on a pretense of opposing the Glass-Owen Bill to convince Congress and the public that big bankers were fearful of it. The final bill was written with many sound features which were included to make it palatable during Congressional debate but which were predesigned to be dropped in later years. To win the support of the Populists under the leadership of William Jennings Bryan, the Jekyll Island team also engineered what appeared to be compromises but which in actual operation were, as Wilson called them, mere 'shadows' while the 'substance' remained. In short, Congress was outflanked, outfoxed, and outclassed by a deceptive, but brilliant, psycho-political attack. The result is that, on December 23,1913, America once again had a central bank.
Chapter Twenty-Three
THE GREAT
DUCK DINNER
The story is told of a New England farmer with a small pond in his pasture. Each summer, a group of wild ducks would frequent that pond but, try as he would, the farmer could never catch one.
No matter how early in the morning he approached, or how carefully he constructed a blind, or what kind of duck call he tried, somehow those crafty birds sensed the danger and managed to be out of range. Of course, when fall arrived, the ducks headed South, and the farmer's craving for a duck dinner only intensified.
Then he got an idea. Early in the spring, he started scattering corn along the edge of the pond. The ducks liked the corn and, since it was always there, they soon gave up dipping and foraging for food of their own. After a while, they became used to the farmer and began to trust him. They could see he was their benefactor and they now walked close to him with no sense of fear. Life was so easy, they forgot how to fly. But that was unimportant, because they were now so fat they couldn't have gotten off the water even if they had tried.
Fall came, and the ducks stayed. Winter came, and the pond froze. The farmer built a shelter to keep them warm. The ducks were happy because they didn't have to fly. And the farmer was especially happy because, each week all winter long, he had a delicious duck dinner.
That is the story of America's Great Depression of the 1930s.
472
THE CREATURE FROM JEKYLL ISLAND
CONSOLIDATION OF POWER
When the Federal Reserve Act was submitted to Congress, many of its most important features were written in vague language. Some details were omitted entirely. That was a tactical move to avoid debate over fine points and to allow flexibility for future interpretation. The goal was to get the bill
Since then, the Act has been amended 195 times, expanding the power and scope of the System to the point where, today, it would be almost unrecognizable to the Congressmen and Senators who voted for it.
In 1913, public distaste for concentration of financial power in the hands of a few Wall Street banks helped to fuel the fire for passage of the Federal Reserve Act. To make it appear that the new System would put an end to the New York 'money trust,' as it was called, the public was told that the Federal Reserve would not represent any one group or one region. Instead, it would have its power diffused over twelve regional Federal Reserve Banks, and none would be able to dominate. As Galbraith pointed out, however, the regional design was 'admirable for serving local pride and architectural ambition and for lulling the suspicions of the agrarians.'1 But that was not what the planners had in mind for the long haul.
In the beginning, the regional branches took their autonomy seriously, and that led to conflict with members of the national board. The Board of Governors was composed of political appointees representing diverse segments of the economy. They were outclassed by the heads of the regional branches of the System who were
