The Creation of the Federal Reserve System

Over the span of six years prior to 1913, what eventually became the Federal Reserve Act went through a series of different names, and there were significant contributions made by many people ranging in ideals all over the political spectrum. The bill even managed to cross party lines following the Election of 1912. While the legislation was originally created by Republican hands, the Federal Reserve Act was pushed through a Democratic Congress and signed on December 23, 1913 by a Democratic President. By that point, the majority of the nation had been demanding banking reform for some time, and the people were rewarded with the Federal Reserve Act. The Act itself, however, can be traced all the way back to the banking crisis in 1907. From there, Congress set up the National Monetary Commission to study the central banking system in Europe, and submit their version of a banking bill to Congress. Senator Nelson W. Aldrich, Chairman of the commission, brought forth a plan for the National Reserve Association, but after the Republicans lost the majority in both houses and the Presidency in 1912, it would be up to the Democrats to push through the final bill. While contemporary economists, historians, and political scientists generally try to denounce the direct relationship the National Reserve Association had to what became the Federal Reserve Act, the evidence procured will prove otherwise.

The Panic of 1907 started on the steps of the New York Stock Exchange on October 17 with Butte Montana and Mercantile National Banks’ declarations of bankruptcy[1]. As news spread throughout New York City, disgruntled customers flocked by the thousands to Wall Street in order to withdraw their savings from the failing banks. In the days following, the relationships between the public and the banks of New York City became increasingly strained[2]. Deplorable banking practices, currency drains, faulty market speculation, and excessive deposit creation were responsible for public distrust, inevitably leading to a bank run[3]. Shockwaves resonated to every corner of New York as loans to stock brokers were hiked up to combat the losses. As a result, the brokers were unable to obtain adequate money and the price of stocks fell to the lowest they had been since December of 1900. The Panic of 1907 was in full-swing.

On Wednesday, October 23, Treasury Secretary George Cortelyou traveled to New York to meet with J.P. Morgan and other wealthy New York financiers to discuss possible resolutions to the panic. Over the course of the next week, twenty five million dollars was deposited into New York City banks by the US Treasury Department, and an additional sixty million was contributed by bankers J.P. Morgan, James Stillman, George F. Baker, and oil magnate John D. Rockefeller[4]. While the money these men supplied helped to correct the panic, there was a great deal of skepticism among economists about how easily and significantly these men could influence the economy.

While the panics and recessions of the past may have been more harsh and widespread, none would impact the future of the American economy more than the Panic of 1907. In the thirty years prior, there had been recessions of varying severity on the average of every five years, but the bank run in 1907 was different in it brought the American people together towards combating a common enemy[5]. While the effects of these recessions impacted those on the bottom rung of the socio-economic scale the most, the majority of America was nevertheless in agreement with the notion that government intervention and banking reform was the only way to prevent these excessive recessions from occurring[6].

Public demand sparked debate amongst members of Congress as to what should be done to fight these recessions. Banking reform would have to become top priority for the subsequent years[7]. After much deliberation, congress passed the Aldrich-Vreeland Act in 1908 creating the National Monetary Commission, which served many functions, the primary of which was to thoroughly investigate the banking methods in other countries and the submission of a report with recommended banking reformations to Congress[8].

While the National Monetary Commission was abroad studying the central banks of Europe, the domestic public had done its part by organizing special committees to study the problems of the current banking system[9]. None was more outspoken than Paul Warburg, representative the international investment banking house of Kuhn, Loeb, and Company and long-time advocate of the German Reichsbank. It was because of his ideas on how the government should proceed with banking legislation he was invited to appear before the National Monetary Commission in New York[10]. It was here Warburg met with Nelson W. Aldrich, United States Senator from Rhode Island, Chairman of the National Monetary Commission, and father-in-law to John D. Rockefeller Jr[11]. Aldrich informed Warburg, “I like your ideas, but you say we cannot have a central bank, and I say we can.” Warburg was an avid component to the idea of a central bank, but always assumed it would never sell to the American people[12].

