CREATURE FROM JEKYLL ISLAND - 4. A TALE OF THREE BANKS: The Banking Empire Strikes Thrice - Edward Griffin

(00:00:00) IV. A TALE OF THREE BANKS (15-19)
(00:00:33) 15. THE LOST TREASURE MAP
(00:35:42) 16. THE CREATURE COMES TO AMERICA
(01:10:22) 17. A DEN OF VIPERS
(01:55:44) 18. LOAVES AND FISHES AND CIVIL WAR
(02:29:49) 19. GREENBACKS AND OTHER CRIMES

The Creature from Jekyll Island: A Second Look at the Federal Reserve - G. Edward Griffin (1998)

Section IV: A Tale of Three Banks A Historical Prelude to the Federal Reserve

In Section IV of The Creature from Jekyll Island, Griffin turns his attention to history, showing that America’s modern central bank—the Federal Reserve—is not an isolated development but the fourth incarnation of a recurring experiment in monetary control. Each previous attempt at central banking, Griffin argues, followed the same pattern: the promise of stability and prosperity, followed by corruption, inflation, political manipulation, and public outrage. The section explores over two centuries of monetary history, beginning in colonial Massachusetts in 1690 and ending after the Civil War. Griffin uses these case studies to illustrate a cyclical story of monetary deception—each central bank emerging under noble pretenses and collapsing under the weight of its own excesses. His thesis is simple yet provocative: America has repeatedly been lured into creating centralized banks that enrich private interests while burdening the nation with debt and inflation. By revisiting earlier banking experiments—the colonial notes of Massachusetts, the First and Second Banks of the United States, and the Civil War’s greenbacks—Griffin provides essential historical context for the rise of the Federal Reserve in 1913. Through these tales, he reveals the continuity of financial manipulation, the enduring influence of European banking traditions, and the public’s struggle against unseen economic forces. The five chapters in this section form a historical narrative that moves from the colonial era to the 19th century. Together, they show how America’s monetary destiny was shaped long before the fateful meeting on Jekyll Island.

15. The Lost Treasure Map
Griffin begins this section by setting his “time machine” to 1690, in colonial Massachusetts—the birthplace of paper money in the Western world. “The Lost Treasure Map” recounts how the Massachusetts Bay Colony, facing financial strain from a failed military expedition, decided to issue paper notes to pay soldiers. These bills of credit were meant to be temporary, but their convenience led to widespread use and eventual abuse. At first, the new money seemed to work miracles. Trade flourished, and economic activity expanded. But the illusion soon faded. As the colony printed more notes without sufficient backing in gold or silver, prices rose, the currency depreciated, and savings were destroyed. The episode, Griffin explains, marked the beginning of the inflationary cycle that would plague paper money systems forever—a cycle of false prosperity followed by collapse. Griffin calls this the “lost treasure map” because it provides the first clue to understanding the nature of all future central banking: an attempt to conjure wealth out of nothing. He emphasizes that each repetition of this pattern—paper money issued to fund government spending—results in the same outcome: inflation, economic distortion, and loss of public trust. By beginning with colonial Massachusetts, Griffin sets up a recurring theme that echoes through later centuries: the political temptation to print money and the inevitable punishment that follows.

16. The Creature Comes to America
In this chapter, Griffin describes how the idea of centralized banking migrated from Europe to the newly independent United States. After the Revolution, the nation was deep in debt and struggling with multiple currencies issued by both states and the Continental Congress. Into this chaos stepped Alexander Hamilton, who proposed a national bank modeled on the Bank of England. Griffin portrays Hamilton as a brilliant but dangerous figure whose admiration for British finance led him to establish America’s first central bank—the Bank of the United States (1791–1811). He argues that Hamilton’s plan gave disproportionate power to private bankers and foreign investors, who held the majority of the bank’s stock. This, Griffin insists, was the first appearance of the “creature” on American soil—a privately controlled institution masquerading as a public servant. The bank’s defenders claimed it brought order to the young nation’s finances, but critics like Thomas Jefferson and James Madison saw it as unconstitutional and elitist. Jefferson warned that allowing private banks to control the issuance of currency would be “a greater danger to our liberties than standing armies.” When the bank’s charter expired in 1811, Congress narrowly voted against renewal. Griffin frames this as the first great victory against central banking in America—a brief return to financial independence before the creature’s inevitable rebirth.

