The Fed Celebrates 100 Years of Economic Slavery While Rome Burns

Friday, November 12, 2010 , 0 Comments

JDA's invite to the Federal Reserve's 100 year celebration of the 1910 Jekyll Island meeting that birthed the Fed as we know it must have been lost in the mail. Such a shame.

Frank Vanderlip, President of National City Bank of New York, was in attendance in 1910 and described it better than any conspiracy theorist could have were he or she writing a work of total fiction about the secretive banking cartel plotting to plant its infectious roots deep into a country ripe for the picking that has now, 100 years later, been looted and burned in the process:

Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near the close of 1910, when I was as secretive — indeed, as furtive — as any conspirator…. I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System….

The servants and train crew may have known the identities of one or two of us, but they did not know all, and it was the names of all printed together that would have made our mysterious journey significant in Washington, on Wall Street, even in London. Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage by Congress.

Remember, the parasite always feeds off the host, sometimes until there is no more host remaining on which to feed.

The bastards had the audacity to hold a meeting to discuss:

  • the origins of the Fed and lessons from the pre-1913 era
  • how closely the Fed's actual performance has adhered to the original vision expressed by the framers of the Aldrich plan
  • what the Fed's almost 100-year track record teaches us about its role going forward
Is FAIL an appropriate assessment or is that too vague?

Helpful bunch that they are, here's the quick primer on how the plan came together and birthed the Fed:

What emerged from the Jekyll meeting was the so-called Aldrich Plan, which was presented to the National Monetary Commission as a legislative blueprint.

The Aldrich Plan was a catalyst for debate about the role of the government and banking in the central bank's governance. The plan, and the bill that followed in 1912, proposed that a National Reserve Association would function as the U.S. central bank. The association would consist of a federation of regional bank associations, each presided over by boards of directors elected by local banks. This diffuse governance represented a departure from the centralized governance of European central banks. Aldrich's proposed central bank would promote macroeconomic stability. The proposals that came out of the Jekyll meeting remained the core of the subsequent steps in the creation of the Federal Reserve.

Aldrich put forward his central banking bill to the U.S. Senate in January 1912. The Senate did not act on it.

After the election of Woodrow Wilson in 1912, Congressman Carter Glass of Virginia assumed leadership of monetary reform. Glass had served for ten years as a minority member of the House Banking and Currency Committee and had led an investigation into concentration of power on Wall Street. Also working on monetary reform was Oklahoma Senator Robert L. Owen.

The Glass-Owen Bill kept the key macroeconomic stabilization mechanisms of the Aldrich Plan, but it differed in terms of the proposed institution's structure and governance. The Glass-Owen Bill provided for eight to twelve districts, with a reserve bank in each district—a departure from the Aldrich Bill, which called for fifteen districts, with a central bank branch in each. However, the most salient difference was the governance of the central bank. The debate about a U.S. central bank had been mired in disagreements about who would control the system—bankers or appointed government officials. The Glass-Owen bill limited banking interest representation. Of the nine-member reserve bank board of directors, only three could be bankers. Three other directors engaged in commerce, industry, or agriculture were to be elected by bankers, and the remaining three directors were to be named by the Federal Reserve Board in Washington, D.C.

The bill also identified the Federal Reserve Board as the controlling agency. The Board was made up of two ex officio members—the Secretary of the Treasury and the Comptroller of the Currency—and five other members appointed by the president and confirmed by the Senate.

The reconciled bill was passed as the Federal Reserve Act and signed into law by President Wilson in 1913, and the twelve Reserve Banks opened about a year later.
So we still have another 3 years before they throw the big party that celebrates the Federal Reserve Act, which gives us a pretty small window in which to act to get them thrown out and to default on all the "money" we owe them. But I guess since dollars are denominated in Dirty Fed credits if we take care of that first one we don't have to worry about taking care of the second.

Bloomberg's wrap up of the November 4th Jekyll Island event (which you may have missed if you were still worked into a post-Election Day lather) may be found here.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.