Over the course of the next few years, Paul Warburg developed a closer relationship with Senator Aldrich and Professor A. Piatt Andrew, Special Assistant to the National Monetary Commission[13]. Warburg describes the Senator from Rhode Island,”Although he was a very shrewd politician, he showed a surprising disregard for party politics in dealing with our particular problem.” According to Warburg, Aldrich invited him and a small group of men to “take part in a several days conference with him, to discuss the form that the new banking bill should take.”[14] After a week of intense study, discussion, and debate, the men emerged proudly from Jekyll Island, Georgia with a copy of the National Reserve Association, or as it is also known, the “Aldrich Plan,” clenched in their fists- a bill they hoped would bring about the banking reform America needed. Frank A. Vanderlip, the President of the National City Bank of New York described his days working on the bill, “The highest pitch of intellectual awareness I have ever experienced.”[15]

Over the next two years, the authors of the Aldrich Plan attempted to garner support for their bill from interest groups all over the nation. Their bill was endorsed by the National Board of Trade, the Chamber of Commerce, the Merchants’ Association of New York, and The New York Product Exchange[16]. However, when Theodore Roosevelt threw his hat into the ring in 1912, created the Bull Moose Party, and split the Republican ticket, the results trickled down to the Congressional and Senatorial races. The Republican Party lost big in the Election of 1912, losing the majority in both branches of Congress as well as the White House to a virtually unknown Democratic Candidate, Woodrow Wilson, former President of Princeton University and Governor of New Jersey. Any hope of pushing through a Republican bill at this time was shattered. Congress was reluctant to endorse a bill which bore Aldrich’s name, for Aldrich himself had lost his seat in the Senate that year[17]. Furthermore, the progressives of the time such as William Jennings Bryan, the former presidential candidate from Nebraska and long time advocate of the common man, protested the bill on the grounds that it lacked adequate governmental control, would augment the power of Wall Street Bankers, and it would give dangerous inflationary power to them by increasing the elasticity of the currency. William Jennings Bryan went on to criticize the Aldrich Plan as, “A scheme which was backed by the big financiers,” and that if passed, the bill would, “Place the big bankers in complete control of everything through the control of our nation’s finances.”[18]

Bryan’s denunciation of the Aldrich Plan contributed greatly to its demise, but many of his colleagues such as Congressmen Charles A. Lindbergh, Sr. and Robert M. Lafollette shared his views on the bill, and the general public undoubtedly shared his views on the money trust[19]. They were growing increasingly dissatisfied with the distribution of wealth within the nation, and feared the ultimate interests of the country were in the hands of the select wealthiest elite. Reflecting that mentality, Congress put together a committee headed by Arsene Pujo of Louisiana for the purpose of investigating the money trust. After a few weeks, the committee returned to Congress with evidence such a trust existed. The following elite banking companies comprised the trust: J.P. Morgan and Co., First National Bank of New York, National City Bank of New York, Lee, Higginson, and Co. of Boston and New York, and Kidder, Peabody, and Co. of Boston and New York, and Kuhn, Loeb, and Co [20]. All were backers of the Aldrich Plan.

The Democratic Platform in 1912 called for “opposition to the Aldrich Plan for a central bank,” and Woodrow Wilson was a hardened advocate of that measure[21]. But before the President-elect was sworn in, he had already begun to talk to his advisors about banking reform. Robert Owen, Senator from Oklahoma and Carter Glass, Congressman from Virginia, along with President Wilson, his personal advisor Colonel Edward Mandel House, and Professor at Washington and Lee University Henry Parker Willis, worked together over the next year to put together the plans for the Federal Reserve[22]. After almost a year’s worth of negotiations, the Glass-Owen bill, or as it is more commonly known, the Federal Reserve Act, was signed into law on December 23, 1913.

 

After six years, currency reform had finally come to America. The new Federal Reserve Act called for, as stated in the Preamble, “To provide for the establishment of Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States and for other purposes.”[23] In addition, the Act called for the creation of the Federal Reserve Board, the governing body of seven men chosen by the President, whose sole purpose is to control the reserve banks operating within the system. The Federal Reserve Board, or “capstone,” as President Wilson referred to it so many times, was his crowning achievement in the creation of his version of the Federal Reserve System[24]. Minutes after President Wilson signed the bill in the evening of December 23, he told sources, “I need not tell you that I feel a very deep gratification at being able to sign this bill, and I feel that I ought to express very heartily the admiration I have for the men who have made it possible for me to sign it.”[25]

