three Blue Degrees were already being practiced centuries earlier by the Assassin sect of Persia. The Templar Knights had frequent contact with the Assassins during the Crusades. During those periods when they were not fighting against one another, the Assassins and Templars established treaties and engaged in other amicable relations. One treaty even allowed the Templars to build several fortresses on Assassin territory. It is believed by some historians that during those peaceful interludes, the Templars learned about the Assassins' extensive mystical teachings and incorporated some of those teachings into the Templar system. It is therefore quite possible that the Templars did indeed have the Blue Degrees long before they were established by the English Mother Grand Lodge. 

Further circumstantial evidence is that during the Crusade era, the Templars were at the height of their power in Europe. They owned properties throughout the Continent. Their holdings and preceptories in Scotland were especially numerous. When the Templars abandoned the Holy Land after the Crusades, they eventually returned to their preceptories around the world, including Scotland. After the Templar Order was suppressed throughout Europe, many Templars refused to abandon their Templar traditions and so they conducted their activities in secrecy. Some secretly-active Templars joined Masonic lodges, including lodges in Scotland and England. It is therefore conceivable that Templars were the conduit through which the three Blue Degrees traveled from the Assassin sect, through Scotland, to the Mother Grand Lodge of 1717. 

Some Freemasons may view any attempt to connect the Blue Degrees with the Assassin sect as an effort to discredit Freemasonry, even though the connection was suggested by one of Masonry's most esteemed historians. In discussing such a link, it is important to keep in mind that the assassination techniques employed by the Assassins were never taught in the Blue Degrees. The Assassins possessed an extensive mystical tradition that extended well beyond their controversial political methods. Furthermore, the Assassins had borrowed many of their mystical teachings from earlier Brotherhood systems. The Blue Degrees may have therefore begun even earlier than the founding of the Assassin organization. 

Whatever the ultimate truth of the origins of the Blue Degrees and Scottish Degrees may have been, both systems gained great popularity. The Scottish Degrees eventually came to dominate nearly all of Freemasonry. On continental Europe, the center of Scottish Freemasonry proved to be Germany, where the same small clique of German petty princes we have been observing soon emerged as leaders in the new Templar Freemasonry. 

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The "King Rats"

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