Chapter Ten:
THE FEDERAL RESERVE TODAY
Today
in the 1990s the Federal Reserve quietly, and
protected from any public examination or accounting, continues its never challenged monopoly of the money
supply. Its twofold function is: (a) to
regulate the flow of credit and money for specific economic objectives, and
(b) to supervise commercial banks, i.e.,
mostly itself. The central policymaking
body of the FRS is the Board of
Governors appointed by the President and confirmed by the Senate. Each of the 12 regional banks has its
own directors. These are divided into
three classes. Class A directors represent the
banking system, Class B directors represent industry and Class C, the public, supposedly. In fact, Class C directors have never
represented the public. It is not at all
unusual for a banker to serve a term as a Class A director then go on and serve another term as
a Class C director. The Federal Reserve
is a private system owned by the banks
(see figure below). Fed control over money is a private monopoly granted by Congress. It's so powerful that no Congressman dare
ask simple questions. 107
The Federal Reserve Conspiracy
Of course, there is good reason why the Fed doesn't want citizens poking around asking questions. It is a
moneymaking machine literally — and this
is freely admitted by the U. S. Government. Here is an official statement: Where does the Federal Reserve get the money
with which to create bank
reserves'? It doesn't "get"
the money, it creates it. When the
Federal Reserve writes a check it is creating money. This can result in an increase in bank reserves - a
demand deposit or in cash. If the
customer prefers cash he can demand Federal Reserve Notes and the Federal Reserve will have the
Treasury Department print them. The
Federal Reserve is a total moneymaking machine.
It can issue money or checks. And it never has a problem in making its checks good because it can obtain
$5 and $10 bills necessary to cover its
checks simply by asking the Treasury
Department to print them. (Source: Money Facts, published by the Committee on Banking and Currency, 1964, U.
S. Congress.) Back in 1913 when the
Federal Reserve Act was passed, the idea
of a Federal Reserve System - in effect a central bank - was promoted
to the American people by both bankers
and President Woodrow Wilson as an
institution outside the control and influence of bankers - on the grounds that monetary policy was too
important to be left in the hands of
private interests. However, in fact, the institution is completely dominated, and always has been, by major New
York bankers. The Fed lied! The very first meeting of the Federal
Reserve Bank of New York on October 5,
1914, was held in the offices of the Bank of Manhattan, 40 Wall Street, New York. Bank of 108
The Federal Reserve Today
Manhattan later merged with Chase National to become Chase Manhattan Bank. Skipping intervening history for lack of
space, we also find that in the
mid-1970s, the leading Class A director of the New York Fed was none other than Chairman of the Trilateral
Commission - David Rockefeller. David's
term expired in 1976 and he was replaced by the
chairman of Morgan Guaranty Trust. However, David's influence was perpetuated in two ways: by appointment of
Trilateral Paul Volcker as president of
the New York Federal Reserve Bank, a permanent position not subject to the necessity of re-election
at periodic intervals and appointment of
G. William Miller (member of the Chase Advisory
Board) as Chairman of the Federal Reserve System, replacing Trilateralist Arthur Burns. Moreover, others (of the nine) Federal
Reserve Bank of New York directors had
links to Chase Manhattan Bank. For example, the three Class B directors were Maurice F. Granville,
Chairman of the board of Texaco; William
S. Sneath, Chairman of the Board of Union Carbide; and John R. Mulhearn, President of New York
Telephone. Let's look briefly at the
career of Paul Volcker, former president of
the New York Federal Reserve Bank. In 30 years, Volcker has divided his time almost equally between the Federal
Reserve Bank, Chase Manhattan Bank and
sub-cabinet positions in Washington, D.C. - a
perfect example of the so-called "revolving door" and the
Trilateral objective of "blurring
the distinctions between public and private
institutions" for Trilateral advantage. Paul Volcker was born in 1927 in New Jersey.
His first degree is from Princeton, his
M. A. from Harvard and his post-graduate work
from the London School of Economics -that well known home of British socialism. In 1952, straight from the
London School of Economics, Volcker
joined the Federal Reserve Bank of New York as
an economist. He stayed for five years, until 1957, at which time Volcker moved 109
The Federal Reserve Conspiracy
from Liberty Street to become an economist for Chase Manhattan
Bank, where he stayed for four years, until
1961. In 1961, Volcker went to the
Treasury Department in Washington, thus completing the first round
of his three stop "revolving
door." Appointed as Deputy Undersecretary
for Monetary Affairs, he held that job just long enough to learn
the ropes in Washington, and returned to
New York, to Chase Manhattan Bank, as
Vice President in charge of Planning. After three years in that post, Volcker left in 1969 to become Undersecretary
for Monetary Affairs at the U. S.
Treasury Department. After five years, Volcker
completed the second round of his "revolving door" with
an appointment as President of the
Federal Reserve Bank of New York.
Volcker is also a member of the Council on Foreign Relations, the Rockefeller Foundation and the American Friends
of the London School of Economics. If Paul Volcker was a solitary phenomenon,
we could make no case for Trilateral
control of the Federal Reserve System. In fact, the Volcker phenomenon is one of a dozen parallel
situations. The Revolving Door Career
of Trilateral Paul Volcker 1952-57 Economist, Federal Reserve Bank of
New York 1957- 61 Economist, Chase
Manhattan Bank 1962-63 U.S. Treasury
1963-65 Deputy Undersecretary for Monetary Affairs, U.S. Treasury 1965-68 Vice President for
Planning, Chase Manhattan Bank 1969-74 Undersecretary for Monetary
Affairs, U.S. Treasury 1975 President,
Federal Reserve Bank of New York 110
The Federal Reserve Today The
Federal Reserve Board itself is appointed by the President. The original Federal Reserve Board
represented those very interests that
Woodrow Wilson assured the American public would not be represented in the Federal Reserve System.