In 1935, twenty two years after the Federal Reserve act was passed, Frank Vanderlip published his autobiography entitled From Farm Boy to Financier. Within this text, there are many points where Vanderlip touched on his involvement in writing the Act, as well as the criticisms he had. In chapter XXI, Vanderlip goes into great detail of his expedition to Jekyll Island, and the discussions that took place there. “Now, although the Aldrich Federal Reserve plan was defeated when it bore the name of Aldrich, nevertheless its essential points were all contained in the plan that finally was adopted. It provided an organization to hold the reserves of all member banks and arranged that they would always be ready to relieve a member-bank under pressure by rediscounting loans that it held. The law as enacted provided for twelve banks instead of the one which the Aldrich plan would have created; but the intent of the law was to coordinate the twelve through the Federal Reserve Board in Washington, so that in effect they would operate as a Central Bank. There can be no question about it: Aldrich undoubtedly laid the essential, fundamental lines which finally took the form of the Federal Reserve Law.”[26] What Vanderlip wrote cannot be taken at face value, nor can it be ignored, but if what later became the Federal Reserve Act was simply a modified version of the plan drawn up by Nelson Aldrich and his Associates at Jekyll Island in November of 1910, it would certainly be one of the greatest manipulations in our Nation’s history.

According to Paul Warburg, the fact that there had been a meeting at Jekyll Island was, “not permitted to become public. I do not feel free to give a description of this most interesting conference concerning which Senator Aldrich pledged all participants to secrecy.”[27] Frank Vanderlip wrote in his autobiography, “I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System.” And, “Since it would be fatal to Senator Aldrich’s plan to have it known that he was calling on anybody from Wall Street to help him in preparing his report and bill, precautions were taken that would have delighted the heart of James Stillman.”[28] Finally, Vanderlip finished it off with, “Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had gotten together and written a banking bill, that bill would have no chance whatever of passage by Congress.”[29] Vanderlip also let slip the names of those in attendance at the Jekyll Island Meeting. Aside from Aldrich, Warburg, and he, there was in addition Benjamin Strong, and Henry P. Davison, both leading partners of J.P. Morgan[30]. After the Federal Reserve Act was passed, Strong became the first Governor of the Federal Reserve Bank of New York[31].

It was widely accepted at the time that the Aldrich Plan was the plan built by the bankers for the bankers. Senator Aldrich himself was commonly known as an advocate of big business. In a campaign speech Woodrow Wilson gave to Topeka, Kansas on October 8, 1912, he commented on the downfall of the Aldrich Plan, “I am not sure the country in general hasn’t turned from it (the Aldrich Plan) chiefly because it bears Mr. Aldrich’s name.”[32] Wilson always strove to come off as a champion of the common man, but was he everything he appeared to be?

The main contributor to Wilson’s campaign fund was Cleveland H. Dodge, director of National City Bank. Dodge and Wilson had known each other for several years at that time, ever since they were classmates together at Princeton University. As director of National City bank, Mr. Dodge was very wealthy, and aided Wilson in advancing his career[33]. The other co-directors of National City Bank at the time were J.P. Morgan Jr., Jacob Schiff, William Rockefeller, J. Ogden Armour, Frank Vanderlip, and James Stillman[34]. These same men who funded Wilson’s campaign were also those targeted at the Pujo meetings as being the “money trust”.

Wilson’s political advisor, Col. Edward Mendel House, wrote a letter to Wilson on November 28, 1912, in which he distinguished the difference between the Democratic platform on which Wilson ran, and what Wilson could accomplish once inaugurated. He said, “The platform says ‘we oppose the so called Aldrich plan for the establishment for a central bank.’ This does not mean I take it, that the central banking idea is opposed but that the Aldrich plan for a central bank is opposed.”[35]

After further investigation, it had been concluded that Wilson and House’s relationship extended far beyond that of typical President and advisee. In fact, House is often credited as the driving force behind Wilson’s nomination at the Democratic Convention. The two’s relationship started shortly before, in the fall of 1911. After their first meeting, House told sources, “I never met a man whose thoughts ran so identically with mine.”[36] It turned into a very powerful relationship. Colonel House is often credited for many things which were accomplished during the Wilson Administration. George Viereck, biographer, portrayed House as, “The pilot who guided the ship.” He also described him as, “The one who made the slate for the cabinet, formulated the first policies of the administration, and practically directed the foreign affairs of the United States.”[37]

The Federal Reserve Act, as passed in 1913, would qualify as one of the first policies of the Wilson Administration. Wilson himself declared House, “The unseen guardian angel of the bill.”[38] In the Intimate Papers of Colonel House, several journal entries discuss him working with those such as Paul Warburg, Carter Glass, William McAdoo, Jacob Schiff, Cleveland H. Dodge, and even J.P. Morgan Jr. on the new currency bill, some of which were the same as those present at the Jekyll Island meetings[39].

