Chapter Eight: THE JEKYL ISLAND CONSPIRACY
In 1910 six prominent Wall Street financial men met on Jekyl Island to map plans for a central
banking system in the United
States. The Federal Reserve System originated in a conspiracy. A
"conspiracy" is defined legally as a
secret meeting for an illegal purpose. The meeting was secret, it involved
six persons and it was illegal..
.as we shall show later. The
six conspirators were:
Senator Nelson Aldrich, father-in-law of John D. Rockefeller, Jr. German banker Paul Warburg, of
the German bankers MM Warburg of
Hamburg and Kuhn Loeb in the United States; Henry P. Davison, partner in J. P. Morgan and Chairman
of Bankers Trust Company; Benjamin Strong, Vice President
of Bankers Trust; Frank
Vanderlip, Chairman of National City Bank; Charles D. Norton, President of First National
Bank. The last three banks
were in the Morgan group; Warburg
represented Kuhn-Loeb and Aldrich represented Rockefeller interests and the "Standard Oil
crowd." The Harriman interest in
Guaranty Trust had been absorbed into the Morgan group after the death of Harriman. 75 The Federal Reserve
Conspiracy These six
dominated wealth and financial power and had considerable political influence. The secret Jekyl Island meeting was actually described
in conspiratorial terms by one of
the participants: Despite my
views about the value to society of greater publicity for the affairs of corporations, there was an occasion, near
the close of 1910, when I was as
secretive, indeed as furtive, as any
conspirator. None of us who participated felt that we were conspirators; on the contrary we felt
we were engaged in a patriotic
work. We were trying to plan a mechanism that would correct the weaknesses of our banking system as revealed
under the strains and pressures of
the panic of 1907. I do not feel it is
any exaggeration to speak of our secret expedition to Jekyl Island as the occasion of the actual
conception of what eventually
became the Federal Reserve System. (1) After the 1907 panic plans were formulated to convince
the public of a "need"
for a central bank. The key at this point was Senator Nelson Aldrich, a wealthy businessman linked
to the Rockefeller family through
marriage of his daughter Abby to John D. Rockefeller Jr. Former Vice President Nelson
Rockefeller was a direct descendent of
this branch of the Rockefeller family. In the post-1907 panic era, Senator Aldrich headed a
Senate Monetary Commission which
toured Europe to discuss and study
European central banks and especially the German Reichsbank system. From this junket Aldrich emerged as the
Congressional expert on bank
planning. Few spotted his close links with the banking interests.
(2) Herbert L. Satterlee was
Morgan's son-in-law and, from the inside,
comments on Aldrich's close relations with the Money Trust 76 The Jekyl Island Conspiracy and planning for the Federal
Reserve System. Aldrich, according to
Satterlee, ...turned
to Mr. Morgan for advice and then during the next two years they were to spend many hours together working out
an orderly pattern for the banking
world of this country from coast to
coastP Again,
according to Satterlee, J. P. Morgan "lent him (Aldrich) Harry Davison (Morgan partner) to help
with details while Paul M.
Warburg, the Kuhn Loeb partner, also "put his service at
Senator Aldrich's disposal. "
(4) This triad -Morgan- Aldrich-Warburg - was the focal point for planning the introduction of central banking
to the United States. The remaining Jekyl Island
conspirators came on the scene later.
Frank Vanderlip (whom we have already quoted) of National City Bank was linked to the Rockefeller family by
marriage and came into the group
in early 1910 after receiving a letter from Stillman, founder and chairman of National City Bank. This
letter referred to a meeting
between Stillman and Aldrich in Europe on the central bank
question. From this letter we
learn that the conspirators used a code and that Aldrich's code name was "Zivil." In his book,
Vanderlip states: Mr.
