Sunday, May 31, 2009

Since Its Inception The FBI Has Been Used As A Domestic Spy/Covert Terrorist -- Protecting Criminal Politicians Like The Bushes & Clintons

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This while attempting to find anything in which to blackmail honest politicians, judges and other government officials whom the military-industrial-intelligence-media-medical-complex cannot control. A primary aspect of the FBI's existence has always been to blackmail those whom the aforesaid Illuminati controlled complex has looked to corrupt. In doing so, the FBI has attacked innocent people while protecting high powered government criminals, as the following *article illustrates.

*Written several years ago by the late Sherman Skolnick

Also see the *testimony of a former Texas Madam who offers irrefutable proof that the FBI & CIA are co conspirators in setting up sting operations in efforts to blackmail our elected officials. These black operations have nothing to do with law and order, but instead the Intel community's usurpation of our elected representatives for their own criminal means. This while the CIA traffics young American women overseas, where they are then used in CIA controlled brothels, which contribute to the CIA's black budget for its illegal and inhumane covert black operations. One must wonder how many billions (or perhaps even trillions) the CIA raises each year through its collective black operations? A practice which began in the 1950's when the CIA began trafficking illegal drugs into the United States by way of the offshore oil wells co owned by former **President George Herbert Walker Bush, through the Zapata oil company.

**For more on the elder Bush see: Bush The Unauthorized Biography

*Texas Madame Robin Head States "FBI/CIA PIMPS" Tried To Shake Me Down

The FBI's Attack On Federal Whistle Blower Michael Boren Williams

*Editor's Note: The FBI/NSA/DHS COINTELPRO against my person and Family continues to get more outrageous by the day, as these criminal thugs seek to murder this author for my exposition of the Intel community's most egregious crimes against the U.S. Constitution in American History. The crimes committed by these agencies have become precedent setting in their scope, as they attempt to cover up their immense crimes against this author and his Family; horrendous crimes committed under the color and cover of law.

FBI MUZZLING WITNESSES TO AID CLINTON AND BUSH FAMILY---THE BIG PURGE IN CHICAGO
by Sherman H. Skolnick


America's secret political police, the FBI, are part of a big purge in Chicago, to muzzle witnesses against Bill Clinton and the George Herbert Walker Bush family.

As I have repeatedly pointed out, Bill Clinton has come repeatedly to Chicago to meet with and speak to the top honchos and traders on the Chicago Mercantile Exchange. Whatever speeches he has made to them, are generally not reported in the monopoly press.

Here is some background. A huge river of Red Chinese and other clandestine funds have been reportedly traveling into the Chicago markets, not only the Chicago Mercantile Exchange, but the Chicago Board of Trade, the Chicago Board Options Exchange, and the Chicago Stock Exchange. These monies and assets are disguised as currency trading, transactions in soybeans, corn, wheat, S & P contract, and other such items. Over a period of years, escalating during the Clinton Administration, Chicago has been the intake point for "China White", high purity heroin from Southwest China. Junkies prefer it since it can be smoked in a pipe and does not require a needle in the arm.

The highly corrupt Drug Enforcement Administration has taken no remedial action on the Red Chinese dope flooding in through the Windy City. Coming in, for example, through small suburban airports encircling Chicago. Our public access Cable TV Program has done stories about this since at least 1994. We told how we met with a top official of the DEA and outlined these crimes. THE DEA OFFICIALS ARE NOT INTERESTED TO KNOW ABOUT THIS, RATHER TO COVER IT UP, to protect the Red Chinese and the Banks.

The Red Chinese clandestine funds are from several sources:
[1] From the proceeds of "China White" flooding the U.S. through Chicago. A pal of the Bush family, Jim Thompson, while Governor of Illinois (1976 to 1990), reportedly arranged the financial and other mechanisms for these shipments and funds. In the 1980s on, it was to benefit the elder Bush, Ollie North, Bill Clinton, and their mutual cronies. The public is generally unaware that Clinton from time to time visited the Bush mansion in Kennebunkport, Maine.

[2] Red China has become a major supplier of human body parts for U.S. hospitals, pieces bought and sold like from a car. They are installed in sick folks with big bucks. The Chinese keep a quantity of political prisoners, particularly those who are healthy. When an order for a heart, liver, kidneys, etc., is received from a U.S. hospital, the Red Chinese condemn to death such a prisoner. Sort of on a "when needed" basis. To protect the human body parts, the prisoners are not shot but beheaded.

[3] The Rockefeller banks, such as what used to be called First National Bank of Chicago, loaned billions of dollars to Red China on the empty promise of repayment in gold from their western provinces. Reneging on payment in gold, the Chinese instead were given immunity from U.S. criminal enforcement, to make payment in "China White", missiles and nuclear weapons smuggling, shipping AK-47 guns, and such to or through the U.S. complicity.

Major fund raiser, campaign and otherwise, for Bill Clinton and his gang, has been Rahm Emanuel. He is an expert reportedly on dirty money through the Chicago markets, particularly the Chicago Mercantile Exchange, called the "Merc". In return, Clinton for five years had Rahm as White House Senior Advisor. On a local TV Show in Chicago, Rahm was shown with his desk right near the door to the Oval Office. He bragged he was the closest to the President. Rahm Emanuel has dual citizenship, U.S. and Israel. He is reputedly the acting deputy station chief for North America of Israeli intelligence, the Mossad (The Institute).

Apparently two-faced, Rahm both set up Clinton in the Monica Lewinsky Affair as well as repeatedly playing the role on network TV of Clinton loyalist.

You need to know lots of details from the past to understand what the FBI is doing more currently. In events leadings up to 1989, a major soybean processor, Archer-Daniels-Midland, vowed to put the armlock on the Chicago markets to further their monopoly. The greedy young traders there generally operate like the Wild West, with the supposed federal regulators willfully blind and terribly corrupted. The purpose was to set up and they did, some 46 young traders. The "Merc" cowboys had a known practice of "front running", getting their own deal in on a very minor basis ahead of their customers. Most of the transaction disparities were as little as five dollars. On the other hand, the FBI, the Chief Federal Prosecutor's office in Chicago, jointly with ADM, incurred expenses of over five million dollars to frame up the "Soybean Ten" on these minor matters. No commodity customer ever complained.

ADM played an instrumental role in these set ups. At the time, I was THE ONLY ONE, pointing out it is illegal for a PRIVATE BUSINESS, namely, ADM, to take over, in effet, the operation of the Federal Prosecutor's Office. This was before Internet, before I got on public access Cable TV, before more widespread talk radio. (The head of ADM, Dwayne Andreas, at the time of Watergate, was so interwoven with Nixon's crimes and should have been sent to prison. In more recent years, ADM's bosses were so crooked in monopoly matters, they WERE SENT TO PRISON.)

The "Soybean Ten" criminal case was handled by Chicago U.S. District Judge George M. Marovich [(312)435-5590]. Marovich owns a west suburban shopping mall, Cermak Plaza, site of reputed criminal money laundries. The top officials of the state tax collectors, the Illinois Department of Revenue and the IRS, Chicago Region Office, are reportedly secret silent partners with the mobsters and Judge Marovich. [Without a search warrant, this Gestapo stole records as to their crimes from us which we were planning to use for an upcoming Cable TV Show about them. The matter is subject of several court cases, us versus them.] Thus subject to blackmail, Judge Marovich went along with the ADM's railroading of the "Soybean Ten" defendants. When the case went up on appeal, I was there at the oral argument of the appeal. Heading the three-judge panel was Federal Appeals Judge Richard D. Cudahy [(312)435-5825]. He is the richest judge in the U.S. According to his mandatory financial annual disclosure, he is the Trustee of the Patrick Cudahy Trust, major former meatpacker now big player in the commodity markets.I tried to tell the families of the some of the "Soybean Ten" that Judge Cudahy, having a major conflict of interest, should not be in charge of the appeal. But being so pro-Establishment types, they did not listen. The defendants were already in jail, as if they were major bank robbers. They were denied release on appeal bond while appeal was pending. Guess who won? Major commodity faker Judge Cudahy upheld the verdict of shopping center mobster Judge Marovich.

The major traders on the "Merc", traditionally,have been the sons and daughters of members of the Jewish aristocracy. On the other hand, the sons and daughters of the Irish Catholic aristocracy, traditionally, dominate the Chicago Board of Trade. It seems to carry out the evil purposes of the Establishment, to rule us by "divide and conquer". That is, to give the false impression that whatever misdeeds, if any, by these traders are to be blamed on the Jewish community COLLECTIVELY, and the Irish Catholic community COLLECTIVELY. Sort of a BLOOD LIBEL on all the men, women, and children of these two minorities.

On the Chicago markets, members of these two minorities, not of the common people but part of the aristocracy, more or less traditionally got along with each other. Ten years after the frame-ups of 1989, the FBI has infiltrated the Merc with their "moles". Some of the handlers of the "moles" are apparently members of British counter-intelligence, MI-6, the Queen's Army of "spooks", no friends of Jews and Irsish Catholics. Somehow or another, traders on the Merc supported Clinton, laundered Red Chinese loot for Clinton's political ambitions, and continue reportedly through Rahm Emanuel and others, to launder funds for Clinton's circle of thieves. Seldom mentioned, for example, is how major soybean trader, Richard Dennis, considered by some to be reportedly highly corrupt, handles soybean and other trading for movie bigshots tight with CLinton and sports stars like Michael Jordan.

Some of the pirates on the Merc wanted to switch their loyalty and support Al Gore's political ambitions. Little known is that in the Clinton Administration, the U.S. Justice Department still consisted of more than 70 per cent of those installed by President Bush. With the FBI "moles" infiltrated at the Merc to frame up traders again, for the benefit again of ADM and other monopolists in commodity and currency trading, it is plain there are plans for a MASSIVE PURGE. It has set loose concealed bigotry among traders of the Irish Catholic aristocracy. They boldly mutter, "To hell with Clinton! Purge the Jews, dammit!" This comes at a time when the British are planning to take over, in London, trading that has been done for more than 150 years and more traditionally in Chicago. The major greed in Chicago is to be replaced with the same in London.