Carter Glass, Chairman of the House Committee on Banking and Currency, was mentioned in a letter from House to Wilson written on November 28, 1912. House claims Glass, “Candidly confessed he knew nothing about banking or the framing of a monetary measure.”[40] If this was indeed true, one can conclude Glass was a perfect puppet for Wall Street.

However, as Chairman of the House Committee on Banking and Currency, it was his duty to meet with the President-elect to discuss currency reform. Henry Parker Willis and he did so on December 26, 1912 in Wilson’s home in Princeton. Three days later, Glass wrote follow-up letters to both men further discussing the issue of currency reform. In the letter to Wilson, Glass posted a memo his committee was given by the American Bankers Association, “The American Bankers Association, as a body as its meeting in New Orleans a year ago, endorsed the Aldrich Bill. It would seem, therefore, impossible for us as members of the Currency Commission of the American Bankers, to take any other position or do anything else before your committee than to endorse that bill, if we were to appear before you officially.” Below it, Glass explains further, “The bankers intend to fight for the Aldrich Plan as it is drafted in order to get the same thing in a different form. They do not intend the $350,000 expended by the Monetary Commission shall be wasted.”[41] In his letter to Willis, written the same day, Glass informs, “I have been thinking much over our interview at Princeton and find some trouble in sifting anything out of it. It is clear to me that Mr. Wilson has been written to and talked to by those who are seeking to mask the Aldrich plan.”

Congressman Glass was not the only one who thought the authors of the Aldrich Plan would try to disguise it and send it through Congress under a different alias. In Senator Charles Lindbergh’s 1913 book Banking and Currency and the Money Trust, he comments on the connection between the Aldrich Plan and the Money Trust, “The advocates of the plan began to look for a means of retreat, and later they declared the plan abandoned, but lest that declaration be misconstrued, let us not deceive ourselves by believing that the purposes of the Aldrich Plan have been abandoned. They have not, and the same interests that were advocating the plan are covertly operating in order to secure a plan that will accomplish the same results and satisfy the same selfish purposes. The Aldrich Plan is not dead, but is being advocated under a disguise.”[42]

 

But speculation can only take one so far. In Paul Warburg’s The Federal Reserve System; its Origins and Growth, he places the Aldrich Plan together with the Federal Reserve Act on the same page, so the reader can “analytically compare” them. The two bills are placed in two vertical columns with their sections and clauses aligned perfectly. There are only two major differences in the bills. The Aldrich plan called for the establishment of a central bank located in Washington D.C., along with fifteen smaller district banks, but the Federal Reserve System called for a decentralized system of twelve privately owned banks spread across the country, ultimately under the supervision of the Federal Reserve Board. This “capstone” Wilson was talking about consisted of seven members, all appointed by the President and approved by the Senate. Whereas the Aldrich Bill called for a council appointed by the bankers as the head of the money supply of the nation, this new Federal Reserve Act placed appointees of the government in charge, with the Federal Advisory Council, consisting of representatives from the Reserve Banks, as a liaison between the Federal Reserve Board and their respective Banks. This was how the people were meant to keep tabs on the Federal Reserve- by electing the person in charge of appointing the members of the Federal Reserve board to fourteen year terms.[43]

All the powers granted to the banks under the two bills were essentially the same[44]. The two versions of the same bill still called for: regulation the money supply, establishment of an elastic currency, furnishing currency for circulation, facilitation of the clearance and collection of checks, interpretation of economic information, and to act as fiscal agents for the treasury and other government agencies[45]. The two bills still stopped the influence of small, rival banks, insuring the prosperity of big wall street banks, drastically increased the spending power of the government, created a fiat money system, and pooled the reserves of the nation’s banks into one large reserve so all banks would keep the same loan-to-deposit ratios, essentially establishing a banking cartel backed by the government[46]. Regardless of how much President Wilson, Colonel House, Carter Glass, and Senator Owen claim to be the authors of The Federal Reserve Act, the initial Legislation was written by Paul Warburg, Nelson Aldrich, Benjamin Strong, and Frank Vanderlip.

