Federal Reserve System

Federal Reserve System
Thomas Allen

[Editor’s note: Footnotes in the original are omitted.]

Perhaps the most powerful tool used by Illuminists to control a government is to control that government’s credit and issuance of money and the country’s banking system. (The fifth plank of the Communist Manifesto reads, “Centralization of credit in the hands of the state by means of a national bank with state capital and an exclusive monopoly.”) With the control of these, comes the control of the economy. (Mayer Amschel Rothschild said, “Give me control over a nation’s economy, and I care not who makes its law.”[1]) Control of the banking, credit, and monetary systems gives the Illuminists enormous influence and power over governments. (Reginald McKenna, president of Midlands Bank of England, said, “Those that create and issue the money and credit direct the policies of government and hold in their hands the destiny of the people.”[2]) They can dictate the terms upon which a government can borrow money. With this power, they can demand and ensure that the government will grant and protect their monopolistic control of the banking, credit, and monetary systems.

To gain and consolidate control and power, the Illuminists use what is often called the Babylonian monetary system. This system depends on a strong central government, which depends on a strong central bank for its continuous financing. Thus, the government grants the bank a monopoly over the money and credit system. The central bank controls the issuance of money, which for much of the twentieth century has been debt, i.e., the money that the people use represents someone’s debt. This power gives the central bank control of the economy.[3]

After the Napoleonic Wars, the Rothschilds established central banks in all the major countries of Europe. They used their power as central bankers to urge countries of Europe to undertake a massive arms buildup although Europe was living in a time of peace. By 1886 military expenditures had become so great that they were beginning to cause Europe’s economies to stagnate. Countries could not continue their arms buildup without either internal rebellion or external war. Yet, they had spent so much money on armaments that they could not finance a war. Finally, the United States offered away out of their problem.

In 1913, Woodrow Wilson became President of the United States. One of his first acts was to sign the Federal Reserve Act into law. A few months later World War I began. This law solved the problem of financing a world war.

The Federal Reserve Act and the Federal Reserve System that it established grew out of the work of a few major bankers and their political allies. In 1910 Paul Warburg of Kuhn, Loeb and Co.; Henry P. Davison, senior partner of J. P. Morgan and Co.; Charles D. Norton, president of (Morgan’s) First National Bank of New York; Frank A. Vanderlip, President of (William Rockefeller’s) National City Bank of New York; Benjamin Strong, vice-president of (Morgan’s) Bankers Trust Co.; and A. Piatt Andrew, Assistant Secretary of the Treasury, met with Senator Nelson Aldrich on Jekyl Island and secretly drafted a plan for an American central bank.[4] The essence of this plan later became the Federal Reserve System.

These bankers controlled heavy industry, oil, communications, and railroads in the United States. They had the reputation of controlling the entire money and credit of the United States. “They elected Congressmen, appointed judges, and bought and sold newspapers and publishing houses whenever they need a job done.”[5]

The first attempt at creating the Federal Reserve System failed because the bill was associated with the Republican Party, which was too closely connected with Wall Street. To solve this problem, the Illuminists decided to put the Democrats in power and have them introduce a new bill. This job was made easy when Theodore Roosevelt, the Republican President whom William Taft had succeeded, decided to run on the Progressive Party ticket. Jacob Schiff had persuaded Roosevelt to run against both Wilson and Taft[6] J. P. Morgan provided Roosevelt money and manpower to run an effective campaign. Two Morgan agents, Frank Munsey and George Perkins, practically ran Roosevelt’s campaign.[7] (Rockefeller financed Wilson’s campaign. Jacob Schiff, Paul Warburg, Bernard Baruch, Henry Morgenthau, Sr., Henry Dodge of National City Bank of New York, and Thomas Ryan, all of whom were bankers, and the first four of whom were Jews, Samuel Untermyer, a wealthy corporate Jewish lawyer, and Adolph Ochs, publisher of the New York Times, also supported Wilson.[8]) Roosevelt received more press coverage than Taft and Wilson combined. Thus, Roosevelt diverted enough votes from President Taft, who was a popular President and who opposed establishing the Federal Reserve System although the Republican platform endorsed it, to give Wilson the presidency. Wilson delivered the Federal Reserve Bank. Actually, the political influence of William Jennings Bryan (the ardent foe of the big bankers, leader of the Democratic Party’s left-wing, and Wilson’s Secretary of State) is what pushed the bill through Congress.[9] The “unseen guardian angel” of the Federal Reserve Act was Colonel Edward House, who was in constant contact with Paul Warburg while the Federal Reserve Act was being prepared and steered through Congress.

(Putting a President in office was nothing new to Morgan. J.P. Morgan and Co. and Kuhn, Loeb and Co. joined in an alliance in 1901 to form the Northern Securities Co. To stop the Department of Justice from prosecuting the Northern Securities Co. as a trust until a less vulnerable system could be worked out, Morgan, Schiff, and Paul Warburg got Theodore Roosevelt elected President in 1904. The Northern Securities Co. was the consolidation of the Rothschild empire in America. In 1869, J.P. Morgan and Co. became an international agency of the Rothschilds when J.P. Morgan and Anthony Drexel concluded an agreement with N.M. Rothschild Co. that made J.P. Morgan Co. its agent.)

