Creature From Jekyll Island by G. Edward полностью

Creature moved into its final lair in 1913 and has

snorted and thrashed about the landscape ever

since. If we wish to know if it is a creature of

service or a beast of prey, we merely have to look

at what it has done. And, after the test of all those

years, we can be sure that what it has done, it will

continue to do. Or, to use the Biblical axiom, a tree

shall be known by the fruit it bears. Let us now

examine the harvest.

Chapter Twenty

THE LONDON

CONNECTION

The rise of the House of Morgan; Morgan's ties

with England and the House of Rothschild; the

connection between the Federal Reserve System

and the Bank of England; the Fed's decision to

inflate American dollars to assist the ailing

British economy.

The period between the Civil War and the enactment of the Federal Reserve System was one of great economic volatility and no small measure of chaos. The National Banking Acts of 1863-65

established a system of federally chartered banks which were given significant privilege and power over the monetary system. They were granted a monopoly in the issuance of bank notes, and the government agreed to accept those notes for the payment of taxes and duties. They were allowed to back this money up to ninety per cent with government bonds instead of gold. And they were guaranteed that every bank in the system would have to accept the notes of every other bank at face value, regardless of how shaky their position. The net effect was that the banking system of the United States after the Civil War, far from being free and unregulated as some historians have claimed, was literally a halfway house to central banking.

The notion of being able to generate prosperity simply by creating more money has always fascinated politicians and businessmen, but at no time in our history was it more in vogue than in the second half of the nineteenth century. The nation had gone mad with the Midas complex, a compulsion to turn everything into money through the magic of banking. Personal checks gradually had become accepted in commerce just as readily as bank notes, and the banks obliged their customers by entering into their passbooks just as many little numbers as they cared to "borrow." As Groseclose 408 THE CREATURE FROM JEKYLL ISLAND

observed: "The manna of cheap money became the universal cry, and as with the Israelites, the easier the manna was acquired, the louder became the complaint, the less willing the people to struggle for it."1

The prevailing philosophy of that time was aptly expressed by Jay Cooke, the famous financier who had marketed the huge Civil War loans of the federal government and who now was raising $100

million for the Northern Pacific Railroad. Cooke had published a pamphlet which was aptly summarized by its own title: How Our National Debt May Be a National Blessing. The Debt is Public Wealth, Political Union, Protection of Industry, Secure Basis for National Currency. "Why," asked Cooke, "should this Grand and Glorious country be stunted and dwarfed—its activities chilled and its very life blood curdled by these miserable 'hard coin' theories—the musty theories of a bygone age."2 As it turned out, however, the chilling and curdling came, not from the musty hard-coin theories of the past, but from the glittering easy-money theories of the present. The Northern Pacific went bankrupt and, as the mountain of imaginary money invested in it collapsed back into nothing, Cooke's giant investment firm disappeared along with it, triggering the panic of 1873 as it went. Matthew Josephson writes:

"All about the failure of Jay Cooke!" newsboys hawked throughoutthe country....