Eustace Mullins The Secrets of the Federal Reserve, the London Connection (1985)

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.P.Morgan.He was named chairman of theExecutive Committee.Thus, Paul Warburg and J.P.Morgan sat inconference at the meetings of the Federal Reserve Board during the first fouryears of its operation, surrounded by the other Governors and members ofthe council, who could hardly have been unaware that their futures would beguided by these two powerful bankers.Another member of the Federal Advisory Council in 1914 was Levi L.Rue,representing the Philadelphia district.Rue was president of the Philadelphia 58National Bank.Rand McNally Bankers Directory of 1914 listed as principalcorrespondent of the First National Bank of New York,__________________________31 F.Cyril James, The Growth of Chicago Banks, Harper, New York, 1938.the Philadelphia National Bank.First National Bank of Chicago also listedPhiladelphia National Bank as its principal correspondent in Philadelphia.The other members of the Federal Advisory Council included Daniel S.Wing, president of the First National Bank of Boston, W.S.Rowe, presidentof the First National Bank of Cincinnati, and C.T.Jaffray, president of theFirst National Bank of Minneapolis.These were all correspondent banks ofthe New York "big five" banks who controlled the money market in theUnited States.Jaffray had an even closer connection with the Baker-Morgan interests.In1908, to reinvest the large annual dividends from their First National Bankof New York stock, Baker and Morgan set up a holding company, FirstSecurity Corporation, which bought 500 shares of the First National Bank ofMinneapolis.Thus Jaffray was little more than a wage-earning employee ofBaker and Morgan, although he had been "selected" by stockholders of theFederal Reserve Bank of Minneapolis to represent their interests.FirstSecurity Corporation also owned 50,000 shares of Chase National Bank, 5400shares of National Bank of Commerce, 2500 shares of Bankers Trust, 928shares of Liberty National Bank, the bank of which Henry P.Davison hadbeen president when he was tapped to join the J.P.Morgan firm, and sharesof New York Trust, Atlantic Trust and Brooklyn Trust.First Securityconcentrated on bank stocks which rapidly appreciated in value, and paidhandsome annual dividends.In 1927, it earned five million dollars, but paidthe shareholders eight million, taking the rest from its surplus.Another member of the initial Federal Advisory Council was E.F.Swinney,president of the First National Bank of Kansas City.He was also a director ofSouthern Railway, and lists himself in Who s Who as "independent inpolitics".Archibald Kains represented the San Francisco district on the FederalAdvisory Council, although he maintained his office in New York, aspresident of the American Foreign Banking Corporation.After serving as a Governor of the Federal Reserve Board from 1914-1918,Paul Warburg did not request another term.However, he was not ready tosever his connection with the Federal Reserve System which he had done somuch to set up and put into operation.J.P.Morgan obligingly gave up hisseat on the Federal Advisory Council, and for the next ten years, PaulWarburg continued to represent the Federal Reserve district of New York onthe Council.He was vice president of the council 1922-25, and president 591926-27.Thus Warburg remained the dominant presence at Federal ReserveBoard meetings throughout the 1920s, when the European central bankswere planning the great contraction of credit which precipitated the Crash of1929 and the Great Depression.Although most of the Federal Advisory Council s "advice" to the Board ofGovernors has never been reported, on rare instances a few glimpses into itsdeliberations were afforded by brief items in The New York Times.OnNovember 21, 1916, The Times reported that the Federal Advisory Councilhad met in Washington for its quarterly conference."There was talk about absorbing Europe s extension of credit to SouthAmerica and othercountries.Federal Reserve officials said that to maintain a position as one ofthe world s bankersthe United States must expect to be called upon to render a good deal of theservice performedlargely by England in the past, in extending short term credits necessary inthe production andtransportation of goods of all kinds in the world s trade, and thatacceptances in foreign traderequire lower discounts and the freest and most reliable gold markets." (TheFirst World Warwas at its zenith in 1916.)In addition to his service on the Board of Governors and the FederalAdvisory Council, Paul Warburg continued to address bankers groupsabout the monetary policies they were expected to follow.On October 22,1915, he addressed the Twin City Bankers Club, St.Paul, Minnesota duringwhich speech he stated,"It is to your interest to see the Federal Reserve banks as strong as theypossibly can be.Itstaggers the imagination to think what the future may have in store for thedevelopment ofAmerican banking [ Pobierz całość w formacie PDF ]

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