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The Creature from Jekyll Island
+++++++++++++++++++++++++++++++++
(Excerpts from Chapter 1)
(Specifically addressing the creation of the Federal Reserve System.)
--
The secret meeting on Jekyll Island in Georgia at which the Federal
Reserve was conceived; the birth of a banking cartel to protect its
members from competition; the strategy of how to convince Congress
and the public that this cartel was an agency of the United States
government.
--
...were seven men who represented an estimated one-forth of the total
wealth of the entire world.
1. Nelson W. Aldrich, Republican "whip" in the Senate, Chairman of the
National Monetary Commission, business associate of J.P. Morgan, father-
in-law to John D. Rockefeller, Jr.;
2. Abraham Piatt Andrew, Assistant Secretary of the United States Treasury;
3. Frank A. Vanderlip, president of the National City Bank of New York,
the most powerful of the banks at that time, representing William Rockefeller
and the international investment banking house of Kuhn, Loeb & Company;
4. Henry P. Davison, senior partner of the J.P Morgan Company;
5. Charles D. Norton, president of J.P. Morgan's First National Bank of
New York;
6. Benjamin Strong, head of J.P. Morgan's Bankers Trust Company;
and
7. Paul M. Warburg, a partner in Kuhn, Loeb & Company, a representative
of the Rothschild banking dynasty in England and France, and brother to
Max Warburg who was head of the Warburg banking consortium in Germany
and the Netherlands.
--
In 1913, the same year that the Federal Reserve Act was passed into law,
a subcommittee of the House Committee on Currency and Banking, under the
chairmanship of Arsene Pujo of Louisiana, completed its investigation into
the concentration of financial power in the United States. Pujo was
considered to be a spokesman for the oil interests, part of the very group
under investigation, and did everything possible to sabotage the hearings.
In spite of his efforts, however, the final report of the committee at
large was devastating. It stated:
Your committee is satisfied from the proofs submitted, even in the
absence of data from the banks, that there is an established and
well defined identity and community of interest between a few leaders
of finance...which has resulted in great and rapidly growing concen-
tration of the control of money and credit in the hands of these few
men...
When we consider, also, in this connection that into these reservoirs
of money and credit there flow a large part of the reserves of the
banks of the country, that they are also the agents and correspondents
of the out-of-town banks in the loaning of their surplus funds in the
only public money market of the country, and that a small group of men
and their partners and associates have now further strengthened their
hold upon the resources of these institutions by acquiring large stock
holdings therein, by representation on their boards and through valuable
patronage, we begin to realize something of the extent to which this
practical and effective domination and control over our greatest
financial, railroad and industrial corporations has developed, largely
within the past five years, and that it is fraught with peril to the
welfare of the country.
--
The purpose of this meeting on Jekyll Island was...to come to an agreement
on the structure and operation of a banking cartel. The goal of the cartel,
as is true with all of them, was to maximize profits by minimizing competition
between members, to make it difficult for new competitors to enter the field,
and to utilize the police power of government to enforce the cartel agreement.
In more specific terms, the purpose and, indeed, the actual outcome of this
meeting was to create the blueprint for the Federal Reserve System.
--
The first leak regarding this meeting found its way into print in 1916. It
appeared in Leslie's Weekly and was written by a young financial reporter by
the name of B.C. Forbes, who later founded Forbes Magazine. The article was
primarily in praise of Paul Warburg, and it is likely that Warburg let the
story out during conversations with the writer. At any rate, the opening
paragraph contained a dramatic but highly accurate summary of both the nature
and purpose of the meeting:
Picture a party of the nation's greatest bankers stealing out of New
York on a private railroad car under cover of darkness, stealthily
hieing hundreds of miles South, embarking on a mysterious launch,
sneaking on to an island deserted by all but a few servants, living
there a full week under such rigid secrecy that the names of not one
of them was once mentioned lest the servants learn the identity and
disclose to the world this strangest, most secret expedition in the
history of American finance.
I am not ramancing. I am giving to the world, for the first time,
the real story of how the famous Aldrich currency report, the foundation
of our new currency system, was written.
--
In 1930, Paul Warburg wrote a massive book - 1750 pages in all - entitled
The Federal Reserve System, Its Origin and Growth. In this tome, he
described the meeting and its purpose but did not mention either its
location or the names of those who attended. But he did say:
"The results of the conference were entirely confidential. Even
the fact there had been a meeting was not permitted to become public."
