“When the power of love overcomes the love of power the world will know peace” ——— Jimi Hendrix

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   “The opposite of love is not hate, it’s indifference.”  —– Concentration camp survivor
   
   
   
   
   

   
   

   “Plutocracy is abhorrent to a republic; it is more despotic than monarchy, more heartless than aristocracy, more selfish than bureaucracy. It preys upon the nation in time of peace and conspires against it in the hour of its calamity. Conscienceless, compassionless and devoid of wisdom, it enervates its votaries while it impoverishes its victims. It is already sapping the strength of the nation, vulgarizing social life and making a mockery of morals.”
   
   

   William Jennings Bryan <<

   
   

   Money in America, Part Four

   Previously,we saw the holy Grail of banking reform was actually a hidden agenda of politics, banking, and big business.The seeds were planted in Indianapolis and now, the game is surely afoot.
   
   The National Monetary Commission in 1908
   
   Informing the public via a predetermined public relation campaign, with surveys and solutions of a predetermined outcome worked well. Keeping the scheme going for a decade took time, effort, and investment.
   With the passage of the Aldrich-Vreeland Act in 1908 contained two important but little-known provisions: the emergency currency potential and the establishment of the NMC. The former provision would have expired in 1914 but curiously, was used for the one and only time that year.
   However, Aldrich had packed his commission in June of 1908 with senators and representatives but, more significantly, powerful banking leaders.
   This junket headed for Europe in the fall, studying and gather information with heads of private European banks and central banks. They concluded European banking was more efficient and the European currencies had more gravitas compared to the dollar. By December,, back in the U.S., Aldrich added Paul Warburg and others to the inner circle. Charles A. Conant was chosen for ‘research and public relations’. Warburg consulted with many academic economists at top-tier universities.
   The American Bankers Association recommended a U.S. Central bank along the lines of the German Reichsbank. Hesitant heads of national banks were assured the business model would not be adversely affected by the origin of a U.S. Central bank.
   Regional banking districts in the country, under control of a central board, was a recommentation in November, 1909. Throughout this whole era, the Morgan and Rockefeller banking interests had agreed to agree on a central bank. Yes.
   Incidentally, William Howard Taft was elected president, a friend of Aldrich and others since 1900. On September 14, 1909, President Taft spoke in Boston and gave a big boost to the notion of a central bank. Wow. And a week later, The Wall Street Journal gave space to various op-eds, unsigned, praising that great idea of ‘elastic currency’ and other benefits. Actually, these letters were crafted by Charles Conant. He also recommended the regulation of interest rates by the central bank as a useful tool. The Washington Bureau of the Associate Press was also co-opted.
   Another significant speech by Paul Warburg in New York on March 23, 1910 impressed the Merchants’ Association of New York. They had printed 30,000 copies of the transcript and distributed these far and wide.
   For public consumption, a monetary conference in New York in November 1910 presented a specific recommendations for a central bank and an appeal for all part of the country to support the Bill that Alrich would soon craft.
   
   The Private Railroad Car
   
   G. Edward Griffin [1] sets the scene at a New Jersey railroad station like the opening of a thriller movie: it’s 10 p.m. on November 22, 1910 as a handful of important men board a private car. Unlike the numbered cars of the rest of this train, this one has no number, only a small plaque with the inscription “Aldrich”.
   The senator greets his guests by first name only – and this rule is adhered throughout the trip and the week at Jekyll Island, Georgia. The private club on the island is part-owned by J.P. Morgan.
   
   The personnel lineup:
   

   • Senator Nelson P.Aldrich
   • Paul Warburg, various banking connections
   • Abraham Andrew, Assistant Secretary of the U.S. Treasury
   • Henry P. Davison, senior partner, J.P. Morgan Co.
   • Frank A. Vanderlip, president, National City Bank of New York
   • Charles D. Norton, president, First National Bank of New York
   • Benjamin Strong, head of Bankers Trust Co.
   •  

   (The last two are questionable due to differing accounts in the ‘historical record’ but both were in the Morgan camp. Aldrich, incidentally, was a financial partner of J.P. Morgan, and also father-in-law of John D. Rockefeller, Jr.)
   If Strong wasn’t there, he surely knew about it – we will hear more of him.
   The public did indeed hear something of this secret meeting, but it was in 1935. The Saturday Evening Post carried an article by Vanderlip and the key takeaway was:
   

   If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have had no chance whatever of passage by Congress.

   Warburg led the argument for a regional structure, presumably cognizant of public mistrust of too much power located in one area. Aldrich wanted an overt central bank with no political meddling. The compromise that was reached became the Aldrich Plan, introduced in Congress in 1912 and 1913.
   (On November 5–6, 2010, Ben Bernanke stayed on Jekyll Island to commemorate the 100-year anniversary of the original meeting.)
   Alas, the Democrats won the 1912 elections resoundingly. The Republican Aldrich Plan seemed to fall by the wayside.
   Shiny new President Woodrow summoned a special session of Congress in April 1913. To seal the importance, he appeared in person, the first president since John Adams to do so. Wilson’s address outlined various approaches to economic policies, banking and currency reform, tariffs, and the income tax.
   The 16^th Amendment had been ratified on February 3, 1913. Wilson needed that tax to support lower tariffs. A little bit of patronage pressure, and the Revenue Act of 1913 was passed by the House on May 8, 1913; finally it went through the Senate on September 9, 1913.
   Meanwhile, the Aldrich Plan was not dead, though that hated Republican name vanished. Representative Carter Glass, chairman of the House Banking and Currency Committee, and Senator Robert Owen, chairman of the Senate’s did a little tinkering here and there. Wilson mandated a central Federal reserve board be appointed by the president – with the consent of the Senate.
   There was one thorn in Wilson’s side, his Secretary of State, William Jennings Bryan. The “Cross of Gold” person was still a power in the Democratic Party. The sop to Bryan was that Federal Reserve currency would be a liability of the government – and also, provision for federal loans to farmers.
   All this horse trading took time, though, and Wilson had other fish to fry during 1913.
   The 17^th Amendment (Direct Election of U.S. Senators), ratified and declared, became part of the Constitution on May 31, 1913..
   Finally, months in the making, what started as the Glass-Owen bill became the Federal Reserve Act of 1913. It passed the House on December 13 and the Senate, after an all nighter, on December 23. Wilson signed it that morning.
   A great year for the Populists, remember they wanted:
   
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