Stillman wrote me that I should make everything else subservient to giving my whole time and thought to a thorough consideration
of the subject (i.e., the currency
plan) and to draft a bill for the new Congress without a Wall Street tag. (5) Above all the conspirators knew
they had to maintain absolute
secrecy. If any Wall Street name ever became attached to a central banking Federal Reserve bill it
would be the kiss of death. Not
only were code names adopted but individuals went to great lengths to avoid public knowledge of their
meetings and discussions. 77 The Federal Reserve Conspiracy Without any question if the
public in 1913 had known what we
know today the Federal Reserve Act would have no possibility at all of becoming law. On the question of public
suspicions of the close family
links in the group, for which the group claimed disinterested impartiality, Vanderlip noted: But would the electorate have
believed that? I question their
ability to do so. Just to give you a faint idea: Senator Aldrich
was the father-in-law of John D.
Rockefeller, Jr., and himself a very
rich man.Once I had written to Woodrow Wilson at Princeton, inviting him to speak at a dinner.
Wishing to impress him with the
importance of the occasion, I had mentioned that Senator Aldrich also had been invited to speak. My
friend Dr. Wilson had astonished
me by replying that he could not bring himself to speak on the same platform with Senator
Aldrich. He did come and make a
speech, however, after I had reported that Mr. Aldrich 's health would prevent him from appearing. Now
then, fancy what sort of
head-lines might have appeared over a story that Aldrich was conferring about new money legislation
with a Morgan partner (Davison)
and the president of the biggest bank (Vanderlip). (6) The National City Bank founded by
Stillman is significant because
one of its directors was Cleveland Dodge, the financial powerhouse and influence behind Woodrow
Wilson. Woodrow Wilson, who
was to sign the Federal Reserve Act into
law, was a deliberate creation of the Money Power, who was approved in the spring of 1912 at a weekend
meeting at Beechwood, the
Vanderlip estate at Scarborough on Hudson. According to one
observer, Wilson passed the test
because Vanderlip and William Rockefeller
discussed the
78 The
Jekyl Island Conspiracy role
of American capital abroad in front of Wilson. (7) This we shall describe in more detail later. The central intellectual figure
in the creation of the Federal
Reserve System was not an American but a German banker - Paul Moritz Warburg, a banker born in 1868 into
the Hamburg Oppenheim family.
Warburg's father was a partner in the M. M. Warburg banking house founded in 1798. Warburg's early
career was with Samuel Montagu
& Co. in London and the Banque Russe Pour he Commerce Etranger in Paris. In 1891 Warburg went
to work at the family bank in
Hamburg and became a partner in 1895. In 1902 he came to the United States as a partner in Kuhn Loeb, and
in spite of defective English,
began a campaign for a Federal Reserve System. The plan may be found in his pamphlets, "Defects
and Needs of our Banking System
since 1907" and "A plan for a modified central bank"
(1907). In 1910 Warburg proposed a
plan for a United Reserve Bank and much of this plan was embodied in the Federal Reserve System. These were the men who met in
secret on Jekyl Island to put
together the initial draft of the Federal Reserve Act. The secret meeting was recorded
by Frank Vanderlip: Since it
would be fatal to Senator Aldrich's plan to have it known that he was calling on anybody from Wall Street to
help him in preparing his report
and bill, precautions were taken that would have delighted the heart of James Stillman. We were told to
leave our last names behind us.
