SECRETS OF THE FEDERAL RESERVE

^{CHAPTER TEN}

^{The Money Creators}

^{The editorial page of The New York Times, January 18,
1920, carried an interesting comment on the Federal Reserve System. The
unidentified writer, perhaps Paul Warburg, stated, "The Federal Reserve is
a fount of credit, not of capital." This is one of the most revealing
statements ever made about the Federal Reserve System. It says that the Federal
Reserve System will never add anything to our capital structure, or to the
formation of capital, because it is organized to produce credit, to create
money for credit money and speculations, instead of providing capital funds for
the improvement of commerce and industry. Simply stated, capitalization would
mean the providing of notes backed by a precious metal or other commodity.
Reserve notes are unbacked paper loaned at interest.}

^{On July 25, 1921, Senator Owen stated on the editorial
page of The New York Times, The Federal Reserve Board is the most gigantic
financial power in all the world. Instead of using this great power as the
Federal Reserve Act intended that it should, the board....delegated this power
to the banks, threw the weight of its influence toward the support of the
policy of German inflation." The senator whose name was on the Act saw
that it was not performing as promised.}

^{After the Agricultural Depression of 1920-21, the
Federal Reserve Board of Governors settled down to eight years of providing
rapid credit expansion of the New York bankers, a policy which culminated in
the Great Depression of 1929-31 and helped paralyze the economic structure of
the world. Paul Warburg had resigned in May, 1918, after the monetary system of
the United States had been changed from a bond-secured currency to a currency
based upon commercial paper and the shares of the Federal Reserve Banks.
Warburg returned to his five hundred thousand dollar a year job with Kuhn, Loeb
Company, but he continued to determine the policy of the Federal Reserve
System, as President of the Federal Advisory Council and as Chairman of the
Executive Committee of the American Acceptance Council.}

^{From 1921 to 1929, Paul Warburg organized three of the
greatest trusts in the United States, the International Acceptance Bank,
largest acceptance bank in the world, Agfa Ansco Film Corporation, with
headquarters in Belgium, and I.G. Farben Corporation whose American}

¹¹⁹

^{branch Warburg set up as I.G. Chemical Corporation.
The Westinghouse Corporation is also one of his creations.}

^{In the early 1920s, the Federal Reserve System played
the decisive role in the re-entry of Russia into the international finance
structure. Winthrop and Stimson continued to be the correspondents between
Russian and American bankers, and Henry L. Stimson handled the negotiations
concluding in our recognition of the Soviet after Roosevelt’s election in 1932.
This was an anti-climax, because we had long before resumed exchange relations
with Russian financiers.}

^{The Federal Reserve System began purchasing Russian
gold in 1920, and Russian currency was accepted on the Exchanges. According to
Colonel Ely Garrison, in his autobiography, and according to the United States
Naval Secret Service Report on Paul Warburg, the Russian Revolution had been
financed by the Rothschilds and Warburgs, with a member of the Warburg family
carrying the actual funds used by Lenin and Trotsky in Stockholm in 1918.}

^{An article in the English monthly
"Fortnightly", July, 1922, says:}

^{"During the
past year, practically every single capitalistic institution has been restored.
This is}

^{true of the State
Bank, private banking, the Stock Exchange, the right to possess money to}

^{unlimited amount,
the right of inheritance, the bill of exchange system, and other institutions
and}

^{practices involved
in the conduct of private industry and trade. A great part of the former}

^{nationalized
industries are now found in semi-independent trusts."}

^{The organization of powerful trusts in Russia under
the guise of Communism made possible the receipt of large amounts of financial
and technical help from the United States. The Russian aristocracy had been
wiped out because it was too inefficient to manage a modern industrial state.
The international financiers provided funds for Lenin and Trotsky to overthrow
the Czarist regime and keep Russia in the First World War. Peter Drucker,
spokesman for the oligarchy in America, declared in an article in the Saturday
Evening Post in 1948, that:}

^{"RUSSIA IS
THE IDEAL OF THE MANAGED ECONOMY TOWARDS WHICH WE ARE}

^MOVING."

