By Sean M. Gancer
If you have been associated or around any Libertarians for an extended amount of time, you have most likely heard them say “end the Fed.” This is a rallying cry of sorts for the return to sound money and to stop the century long destruction of the U.S. Dollar caused by the inflationary practices of the Federal Reserve Banking System. Since 1913, the United States money supply has been dictated by the Federal Reserve System– which is a central banking system that determines the money supply. Unlike previous national banks, the Federal Reserve was created with more power and for the sole purpose of an “elastic currency” that would expand or contract according to the “needs of trade.” It never had the purpose of price stability or full employment, and if you understand how it operates and its origin, it would make sense as to the destructiveness of its operation. Powerful groups of financial interests had been agitating for a US central bank for years. Much of the structure of what would become the Federal Reserve Act was laid out during secret meetings held at Jekyll Island (off the coast of Georgia) in November 1910 between government officials and private money men and bankers– including Henry Davidson, J.P. Morgan partner. These prominent figures from government and banking knew that they should keep a low profile, going so far as to book their travel to Jekyll Island under assumed names so that the press wouldn’t begin wondering why such powerful men were meeting clandestinely. They even claimed to be going on hunting trip to an island off the coast of Georgia– Jekyll Island– where there was an exclusive resort where J.P. Morgan was a member. And a senator, three bankers, the assistant secretary of the treasury—who, by the way, didn’t tell his boss—went down there for a week. They were plied with wild turkey, quail, and stuffed oysters. They wrote what became the first draft of the Federal Reserve Act. The original Federal Reserve Act was signed into law by President Woodrow Wilson on at 6:02 PM on December 23, 1913. (The fact that such a significant piece of legislation was enacted the night before Christmas Eve helps fuel the suspicion surrounding the Fed. Of the thirty-seven cities that applied to have Reserve Banks, twelve were selected. There are twelve Federal Reserve Banks, one for each district, each located in its respective city. The Board of Governors is located in Washington, DC. Congress has amended the Federal Reserve Act several times since its inception. The most significant changes to the structure of the Federal Reserve System itself came in the Banking Act of 1935. This new legislation strengthened the overall power of the Federal Reserve System and consolidated it in Washington, DC, away from the Fed’s own Reserve Banks. However, the Banking Act of 1935 also served to make the Fed more autonomous from the federal government. And thus, through the 1935 legislation, the United States created a truly “modern” central bank patterned after the European model. Setting aside the question of the merits of this consolidation of power in Washington, it is safe to say that this version of the Federal Reserve would not have been approved politically back in late 1913. But since the Federal Reserve has been created, it has allowed for the government to spend recklessly to the point of trillions of dollars worth of deficits. The Fed has been a bailout machine for major corporations, the enabler of reckless speculation, and has presided over the largest inflation in history– which has led to depressions, higher prices, and perpetual wars. The Federal Reserve in its current form is also unconstitutional. For the sake of being concise, the Federal Reserve operates independently of the Secretary of the Treasury and Congress. In the original Federal Reserve Act, the Treasurer was a chairman, but the 1935 act changed that requirement– thereby making it unconstitutional. There is no constitutional justification for an independent banking cartel that is the master of the money supply and economy. Only the Congress and the Treasury have the authority over the money supply– not a Federal Reserve board of governors. If there is to be a national bank, let it operate solely out of the Congress and the Treasury. The current Federal Reserve is nothing more than a tool for politicians and corporations to collaborate to get their way at the expense of everyday Americans and small businesses. It’s time to get back to sound money and allow people to be able to take care of themselves again — real market capitalism, not crony capitalism like we have had since 1913. END THE FED!
