To cover the fact that a central bank is merely a cartel which has been legalized, its proponents had to lay down a thick smoke screen of technical jargon focusing always on how it would supposedly benefit commerce, the public, and the nation; how it would lower interest rates, provide funding for needed industrial projects, and prevent panics in the economy. There was not the slightest glimmer that, underneath it all, was a master plan which was designed from top to bottom to serve private interests at the expense of the public.

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 instructed to come one at a time… where Senator Aldrich’s private rail car would be in readiness…

It was the names of all printed together that would have made our mysterious journey significant in Washington, in Wall Street, even in London. Discovery, we knew, simply must not happen, or else all our time and effort would be wasted. If it were to be exposed publicly that our particular group had got together and written a banking bill, that bill would have no chance whatever of passage in Congress.

What emerged was a cartel agreement with five objectives: 1) stop the growing competition from the nation’s newer banks; 2) obtain a franchise to create money out of nothing for the purpose of lending; 3) get control of the reserves of all banks so that the more reckless ones would not be exposed to currency drains and bank runs; 4) get the taxpayer to pick up the cartel’s inevitable losses; 5) and convince Congress that the purpose was to protect the public.

A primary objective of that cartel was to involve the federal government as an agent for shifting the inevitable losses from the owners of those banks to the taxpayers. That of course is one of the more controversial assertions made in this book. Yet, there is little room for any other interpretation when one confronts the massive evidence of history since the System was created.

This was the golden moment… Without government intervention, Continental would have collapsed, its stockholders would have been wiped out, depositors would have been badly damaged, and the financial world would have learned that banks not only have to talk about prudent management, they actually have to adopt it. Future banking practices would have been severely altered, and the long-term economic benefit to the nation would have been enormous. But with government intervention, the discipline of a free market is suspended, and the cost of failure or fraud is passed to the taxpayers… Banks can operate recklessly and fraudulently with the knowledge that their political partners in government will come to their rescue when they get in trouble…

The final bailout package was a whopper. Basically, the government took over Continental Illinois and assumed all of its losses ($4.5 billion).

Even as the Bush administration insists it won't risk public funds in a bailout, American taxpayers may already be liable for billions of dollars stemming from Federal Reserve and Treasury efforts to quell a financial crisis.

History suggests the Fed may not recover some of the almost $30 billion investment in illiquid mortgage securities it received from Bear Stearns Cos., said Joe Mason, a Drexel University professor who has written on banking crises….

The Record of the Federal Reserve System
If the Federal Reserve System really does serve the purpose of stabilizing our economy then one should be able to point to evidence of that. At least that’s what a “conspiracy theorist”… I mean a skeptic would say.

Griffin summarizes the record of the Federal Reserve System in stabilizing our economy:

Since its inception, it has presided over the crashes of 1921 and 1929; the Great Depression of ’29 to ‘39; recessions in ’53, ’57, ’69, ’75, and ’81; a stock market “Black Monday” in ’87 (Is it just a coincidence that all those depressions and recessions began during Republican presidencies?); and a 1000% inflation….

The consequences of wealth confiscation by the Federal-Reserve mechanism are now upon us. In the current decade (the book was copyrighted in 1994), corporate debt is soaring; personal debt is greater than ever; both business and personal bankruptcies are at an all-time high; banks and savings and loan associations are failing in larger numbers than ever before; interest on the national debt is consuming half of our tax dollars…

That is the scorecard 80 years after Federal Reserve was created supposedly to stabilize our economy! There can be no argument that the System has failed in its stated objectives… There has been more than ample opportunity to work out mere procedural flaws. It is not unreasonable to conclude, therefore, that the System has failed, not because it needs a new set of rules or more intelligent directors, but because it is incapable of achieving its stated objectives…. That leads to the question: why is the System incapable of achieving its stated objectives? The painful answer is: those were never its true objectives… It becomes obvious that the System is merely a cartel with a government façade… When there is a conflict between the public interest and the private needs of the cartel – a conflict that arises almost daily – the public will be sacrificed. That is the nature of the beast. It is foolish to expect a cartel to act in any other way….

This view is not encouraged by Establishment institutions and publishers. It has become their apparent mission to convince the American people that the system in not intrinsically flawed.

At the time, the conventional wisdom… was that a government institution would finally harness the “money trust,” disarm its powers, and establish broad democratic control over money and credit… The results were nearly the opposite. The money reforms enacted in 1913, in fact, helped to preserve the status quo… Once the Fed was in operation, the steady diffusion of financial power halted. Wall Street maintained its dominant position – and even enhanced it.