^{In Russia, the issuance of sufficient currency to
handle the needs of their economy occurred only after a government had been put
in power which had absolute control of the people. During the 1920s, Russia
issued large quantities of so-called "inflation money", a managed
currency. The same "Fortnightly" article (of July, 1922) observed
that:}

^{"As economic
pressure produced the ‘astronomical dimensions system’ of currency; it can
never}

^{destroy it. Taken
alone, the system is self-contained, logically perfected, even intelligent. And
it}

^{can perish only
through the collapse or destruction of the political edifice which it
decorates."}

¹²⁰

^{"Fortnightly" also remarked, in 1929, that:}

^{"Since 1921,
the daily life of the Soviet citizen is no different from that of the American
citizen,}

^{and the Soviet
system of government is more economical."}

^{Admiral Kolchak, leader of the White Russian armies,
was supported by the international bankers, who sent British and American
troops to Siberia in order to have a pretext for printing Kolchak rubles. At
one time in 1920, the bankers were manipulating on the London Exchange the old
Czarist rubles, Kerensky rubles and Kolchak rubles, the values of all three
fluctuating according to the movements of the Allied troops aiding Kolchak.
Kolchak also was in possession of considerable amounts of gold which had been
seized by his armies. After his defeat, a trainload of this gold disappeared in
Siberia. At the Senate Hearings in 1921 on the Federal Reserve System, it was
brought out that the System had been receiving this gold. Congressman Dunbar
questioned Governor W.P.G. Harding of the Federal Reserve Board as follows:}

^{DUNBAR: "In other words, Russia is sending a
great deal of gold to the European countries, which in turn send it to
us?"}

^{HARDING: "This is done to pay for the stuff
bought in this country and to create dollar exchange."}

^{DUNBAR: "At the same time, that gold came from
Russia through Europe?"}

^{HARDING: "Some of it is thought to be Kolchak gold,
coming through Siberia, but it is none of the Federal Reserve Banks’ business.
The Secretary of the Treasury has issued instructions to the assay office not
to take any gold which does not bear the mint mark of a friendly nation."}

^{Just what Governor Harding meant by "a friendly
nation" is not clear. In 1921, we were not at war with any country, but
Congress was already beginning to question the international gold dealings of
the Federal Reserve System. Governor Harding could very well shrug his shoulders
and say that it was none of the Federal Reserve Banks’ business where the gold
came from. Gold knows no nationality or race. The United States by law had
ceased to be interested in where its gold came from in 1906, when Secretary of
the Treasury Shaw made arrangements with several of the larger New York banks
(ones in which he had interests) to purchase gold with advances of cash from
the United States Treasury, which would then purchase the gold from these
banks. The Treasury could claim that it did not know where its gold came from
since their office only registers the bank from which it made the purchase.
Since 1906, the Treasury has not known from which of the international gold
merchants it was buying its gold.}

^{The international gold dealings of the Federal Reserve
System, and its active support in helping the League of Nations to force all
the nations}

¹²¹

^{of Europe and South America back on the gold standard
for the benefit of international gold merchants like Eugene Meyer, Jr. and
Albert Strauss, is best demonstrated by a classic incident, the sterling credit
of 1925.}

^{J.E. Darling wrote, in the English periodical,
"Spectator", on January 10, 1925 that:}

^{"Obviously,
it is of the first importance to the United States to induce England to resume
the gold}

^{standard as early
as possible. An American controlled Gold Standard, which must inevitably}

^{result in the
United States becoming the world’s supreme financial power, makes England a}

^{tributary and
satellite, and New York the world’s financial centre."}

^{Mr. Darling fails to point out that the American
people have as little to do with this as the British people, and that
resumption of the gold standard by Britain would benefit only that small group
of international gold merchants who own the world’s gold. No wonder that
"Banker’s Magazine" gleefully remarked in July, 1925 that:}

^{"The
outstanding event of the past half year in the banking world was the
restoration of the gold}

^standard."

^{The First World War changed the status of the United
States from that of a debtor nation to the position of the world’s greatest
creditor nation, a title formerly occupied by England. Since debt is money,
according to the Governor Marriner Eccles of the Federal Reserve Board, this
also made us the richest nation of the world. The war also caused the removal
of the headquarters of the world’s acceptance market from London to New York,
and Paul Warburg became the most powerful trade acceptance banker in the world.
The mainstay of the international financiers, however, remained the same. The
gold standard was still the basis of foreign exchange, and the small group of
internationals who owned the gold controlled the monetary system of the Western
nations.}

^{Professor Gustav Cassel wrote in 1928:}

^{"The American
dollar, not the gold standard, is the world’s monetary standard. The American}

^{Federal Reserve
Board has the power to determine the purchasing power of the dollar by making}