..that we should avoid dining together on
the night of our departure to come one at a time and as unobtru- sively as possible to the railroad
terminal on the New Jersey
littoral of the Hudson, where Senator Aldrich's private car would be in readiness, attached to the rear
end of a train for the South. 79 The Federal Reserve Conspiracy When I came to that car the
blinds were down and only slender
threads of amber light showed the shape of the windows. Once aboard the private car we began to
observe the taboo that had been
fixed on last names. We addressed each other as "Ben, " "Paul, " "Nelson, "
and "Abe. " Davison and I adopted even deeper disguises, abandoning our own first
names. On the theory that we were
always right, he became Wilbur and I became Orville, after those two aviation pioneers, the Wright
brothers. The servants and
the train crew may have known the
identities of one or two of us, but they did not know all, and it was the names of all printed together that
would have made our mysterious
journey significant in Washington, in Wall Street, even in London. Discovery, we knew, simply
must not happen, or else all our
time and effort would be wasted. If it were to be exposed publicly that our particular group had
gotten together and written a
banking bill, that bill would have no chance whatever of passage by Congress. (8) The last sentence says it all
from the vantage point of an insider -
this was a planned conspiracy. The American public would never hand over a monopoly of the money supply to
a small group. After all, the Sherman
Antitrust Act had just made monopoly in restraint of trade illegal and a money monopoly was even
less acceptable. To avoid
public knowledge, these bankers went skulking off to a remote island in the dead of night
using code names and disguises!
Vanderlip goes on to describe the secret meeting itself and that Vanderlip and Strong actually wrote the
so-called Aldrich report and the
bill presented to the Senate. What is interesting is the utter assurance
on the part of Vanderlip 80 The Jekyl Island
Conspiracy that the bankers
were acting in the interests of the country as a whole rather than in their own selfish
interests. What this group
proposed to do - and actually did do in 1913 - was replace gold and silver with a paper factory which they
controlled. How this could be
presented as a public-spirited act is probably beyond most readers. We were taken by boat from the mainland to Jekyl
Island and for a week or ten days
were completely secluded, without any
contact by telephone or telegraph with the outside. We had disappeared from the world onto a
deserted island. There were plenty
of colored servants but they had no idea who Ben and Paul and Nelson were; even Vanderlip, or
Davison, or Andrew, would have
meant less than nothing to them.
There we worked in the club-house - We returned to the North as secretly as we had gone South.
It was agreed that Senator Aldrich
would present the bill we had drafted to the Senate. It became known to the country as the
Aldrich Plan. Aldrich and Andrew
left us at Washington,and Warburg, Davison, Strong, and I returned to New York. Congress was about to meet; but
on a Saturday we got word in New
York that Senator Aldrich was ill, too ill to write an appropriate document to accompany his
plan. Ben Strong and I went on to
Washington and together we prepared that report. If what we had done then had been made known publicly, the
effort would have been denounced
as a piece of Wall Street chicanery,
which it certainly was not. Aldrich never was a man to be a mere servant of the so-called
money-interests. He was a con- 81 The Federal Reserve Conspiracy _ scientious, public
-spirited man. He had called on the four of us who had Wall Street addresses because he knew that we had
for years been studying aspects of
the problem with which it was his
public duty to deal.
The Aldrich plan written by Vanderlip and Strong did not get through Congress. It was shot down. An
ailing Senator Aldrich retired and
the Money Trust was forced to look elsewhere to get its plans through Congress. National City Bank director
Cleveland Dodge was a classmate
(1879, Princeton) of Woodrow Wilson. McCormick of the Harvester Trust was in the same Princeton Class.
By the early 1900s, Wilson, with
help from Cleveland Dodge, had become President of Princeton University and Dodge let it be known
that Wall Street considered Wilson
"presidential material."
A flattered Woodrow Wilson wrote journalist George Harvey in December, 1906 to identify "the
influential men who considered him as
presidential material." Harvey replied, "naming some of the
most influential bankers, utility
executives and conservative journalists in the country."' 9 ' Wilson, for all his public image of a teetering, owlish
professor, had one lesson down by
heart, that to get along, one has to go along. In March, 1907 George Harvey introduced Wilson to Thomas
Fortune Ryan, member of the copper
trust and a prominent financier. After this meeting, Wilson wrote a brief for the Wall Street
establishment in which he provided
academic support for the Trusts -incidentally, in total contradiction to his public statements. This Wall Street cabal, with the
aid of New Jersey political bosses,
pushed for Woodrow Wilson to become Governor of New Jersey in November, 1910. Within a few months, Cleveland
Dodge opened a bank account in New
York and an office at 42 Broadway to boom 82 The Jekyl Island Conspiracy Wilson into the Presidency. The
campaign bank account was opened
with a check for $1,000 from Cleveland Dodge. Dodge then provided funds to mail out the True American of
Trenton, New Jersey to 40,000
subscribers throughout the United States, followed by a regular two pages a week of promotional material on
Wilson For President.