Among the targets of America's secret political police:
===Leasing under less than formal arrangements of seats on the Chicago Mercantile Exchange. These deals have been sort of friendly business among rapacious vultures. "You look the other way, I'll look the other way. Let's both pay-off the regulators."
===Failure of "due diligence" in finding out just who the supposed "customer" really is. But the FBI has to be careful not to bring out the political and financial hot potato, the Red Chinese mess. Reagan-Bush Administration crooks like Alexander Haig have been busy working their reputedly crooked China-U.S. deals. Likewise active has been former President Bush's brother, Prescott, in China, and he also reportedly has worked dirty deals with the Japanese mafia, the Yakuza. Now a bigshot with the Chicago office of New York-headquartered Wasserstein & Perella, Rahm Emanuel is apparently deep into the Red Chinese dirty money-Chicago dealing also.

==="Back door" dealing in cash with no apparent records. A defiant attitude, "Treasury rules be damned", disregarding federal regulations requiring incoming cash of more than ten thousand dollars to have the source identified. Exemptions being "deposits" from movie theaters, grocery stores, restaurants, and other large cash businesses. {No law so far prevents criminals from owning such places.)

The FBI purpose is clear: to muzzle witnesses as to crimes committed by Bill Clinton and his pals such as George Herbert Walker Bush and his sons George W., and Jeb. According to some in the foreign press, Jeb Bush and his Columbian-born wife are reportedly big in laundering dope proceeds overseas.

HEY, MERC TRADERS! THE PLACES WHERE YOU LIKE TO EAT ARE "BUGGED", with audio and video.

Stories for a later date: murdering those in the markets who won't stay muzzled. And the U.S. Hospitals buying and selling Red Chinese human body parts.

Secrets Of The Federal Reserve By Eustace Mullins - The Federal Reserve Act - Chapter 3 Of 14 Chapters

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Secrets of the Federal Reserve
by Eustace Mullins
From Web Archive Sources

Chapter 3 — The Federal Reserve Act


"Our financial system is a false one and a huge burden on the people . . . This Act establishes the most gigantic trust on earth." -- Congressman Charles Augustus Lindbergh, Sr.

The speeches of Senator LaFollette and Congressman Lindbergh became rallying points of opposition to the Aldrich Plan in 1912. They also aroused popular feeling against the Money Trust. Congressman Lindbergh said, on December 15, 1911,
"The government prosecutes other trusts, but supports the money trust. I have been waiting patiently for several years for an opportunity to expose the false money standard, and to show that the greatest of all favoritism is that extended by the government to the money trust."

Senator LaFollette publicly charged that a money trust of fifty men controlled the United States. George F. Baker, partner of J.P. Morgan, on being queried by reporters as to the truth of the charge, replied that it was absolutely in error. He said that he knew from personal knowledge that not more than eight men ran this country.


The Nation Magazine replied editorially to Senator LaFollette that "If there is a Money Trust, it will not be practical to establish that it exercises its influence either for good or for bad."

Senator LaFollette remarks in his memoirs that his speech against the Money Trust later cost him the Presidency of the United States, just as Woodrow Wilson’s early support of the Aldrich Plan had brought him into consideration for that office.

Congress finally made a gesture to appease popular feeling by appointing a committee to investigate the control of money and credit in the United States. This was the Pujo Committee , a subcommittee of the House Banking and Currency Committee, which conducted the famous "Money Trust" hearings in 1912, under the leadership of Congressman Arsene Pujo of Louisiana, who was regarded as a spokesman for the oil interests. These hearings were deliberately dragged on for five months, and resulted in six-thousand pages of printed testimony in four volumes. Month after month, the bankers made the train trip from New York to Washington, testified before the Committee and returned to New York. The hearings were extremely dull, and no startling information turned up at these sessions. The bankers solemnly admitted that they were indeed bankers, insisted that they always operated in the public interest, and claimed that they were animated only by the highest ideals of public service, like the Congressmen before whom they were testifying.

The paradoxical nature of the Pujo Money Trust Hearings may better be understood if we examine the man who single-handedly carried on these hearings, Samuel Untermyer. He was one of the principal contributors to Woodrow Wilson’s Presidential campaign fund, and was one of the wealthiest corporation lawyers in New York. He states in his autobiography in "Who’s Who" of 1926 that he once received a $775,000 fee for a single legal transaction, the successful merger of the Utah Copper Company and the Boston Consolidated and Nevada Company, a firm with a market value of one hundred million dollars. He refused to ask either Senator LaFollette or Congressman Lindbergh to testify in the investigation which they alone had forced Congress to hold.

As Special Counsel for the Pujo Committee, Untermyer ran the hearings as a one-man operation. The Congressional members, including its chairman, Congressman Arsene Pujo, seemed to have been struck dumb from the commencement of the hearings to their conclusion. One of these silent servants of the public was Congressman James Byrnes, of South Carolina, representing Bernard Baruch’s home district, who later achieved fame as "Baruch’s man", and was placed by Baruch in charge of the Office of War Mobilization during the Second World War.

Although he was a specialist in such matters, Untermyer did not ask any of the bankers about the system of interlocking directorates through which they controlled industry. He did not go into international gold movements, which were known as a factor in money panics, or the international relationships between American bankers and European bankers. The international banking houses of Eugene Meyer, Lazard Freres, J. & W. Seligman, Ladenburg Thalmann, Speyer Brothers, M. M. Warburg, and the Rothschild Brothers did not arouse Samuel Untermyer’s curiosity, although it was well known in the New York financial world that all of these family banking houses either had branches or controlled subsidiary houses in Wall Street.

When Jacob Schiff appeared before the Pujo Committee, Mr. Untermyer’s adroit questioning allowed Mr. Schiff to talk for many minutes without revealing any information about the operations of the banking house of Kuhn Loeb Company, of which he was senior partner, and which Senator Robert L. Owen had identified as the representative of the European Rothschilds in the United States.

The aging J.P. Morgan, who had only a few more months to live, appeared before the Committee to justify his decades of international financial deals. He stated for Mr. Untermyer’s edification that "Money is a commodity." This was a favorite ploy of the money creators, as they wished to make the public believe that the creation of money was a natural occurrence akin to the growing of a field of corn, although it was actually a bounty conferred upon the bankers by governments over which they had gained control.

J.P. Morgan also told the Pujo Committee that, in making a loan, he seriously considered only one factor, a man’s character; even the man’s ability to repay the loan, or his collateral, were of little importance. This astonishing observation startled even the blasé members of the Committee.

The farce of the Pujo Committee ended without a single well-known opponent of the money creators being allowed to appear or testify. As far as Samuel Untermyer was concerned, Senator LaFollette and Congressman Charles Augustus Lindbergh had never existed. Nevertheless, these Congressmen had managed to convince the people of the United States that the New York bankers did have a monopoly on the nation’s money and credit.

At the close of the hearings, the bankers and their subsidized newspapers claimed that the only way to break this monopoly was to enact the banking and currency legislation now being proposed to Congress, a bill which would be passed a year later as the Federal Reserve Act. The press seriously demanded that the New York banking monopoly be broken by turning over the administration of the new banking system to the most knowledgeable banker of them all, Paul Warburg.

The Presidential campaign of 1912 records one of the more interesting political upsets in American history. The incumbent, William Howard Taft, was a popular president, and the Republicans, in a period of general prosperity, were firmly in control of the government through a Republican majority in both houses. The Democratic challenger, Woodrow Wilson, Governor of New Jersey, had no national recognition, and was a stiff, austere man who excited little public support.

Both parties included a monetary reform bill in their platforms: The Republicans were committed to the Aldrich Plan, which had been denounced as a Wall Street plan, and the Democrats had the Federal Reserve Act. Neither party bothered to inform the public that the bills were almost identical except for the names.

In retrospect, it seems obvious that the money creators decided to dump Taft and go with Wilson. How do we know this? Taft seemed certain of reelection, and Wilson would return to obscurity.

Suddenly, Theodore Roosevelt "threw his hat into the ring." He announced that he was running as a third party candidate, the "Bull Moose". His candidacy would have been ludicrous had it not been for the fact that he was exceptionally well-financed. Moreover, he was given unlimited press coverage, more than Taft and Wilson combined. As a Republican ex-president, it was obvious that Roosevelt would cut deeply into Taft’s vote. This proved the case, and Wilson won the election.

To this day, no one can say what Theodore Roosevelt’s program was, or why he would sabotage his own party. Since the bankers were financing all three candidates, they would win regardless of the outcome. Later Congressional testimony showed that in the firm of Kuhn Loeb Company, Felix Warburg was supporting Taft, Paul Warburg and Jacob Schiff were supporting Wilson, and Otto Kahn was supporting Roosevelt.

The result was that a Democratic Congress and a Democratic President were elected in 1912 to get the central bank legislation passed. It seems probable that the identification of the Aldrich Plan as a Wall Street operation predicted that it would have a difficult passage through Congress, as the Democrats would solidly oppose it, whereas a successful Democratic candidate, supported by a Democratic Congress, would be able to pass the central bank plan. Taft was thrown overboard because the bankers doubted he could deliver on the Aldrich Plan, and Roosevelt was the instrument of his demise.

*The final electoral vote in 1912 was Wilson - 409; Roosevelt - 167; and Taft - 15.

To further confuse the American people and blind them to the real purpose of the proposed Federal Reserve Act, the architects of the Aldrich Plan, powerful Nelson Aldrich, although no longer a senator, and Frank Vanderlip, president of the National City Bank, set up a hue and cry against the bill. They gave interviews whenever they could find an audience denouncing the proposed Federal Reserve Act as inimical to banking and to good government. The bugaboo of inflation was raised because of the Act’s provisions for printing Federal Reserve notes. The Nation, on October 23, 1913, pointed out, "Mr. Aldrich himself raised a hue and cry over the issue of government "fiat money", that is, money issued without gold or bullion back of it, although a bill to do precisely that had been passed in 1908 with his own name as author, and he knew besides, that the ‘government’ had nothing to do with it, that the Federal Reserve Board would have full charge of the issuing of such moneys."