Then in a footnote he added:
"Though eighteen years have since gone by, I do not feel free to
give a description of this most interesting conference concerning
which Senator Aldrich pledged all participants to secrecy."
--
In the February 9, 1935, issue of the Saturday Evening Post, an article
appeared written by Frank Vanderlip. In it he said:
Despite my views about the value to society of greater publicity
for the affairs of corporations, there was an occasion, near the close
of 1910, when I was as secretive - indeed, as furtive - as any
conspirator....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....
We were told to leave our last names behind us. We were told, further,
that we should avoid dining together on the night of our departure.
We were instructed to come one at a time and as unobtrusively as
possible to the railroad terminal on the New Jersy littoral of the
Hudson, where Senator Aldrich's private car would be in readiness,
attached to the rear end of a train for the South....
Once aboard the private car we began to observe the taboo that had
been fixed on last names. we addressed one another as "Ben," "Paul,"
"Nelson," "Abe" - it is Abraham Piatt Andrew. Davison and I adopted
even deeper disguises, abandoning our first names. On the theory that
we were always right, he became Wilbur and I became Orville, after
those two aviation pioneers, the Wright brothers....
The servants and train crew may have known the identities of one
or two of us, but they did not know all, and it was the names of all
printed together that would have made our mysterious journey significant
in Washington, in Wall Street, even in London. 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 got
together and written a banking bill, that bill would have no chance
whatever of passage by Congress.
--
As with all cartels, it had to be created by legislation and sustained by
the power of goverment under the deception of protecting the consumer.
--
As John Kenneth Galbraith explained it:
"It was his [Aldrich's] thought to outflank the opposition by
having not one central bank but many. And the word bank would
itself be avoided."
--
Galbraith says
"...Warburg has, with some justice, been called the father of
the system."
Professor Edwin Seligman, a member of the international banking family of
J. & W. Seligman, and head of the Department of Economics at Columbia
University, writes that
"...in its fundamental features, the Federal Reserve Act is the work
of Mr. Warburg more than any other man in the country."
--
A third brother, Max Warburg, was the financial adviser of the Kaiser and
became Director of the Reichsbank in Germany. This was, of course, a central
bank, and it was one of the cartel models used in the construction of the
Federal Reserve System. The Reichsbank, incidentally, a few years later
would create the massive hyperinflation that occured in Germany, wiping
out the middle class and the entire German economy as well.
--
...A. Barton Hepburn of Chase National Bank was even more candid. He said:
"The measure recognizes and adopts the principles of a central bank.
Indeed, if all works out as the sponsers of the law hope, it will make
all incorporated banks together joint owners of a central dominating
power"
And that is about as good a definition of a cartel as one is likely to find.
--
...it is incapable of achieving its stated objectives.
--
...why is the System incapable of achieving its stated objectives?
The painful answer is: those were never its true objectives.
--
Anthony Sutton, former Research Fellow at the Hoover Institution for War,
Revolution and Peace, and also Professor of Economics at California State
University, Los Angeles, provides a somewhat deeper analysis. He writes:
Warburg's revolutionary plan to get American Society to go to work
for Wall Street was astonishingly simple. Even today,...academic
theoreticians cover their blackboards with meaningless equations,
and the general public struggles in bewildered confusion with
inflation and the coming credit collapse, while the quite simple
explanation of the problem goes undiscussed and almost entirely
uncomprehended. The Federal Reserve System is a legal private
monopoly of the money supply operated for the benefit of the few
under the guise of protecting and promoting the public interest.
--
The real significance of the journey to Jekyll Island and the creature that
was hatched there was inadvertantly summarized by the words of Paul Warburg's
admiring biographer, Harold Kellock:
Paul M. Warburg is probably the mildest-mannered man that ever
personally conducted a revolution. It was a bloodless revolution:
he did not attempt to rouse the populace to arms. He stepped forth
armed simply with an idea. And he conquered. That's the amazing
thing. A shy, sensitive man, he imposed his idea on a nation of a
hundred million people.
--
The Creature from Jekyll Island:
A Second Look at the Federal Reserve
By G. Edward Griffin (C)1994
Published by: American Opinion Publishing, Inc.
P.O.Box 8040
Appleton, WI 54913-8040
--
[end]
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The BIRCH BARK BBS / 414-242-5070
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