 This class I gave a topic of the Curse of Economic Nationalism and I actually taught an online Mises Academy course a couple years ago on this topic since I've written a good bit about it. But some of you who have read some of my writings know that one of the things I try to do is study economic history and then draw lessons for today from history. It's not unique with me, of course. The old saying, those who fail to learn the lessons of history are doomed to repeat its failures is probably thousands of years old, that idea. And so that's what I'm doing here. This is particularly relevant, I think, because the topic economic nationalism, well, what the heck is it, first of all? But this is an article from the Breitbart website, which is the main pro-Trump website, I think, in the world, probably. His right-hand man, Steve Bannon, was the ran it until he joined the government. And this is an article, but there's a guy who writes for them by a pseudonym named Virgil. I guess he thinks pretty highly of himself. That's his picture there on the lower left-hand side. And this one says, this is about a speech that President Trump made in Kentucky a couple of months ago. I think it was in March. And it said, Trump connects to the taproot of American economic and nationalism with Henry Clay's American system. Henry Clay was from Kentucky. He ran a slave plantation that grew hemp in Kentucky. He was known as the Prince of Hemp in his time. And he once said, and he became the Speaker of the House of Representatives, the Senator, Secretary of War, quite the big shot in American politics in 19th century. And he once said that the reason he got into politics was that he wanted to impose protectionist tariffs on foreign hemp. And he wanted to get the taxpayers to pay for roads and canals so he could ship his hemp to the markets in the East. And so he was an honest politician. I'm working on a book on him. Gary North has been bugged me for years because I wrote a book on Hamilton. And then Abe Lincoln is sort of the political son of Hamilton. But in the middle there is Henry Clay. He's sort of the connecting link ideologically between the two of them. And so here's President Trump saying that his agenda is economic nationalism. And they're writing about it in Breitbart. I sent a book proposal to a Regnery not too long ago to write a book about this. And they turned me down. They said it wouldn't have the popular appeal of my last book, but it's the whole Trump agenda. So they apparently thought the whole Trump agenda would not have any appeal to the public for this. So I'm going to publish it elsewhere anyway. But this article, what it says about this, I'll read a few things about it. The 45th president, Trump, name checked Clay no less than seven times in his speech and used the phrase American system three times. So his speech writers, probably Bannon knew all about this stuff. Trumpism says is in fact an agenda deeply informed by the best traditions of American history. It was the American system that built up this country giving us widespread prosperity and also crucially the material muscle we needed to win the wars we had to fight. I know when's the last time we won a war anyway. What wars are they talking? The Civil War? I don't know. The factories envisioned by Clay were truly the arsenals of democracy. I don't think he ever envisioned factories. And then he says it's fair to say that the American system was the dominant economic school of thought in the U.S. until the 1970s. Then over the next few decades, it was disastrously pulled down. And today we see the consequences all around us. And that's all false, by the way, and I'll explain why. And so this American system, what is it? I mentioned it briefly in my other talk yesterday. The phrase was actually coined by Alexander Hamilton. And I described it yesterday in my talk. I'll repeat this quote again from Murray Rothbard because he really nailed it when he studied early America. And he first ran across this American system language by reading Hamilton. And here's what Murray Rothbard said in his book The Mystery of Banking. Hamilton and his political compatriots were up to. They wanted, quote, quoting Murray Rothbard, to reimpose in the new United States a system of mercantilism and big government similar to that in Great Britain, against which the colonists had rebelled. The object was to have a strong central government, particularly a strong president or king as chief executive, built up by high taxes and heavy public debt. The strong government was to impose high tariffs to subsidize domestic manufacturers, develop a big Navy to open up and subsidize foreign markets for American exports, and launch a massive system of internal public works. In short, the United States was to have a British system without Great Britain. And this was called mercantilism at the time. And a rough definition of mercantilism is a set of policies that benefits producers at the expense of consumers. Protectionism would be a perfect example of mercantilism. And if you've ever studied the history of economic thought, as I did, I had three courses in it in graduate school. And, you know, mercantilism was, you know, it's something, one of the more foolish ideas in the whole history of economic thought, but it's a synonym for the American system. And so when you see