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Why monetary reform advocates are revisiting the Chicago Plan

Richard (Rick) Mills
0 Comments|October 30, 2012

In 1933, economists at the University of Chicago put forward confidential proposals to roughly 40 individuals concerning banking reform.

Should we leave the creation of new money in the hands of bankers or place its creation solely with our government?

 

“The financial system used by all national economies worldwide is actually founded upon debt. To be direct and precise, modern money is created in parallel with debt…

The creation and supply of money is now left almost entirely to banks and other lending institutions. Most people imagine that if they borrow from a bank, they are borrowing other people's money. In fact, when banks and building societies make any loan, they create new money. Money loaned by a bank is not a loan of pre-existent money; money loaned by a bank is additional money created. The stream of money generated by people, businesses and governments constantly borrowing from banks and other lending institutions is relied upon to supply the economy as a whole. Thus the supply of money depends upon people going into debt, and the level of debt within an economy is no more than a measure of the amount of money that has been created.” Michael Rowbotham, ‘The Grip of Death’

US Federal Reserve – the Fed

On the night of November 22, 1910 a delegation of the nation’s leading financiers, led by Senator Nelson Aldrich, left New Jersey for a very secret ten day meeting on Jekyll Island, Georgia.

 

Aldrich had previously led the members of the National Monetary Commission on a two year banking tour of Europe. He had yet to write a report regarding the trip, nor had he yet offered any plans for banking reforms.

 

Accompanying Senator Aldrich to Jekyll Island were:

  • Frank Vanderlip, president of the National City Bank of New York, associated with the Rockefellers

  • Henry P. Davison, senior partner of J.P. Morgan Company, regarded as Morgan’s personal emissary

  • Charles D. Norton, president of the Morgan dominated First National Bank of New York

  • Col. Edward House, who would later become President Woodrow Wilson's closest adviser and founder of the Council on Foreign Relations

  • Benjamin Strong, a lieutenant of J.P. Morgan

  • Paul Warburg, a recent immigrant from Germany who had joined the banking house of Kuhn, Loeb and Company, New York directed the proceedings and wrote the primary features of what would be called the Aldrich Plan.

After the Jekyll Island visit the National Monetary Commission “wrote” the Aldrich Plan which formed the basis for the Federal Reserve system.

 

"In 1912 the National Monetary Association, under the chairmanship of the late Senator Nelson W. Aldrich, made a report and presented a vicious bill called the National Reserve Association bill. This bill is usually spoken of as the Aldrich bill. Senator Aldrich did not write the Aldrich bill. He was the tool, if not the accomplice, of the European bankers who for nearly twenty years had been scheming to set up a central bank in this Country and who in 1912 has spent and were continuing to spend vast sums of money to accomplish their purpose." Congressman Louis T. McFadden on the Federal Reserve Corporation: Remarks in Congress, 1934

 

After several failed attempts to push the Federal Reserve Act through Congress, a group of bankers funded and staffed Woodrow Wilson's campaign for President. He had committed to sign a slightly different version of the Federal Reserve Act than Aldrich’s Plan.

 

In 1913, Senator Aldrich pushed the Federal Reserve Act through Congress just before Christmas when much of Congress was on vacation. When elected president Woodrow Wilson passed the FED.

 

To view the rest of this article, please click on the link:

 

http://aheadoftheherd.com/Newsletter/2012/A-Distinction-Between-Money-and-Credit.html 


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