Contrary to the American central banks of the past, the Federal Reserve System has survived for almost a hundred years. Andrew Jackson and Thomas Jefferson fought tooth and nail against central banks throughout their political careers on the basis that they were oppressive, but the Federal Reserve Act has slipped through the smoke virtually undetected. This Act has had more impact on our economy than any legislation prior to the year of 1913, and every dollar owned by Americans is exponentially depreciating in value as we move into the future. The Federal Reserve Act is portrayed as a blessing for the American people, but the truth could not be farther removed. The “money trust” investigated by the Pujo committee is the same group of men which financed Woodrow Wilson during the Election of 1912. The “money trust” investigated by the Pujo Committee is the same group of authors who collectively wrote the Aldrich Plan, and the “money trust” investigated by the Pujo Committee is the same group of bankers now in charge of the money supply of the nation. Those written about in high school text books and given credit for the Federal Reserve System are the same as those who drew up the plan for the banking monopoly seen in the bill for the National Reserve Association.

 

Sources:

1. Economic history Organization, Jon Moen, “The Panic of 1907” http://eh.net/encyclopedia/article/moen.panic.1907 (Accessed November 28- December 4, 2010).
2. Federal Reserve Bank of Boston, The Panic of 1907, (Boston, Federal Reserve Bank of Bastion 1990) 4-5. http://www.bos.frb.org/about/pubs/panicof1.pdf Accessed November 28- December 4, 2010).
3. G. Edward Griffin, The Creature from Jekyll Island; A Second Look at the Federal Reserve (Westlake Village, CA: American Media, 2002), 14-15.
4. Federal Reserve Bank of Boston, The Panic of 1907, 7.
5. Paul Warburg, The Federal Reserve System; Its Origins and Growth Vol. I (New York: The Macmillan Company, 1930), 11-15.
6. William McAdoo, Crowded Years (Boston and New York: Houghton Mifflin Company, 1931), 207-213.
7. Carl H. Moore, The Federal Reserve System: A History of the First 75 Years (Jefferson, North Carolina: McFarland and Company Inc., 1990), 5.
8. Paul Walburg, The Federal Reserve System: Its Origins and Growth Vol I., 31.
9. Ibid, 33
10. Ibid, 56
11. G. Edward Griffin, The Creature from Jekyll Island; A Second Look at the Federal Reserve, 24.
12. Paul Walburg, The Federal Reserve System: Its Origins and Growth Vol I., 56.
13. Ibid, 58.
14. Ibid, 58-59.
15. Frank A. Vanderlip, From Farm Boy to Financier (New York: D. Appleton-Century Company, 1935), under “Chapter XXI: A Conclave on Jekyll Island,” http://www.marketskeptics.com/2009/06/frank-vanderlip-and-creation-of-federal.html (accessed November 29, 2010).
16. Paul Walburg, The Federal Reserve System: Its Origins and Growth Vol I, 68.
17. Nathaniel Stephenson Wright, Nelson W. Aldrich; A Leader in American Politics (New York: Kennikat Press, 1930) pg 401-412.
18. Roger T. Johnson, Historical Beginnings…the Federal Reserve (Boston: Public and Community Affairs Department, Federal Reserve Bank of Boston, 1999) 20, http://www.bos.frb.org/about/pubs/begin.pdf.
19. Charles Lindbergh, Banking and currency and the money trust (Washington D.C., National Capital Press Inc., 1913) pg 71.
20. Report of the Committee Appointed Pursuant to House Resolutions 429 and 504 to Investigate the Concentration of Control of Money and Credit. February 28, 1913. Pages 1-258. (http://fraser.stlouisfed.org/publications/montru/issue/3642/download/53836/montru_report.pdf) pg 56.
21. Paul Walburg, The Federal Reserve System: Its Origins and Growth Vol I, 79.
22. Carter Glass, An Adventure in Constructive Finance (New York: Arno Press, 1927), 227.
23. Carl H. Moore, The Federal Reserve System: A History of the First 75 Years, 7.
24. Woodrow Wilson, The Papers of Woodrow Wilson, Vol. 25 (Princeton, New Jersey: Princeton University Press, 1978 ), 642.
25. Carter Glass, An Adventure in Constructive Finance, 229.
26. Frank A. Vanderlip, From Farm Boy to Financier (New York: D. Appleton-Century Company, 1935), under “Chapter XXI: A Conclave on Jekyll Island,” http://www.marketskeptics.com/2009/06/frank-vanderlip-and-creation-of-federal.html (accessed November 29, 2010).
27. Paul Walburg, The Federal Reserve System: Its Origins and Growth Vol I, 60.
28. Vanderlip, From Farm Boy to Financier, under Chapter XXI: A Conclave on Jekyll Island.
29. Vanderlip, From Farm Boy to Financier, (New York: D. Appleton-Century Company, 1935), 210-219 quoted in G. Edward Griffin, The Creature From Jekyll Island, A Second Look at the Federal Reserve, 11.
30. Ibid, 210-219.
31. Anthony C. Sutton, The War on Gold (Seal Beach, CA: ’76 Press, 1978 ), 84.
32. Woodrow Wilson, The Papers of Woodrow Wilson, Vol. 25, 380.
33. Ferdinand Lundberg, America’s Sixty Families (New York: Vanguard Press, 1938 ), 114.
34. Ibid, 113.
35. Woodrow Wilson, The Papers of Woodrow Wilson, Vol. 25, 564.
36. Alexander L. George and Juliette L. George, Woodrow Wilson and Colonel House; A Personal Study (New York, Dover Publications inc., 1964), 93.
37. George Sylvester Viereck, The Strangest Friendship in History; Woodrow Wilson and Colonel House (New York: Liveright Publishers, 1932), 4.
38. Charles Seymour, The Intimate Papers of Colonel House, Vol. I (New York: Houghton Mifflin Co., 1926), 160.
39. Ibid, 161-168.
40. Woodrow Wilson, The Papers of Woodrow Wilson, Vol. 25, 564.
41. Ibid, 642.
42. Charles A. Lindbergh Sr., Banking and Currency and the Money Trust, 99-100.
43. Roger T. Johnson, Historical Beginnings…The Federal Reserve, 27.
44. Paul Walburg, The Federal Reserve System: Its Origins and Growth Vol. I, 369-405.
45. Ibid, 369-406.
46. G. Edward Griffin, The Creature from Jekyll Island; A Second Look at the Federal Reserve, 16.


