22. FED ACT OF 1913
During the Presidential campaign, the Democrats were careful to pretend to oppose the Aldrich Bill. As Rep. Louis McFadden, himself a Democrat as well as chairman of the House Banking and Currency Committee, explained it 20 years after the fact:
"The Aldrich bill was condemned in the platform … when Woodrow Wilson was nominated… The men who ruled the Democraic party promised the people that if they were returned to power there would be no central bank established here while they held the reins of government. Thirteen months later that promise was broken, and the Wilson administration, under the tutelage of those sinister Wall Street figures who stood behind Colonel House, established here in ourfree country the worm-eaten monarchical institution of the 'king's bank' to control us from the top downward, and to shackle us from the cradle to the grave."
Once Wilson was elected, Warburg, Baruch and company advanced a "new" plan, which Warburg named the Federal Reserve System. The Democratic leadership hailed the new bill, called the Glass-Owen Bill, as something radically different from the Aldrich Bill. But in fact, the bill was virtually identical in every important detail.
In fact, so vehement were the Democratic denials of similarity to the Aldrich Bill that Paul Warburg - the father of both bills - had to step in privately to reassure his paid iends in Congress that the two bills were virtually identical:
"Brushing aside the external differences affecting the 'shells,' we find the 'kernels ' of the two systems very closely resembling and related to one another."
But that admission was fo rprivate consumption only. Publicly, the Money Trust trotted out Senator Aldrich and Frank Vanderlip, the president of the Morgan/Rockefeller dominated National City Bank of New York and one of the Jekyll Island seven, to offer token opposition to the new Federal Reserve System.
Years later, however, Vanderlip admitted in the Saturday Evening Post that the two measures were virtually identical:
Saturday Evening Post,
February 9, 1935, p. 25,
"From Farmboy to Financier
Although the Aldrich Federal Reserve Plan was defeated when it bore the name Aldrich, nevertheless its essential points were all contained in the plan that finally was adopted."
As Congress neared a vote, they called Ohio attorney Alfred Crozier to testify. Crozier noted the similarities between the Aldrich Bill and the Glass-Owen Bill:
"The … bill grants just what Wall Street and the big bas for twenty-five years have been striving for - private instead of public control of currency. It [the Glass-Owen bill] does this as completely as the Aldrich Bill. Both measures rob the government and the people of all effective control over the public's money, and vest in the banks exclusively the dangerous power to make money among the people scarce or plenty."
Exactly. During the debate on the measure, Senators complained that the big banks were using their financial muscle to influence the outcome. "There are bankers in this country who are enemies of the public welfare," declared one Senator. What an understatement!
Despite the charges of deceit and corruption, the bill was finally rammed through the House and Senate on December 23, 1913, after many Senators and Representatives had left town for the Holidays, having been assured by the leadership that nothing would be done until long after the Christmas recess. On the day the bill was passed, Congressman Lindbergh prophetically warned his countrymen that:
"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 worst legislative crime of the ages is perpetrated by this banking bill."
On top of all this, only weeks earlier, Congress had finally passed a bill legalizing the income tax. Why was the income tax law important? Because bankers finally had in place a system which would run up a virtually unlited federal debt. How would the interest on this debt be repaid, never mind the principal? Remember, a privately-owned central bank creates the principal out of nothing. The federal government was small then. Up to then, it had subsisted merely on tariffs and excise taxes.
Just as with the Bank of England, the interest payments had to be guaranteed by direct taxation of the people. The Money Changers knew that if they had to rely on contributions from the states, eventually the individual state legislatures would revolt and either refuse to pay the interest on their own money, or at least bring political pressure to bear to keep the debt small.
It is interesting to note that in 1895 the Supreme Court had found a similar income tax law to be unconstitutional. The Supreme Court even found a corporate income tax law unconstitutional in 1909. As a result, in October, 1913 Senator Aldrich hustled a bill through the Congress for a constitutional amendment allowing income tax.
The proposed 16th Amendment to the Constitution was then sent to the state legislatures for approval, but some critics claim that the 16th Amendment was never passed by the necessary 3/4s of the states. In other words, the 16th Amendment may not be legal. But the Money Changers were in no mood to debate the fine points. Without the power to tax the people directly and bypass the states, the Federal Reserve Bill would be far less useful to those who wanted to drive America deeply into their debt.
