Well, it may be true, that the Bank of England was nationalized in 1946, and in 1998 it became an independent public organization, wholly owned by the Treasury Solicitor of the United Kingdom and acting on behalf of the government - BUT - with complete autonomy and independence in setting monetary policy.  In other words, the Bank of England has the right, indeed the responsibility, to tell anyone, any branch, any entity, to butt out of its decision-making process.  No oversight.  None, nada, zero, zip, null, nothing.  It is the king of the monetary universe, the ruler of all things currency and the sole responsible party for increasing or decreasing the value of currency in the British banking system.  In the immortal words of Mel Brooks, “It’s good to be the King” and indeed the Bank of England, like every other central bank around the world, operates as if it were a kingdom onto itself.  If there is a single great issue the Bank has to grapple with, such as a nationwide financial crisis, the Treasury theoretically can direct the Bank to take action, but it has to take it to Parliament first which has to endorse such action within 28 days or it becomes null and void.  In other words, the Bank of England can pretty much do as it damn well pleases, and everyone just needs to shut the hell up and take it. Now, some people might argue that the creation of the Bank of England had the effect of leading the country towards greater industrialization through the proliferation of monetary accessibility.  This action and the eventual unification of England and Scotland in 1707, resulted in the United Kingdom and it gave the British Government unprecedented global reach and power, which was theirs to keep until the United States emerged victoriously from WWII and assumed that role from the British.  But it should take a lot more than the centralization of such power and the ability of His Majesty’s government throughout the ages to colonize over 70% of the world to label such action as “good” and in the common interest.  Not to mention, if we try to go as far as labeling it as a benefit to the vast majority of the people living today.  I think it had the opposite effect, whereas the British were successful in exporting their view of top down economic and social justice that allowed for the creation of numerous dictatorial powers to rise throughout history, resulting in the death of millions of innocent people in countless wars and revolutions.  Fast forward to January 14, 1790.  The former British colonies on the North American continent, just waged an eight-year war against the crown and having won, formed the United States of American. During the war, the Continental Congress and individual states had the unfortunate circumstance of running up a massive debt to finance the war effort.  They borrowed heavily from French and Dutch bankers and had something called the Continental, a currency issued by the Congress, but due to massive counterfeiting operations by the British and the overprinting of the currency, the value of the Continental was less than toilet paper by the time the war ended.  In other words, the new American nation was, for all practical purposes, bankrupt from the get-go.  Since the US stopped paying its debt to the bankers and governments in France and Holland, contributing greatly to the French Revolution of 1789, the country had absolutely no credit.  None whatsoever.  Bonds which could have been issued by the new government were deemed worthless.  Who would want to buy the bonds of a nation that is bankrupt?  Ever hear of Soviet government bonds?  No?  Why not?  Well, pretty much for the same reason as the early US bonds, they were not worth the paper they were printed on.  Although in 1791 the US faced no imminent danger from being overtaken by an outside power, as the British did after the French naval loss, the credit situation of the new country was on par with that of King William in 1690.  The nation was broken and out of credit.  Alexander Hamilton, one of the founders of the Bank of New York, one of only 2 banks on the entire continent at that time, is the new Secretary of the Treasury.  Mr. Hamilton, seeing the bond rating of the new country worthless, and seeing the British bond ratings to be healthy and effective by this time, formulates a plan to model the new nation’s monetary policy on the same wavelength as that of the Bank of England.  The same country his nation just fought a war with to become independent.  Hamilton submits a proposal to the US Congress, called “The Report on the Public Credit” in which he describes a 3-point plan on effectively how to proceed with the monetary policy of the new nation as it is grappling with the problem.  Point one: create a national debt. Say what?  Yes, that’s right!  Hamilton wanted to fix the nation’s crippling debt problem resulting from the Revolutionary War by creating a new national debt.  Now, even a child can tell you that if you are in trouble, the way to get out of it is not by making more trouble for yourself.  You ever hear the story of successfully digging yourself out of a hole by digging deeper?  No?  Why not?  Because the more you dig, the lower you go.  But Hamilton was looking at the situation from a different perspective.  He thought that the way to fix the issue was to emulate the British banking system – hey, if you can establish credit by using the same model and pass your problems onto the next generation by creating a national debt, so be it.  Something YOU don’t have to deal with then.  Your kids, well, they can figure it out. 

