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| Uploaded on Tuesday 27 May, 2014 to the money trust |
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| The catalyst for the Federal Reserve Act of 1913 |
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At the dawn of the twentieth century, the money trust got back to the business of paving the way for a new, private central bank for America. Powerful bankers such as John Pierpont Morgan (J. P. Morgan) led the charge.
A major final panic would be necessary to focus the country's attention on the supposed need for a central bank. The thin rationale offered was that only a central bank can prevent widespread bank failures and stabilize the currency. The critically important feature of who would own and control it was an issue carefully avoided.
Morgan was the most powerful banker in America during his time, and, like his father, Junius Spencer Morgan, he worked as an agent for powerful overseas bankers, but also for his own interests. He helped finance the monopolization of various industries like Rockefeller's Standard Oil empire, consolidated big steel holdings into a monopoly by buying Andrew Carnegie's steel companies, and, he owned numerous industrial companies and banks.
The sitting president during the 1907 stock market crash, Theodore Roosevelt, had perhaps genuine intentions of breaking up industrial monopolies, using the Sherman Antitrust Act of 1890; but in real terms, his actions amounted to very little. Instead of curbing big corporations and creating new opportunity in the market place, all he ended up doing was dividing big corporations into several small sized ones which (a) were still functioning in tandem as though they were one contiguous unit; (b) were controlled by the same people at the top and; (c) were unaffected by the structural changes with regard to their market share.
It was clear that the money trust had the upper hand. So strong was their clout that they could dictate policy to Congress through the connections they had forged. But, not everyone in the District of Columbia was convinced that America needed a central bank. If the money trust were to have things their way, then coercion it would have to be. The Panic of 1907 was orchestrated by financiers to deceive Congress into thinking that, only financial institutions knew better and should therefore be in charge of the country's money supply. That is why J. P. Morgan stepped into the fray to rescue the economy. He ran the entire deception, breaking the news of the pending collapse of the Knickerbocker Trust Company.
Several years later on the 23rd of December, 1913, President Woodrow Wilson signed the Federal Reserve Act of 1913 into law, reinstating a central bank for America; the fourth such bank in existence since 1781. Economic textbooks would later explain that the creation of the Federal Reserve System was the direct result of the Panic of 1907. |
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