The Jekyll Island Conspiracy: How Bankers Hijacked the U.S. Government

By now, it should be painfully clear that the Federal Reserve isn’t the hero it’s painted to be. The job Congressman Carter Glass supposedly gave it in 1913 – managing the money supply, ensuring economic stability – is little more than a relic of a bygone era. The financial system has been drowning in a flood of liquidity for decades, and yet, we’re still being told the Fed is needed to secure jobs, growth, and prosperity. David Stockman nailed it: it’s time to pull the plug on this experiment and let the free market do its job. To understand why the Fed still exists, let’s go back to its creation in 1913, with the passage of the Federal Reserve Act. The Fed wasn’t born from market forces—it was a creature of government intervention, an attempt by big business to safeguard their interests against competition. During the Progressive Era, powerful business leaders learned that the best way to lock in profits was to form a partnership with government, creating what’s now essentially a state-backed cartel. Take a look at the big players in the late 19th and early 20th centuries. Mergers and market domination kept failing because new competitors kept cropping up, even in new industries, like automobiles. By the mid-1890s, 30 American manufacturers were churning out over 2,500 vehicles. Big business realized the only way to beat competition was to work with the government. And, as Gabriel Kolko so bluntly put it, federal regulations were designed to serve the economic and political interests of certain industrial groups. The Federal Reserve was no exception. The bankers’ dream wasn’t about stabilizing the economy; it was about crafting a system that allowed them to inflate the currency at will, synchronizing rates of inflation across banks. Bank runs were embarrassing and costly, and the financial elite wanted to put an end to them. Enter the Panic of 1907, which served as the perfect excuse to reshape the U.S. monetary system. Knickerbocker Trust Company’s failed attempt to corner the copper market sparked a run that nearly brought down the financial system. J.P. Morgan stepped in as a private central banker, bailing out several trust companies and saving the New York Stock Exchange from collapse. But the message was clear: the big bankers needed a more permanent solution. So the bankers got to work. With the help of their political connections, they began pushing for a central bank under the guise of reform. The infamous meeting at Jekyll Island in 1910, where the world’s wealthiest bankers and politicians secretly gathered, was where the real plan for the Federal Reserve took shape. Long dismissed as conspiracy theory, this meeting was later confirmed by attendee Frank Vanderlip and celebrated by the Fed itself, flaunting its role in reshaping America’s economy. The real mastermind behind the Fed? Paul Warburg, a partner at Kuhn, Loeb & Co., with deep connections in European banking. Warburg’s plan was simple: a National Reserve Association with private bankers calling the shots from Washington, overseeing regional banks across the country. To sell it, though, they needed political cover. Enter Nelson Aldrich, Republican Senator and head of the National Monetary Commission, who put his name on the plan to give it a veneer of legitimacy. The final act in this bankers’ play was a masterclass in political manipulation. The politicians had to be convinced to back the plan, without appearing to be puppets of Wall Street. So they rewrote the script. They branded it as reform, and to appease the Democrats who had taken power in 1912, the Aldrich Plan was repackaged as the Glass-Owen Bill. Congressman Carter Glass, a political lightweight in banking matters, was tasked with pushing the bill through Congress, with some help from a young economics professor, H. Parker Willis. The resulting legislation was nearly identical to the Aldrich Plan, and with a little help from progressive Democrats and a divided Republican Party, President Woodrow Wilson signed it into law on December 23, 1913. By all appearances, the new law was designed to protect the public from Wall Street’s influence. But in reality, the Federal Reserve Act was Wall Street’s Trojan horse. The legislation allowed the bankers to continue their inflationary schemes under the protection of government regulation, all while keeping the system opaque enough that the public wouldn’t catch on. Which brings us back to Stockman’s point: it’s time for the Fed to declare “mission accomplished” and hand control back to the free market. But here’s the hard truth: the Fed won’t go quietly. Inflation is the perfect tool for the political and financial elite – it’s theft disguised as policy. The longer they can keep the system going, the more they stand to gain.

The Jekyll Island Conspiracy: How Bankers Hijacked the U.S. Government

Bill Brocius Oct 15

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