J.P. Morgan, The Federal Reserve, and the 1920’s Market Boom

From the very beginning, the Federal Reserve has been dominated by the interests of J.P. Morgan.

On page 122 of America’s Sixty Families by Ferdinand Lundberg, we read the following:

“In practice, the Federal Reserve Bank of New York became the fountainhead of the system of twelve regional banks, for New York was the money market of the nation. The other eleven banks we so many expensive mausoleums erected to salve the local pride and quell the Jacksonian fears of the hinterland. Benjamin Strong,…. president of the Bankers Trust Company [J.P. Morgan] was selected as the first Governor of the New York Reserve Bank. An adept in high finance, Strong for many years manipulated the country’s monetary system at the discretion of directors representing the leading New York banks. Under Strong the Reserve System, unsuspected by the nation, was brought into interlocking relations with the Bank of England and the Bank of France.”

This “interlocking relation” with the Bank of England led directly to the stock market boom of the 1920’s. Alan Greenspan, former Chairman of the Federal Reserve and former Board member of the J.P. Morgan Company, wrote the following in 1966 on pages 99-100 of Capitalism: The Unknown Ideal edited by Ayn Rand:

“When business in the United States underwent a mild contraction in 1927, the Federal Reserve created more paper reserves in the hope of forestalling any possible bank reserve shortage. More disastrous, however, was the Federal Reserve’s attempt to assist Great Britain who had been losing gold to us…. The Fed succeeded: it stopped the gold loss, but it nearly destroyed the economies of the world in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market – triggering a fantastic speculative boom…. As a result, the American economy collapsed.”

These quotes are cited from pages 473 and 474 of The Creature from Jekyll Island, A Second Look at the Federal Reserve, by G. Edward Griffin.

  

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