The Constitution for the United States, Its Sources and Its Application
Undermining The Constitution - A History of Lawless Government
Our Enemy, The State
Secrets of the Federal Reserve
Chapter 2 The Aldrich Plan
"Finance and the tariff are reserved by Nelson Aldrich as falling within his sole purview and jurisdiction. Mr. Aldrich is endeavoring to devise, through the National Monetary Commission, a banking and currency law. A great many hundred thousand persons are firmly of the opinion that Mr. Aldrich sums up in his personality the greatest and most sinister menace to the popular welfare of the United States. Ernest Newman recently said, ‘What the South visits on the Negro in a political way, Aldrich would mete out to the mudsills of the North, if he could devise a safe and practical way to accomplish it.’"--Harper’s Weekly, May 7, 1910."
The participants in the Jekyll Island conference returned to New York to direct a nationwide propaganda campaign in favor of the "Aldrich Plan". Three of the leading universities, Princeton, Harvard, and the University of Chicago, were used as the rallying points for this propaganda, and national banks had to contribute to a fund of five million dollars to persuade the American public that this central bank plan should be enacted into law by Congress.
Woodrow Wilson, governor of New Jersey and former president of Princeton University, was enlisted as a spokesman for the Aldrich Plan. During the Panic of 1907, Wilson had declared, "All this trouble could be averted if we appointed a committee of six or seven public-spirited men like J.P. Morgan to handle the affairs of our country."
In his biography of Nelson Aldrich in 1930, Stephenson says:
It is notable that Stephenson characterizes the work of the National Citizens League as "propaganda", in line with Seligman’s exposition of
11. Nathaniel Wright Stephenson, Nelson W. Aldrich, A Leader in American Politics, Scribners, N.Y. 1930
Warburg’s work as "the education of the country" and "to break down prejudices".
Much of the five million dollars of the bankers slush fund was spent under the auspices of the National Citizens’ League, which was made up of college professors. The two most tireless propagandists for the Aldrich Plan were Professor O.M. Sprague of Harvard, and J. Laurence Laughlin of the University of Chicago.
Congressman Charles A. Lindbergh, Sr., notes:
In his biography of Nelson Aldrich, Stephenson reveals that the Citizens’ League was also a Jekyll Island product. In chapter 24 we find that: The Aldrich Plan was represented to Congress as the result of three years of work, study and travel by members of the National Monetary Commission, with expenditures of more than three hundred thousand dollars.*
Testifying before the Committee on Rules, December 15, 1911, after the
Aldrich plan had been introduced in Congress, Congressman Lindbergh stated:
Lindbergh continued his speech,
12. Charles A. Lindbergh, Sr., Banking, Currency and the Money Trust, 1913, p. 131
* In 1911, the Aldrich Plan became part of the official platform of the Republican Party.
prosperous year. Instead, a panic entailed enormous losses upon us. Wall Street knew the American people were demanding a remedy against the recurrence of such a ridiculously unnatural condition. Most Senators and Representatives fell into the Wall Street trap and passed the Aldrich Vreeland Emergency Currency Bill. But the real purpose was to get a monetary commission which would frame a proposition for amendments to our currency and banking laws which would suit the Money Trust. The interests are now busy everywhere educating the people in favor of the Aldrich Plan. It is reported that a large sum of money has been raised for this purpose. Wall Street speculation brought on the Panic of 1907. The depositors’ funds were loaned to gamblers and anybody the Money Trust wanted to favour. Then when the depositors wanted their money, the banks did not have it. That made the panic."
Edward Vreeland, co-author of the bill, wrote in the August 25, 1910
Independent (which was owned by Aldrich),
Vreeland’s fantastic claims were typical of the propaganda flood unleashed to pass the Aldrich Plan. Monopolies would disappear, the Government would disappear from the banking business. Pie in the sky.
Nation Magazine, January 19, 1911, noted, "The name of Central Bank is carefully avoided, but the ‘Federal Reserve Association’, the name given to the proposed central organization, is endowed with the usual powers and responsibilities of a European Central Bank."
After the National Monetary Commission had returned from Europe, it held no official meetings for nearly two years. No records or minutes were ever presented showing who had authored the Aldrich Plan. Since they held no official meetings, the members of the commission could hardly claim the Plan as their own. The sole tangible result of the Commission’s three hundred thousand dollar expenditure was a library of thirty massive volumes on European banking. Typical of these works is a thousand page history of the Reichsbank, the central bank which controlled money and credit in Germany, and whose principal stockholders, were the Rothschilds and Paul Warburg’s family banking house of M.M. Warburg Company. The Commission’s records show that it never functioned as a deliberative body. Indeed, its only "meeting" was the secret conference held at Jekyll Island, and this conference is not mentioned in any publication of the Commission. Senator Cummins passed a resolution in Congress ordering the Commission to report on January 8, 1912, and show some constructive results of its three years’ work. In the face of this challenge, the National Monetary Commission ceased to exist.
With their five million dollars as a war chest, the Aldrich Plan propagandists waged a no-holds barred war against their opposition. Andrew Frame testified before the House Banking and Currency Committee of the American Bankers Association. He represented a group of Western bankers who opposed the Aldrich Plan:
CHAIRMAN CARTER GLASS:
Andrew Frame exposed the collusion which in 1911 procured an endorsement of the Aldrich Plan from the American Bankers Association but which in 1912 did not even dare to repeat its endorsement, for fear of an honest and open discussion of the merits of the plan.
Chairman Glass then called as witness one of the ten most powerful bankers in the United States, George Blumenthal, partner of the international banking house of Lazard Freres and brother-in-law of Eugene Meyer, Jr. Carter Glass effusively welcomed Blumenthal, stating that "Senator O’Gorman of New York was kind enough to suggest your name to us."
A year later, O’Gorman prevented a Senate Committee from asking his master, Paul Warburg, any embarrassing questions before approving his nomination as the first Governor of the Federal Reserve Board.
George Blumenthal stated, "Since 1893 my firm of Lazard Freres has been foremost in importations and exportations of gold and has thereby come into contact with everybody who had anything to do with it."
Congressman Taylor asked,
"No," replied George Blumenthal, "I have nothing at all on that, because it is not bearing on the question."
A banker from Philadelphia, Leslie Shaw, dissented with other witnesses at
these hearings, criticizing the much vaunted "decentralization" of the System.
To promote the Democratic currency bill, Carter Glass made public the sorry record of the Republican efforts of Senator Aldrich’s National Monetary Commission.
His House Report in 1913 said,
Glass’s denunciation of the Aldrich Bill as a central bank plan ignored the fact that his own Federal Reserve Act would fulfill all the functions of a central bank. Its stock would be owned by private stockholders who could use the credit of the Government for their own profit; it would have control of the nation’s money and credit resources; and it would be a bank of issue which would finance the government by "mobilizing" credit in time of war.
In "The Rationale of Central Banking," Vera C. Smith (Committee for Monetary Research and
Education, June, 1981) writes,
Thus a central bank attains its commanding position from its government granted monopoly of the note issue. This is the key to its power. Also, the act of establishing a central bank has a direct inflationary impact because of the fractional reserve system, which allows the creation of book-entry loans and thereby, money, a number of times the actual "money" which the bank has in its deposits or reserves.
The Aldrich Plan never came to a vote in Congress, because the Republicans lost control of the House in 1910, and subsequently lost the Senate and the Presidency in 1912.
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