A year after passage of the Federal Reserve Bill, Congressman Lindbergh explained how the Fed created what we have come to call the "Business Cycle" and how they use it to their advantage:
"To cause high prices, all the Federal Reserve Board will do will be to lower the rediscount rate…, producing an expansion of credit and a rising stock market; then when… business men are adjusted to these conditions, it can check… prosperity in mid-career by arbitrarily raising the rate of interest.
It can cause the pendulum of a rising and falling market to swing gently back and forth by slight changes in the discount rate, or cause violent fluctuations by a greater rate variation, and in either case it will possess inside information as to financial conditions and advance knowledge of the coming change, either up or down.
This is the strangest, most dangerous advantage ever placed in the hands of a special privilege class by any Government that ever existed.
They know in advance when to create panics to their advantage. They also know when to stop panic. Inflation and deflaion work equally well for them when they control finance…"
Congressman Lindbergh was correct on all points. What he didn't realize was that most European nations had already fallen prey to the private central bankers decades or even centuries earlier. But he also mentions the interesting fact that only one year later, the Fed had cornered the market in gold: According to Lindbergh, "Already the Federal Reserve banks have cornered the gold and gold certificates…"
But Congressman Lindbergh was not the only critic of the Fed. Congressman Louis McFadden, the Chairman of the House Banking and Currency committee from 1920 to 1931 remarked that the Federal Reserve Act brought about:
"A super state controlled by international bankers and international industrialists acting together to enslave the world for their own pleasure."
Notice how McFadden saw the international character of the stockholders of the Federal Reserve. Another chairman of the House Banking and Currency Committee in the 1960s, Wright Patman from Texas, put it this way:
"In the United States today we have in effect two governments … We have the duly constituted Government … Then we have an independent, uncontrolled and uncoordinated government in the Federal Reserve System, operating the money powers which are reserved to Congress by the Constitution."
Even the inventor of the electric light, Thomas Edison, joined the fray in criticizing the system of the Federal Reserve:
"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makesthe bond good, makes the bill good, also… It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, bu one promise fattens the userers and the other helps the people."
Three years after the passage of the Federal Reserve Act, even President Wilson began to have second thoughts about what he had unleashed during his first term in office.
"We have come to be one of the worst ruled, one of the most completely controlled governments in the civilized world - no longer a government offree opinion, no longer a government by … a vote of the majority, but a government by the opinion and duress of a small group of dominant men.
Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it."
Before his death in 1924, President Wilson realized the full extent of the damage he had done to America, when he sadly confessed:
"I have unwittlngly ruined my government."
So finally, the Money Changers, those who profit by creating and manipulating the amount of money in circulation, had their privately owned central bank installed again in America. The major newspapers (which they owned or heavily influenced through their advertising) hailed passage of the Federal Reserve Act of 1913, telling the public that "now depressions could be scientifically prevented." The fact of the matter was that now depressions could be scientifically initiated.
By bribery, deceitful political manipulation and abuse of their press influence and ownership, they had usurped the monetary function of government. The U.S. government was left with only trivial relics of its sovereign monetary power: the minting of coins (a tiny fraction ofthe money supply, but a debt-free one); the re-printing of Lincoln's U.S. notes (Greenbacks, but limited to $300,000,000 total); and issuing a limited number of gold and silver certificates.
As Mr. James Rand, former President of Remington Rand, Inc. well said:
"No government should permit such coercive power over its own credit to be held by any one group or class as the privately owned Federal Reserve System holds today.
No government should delegate to private interests the control over the purchasing power of money.
The issue must be faced and settled. There can be no complete restoration of confidence until the conflict between private and government control over money is ended."
The 5th Amencan Bank War ended in victory for the Money Changers and the defeat of the American people. In the interim, the Money Changers' grip has gradually tightened, hiding this history, propagandizing our people to support their various nefarious activities through their media control, and choking our liberties by degrees. Whether America will escape their tightening grip is an open question, but is increasingly unlikely.
Acknowledgement and credits
The Money Masters: How International Bankers Gained Control of America
Produced by Patrick S. J. Carmack
Directed by Bill Still
Royalty Production Company 1998