The 1930s, Congressional Expose, excerpted from the book The Secrets of the Federal Reserve by Eustace Mullins Bankers Research Institute, 1983, paperback (originally published in 1952 as "Mullins on the Federal Reserve")

The 1930s,
Congressional Expose

excerpted from the book

The Secrets of the Federal Reserve

by Eustace Mullins

Bankers Research Institute, 1983, paperback

(originally published in 1952 as "Mullins on the Federal Reserve")

p153
During this tragic period [the Depression], chairman Louis McFadden of the House Banking and Currency Committee continued his lone crusade against the "London Connection" which had wrecked the nation. On June 10, 1932, McFadden addressed the House of Representatives:

"Some people think the Federal Reserve banks are United States Government institutions. They are not government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers. The Federal Reserve banks are the agents of the foreign central banks. Henry Ford has said, 'The one aim of these financiers is world control by the creation of inextinguishable debts.' The truth is the Federal Reserve Board has usurped the Government of the United States by the arrogant credit monopoly which operates the Federal Reserve Board and the Federal Reserve Banks."

On January 13, 1932, McFadden had introduced a resolution indicting the Federal Reserve Board of Governors for "Criminal Conspiracy".

"Whereas I charge them, jointly and severally, with the crime of having treasonably conspired and acted against the peace and security of the United States and having treasonably conspired to destroy constitutional government in the United States. Resolved, that the Committee on the Judiciary is authorized and directed as a whole or by subcommittee to investigate the official conduct of the Federal Reserve Board and agents to determine whether, in the opinion of the said committee, they have been guilty of any high crime or misdemeanor which in the contemplation of the Constitution requires the interposition of the Constitutional powers of the House."

No action was taken on this Resolution. McFadden came back on December 13, 1932 with a motion to impeach President Herbert Hoover. Only five Congressmen stood with him on this, and the resolution failed. The Republican majority leader of the House remarked, "Louis T. McFadden is now politically dead."

On May 23, 1933, McFadden introduced House Resolution No. 158, Articles of Impeachment against the Secretary of the Treasury, two Assistant Secretaries of the Treasury, the Federal Reserve Board of Governors, and officers and directors of the Federal Reserve Banks for their guilt and collusion in causing the Great Depression. "I charge them with having unlawfully taken over 80 billion dollars from the United States Government in the year 1928, the said unlawful taking consisting of the unlawful recreation of claims against the United States Treasury to the extent of over 80 billion dollars in the year 1928, and in each year subsequent, and by having robbed the United States Government and the people of the United States by their theft and sale of the gold reserve of the United States."

The Resolution never reached the floor. A whispering campaign that McFadden was insane swept Washington, and in the next Congressional elections, he was overwhelmingly defeated by thousands of dollars poured into his home district of Canton, Pennsylvania.

p155
[Franklin] Roosevelt owed his political career to a fortuitous circumstance. As Assistant Secretary of the Navy during World War 1, because of old school ties, he had intervened to prevent prosecution of a large ring of homosexuals in the Navy which included several Groton and Harvard chums. This brought him to the favorable attention of a wealthy international homosexual set which travelled back and forth between New York and Paris, and which was presided over by Bessie Marbury, of a very old and prominent New York family. Bessie's "wife", who lived with her for a number of years, was Elsie de Wolfe, later Lady Mendell in a "manage de convenance' the arbiter of the international set. They recruited J.P. Morgan's youngest daughter, Anne Morgan, into their circle, and used her fortune to restore the Villa Trianon in Paris, which became their headquarters. During World War I, it was used as a hospital. Bessie Marbury expected to be awarded the Legion of Honor by the French Government as a reward, but J.P. Morgan, Jr., who despised her for corrupting his youngest sister, requested the French Government to withhold the award, which they did. Smarting from this rebuff, Bessie Marbury threw herself into politics, and became a power in the Democratic National Party. She had also recruited Eleanor Roosevelt into her circle, and, during a visit to Hyde Park, Eleanor confided that she was desperate to find something for "poor Franklin" to do, as he was confined to a wheelchair, and was very depressed.