^{changes in the
rate of discount, and thus controls the monetary standard of the world."}

^{If this were true, the members of the Federal Reserve
Board would be the most powerful financiers in the world. Occasionally their
membership includes such influential men as Paul Warburg or Eugene Meyer, Jr.,
but usually they are a rubber-stamp committee for the Federal Advisory Council
and the London bankers.}

^{In May, 1925, the British Parliament passed the Gold
Standard Act, putting Great Britain back on the gold standard. The Federal
Reserve System’s major role in this event came out on March 16, 1926, when
George Seay, Governor of the Federal Reserve Bank of Richmond, testified before
the House Banking and Currency Committee that:}

¹²²

^{"A verbal
understanding confirmed by correspondence, extended Great Britain a two hundred}

^{million dollar
gold loan or credit. All negotiations were conducted between Benjamin Strong,}

^{Governor of the
Federal Reserve Bank of New York and Mr. Montagu Norman, Governor of the}

^{Bank of England.
The purpose of this loan was to help England get back on the gold standard,}

^{and the loan was
to be met by investment of Federal Reserve funds in bills of exchange and}

^{foreign
securities."}

^{The Federal Reserve Bulletin of June, 1925, stated
that:}

^{"Under its
arrangement with the Bank of England the Federal Reserve Bank of New York}

^{undertakes to sell
gold on credit to the Bank of England from time to time during the next two}

^{years, but not to
exceed $200,000,000 outstanding at any one time."}

^{A two hundred million dollar gold credit had been
arranged by a verbal understanding between the international bankers, Benjamin
Strong and Montagu Norman. It was apparent by this time that the Federal
Reserve System had other interests at heart than the financial needs of
American business and industry. Great Britain’s return to the gold standard was
further facilitated by an additional gold loan of a hundred million dollars
from J.P. Morgan Company. Winston Churchill, British Chancellor of the
Exchequer, complained later that the cost to the British government of this
loan was $1,125,000 the first year, this sum representing the profit to J.P.
Morgan Company in that time.}

^{The matter of changing the discount rate, for
instance, has never been satisfactorily explained. Inquiry at the Federal
Reserve Board in Washington elicited the reply that "the condition of the
money market is the prime consideration behind changes in the rate." Since
the money market is in New York, it takes no imagination to deduce that New
York bankers may be interested in changes of the rate and often attempt to
influence it.}

^{Norman Lombard, in the periodical "World’s
Work" writes that:}

^{"In their
consideration and disposal of proposed changes of policy, the Federal Reserve
Board}

^{should follow the
procedure and ethics observed by our court of law. Suggestions that there}

^{should be a change
of rate or that the Reserve Banks should buy or sell securities may come from}

^{anyone and with no
formality or written argument. The suggestion may be made to a Governor or}

^{Director of the
Federal Reserve System over the telephone or at his club over the luncheon
table,}

^{or it may be made
in the course of a casual call on a member of the Federal Reserve Board. The}

^{interests of the
one proposing the change need not be revealed, and his name and any suggestions}

^{he makes are
usually kept secret. If it concerns the matter of open market operations, the
public}

^{has no inkling of
the decision until the regular weekly statement appears, showing changes in the}

^{holdings of the
Federal Reserve Banks. Meanwhile, there is no public discussion, there is no}

^{statement of the
reasons for the decision, or of the names of those opposing or favoring
it."}

¹²³

^{The chances of the average citizen meeting a Governor
of the Federal Reserve System at his club are also slight.}

^{The House Hearings on Stabilization of the Purchasing
Power of the Dollar in 1928 proved conclusively that the Federal Reserve Board
worked in close cooperation with the heads of European central banks, and that
the Depression of 1929-31 was planned at a secret luncheon of the Federal
Reserve Board and those heads of European central banks in 1927. The Board has
never been made responsible to the public for its decisions or actions. The
constitutional checks and balances seem not to operate in finance.}

^{The true allegiance of the members of the Federal
Reserve Board has always been to the central bankers. The three features of the
central bank, its ownership by private stockholders who receive rent and profit
for their use of the nation’s credit, absolute control of the nation’s
financial resources, and mobilization of the nation’s credit to finance
foreigners, all were demonstrated by the Federal Reserve System during the
first fifteen years of its operations.}

