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from the Second Bank of the United States, but he deposited these 

funds, $10 million, in state banks. The immediate result, Clews tells us, is 

that the country began to enjoy great prosperity. This sudden flow of 

cash caused an immediate expansion of the national economy, and 

the government paid off the entire national debt, leaving a surplus of 

$50 million in the Treasury.

The European financiers had the answer to this situation. Clews further 

states, "The Panic of 1837 was aggravated by the Bank of England 

when it in one day threw out all the paper connected with the United 

States."

The Bank of England, of course, was synonymous with the name of 

Baron Nathan Mayer Rothschild. Why did the Bank of England in one 

day "throw out" all paper connected with the United States, that is, 

refuse to accept or discount any securities, bonds or other financial 

paper based in the United States? The purpose of this action was to 

create an immediate financial panic in the United States, cause a 

complete contraction of credit, halt further issues of stocks and bonds, 

and ruin those seeking to turn United States securities into cash. In this 

atmosphere of financial panic, John Pierpont Morgan came into the 

world. His grandmother, Joseph Morgan, was a well to do farmer who 

owned 106 acres in Hartford, Connecticut. He later opened the City 

Hotel, and the Exchange Coffee Shop, and in 1819, was one of the 

founders of the Aetna Insurance Company.

George Peabody found that he had chosen well in selecting Junius S. 

Morgan as his successor. Morgan agreed to continue the sub rosa 

relationship with N.M. Rothschild Company, and soon expanded the 

firm’s activities by shipping large quantities of railroad iron to the United