"I know what well do," exclaimed Bessie. "We'll run him for Governor of New York!" Because of her power, she succeeded in this goal, and Roosevelt later became President.

p155
Franklin D. Roosevelt himself was an international banker of ill repute, having floated large issues of foreign bonds in this country in the 1920s. These bonds defaulted, and our citizens lost millions of dollars, but they still wanted Mr. Roosevelt as President. The New York Directory of Directors lists Mr. Roosevelt as President and Director of United European Investors, Ltd., in 1923 and 1924, which floated many millions of German marks in this country, all of which defaulted. Poor's Directory of Directors lists him as a director of The International Germanic Trust Company in 1928. Franklin D. Roosevelt was also an advisor to the Federal International Banking Corporation, an Anglo-American outfit dealing in foreign securities in the United States.

Roosevelt's law firm of Roosevelt and O'Connor during the 1920s represented many international corporations. His law partner, Basil O'Connor, was a director in the following corporations:

Cuban-American Manganese Corporation, Venezuela-Mexican Oil Corporation, Honduras Timber Corporation, Federal International Corporation, West Indies Sugar Corporation, American Reserve Insurance Corporation, Warm Springs Foundation. He was director in other corporations, and later head of the American Red Cross.

When Franklin D. Roosevelt took office as President of the United States, he appointed as Director of the Budget James Paul Warburg, son of Paul Warburg, and Vice President of the International Acceptance Bank and other corporations. Roosevelt appointed as Secretary of the Treasury W.H. Woodin, one of the biggest industrialists in the country, Director of the American Car and Foundry Company and numerous other locomotive works, Remington Arms, The Cuba Company, Consolidated Cuba Railroads, and other big corporations. Woodin was later replaced by Henry Morgenthau, Jr., son of the Harlem real estate operator who had helped put Woodrow Wilson in the White House. With such a crew as this, Roosevelt's promises of radical social changes showed little likelihood of fulfillment. One of the first things he did was to declare a bankers' moratorium, to help the bankers get their records in order.

World's Work says:

"Congress has left Charles G. Dawes and Eugene Meyer, Jr. free to appraise, by their own methods, the security which prospective borrowers of the two billion dollar capital may offer".

Roosevelt also set up the Securities Exchange Commission, to see to it that no new faces got into the Wall Street gang...

p157
Senator Robert L. Owen, testifying before the House Committee on Banking and Currency in 1938 said:

"I wrote into the bill which was introduced by me in the Senate on June 26, 1913, a provision that the powers of the System should be employed to promote a stable price level, which meant a dollar of stable purchasing, debt-paying power. It was stricken out. The powerful money interests got control of the Federal Reserve Board through Mr. Paul Warburg, Mr. Albert Strauss, and Mr. Adolph C. Miller and they were able to have that secret meeting of May 18, 1920, and bring about a contraction of credit so violent it threw five million people out of employment. In 1920 that Reserve Board deliberately caused the Panic of 1921. The same people, unrestrained in the stock market, expanding credit to a great excess between 1926 and 1929, raised the price of stocks to a fantastic point where they could not possibly earn dividends, and when the people realized this, they tried to get out, resulting in the Crash of October 24, 1929".

Senator Owen did not go into the question of whether the Federal Reserve Board could be held responsible to the public. Actually, they cannot. They are public officials who are appointed by the President, but their salaries are paid by the private stockholders of the Federal Reserve Banks.

Governor W.P.G. Harding of the Federal Reserve Board testified in 1921 that:

"The Federal Reserve Bank is an institution owned by the stockholding member banks. The Government has not a dollar's worth of stock in it".

However, the Government does give the Federal Reserve System the use of its billions of dollars of credit, and this gives the Federal Reserve its characteristic of a central bank, the power to issue currency on the Government's credit. We do not have Federal Government notes or gold certificates as currency. We have Federal Reserve Bank notes, issued by the Federal Reserve Banks, and every dollar they print is a dollar in their pocket.

W. Randolph Burgess, of the Federal Reserve Bank of New York, stated before the Academy of Political Science in 1930 that:

"In its major principles of operation the Federal Reserve System is no different from other banks of issue, such as the Bank of England, the Bank of France, or the Reichsbank".

p159
The Banking Act of 1935 repealed the clause of the Glass-Steagall Banking Act of 1933, which had provided that a banking house could not be on the Stock Exchange and also be involved in investment banking.

