Rothschild Money Trust

in the direction of a centralized banking authority with the
power of life and death over commerce and industry. Without
authority of law the Federal Reserve Board established an "open
market committee" to fix and regulate the volume and value of
money, with the Governor of the New York Federal Reserve
Bank as chairman. It is and was the office of this committee to
expand the currency by buying securities, etc., on the open market
in New York and Chicago, and issuing in payment therefor
the notes of the Federal Reserve banks. To contract the currency
the process is reversed; they sell securities and receive
currency in payment therefor, which is thereby withdrawn from
circulation.
This supplanted the original system of issuing currency in
payment of eligible notes discounted by member banks. The
difference is that under the present system the "open market"
committee determines how much currency is good for us; under
the original system the demands of commerce and industry and
the member banks determined the quantity of it; the one depends
on the integrity and wisdom of the committee, the other
responds automatically to the currency and credit needs of the
people.
The depression of 1930 and the remedy for it was the issue
in the 1932 campaign. Mr. Roosevelt charged that President
Hoover was responhible for the depression and that he had
adopted inadequate measures to restore prosperity. There was
no demand by either political party or any candidate for office
that the Federal Reserve System be converted into a centralized
banking authority and that its powers be enlarged. No man
could have been elected President of the United States on any
such platform.
Under the pretense of protecting bank deposits and of
creating a corporation for that purpose, for which there was
some demand,—the Congress enacted the bill known as the
"Banking Act of 1935." This bill completed and perfected the
system as a centralized banking authority with much greater
power than was provided in the original Aldrich Bill. Among
other things it legalized the "open market committee" and provided
that the members of the Federal Reserve Board and five
members of the Federal Reserve banks (to be selected by their
directors) should constitute this "open market committee."
The Bank Act of 1935 called for a new Governor, and new
members of the Federal Reserve Board to be appointed by the