Bibliography:

Books:
George, Alexander L., and Juliette L. George. Woodrow Wilson and Colonel House; A Personal Study.
New York, Dover Publications inc., 1964.
Glass, Carter. Adventures in Constructive Finance. New York: Arno Press, 1927
Griffin, G. Edward. The Creature from Jekyll Island; A Second Look at the Federal Reserve. Westlake
Village, CA: American Media, 2002.
Lindbergh, Charles A. Banking and Currency and the Money Trust. Washington D.C., National Capital
Press Inc., 1913.
Lundberg, Ferdinand. America’s Sixty Families. New York: Vanguard Press, 1938.
McAdoo, William. The Crowded Years. Boston and New York: Houghton Mifflin Company, 1931.
Moore, Carl H. The Federal Reserve System: A History of the First 75 Years. Jefferson, North Carolina:
McFarland and Company Inc., 1990.
Seymour, Charles. The Intimate Papers of Colonel House, Vol. I. New York: Houghton Mifflin Co., 1926.
Sutton, Anthony C. The War on Gold. Seal Beach, CA: ’76 Press, 1978.
Vanderlip, Frank A. From Farm Boy to Financier. New York: D. Appleton-Century Company, 1935.
Viereck, George Sylvester. The Strangest Friendship in History; Woodrow Wilson and Colonel House.
New York: Liveright Publishers, 1932.
Warburg, Paul. The Federal Reserve System; Its Origins and Growth Vol. I. New York: The Macmillan
Company, 1930.
Wilson, Woodrow. The Papers of Woodrow Wilson, Vol. 25. Princeton, New Jersey: Princeton
University Press, 1978.
Wright, Nathaniel Stephenson. Nelson W. Aldrich: A Leader In American Politics. New York: Kennikat
Press, 1930.