articles like this, you know, like in the Breitbart claiming that the Trump economic policy will bring us back to the glory days of mercantilism, it's like 18th century corruption is what we want. And so Hamilton's, so that was Hamilton's American system was protectionist tariffs, what we today call corporate welfare for road building, canal building, eventually it became railroad building in the U.S., and a national bank, a national bank to provide cheap credit for politically connected businesses and to inflate the economy. And also a big public debt. Hamilton's original American system, a large public debt. And to persuade people of this, you know, mercantilism, the people who defended mercantilism in England and other parts of Europe, they had to hire publicists for this. They had to bamboozle the public into thinking that special interest policies that rip off the public for the benefit of a small group were really in the best interest of the public. They had to pull the wool over the people's eyes, and they did that in various ways. And in America, one of the masters of that was Hamilton himself. And one of the techniques he used, which was not original with him, is to describe all these policies as in the public interest. And he used the public interest in many ways. There's a political scientist named Cecilia Kenyon, who wrote an article once in the American Political Science Review called The Conservative Rousseau. I think it's about Hamilton, the conservative Rousseau, or the Rousseau of the Right. That's what it was, the Rousseau of the Right. And in it she put together a big long list of the various synonyms that Hamilton used in his writings for the public interest. And in various writings where he tried to convince people that, say, protectionist tariffs or the granting of a monopoly to a particular politically connected business were really in the public interest to do that. And I'll read you some of the language he used in his actual writings. The public good, the public interest, the public will, public safety, the public welfare, the public felicity, the public happiness, the general good, the general interest, the common interest, the national interest, the national happiness, the welfare of the community, the true interest of the community, the permanent welfare of society, the good of the whole community, common interest of humanity. And so if you get ripped off by paying two or three times the price for the next pair of shoes you have to buy, that's for the good of humanity according to the mercantilists. And you know, if you repeat language like that enough, a lot of people will believe it. And so that's one of the oldest tricks in the book. And it comes from Jean-Jacques Rousseau, the French philosopher. He argued that there is such a thing as the public will, but only a small elite knows what this will is. And they therefore have the right to oppose that will on everybody. And so in many ways the Hamilton and his cronies were, they were the real Jacobins in American politics, not the Jeffersonians. And so the Bank of the United States story, that was the linchpin of economic nationalism as a national bank to fund this. And we did get a national bank. Hamilton succeeded and that was the first plank of the American system. And here's what Rothbard said about the Bank of the United States in his book, History of Money and Banking in the United States. As soon as it was created, 1791, the Bank of the United States promptly fulfilled its inflationary potential by issuing millions of dollars in paper money and demand deposits, pyramiding on top of two million dollars in species, gold and silver. The bank invested heavily in loans to the United States government. In addition to two million dollars invested in the assumption of pre-existing long-term debt assumed by the new federal government, the bank engaged in massive temporary lending to the government, which reached 6.2 million by 1796. The result of the outpouring of credit and paper money by the new bank of the United States was an increase in prices of 72% in five years. So it created pretty much massive price inflation immediately as soon as we created it. And as I said in my talk yesterday, the first bank of the United States had a 20-year charter and it created so much inflation and economic stability and corruption that it was not renewed after 20 years. But then the War of 1812 came and they renewed it again. And in January of 1817 it went back into business and it promptly created the Panic of 1819, which of course Rothbard has written about pretty extensively. It was his doctoral dissertation on the Panic of 1819. So it was quite the calamity. Keep in mind these are the things that the advocates of economic nationalism are saying, this is what we need. We need to have this today. We need to bring this back today. And so the bank was resurrected and it was killed again by Andrew Jackson in the late 1820s, early 30s. And I mentioned yesterday some of the statements Jackson made in vetoing the bank and I didn't tell you all of them. But here's one description that Andrew Jackson said about this bank of the United States. He called it a monster, a hydro-headed monster equipped with horns, hoofs and a tail so dangerous that it impaired the morals of our people, corrupted our statesmen and threatened our liberty. He brought