... When the provision that banks could not be involved in investment banking and operate on the Stock Exchange was repealed in 1935, Carter Glass, originator of that provision, was asked by reporters:

"Does that mean that J.P. Morgan can go back into investment banking?"

"Well, why not?" replied Senator Glass. "There has been an outcry all over the country that the banks will not make loans. Now the Morgans can go back to underwriting."

Because that provision was unfavorable to them, the bankers had simply clamped down on making loans until it was repealed.

p161
Senator Robert L Owen [at the Gold Reserve hearings of 1934]

"The people did not know the Federal Reserve Banks were organized for profit-making. They were intended to stabilize the credit and currency supply of the country. That end has not been accomplished... The Federal Reserve men are chosen by the big banks, through discreet little campaigns, and they naturally follow the ideals which are portrayed to them as the soundest from a financial point of view."

p162
Governor Marriner Eccles, before the House Banking and Currency Committee on June 24, 1941
said:

"Money is created out of the right to issue credit-money."

Turning over the Government's credit to private bankers in 1913 gave them unlimited opportunities to create money.

The Federal Reserve System could also destroy money in large quantities through open market operations. Eccles said, at the Silver Hearings of 1939:

p162
Governor Marriner Eccles, before the House Banking and Currency Committee on September 30, 1940

"If there were no debts in our money system, there would be no money."

p164
Governor Marriner Eccles testimony [before the House Banking and Currency Committee] exposed the heart of the money machine which Paul Warburg revealed to his incredulous fellow bankers at Jekyll Island in 1910. Most Americans comment that they cannot understand how the Federal Reserve System operates. It remains beyond understanding, not because it is complex, but because it is so simple. If a confidence man comes up to you and offers to demonstrate his marvelous money machine, you watch while he puts in a blank piece of paper, and cranks out a $100 bill. That is the Federal Reserve System. You then offer to buy this marvelous money machine, but you cannot. It is owned by the private stockholders of the Federal Reserve Banks, whose identities can be traced partially, but not completely, to "the London Connection."

... the most incredible part of the Federal Reserve operation and one which is difficult for anyone to understand [is] how can any American citizen grasp the concept that there are people in this country who have the power to make an entry in a ledger that the government of the United States now owes them one billion dollars, and to collect the principal and interest on this "loan".

p164
Congressman Wright Patman about the Federal Reserve, in "The Primer of Money"

"The cash, in truth, does not exist and has never existed. What we call 'cash reserves' are simply bookkeeping credits entered upon ledgers of the Federal Reserve Banks. The credits are created by the Federal Reserve Banks and then passed along through the banking system."

p165
Congressman Wright Patman about the Federal Reserve, (Money Facts, House Banking and Currency Committee, 1964)

"The dollar represents a one dollar debt to the Federal Reserve System. The Federal Reserve Banks create money out of thin air to buy Government bonds from the United States Treasury, lending money into circulation at interest, by bookkeeping entries of checkbook credit to the United States Treasury. The Treasury writes up an interest bearing bond for one billion dollars. The Federal Reserve gives the Treasury a one billion dollar credit for the bond, and has created out of nothing a one billion dollar debt which the American people are obligated to pay with interest."

... "Where does the Federal Reserve system get the money with which to create Bank Reserves? Answer. It doesn't get the money, it creates it. When the Federal Reserve writes a check, it is creating money. The Federal Reserve is a total moneymaking machine. It can issue money or checks."

p166
Milton Friedman, Newsweek, May 2, 1983

"The Federal Reserve's major function is to determine the ) money supply. It has the power to increase or decrease the money supply at any rate it chooses."

p167
Senate Document No 23, presented on January 24, 1939

"The Government should create, issue and circulate currency and credit needed to satisfy the spending power of the Government and the buying power of consumers. The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity."

p167
Governor Marriner Eccles at Hearings before the House Committee on Banking a Currency on June 24, 1941

"The banks create money when they make loans and investments."

p167
Governor Marriner Eccles at Hearings before the House Committee on Banking a Currency on June 24, 1941

"If there were no debts in our money system, there wouldn't be any money."