The Federal Reserve System achieved the three main functions of a central bank. Private individuals owned the bank, received a profit from the ownership, and controlled the issuance of money. Through the Federal Reserve System, the owning banks could use the credit of the United States government for their own profit. They issued currency (federal reserve notes) on the credit of the United States government. The country’s entire financial resources were at the command of the Illuminists through the central bank. Perhaps most important, the Federal Reserve System mortgaged the country by involving it in perpetual war. Like all central banks, the Federal Reserve System sought to control the government by controlling loans to the government. It sought to influence economic activity and manipulate foreign exchanges. To secure its monopoly, it sought to influence politicians by economic rewards in the business world when they left government.

With the initial stock offering in 1914, six New York banks bought a controlling interest in the Federal Reserve Bank of New York. They were National City Bank (a Rockefeller bank), First National Bank (a Morgan bank), National Bank of Commerce (a Warburg bank), Hanover National Bank, Chase National Bank (a Rockefeller bank), Chemical Bank, and Marine National Bank of Buffalo (later Marine Midland).[10] These seven banks acquired more than 40 percent of the stock of the Federal Reserve Bank of New York. Some of the leading merchant banks of Great Britain controlled most of these banks. These British banks included Schroder Bank; Morgan, Grenfell and Co. (affiliated with J.P. Morgan Co.), Lazard Brothers; N.M. Rothschild; Brown Shipley Co. (affiliated with Brown Brothers, later Brown Brothers, Harriman).

The Federal Reserve System gave the international bankers control of the money and credit in the United States. (Federal reserve notes are privately issued money backed by the taxing power of the United States government to cover losses of the banks issuing the notes.) Thus, the international bankers gained control of the economy of the United States. With control of the economy, they could control the country. With control of the economy, they controlled and exaggerated the boom-bust cycle. Insiders who knew when the Federal Reserve Bank would begin expanding the money supply could buy property and shares when they were cheap before the expansion. Then they could sell just before the Federal Reserve Bank began to contract the money supply, which they would know in advance. As the economy crashed, they could again buy shares and property cheaply, often at distressed prices of bankruptcy. If their banks had financial difficulty because of loan defaults, the Federal Reserve Bank would lend them the money necessary to protect them from bankruptcy.

For the Illuminists, 1913 was a victorious year in the United States. They obtained a vast new source of revenue for the United States government with the ratification of the Sixteenth Amendment. (In 1909, Aldrich, John D. Rockefeller’s spokesman in Congress, proposed, with President Taft’s support, amending the Constitution to grant Congress the power to levy income taxes.) This Amendment gave them unrestricted power to tax incomes and estates. With unlimited power to tax incomes and inheritance, the economy could be socialized, unlimited wars fought, and foreign socialistic governments maintained in power with foreign aid. (Without the income tax, the United States’ participation in World War I was doubtful; this tax was necessary to pay for the war.) Next came the ratification of the Seventeenth Amendment, which destroyed what little remained of the federal republic that survived Lincoln’s war to destroy the South and the Constitution. This Amendment removed the elections of Senators from state legislatures and required them to be elected by popular vote. Perhaps their greatest victory came at the end of the year when the Federal Reserve bill became law. Now the Illuminists had the power to create booms and busts—and thus amass enormous fortunes for themselves.

Endnotes
1. H.S. Kenan, The Federal Reserve Bank (Los Angeles, California: The Noontide Press, 1966), p. 6.

2. Gary Allen, None Dare Call It Conspiracy (Seal Beach, California: Concord Press, n.d.), p. 41.

3. Eustace Mullins, The Curse of Canaan: A Demonology of History (Staunton, Virginia: Revelation Book, 1987), pp. 196-197.

4. G. Edward Griffin, The Creature from Jekyll Island (Westlake Village, California: American Media, 2002), p. 5.

5. Kenan, pp. 94-95.

6. Archibald E. Roberts, Emerging Struggle for State Sovereignty (Fort Collins, Colorado: Betsy Ross Press, 1979), p. 152.

7. Allen, p. 48.

8. Kenan, p. 123.

9. Martin A. Larson, The Federal Reserve and Our Manipulated Dollar (Old Greenwich, Connecticut: The Devin-Adair Company, 1975), pp. 46-47.

10. Eustace Mullins, Secrets of the Federal Reserve (1991), p. 34. Eustace Mullins, The World Order: Our Secret Rulers (Second edition, Staunton, Virginia: Ezra Pound Institute of Civilization, 1992), p. 103.

[Editor’s note: The list of references in the original is omitted.]

Copyright © 2010 by Thomas Coley Allen.

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