17. A Den of Vipers
The story continues with the Second Bank of the United States (1816–1836), established after financial turmoil following the War of 1812. Griffin describes this institution as the creature’s second incarnation—a larger and more sophisticated version of the first. Once again, it promised stability but quickly fell prey to corruption and manipulation. At the center of this drama stands President Andrew Jackson, whom Griffin celebrates as one of the few political leaders to openly confront the banking establishment. Jackson’s battle against the Second Bank—its president Nicholas Biddle, and the powerful financial interests behind him—is one of the most dramatic episodes in American history. Griffin recounts how Jackson, alarmed by the bank’s political influence, vetoed its recharter in 1832 and moved federal deposits into state banks, famously declaring: “I will rout you out, you den of vipers and thieves.” Biddle retaliated by tightening credit and triggering a recession, hoping public pressure would force Jackson to relent. But Jackson held firm, and in 1836 the Second Bank’s charter expired. Griffin views this as a temporary triumph of democracy over financial oligarchy—a rare moment when political courage defeated economic manipulation. Yet he cautions that the victory was fleeting; the same forces would eventually regroup, biding their time until 1913.

18. Loaves and Fishes, and Civil War
With the destruction of the Second Bank, America entered what Griffin calls the “Free Banking Era.” In theory, this meant financial freedom—banks issued their own notes backed by gold or silver. In practice, it produced chaos, as many banks overissued paper money and failed when customers demanded redemption. Griffin argues, however, that these problems were not caused by freedom itself but by government interference, inconsistent regulations, and the lingering temptation to inflate. The next great test came with the Civil War (1861–1865). Facing enormous expenses, the Lincoln administration revived the old colonial habit: printing money. The new paper currency—Greenbacks—was declared legal tender but not backed by gold or silver. Initially, it solved the government’s immediate funding crisis, but it also unleashed inflation and economic instability. Griffin highlights the irony that Lincoln, while saving the Union militarily, undermined it financially by creating a precedent for unbacked government currency. The “loaves and fishes” metaphor refers to the illusion of miraculous abundance—money created by decree rather than productivity. He argues that this moment normalized the idea that government could manufacture wealth through paper, setting the stage for future abuses.

19. Greenbacks and Other Crimes
The final chapter of the section examines the post-war legacy of Greenbacks and the rise of new forms of financial manipulation. Griffin traces how the National Banking Acts (1863–1864) transformed private banks into instruments of government finance. Under this system, banks could issue national banknotes backed by government bonds—a subtle form of monetized debt similar to the Federal Reserve system that would follow decades later. Griffin portrays this as a crucial turning point: the institutionalization of debt as money. Instead of gold or tangible value, the nation’s currency now rested on government IOUs. The result, he argues, was a self-reinforcing loop of borrowing, inflation, and dependence on bankers. He also explores the moral dimension of this shift, calling it a “crime” not in the legal sense but in the ethical one—a betrayal of honest money and public trust. Griffin links these post-war developments to a global trend: the consolidation of financial power under centralized, debt-based systems. By the late 19th century, the stage was set for the final creation of a permanent central bank—the Federal Reserve. “Greenbacks and Other Crimes” closes the section on a darkly prophetic note. Each experiment in centralized banking had collapsed, yet each failure paved the way for the next. The “creature” had survived every attempt to slay it, adapting to new forms and new justifications. The next chapter in this evolutionary chain would begin on Jekyll Island.

Analysis and Broader Significance Section IV serves as the historical backbone of Griffin’s thesis. By tracing the Federal Reserve’s lineage through earlier central banks, he argues that monetary manipulation is not a modern innovation but a recurring pattern rooted in human greed and political expediency. Each episode in A Tale of Three Banks follows a similar arc:

1. Crisis and justification – A financial emergency