Creature From Jekyll Island by G. Edward

with w o r d s w h i c h are emotionally n e u t r a l - p e r h a p s e v e n allur-i n g — t h e n half the battle w o u l d b e w o n . , t , The first decision, therefore, w a s to follow the practice a d o p t e d in Europe. Henceforth, the cartel w o u l d operate as a central bank.

A n d e v e n that w a s to be but a generic expression. F o r p u r p o s e s ofpublic relations and legislation, they w o u l d devise a n a m e thatw o u l d avoid the w o r d bank altogether and which w o u l d conjurethe i m a g e of the federal g o v e r n m e n t itself. F u r t h e r m o r e , to createthe impression that there w o u l d be no concentration of p o w e r , theyw o u l d establish regional branches of the cartel and m a k e that amain selling point. Stephenson tells us: " A l d r i c h entered thisdiscussion at Jekyll Island an ardent convert to the idea of a centralbank His desire w a s to transplant the system of one of the greatE u r o p e a n banks, say the Bank of England, bodily to A m e r i c a . " Butpolitical expediency required that such plans be concealed from thepublic. As John Kenneth Galbraith explained it: "It w a s his

[Aldrich's] thought to outflank the opposition by having n o t onecentral bank but m a n y . A n d the w o r d bank w o u l d itself bea v o i d e d . " 2

W i t h the exception of Aldrich, all of those present w e r ebankers, but only one w a s an expert on the E u r o p e a n m o d e l of acentral bank. Because of this knowledge, Paul W a r b u r g b e c a m e thedominant a n d guiding mind t h r o u g h o u t all of the discussions.

E v e n a casual perusal of the literature on the creation of the FederalReserve System is sufficient to find that he w a s , indeed, the cartel'smastermind. Galbraith says "... W a r b u r g has, with s o m e justice,been called the father of the s y s t e m . " 3 Professor E d w i n Seligman, am e m b e r of the international banking family of J. & W. Seligman,a n d head of the D e p a r t m e n t of E c o n o m i c s at Columbia University,writes that "... in its fundamental features, the Federal Reserve A c tis the w o r k of Mr. W a r b u r g m o r e than a n y other m a n in thec o u n t r y . " 4

2. Stephenson Galbraith, Money. Whence It Came, Where It Went (Boston: Houghton Mifflin, 1975), p. 122.

3. Galbraith, p. 123. .

4. The Academy of Political Science, Proceedings, 1914, Vol. 4, No. 4, p. 387.

18 THE CREATURE FROM JEKYLL ISLAND

THE REAL DADDY WARBUCKS

Paul Moritz Warburg was a leading member of the investment banking firm of M.M. Warburg & Company of Hamburg,