up members of Congress, bought up members of Congress by the dozen, subverted the electoral process and sought to destroy our Republican institutions. That's a pretty good reason for vetoing the rechartering of the bank, I would think. And so you don't hear politicians talk like that anymore, unfortunately, about the Fed. So this is a precursor of the Fed that he's condemning with this kind of language. And John Marshall was a protege of Hamilton's. He worshipped Hamilton. A lot of John Marshall's legal opinions were literally verbatim of some of Hamilton's writings, literally word for word in some of them. And when John Marshall issued the opinion, his opinion, personal opinion, that the bank of the United States was constitutional, well, back in those days in America, not everyone thought of the Supreme Court as black-robed deities, as the voices of God. And they didn't always pay attention to it. They pretty much said, OK, thanks for your opinion, I'll get lost sometimes. And here's Jackson's version of that. He says, to this conclusion, that is the conclusion that the bank of the United States is constitutional, I cannot assent Congress and a president as well as the court must each for itself be guided by its own opinion of the Constitution. So he's saying, we have three branches of government, not one, let alone just you, Mr. Marshall, who are you. It is as much the duty of the House of Representatives, of the Senate, of the President, to decide upon the constitutionality of any bill or resolution which may be presented. The opinion of the judges has no more authority over Congress than the opinion of Congress has over the judges. And on that point, the President is independent of both. The authority of the Supreme Court must not therefore be permitted to control the Congress or the executive, but to have only such influence as a force of their reasoning may deserve. And so back in those days, it was assumed by a lot of people that, yeah, we have three branches of government in the United States, and five government lawyers with lifetime tenure should not be responsible for defining everybody's liberties in the country. In fact, the old Jeffersonians warned that if that day ever come, we'd all live under a tyranny. And of course, we've had that system in this country for at least 150 years now, as far as that goes. And so they did destroy the bank, and it went out of business, and we didn't have another central bank until 1913. But we had something also insidious in the 1860s, the National Currency Acts, which I'll talk about in a little bit. The second plank of Hamilton's American system was crony capitalism. Well, today we call crony capitalism. There's a great free book downstairs on crony capitalism that you should pick up. It's a very interesting topic. And Hamilton wrote this famous series of reports to the government, very long winter reports. One was called The Report on Manufacturers, where he made the case for what we today call crony capitalism. In those days they called it internal improvement subsidies, a euphemism for crony, for mercantilism, basically. And here's where he made the famous infant industries argument that he said this. Some new industries, they're infants, and they need support by the government. They can't compete against the British or the French or the Spaniards who have already developed industries and various things. And for a long time, for some cases for decades, so they need help, they need to be subsidized. And of course the standard response by most economists is that the history of this is that the infants never grow up. Once you put them on the dole, they're always on the dole. The steel industry, for example, has been subsidized with protectionist tariffs and other forms of protection from competition from the very beginning, from the early 19th century, from its inception. And you know, you fast forward a couple hundred years, or 150 years anyway. And one of the first things the Bush administration did was to put 35% tariffs on steel. And so it's still an infant industry, 35% tariffs. This was the George W. Bush administration. And so yeah, some infant industries never do grow up. And of course, while Hamilton was saying that, there were American industries, especially shipping, that were growing like crazy and doing very well without any subsidies whatsoever, and were overtaking some of the European industries in terms of competition, in terms of global competition. And so they were proving him wrong as he wrote this thing. But this has been a case that has been made to this day. You can still hear examples of this as far as that goes. He made the case for the free rider problem. He articulated a free rider problem to justify government subsidies to build roads and canals, and that was later used to build for railroads. And again, at the same time, private corporations were building thousands of miles of private roads in America in the first decade or two of the 19th century. And while he was making this argument, this was all going on. And he had to know that, I think, anyway. And Hamilton also a part of this was the idea that the government should choose which industries to subsidize and which not to subsidize. Picking winners and losers in the language of gambling, I guess, is what you would call here. And the basic problem that always