Frank Vanderlip’s claims were so bizarre that Senator Robert L. Owen, chairman of the newly formed Senate Banking and Currency Committee, which had been formed on March 18, 1913, accused him of openly carrying on a campaign of misrepresentation about the bill. The interests of the public, so Carter Glass claimed in a speech on September 10, 1913 to Congress, would be protected by an advisory council of bankers. "There can be nothing sinister about its transactions. Meeting with it at least four times a year will be a bankers’ advisory council representing every regional reserve district in the system. How could we have exercised greater caution in safeguarding the public interests?"

Glass claimed that the proposed Federal Advisory Council would force the Federal Reserve Board of Governors to act in the best interest of the people.

Senator Root raised the problem of inflation, claiming that under the Federal Reserve Act, note circulation would always expand indefinitely, causing great inflation. However, the later history of the Federal Reserve System showed that it not only caused inflation, but that the issue of notes could also be restricted, causing deflation, as occurred from 1929 to 1939.

One of the critics of the proposed "decentralized" system was a lawyer from Cleveland, Ohio, Alfred Crozier: Crozier was called to testify for the Senate Committee because he had written a provocative book in 1912, U.S. Money vs. Corporation Currency.* He attacked the Aldrich-Vreeland Act of 1908 as a Wall Street instrument, and he pointed out that when our government had to issue money based on privately owned securities, we were no longer a free nation.

Crozier testified before the Senate Committee that,
"It should prohibit the granting or calling in of loans for the purpose of influencing quotation prices of securities and the contracting of loans or increasing interest rates in concert by the banks to influence public opinion or the action of any legislative body. Within recent months, William McAdoo, Secretary of the Treasury of the United States was reported in the open press as charging specifically that there was a conspiracy among certain of the large banking interests to put a contraction upon the currency and to raise interest rates for the sake of making the public force Congress into passing currency legislation desired by those interests. The so-called administration currency bill grants just what Wall Street and the big banks for twenty-five years have been striving for, that is, PRIVATE INSTEAD OF PUBLIC CONTROL OF CURRENCY. It does this as completely as the Aldrich Bill. Both measures rob the government and the people of all effective control over the public’s money, and vest in the banks exclusively the dangerous power to make money among the people scarce or plenty. The Aldrich Bill puts this power in one central bank. The Administration Bill puts it in twelve regional central banks, all owned exclusively by the identical private interests that would have owned and operated the Aldrich Bank. President Garfield shortly before his assassination declared that whoever controls the supply of currency would control the business and activities of the people. Thomas Jefferson warned us a hundred years ago that a private central bank issuing the public currency was a greater menace to the liberties of the people than a standing army."

It is interesting to note how many assassinations of Presidents of the United States follow their concern with the issuing of public currency; Lincoln with his Greenback, non-interest-bearing notes, and Garfield, making a pronouncement on currency problems just before he was assassinated. [and John F. Kennedy after issuing U.S. Treasury Notes in 1963]

We now begin to understand why such a lengthy campaign of planned deception was necessary, from the secret conference at Jekyll Island to the identical "reform" plans proposed by the Democratic and



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[Footnotrs]

* Crozier’s book exposed the financiers plan to substitute "corporation currency" for the lawful money of the U.S. as guaranteed by Article I, Sec. 8 Para. 5, of the Constitution.



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Republican parties under different names. The bankers could not wrest control of the issuance of money from the citizens of the United States, to whom it had been designated through its Congress by the Constitution, until the Congress granted them their monopoly for a central bank. Therefore, much of the influence exerted to get the Federal Reserve Act passed was done behind the scenes, principally by two shadowy, non-elected persons: The German immigrant, Paul Warburg, and Colonel Edward Mandell House of Texas.

Paul Warburg made an appearance before the House Banking and Currency Committee in 1913, in which he briefly stated his background: "I am a member of the banking house of Kuhn, Loeb Company. I came over to this country in 1902, having been born and educated in the banking business in Hamburg, Germany, and studied banking in London and Paris, and have gone all around the world. In the Panic of 1907, the first suggestion I made was ‘Let us get a national clearing house.’ The Aldrich Plan contains some things which are simply fundamental rules of banking. Your aim in this plan (the Owen-Glass bill) must be the same--centralizing of reserves, mobilizing commercial credit, and getting an elastic note issue."

Warburg’s phrase, "mobilization of credit" was an important one, because the First World War was due to begin shortly, and the first task of the Federal Reserve System would be to finance the World War. The European nations were already bankrupt, because they had maintained large standing armies for almost fifty years, a situation created by their own central banks, and therefore they could not finance a war. A central bank always imposes a tremendous burden on the nation for "rearmament" and "defense", in order to create inextinguishable debt, simultaneously creating a military dictatorship and enslaving the people to pay the "interest" on the debt which the bankers have artificially created.

In the Senate debate on the Federal Reserve Act, Senator Stone said on December 12, 1913,
"The great banks for years have sought to have and control agents in the Treasury to serve theirpurposes. Let me quote from this World article, ‘Just as soon as Mr. McAdoo came to Washington, a woman whom the National City Bank had installed in the Treasury Department to get advance information on the condition of banks, and other matters of interest to the big Wall Street group, was removed. Immediately the Secretary and the Assistant Secretary, John Skelton Williams, were criticized severely by the agents of the Wall Street group.’"

"I myself have known more than one occasion when bankers refused credit to men who opposed their political views and purposes. When Senator Aldrich and others were going around the country exploiting this scheme, the big banks of New York and Chicago were engaged in 21 raising a munificent fund to bolster up the Aldrich propaganda. I have been told by bankers of my own state that contributions to this exploitation fund had been demanded of them and that they had contributed because they were afraid of being blacklisted or boycotted. There are bankers of this country who are enemies of the public welfare. In the past, a few great banks have followed policies and projects that have paralyzed the industrial energies of the country to perpetuate their tremendous power over the financial and business industries of America."

Carter Glass states in his autobiography that he was summoned by Woodrow Wilson to the White House, and that Wilson told him he intended to make the reserve notes obligations of the United States. Glass says, "I was for an instant speechless. I remonstrated. There is not any government obligation here, Mr. President. Wilson said he had had to compromise on this point in order to save the bill."

The term "compromise" on this point came directly from Paul Warburg. Col. Elisha Ely Garrison, in Roosevelt ,* Wilson and the Federal Reserve Law wrote,
"In 1911, Lawrence Abbot, Mr. Roosevelt’s private officer at ‘The Outlook’ handed me a copy of the so-called Aldrich Plan for currency reform. I said, I could not believe that Mr. Warburg was the author. This plan is nothing more than the Aldrich-Vreeland legislation which provided for currency issue against securities. Warburg knows that as well as I do. I am going to see him at once and ask him about it. All right, the truth. Yes, I wrote it, he said. Why? I asked. It was a compromise, answered Warburg."13

Garrison says that Warburg wrote him on February 8, 1912.
"I have no doubt that at the end of a thorough discussion, either you will see it my way or I will see it yours--but I hope you will see it mine."

This was another famous Warburg saying when he secretly lobbied Congressmen to support his interest, the veiled threat that they should "see it his way". Those who did not found large sums contributed to their opponents at the next elections, and usually went down in defeat.

Col. Garrison, an agent of Brown Brothers bankers, later Brown Brothers Harriman, had entree everywhere in the financial community. He writes of Col. House, "Col. House agreed entirely with the early writing of Mr. Warburg." Page 337, he quotes Col. House:
"I am also suggesting that the Central Board be increased from four members to five and their terms lengthened from eight to ten years. This would give stability and would take away the power of a President to change the personnel of the board during a single term of office."



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[Footnotes]

* Theodore Roosevelt

13. Elisha Ely Garrison, Roosevelt, Wilson and the Federal Reserve Law, Christopher Publications, Boston, 1931



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House’s phrase, "take away the power of a President" is significant, because later Presidents found themselves helpless to change the direction of the government because they did not have the power to change the composition of the Federal Reserve Board to attain a majority on it during that President’s term of office. Garrison also wrote in this book,
"Paul Warburg is the man who got the Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and opposition. The mastermind of both plans was Baron Alfred Rothschild of London."

Colonel Edward Mandell House * was referred to by Rabbi Stephen Wise in his autobiography, 'Challenging Years' as "the unofficial Secretary of State". House noted that he and Wilson knew that in passing the Federal Reserve Act, they had created an instrument more powerful than the Supreme Court. The Federal Reserve Board of Governors actually comprised a Supreme Court of Finance, and there was no appeal from any of their rulings.

In 1911, prior to Wilson’s taking office as President, House had returned to his home in Texas and completed a book called Philip Dru, Administrator. Ostensibly a novel, it was actually a detailed plan for the future government of the United States, "which would establish Socialism as dreamed by Karl Marx", according to House. This "novel" predicted the enactment of the graduated income tax, excess profits tax, unemployment insurance, social security, and a flexible currency system. In short, it was the blueprint which was later followed by the Woodrow Wilson and Franklin D. Roosevelt administrations. It was published "anonymously" by B. W. Huebsch of New York, and widely circulated among government officials, who were left in no doubt as to its authorship.