^{Further demonstration of the international purposes of
the Federal Reserve Act of 1913 is provided by the "Edge Amendment" of
December 24, 1919, which authorizes the organization of corporations expressly
for "engaging in international foreign banking and other international or
foreign financial operations, including the dealing in gold or bullion, and the
holding of stock in foreign corporations." In commenting on this
amendment, E.W. Kemmerer, economist from Princeton University, remarked that:}

^{"The federal
reserve system is proving to be a great influence in the internationalizing of}

^{American trade and
American finance."}

^{The fact that this internationalizing of American
trade and American finance has been a direct cause for involving us in two
world wars does not disturb Mr. Kemmerer. There is plenty of evidence to show
how Paul Warburg used the Federal Reserve System as the instrument for getting
trade acceptance adopted on a wide scale by American businessmen.}

^{The use of trade acceptances, (which are the currency
of international trade) by bankers and corporations in the United States prior
to 1915 was practically unknown. The rise of the Federal Reserve System exactly
parallels the increase in the use of acceptances in this country, nor is this a
coincidence. The men who wanted the Federal Reserve System were the men who set
up acceptance banks and profited by the use of acceptances.}

^{As early as 1910, the National Monetary Commission
began to issue pamphlets and other propaganda urging bankers and businessmen in
this country to adopt trade acceptances in their transactions. For three}

¹²⁴

^{years the Commission carried on this campaign, and the
Aldrich Plan included a broad provision authorizing the introduction and use of
bankers’ acceptances into the American system of commercial paper.}

^{The Federal Reserve Act of 1913 as passed by Congress
did not specifically authorize the use of acceptances, but the Federal Reserve
Board in 1915 and 1916 defined "trade acceptance", further defined by
Regulation A Series of 1920, and further defined by Series 1924. One of the
first official acts of the Board of Governors in 1914 was to grant acceptances
a preferentially low rate of discount at Federal Reserve Banks. Since
acceptances were not being used in this country at that time, no explanation of
business exigency could be advanced for this action. It was apparent that
someone in power on the Board of Governors wanted the adoptance of acceptances.}

^{The National Bank Act of 1864, which was the
determining financial authority of the United States until November, 1914, did
not permit banks to lend their credit. Consequently, the power of banks to
create money was greatly limited. We did not have a bank of issue, that is, a
central bank, which could create money. To get a central bank, the bankers
caused money panic after money panic on the business people of the United
States, by shipping gold out of the country, creating a money shortage, and
then importing it back. After we got our central bank, the Federal Reserve
System, there was no longer any need for a money panic, because the banks could
create money. However, the panic as an instrument of power over the business
and financial community was used again on two important occasions, in 1920,
causing the Agricultural Depression, because state banks and trust companies
had refused to join the Federal Reserve System, and in 1929, causing the Great
Depression, which centralized nearly all power in this country in the hands of
a few great trusts.}

^{A trade acceptance is a draft drawn by the seller of
goods on the purchaser, and accepted by the purchaser, with a time of
expiration stamped upon it. The use of trade acceptances in the wholesale
market supplies short-term, assured credit to carry goods in process of
production, storage, transit, and marketing. It facilitates domestic and
foreign commerce. Seemingly, then, the bankers who wished to replace the
open-book account system with the trade acceptance system were progressive men
who wished to help American import-export trade. Much propaganda was issued to
that effect, but this was not really the story.}

^{The open-book system, heretofore used entirely by
American business people, allowed a discount for cash. The acceptance system
discourages the use of cash, by allowing a discount for credit. The open-book
system also allowed much easier terms of payment, with liberal extensions on
the debt. The acceptance does not allow this, since it is}

¹²⁵

^{a short-term credit with the time-date stamped upon
it. It is out of the seller’s hands, and in the hands of a bank, usually an
acceptance bank, which does not allow any extension of time. Thus, the adoption
of acceptances by American businessmen during the 1920’s greatly facilitated
the domination and swallowing up of small business into huge trusts, which
accelerated the crash of 1929.}

^{Trade acceptances had been used to some extent in the
United States before the Civil War. During that war, exigencies of trade had
destroyed the acceptance as a credit medium, and it had not come back into
favor in this country, our people preferring the simplicity and generosity of
the open-book system. Open-book accounts are a single-name commercial paper,
bearing only the name of the debtor. Acceptances are two-name paper, bearing
the name of the debtor and the creditor. Thus they became commodities to be
bought and sold by banks. To the creditor, under the open-book system, the debt
is a liability. To the acceptance bank holding an acceptance, the debt is an
asset. The men who set up acceptance banks in this country, under the
leadership of Paul Warburg, secured control of the billions of dollars of
credit existing as open accounts on the books of American businessmen.}

