CHAPTER 10 - The
Money Creators
A two hundred
million dollar gold credit had been arranged by a verbal understanding
between the international bankers, Benjamin Strong and Montagu Norman. It
was apparent by this time that the Federal Reserve System had other
interests at heart than the financial needs of American business and
industry. Great Britain's return to the gold standard was further
facilitated by an additional gold loan of a hundred million dollars from
J.P. Morgan Company. Winston Churchill, British Chancellor of the Exchequer,
complained later that the cost to the British government of this loan was
$1,125,000 the first year, this sum representing the profit to J.P. Morgan
Company in that time.
The matter of changing the discount rate, for instance, has never been
satisfactorily explained. Inquiry at the Federal Reserve Board in Washington
elicited the reply that "the condition of the money market is the prime
consideration behind changes in the rate." Since the money market is in New
York, it takes no imagination to deduce that New York bankers may be
interested in changes of the rate and often attempt to influence it.
Norman Lombard, in the periodical "World's Work" writes that:
"In their consideration and disposal of proposed changes of policy, the
Federal Reserve Board
should follow the procedure and ethics observed by our court of law.
Suggestions that there
should be a change of rate or that the Reserve Banks should buy or sell
securities may come from
anyone and with no formality or written argument. The suggestion may be made
to a Governor or
Director of the Federal Reserve System over the telephone or at his club
over the luncheon table,
or it may be made in the course of a casual call on a member of the Federal
Reserve Board. The
interests of the one proposing the change need not be revealed, and his name
and any suggestions
he makes are usually kept secret. If it concerns the matter of open market
operations, the public
has no inkling of the decision until the regular weekly statement appears,
showing changes in the
holdings of the Federal Reserve Banks. Meanwhile, there is no public
discussion, there is no
statement of the reasons for the decision, or of the names of those opposing
or favoring it."
The chances of the average citizen meeting a Governor of the Federal Reserve
System at his club are also slight.
The House Hearings on Stabilization of the Purchasing Power of the Dollar in
1928 proved conclusively that the
Federal Reserve Board worked in close
cooperation with the heads of European central banks, and that the
Depression of 1929-31 was planned at a secret luncheon of the Federal
Reserve Board and those heads of European central banks in 1927. The Board
has never been made responsible to the public for its decisions or actions.
The constitutional checks and balances seem not to operate in finance.
The true allegiance of the members of the Federal Reserve Board has always
been to the central bankers. The three features of the central bank, its
ownership by private stockholders who receive rent and profit for their use
of the nation's credit, absolute control of the nation's financial
resources, and mobilization of the nation's credit to finance foreigners,
all were demonstrated by the Federal Reserve System during the first fifteen
years of its operations.
Further demonstration of the international purposes of the Federal Reserve
Act of 1913 is provided by the "Edge Amendment" of December 24, 1919, which
authorizes the organization of corporations expressly for "engaging in
international foreign banking and other international or foreign financial
operations, including the dealing in gold or bullion, and the holding of
stock in foreign corporations." In commenting on this amendment, E.W.
Kemmerer, economist from Princeton University, remarked that:
"The federal reserve system is proving to be a great influence in the
internationalizing of American trade and American finance."
The fact that this internationalizing of American trade and American finance
has been a direct cause for involving us in two world wars does not disturb
Mr. Kemmerer. There is plenty of evidence to show how Paul Warburg used the
Federal Reserve System as the instrument for getting trade acceptance
adopted on a wide scale by American businessmen.
The use of trade acceptances, (which are the currency of international
trade) by bankers and corporations in the United States prior to 1915 was
practically unknown. The rise of the Federal Reserve System exactly
parallels the increase in the use of acceptances in this country, nor is
this a coincidence. The men who wanted the Federal Reserve System were the
men who set up acceptance banks and profited by the use of acceptances.
As early as 1910, the National Monetary Commission began to issue pamphlets
and other propaganda urging bankers and businessmen in this country to adopt
trade acceptances in their transactions. For three
years the Commission carried on this campaign, and the Aldrich Plan included
a broad provision authorizing the introduction and use of bankers'
acceptances into the American system of commercial paper.
The Federal Reserve Act of 1913 as passed by Congress did not specifically
authorize the use of acceptances, but the Federal Reserve Board in 1915 and
1916 defined "trade acceptance", further defined by Regulation A Series of
1920, and further defined by Series 1924. One of the first official acts of
the Board of Governors in 1914 was to grant acceptances a preferentially low
rate of discount at Federal Reserve Banks. Since acceptances were not being
used in this country at that time, no explanation of business exigency could
be advanced for this action. It was apparent that someone in power on the
Board of Governors wanted the adoptance of acceptances.
