We have not yet examined another important change wrought in the U.S. financial system by the New Deal. In 1933, it proclaimed assurance against the rash of bank failures that had plagued the country during the Depression. By the advent of Franklin Roosevelt, the fractional-reserve banking system had collapsed, revealing its inherent insolvency; the time was ripe for a total and genuine reform, for a cleansing of the American monetary system by putting an end, at long last, to the mendacities and the seductive evils of fractional-reserve banking.

Having examined the nature of fractional reserve and of central banking, and having seen how the questionable blessings of Central Banking were fastened upon America, it is time to see precisely how the Fed, as presently constituted, carries out its systemic inflation and its control of the American monetary system.

It should by now be all too clear that we cannot rely upon Alan Greenspan, or any Federal Reserve Chairman, to wage the good fight against the chronic inflation that has wrecked our savings, distorted our currency, levied hidden redistribution of income and wealth, and brought us devastating booms and busts. Despite the Establishment propaganda, Greenspan, the Fed, and the private commercial bankers are not the “inflation hawks” they like to label themselves. The Fed and the banks are not part of the solution to inflation; they are instead part of the problem.

The new Federal Reserve System had finally brought a central bank to America: the push of the big bankers had at last succeeded. Following the crucial plank of post-Peel Act Central Banking, the Fed was given a monopoly of the issue of all bank notes; national banks, as well as state banks, could now only issue deposits, and the deposits had to be redeemable in Federal Reserve Notes as well as, at least nominally, in gold.

It was not only through Benjamin Strong that the Morgans totally dominated American politics and finance during the 1920s. President Calvin Coolidge, who succeeded Rockefeller ally President Harding when he died in office, was a close personal friend of J. P. Morgan, Jr., and a political protege of Coolidge’s Amherst College classmate, Morgan partner Dwight Morrow, as well as of fellow Morgan partner Thomas Cochran. And throughout the Republican administrations of the 1920s, the Secretary of the Treasury was multimillionaire Pittsburgh tycoon Andrew W.

Now that the groundwork had been laid for a central bank among scholars, bankers, and interested public opinion, by the latter half of 1910 it was time to formulate a concrete practical plan and to focus the rest of the agitation to push it through. As Warburg wrote in the Academy of Political Science book on Reform of the Currency: “Advance is possible only by outlining a tangible plan” to set the terms of the debate.

After the failure of the first drive toward central banking with the defeat of the Fowler Bill in 1902, and the collapse of Secretary Shaw’s efforts to use the Treasury as a surrogate central bank, the bank reform forces decided to put their cards on the table and push frankly for a Central Bank for the United States.