Two-thirds of Wilson's campaign funds for the presidency came from just seven individuals, all Wall
Streeters and linked to the very
trusts Wilson was publicly denouncing. Wilson's election slogans promoted him as a man of peace and
against trusts and monopoly. These
were the very sources financing his campaign: (10) Cleveland H. Dodge $51,300 (Director: National City Bank, etc.); Henry Morgenthau (financier)
$20,000 Cyrus PL McCormick
(Harvester Trust) $12,500
Abram I. Elkus (Wall Street lawyer) $12,500 Frederick C. Penfield $12,000 (Philadelphia real estate) William F. McCombs $11,000 Charles R. Crane (Crane Co.,
Chicago) $10,000 Wilson
received the nomination and wrote to "dear Cleve" (Dodge) to exult, "I am so happy I
can hardly think! " (11) Wilson's
acceptance speech was written on board the Corona, Dodge's yacht, while they planned strategy for the
coming campaign. (12) In
brief, Woodrow Wilson was in the hands of the Money Trust, had lied to the American public about
his true position on the trusts and
Wall Street and betrayed the Jef-fersonian-Jacksonian tradition of
the Democratic Party. Wilson was elected President. And
the ballots had hardly been
counted when Wall Street bustled about to arrange "currency
reform." By early December,
1912, Colonel House had already talked with key members of Congress to
83 The
Federal Reserve Conspiracy
get them behind Wilson, and when Paul Warburg telephoned House on December 12, 1912, the Colonel told him
that the plan was ready. Added
House in his memoirs: "I knew the President-elect thought straight concerning the issue. "
(13) In March, Frank
Vanderlip talked with House, and two weeks later a group of bankers arrived at the White House with a
printed "currency
reform" bill for Wilson to present to Congress. House suggested that it would not be wise to
flaunt the power of the House of
Morgan with a pre-printed reform bill - so the Federal Reserve Act
was taken back to Wall Street and
a typewritten copy made from the printed
plan. (14) It now only remained to get the Federal Reserve Bill
through Congress. 84 The Jekyl Island
Conspiracy
Endnotes to Chapter Eight (1) Frank A. Vanderlip, President, First
National City Bank, From Farm Boy
to Financier (New York: Appleton, 1935), p. 210. (2) See Ferdinand Lundberg, America's 60 Families (New
York: Vanguard Press, 1937). (3) Herbert L. Satterlee, J.
Pierpont Morgan: An Intimate
Portrait (New York: Macmillan, 1939), p. 493. (4) Ibid., p. 550. (5) Frank Vanderlip, op. cit., p. 211. (6) Ibid., p. 212. (7) John K. Winkler, The First
Billion, (New York: Vanguard Press,
1934), pp. 209-211.
(8) Frank Vanderlip, op. cit., p. 213. (9) Ray Baker, Woodrow Wilson: Life and Letters (New
York, Doubleday, Page & Co.,
1927-39) vol 3, p. 365. (10)
Louise Overacker, Money in Elections (New York: Macmillan, 1932). (11) Ray Baker, Ibid. (12) op cit. p. 372. 85 The Federal Reserve Conspiracy (13) Charles Seymour, The
Intimate Papers of Colonel House (Boston,
New York: Houghton Mifflin Co., 1926-28), vol. I, p. 161. (14) Seymour, op cit. p. 161. 86 Chapter Nine THE MONEY TRUST CONS CONGRESS
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