George Sylvester Viereck **, who knew House for years, later wrote an account of the Wilson-House relationship, The Strangest Friendship in History. 14 In 1955, Westbrook Pegler, the Hearst columnist from 1932 to 1956, heard of the Philip Dru book and called Viereck to ask if he had a copy. Viereck sent Pegler his copy of the book, and Pegler wrote a column about it, stating:
"One of the institutions outlined in Philip Dru is the Federal Reserve System. The Schiffs, the Warburgs, the Kahns, the Rockefellers and Morgans put their faith in House. The Schiff, Warburg, Rockefeller and Morgan interests were personally represented in the mysterious conference at Jekyll Island. Frankfurter landed on the Harvard law faculty, thanks to a financial contribution to Harvard by Felix Warburg and Paul



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[Footnotes]

* See House note in "Biographies"

** See Viereck note in "Biographies"

14 George Sylvester Viereck, The Strangest Friendship in History, Woodrow Wilson and Col. House, Liveright, New York, 1932



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Warburg, and so we got Alger and Donald Hiss, Lee Pressman, Harry Dexter White and many other protégés of Little Weenie." *

House’s openly Socialistic views were forthrightly expressed in Philip Dru, Administrator; on pages 57-58, House wrote:
"In a direct and forceful manner, he pointed out that our civilization was fundamentally wrong, inasmuch, among other things, as it restricted efficiency; that if society were properly organized, there would be none who were not sufficiently clothed and fed. The result, that the laws, habits and ethical training in vogue were alike responsible for the inequalities in opportunity and the consequent wide difference between the few and the many; that the results of such conditions was to render inefficient a large part of the population, the percentage differing in each country in the ratio that education and enlightenment and unselfish laws bore to ignorance, bigotry and selfish laws."15

In his book, House (Dru) envisions himself becoming a dictator and forcing on the people his radical views, page 148: "They recognized the fact that Dru dominated the situation and that a master mind had at last risen in the Republic." He now assumes the title of General. "General Dru announced his purpose of assuming the powers of a dictator . . . they were assured that he was free from any personal ambition . . . he proclaimed himself ‘Administrator of the Republic.’" **

This pensive dreamer who imagined himself a dictator actually managed to place himself in the position of the confidential advisor to the President of the United States, and then to have many of his desires enacted into law! On page 227, he lists some of the laws he wishes to enact as dictator. Among them are an old age pension law, laborers insurance compensation, cooperative markets, a federal reserve banking system, cooperative loans, national employment bureaus, and other "social legislation", some of which was enacted during Wilson’s administration, and others during the Franklin D. Roosevelt’s administration. The latter was actually a continuation of the Wilson Administration,



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[Footnotes

* The present writer was with Viereck in his suite at the Hotel Belleclaire when Pegler called and asked for the book. Viereck sent it over by his secretary. He grinned and said Pegler seemed very excited. "He ought to get a good column out of that," Viereck told me.

Indeed Pegler did get a good column out of it. Unfortunately for him, he had gone too far in mentioning the Warburgs. As long as he confined his attacks to La Grand Bouche (Eleanor Roosevelt), and her spouse, he had been permitted to continue, but now that he had exposed the Warburg connection with the Communist spy ring in Washington, his column was immediately dropped by the big city dailies, and Pegler’s long run was over.

15. Col. Edward M. House, Philip Dru, Administrator, B. W. Heubsch, New York, 1912.

** This quotation from Philip Dru, Administrator, written by Col. House in 1912, is included here to show his totalitarian Marxist philosophy. House was to become for 8 years with Wilson, the President’s closest advisor. Later he continued his influence in the Franklin D. Roosevelt administration. From his home in Magnolia, Mass., House advised FDR through frequent trips of Felix Frankfurter to the White House. Frankfurter was later appointed to the Supreme Court by F.D.R.



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with many of the same personnel, and with House guiding the administration from behind the scenes.

Like most of the behind-the-scenes operators in this book, Col. Edward Mandell House had the obligatory "London connection". Originally a Dutch family, "Huis", his ancestors had lived in England for three hundred years, after which his father settled in Texas, where he made a fortune in blockade-running during the Civil War, shipping cotton and other contraband to his British connections, including the Rothschilds, and bringing back supplies for the beleaguered Texans. The senior House, not trusting the volatile Texas situation, prudently deposited all his profits from his blockade-running in gold with Baring banking house in London. * At the close of the Civil War, he was one of the wealthiest men in Texas. He named his son "Mandell" after one of his merchant associates. According to Arthur Howden Smith, when House’s father died in 1880, his estate was distributed among his sons as follows: Thomas William got the banking business; John, the sugar plantation; and Edward M. the cotton plantations, which brought him an income of $20,000 a year. 16

At the age of twelve, the young Edward Mandell House had brain fever, and was later further crippled by sunstroke. He was a semi-invalid, and his ailments gave him an odd Oriental appearance. He never entered any profession, but used his father’s money to become the kingmaker of Texas politics, successively electing five governors from 1893 to 1911. In 1911 he began to support Wilson for president, and threw the crucial Texas delegation to him which ensured his nomination. House met Wilson for the first time at the Hotel Gotham, May 31, 1912.

In The Strangest Friendship In History, Woodrow Wilson and Col. House, by George Sylvester Viereck, Viereck writes:

"What," I asked House, "cemented your friendship?" "The identity of our temperaments and our public policies," answered House. "What was your purpose and his?" "To translate into legislation certain liberal and progressive ideas." 17

House told Viereck that when he went to Wilson at the White



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* Dope, Inc., identifies Barings as follows: "Baring Brothers, the premier merchant bank of the opium trade from 1783 to the present day, also maintained close contact with the Boston families . . . The group’s leading banker became, at the close of the 19th century, the House of Morgan--which also took its cut in Eastern opium traffic . . . Morgan’s Far Eastern operations were the officially conducted British opium traffic . . . Morgan’s case deserves special scrutiny from American police and regulatory agencies, for the intimate associations of Morgan Guaranty Trust with the identified leadership of the British dope banks."

16. Arthur Howden Smith, The Real Col. House, Doran Company, New York, 1918

17. George Sylvester Viereck, The Strangest Friendship in History, Woodrow Wilson and Col. House, Liveright, New York, 1932



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House, he handed him $35,000. This was exceeded only by the $50,000 which Bernard Baruch had given Wilson.

The successful enactment of House’s programs did not escape the notice of other Wilson associates. In Vol. 1, page 157 of The Intimate Papers of Col. House, House notes, "Cabinet members like Mr. Lane and Mr. Bryan commented upon the influence of Dru with the President. ‘All that the book has said should be,’ wrote Lane, ‘comes about. The President comes to ‘Philip Dru’ in the end.’"18

House recorded some of his efforts on behalf of the Federal Reserve Act in The Intimate Papers of Col. House,
"December 19, 1912. I talked with Paul Warburg over the phone concerning currency reform. I told of my trip to Washington and what I had done there to get it in working order. I told him that the Senate and the Congressmen seemed anxious to do what he desired, and that President-elect Wilson thought straight concerning the issue."19

Thus we have Warburg’s agent in Washington, Col. House, assuring him that the Senate and Congressmen will do what he desires, and that the President-elect "thought straight concerning the issue." In this context, representative government seems to have ceased to exist. House continues in his "Papers":

"March 13, 1913. Warburg and I had an intimate discussion concerning currency reform.

March 27, 1913. Mr. J.P. Morgan, Jr. and Mr. Denny of his firm came promptly at five.

McAdoo came about ten minutes afterward. Morgan had a currency plan already printed. I suggested he have it typewritten, so it would not seem too prearranged, and send it to Wilson and myself today.

July 23, 1913. I tried to show Mayor Quincy (of Boston) the folly of the Eastern bankers taking an antagonistic attitude towards the Currency Bill. I explained to Major Henry Higginson * with what care the bill had been framed. Just before he arrived, I had finished a review by Professor Sprague of Harvard of Paul Warburg’s criticism of the Glass-Owen Bill, and will transmit it to Washington tomorrow. Every banker known to Warburg, who knows the subject practically, has been called up about the making of the bill.

October 13, 1913. Paul Warburg was my first caller today. He came to discuss the currency measure. There are many features of the Owen-Glass Bill that he does not approve. I promised to put him in touch with McAdoo and Senator Owen so that he might discuss it with them.

November 17, 1913. Paul Warburg telephoned about his trip to Washington. Later, he and Mr. Jacob Schiff came over for a few minutes.



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[Footnotes]

18. Col. Edward Mandell House, The Intimate Papers of Col. House, edited by Charles Seymour, Houghton Mifflin Co., 1926-28, Vol. 1, p. 157

19. Ibid. Vol. 1, p. 163

* The most prominent banker in Boston.



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Warburg did most of the talking. He had a new suggestion in regard to grouping the regular reserve banks so as to get the units welded together and in easier touch with the Federal Reserve Board."

George Sylvester Viereck in The Strangest Friendship in History, Woodrow Wilson and Col. House wrote:
"The Schiffs, the Warburgs, the Kahns, the Rockefellers, the Morgans put their faith in House. When the Federal Reserve legislation at last assumed definite shape, House was the intermediary between the White House and the financiers."20

On page 45, Viereck notes, "Col. House looks upon the reform of the monetary system as the crowning internal achievement of the Wilson Administration."21

The Glass Bill (the House version of the final Federal Reserve Act) had passed the House on September 18, 1913 by 287 to 85. On December 19, 1913, the Senate passed their version by a vote of 54-34. More than forty important differences in the House and Senate versions remained to be settled, and the opponents of the bill in both houses of Congress were led to believe that many weeks would yet elapse before the Conference bill would be ready for consideration. The Congressmen prepared to leave Washington for the annual Christmas recess, assured that the Conference bill would not be brought up until the following year. Now the money creators prepared and executed the most brilliant stroke of their plan. In a single day, they ironed out all forty of the disputed passages in the bill and quickly brought it to a vote. On Monday, December 22, 1913, the bill was passed by the House 282-60 and the Senate 43-23.

On December 21, 1913, The New York Times commented editorially on the act, "New York will be on a firmer basis of financial growth, and we shall soon see her the money centre of the world."

The New York Times reported on the front page, Monday, December 22, 1913 in headlines: MONEY BILL MAY BE LAW TODAY--CONFEREES HAD ADJUSTED NEARLY ALL DIFFERENCES AT 1:30 THIS MORNING--NO DEPOSIT GUARANTEES--SENATE YIELDS ON THIS POINT BUT PUTS THROUGH MANY OTHER CHANGES -- "With almost unprecedented speed, the conference to adjust the House and Senate differences on the Currency Bill practically completed its labours early this morning. On Saturday the Conferees did little more than dispose of the preliminaries, leaving forty essential differences to be thrashed out Sunday. . . . No other legislation of importance will be taken up in either House of Congress this week. Members of both houses are already preparing to leave Washington."



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[Footnotes]

20. George Sylvester Viereck, The Strangest Friendship In History, Woodrow Wilson and Col. House, Liveright, New York, 1932

21. Ibid.



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"Unprecedented speed", says The New York Times. One sees the fine hand of Paul Warburg in this final strategy. Some of the bill’s most vocal critics had already left Washington. It was a long-standing political courtesy that important legislation would not be acted upon during the week before Christmas, but this tradition was rudely shattered in order to perpetrate the Federal Reserve Act on the American people.