exists with this is there's a public choice problem, and then there's a knowledge problem to use the language of Hayek, the knowledge problem. Because, of course, how can politicians who have no financial stake in a particular, the growth of a particular industry be relied upon to pick which industries should be subsidized and which should not? It's one thing for investors to put their money behind what they think is a promising new industry because if they guess wrong, they personally lose their money. If they're right, they make a profit. So you've got the incentives in the right place anyway. It doesn't guarantee they're always going to be right, but that's the right incentive. Whereas with government, when you have politicians doing this, if they're wrong, it's no sweat off their back. There's no penalty at all for being wrong because it's not your money. And if you're right, well, you don't really win out and you don't get anything, an exceptional income yourself anyway. If you're right, you just get campaign contributions from the subsidized businesses or industries, and that's about it. And so that's one problem with that. And then the public choice problem, of course, is that if you put politicians in charge of subsidizing what they think are the industries of the future, the industries what will determine how they spend the money is politics. It's how it will earn them the most votes and campaign contributions. And that's not necessarily the same as the industries that will serve the consumer the best as far as that goes. And when I talk about this with students, I ask them if the U.S. government were to start massively subsidizing the computer industry back in the 1970s at the beginning of the computer revolution, you know, there'd be personal computer revolution anyway. And it had some options of who to subsidize. IBM, so you could give money to IBM, that would be a safe place to put money. Choice number two would be the computer company that exists in the Congressional District of the Chairman of the House Ways and Means Committee. That's another company, or a bunch of bearded long-haired 20-somethings tinkering with computers in Bill Gates' father's garage in California. Who do you think the U.S. Congress would give the subsidies to? These are the people who founded Microsoft in Bill Gates' father's garage. And that money would go to IBM and the company owned by the, that's in cahoots with the Chairman of the House Ways and Means Committee. And if you want to see something funny, by the way, Google picture of Microsoft founders. You'll see a picture of Bill Gates. It looks like the cast of the movie Revenge of the Nerds. And Bill Gates looks like he's about five years old in the picture. But I use that in a classroom to talk about how competition is always pervasive when people are going and even mighty IBM was toppled by these guys. And you look at them, it looks like a bunch of kids in the 1970s. It's a funny looking picture. I think it is anyway. Although all of our faculty here probably look just like that at the same time around that time. And so that's a problem, there's always been a problem with that. And if you read the report on manufacturers, one of the interesting aspects about this is that the historians typically say that it was Jefferson who was sort of the economic ignoramus. Hamilton's nemesis. He was in favor of agriculture. He wanted America to be a bunch of farmers. And what does he know about industry? But that's unequivocally untrue. It was Jefferson who was very widely educated in economics. One of the names up here, I don't know if it's in this room or downstairs is Turgo. He's right there. He's right in front of me. Turgo is right there. He was French physiocrats, free market precursors to the Austrian school. And he was the leader of that. He was also the French finance minister. And he was a personal friend of Thomas Jefferson's. If you were to walk into Monticello this afternoon, it's Jefferson's home in Virginia. You walk in, and right here above your head is the big marble bust of Turgo. He's right there. Jefferson himself put there. And he translated into English his writings, his free market economics writings. Hamilton on the other hand, he knew nothing about his biographer, Ron Cherno, writes that when he got the job as Treasury Secretary, George Washington told him, I didn't know you knew anything about finance. We never talked about finance. And so he read a dictionary. He read a dictionary of economics that Senator Timothy Pickering had given him to sort of learn some of the lingo of economics. And then he wrote a big long letter to the richest man in America, Robert Morris, who hired him as his sort of political plant in the administration of George Washington to help get the Bank of the United States started and things like that. But it was Hamilton who was the ignoramus on economics. And if you read his report on manufacturers, if you read the Wealth of Nations or understood the ideas in Adam Smith's Wealth of Nations published in 1776, there's no evidence of it in there at all because he sort of thought, he had this idea that economic development could not take place unless it was guided by a very visible hand such as his hand. And so he didn't buy into that at all. That's how we can make all these arguments, the infant industry arguments