^{Governor Marriner Eccles of the Federal Reserve Board
stated before the House Banking and Currency Committee that: "Debt is the
basis for the creation of money."}

^{Large holders of trade acceptances got the use of billions
of dollars worth of credit-money, besides the rate of interest charged upon the
acceptance itself. It is obvious why Paul Warburg should have devoted so much
time, money, and energy to getting acceptances adopted by this country’s
banking machinery.}

^{On September 4, 1914, the National City Bank accepted
the first time-draft drawn on a national bank under provisions of the Federal
Reserve Act of 1913. This was the beginning of the end of the open-book account
system as an important factor in wholesale trade. Beverly Harris,
vice-president of the National City Bank of New York, issued a pamphlet in 1915
stating that:}

^{"Merchants
using the open account system are usurping the functions of bankers."}

^{In The New York Times on June 14, 1920, Paul Warburg,
Chairman of the American Acceptance Council, said:}

^{"Unless the
Federal Reserve Board puts itself heart and soul behind the untrammeled}

^{development of
acceptances as a prime investment for banks of the Federal Reserve Banks the}

^{future safe and
sound development of the system will be jeopardized."}

^{This was a statement of the purpose of Warburg and his
bunch who wanted "monetary reform" in this country. They were out to
get control}

¹²⁶

^{of all credit in the United States, and they got it,
by means of the Federal Reserve System, the acceptance system, and the lack of
concern by the citizens.}

^{The First World War was a boon to the introduction of
trade acceptances, and the volume jumped to four hundred million dollars in
1917, growing through the 1920s to more than a billion dollars a year, which
culminated in a high peak just before the Great Depression of 1929-31. The
Federal Reserve Bank of New York’s charts show that its use of acceptances
reached a peak in November, 1929, the month of the stock market crash, and
declined sharply thereafter. The acceptance people by then had gotten what they
wanted, which was control of American business and industry. "Fortune
Magazine" in February of 1950 pointed out that:}

^{"Volume of
acceptances declined from $1,732 million in 1929 to $209 million in 1940,
because}

^{of the
concentration of acceptance banking in a few hands, and the Treasury’s
low-interest}

^{policy, which made
direct loans cheaper than acceptance. There has been a slight upturn since}

^{the war, but it is
often cheaper for large companies to finance imports from their own
coffers."}

^{In other words, the "large companies" more
accurately, the great trusts, now have control of credit and have not needed
acceptances. Besides the barrage of propaganda issued by the Federal Reserve
System itself, the National Association of Credit Men, the American Bankers’
Association, and other fraternal organizations of the New York bankers devoted
much time and money to distributing acceptance propaganda. Even their flood of
lectures and pamphlets proved insufficient, and in 1919 Paul Warburg organized
the American Acceptance Council, which was devoted entirely to acceptance
propaganda.}

^{The first convention held by this association at
Detroit, Michigan, on June 9, 1919, coincided with the annual convention of the
National Association of Credit Men, held there on that date, so that
"interested observers might with facility participate in the lectures and
meetings of both groups," according to a pamphlet issued by the American
Acceptance Council.}

^{Paul Warburg was elected President of this
organization, and later became chairman of the Executive Committee of the
American Acceptance Council, a position which he held until his death in 1932.
The Council published lists of corporations using trade acceptances, all of
them businesses in which Kuhn, Loeb Co. or its affiliates held control.
Lectures given before the Council or by members of the Council were
attractively bound and distributed free by the National City Bank of New York
to the country’s businessmen.}

^{Louis T. McFadden, Chairman of the House Banking and
Currency Committee, charged in 1922 that the American Acceptance Council was}

¹²⁷

^{exercising undue influence on the Federal Reserve
Board and called for a Congressional investigation, but Congress was not
interested.}

^{At the second annual convention of the American
Acceptance Council, held in New York on December 2, 1920, President Paul
Warburg stated:}

^{"It is a
great satisfaction to report that during the year under review it was possible
for the}

^{American
Acceptance Council to further develop and strengthen its relations with the
Federal}

