Creature From Jekyll Island by G. Edward полностью

Throughout this period, the demand by the System for government bonds and acceptances pushed interest rates down.1 As anticipated, people with gold then preferred to send it to London whereit could earn a higher yield, and America's gold supply began tomove abroad. Furthermore, as inflation began to eat its way into thepurchasing power of the dollar, the prices of American-made goodsbegan to rise in world markets making them less competitive; U.S.

exports began to decline; unemployment began to rise; low interestrates and easy credit led to speculation in the securities markets;and the system lunged full speed ahead toward the Great Crash of1929. But that part of the story must wait for another chapter.

The technician who actually drafted the final version of theFederal Reserve Act was H. Parker Willis. After the System was created, he was appointed as First Secretary of the Board of Governors.

By 1929, he had become disillusioned with the cartel and, in an article published in The North American Review, he wrote: In the autumn of 1926 a group of bankers, among whom was one with a world famous name, were sitting at a table in a Washington hotel. One of them raised the question whether the low discount rates of the System were not likely to encourage speculation. "Yes," replied the conspicuous figure referred to, "they will, but that cannot be helped. It is the price we must pay for helping Europe."2

There can be little doubt that the banker in question was J.P.

(Jack) Morgan, Jr. It was Jack who was imbued with Englishtradition from the earliest age, whose financial empire had its rootsin London, whose family business was saved by the Bank ofEngland, who spent six months out of every year of his later life asa resident of England, who had openly insisted that his junior partners demonstrate a "loyalty to Britain,"3 and who had directed theCouncil on Foreign Relations, the American branch of a secret society dedicated to the supremacy of British tradition and political 1- When an item is in demand, its price goes up. In the case of bonds and other interest-bearing debt instruments, the price is expressed in reverse of its interest yield. The higher the price, the lower the interest. In other words, the higher the price, the more one has to pay to obtain the same dollar return in interest. Therefore, when the Fed creates an artificial demand for bonds or commercial paper, such as acceptances, the interest yield on these items goes down, which makes them more costly as an investment.

2- "The Failure of the Federal Reserve," by H. Parker Willis, The North American Revieiu, May, 1929, p. 553.

3- Chernow, p. 167.

428 THE CREATURE FROM JEKYLL ISLAND

power. It is only with that background that one can fully appreciatethe willingness to sacrifice American interests. Indeed, "it is theprice we must pay for helping Europe."