Secrets
of the Federal Reserve
The
history, organization and controlling interests
behind the Federal Reserve
-- by Eustace
Mullins, 1983 source: Whale.to
(http://www.whale.to/b/mullins_h.html)
Modern
History Project, Chapter 3
(http://www.modernhistoryproject.org/mhp/ArticleDisplay.php?Article=SecretsCh03)
Passage
of the Federal Reserve Act (1913)
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."
"Unprecedented speed",
says the New York Times. One sees the fine hand of
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.
<snip>
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===========================================================================================
----- Original
Message -----
Sent:
Monday, October 05, 2009 10:15 AM
Subject:
Judge Carter and Dr.Orly's Hearing -- Fed
Comment
A
friend just sent this to me. The friend received
this info from the Minutemen in Sand Diego...I
guess. Fed info
below.
************************
News should be out soon,
as soon as the hearing ends.
From the
beginning of bank arguments in the US one needs
to know that the current arguments put forth by
Ron Paul were all debated over the years since
the FED was first established.
The
FED issues debate are responsible for bringing
about, at least 200 changes in how the FEDERAL
RESERVE operates as shown at this link.
One needs to know that the GOLD and SILVER
producers and sales personnel have a HUGE
stake in what's used to back America's
currency... and in fact one needs to realize
that the ability to create money in a money
system allows for economic expansion, for
without PRUDENT expansion of the money
supply then NATIONAL GROWTH is restricted.
Again, FED or Congress money supply management
is FULLY DEPENDENT on the honesty and integrity
of citizens who manage either of the
enterprises.
Having changed the FED
rules 200 times since its inception one needs to
ask WHY are the rules the way that they are now
constructed ? In my view if we know why
the FED was provided FULL immunity to Congress
to conduct their operations ...then why are we
again questioning the FED's structure? I
want to know WHY the existing FED rules were
created before changing ANYTHING dealing with
the FED's operations.
Also, one would
have to believe that 535 members of Congress,
judges at state and federal levels, along with
AGs both federal and state, etc are all
involved in the grand FED conspiracy.
The FED
issue boils down to one END argument and
question; "ARE THERE ANY MORAL, ETHICAL, HONEST,
GOD FEARING, people existing in America?
If not then return the land back to the
Indians.
I have no doubts that Ron
PAUL is just re-inventing the wheel... but his
query may be the on more than the previous 200
Fed rule changes making Ron Pauls changes
the 201st time that the
FED rules are changed.
*****************************************
The Fed Fighter: DealBook’s Ron Paul
Interview
October 2,
2009, 1:35 pm
The fallout from the credit crisis has put
the financial system of the United States under
a microscope. Banker pay, lending practices and
regulatory oversight are now topics of
mainstream interest for the first time since the
Great Depression.
As Congress debates whether or not to give
more power to the Federal Reserve to watch over
the financial system, Ron Paul, the Republican
congressman from Texas, is arguing, as he has
for years, for the government to go in the
opposite direction and actually cut the Fed’s
powers.
In an interview with DealBook on Thursday,
Mr. Paul discussed his new book, “End the Fed,”
as well as his views on Wall Street.
The outspoken lawmaker contends that the
government is essentially controlled by the Fed
and in collusion with Wall Street, and has
created an unsustainable economic system through
the excess printing of money. He predicts that
the system will eventually break down and the
dollar will collapse, creating economic
chaos.
Here are edited and condensed excerpts from
DealBook’s talk with Mr. Paul.
Q.
What would Wall Street look like without
the Fed? Do you believe that Wall Street banks —
which you’ve described as a “secretive cartel of
powerful money managers” — would be able to
manipulate interest rates if the Fed didn’t
exist?
A.
No, the interest rate would be set by savers.
Capital would come from savings, which is what
happens in a free market. So if there were a lot
of savings then interest rates would go down.
This would give information to the marketplace,
which is the most important thing that has to be
corrected without a central bank: sending the
right information out to borrowers, investors
and savers.
Right now we don’t have a free market in
interest rates, so it is basically price
controls.
Q.
In your book, you argue that ending the
Fed would put the American banking system on
solid financial footing. With the banks still
far from clearing their toxic assets, how is
that possible?
A.
Well, to get rid of the toxic assets, the Fed
said we need to step in because the assets were
illiquid. Illiquid means that they are
worthless, and if they are worthless, we should
take care of that problem like we did in 1921
and eliminate them and get it over with and get
back to work again.
But to take these illiquid, worthless assets
and dump them on the American taxpayers and not
really get rid of them just prolongs the
agony.
