Congressman McFadden on the Federal Reserve Corporation

Privatization has it's roots in the Federal Reserve System:

Remarks in Congress, 1934

Congressman McFadden's Speech On the Federal Reserve Corporation

Quotations from several speeches made on the Floor of the House of Representatives by the Honorable Louis T. McFadden of Pennsylvania. Mr. McFadden, due to his having served as Chairman of the Banking and Currency Committee for more than 10 years, was the best posted man on these matters in America and was in a position to speak with authority of the vast ramifications of this gigantic private credit monopoly. As Representative of a State which was among the first to declare its freedom from foreign money tyrants it is fitting that Pennsylvania, the cradle of liberty, be again given the credit for producing a son that was not afraid to hurl defiance in the face of the money-bund. Whereas Mr. McFadden was elected to the high office on both the Democratic and Republican tickets, there can be no accusation of partisanship lodged against him. Because these speeches are set out in full in the Congressional Record, they carry weight that no amount of condemnation on the part of private individuals could hope to carry.

The Federal Reserve-A Corrupt Institution

"Mr. Chairman, we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of these United States and the people of the United States out of enough money to pay the Nation's debt. The depredations and iniquities of the Fed has cost enough money to pay the National debt several times over.

"This evil institution has impoverished and ruined the people of these United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Fed and through the corrupt practices of the moneyed vultures who control it.

"Some people who think that the Federal Reserve Banks United States Government institutions. They are private monopolies which prey upon the people of these United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lender. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into states to buy votes to control our legislatures; there are those who maintain International propaganda for the purpose of deceiving us into granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.

"These twelve private credit monopolies were deceitfully and disloyally foisted upon this Country by the bankers who came here from Europe and repaid us our hospitality by undermining our American institutions. Those bankers took money out of this Country to finance Japan in a war against Russia. They created a reign of terror in Russia with our money in order to help that war along. They instigated the separate peace between Germany and Russia, and thus drove a wedge between the allies in World War. They financed Trotsky's passage from New York to Russia so that he might assist in the destruction of the Russian Empire. They fomented and instigated the Russian Revolution, and placed a large fund of American dollars at Trotsky's disposal in one of their branch banks in Sweden so that through him Russian homes might be thoroughly broken up and Russian children flung far and wide from their natural protectors.

Cont'd >

http://home.hiwaay.net/~becraft/mcfadden.html

I received this via email and read about half of it and thought it was interesting as a document regarding the history of the Federal Reserve (something I know little about). Didn't think about checking out the homepage because it was a document/record of a real historic event (so not subject to political bias). In retrospect, I should have checked it out more.

As regards its content, it certainly seems to reflect an attitude that has been carried forward by the rightwing, or maybe the libertarians. Knowing so little about this subject I haven't formed an opinion about the creation of the Federal Reserve. Is this Congressman's assessment of the Fed completely false/inaccurate?

Later in his career, McFadden became more explicit in his bigotry.

fiction on the Fed Reserve. The religious beliefs of the bankers doesn't interest me. It is the story behind the creation of the Fed Reserve that I would like to know more about. What struck me about it is the implications and effect of the Fed Reserve's private ownership. It does seem to be an early and successful effort toward privatization.

Is McFadden's account a "conspiracy theory" built on paranoia/bigotry or is there truth to it?

Secrets of the Temple: How the Federal Reserve Runs the Country.

..

I couldn't wade thru the whole thing.

As a general rule this sort of thing is the province of the far right. However William Jennings Bryan, that voice of the late 19th century rural populism which was in fact highly soicalistic, was just as opposed to central banking. (Bryan was by all measures, then and now on the political continuum, a socialist. Imagine. Famous now for his Fundamentalism he was also a socialist. The modern mind boggles) I've argued before here that despite the lefts of that period opposition to central banking it was their contribution to the reform movement led by TR which led to the Fed. This is perhaps a weak arguement but I'll stand by it.

The supply and availibility of money, and just as importantly credit, in the late 19th and early 20th centuries was understood to be under the control of the JP Morgan's and the financiers of Wall St. There was a large well of truth to this.

Bryan's calls were in essence a call for an expansive money and credit system. For the rural populists of the era it was thought that their economic problems were caused by a shortage of money. His call for silver coining was a simiplistic solution to that perceived problem. There was plenty of silver about, especially that flowing from the great Nevada mines so he wanted that put into circulation as money.

This horrified the financeers who wanted the hardest of hard money, gold backed money.

Underlying all this was the banking system. American banking was always a story of excess and collapse, with the collapses lingering far longer than the frenzied booms. Americans have always loved easy credit. One might say America was built on easy credit. Nothing is more popular.

The Fed was brought into being in order to make banks more stable. Less booms and thus fewer devasating busts. The method of acheiveing this was that the Federal Reserve system would regulate the QUALITY and level of bank assets. Over time this morphed into the concern with the QUANTITY of money. (Econ 102 tells how it is that money is created by lending in a fractional reserve system)

The far rights obsession with the Fed is based in part on the very constituionality of it. After all money was put into the hands of congress, not some quasi independent group of private banks. McFaddens ramblings over the worthlessness of Federal Reserve notes as well as the whole consitutional issue are not without merit. The important thing to know is that when the constition was written only the vauge outlines of modern money and credit were in view. All then was hard money.

The world changed. Rightly or wrongly the idea of money changed. The Fed, Americas central bank, was a practical solution to a changing reality.

I recommend JK Galbraiths 'Money' to start to get a handle on all this.

I mean not to praise the current Greenspan Fed. It is an ongoing disaster of possibly gigantic proportion in my opinion. That disaster is still to this day, by the populists of both the right and left, traced to the very concept of the Fed. While logically true I suppose a better way to look at it is that the system isn't at fault as much as the operation of the system. NO SYSTEM is perfect. NO SYSTEM will save us.

Fringe and not so fringe enemies of the Fed end up always calling for a return to hard money. Let me assure you that NOTHING could be more reactionary than that. If you consider yourself of the left and find yourself favoring a gold standard based money then you better take a break and study this stuff.

PS: Even I can make a case that the entire world of consumption excess and decadence that is America, and its attendent enviromental destruction, and even it's mad quest towards worldwide political/military/economic hegemony springs in the main from the inventions of modern American finance, of which the Fed is a lyncpin. I have no answer to how we might, nor how the worlds other 5 billion, might live if we suddenly found ourselves living again with some premodern money system.

I don't know WHAT the answers are, or where we might go from here. It does seem that much of the problems we find ourselves in come from abuses of the system (loopholes, blatant manipulation of or avoidance of existing laws, etc.), rather than the system itself. And there also seems to be few legal repercussions for these abuses.
Is there any system that can direct man's greed or inclination toward self interest?

As for "hard" currencies, I can't imagine they are the answer, but it is interesting that so many have returned to the security of these hard assets of late, as the dollar's vulnerability and weakness have risen and global instability is the rule rather than the exception. Perhaps it's just a temporary life raft.

the Federal Reserve and US politics. Now he's dead, I would
gather, so why not let him rest?