The Times buried a brief quote from Congressman Lindbergh that "the bill would establish the most gigantic trust on earth," and quoted Representative Guernsey of Maine, a Republican on the House Banking and Currency Committee, that "This is an inflation bill, the only question being the extent of the inflation."

Congressman Lindbergh said on that historic day, to the House:
"This Act establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized. The people may not know it immediately, but the day of reckoning is only a few years removed. The trusts will soon realize that they have gone too far even for their own good. The people must make a declaration of independence to relieve themselves from the Monetary Power. This they will be able to do by taking control of Congress. Wall Streeters could not cheat us if you Senators and Representatives did not make a humbug of Congress. . . . If we had a people’s Congress, there would be stability.

The greatest crime of Congress is its currency system. The worst legislative crime of the ages is perpetrated by this banking bill. The caucus and the party bosses have again operated and prevented the people from getting the benefit of their own government."

The December 23, 1913 New York Times editorially commented, in contrast to Congressman Lindbergh’s criticism of the bill, "The Banking and Currency Bill became better and sounder every time it was sent from one end of the Capitol to the other. Congress worked under public supervision in making the bill."

By "public supervision", The Times apparently meant Paul Warburg, who for several days had maintained a small office in the Capitol building, where he directed the successful pre-Christmas campaign to pass the bill, and where Senators and Congressmen came hourly at his bidding to carry out his strategy.

The "unprecedented speed" with which the Federal Reserve Act had been passed by Congress during what became known as "the Christmas massacre" had one unforeseen aspect. Woodrow Wilson was taken unaware, as he, like many others, had been assured the bill would not come up for a vote until after Christmas. Now he refused to sign it, because he objected to the provisions for the selection of Class B. Directors. William L. White relates in his biography of Bernard Baruch that Baruch, a principal contributor to Wilson’s campaign fund, was stunned when he was informed that Wilson refused to sign the bill. He hurried to the White House and assured Wilson that this was a minor matter, which could be fixed up later through "administrative processes". The important thing was to get the Federal Reserve Act signed into law at once. With this reassurance, Wilson signed the Federal Reserve Act on December 23, 1913. History proved that on that day, the Constitution ceased to be the governing covenant of the American people, and our liberties were handed over to a small group of international bankers.

The December 24, 1913 New York Times carried a front page headline "WILSON SIGNS THE CURRENCY BILL!" Below it, also in capital letters, were two further headlines, "PROSPERITY TO BE FREE" and "WILL HELP EVERY CLASS". Who could object to any law which provided benefits to everyone? The Times described the festive atmosphere while Wilson’s family and government officials watched him sign the bill. "The Christmas spirit pervaded the gathering," exulted The Times.

In his biography of Carter Glass, Rixey Smith states that those present at the signing of the bill included Vice President Marshall, Secretary Bryan, Carter Glass, Senator Owen, Secretary McAdoo, Speaker Champ Clark, and other Treasury officials. None of the real writers of the bill, the draftees of Jekyll Island, were present. They had prudently absented themselves from the scene of their victory. Rixey Smith also wrote, "It was as though Christmas had come two days early." On December 24, 1913, Jacob Schiff wrote to Col. House,

"My dear Col. House. I want to say a word to you for the silent, but no doubt effective work you have done in the interest of currency legislation and to congratulate you that the measure has finally been enacted into law. I am with good wishes, faithfully yours, JACOB SCHIFF."

Representative Moore of Kansas, in commenting on the passage of the Act, said to the House of Representatives:
"The President of the United States now becomes the absolute dictator of all the finances of the country. He appoints a controlling board of seven men, all of whom belong to his political party, even though it is a minority. The Secretary of the Treasury is to rule supreme whenever there is a difference of opinion between himself and the Federal Reserve Board. AND, only one member of the Board is to pass out of office while the President is in office."

The ten year terms of office of the members of the Board were lengthened by the Banking Act of 1935 to fourteen years, which meant that these directors of the nation’s finances, although not elected by the people, held office longer than three presidents.

While Col. House, Jacob Schiff and Paul Warburg basked in the glow of a job well done, the other actors in this drama were subject to later afterthoughts. Woodrow Wilson wrote in 1916, National Economy and the Banking System, Sen. Doc. No. 3, No. 223, 76th Congress, 1st session, 1939: "Our system of credit is concentrated (in the Federal Reserve System). The growth of the nation, therefore, and all our activities, are in the hands of a few men."

When he was asked by Clarence W. Barron whether he approved of the bill as it was finally passed. Warburg remarked, "Well, it hasn’t got quite everything we want, but the lack can be adjusted later by administrative processes."

Woodrow Wilson and Carter Glass are given credit for the Act by most contemporary historians, but of all those concerned, Wilson had least to do with Congressional action on the bill. George Creel, a veteran Washington correspondent, wrote in Harper’s Weekly, June 26, 1915:

"As far as the Democratic Party was concerned, Woodrow Wilson was without influence, save for the patronage he possessed. It was Bryan who whipped Congress into line on the tariff bill, on the Panama Canal tolls repeal, and on the currency bill." Mr. Bryan later wrote, "That is the one thing in my public career that I regret--my work to secure the enactment of the Federal Reserve Law."

On December 25, 1913, The Nation pointed out that "The New York Stock Market began to rise steadily upon news that the Senate was ready to pass the Federal Reserve Act."

This belies the claim that the Federal Reserve Act was a monetary reform bill. The New York Stock Exchange is generally considered an accurate barometer of the true meaning of any financial legislation passed in Washington. Senator Aldrich also decided that he no longer had misgivings about the Federal Reserve Act. In a magazine which he owned, and which he called The Independent, he wrote in July, 1914: "Before the passage of this Act, the New York bankers could only dominate the reserves of New York. Now we are able to dominate the bank reserves of the entire country."

H.W. Loucks denounced the Federal Reserve Act in The Great Conspiracy of the House of Morgan, "In the Federal Reserve Law, they have wrested from the people and secured for themselves the constitutional power to issue money and regulate the value thereof." On page 31, Loucks writes, "The House of Morgan is now in supreme control of our industry, commerce and political affairs.

They are in complete control of the policy making of the Democratic, Republican and Progressive parties. The present extraordinary propaganda for ‘preparedness’ is planned more for home coercion than for defense against foreign aggression." 22

The signing of the Federal Reserve Act by Woodrow Wilson represented the culmination of years of collusion with his intimate friend, Col. House, and Paul Warburg. One of the men with whom House became acquainted in the Wilson Administration was Franklin D.



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[Footnotes]

22. H.W. Loucks, The Great Conspiracy of the House of Morgan, Privately printed, 1916



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Roosevelt, Assistant Secretary of Navy. As soon as he obtained the Democratic nomination for President, in 1932, Franklin D. Roosevelt made a "pilgrimage" to Col. House’s home at Magnolia, Mass. Roosevelt, after the Republican hiatus of the 1920s, filled in the goals of Philip Dru, Administrator, 23 which Wilson had not been able to carry out. The late Roosevelt achievements included the enactment of the social security program, excess profits tax, and the expansion of the graduated income tax to 90% of earned income.

House’s biographer, Charles Seymour, wrote: "He was wearied by the details of party politics and appointments. Even the share he had taken in constructive domestic legislation (the Federal Reserve Act, tariff revision, and the Income Tax amendment) did not satisfy him. From the beginning of 1914 he gave more and more of his time to what he regarded as the highest form of politics and that for which he was particularly suited--international affairs." 24

In 1938, shortly before he died, House told Charles Seymour,
"During the last fifteen years I have been close to the center of things, although few people suspect it. No important foreigner has come to the United States without talking to me. I was close to the movement that nominated Roosevelt. He has given me a free hand in advising him. All the Ambassadors have reported to me frequently."

A comparative print of the Federal Reserve Act of 1913 as passed by the House of Representatives and amended by the Senate shows the following striking change:
The Senate struck out, "To suspend the officials of Federal Reserve banks for cause, stated in writing with opportunity of hearing, require the removal of said official for incompetency, dereliction of duty, fraud or deceit, such removal to be subject to approval by the President of the United States." This was changed by the Senate to read "To suspend or remove any officer or director of any Federal Reserve Bank, the cause of such removal to be forthwith communicated in writing by the Federal Reserve Board to the removed officer or director and to said bank." This completely altered the conditions under which an officer or director might be removed. We no longer know what the conditions for removal are, or the cause. Apparently incompetency, dereliction of duty, fraud or deceit do not matter to the Federal Reserve Board. Also, the removed officer does not have the opportunity of appeal to the President. In answer to written inquiry, the Assistant Secretary of the Federal Reserve Board replied that only one officer has been removed "for cause" in the thirty-six years, the name and details of this matter being a "private concern" between the individual, the Reserve Bank concerned, and the Federal Reserve Board.



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[Footnotes]

23. E.M. House, Philip Dru, Administrator, B. W. Heubsch, N.Y., 1912

24. Col. E.M. House, The Intimate Papers of Col. House, 4 v. 1926-1928, Houghton Mifflin Co.



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The Federal Reserve System began its operations in 1914 with the activity of the Organization Committee, appointed by Woodrow Wilson, and composed of Secretary of the Treasury William McAdoo, who was his son-in-law, Secretary of Agriculture Houston and Comptroller of the Currency John Skelton Williams.

On January 6, 1914. J.P. Morgan met with the Organizing Committee in New York. He informed them that there should not be more than seven regional districts in the new system.

This committee was to select the locations of the "decentralized" reserve banks. They were empowered to select from eight to twelve reserve banks, although J.P. Morgan had testified he thought that not more than four should be selected. Much politicking went into the selection of these sites, as the twelve cities thus favored would become enormously important as centers of finance. New York, of course, was a foregone conclusion. Richmond was the next selection, as a payoff to Carter Glass and Woodrow Wilson, the two Virginians who had been given political credit for the Federal Reserve Act. The other selections of the Committee were Boston, Philadelphia, Cleveland, Chicago, St. Louis, Atlanta, Dallas, Minneapolis, Kansas City, and San Francisco. All of these cities later developed important "financial districts" as the result of this selection.