and so forth. And on trade, he was especially bad on trade. That was a third plank of the American system, protectionism, tariffs. And some of the arguments that he makes in this report were that he said that trade barriers, such as high tariffs, will actually cause lower prices to consumers. So we should block off all imports. And he said, because if we do that, then the internal competition will become more intense. The American businesses competing with each other become more intense and prices will fall. Well, that's contrary to all world history for one thing. It's not logical if the competitive pressure is lessened, you're going to have less price cutting and not more. He also made the argument that transportation costs are a waste. Therefore, we should prohibit anything that has to be shipped from England or France or anywhere. Like that if we can make it here, we should only allow imports of things which we cannot grow or make here, like coffee. If we can't grow coffee in America, then we can import coffee. But otherwise, nothing because transportation costs are a waste. And that sort of contradicts the idea that the founders put into place when they advocated the Commerce Clause of the Constitution where they gave the federal government the right to regulate interstate commerce because the history books tell you that one of the things they talked about was they wanted to encourage free trade between the states. But of course, that involves transportation costs. If you ship something from Alabama to Georgia, so should we ban that? It's totally a flat contradiction. Another thing he said, he just ignored the effect on consumers. This was a classic mercantilist polemic, the report on manufacturers, because almost 100% ignores the effects on consumers of the higher prices that would be caused by all of this. And he also advocated a banning, a legal banning of exports of goods that could be used in manufacturing by foreigners. So if the British are making a certain type of textiles in competition with American textile manufacturers or clothing manufacturers, we should not ship cotton to England if they can use the cotton to make textile goods and ship them to the United States, he said. And of course, what that would do is that just American businesses would just lose up to foreign businesses who would ship those things to England that they could use to make these products. It's sort of like the futility of sanctions that we sometimes impose. Or the Cuban embargo, the embargo on Cuba of American traders, whether dozens of other countries around the world are free to trade with Cuba. And so all that does is deprive American businesses and Cuban consumers with things that they could have bought from American businesses. But they can buy the same things or get the same things from other countries. And so these are things, though, that these arguments for protection have been repeated endlessly over the decades. Abraham Lincoln made all the exact same arguments for protection. He was, as I said, he was the political son of Hamilton who carried forth the mantle of the American system and his system in his administration. And he especially repeated many times the argument about transportation costs. We shouldn't allow any imports in because the transportation costs will add a cost to the good. And of course, that's not even necessarily true all the time because of competition. If somebody in another country can produce something 50% cheaper than Americans can, so what? There's a tiny transportation cost involved. They'll sell it cheaper than the American company can over here. And so you go through this and Henry Clay became the carrier of the flame after Hamilton died in a duel with Aaron Burr. I got an applause yesterday when I said that, when Aaron Burr shot him dead and some of those students. And I told the story of Gary North once told me that he once started an Aaron Burr Society and they made baseball caps and it said, not soon enough on the back of the cup. I had to get a little pistol on the side and not soon enough with their logo as far as that goes. And so he carried this mantle through. It had no success. President after president vetoed internal improvement subsidies. The Bank of the United States was destroyed and America had pretty much free trade by the eve of the American Civil War. The average tariff rate was 15%, one five in the late 1850s. And that's the closest to free trade the United States ever was in the 19th century right on the eve of the Civil War. And then when the Republicans came in, they immediately increased the average tariff rate from 15% to 45%. And it remained at 45%, 50% or even higher until the income tax was enacted in the year 1913. So the ascendancy of the Republican Party first with Lincoln and then with the whole cast of criminals after him. The protectionism was the trade policy of the United States, very high tariff rates. And so when Lincoln himself decided to run for political office, he made speeches proclaiming that Henry Clay was, he called him the bow ideal of a statesman and he once said that all of his ideas, Lincoln's all of his ideas about politics came from Henry Clay. And here's what he said when he first ran for political office is Abe Lincoln. He said, I presume you all know who I am. I am humble Abraham Lincoln. You know a politician