"If the American people ever 
allow private banks to control 
the issue of their currency, 
first by inflation then by 
deflation, the banks and 
the corporations will grow up 
around them, will deprive the 
people of all property until 
their children wake up 
homeless on the continent 
their fathers conquered. The 
issuing power should be 
taken from the banks and 
restored to the people,
to whom it properly belongs." 
~ Thomas Jefferson

1913 was a very bad year in our country. Not only did we see
the passage of the 16th Amendment which would lead to the
overwhelming taxation of Americans, it was also the year that
the Federal Reserve was created. In this article, we are going
to take a look at The Fed's history, learn about their power,
and see if we can determine who actually owns it and where the
money goes.

What is the Federal Reserve
The Federal Reserve is the central bank of the United States.
Despite the fact that their web site has a .gov extension, they
are actually a private company and NOT part of the government.
That fact was a little shocking to me the first time I learned
it. The Fed is comprised of 12 regional banks each of which
represent a district in our country. The rest of the banks in
the country are called member banks (members by force). The
management of the Fed is handled by a board of governors who are
appointed by the president to a 14 year term. One of these
governors is the Chairman; In recent years, this was Alan
Greenspan who has since retired. While the Fed chairman must
report their activities and findings to Congress, they have the
power to make money, alter interest rates, and many other
actions are at the Fed's sole discretion. Their powers are great
and the controls on them are very few. Our government cannot
remove a board member, audit the organization, or dictate their
policies. In fact, about the only power our government has over
the Federal Reserve is the ability to repeal the Federal Reserve
Act.

The most important policy making body of the Federal Reserve
System is the Federal Open Market Committee (FOMC). It is
composed of the seven Governors, the president of the Federal
Reserve Bank of New York, and four other Reserve Bank presidents
that serve on a rotating basis. The FOMC can affect monetary
policy by buying and selling U.S. securities, alter the amount
of money that commercial banks must reserve against deposits,
and adjusting the interest rate charged to commercial banks.

One of the Fed's biggest responsibilities is to loan our
government money to pay off debt. The Fed charges our government
interest on these loans, but oddly enough, does not pay taxes on
these profits. As taxpayers, 40% of our taxes go toward paying
the interest on the national debt.

History of The Fed
Alexander Hamilton created the first central bank which was
dismantled after 20 years. You should note that Hamilton was at
odds with everything the rest of our forefathers had tried to
do. When the Constitution was being drafted, he envisioned a
monarchy with a king, just like the very system he had left. The
truth is that he was power hungry and thought that he could
achieve power in the new world. Fortunately, his attempt with
the central bank failed.

In 1816, there was another attempt to create a central bank.
This bank inflated the money and eventually busted. Andrew
Jackson, who called the bank a "monster bank", abolished it in
1836. In 1834, the government created the "Gold Standard" which
made a dollar worth approximately 1/20th of an ounce of gold.
Because gold is very resistant to inflation, this created a very
stable dollar and prevented abusive government expenditures
using fiat currencies that were not backed by gold.

In 1862, Lincoln needed money to fund his invasion of the south
and the government again began printing paper money; these bills
were known as "Greenbacks". These bills were necessary because
the government didn't have enough gold to fund the war. After
the war was over, we went back on the gold standard and the
economy stabilized.

The beginnings of the Federal Reserve began in the early 1900's
as Rockefeller and J.P. Morgan desired a central bank so that
they could have cheap credit and inflated money to further their
empires. The idea being that since they were already wealthy,
they could loan out inflated money, not backed by gold, and
charge interest on it. This is known as "Fractional Banking". In
1907, their cause was furthered when many banks in New York
didn't have enough gold to back their currency, which led to
panic among the people. This made the idea of a central bank
that would exist as a sort of insurance policy on the people's
money very attractive, and the idea was sold by people like J.P.
Morgan as being in the people's best interest despite the fact
that it was really in his best interest.

In 1910, 7 men under the guise of a hunting trip, took a train
to the most exclusive club in the country located at Jekyll
Island, Georgia. These 6 men represented a sizable chunk of the
world's wealth and were as follows:

Senator Nelson Aldrich - Republican whip in the Senate and the
father-in-law of John D. Rockefeller.

Abraham Andrew - Assistant Secretary of the Treasury

Frank Vanderlip - President of the National City Bank of New
York (Now Citibank)

Henry Davison - Senior partner of the J.P. Morgan Company

Benjamin Strong - Lieutenant of J.P. Morgan

Charles Norton - President of the First National Bank of New
York 

Paul Warburg - Partner in Kuhn, Loeb & Company and a
representative of the Rothschild banking dynasty in England 

While on this trip, these men didn't even address each other by
their real names and tried to conceal their identities. In fact,
they denied the trip even happened for many years, however,
finally admitted to it later. It was here that these 6 men
drafted a bill for the creation of the Federal Reserve. Now, I
read a couple of documents that claim that this meeting is a
myth, however, they are in the minority, and I also found these
statements by Frank Vanderlip as quoted in the February 9th,
1935 edition of the Saturday Evening Post:

"I do not feel it is any exaggeration to speak of our secret
expedition to Jekyll Island as the occasion of the actual
conception of what eventually became the Federal Reserve System.
We were told to leave our last names behind us. We were told
further that we should avoid dining together on the night of our
departure. We were instructed to come one at a time and as
unobtrusively as possible to the railroad terminal on the New
Jersey littoral of the Hudson where Senator Aldrich's private
car would be in readiness attached to the rear-end of a train to
the south. Once aboard the private car we began to observe the
taboo that had been fixed on last names. We addressed one
another as Ben, Paul, Nelson and Abe. Davison and I adopted even
deeper disguises abandoning our first names. On the theory that
we were always right, he became Wilbur and I became Orville
after those two aviation pioneers the Wright brothers. The
servants and train crew may have known the identities of one or
two of us, but they did not know all and it was the names of all
printed together that would've made our mysterious journey
significant in Washington, in Wall Street, even in London.
Discovery we knew simply must not happen."