These local battles, however, paled in view of the complete dominance of the Federal Reserve bank of New York in the system. Ferdinand Lundberg pointed out, in America’s Sixty Families, that, "In practice, the Federal Reserve Bank of New York became the fountainhead of the system of twelve regional banks, for New York was the money market of the nation. The other eleven banks were so many expensive mausoleums erected to salve the local pride and quell the Jacksonian fears of the hinterland. Benjamin Strong, president of the Bankers Trust (J.P. Morgan) was selected as the first Governor of the New York Federal Reserve Bank. Adept in high finance, Strong for many years manipulated the country’s monetary system at the discretion of directors representing the leading New York banks. Under Strong, the Reserve System was brought into interlocking relations with the Bank of England and the Bank of France. Benjamin Strong held his position as Governor of the Federal Reserve Bank of New York until his sudden death in 1928, during a Congressional investigation of the secret meetings between Reserve Governors and heads of European central banks which brought on the Great Depression of 1929-31." 25

Strong had married the daughter of the President of Bankers Trust, which brought him into the line of succession in the dynastic intrigues which play such an important role in the world of high finance. He also had been a member of the original Jekyll Island group, the First Name Club, and was thus qualified for the highest position in the Federal Reserve System, as the Governor of the Federal Reserve Bank of New York which dominated the entire system.

Paul Warburg also is mentioned in J. Laurence Laughlin’s definitive volume, The Federal Reserve Act, Its Origins and Purposes,
"Mr. Paul Warburg of Kuhn, Loeb Company offered in March, 1910 a fairly well thought out plan to be known as the United Reserve Bank of the United States. This was published in The New York Times of March 24, 1910. The group interested in the purposes of the National Monetary Commission met secretly at Jekyll Island for about two weeks in December, 1910, and concentrated on the preparation of a bill to be presented to Congress by the National Monetary Commission. The men who were present at Jekyll Island were Senator Aldrich, H. P. Davison of J.P. Morgan Company, Paul Warburg of Kuhn, Loeb Company, Frank Vanderlip of the National City Bank, and Charles D. Norton of the First National Bank. No doubt the ablest banking mind in the group was that of Mr. Warburg, who had had a European banking training. Senator Aldrich had no special training in banking."26

A mention of Paul Warburg, written by Harold Kelloch, and titled, "Warburg the Revolutionist" appeared in the Century Magazine, May, 1915. Kelloch writes:
"He imposed his ideas on a nation of a hundred million people . . . Without Mr. Warburg there would have been no Federal Reserve Act. The banking house of Warburg and Warburg in Hamburg has always been strictly a family business. None but a Warburg has been eligible for it, but all Warburgs have been born into it. In 1895 he married the daughter of the late Solomon Loeb of Kuhn Loeb Company. He became a member of Kuhn Loeb Company in 1902. Mr. Warburg’s salary from his private business has been approximately a half million a year. Mr. Warburg’s motives had been purely those of patriotic self-sacrifice."

The true purposes of the Federal Reserve Act soon began to disillusion many who had at first believed in its claims. W. H. Allen wrote in Moody’s Magazine, 1916,
"The purpose of the Federal Reserve Act was to prevent concentration of money in the New York banks by making it profitable for country bankers to use their funds at home, but the movement of currency shows



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[Footnotes]

25. Ferdinand Lundberg, America’s Sixty Families, 1937

26. J. Laurence Laughlin, The Federal Reserve Act, It’s Origins and Purpose



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that the New York banks gained from the interior in every month except December, 1915, since the Act went into effect. The stabilization of rates has taken place in New York alone. In other parts, high rates continue. The Act, which was to deprive Wall Street of its funds for speculation, has really given the bulls and the bears such a supply as they have never had before. The truth is that far from having clogged the channel to Wall Street, as Mr. Glass so confidently boasted, it actually widened the old channels and opened up two new ones. The first of these leads directly to Washington and gives Wall Street a string on all the surplus cash in the United States Treasury. Besides, in the power to issue bank-note currency, it furnishes an inexhaustible supply of credit money; the second channel leads to the great central banks of Europe, whereby, through the sale of acceptances, virtually guaranteed by the United States Government, Wall Street is granted immunity from foreign demands for gold which have precipitated every great crisis in our history."

For many years, there has been considerable mystery about who actually owns the stock of the Federal Reserve Banks. Congressman Wright Patman, leading critic of the System, tried to find out who the stockholders were. The stock in the original twelve regional Federal Reserve Banks was purchased by national banks in those twelve regions. Because the Federal Reserve Bank of New York was to set the interest rates and direct open market operations, thus controlling the daily supply and price of money throughout the United States, it is the stockholders of that bank who are the real directors of the entire system. For the first time, it can be revealed who those stockholders are. This writer has the original organization certificates of the twelve Federal Reserve Banks, giving the ownership of shares by the national banks in each district.

The Federal Reserve Bank of New York issued 203,053 shares, and, as filed with the Comptroller of the Currency May 19, 1914, the large New York City banks took more than half of the outstanding shares. The Rockefeller Kuhn, Loeb-controlled National City Bank took the largest number of shares of any bank, 30,000 shares. J.P. Morgan’s First National Bank took 15,000 shares. When these two banks merged in 1955, they owned in one block almost one fourth of the shares in the Federal Reserve Bank of New York, which controlled the entire system, and thus they could name Paul Volcker or anyone else they chose to be Chairman of the Federal Reserve Board of Governors. Chase National Bank took 6,000 shares. The Marine Nation Bank of Buffalo, later known as Marine Midland, took 6,000 shares. This bank was owned by the Schoellkopf family, which controlled Niagara Power Company and other large interests. National Bank of Commerce of New York City took 21,000 shares. The shareholders of these banks which own the stock of the Federal Reserve Bank of New York are the people who have controlled our political and economic destinies since 1914.

They are the Rothschilds, of Europe, Lazard Freres (Eugene Meyer), Kuhn Loeb Company, Warburg Company, Lehman Brothers, Goldman Sachs, the Rockefeller family, and the J.P. Morgan interests.

These interests have merged and consolidated in recent years, so that the control is much more concentrated. National Bank of Commerce is now Morgan Guaranty Trust Company. Lehman Brothers has merged with Kuhn, Loeb Company, First National Bank has merged with the National City Bank, and in the other eleven Federal Reserve Districts, these same shareholders indirectly own or control shares in those banks, with the other shares owned by the leading families in those areas who own or control the principal industries in these regions. * The "local" families set up regional councils, on orders from New York, of such groups as the Council on Foreign Relations, The Trilateral Commission, and other instruments of control devised by their masters. They finance and control political developments in their area, name candidates, and are seldom successfully opposed in their plans.

With the setting up of the twelve "financial districts" through the Federal Reserve Banks, the traditional division of the United States into the forty-eight states was overthrown, and we entered the era of "regionalism", or twelve regions which had no relation to the traditional state boundaries.

These developments following the passing of the Federal Reserve Act proved every one of the allegations Thomas Jefferson had made against a central bank in 1791:

that the subscribers to the Federal Reserve Bank stock had formed a corporation, whose stock could be and was held by aliens;
that this stock would be transmitted to a certain line of successors;
that it would be placed beyond forfeiture and escheat;
that they would receive a monopoly of banking, which was against the laws of monopoly;
and that they now had the power to make laws, paramount to the laws of the states.
No state legislature can countermand any of the laws laid down by the Federal Reserve Board of Governors for the benefit of their private stockholders.
This board issues laws as to what the interest rate shall be, what the quantity of money shall be and what the price of money shall be.
All of these powers abrogate the powers of the state legislatures and their responsibility to the citizens of those states.

The New York Times stated that the Federal Reserve Banks would be ready for business on August 1, 1914, but they actually began operations on November 16, 1914. At that time, their total assets were listed at $143,000,000, from the sale of shares in the Federal Reserve Banks to stockholders of the national banks which subscribed to it.

The actual part of this $143,000,000 which was paid in for these shares remains shrouded in mystery. Some historians believe that the shareholders only paid about half of the amount in cash; others believe



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[Footnotes]

* See charts V through IX



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that they paid in no cash at all, but merely sent in checks which they drew on the national banks which they owned. This seems most likely, that from the very outset, the Federal Reserve operations were "paper issued against paper", that bookkeeping entries comprised the only values which changed hands.

The men whom President Woodrow Wilson chose to make up the first Federal Reserve Board of Governors were men drawn from the banking group. He had been nominated for the Presidency by the Democratic Party, which had claimed to represent the "common man" against the "vested interests". According to Wilson himself, he was allowed to choose only one man for the Federal Reserve Board. The others were chosen by the New York bankers. Wilson’s choice was Thomas D. Jones, a trustee of Princeton and director of International Harvester and other corporations. The other members were Adolph C. Miller, economist from Rockefeller’s University of Chicago and Morgan’s Harvard University, and also serving as Assistant Secretary of the Interior; Charles S. Hamlin, who had served previously as an Assistant Secretary to the Treasury for eight years; F.A. Delano, a Roosevelt relative, and railroad operator who took over a number of railroads for Kuhn, Loeb Company, W.P.G. Harding, President of the First National Bank of Atlanta; and Paul Warburg of Kuhn, Loeb Company. According to The Intimate Papers of Col. House, Warburg was appointed because "The President accepted (House’s) suggestion of Paul Warburg of New York because of his interest and experience in currency problems under both Republican and Democratic Administrations." 27 Like Warburg, Delano had also been born outside the continental limits of the United States, although he was an American citizen. Delano’s father, Warren Delano, according to Dr. Josephson and other authorities, was active in Hong Kong in the Chinese opium trade, and Frederick Delano was born in Hong Kong in 1863.