is lying when he calls himself humble, no matter who it is. You also know he's lying when he says this. I'm continuing with the quote, I have been solicited by many friends to become a candidate for the legislature. My politics are short and sweet like the old woman's dance. I am in favor of a national bank in favor of the internal improvement system and a high protective tariff period. That's what Abraham Lincoln said was his why he was getting into politics. So he was the wig party at the time was the party of the wealthy and the politically connected of the north of New York, Philadelphia, Chicago, the railroad corporations, the banking industry. That was the wig party of the north. There were southern wigs that were somewhat different, but those were the northern wigs and that's who Abe Lincoln hooked in with is connected himself with these people. And a few more aspect quotations here. As to what Henry Clay was all about and Lincoln just slavishly praising Henry Clay and saying, I'm just like him. I want to run for political office to carry forward Henry Clay's agenda, which was Hamilton's agenda. There's a book by Edgar Lee Masters on Lincoln called Lincoln the Man. Edgar Lee Masters was Clarence Darrow's law partner, famous the monkeys, scopes monkey trial monkey case in the 19th early 20th century and which H. L. Lincoln reported on very hilariously. And he was a famous playwright also, but he wrote this about Clay in this book. He said Henry Clay was the champion of that political system, which doles favors to the strong in order to win and keep their adherence to the government. His system offered shelter to devious schemes and corrupt enterprises. He was the beloved son, figuratively speaking of course, of Alexander Hamilton with his corrupt funding schemes, his superstitions concerning the advantage of a public debt and the people taxed to make profits for enterprises that cannot stand alone. His example and his doctrines led to the creation of a party that had no platform to announce because its principles were plunder and nothing else. So if what you're about in politics is plunder, you better keep your platform to yourself. Don't announce it if that's what you're about. And so that's what we're into when we get the Hamilton-Clay-Lincoln-American system cemented into place finally during the American Civil War. And we had some trial runs of this in America in the 1830s and 1840s where state governments started funding internal improvements. And this was the first big push in the direction of actually achieving this American system and it turned out to be such a debacle all over the United States that by the time you get to the American Civil War, 1861, every state except for Massachusetts had amended its constitution to prohibit the use of tax dollars to go to any corporation for any reason because they had all had such horrible experiences with money going to corporations to build roads and things. And I'll give you one example. This is Abraham Lincoln's personal secretaries in the White House, George Nicolay and John Hay. After his death they wrote a book about Lincoln and in it they described what happened when Lincoln was the leader of the Whig Party in the Illinois legislature and he got 11 million dollars allocated to build roads and canals in Illinois. He thought they could turn Illinois into New York. He wanted it to be the Empire State of the Midwest. And here's what Nicolay and Hay said. The market was glutted with Illinois bonds, one banker and one broker after another to whose bonds they had been recklessly confided in New York and London failed or made away with the proceeds of the sales. The system had utterly failed. There was nothing to do but repeal it, stop work on the visionary roads and endeavor to invent some means of paying the enormous debt. And they go on to write that not a single road or canal was completed. They spent all that money, some of it was stolen. It was this one big inefficient mess. What else would you expect by giving politicians a pile of money to spend? They're not experts in road building and that's what happened in state after state. And so it became quite the debacle. And Lincoln was personally responsible for this. This was the 1830s, but they never gave up on this. By the time when he gets to 1840, my favorite president in all American history, and Lou Rockwells, William Henry Harrison was elected president, he's our favorite because he died in one month in office after one month in office. He died of pneumonia, so he couldn't have done much damage. So he has to be the best, highly ranked, most highly ranked president. All these rankings of presidents. I don't see how he couldn't be number one in all of them, no matter what. But he died and then a member of the Whig party was vice president, John Tyler. And so Henry Clay thought he was in high cotton as they say down south. They're finally going to ram through protectionist tariffs, a national bank in corporate welfare gone wild. It turns out John Tyler was a Jeffersonian and he vetoed everything. And so they kicked him out of the Whig party. They burned him in effigy in front of the White House and they had no success. He vetoed everything, protectionist tariffs, corporate welfare, and so forth. And so this is why, by the way, if you read the book, Recarving Rushmore by Ivan Elans. It's