Griffin - The Creature from Jekyll Island: A Second Look at the Federal Reserve

Dedicated to the next generation-especially my own brood:

James, Daniel, Ralph, and Kathleen.

May this effort help to build for them a better world.

Seventh printing: May 1998 Sixth printing: September 1997

Fifth printing: August 1996 Fourth printing: September 1995

Third printing: April 1995

Second printing: November 1994

First printing: July 1994

Third edition: May 1998

Second edition: September 1995

First edition: July 1994

Copyright 1998,1995 and 1994 by G. Edward Griffin

Published by American Media

P.O. Box 4646

Westlake Village, California 91359-1646

Library of Congress Catalog Card Number: 98-71615

ISBN 0-912986-21-2

Manufactured in the United States

TABLE OF CONTENTS

Preface i

Acknowledgments iv

Introduction v

I. WHAT CREATURE IS THIS? 1

What is the Federal Reserve System? The answer may surprise you. It is not federal and there are no reserves. Furthermore, the Federal Reserve Banks are not even banks. The key to this riddle is to be found, not at the beginning of the story, but in the middle. Since this is not a textbook, we are not confined to a chronological structure. The subject matter is not a curriculum to be mastered but a mystery to be solved. So let us start where the action is.

1. The Journey to Jekyll Island 3

2. The Name of the Game Is Bailout 25

3. Protectors of the Public 41

4. Home Sweet Loan 67

5. Nearer to the Heart's Desire .85

6. Building the New World Order .107

II. A CRASH COURSE ON MONEY 133

The eight chapters contained in this and the following section deal with material that is organized by topic, not chronology. Several of them will jump ahead of events that are not covered until later. Furthermore, the scope is such that the reader may wonder what, if any, is the connection with the Federal Reserve System. Please be patient. The importance will eventually become clear. It is the author's intent to cover concepts and principles before looking at events. Without this background, the history of the Federal Reserve is boring. With it, the story emerges as an exciting drama which profoundly affects our lives today. So let us begin this adventure with a few discoveries about the nature of money itself.

7. The Barbaric Metal .135

8. Fool's Gold 155

9. The Secret Science .171

The ancient alchemists sought in vain to convert lead into gold. Modern alchemists have succeeded in that quest. The lead bullets of war have yielded an endless source of gold for those magicians who control the Mandrake Mechanism. The startling fact emerges that, without the ability to create fiat money, most modern wars simply would not have occurred. As long as the Mechanism is allowed to function, future wars are inevitable. This is the story of how that came to pass.

11. The Rothschild Formula 217

12. Sink the Lusitania! 235

13. Masquerade in Moscow 263

14. The Best Enemy Money Can Buy 285

IV. A TALE OF THREE BANKS 307

It has been said that those who are ignorant of history are doomed to repeat its mistakes. It may come as a surprise to learn that the Federal Reserve System is America's fourth central bank, not its first. We have been through all this before and, each time, the result has been the same. Interested in what happened? Then let's set the coordinates of our time machine to the colony of Massachusetts and the year 1690. To activate, turn to chapter fifteen.

15. The Lost Treasure Map 309

16. The Creature Comes to America 325

17. A Den of Vipers 341

18. Loaves and Fishes, and Civil War 361

19. Greenbacks and Other Crimes 377

V. THE HARVEST 405

Monetary and political scientists continue to expound the theoretical merits of the Federal Reserve System. It has become a modern act of faith that economic life simply could not go on without it. But the time for theory is past. The Creature moved into its final lair in 1913 and has snorted and thrashed about the landscape ever since. If we wish to know if it is a creature of service or a beast of prey, we merely have to look at what it has done. And, after the test of all those years, we can be sure that what it has done, it will continue to do. Or, to use the Biblical axiom, a tree shall be known by the fruit it bears. Let us now examine the harvest.

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21. Competition Is A Sin .431

22. The Creature Swallows Congress 451

23. The Great Duck Dinner 471

VI. TIME TRAVEL INTO THE FUTURE 505

In the previous sections of this book, we have travelled through time. We began our journey by stepping into the past. As we crisscrossed the centuries, we observed wars, treachery, profiteering, and political deception. That has brought us to the present. Now we are prepared to ride our time machine into the future. It will be a hair-raising trip, and much of what lies ahead will be unpleasant. But it has not yet come to pass. It is merely the projection of present forces. If we do not like what we see, we still have an opportunity to change those forces. The future will be what we choose to make it.

24. Doomsday Mechanisms 507

25. A Pessimistic Scenario 537

26. A Realistic Scenario 565

PHOTOGRAPHS

The seven men who met in secret at Jekyll Island 24

The Fabian Society stained-glass window 106

First photo section 208-214

Period cartoons about the Rothschilds 234

Items relating to the sinking of the Lusitania 262

Second photo section 396-404

APPENDIX

A. Structure and Function of the Federal Reserve 590

B. Natural Laws of Human Behavior in Economics 592

C. Is Ml Subtractive or Accumulative? 594

BIBLIOGRAPHY 596

INDEX 602

PREFACE

Does the world really need another book on the Federal Reserve System?

I have struggled with that question for several years. My own library is mute testimony to the fact that there has been no shortage of writers willing to set off into the dark forest to do battle with the evil dragon. But, for the most part, their books have been ignored by the mainstream, and the giant snorter remains undaunted in his lair. There seemed to be little reason to think that I could succeed where so many others have failed.

Yet, the idea was haunting. There was no doubt in my mind that the Federal Reserve is one of the most dangerous creatures ever to stalk our land. Furthermore, as my probing brought me into contact with more and more hard data, I came to realize that I was investigating one of the greatest "who-dunits" of history. And, to make matters worse, I discovered who did it.

Someone has to get this story through to the public. The problem, however, is that the public doesn't want to hear it. After all, this is bad news, and we certainly get enough of that as it is.

Another obstacle to communication is that this tale truly is incredible, which means unbelievable. The magnitude by which reality deviates from the accepted myth is so great that, for most people, it simply is beyond credibility. Anyone carrying this message is immediately suspected of paranoia. Who will listen to a madman?

And, finally, there is the subject matter itself. It can become pretty complex. Well, at least that's how it seems at first. Treatises on this topic often read like curriculum textbooks for banking and finance. It is easy to become ensnared in a sticky web of terminology and abstractions. Only monetary professionals are motivated to master the new language, and even they often find themselves in serious disagreement. For example, in a recent letter circulated by a group of monetary experts who, for years, have conducted an ongoing exchange of ideas regarding monetary reform, the editor said: "It is frustrating that we cannot find more agreement among ourselves on this vital issue. We seem to differ so much on definitions and on, really, an