In The Money Power of Europe, Paul Emden writes that "The Warburgs reached their outstanding eminence during the last twenty years of the past century, simultaneously with the growth of Kuhn, Loeb Company in New York, with whom they stood in a personal union and family relationship. Paul Warburg with magnificent success carried through in 1913 the reorganization of the American banking system, at which he had with Senator Aldrich been working since 1911, and thus most thoroughly consolidated the currency and finances of the United States."28



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[Footnotes]

27. Charles Seymour, The Intimate Papers of Col. House, 4 v. 1926-1928, Houghton Mifflin Co.

28 Paul Emden, The Money Power of Europe in the 19th and 20th Century, S. Low, Marston Co., London, 1937



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The New York Times 29

Despite his retirement from Kuhn, Loeb Company in May of 1914 to serve on the Federal Reserve Board of Governors, Warburg was asked to appear before a Senate Subcommittee in June of 1914 and answer some questions about his behind-the-scenes role in getting the Federal Reserve Act through Congress. This might have meant some questions about the secret conference in Jekyll Island, and Warburg refused to appear. On July 7, 1914 he wrote a letter to G.M. Hitchcock, Chairman of the Senate Banking and Currency Committee, stating that it might impair his usefulness on the Board if he were required to answer any questions, and that he would therefore withdraw his name. It seemed that Warburg was prepared to bluff the Senate Committee into confirming him without any questions asked. On July 10, 1914, The New York Times defended Warburg on the editorial page and denounced the "Senatorial Inquisition". Since Warburg had not yet been asked any questions, the term "Inquisition" seemed remarkably inappropriate, nor was there any real danger that the Senators were preparing to use instruments of torture on Mr. Warburg. The imbroglio was resolved when the Senate Committee, in abject surrender, agreed that Mr. Warburg would be given a list of questions in advance of his appearance so that he could go over them, and that he could be excused from answering any questions which might tend to impair his service on the Board of Governors. The Nation reported on July 23, 1914 that "Mr. Warburg finally had a conference with Senator O’Gorman and agreed to meet the members of the Senate Subcommittee informally, with a view to coming to an understanding, and to giving them any reasonable information they might desire. The opinion in Washington is that Mr. Warburg’s confirmation is assured." The Nation



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[Footnotes]

* The New York Times, April 30, 1914, reported that the 12 districts had subscriptions of $74,740,800 and that the subscribing banks would pay one-half of this sum in six months.

29. Clarence W. Barron, More They Told Barron, Arno Press, New York Times, 1973, June 12, 1914. p. 204



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was correct. Mr. Warburg was confirmed, the way having been smoothed by his "fixer", Senator O’Gorman of New York, more familiarly known as "the Senator from Wall Street". Senator Robert L. Owen had previously charged that Warburg was the American representative of the Rothschild family, but questioning him about this would indeed have smacked of the mediaeval "Inquisition", and his fellow Senators were too civilized to indulge in such barbarity. *

During the Senate Hearings on Paul Warburg before the Senate Banking and Currency Committee, August 1, 1914, Senator Bristow asked,
"How many of these partners (of Kuhn, Loeb Company) are American citizens?"
WARBURG: "They are all American citizens except Mr. Kahn. He is a British subject."
BRISTOW: "He was at one time a candidate for Parliament, was he not?"
WARBURG: "There was talk about it, it had been suggested and he had it in his mind."

Paul Warburg also stated to the Committee, "I went to England, where I stayed for two years, first in the banking and discount firm of Samuel Montague & Company. After that I went to France, where I stayed in a French bank."

CHAIRMAN: "What French bank was that?"
WARBURG: "It is the Russian bank for foreign trade which has an agency in Paris."
BRISTOW: "I understand you to say that you were a Republican, but when Mr. Theodore Roosevelt came around, you then became a sympathizer with Mr. Wilson and supported him?"
WARBURG: "Yes."
BRISTOW: "While your brother (Felix Warburg) was supporting Taft?"
WARBURG: "Yes."

Thus three partners of Kuhn, Loeb Company were supporting three different candidates for President of the United States. Paul Warburg was supporting Wilson, Felix Warburg was supporting Taft, and Otto Kahn was supporting Theodore Roosevelt. Paul Warburg explained this curious situation by telling the Committee that they had no influence over each other’s political beliefs, "as finance and politics don’t mix."

Questions about Warburg’s appointment vanished in a hue and cry with Wilson’s sole appointment to the Board of Governors, Thomas B. Jones. Reporters had discovered that Jones, at the time of his appointment, was under indictment by the Attorney General of the United States. Wilson leaped to the defense of his choice, telling reporters that "The majority of the men connected with what we have come to call ‘big business’ are honest, incorruptible and patriotic." Despite Wilson’s protestations, the Senate Banking and Currency Committee scheduled



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[Footnotes]

* Warburg was confirmed August 8, 1914, 38-11, and principally opposed by Sen. Bristow of Kansas, who was denounced by The New York Times as a "radical Republican", and whose excellent library of rare books on banking were acquired by the present writer in 1983 for research on this work.



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hearings on the fitness of Thomas D. Jones to be a member of the Board of Governors. Wilson then wrote a letter to Senator Robert L. Owen, Chairman of that Committee:

White House
June 18, 1914

Dear Senator Owen:

Mr. Jones has always stood for the rights of the people against the rights of privilege. His connection with the Harvester Company was a public service, not a private interest. He is the one man of the whole number who was in a peculiar sense my personal choice.

Sincerely,
Woodrow Wilson

Woodrow Wilson said, "There is no reason to believe that the unfavorable report represents the attitude of the Senate itself." After several weeks, Thomas D. Jones withdrew his name, and the country had to do without his services.

The other members of the first Board of Governors were Secretary of the Treasury, William McAdoo, Wilson’s son-in-law, and President of the Hudson-Manhattan Railroad, a Kuhn, Loeb Company controlled enterprise, and Comptroller of the Currency John Skelton Williams.

When the Federal Reserve Banks were opened for business on November 16, 1914, Paul Warburg said, "This date may be considered as the Fourth of July in the economic history of the United States."

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This HTML Edition of "Secrets of the Federal Reserve" by Eustace Mullins, as controversial as it may seem to some, is placed on the web as a valid and well researched viewpoint of the history of U.S. and World Banking manipulations, and to keep it from disappearing,.

Saturday, May 30, 2009

Secrets Of The Federal Reserve By Eustace Mullins - Chapter 2 - The Aldrich Plan - This Is Part 2 Of A 14 Part Series

Please Sign This Petition To Abolish The Patriot Act


Editor's Note: For the past several days this author has been subjected to an increase in the NSA's use of DEW (directed energy weapons)weaponry on my person. These attacks include the use of microwave heating as well as ULF (ultra low frequency waves),which have caused fatigue so extreme that I have been forced to rest on the couch for several hours in the afternoon each day to fight this terrible exhaustion. This is further evidence in regard to the crimes being committed by the NSA, FBI and other Intel agencies against American citizens, through the infrared portion of the electromagnetic spectrum. Crimes against humanity being committed by agents of the U.S. Federal Government, with complete impunity.

The fact that these government financed terrorists are not being arrested and indicted for this egregious rape of the U.S. Bill of Rights is a further illustration of why they commit these crimes; they know that they won't be punished for doing so and thus continue to remotely torture and murder Americans by way of satellite spy networks like Echelon; those which exploit the IF spectrum and our own unique electromagnetic fields in which to perpetrate these outrageous and inhumane crimes.

See: AKWEI VS NSA to learn more about the NSA's satellite predation

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Also See: "The Creature From Jekyll Island" by Author G. Edward Griffin. Griffin comments in regard to the Federal Reserve System banking cartel, and the criminal monopoly which it maintains over the American people through its partnership with the U.S. Federal Government. Griffin's biography has been removed on more than one occasion from the Internet Encyclopedia, Wikipedia, under the excuse that he supports quack medical cures. However, this is just a ruse. The real reason for the attack on Griffin is his book exposing the Federal Reserve System's fraudulent operations in the United States, and its function as little more than a U.S. Congress authorized counterfeiter. Recently, his profile was again reinstated after challenging Wikipedia's fraudulent claims.




Secrets of the Federal Reserve
by Eustace Mullins
From Web Archive Sources

Chapter 2 — The Aldrich Plan


"Finance and the tariff are reserved by Nelson Aldrich as falling within his sole purview and jurisdiction. Mr. Aldrich is endeavoring to devise, through the National Monetary Commission, a banking and currency law. A great many hundred thousand persons are firmly of the opinion that Mr. Aldrich sums up in his personality the greatest and most sinister menace to the popular welfare of the United States. Ernest Newman recently said, ‘What the South visits on the Negro in a political way, Aldrich would mete out to the mudsills of the North, if he could devise a safe and practical way to accomplish it.’"--Harper’s Weekly, May 7, 1910."

The participants in the Jekyll Island conference returned to New York to direct a nationwide propaganda campaign in favor of the "Aldrich Plan". Three of the leading universities, Princeton, Harvard, and the University of Chicago, were used as the rallying points for this propaganda, and national banks had to contribute to a fund of five million dollars to persuade the American public that this central bank plan should be enacted into law by Congress.

Woodrow Wilson, governor of New Jersey and former president of Princeton University, was enlisted as a spokesman for the Aldrich Plan. During the Panic of 1907, Wilson had declared, "All this trouble could be averted if we appointed a committee of six or seven public-spirited men like J.P. Morgan to handle the affairs of our country."

In his biography of Nelson Aldrich in 1930, Stephenson says:
"A pamphlet was issued January 16, 1911, ‘Suggested Plan for Monetary Legislation’, by Hon. Nelson Aldrich, based on Jekyll Island conclusions." Stephenson says on page 388, "An organization for financial progress has been formed. Mr. Warburg introduced a resolution authorizing the establishment of the Citizens’ League, later the National Citizens League . . . Professor Laughlin of the University of Chicago was given charge of the League’s propaganda." 11

It is notable that Stephenson characterizes the work of the National Citizens League as "propaganda", in line with Seligman’s exposition of



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[Footnotes]

11. Nathaniel Wright Stephenson, Nelson W. Aldrich, A Leader in American Politics, Scribners, N.Y. 1930



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Warburg’s work as "the education of the country" and "to break down prejudices".

Much of the five million dollars of the bankers slush fund was spent under the auspices of the National Citizens’ League, which was made up of college professors. The two most tireless propagandists for the Aldrich Plan were Professor O.M. Sprague of Harvard, and J. Laurence Laughlin of the University of Chicago.