The National Bank Act of 1864, which was the determining financial authority
of the United States until November, 1914, did not permit banks to lend
their credit. Consequently, the power of banks to create money was greatly
limited. We did not have a bank of issue, that is, a central bank, which
could create money. To get a central bank, the bankers caused money panic
after money panic on the business people of the United States, by shipping
gold out of the country, creating a money shortage, and then importing it
back. After we got our central bank, the Federal Reserve System, there was
no longer any need for a money panic, because the banks could create money.
However, the panic as an instrument of power over the business and financial
community was used again on two important occasions, in 1920, causing the
Agricultural Depression, because state banks and trust companies had refused
to join the Federal Reserve System, and in 1929, causing the Great
Depression, which centralized nearly all power in this country in the hands
of a few great trusts.
A trade acceptance is a draft drawn by the seller of goods on the purchaser,
and accepted by the purchaser, with a time of expiration stamped upon it.
The use of trade acceptances in the wholesale market supplies short-term,
assured credit to carry goods in process of production, storage, transit,
and marketing. It facilitates domestic and foreign commerce. Seemingly,
then, the bankers who wished to replace the open-book account system with
the trade acceptance system were progressive men who wished to help American
import-export trade. Much propaganda was issued to that effect, but this was
not really the story.
The open-book system, heretofore used entirely by American business people,
allowed a discount for cash. The acceptance system discourages the use of
cash, by allowing a discount for credit. The open-book system also allowed
much easier terms of payment, with liberal extensions on the debt. The
acceptance does not allow this, since it is
a short-term credit with the time-date stamped upon it. It is out of the
seller's hands, and in the hands of a bank, usually an acceptance bank,
which does not allow any extension of time. Thus, the adoption of
acceptances by American businessmen during the 1920's greatly facilitated
the domination and swallowing up of small business into huge trusts, which
accelerated the crash of 1929.
Trade acceptances had been used to some extent in the United States before
the Civil War. During that war, exigencies of trade had destroyed the
acceptance as a credit medium, and it had not come back into favor in this
country, our people preferring the simplicity and generosity of the
open-book system. Open-book accounts are a single-name commercial paper,
bearing only the name of the debtor. Acceptances are two-name paper, bearing
the name of the debtor and the creditor. Thus they became commodities to be
bought and sold by banks. To the creditor, under the open-book system, the
debt is a liability. To the acceptance bank holding an acceptance, the debt
is an asset. The men who set up acceptance banks in this country, under the
leadership of Paul Warburg, secured control of the billions of dollars of
credit existing as open accounts on the books of American businessmen.
Governor Marriner Eccles of the Federal Reserve Board stated before the
House Banking and Currency Committee that: "Debt is the basis for the
creation of money."
Large holders of trade acceptances got the use of billions of dollars worth
of credit-money, besides the rate of interest charged upon the acceptance
itself. It is obvious why Paul Warburg should have devoted so much time,
money, and energy to getting acceptances adopted by this country's banking
machinery.
On September 4, 1914, the National City Bank accepted the first time-draft
drawn on a national bank under provisions of the Federal Reserve Act of
1913. This was the beginning of the end of the open-book account system as
an important factor in wholesale trade. Beverly Harris, vice-president of
the National City Bank of New York, issued a pamphlet in 1915 stating that:
"Merchants using the open account system are usurping the functions of
bankers."
In The New York Times on June 14, 1920, Paul Warburg, Chairman of the
American Acceptance Council, said:
"Unless the Federal Reserve Board puts itself heart and soul behind the
untrammeled
development of acceptances as a prime investment for banks of the Federal
Reserve Banks the
future safe and sound development of the system will be jeopardized."
This was a statement of the purpose of Warburg and his bunch who wanted
"monetary reform" in this country. They were out to get control
of all credit in the United States, and they got it, by means of the Federal
Reserve System, the acceptance system, and the lack of concern by the
citizens.
The First World War was a boon to the introduction of trade acceptances, and
the volume jumped to four hundred million dollars in 1917, growing through
the 1920s to more than a billion dollars a year, which culminated in a high
peak just before the Great Depression of 1929-31. The Federal Reserve Bank
of New York's charts show that its use of acceptances reached a peak in
November, 1929, the month of the stock market crash, and declined sharply
thereafter. The acceptance people by then had gotten what they wanted, which
was control of American business and industry. "Fortune Magazine" in
February of 1950 pointed out that:
"Volume of acceptances declined from $1,732 million in 1929 to $209 million
in 1940, because
of the concentration of acceptance banking in a few hands, and the
Treasury's low-interest
policy, which made direct loans cheaper than acceptance. There has been a
slight upturn since
the war, but it is often cheaper for large companies to finance imports from
their own coffers."
