Creature From Jekyll Island by G. Edward

himself has confirmed it.

But let us return to the great deceit of 1913. The second demand made by Bryan—political control over the System, not banker control—was met with an equally beguiling 'compromise.' In addition to the governing board of regional bankers previously proposed, there now would be a central regulatory commission, to

•be called the Federal Reserve Board, appointed by the President with the advice and consent of the Senate.2 Thus, the public was to be protected through a sharing of power, a melding of interests, a system of checks and balances. In this way, said Wilson, 'the banks may be instruments, not the masters, of business and of individual enterprise and initiative.'

The arrangement was heralded as a bold, new experiment in representative government. In reality, it was but the return of the ancient partnership between the monetary and political scientists.

The only thing new was that power was now to be shared openly in plain view of the public. But, of course, there would not be much to see. All the deliberations and most of the decisions were to happen behind closed doors. Furthermore, the division of power and responsibility between these groups was left deliberately vague.

Without a detailed line of command or even a clear concept of function, it was inevitable that, as with the drafting of the bill itself, real power would gravitate into the hands of those with technical'

knowledge and Wall Street connections. To the monetary scientists drafting the bill and engineering the compromises, the eventual 1- Warburg, Vol. I, p. 409.

2. The original plan called for the Secretary of the Treasury and the Comptroller ot the Currency to be on the board also, but this was later dropped.

Quoted by Greider, p. 277.

468 THE CREATURE FROM JEKYLL ISLAND

concentration of effective control into their hands was never in serious doubt. And, as we shall see in the next chapter, subsequent events have proved the soundness of that strategy.

BRYAN ENDORSES THE BILL

Bryan was no match for the Jekyll Island strategists and he accepted the 'compromises' at face value. Had there been any lingering doubts in his mind, they were swept away by gratitude for his appointment as Wilson's Secretary of State. Now that he was on the team, he declared:

I appreciate so profoundly the service rendered by the President to the people in the stand he has taken on the fundamental principles involved in currency reform, that I am with him in all the details....

The right of the government to issue money is not surrendered to the banks; the control over the money so issued is not relinquished by the government.... I am glad to endorse earnestly and unreservedly the currency bill as a much better measure than I supposed it possible to secure at this time.... Conflicting opinions have been reconciled with a success hardly to have been expected.1

With the conversion of Bryan, there was no longer any doubt about the final outcome. The Federal Reserve Act was released from the joint House and Senate conference committee on December 22, 1913, just as Congress was preoccupied with departure for the Christmas recess and in no mood for debate. It quickly passed by a vote of 282 to 60 in the House and 43 to 23 in the Senate. The President signed it into law the next day.

The Creature had swallowed Congress.

SUMMARY

President Taft, although a Republican spokesman for big business, refused to champion the Aldrich Bill for a central bank.

This marked him for political extinction. The Money Trust wanted a President who would aggressively promote the bill, and the man selected was Woodrow Wilson who had already publicly declared his allegiance. Wilson's nomination at the Democratic national convention was secured by Colonel House, a close associate of Morgan and Warburg. To make sure that Taft did not win his bid for reelection, the Money Trust encouraged the former Republican President, Teddy Roosevelt, to run on the Progressive ticket. The 1. Glass, pp. 139-42.

THE CREATURE SWALLOWS CONGRESS 469

result, as planned, was that Roosevelt pulled away Republican support from Taft, and Wilson won the election with less than a majority vote. Wilson and Roosevelt campaigned vigorously against the evils of the Money Trust while, all along, being dependent upon that same Trust for campaign funding.

When Wilson was elected, Colonel House literally moved into the White House and became the unseen President of the United States. Under his guidance, the Aldrich Bill was given cosmetic surgery and emerged as the Glass-Owen Bill. Although sponsored by Democrats, in all essential features it was still the Jekyll Island plan. Aldrich, Vanderlip, and others identified with Wall Street put