Jekyll_text

422 THE CREATURE FROM JEKYLL ISLAND
Committee of the League of Nations—which England dominated
to require all the other European nations to follow similar inflationary
monetary policies. They were also required to establish what
was called the "gold exchange standard," a scheme whereby all
countries based their currency, not on gold, but on the pound sterling.
In that way, they could all inflate together without causing a
disruptive flow of gold from one to the other, and England would
act as the regulator and guarantor of the system. In other words,
England used the power of her position within the League of Nations
to establish the Bank of England as a master central bank for all
the other central banks of Europe. It was the prototype for what the
Cabal now is doing with Federal Reserve and the World Bank
within the framework of the United Nations.
PROBLEM OF AMERICAN PROSPERITY
Europe was well in hand, but that still left the United States to be
controlled. America had also inflated during the war but not nearly
as much. She also had a fractional gold standard, but the stockpile of
gold was very large and still growing. As long as America continued
to exist as the producer of so many commodities that England
needed for import, and as long as the value of the dollar continued
to be high, the anemia of the pound sterling would continue.
The therapy chosen for this problem was simple. Perform a
monetary transfusion from a healthy patient to the unhealthy one.
All the London financiers had to do was find a large and robust
specimen who, without asking too many questions, would be willing
to become the donor. The specimen selected, of course, was
Uncle Sam himself. It was the prototype of the transfer mechanism,
previously described, which has been the life support keeping alive
the moribund Communist and Socialist countries since World War
II.
There are several ways the life blood of one nation can be transfused
to another. The most direct method, of course, is to make an
outright gift, such as the bizarre American ritual called foreign aid.
Another is to make a gift disguised as something else, such as needlessly
stationing military bases abroad for the sole purpose of bolstering
the foreign economy, or granting a loan to a foreign
1. For an overview of the foregoing developments, see "The Federal Reserve as A
Cartelization Device/' by Murray N. Rothbard, in Money in Crisis, Barry N. Siegei
ed. (New York: Ballinger, 1984), pp. 115-17.
THE LONDON CONNECTION 423
government at below market rates or—worse—with the full expectation
that the loan will never be repaid. But the third way is the
most ingenious of them all: to have one nation deliberately inflate its
currency at a rate greater than the other nation so that real purchasing
power, in terms of international trade, moves from the more inflating
to the less inflating nation. This is a method truly worthy of
the monetary scientists. It is so subtle and so sophisticated that not
one in a thousand would even think of it, much less object to it. It
was, therefore, the ideal method chosen in 1925 to benefit England
at the expense of America. As Professor Rothbard observed:
In short, the American public was nominated to suffer the burdens
of inflation and subsequent collapse [the crash of 1929] in order to
maintain the British government and the British trade union
movement in the style to which they insisted on becoming
accustomed.
°
At the inception of the Federal Reserve System, there had been a
brief struggle for power but, within a few years, the contest was
decisively won by the head of the New York Bank, Benjamin Strong.
Strong, it will be recalled, previously had been head of Morgan's
Bankers Trust Company and was one of the seven participants at
the secret meeting on Jekyll Island. Professor Quigley reminds us
that "Strong owed his career to the favor of the Morgan bank. ... He
became Governor of the Federal Reserve Bank of New York as the
joint nominee of Morgan and Kuhn, Loeb and Company." 2
Strong was the ideal choice for the cartel. Not the least of his
qualifications was his alliance with the financial powers of London.
When Montagu Norman was made the Governor of the Bank of
England in 1920, there began a close personal relationship between
the two central bankers which lasted until Strong's sudden death in
1928.
Norman was considered by many to be eccentric if not mentally
unbalanced. Quigley says:
Norman was a strange man whose mental outlook was one of
successfully suppressed hysteria or even paranoia. He had no use for
government and feared democracy. Both of these seemed to him to be
threats to private banking, and thus to all that was proper and
[
precious in human life.... When he rebuilt the Bank of England, he
1 Rothbard, Crisis, pp. 131-32.
2
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Quigley, Tragedy, p. 326.