The Chairman of the Board was William G.
M'Adoo, a prominent Wall Street figure, former
Secretary of the Treasury - and Woodrow Wilson's son-in-law. A key appointment was Paul M. Warburg, the German
banker brains behind the Federal Reserve
System. The Warburg family controlled the
Manhattan Bank. Also on the Board was Charles S. Hamlin, of the Carnegie Endowment for International Peace.
Another member of the original board was
banker W. P. G. Harding. Franklin D. Roosevelt's uncle, Frederic A. Delano, was Vice Governor
of the board - very appropriate because
the "liberal" Roosevelts came from an old-time New York banking family. John Skelton
Williams, President of the Richmond
Trust Company was another member. Thus, the initial makeup of the original Board of Governors
reflected the elite and the banking
interests and from that time on the Federal Reserve System has continued to reflect those interests. Trilateral Arthur M. Burns was Chairman of
the Board from 1970 to 1978, a dominant
voice who pretty much dictated Federal Reserve
policy. According to Board member and Trilateral Andrew Brimmer, "Arthur Burns has had a direct hand in
selecting every board member. "
Trilateral dominance of the domestic monetary system suggests we examine Trilateral world order objectives
for a possible linkage. Trilateral
policy makers and analysts fully realize that the world monetary system, with created money as
reserve assets, is in a state of
collapse. The Triangle Papers dealt with the world monetary systems (Towards a Renovated World Monetary System),
and was authored by Richard N.
Cooper 111
The Federal Reserve Conspiracy
(later Undersecretary of State for Economic Affairs). Motoo Kaji, Professor of Economics at Tokyo University
(author of a book in Japanese, Gendai No
Kokusai Kinyu - Contemporary International
Monetary Affairs) and Claudio Segre, a French banker with Compagnie Europeenne de Placements. Triangle Paper No. 1 identified two world
problems: (a), how to achieve full
employment without "rapid" inflation, and (b), how to combine "managed" national
economies into a "mutually beneficial
world economy." It is vital
to hold Trilateralist assumptions in mind. Trilateralists are not looking for a solution to the world
monetary problems: Trilateralists are
looking for a "solution" consistent with, and which will promote, their own objectives. These
objectives are: (a), a managed economy,
i.e., managed by Trilaterals; and (b), a "new world order" of these managed economies. Once again we find manipulation of a problem
to achieve Trilateral objectives. Almost
on a daily basis we find reflections of the
struggle to keep a hold on the U.S. monetary system in order to
achieve a world federal reserve
system. Fed Monetizes Foreign Debt In the early 1980s the Fed, through Paul
Volcker, conned Congress into another
vast expansion of monetary credit through
monetization of foreign debt instruments. The so-called Depository Institutions
Deregulation and Monetary Control Act of
1980 is a total misnomer. In practice it brings all banks under Fed control whether they like it or not
and gives the Fed power to vastly
increase fiat money by monetizing foreign debt, much of it worthless (see attached reproduction from the
Bill). Once again the Fed did
everything possible to avoid publicity.
Only one Congressman, Dr. Ron Paul, spotted the clause to monetize foreign debt. To avoid any publicity,
the 112 The Federal Reserve Today Chairman of the Banking Committee quickly
agreed to Paul's request to remove the
clause: "You want it removed? We'll take it out." Then we get a repeat of the unconstitutional
conduct surrounding the 1913 FRS Act.
The House voted for the Bill without the clause - but in Conference Committee it was quietly
re-inserted and became part of the Act
as finally approved by both Houses. We doubt any Congressman knew what was included in the
bill as finally passed - that's the
influence of the Fed today. Quietly,
without fanfare - and with the vast bulk of citizens unaware - the world bankers have been
building an international money machine:
an international Federal Reserve System with power to control the world's financial and economic
system. The elements of this global
money machine can be traced back to the
League of Nations and the Bank of International Settlements in the 1920s. After World War Two the International
Money Fund and the World Bank were
instituted to globalize credit and loans.
Then in the late 1950s came the Eurodollar market, now a vast international market dealing in deposits and
credits denominated in dollars outside
the United States. The Eurodollar system may in the light of history come to be seen as a first
step in a global dollar system.
Eurodollars are dealt in by banks not resident in the U.S. and by institutions not subject to U.S. banking regulations
and restrictions. Paul A. Volcker,
former Fed Chairman, has made the role of
appointments to the Federal Reserve Board clear, - to support the Chairman's policy. In reference to Clinton appointment Alan
Blinder, Volcker commented: I think a vice chairman has a responsibility
for supporting policy in public
statements. If he has 113 The Federal Reserve Conspiracy any real difference of opinion at the end of
the day that shouldn 't be disguised but
as much as possible he should support the
institution. In brief, the
policy created by New York bankers should prevail, whatever the personal opinions of the Vice Chairman
of the Board or any lesser Director.
Which is about as close to a closed shop monopoly as one can get. In replying to criticism that he spoke out
too much, Alan Blinder made a revealing
comment: "When we take actions, they are not reversible by any other body of government..."
New York Times, September 26, 1994. So here we have it. The Federal Reserve is a
private monopoly of money credit created
by Congress under highly questionable
circumstances which is beholden to the Chairman of the Board and whose decisions cannot be changed by
Government or anyone else. A free
society under the rule of law? The United States has quietly become a hostage to a handful of
international bankers. And just dare any
Congressman challenge Fed authority!
114 The Federal Reserve
Today Federal Reserve Bank of San
Francisco Claims "Some people think
we're a branch of the Government We're not
We're the banks' Bank. "
This confirms our discussion in this book. July 16, 1979- £23 CattPtiuMtdRU P->1
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