Later he states:

"If it were to be exposed publicly that our particular group
had gotten together and written a banking bill, that bill would
have no chance whatever of passage by Congress."

It must be noted that their bill originally did not pass
Congress. This was partially because Aldrich attached his name
to the bill despite protest from the others. But the bill was
slightly revamped and renamed, and it passed in 1913. Some
people believe that these powerful men had a couple of
democratic senators (who were most resistant) and President
Wilson in their pockets which also helped its eventual passage.
Wilson later stated, "I have unwittingly ruined my country".

In 1933 the gold standard was abolished by FDR and it has never
been used since, nor has the U.S. budget ever been balanced
since. This was done because FDR was a socialist and had tons of
government spending that needed to be done in order to put his
New Deal policies into place. His problem was the simple fact
that there wasn't enough gold available to back enough currency
to fund his ambitions. FDR had American's gold confiscated
shortly after. 

The only other major changes between then and now has been
continued devaluation of the dollar due to inflation. This
inflation occurs because the Fed prints more money so that they
can in turn loan more money, and hence, make more money. So
where does the money go?

Who Owns the Fed?
The official Federal Reserve web site claims that they are a
non-profit organization and nobody owns it. If this is true,
then why do they later state that there are shareholders who
earn dividends of 6%/year? It would follow that those who own
the stock, own the Fed. The stock is not publicly traded and it
is estimated that there are about 300 stock holders, however, it
is not public knowledge as to who these people are. I think it
is safe to say that it isn't anyone from the middle or lower
classes of society. It should be noted that this "ownership" of
the fed is a little different than ownership of a publicly
traded company as the Fed's stocks cannot be sold. I guess, in
essence, that makes the stockholders permanent owners and
permanently entitled to their 6% dividends every year.

Discussing the real ownership of the Fed, typically leads to
conspiracy theories that state that it is really owned by
foreign banks (Rothschilds of England), or the world's richest
families, etc. I have honestly been unable to find information
that proves or disproves these theories, and I want to stick to
the things that we do know. I think it is fair to say that we
really don't know who owns it for sure, but the whole system is
sketchy enough that nearly anything is believable. It is also
worth mentioning that many of the prevalent conspiracy theories
of today state the same things that many of our leaders asserted
in the years following the creation of the Fed.

Who Benefits?
Perhaps more important than knowing who owns the Fed, is knowing
who benefits from it. The Fed's web site states that the
interest on the national debt pays their operating expenses, 6%
dividends go to the shareholders, and the remainder is returned
to the Secretary of the Treasury to be returned to the general
fund. In the year 2000, this amount, according to the Fed's web
site was just over 3.75 billion dollars. Let's think about that
for a minute... The Fed raked in interest on over 6 trillion
dollars and only had 3.75 billion dollars left over to return to
the government? Let's do a little math on this. Let's say the
Fed was charging 5% interest on the 6 trillion dollar debt -
that would be 300 billion dollars in interest revenue. Next,
let's go ahead and take 6% off the top (since we don't know how
much profit they made) and give it to the shareholders - that
adds up to 18 billion dollars leaving 282 billion. 3.75 billion
was returned to the Secretary of the Treasury which means that
the Fed's operating costs for the year were nearly 280 billion
dollars of our tax dollars according to my math. I think all of
us would have a hard time believing that the Fed costs that much
to operate, but we don't really know because they aren't
accountable to us or Congress. Even if this 280 billion was
spent legitimately, do we really want to continue contributing
40% of our tax dollars to a system that is, at best, inefficient
and costly?

We know that the Fed has the power to create and end periods of
expansion and recession, however, part of their charter is to
keep prices stable and inflation at bay. How have they done in
this department? Before the Fed came about, a dollar was worth a
dollar and now it is worth about 4 cents. Every time they print
more money, your money becomes more worthless, yet they have
more to loan out. Their devaluation of the dollar has been as
intentional as a robbery. This devaluation of our money is the
very reason that it takes 2 incomes to raise a family now. It is
also the reason that we rely so much on credit. And who benefits
from our reliance on credit? Banks! Currently, banks are
collecting interest on over 27 trillion dollars of American's
personal debt, and most of this debt is incurring much higher
interest rates than what the Fed gives the government. So we see
a pattern here where the majority of the money in this country
winds up in the banks, which certainly lends some credence to
the many conspiracy theories out there.

Food for Thought
Is it really so difficult to believe that those that make
the money, control our country?  If the Fed can greatly
influence the economy, what would prevent them from engaging in
insider trading?  Is the Federal Reserve even
constitutional given the statement that Congress shall have the
power to "To coin Money, regulate the Value thereof, and of
foreign Coin, and fix the Standard of Weights and Measures"
(Article 1, Section 8)?  Was FDR's seizure of gold in
1933 constitutional?  In 1994, a 32 person bipartisan
committee concluded that if things continue as they are, by the
year 2012 we won't even be able to pay the interest on the
national debt. Our country is close to bankruptcy. What will
happen when this occurs? Will we be "saved (owned)" by the U.N.?
Or maybe bankruptcy won't happen, but rather we will be
permanently enslaved to paying off the national debt while the
rich get richer?  Look at the quotes below and see if
they lend credence even to some of the wilder "conspiracy
theories". What does it take for a conspiracy theory to become a
theory for you? How about our forefathers and elected leaders
saying the same things as the conspiracy theorists for over 200
years? How about the first 2 quotes by the very people accused
of being part of the original conspiracy?