p168
Governor Marriner Eccles at Hearings before the House Committee on Banking a Currency on June 24, 1941

"[Monetization of the public debt [means the Federal Reserve] bank creating money by the purchase of Government securities. All money is created by debt-either private or public debt."

p168
Secretary of the Treasury Anderson, at the Hearings before the House Committee on Banking a Currency on June 24, 1941

"Banks are different from other lending institutions. When a savings association, an insurance company, or a credit union makes a loan, it lends the very dollar that its customers have previously paid in. But when a bank makes a loan, it simply adds to the borrower's deposit account in the bank by the amount of the loan. The money is not taken from anyone. It is new money, recreated by the bank, for the use of the borrower."

p171
a well-known economist about Paul Volker's appointment as chairman of the Federal Reserve Board of Governors

"Volcker's selection has been by far the worst. Carter has put Dracula in charge of the blood bank. To us, it means a crash and depression in the 80s is more certain than ever."

p172
Who was [Paul] Volcker, that his appointment could have such an effect on the stock market and the value of the dollar in foreign exchange? He represented the most powerful houses of "the London Connection:' Brown Brothers Harriman, and the London houses which directed the Rockefeller empire. On July 29, 1979, The Times had said of Volcker, "New Man Will Chart His Own Course".

Volcker's background shows that this was nonsense. His course has always been charted for him by his masters in London. He attended Princeton, obtained an M.A. at Harvard, and went to the London School of Economics 1951-52, the banker's graduate school. He then came to the Federal Reserve Bank of New York as an economist from 1952-57, economist at Chase Manhattan Bank, 1957-61, with Treasury Department 1961-65, as deputy under secretary for monetary affairs, 1963-65, and under secretary for monetary affairs, 1969-74. He then became President of the Federal Reserve Bank of New York from 1975-79, when Carter, at the behest of Robert Roosa and David Rockefeller, appointed him Chairman of the Federal Reserve Board of Governor. He was succeeded as President of Federal Reserve Bank of New York by Anthony Solomon...

... Behind Volcker and Solomon stands Robert Roosa, Secretary of the Treasury in Carter's shadow cabinet, and representing Brown Brothers Harriman, the Trilateral Commission, the Council on Foreign Relations, the Bilderbergers, and the Royal Economic Institute. He is a trustee of the Rockefeller Foundation", and a director of Texaco and American Express companies. Dr. Martin Larson points out that "The international consortium of financiers known as the Bilderbergers, who meet annually in profound secrecy to determine the destiny of the western world, is a creature of the Rockefeller-Rothschild alliance... Larson also states that "The Rockefeller interests work in close alliance with the Rothschilds and other central banks."

p173

In reality, [Paul] Volker is more of a politician than an economist. After attending the London School of Economics, and finding out who issues the orders of the international financial community, Volcker has ever since played the game. Not once has he failed to carry out the orders of the "London Connection".

Can it really be possible that "The London Connection" exists, and that men like Volcker and Solomon receive their instructions, in however devious or indirect a manner, from foreign bankers.

p174
The direct line which leads from the participants in the Jekyll Island Conference of 1910 to the present day is illustrated by a passage from "A Primer on Money ", Committee on Banking and Currency, U.S. House of Representatives, 88th congress, 2nd session, August 5, 1964, p. 75

"The practical effect of requiring all purchases to be made through the open market is to take money from the taxpayer and give it to the dealers. It forces the Government to pay a toll for borrowing money. There are six 'bank' dealers: First National City Bank of New York; Chemical Corp. Exchange Bank, New York, Morgan Guaranty Trust Co., New York, Bankers Trust of New York, First National Bank of Chicago, and Continental Illinois Bank of Chicago."

Thus the banks which receive a "toll" on all money borrowed by the Government of the United States are the same banks which planned the Federal Reserve Act of 1913.

p175
What of "the London Connection"? Does it still exist, and is it still dictating the economic destiny of the United States? The Washington Post, May 19, 1983, carried a story datelined Nairobi, Kenya, noting the meeting of the African Development Bank. "The British merchant bank, Morgan Grenfell and a syndicate of the United States, Kuhn Loeb, Lehman Brothers International, the French Lazard Freres and Britain's Warburg are discreetly acting as financial advisors to about ten debt-plagued African states."