But Hamilton ran into a problem.  The Congress wanted to have a new national monetary system based on gold and silver and they said so in the Constitution.  Article 1, Section 10, Clause 1 states:

“No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.”

Congress spells out specifically that states shall not have the power to emit Bills of Credit – now that is a peculiar statement.  Why would they say that so specifically?  What is a Bill of Credit?  Well, a Bill of credit is nothing more than paper currency.  It refers back to a time when gold was deposited in a bank for safe keeping and in return the owner was given a Bill of Credit signifying his or her ownership of the gold that they could then trade, or use to redeem their gold.  In effect, the Bill of Credit became a paper currency that allowed the owner to trade his gold without having to carry it.  But in Article 1, Section 10, Clause 1 the Constitution seems to prohibit specifically the creation of bills of credit – most likely because most of the men who took part in writing it, saw what an absolute horror the Continental Currency turned out to be and didn’t want to repeat the fiasco with the new nation.  However, they went on to say that the states shall have the power, indeed the responsibility, to coin the nation’s money, and although it prohibits the printing of paper currency, or as it was called back then, a bill of credit, states should make gold and silver coins tender in payment of debts.  So, Hamilton’s proposal, coinciding with the idea of printing another national currency, and running up a national debt, did not gain a lot of traction with the newly formed US Congress.  Congress understood at that time that for Hamilton’s proposal to work, creating a national debt required the reintroduction of a national paper currency.  You can't borrow more gold or silver than what is physically available, you must produce Bills of Credit against them then dilute those bills of credit in order to have more available.  The problem is, the more you dilute paper currency, the less it is worth.  Just ask any German living through the Weimar government in the 1920s.  So to say that Hamilton’s idea was unpopular with the Congress is an understatement and proposing a national debt shortly after the ending of the war was seen as governmental overreach by many of the states. Now, in all fairness, some states, which were crippled with debt from the war welcomed the news, such as New England states, for them it was a great idea!  They no longer had to worry about how to repay their debts, they could shift it to the Federal Government.  But, Virginia, Thomas Jefferson’s home state, a state that had already paid back its revolutionary war debt, did not want to hear anything about a new national plan where they would be saddled as part of the new nation, with the debt of other states.  In their view, that would be like the US being responsible for the debt of Spain, France or Germany or any other country.  Hamilton felt that by roping all the states to buy into a national debt, it would help cement the bond between them – sort of a misery enjoys company type of deal, but he couldn’t make the sale. To say that Hamilton’s plan was not universally accepted and liked is an understatement of the century.  Hamilton, however, being a persistent man, was not to be deterred. In his views, he stated unequivocally, a national debt, if controlled properly, can be a “national blessing”.  He did not specify what he meant by the phrase “controlled properly”.  Of course, Hamilton, by proposing this plan, evoked the outrage of the most influential man in the country at the time after President Washington.  Thomas Jefferson, a future 2 term president himself, was outraged and he minced no words about it and so was Madison.  As stated before, Jefferson’s home state of Virginia had already repaid its war debt and he wanted no part of it.  No way they are going to sign off on something that called for the creation of a national debt and they wanted no part of this nonsense Hamilton was peddling.  But they also wanted something desperately and Hamilton knew what that was.  Both Jefferson and Madison have been trying to establish a new Capitol city for the new nation, and they had a hard time convincing Congress to do so.  So, Hamilton proposed something the other two men desperately wanted to soften the blow.  He proposed that in return for their support for the national debt, he was prepared to support their idea that the capital city of the country be moved from New York to a new location on Potomac that Jefferson could select.  Establish a new Capital outside of New York City - the silver bullet that killed the objection and Jefferson relented on the national debt issue.  The nation was not even a decade old and already indebted to a banking system that was to see the people’s debt top over 30 trillion dollars in less than 300 years.  But the last point in Hamilton’s 3-point plan was the most bitter pill to swallow.  