a good book that ranks American presidents on the basis of how faithful they were into enforcing the Constitution in a way that would limit government. That's his criterion. It's not who kills the most people and spends the most money. That's the history profession. That's their criterion. And guess who came out number one in the book, Recarving Rushmore? Well, not my favorite, William Henry Harrison, but John Tyler, who of course hardly anyone has ever heard of, but he turned out to be number one. So that didn't go on. But once Lincoln came in and the main opposition was always from the south, southerners, and so once they seceded, well then the cost, if you will, of secession was to America, one of the costs was, well the Republican Party now had a monopoly in the government and they put all this through. The National Currency Acts and the Legal Tender Acts created and nationalized the money supply. The protectionist tariff rate went to 45 or 50% and stayed that way for 60 years and they started massively subsidizing the railroads. And that of course led to one of the most famous cases of political corruption, the Crédit Mabillier scandal of the grant administrations, which is also inevitable. They didn't want to learn anything about this. There was a name of a company, Crédit Mabillier Company. And in my writings, I write about, there was a man named James J. Hill. Has anybody heard of James J. Hill? You've heard of James Hill. You've read my book. Well the government massively subsidized the railroads. This is an interesting story. There's a book called Lincoln and the Railroads. It was written in the early 20th century but reprinted. I have a copy of it and it talks about how in 1857, Abe Lincoln was offered the job of General Counsel of the New York Central Railroad because he was a famous wealthy railroad lobbyist and attorney at the time from representing all the Midwest, Chicago railroad companies. And he turned it down because he had just invested in land in Council Bluffs, Iowa, of all places. A big bunch of land in Council Bluffs, Iowa. And when he became president, one of the first things he did, even though the war was on, the Battle of First Manassas was being fought, he called Congress back not to discuss the Battle of First Manassas, which his army lost, but to get the Pacific Railroad bill going, to start subsidizing the building of a railroad to California from the American Midwest. That was the priority. After all, he was a railroad lawyer, he was a railroad attorney and a lobbyist. The railroad corporations got him elected along with the banking, the bankers and the manufacturers, the protectionists of the North. That's what politicians do. You get an office, you got to pay back the people who put you there. That's why you're there. And in this law, he made sure that the president got the right to decide where they would start building the Transcontinental Railroad. Anybody want to guess where they started building the Transcontinental Railroad? The Eastern Terminus, Council Bluffs, Iowa. Just, of course, to this day, it's called Lincoln's Hill, that part of Council Bluffs, Iowa. That's why he turned down this big-time job. The General Counsel of the New York Central offered him by a rastus corning. He was apparently made a killing there. If you knew where to go to Springfield, Illinois this afternoon, Abe Lincoln's home and visit his home. It's a museum now. It's on a part of town that's called Old Aristocracy Row. His house is the biggest house in Old Aristocracy Row. Where he lived before he became president. He lived there. So that's what some things never change, do they? It's pretty much the same as today if you look at the Goldman Sachs guy who becomes Treasury Secretary. He lives in the biggest house in Manhattan or wherever, something like that. But James J. Hill in the 1870s built a transcontinental, the Great Northern, without a penny in government aid and proved that it was not necessary. Investors capitalized the whole thing. He paid the Indians for rights of way across their land with livestock, money, whatever they could trade for. He found the shortest route across the country. Whereas the government subsidized railroads was all political. So here you have, I'll draw you on my quick map of the United States or Thanksgiving turkey, one after the other. Let's say they started here. Here's Council Bluffs over there. James J. Hill, you know, he's a capitalist and he has private investors who are investing in this. He has to make money, he has to minimize his costs and maximize his traffic. So he found the shortest route through the Rocky Mountains to the West Coast. Something like that, like that. And he became the most profitable, the most efficiently built and the most profitable railroad, the Great Northern. The government, here's the government railroads, theirs look more like this. Because of the politics of it, because every member of Congress, even the representatives from the territories that were not yet Congress, said you'll get our support but you have to run a line to our town or else no vote from me. And so they had to run all these lines all over the place and go hundreds of miles for maybe one person to ride the train every six months because that's the cost of getting my vote. And then when they built it, you read the book by Burton Folsom