Continue chapter 10C
Foreword
to Secrets of the Federal Reserve
Chapter
1
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2 -
3 -
4 -
5 -
6 -
7 -
8 -
9 -
10 -
11 -
12 -
13 -
14
ADDENDUM
BIBLIOGRAPHY
BIOGRAPHIES
INDEX
REAL Freedom
Library
History of Banking Fraud:
The Coming Battle
By M. W. WALBERT
The
Coming Battle documents from Congressional records, newspaper reports
and writings by the founding fathers and others a chronology of events long
forgotten that shaped our fledgling nation from 1776 to 1899. Read about the
manipulation of our money and its supply, the intentional creation of
recessions, depressions and panics, manipulation of the stock markets, and
the demonetization of silver.
Secrets of the Federal Reserve
by Eustace Mullins
Eustace Mullins' carefully
researched and documented treatise picks up from Walbert's expose' of
control of the money supply and the economy and
brings it to the mid 1980's.
The
World Order
by Eustace Mullins
How control of the world's money has inexorably led to an ever tighter
grip on control of the world's people.
Brave New World
by Aldous Huxley
Huxley presents a dystopic view of a future
in which mind-control creates a harmonized society stratified into classes
suitably manipulated and deprived to carry out work tasks with a hive
mentality. A foreign element is inserted when a high ranking Alpha brings a
Native American from a Reservation and a new perspective on freedom gnaws at
the fabric of the propaganda matrix.
Propaganda
by Edward Bernays
Walter
Lippmann's book, Public Opinion, published in 1922, detailed the
study in which he and Edward Bernays were involved while in London during
the First World War. It had to do with painting pictures inside people's
heads, which were cunningly and deliberately designed by expert craftsmen to
mislead not only individuals but entire societies.
Pawns in the Game
by William Guy Carr
This is the classic expose' of the New World Order from a Commander in
the Canadian Navy through the first half of the 20th Century.
Commander Carr was introduced to the Hidden Hand early in his life and
pursuing its mysteries became a lifelong mission.
Social Credit
by CH Douglas
In every country of the world the global financial system has
repeatedly been brought to the Bar of
Public Opinion as the chief factor in world unrest, and there is little
doubt that the jury of We the People has confirmed the Verdict somewhat rhetorically
expressed by Mr. William Jennings Bryan in his famous election speech: "The
money power preys upon the nation in times of peace, and conspires against
it in times of adversity. It is more despotic than monarchy, more insolent
than autocracy, more selfish than bureaucracy. It denounces, as public
enemies, all who question its methods, or throw light upon its crimes. It
can only be overthrown by the awakened conscience of the nation."
Social Credit by C.H. Douglas can clarify the issues from which we can
move forward to create a financial system that is fair and equitable.
Final Warning: A History of the New World Order
by
by David
Allen Rivera
David Allen Rivera has assembled a very carefully written history that
can serve us well. To have been
ignored in the history books, by the colleges and
universities, the print and electronic media, and the entire
national and international discussion shows their power to control
the flow of information as much as they control the flow of money.
What they intend to do with this power and influence should be one
of the most vital topics of conversation.
An Independent Investigation of 9-11 and its Zionist Connection
by Dr. Albert Pastore
History
provides patterns that we can learn to recognize so that we can avoid
them. Properly presented, history provides any of us with
invaluable tools to help us see behind the illusions. No one who
is paying attention to the patterns and their application to today's
events would fail to miss the signals or the dog that fails to bark.
Uranium Wars by Leuren Moret
How control of the world's people has inexorably led to wider use of
depopulation methods which include spreading radioactivity in food,
water, air, and the human genome.
Taking Back Your Power
by Allen Aslan Heart
WHAT CAN YOU DO? Stop playing THEIR game. Take back
your power. Stop paying taxes that are not legal or lawful. Stop paying
bills you don't really owe. Debt Elimination! Stop using THEIR money. There ARE ways if you
open your mind and look for the gaps in their fences that keep the sheeple
in their pasture. Are you chattel or a real person? You are the one who
makes that choice.
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Secrets
of the Federal Reserve by Eustace
Mullins