There are the same names we encountered in 1914, still managing the finances of the world, with profits for themselves but with disastrous results for everyone else.

p176
The Nation magazine, December 11, 1982, commenting on economic problems

"The blame for all this lies at the door of the Federal Reserve System working as usual on behalf of the international banking system."

p177
Federal Reserve Directors: A Study of Corporate and Banking Influence [ from the House of Representatives Committee on Banking, Currency and Housing, August 1976 ... details public policy functions of the Federal Reserve District Banks, how directors are selected, who, is selected, the public relations lobbying factor, bank domination and bank examination, and corporate interlocks with Reserve banks.

in the Foreword to the study, Chairman Henry S. Reuss, (D-Wis) wrote:

"This Committee has observed for many years the influence of private interests over the essentially public responsibilities of the Federal Reserve System.

As the study makes clear, it is difficult to imagine a more narrowly-based board of directors for a public agency than has been gathered together for the twelve banks of the Federal Reserve System.

Only two segments of American society-banking and big business have any substantial representation on the boards, and often even these become merged through interlocking directorates...

... The big business and banking dominance of the Federal Reserve System cited in this report can be traced, in part, to the original Federal Reserve Act which gave member commercial banks the right to select two-thirds of the directors of each district bank. But the Board of Governors in Washington must share the responsibility for this imbalance. They appoint the so-called "public" members of the boards of each district bank, appointments which have largely reflected the same narrow interests of the bank-elected members... Until we have basic reforms, the Federal Reserve System will be handicapped in carrying out its public responsibilities as an economic stabilization and bank regulatory agency. The System's mandate is too essential to the nation's welfare to leave so much of the machinery under the control of narrow private interests. Concentration of economic and financial power in the United States has gone too far."

p178
The Federal Reserve directors are apparently representatives of a small elite group which dominates much of the economic life of his nation.

[Based on the congressional study "Federal Reserve Directors: A Study of Corporate and Banking Influence [ from the House of Representatives Committee on Banking, Currency and Housing, August 1976" which details the public policy functions of the Federal Reserve District Banks, how directors are selected, who, is selected, the public relations lobbying factor, bank domination and bank examination, and corporate interlocks with Reserve banks.]

p183
The Federal Reserve "created" money is not used only for financial matters; this money is also used to maintain the bankers' control of every aspect of political, economic and social life. It is used to bankroll the enormous expenditures of political candidates, the swollen budgets of universities, the huge outlays required to start newspapers or magazines, and a vast array of foundations, "think-tanks" and other instruments of mind control.

p184
During World War II, the Tavistock Institute [of London] combined with the medical sciences division of the Rockefeller Foundation for esoteric experiments with mind-altering drugs. The present drug culture of the United States is traced in its entirety to this Institute, which supervised the Central Intelligence Agency's training programs. The "LSD counter culture" originated when Sandoz A.G., a Swiss pharmaceutical house owned by S.C. Warburg & Co., developed a new drug from lycergic acid, called LSD. James Paul Warburg (son of Paul Warburg who had written the Federal Reserve Act in 1910), financed a subsidiary of the Tavistock Institute in the United States called the Institute for Policy Studies, whose director, Marcus Raskin, was appointed to the National Security Council James Paul Warburg set up a CIA program to experiment with LSD on CIA agents, some of whom later committed suicide. This program, MK-Ultra, supervised by Dr. Gottlieb, resulted in huge lawsuits against the United States Government by the families of the victims.

The Institute for Policy Studies set up a campus subsidiary, Students for Democratic Society (SDS), devoted to drugs and revolution. Rather than finance SDS himself, Warburg used CIA funds, some twenty million dollars, to promote the campus riots of the 1960s.

The English Tavistock Institute has not restricted its activities to leftwing groups, but has also directed the programs of such supposedly "conservative" American think tanks as the Herbert Hoover Institute at Stanford University, Heritage Foundation, Wharton, Hudson, Massachusetts Institute of Technology and Rand. The "sensitivity training" and "sexual encounter" programs of the most radical California groups such as Esalen Institute and its many imitators were all developed and implemented by Tavistock Institute psychologists.

Secrets of the Federal Reserve

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