Congressman Charles A. Lindbergh, Sr., notes:
"J. Laurence Laughlin, Chairman of the Executive Committee of the National Citizens’ League since its organization, has returned to his position as professor of political economics in the University of Chicago. In June, 1911, Professor Laughlin was given a year’s leave from the university, that he might give all of his time to the campaign of education undertaken by the League . . . He has worked indefatigably, and it is largely due to his efforts and his persistence that the campaign enters the final stage with flattering prospects of a successful outcome . . . The reader knows that the University of Chicago is an institution endowed by John D. Rockefeller, with nearly fifty million dollars." 12

In his biography of Nelson Aldrich, Stephenson reveals that the Citizens’ League was also a Jekyll Island product. In chapter 24 we find that: The Aldrich Plan was represented to Congress as the result of three years of work, study and travel by members of the National Monetary Commission, with expenditures of more than three hundred thousand dollars.*

Testifying before the Committee on Rules, December 15, 1911, after the Aldrich plan had been introduced in Congress, Congressman Lindbergh stated:
"Our financial system is a false one and a huge burden on the people . . . I have alleged that there is a Money Trust. The Aldrich plan is a scheme plainly in the interest of the Trust . . . Why does the Money Trust press so hard for the Aldrich Plan now, before the people know what the money trust has been doing?"

Lindbergh continued his speech,
"The Aldrich Plan is the Wall Street Plan. It is a broad challenge to the Government by the champion of the Money Trust. It means another panic, if necessary, to intimidate the people. Aldrich, paid by the Government to represent the people, proposes a plan for the trusts instead. It was by a very clever move that the National Monetary Commission was created. In 1907 nature responded most beautifully and gave this country the most bountiful crop it had ever had. Other industries were busy too, and from a natural standpoint all the conditions were right for a most



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[Footnotes]

12. Charles A. Lindbergh, Sr., Banking, Currency and the Money Trust, 1913, p. 131

* In 1911, the Aldrich Plan became part of the official platform of the Republican Party.



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prosperous year. Instead, a panic entailed enormous losses upon us. Wall Street knew the American people were demanding a remedy against the recurrence of such a ridiculously unnatural condition. Most Senators and Representatives fell into the Wall Street trap and passed the Aldrich Vreeland Emergency Currency Bill. But the real purpose was to get a monetary commission which would frame a proposition for amendments to our currency and banking laws which would suit the Money Trust. The interests are now busy everywhere educating the people in favor of the Aldrich Plan. It is reported that a large sum of money has been raised for this purpose. Wall Street speculation brought on the Panic of 1907. The depositors’ funds were loaned to gamblers and anybody the Money Trust wanted to favour. Then when the depositors wanted their money, the banks did not have it. That made the panic."

Edward Vreeland, co-author of the bill, wrote in the August 25, 1910 Independent (which was owned by Aldrich),
"Under the proposed monetary plan of Senator Aldrich, monopolies will disappear, because they will not be able to make more than four percent interest and monopolies cannot continue at such a low rate. Also, this will mark the disappearance of the Government from the banking business."

Vreeland’s fantastic claims were typical of the propaganda flood unleashed to pass the Aldrich Plan. Monopolies would disappear, the Government would disappear from the banking business. Pie in the sky.

Nation Magazine, January 19, 1911, noted, "The name of Central Bank is carefully avoided, but the ‘Federal Reserve Association’, the name given to the proposed central organization, is endowed with the usual powers and responsibilities of a European Central Bank."

After the National Monetary Commission had returned from Europe, it held no official meetings for nearly two years. No records or minutes were ever presented showing who had authored the Aldrich Plan. Since they held no official meetings, the members of the commission could hardly claim the Plan as their own. The sole tangible result of the Commission’s three hundred thousand dollar expenditure was a library of thirty massive volumes on European banking. Typical of these works is a thousand page history of the Reichsbank, the central bank which controlled money and credit in Germany, and whose principal stockholders, were the Rothschilds and Paul Warburg’s family banking house of M.M. Warburg Company. The Commission’s records show that it never functioned as a deliberative body. Indeed, its only "meeting" was the secret conference held at Jekyll Island, and this conference is not mentioned in any publication of the Commission. Senator Cummins passed a resolution in Congress ordering the Commission to report on January 8, 1912, and show some constructive results of its three years’ work. In the face of this challenge, the National Monetary Commission ceased to exist.

With their five million dollars as a war chest, the Aldrich Plan propagandists waged a no-holds barred war against their opposition. Andrew Frame testified before the House Banking and Currency Committee of the American Bankers Association. He represented a group of Western bankers who opposed the Aldrich Plan:

CHAIRMAN CARTER GLASS:
"Why didn’t the Western bankers make themselves heard when the American Bankers Association gave its unqualified and, we are assured, unanimous approval of the scheme proposed by the National Monetary Commission?"

ANDREW FRAME:
"I’m glad you called my attention to that. When that monetary bill was given to the country, it was but a few days previous to the meeting of the American Bankers Association in New Orleans in 1911. There was not one banker in a hundred who had read that bill. We had twelve addresses in favor of it. General Hamby of Austin, Texas, wrote a letter to President Watts asking for a hearing against the bill. He did not get a very courteous answer. I refused to vote on it, and a great many other bankers did likewise."

MR. BULKLEY:
"Do you mean that no member of the Association could be heard in opposition to the bill?"

ANDREW FRAME:
"They throttled all argument."

MR. KINDRED:
"But the report was given out that it was practically unanimous."

ANDREW FRAME:
"The bill had already been prepared by Senator Aldrich and presented to the executive council of the American Bankers Association in May, 1911. As a member of that council, I received a copy the day before they acted upon it. When the bill came in at New Orleans, the bankers of the United States had not read it."

MR. KINDRED:
"Did the presiding officer simply rule out those who wanted to discuss it negatively?"

ANDREW FRAME:
"They would not allow anyone on the program who was not in favor of the bill."

CHAIRMAN GLASS:
"What significance has the fact that at the next annual meeting of the American Bankers Association held at Detroit in 1912, the Association did not reiterate its endorsement of the plan of the National Monetary Commission, known as the Aldrich scheme?"

ANDREW FRAME:
"It did not reiterate the endorsement for the simple fact that the backers of the Aldrich Plan knew that the Association would not endorse it. We were ready for them, but they did not bring it up."

Andrew Frame exposed the collusion which in 1911 procured an endorsement of the Aldrich Plan from the American Bankers Association but which in 1912 did not even dare to repeat its endorsement, for fear of an honest and open discussion of the merits of the plan.

Chairman Glass then called as witness one of the ten most powerful bankers in the United States, George Blumenthal, partner of the international banking house of Lazard Freres and brother-in-law of Eugene Meyer, Jr. Carter Glass effusively welcomed Blumenthal, stating that "Senator O’Gorman of New York was kind enough to suggest your name to us."

A year later, O’Gorman prevented a Senate Committee from asking his master, Paul Warburg, any embarrassing questions before approving his nomination as the first Governor of the Federal Reserve Board.

George Blumenthal stated, "Since 1893 my firm of Lazard Freres has been foremost in importations and exportations of gold and has thereby come into contact with everybody who had anything to do with it."

Congressman Taylor asked,
"Have you a statement there as to the part you have had in the importation of gold into the United States?" Taylor asked this because the Panic of 1893 is known to economists as a classic example of a money panic caused by gold movements.

"No," replied George Blumenthal, "I have nothing at all on that, because it is not bearing on the question."

A banker from Philadelphia, Leslie Shaw, dissented with other witnesses at these hearings, criticizing the much vaunted "decentralization" of the System. He said,
"Under the Aldrich Plan the bankers are to have local associations and district associations, and when you have a local organization, the centered control is assured. Suppose we have a local association in Indianapolis; can you not name the three men who will dominate that association? And then can you not name the one man everywhere else. When you have hooked the banks together, they can have the biggest influence of anything in this country, with the exception of the newspapers."

To promote the Democratic currency bill, Carter Glass made public the sorry record of the Republican efforts of Senator Aldrich’s National Monetary Commission.

His House Report in 1913 said,
"Senator MacVeagh fixes the cost of the National Monetary Commission to May 12, 1911 at $207,130. They have since spent another hundred thousand dollars of the taxpayer’s money. The work done at such cost cannot be ignored, but, having examined the extensive literature published by the Commission, the Banking and Currency Committee finds little that bears upon the present state of the credit market of the United States. We object to the Aldrich Bill on the following points:


Its entire lack of adequate government or public control of the banking mechanism it sets up.


Its tendency to throw voting control into the hands of the large banks of the system.


The extreme danger of inflation of currency inherent in the system.


The insincerity of the bond-funding plan provided for by the measure, there being a barefaced pretense that this system was to cost the government nothing.


The dangerous monopolistic aspects of the bill.


Our Committee at the outset of its work was met by a well-defined sentiment in favor of a central bank which was the manifest outgrowth of the work that had been done by the National Monetary Commission."

Glass’s denunciation of the Aldrich Bill as a central bank plan ignored the fact that his own Federal Reserve Act would fulfill all the functions of a central bank. Its stock would be owned by private stockholders who could use the credit of the Government for their own profit; it would have control of the nation’s money and credit resources; and it would be a bank of issue which would finance the government by "mobilizing" credit in time of war.

In "The Rationale of Central Banking," Vera C. Smith (Committee for Monetary Research and Education, June, 1981) writes,
"The primary definition of a central bank is a banking system in which a single bank has either a complete or residuary monopoly in the note issue. A central bank is not a natural product of banking development. It is imposed from outside or comes into being as the result of Government favors."

Thus a central bank attains its commanding position from its government granted monopoly of the note issue. This is the key to its power. Also, the act of establishing a central bank has a direct inflationary impact because of the fractional reserve system, which allows the creation of book-entry loans and thereby, money, a number of times the actual "money" which the bank has in its deposits or reserves.

The Aldrich Plan never came to a vote in Congress, because the Republicans lost control of the House in 1910, and subsequently lost the Senate and the Presidency in 1912.

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This HTML Edition of "Secrets of the Federal Reserve" by Eustace Mullins, as controversial as it may seem to some, is placed on the web as a valid and well researched viewpoint of the history of U.S. and World Banking manipulations, and to keep it from disappearing,.

Reproduction of all or any parts of the above text may be used for general information.
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