If Jefferson was outraged by the prospect of establishing a national debt and had to be placated with something as significant as establishing a new Capital city, this last point positively sent him into a frenzy because the point the Treasury secretary proposed was nothing short than the duplication of a British institution that Jefferson despised with a passion.  Secretary of State Jefferson, along with James Madison, hated the British governmental system and made his views known at every opportunity.  He saw the potential of extending federal powers as a complete overreach and the road to a dictatorial government that will trample the rights of states and ordinary citizens.  He saw what the Bank of England was able to accomplish during the revolutionary war, essentially bankrupting the new nation with the counter fitting of the Continental Currency, and the last thing he wanted was to have the new US government relinquish that power to a bunch of PRIVATE bankers.  Hamilton’s proposal, however, did just that.  It sought to establish a banking corporation that would effectively be put in charge of the nation’s monetary policy.  A central bank of the United States if you will.  Modeled precisely on the workings of the Bank of England and proposing to fulfill the same itemized structure that Hamilton’s banking friends across the pond had.  A tool that they used successfully to centralize more and more financial and real power into the hands of fewer and fewer people as time went on.  Think about it.  A country, that just finished fighting a bloody, drawn out war with an occupying power, a war that resulted in the deaths of thousands of people across every part of the newly created nation, now has a Secretary of Treasury, Mr. Hamilton, who is proposing the creation of the same entity that the country that was just booted out for being an oppressive, tyrannical monster, uses to keep its population in line with financial manipulation.  Jefferson went into complete war mode and started circling the wagons as soon as he read the Secretary’s proposal.  He wanted to stop this nonsense once and for all and went as far as accusing Hamilton of putting forward a proposal that was unconstitutional. Hamilton of course, saw it differently.  He wanted to do for America what the Bank of England did for the United Kingdom.  His point of view was driven – as he stated – by the possibility of US government bonds being traded as easily as British bonds, thereby allowing the nation to raise money quickly, efficiently and backed by the tariffs of the country, without anyone calling into question the credit worthiness of the nation ever again.  Jefferson was outraged.  He saw the proposal as nothing more than Hamilton’s attempt to form a private corporation that would use the power of the central government to enrich the wealthy, such as Hamilton and his banker friends, at the expense of everyone else, especially the states.  Furthermore, the concept of establishing a corporation by the government was specifically prohibited in the Constitution and Jefferson, one of the architects of the Constitution, saw Hamilton’s approach as a personal insult.  He and his supporters worked tirelessly to defeat the Secretary’s bill, but Hamilton had been able to rally all his friends across the country also, everyone involved in finance, who succeeded in putting enough pressure on Congress, that the body ended up passing the bill.  It went to President Washington for signature.  So, Jefferson, Madison and Edmund Randolph, the attorney general, appealed directly to Washington to veto the bill. Their view would not prevail.  Hamilton was not easily deterred.  After the congressional vote, the Secretary, in a single night, wrote a lengthy essay, rumored to be over 15,000 words, that was a repudiation of everything the Jeffersonians brought about regarding the establishment of a Central Bank and this essay turned the tide in Hamilton’s favor.  President Washington signed the bill into law.  The first American Central Bank was born, and it would never truly die.  The concept, over the years, will come to dominate the US, as well as the world financial system and today, there is no nation on earth that has a central bank, that is not modeled on the US and the British central banking system.  A member owned, private banking cartel, that has the power to issue the nation’s money supply and practically without oversight determine, based on its own self-interests, how to manage the monetary policy of the country. Some people argue that the case cannot be made for such a statement, since the FED chairman is obligated to go to Congress, the people’s house, every once in a while, and give a report on the state of the monetary system and how it is progressing. But if you watch these reports, you will notice, the FED chairperson does not go to Congress to ask for permission to implement a monetary policy.  He or she goes to Congress to TELL the members how the policy is implemented. The banking system is in essence, as former Chairmans Greenspan and Bernanke emphatically pointed out on numerous occasions, a private entity, owned by its members and nobody has the oversight power to tell the FED how to run its operations.  Not the Congress, not the President, nobody.  The Federal Reserve and the US banking system are independent of any oversight.