Q.
It’s widely believed that the Fed is
independent, made up mostly of academics, not
politicians or business leaders. What specific
powers do you believe the Wall Street banks have
over the Fed that would allow them to influence
it?
A.
Well, we don’t have a full answer on that,
but that’s obviously the reason the Fed doesn’t
want a full audit. What we do know is that they
do have influence over the Fed; I mean Wall
Street was bailed out, and it wasn’t the first
time.
We know that Lehman Brothers was
allowed to go bankrupt, but Goldman Sachs came out
very well outside of this mess. We want to know
why this happened, what they did, who got these
loans and why. Someone has always been in our Treasury or our Federal
Reserve who is closely connected to Wall Street
— Goldman Sachs more than anybody else.
Q.
So do you think Goldman Sachs has the most
influence at the Fed?
A.
I think they have been in the news the most,
but we might find out a lot of new things once
we audit the Fed. We might find out that there
are some international banks with influence.
The one thing the Fed is really fighting is
to keep us from auditing any of the
international agreements they have with other
central banks and the international financial
institutions — who knows who’s involved. The key
issue is transparency, and I don’t think you
will know the full extent until we have a true
audit.
Q.
Which brings us to your bill to audit the
Federal Reserve. What would an audit show, and
why do you think that information is important?
A.
It is going to show what kind of promises the
Fed made, what kind of loans they made, which
companies benefited, which companies did not. We
want to know about these international
arrangements. You know if they can enter into
arrangements with other countries and other
central banks and issue new money and credit —
they are literally a government unto itself.
The Fed is making appropriations that are off
the books and didn’t go through Congress. That
should be unconstitutional. They are making
agreements with other governments. That’s
treaty-making and we don’t even know about it.
They always say it is to maintain an orderly
financial system, but there is nothing orderly
about it. They created problems, and it is
something we deserve to know about.
Q.
Congress is considering various ways to
increase regulatory oversight of Wall Street. Do
you believe that could help alleviate the
severity of the financial boom and bust
cycles?
A.
No, it wouldn’t do a thing because it is a
distraction. The real problem is the
inflationary monetary policy of the Fed — you
have to deal with the problem in order to
correct it. I mean Congress is talking about
more and more regulations, but that just won’t
work.
In a market economy with a gold standard you
do have market regulations. Bad businesses and
bad banks – they go out of business. They would
never be all at one time. F.D.I.C. kind of
insurance would be private, banks would be rated
by a private company and when they made bad
loans, it would be known.
The better they ran their affairs, the lower
their insurance rates would be and people would
know every single day how a bank is doing,
rather than allowing every bank to hide behind
government guarantees.
Q.
You mention in the book that your ultimate
goal is to “repel legal tender laws and letting
everyone get into the business of the production
of money.” Can you explain what you mean by
that? It sounds kind of chaotic.
A.
This is kind of a theoretical argument,
because I follow what [Austrian economist
Friedrich] Hayek said in that you should have
competing currencies in one economy. The market
would decide if you use gold or silver or some
other things – anything to restrain the printing
press.
If we follow the Constitution, only gold and
silver could be legal tender, but today that is
not allowed and the only thing you can use is
Federal Reserve notes (dollars). That means you
get locked into the system.
Q.
Some argue that your view on returning the
United States to the gold standard is simplistic
and not applicable to today’s sophisticated and
interconnected financial system. How do you
respond to that?
A.
I think the system we have is not a very good
system and it is in the process of causing us a
lot of trouble. We had the biggest financial
bubble in the world just burst and the dollar
reserve standard has literally come to an end,
so I would say everything we’ve had, especially
since 1971, has been very, very impractical and
has not worked anyway.
Q.
So how close are you in convincing members
of Congress to “end the Fed”?
A.
They are not ready. They are only going to
study it when they see the collapse of the
dollar. Although the dollar is collapsing, it’s
not happening fast enough for them to think
about currency reform. They are talking about
financial system reform with all these
regulations that will make it worse, but they
aren’t anywhere close to dealing with the
currency issue. If they think they can double
the money supply in a year, they aren’t close to
talking about sound money.
That being said, I am excited that now at
least people are beginning to take a look at the
Federal Reserve. I am very positive about how
the college kids have taken to reading Austrian
economics. To me it is remarkable that 75
percent of the country said that we should limit
the Fed, when a couple years ago they didn’t
even think about it.
We now have every Republican on the audit
bill and 119 Democrats, so it is very positive
that attention is directed toward the Fed.
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