THE BIRTH OF THE FEDERAL RESERVE SYSTEM
LICKER than an eel in a bucket of soap suds" is a fair description of the accomplished financial accoucheurs who ushered this monster into legal existence. You must understand that the real object was to establish what was in truth and fact a Central Bank which would dominate and control currency issues and bank credits in the United States. To weld those chains upon American industry without appearing to do it was the object in view. It could be done only by encasing dirty hands of real pillage in the white gloves of a "Reserve System." The Invisible Empire must remain invisible. Visibility would defeat its object. The Money Masters had read history and knew that the American people stood four square against a Central Bank. If their monster of pillage were called a Central Bank they knew it would die in the legislative womb.
Two such attempts had been made and had resulted disastrously thusly. The first attempt was the First United States Bank. It was the child of Alexander Hamilton's astute brain. It began business on December 12, 1791. It met violent opposition from its birth. It was branded as a "Money Trust," struggled along with varying fortunes and finally died on March 3, 1811, when its charter expired—with its renewal vainly sought. American industry rebelled at the idea of a Central Bank domination. It savored too much of that aristocracy and oligarchy whose chains they had recently chiseled.
The second attempt to engraft a Central Bank on American industry was the Second Bank of the United States. It was chartered on April 10, 1816, and was a stormy petrel of finance. About it waged a running battle. It was from birth to death the center of a conflict. Against its domination American industry rebelled. Real producers of real wealth constantly fought this parasite of finance. Andrew Jackson was its bitter foe and it went out of existence during his administration "unwept, unhonored and unsung" except in the doleful dirges of the then Money Masters who mourned its demise. The Money Masters of those two eras read the handwriting on the wall. American industry would not endure a Central Bank and the Money Masters of 1914 read the same symbols. History was against them and the genius of American institutions was against them. Their idea of a Central Bank had never changed. It was the very core and center of their scheme to dominate American industry. But to "get it across" or to "put it over" they must re-christen the monster. Twice the people had violently repudiated the Central Bank banditry. Hence in the fertile brainery of predacity was born the idea of the Federal Reserve System—a camouflage, a deception and a mere cloak of Pecksniffian hypocrisy. A clever nation-wide propaganda was at once instituted with every "prop" put under it that wily astuteness could suggest. A subsidized press ballyhooed, touted and paeanized the proposed Federal Reserve System. It was hailed as the Moses which was going to lead America into the Promised Land of industrial freedom. It was paeanized as an absolutely new discovery in finance—when in truth and in fact it was one of predacity's oldest cards soiled in many a game. But it was varnished o'er and played again.
There wasn't to be any "Central Bank" you understand. The sponsors of this monster abhorred the idea of a "Central Bank." It was the furthest possible from their pure thoughts of altruistic finance! They were going to have twelve banks, each one established in a center of industry and catering to and upbuilding the industries in its regional zone. Each one was going to be a separate and distinct corporation absolutely disconnected from its eleven brethren. This idea was advertised, adulated, and saccharinely paeanized until America was lulled to sleep. For month after month this cone of chloroform was held over American citizens until the anesthetic took effect. Then came forth what was known as the Glass-Owen bill. The smoothness of its head sponsors' name was symbolic. The ground had been prepared for its reception. Propaganda seed had been diligently sown. Years of the most astute scheming and plotting of the brainiest schemers who ever schemed bore its fruit in the Glass-Owen bill. On rails greased by years of propaganda it slid into the legislative hopper, came through in an oil bath and went to President Wilson. Whether he was the deceived or the deceiver none but himself knows. But he painted the Federal Reserve System with his most magnificent verbal rainbow colors, prated of it as "the emancipator of credit," signed it in the midst of a coterie of sycophantic Pecksniffs and the pen whose strokes made it a law was religiously preserved!
Its real authors—who had spent years in weaving its phrases and scores of thousands of dollars in propagandizing for its passage—winked, smiled in their sleeves and prepared for pillage. The Federal Reserve System was born with a caul—concealing its grin of greed—and was brought into being by the most astute coterie of legislative accoucheurs who ever delivered a babe of legislation.
Here and now read just two of the sample promises made by the Money Masters at the birth of their monster. They told you that the Federal Reserve System would "prevent unfair and undue constriction of credits with its consequent paralyzing effect on business and on the productive energies of the nation." They told you that "men will not be thrown out of employment wholesale throughout the country by the fright of financial and commercial panic, but finance and commerce will be steady. Hundreds and thousands of men will not suddenly be thrown out of employment during these national waves of depression nor undue feverish buoyancy." Peg these specious promises in your brainery and compare them later on with the actual performances of this monster of depression with the Federal Reserve Board at Washington really functioning as a Central Bank.