on entrepreneurs versus the state. They did things like they built railroad tracks on the top of ice packs in the Rockies in the early winter when it was still not so cold that you couldn't work and they built the tracks. Then springtime came and the ice melted and the tracks would just collapse but that was all good because they had a per mile subsidy from the government. So the more miles of track you build, the more profit you make. And so who cares if the tracks collapse in the spring? It's all good for me. But a real capitalist like James J. Hill would never think of doing anything like that. And so of course this was a later version of the disasters at the state level that I described earlier. They did the same kind of thing. That's the incentives that governments have when you put them in charge of building something. That's what bureaucracies do. And then finally we had the National Currency Acts. And I want to read you a few things about the importance of the National Currency Acts which is the other plank of the American system. I want to read you what some of the advocates of these things were saying. Here's what Senator John Sherman, who was the chairman of the Senate Finance Committee during the Lincoln years, said. He was the brother of General Sherman from Ohio. And when they passed the National Currency Acts, he was praising it. He's saying this. He said our purpose, he says, is quote, to nationalize as much as possible even the currency so as to make men love their country before their states. All private interests, all local interests, all banking interests, the interests of individuals, everything should be subordinate now to the interests of the government. And that's what Senator John Sherman, the chairman of the Senate Finance Committee said was the purpose of nationalizing the money supply in America. A Democrat who was an opponent of this named Lazarus Powell took the opposite position. He's a Kentucky Democrat. And he says this. The result of this course of banking legislation is utterly to destroy all the rights of the states. It is asserting a power which if carried out to its logical result would enable the National Congress to destroy every institution of the states and cause all power to be consolidated and concentrated here in Washington. And so the Republicans would hear that and say, yeah, right on. That's exactly. That's what we want. That's the whole purpose of all of this. And so if you fast forward even further in my book on Hamilton called Hamilton's Curse, one of the chapters is called the Hamiltonian Revolution of 1913 when we got the Fed, the Income Tax and the 17th Amendment at the same time. The 17th Amendment called for the direct election of senators. Well, the importance of the Income Tax and the Fed is that the central government now has unlimited money. If they have a conscription law, when Abe Lincoln was president, they couldn't afford to run down the runaways, the people who went AWOL from the military. They just didn't have the money to hire all the police to go chase them down. But when you have an Income Tax and the ability to print money like a Fed, you can afford anything. If some guy in Iraq leaves the army, you could hunt him down. You could have 100 people to go hunt him down in Iraq, let alone the mountains of Pennsylvania, which is where a lot of the Union Army soldiers hit out after they abandoned the army. And so that's what they're talking about. They understood that the central government would become, have monopolistic power and many orders of magnitude, more power than it previously had if it could get its claws on all that money that a nationalizing the currency would do, even without a Fed or even without a central bank. They were very happy about this. And so that's why I started out talking about this article in Breitbart praising the American system. And if you read the whole article, this was in March of this year. They claimed that it's a bad thing that we abandoned this thing, but I think the opposite is true. When my book on Hamilton came out, my random house was my publisher, and they wrote a great press release. They have really talented people who work for a company like that. And it's very persuasive that Hamilton was sort of the evil genius who's responsible for the crash of oh age. Because after all the Fed, Ben Bernanke himself once called him the founding father of Central Banking in America. And so they brought me on the Morning Joe television show and sat me down next to Patrick J Buchanan. And the first thing Buchanan says to me is Alexander Hamilton is my hero. And so I knew it was going to be a bad day after that. So they pretty much shouted me down. But I did sell books because they put my book on the TV screen and sold some books. And there were four people kind of shouting at me. And I just sat there saying, what's the use? But I had in my mind, I'm going to get the last word. And I did. Right before they went to the commercial, they kind of shut up and they said, OK, let's give them 10 seconds to respond to all this. And all I could think of saying was that at least Aaron Burr had a good reason for shooting someone unlike Dick Cheney. And that was the end. That's the only thing. It's on YouTube as you can look it up. It's kind of a force. But that's all. I guess our time is up. And that's it for now.