Creature From Jekyll Island by G. Edward

The real significance of the journey to Jekyll Island and the creature that was hatched there was inadvertently summarized by the words of Paul Warburg's admiring biographer, Harold Kellock: Paul M. Warburg is probably the mildest-mannered man that ever personally conducted a revolution. It was a bloodless revolution: he did not attempt to rouse the populace to arms. He stepped forth armed simply with an idea. And he conquered. That's the amazing thing. A shy, sensitive man, he imposed his idea on a nation of a hundred million people.2

SUMMARY

The basic plan for the Federal Reserve System was drafted at a secret meeting held in November of 1910 at the private resort of J.P.

Morgan on Jekyll Island off the coast of Georgia. Those who attended represented the great financial institutions of Wall Street and, indirectly, Europe as well. The reason for secrecy was simple.

Had it been known that rival factions of the banking community had joined together, the public would have been alerted to the possibility that the bankers were plotting an agreement in restraint of trade—which, of course, is exactly what they were doing. What emerged was a cartel agreement with five objectives: stop the growing competition from the nation's newer banks; obtain a franchise to create money out of nothing for the purpose of lending; get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; get the taxpayer to pick up the cartel's inevitable losses; and convince Congress that the purpose was to protect the public. It was realized that the bankers would have to become partners with the politicians and that the structure of the cartel would have to be a central bank. The record shows that the Fed has failed to achieve its stated objectives. That is because those were never its true goals. As a banking cartel, and in terms of the five objectives stated above, it has been an unqualified success.

1. Sutton, Wall Street and F.D.R., p. 94.

2. Harold Kellock, "Warburg, the Revolutionist," The Century Magazine, May 1915, p. 79.

UPl/Belmar-

Henry P. Davison (L) an Charle

d

s D. Norton (R)

The seven men who attended the secret meetining on JekyiIsland, where the Federal Reserve System was conceived,represented an estimated one-fourth of the total wealth of th;entire world. They were:

1. Nelson W. Aldrich, Republican "whip" in the Senate,Chairman of the National Monetary Commission,

father-in-law to John D. Rockefeller, Jr.;

2. Henry P. Davison, Sr. Partner of J.P. Morgan Company 3. Charles D. Norton, Pres. of 1st National Bank of New Yark 4. A. Piatt Andrew, Assistant Secretary of the Treasury; Frank A. Vanderlip, President of the National City Bank of 5. New York, representing William Rockefeller.

6. Benjamin Strong, head of J.P. Morgan's Bankers TrustCompany, later to become head of the System;

Paul M. Warburg, a partner in Kuhn, Loeb & Company, Jekyll Island Museum

7.

Abraham Piatt Andrew

representing the Rothschilds and Warburgs in Europe.

Jekyll Island Museum

UPl/Bettmann Jekyll Island Museuf

Frank A. Vanderlip

Benjamin Strong Paul M. Warburg

Chapter Two

THE NAME OF THE

GAME IS BAILOUT

The analogy of a spectator sporting event as a

means of explaining the rules by ivhich taxpayers

are required to pick up the cost of bailing out the

banks ivhen their loans go sour.