Websites:
Moen, Jon. Economic history Organization,“The Panic of 1907”
http://eh.net/encyclopedia/article/moen.panic.1907 (Accessed November 28- December 4, 2010).
Federal Reserve Bank of Boston, The Panic of 1907, (Boston, Federal Reserve Bank of Bastion 1990) 4-5.
Http://www.bos.frb.org/about/pubs/panicof1.pdf Accessed November 28- December 4, 2010).
Vanderlip, Frank A., From Farm Boy to Financier. New York: D. Appleton-Century Company, 1935,
http://www.marketskeptics.com/2009/06/frank-vanderlip-and-creation-of-federal.html (accessed November 29, 2010).
Report of the Committee Appointed Pursuant to House Resolutions 429 and 504 to Investigate the Concentration
of Control of Money and Credit. February 28, 1913. Pages 1-258. (http://fraser.stlouisfed.org/publications/montru/issue/3642/download/53836/montru_report.pdf) pg 56.

 

Perhaps this should have been a blog!!! I am not sure what point you are trying to make or is this just a history lesson?

 

It's to show the men who created the Federal Reserve System and the type of deception they used to get the Federal Reserve Act passed. The Federal Reserve system is a cartel between banks and government, it serves both. It's inherently corrupt and must be abolished immediately.

 

Yessir. That is true.

 

Who is going to regulate the money supply and smooth out troughs and valleys in the market? We can't just 'let things go' and expect them work, that failed before.

 

When did it fail?

 

why do you think manipulating the money supply smooths the market?

 

And you call yourself a conservative!

 

Yes, that is the reason the Fed Reserve came to be. The fact is that the Fed still did not stop the troughs and valleys. Look at today and how little they were able to do. In fact, it is arguably part of their fault we are in this mess. Part of the problem with getting rid of the Fed is that we would have to go back on gold and then we would have a changing currency with the changing value of gold. The value of gold will drop sooner or later, especially after the economic scare has passed and trust in the dollar has returned.

 

No, the reason the Fed came into being was so that the money trust could control their competition and comeptition among themselves. It's a cartel between banks and the government. Maintining employment, stablizing the pricing structure and controlling interest rates are only their stated objectives. They have failed in sustaining those goals.

The value of gold hasn't really moved, it's the value of the dollar that is fluctuating. The recent surge in the price of gold is not due to the quantity of gold in circulation suddenly halving itself, it's because the value of the dollar is subject to wild speculation that has driven gold into a bubble that will pop once (if) the economy improves.

There's nothing wrong with using gold as money. It was done for thousands of years, long before governments existed, and provided a stable pricing structure. The only job of government should be (and is, according to the Constitution) to ensure that the money is sound and honest.

 

Intentions are the one of the hardest things to prove. Your ideas on what the Fed intended, beyond what they stated, is only speculation or do you have actual proof?

 

Last I checked John Boehner, who represents my values fairly closely, wasn't pushing to end the Fed. If he's the leader of the Conservative Party, I'd say that makes me Conservative.

 

I absolutely agree. If we could undo this one terrible act our country would benefit immeasurably. But in the format you put you posts in, anyone without a half hour or more to pore over all the text will never find that out.
You would do better to summarize much more and not overwhelm people with the verbiage.

 

The end of the fed is more of a libertarian party type of thinking. Ron Paul never misses a chance to bring up the topic. I like the idea of ridding us of the corruption and hidden taxes of inflation caused by printing money.

Side note: Sometimes I wish Ron Paul would let up on the issue and discuss other issues, besides just getting rid of the Fed. It seems to be his solution for everything that ails us.

 

You think he would have realized that when he had to start a third post just to cover all the content. A summary with a link to the full document is the best approach.

 

This isn't the UK.

 

Instead of blaming the Fed for everything, it would be nice to propose alternative solutions to our banking system and monetary system. And if you say "the private market will dictate it", then you at least have to mathematically describe how that will take place in our system.

All these regulations/systems in place came about because the private sector didn't have an answer. So you better start coming up with some answers or else you will continue being unimportant in our economy.

 

Free Banking.

Why?

Have an answer to what?

Define "unimportant".

 

Did you read the OP? Competetors that represented the money trust, 1/4 of the world's wealth, coming together to forge a bill that was intended to break up the money trust? Use your head. 2+2=4

 

Makes no sense unless you explain how it would work mathematically

Because

To my question

Not important

It's fun arguing with philosophers!! You don't actually have to say anything!

 

People create their own currencies and lend them at whatever interest rate they choose, even negative ones.

Why?

Which is?

To what?

 

Bookmarked.