^{Reserve
Board."}

^{During the 1920s Paul Warburg, who had resigned from
the Federal Reserve Board after holding a position as Governor for a year in
wartime, continued to exercise direct personal influence on the Federal Reserve
Board by meeting with the Board as President of the Federal Advisory Council
and as President of the American Acceptance Council. He was, from its
organization in 1920 until his death in 1932, Chairman of the Board of the
International Acceptance Bank of New York, the largest acceptance bank in the
world. His brother, Felix M. Warburg, also a partner in Kuhn, Loeb Co., was
director of the International Acceptance Bank and Paul’s son, James Paul
Warburg, was Vice-President. Paul Warburg was also a director on other
important acceptance banks in this country, such as Westinghouse Acceptance
Bank, which were organized in the United States immediately after the World
War, when the headquarters of the international acceptance market was moved
from London to New York, and Paul Warburg became the most powerful acceptance
banker in the world.}

^{Paul Warburg became an even more legendary figure by
his memorialization as "Daddy Warbucks" in the comic strip,
"Little Orphan Annie". The strip celebrated a homeless waif and her
dog who are adopted by "the richest man in the world", Daddy
Warbucks, a takeoff on "Warburg", who has almost magical powers and
can accomplish anything by the power of his limitless wealth. Those in the know
snickered when "Annie", the musical comedy version of this story, had
a highly successful run of several years on Broadway, because the vast majority
of the audience had no idea that this was merely another Warburg operation.}

^{It was the transference of the acceptance market from
England to this country which gave rise to Thomas Lamont’s ecstatic speech
before the Academy of Political Science in 1917 that:}

^{"The dollar,
not the pound, is now the basis for international exchange."}

^{Americans were proud to hear that, but they did not
realize at what a price.}

^{Visible proof of the undue influence of the American
Acceptance Council on the Federal Reserve Board, about which Congressman
McFadden complained, is the chart showing the rate-pattern of the}

¹²⁸

^{Federal Reserve Bank of New York during the 1920s. The
Bank’s official discount rate follows exactly for nine years the ninety-day
bankers’ acceptance rate, and the Federal Reserve Bank of New York sets the
discount rate for the rest of the Reserve Banks.}

^{Throughout the 1920s the Board of Governors retained
two of its first members, C.S. Hamlin and Adolph C. Miller. These men found
themselves careers as arbiters of the nation’s monetary policy. Hamlin was on
the Board from 1914 until 1936, when he was appointed Special Counsel to the
Board, while Miller served from 1914 until 1931. These two men were allowed to
stay on the Board so many years because they were both eminently respectable
men who gave the Board a certain prestige in the eyes of the public. During
these years one important banker after another came on the Board, served for
awhile, and went on to better things. Neither Miller nor Hamlin ever objected
to anything that the New York bankers wanted. They changed the discount rate and
they performed open market operation with Government securities whenever Wall
Street wanted them to. Behind them was the figure of Paul Warburg, who
exercised a continuous and dominant influence as President of the Federal
Advisory Council, on which he had such men of common interests with himself as
Winthrop Aldrich and J.P. Morgan. Warburg was never too occupied with his
duties of organizing the big international trusts to supervise the nation’s
financial structures. His influence from 1902, when he arrived in this country
as immigrant from Germany, until 1932, the year of his death, was dependent on
his European alliance with the banking cartel. Warburg’s son, James Paul
Warburg, continued to exercise such influence, being appointed Franklin D.
Roosevelt’s Director of the Budget when that great man assumed office in 1933,
and setting up the Office of War Information, our official propaganda agency
during the Second World War.}

^{In The Fight for Financial Supremacy, Paul Einzig,
editorial writer for the London Economist, wrote that:}

^{"Almost
immediately after World War I a close cooperation was established between the
Bank of}

^{England and the
Federal Reserve authorities, and more especially with the Federal Reserve Bank}

^{of New York.* This
cooperation was largely due to the cordial relations existing between Mr.}

^{Montagu Norman of
the Bank of England and Mr. Benjamin Strong, Governor of the Federal}

^{Reserve Bank of
New York until 1928. On several occasions the discount rate policy of the}

^{Federal Reserve
Bank of New York was guided by a desire to help the Bank of England.}

^{__________________________}

^{* William Boyce
Thompson (Wall Street operator) commented to Clarence Barron, Nov. 27, 1920,
"Why should the Federal Reserve Bank have private wires all over the
country and talk daily by cable with the Bank of England?" p. 327
"They Told Barron".}

¹²⁹

^{There has been
close cooperation in the fixing of discount rates between London and New}

^York."86

^{__________________________}

^{86 Paul Einzig,
The Fight For Financial Supremacy, Macmillan, 1931}

¹³⁰