The Fed and the Power Eilte

0:00This is, as you can see, a potentially very big topic. I'm going to try to condense it in a fairly short amount of time. The first thing that's talked about is the power elite. And those of us who are interested in power elite analysis and its ramifications, which are fascinating, are always accused of being conspiracy theorists. And the thing about the analysis is Because of those theory involved in this thing, except common sense, it's not that somehow we've got a theory and something imposes it on the fact. These analyses pop up from the fact, they stare out at you, and you begin to see connections. For example, suppose you look in the paper, you open up the New York Times or whatever, you see that Congress has just passed a steel import quota, or has increased the steel import quota, or has passed a new automobile import quota.

0:55And supposing you think to yourself, I mean, do you think to yourself, A, well, gee, it looks like a few intellectuals and congressmen suddenly got into it there, has increased the import quota? Or do you say to yourself, I guess the oil interests or the steel interests or the automobile interests have been lobbying for increased import quotas? Which of the two do you say? If you say to yourself, if somebody says, I guess, if it's a case of an automobile import quota, if the automobile industry has been lobbying for it, if somebody would say, no, you're a conspiracy theorist, clearly not. You'd have to be sort of a nut to think that an import quota has been established or a tariff has been increased because of some abstract intellectual interest without the drive for it of the particular industry at stake.

1:47And the thing is that doesn't conclusively prove it. First you have the hypothesis. The hypothesis is that the steel import quota has increased yesterday, let's say. The hypothesis is that it looks like the steel industry lobbied for it, and then you find out. You look in the situation, you find out nine times out of ten or 99 times out of 100, yes indeed they did lobby for it, and that's it. So that's how you get the hypothesis, and then you look for the evidence, which usually is fairly clear. So this is clear on that kind of a level of a tariff, or import quota, or a lobby for some airport, and you find out who did it, who gets the contract, things of that sort. It's fairly obvious that economic interests are pushing for it. Where it gets controversial, so to speak, is when it gets a little bit more abstract, a little bit more systemic.

2:33Lobbying, for example, for some kind of measure, which is supposed to be just for the general interest, like a central bank, we're talking about tonight, or some kind of regulatory commission or a war. In that sort of situation, it becomes somehow controversial to look into the possible economic interests which have been lobbying for it. And if you start looking around for the evidence, you usually find it, but usually you don't look for evidence. The problem is historians mostly don't look for evidence on a more abstract level. and particularly with financial groups involved. The Chicago economists are pretty good when they're dealing with a specific industry, like a specific regulatory commission, say the ICC and the railroad.

3:22It's pretty clear that the Interstate Commerce Commission is lobbied for the railroad interests. It's not put in by intellectuals and abstract leftists or something. It's put in by the railroads themselves, but cartelized the industry. The problem in the Chicago School is they don't go far enough and look for the financial interests underneath, underlying the various industrial, the various industries. There are financial interests of investment bankers and commercial bankers which cut across narrow industrial lines. We get more specific, because this is an empirical question. We get more specific. In the late 19th century, Various groups of businessmen tried to cartelize their industry, monopolize and cartelize the industry.

4:08First in the railroads in the 1860s and 70s and then in the manufacturing in the 1890s. And they tried, the theory was, cut production, raise prices and thereby increase profits. And this was the attempt, this was the theory. These are first part cartels, getting together and say, look, we'll raise the prices, we'll raise the railroad rates, or whatever, but in order to do that, you have to cut production, you have to cut railroad shipments, because the railroads, it's very difficult to do, you have to arrange a quota kind of system to cut production. Anyway, they tried to do that, and it never worked. It was a flop-a-roo. It didn't work. The economic theory shows us it will never work.

4:53Two reasons, one because internal pressure, because different firms have a temptation to cheat on the cartel, to undercut the cartel buddies and pick up more sales, or new firms come in, they see this industry is getting high profits, they establish a new plant with more modern equipment and they're permanently, and they smash the cartel, and you're stuck forever with a newer dangerous competitor. So for those reasons, both first in the railroads and then in manufacturing, cartels and mergers didn't work. There was a great merger boom from 1898 to 1902, 200 industries or so tried to form one monopoly company in each industry in order to cut production and raise prices. Almost all of them were flop-a-roos, totally collapsed.

5:42So with that knowledge, various would-be cartelists cited the turn of the government to do the cartelization for them. This is the essence of the so-called progressive era, which lasted approximately from, well, officially from 1900 to 1918, or actually from then on, I mean, we're still living in it, basically. And so the theory was, we get together, we get the government, either state or urban or state or federal, to do the cartellizing for us. The model of that was Bismarck and Prussia in Germany in the late 19th century. We forced all the firms into one cartel, we forced them to go along with cutting production and raising prices.

6:28With the government, it's sort of the big brother, sort of running everything and arbitrating prices and wages and having high tariffs to keep competitive imports. That was the basic schema. And around 1900, several financial groups began to form around banks, around investment banks, commercial banks. And particularly, from the panic of 1873 on, JP Morgan and Company was a major investment banker, first in railroads and then in manufacturing later on. Morgan started from the very beginning with the theory of cartelizing, organizing, first of all, organizing railroad cartels. They didn't work.

7:14And then Morgan turns to the federal government with forces for them and the Interstate Commerce Commission. And then in manufacturing in the late 19th century, in the 1890s. So about 1900, what you've got is two competing financial groups, more or less. You have the Morgans on the one hand, JP Morgan Company and all their vast network of corporations which they controlled, on the one hand versus another combine consisting of three groups. The Rockefeller Empire, starting, of course, with Standard Oil and moving outward into banking and finance, et cetera, allied with the Harriman, Edward Harriman, who was a big railroad financier and speculator, who took over a lot of railroads under the nose of Morgan, so that Morgan hated Harriman, And Harriman's expanding out into finance also, plus Kuhn-Loeb, a German Jewish investment banking house in New York, which also, which really, which really anticipated Morgan and going into manufacturing, so they were, so the three of them formed an alliance, basically what you've got from that 1900 on, is the Rockefeller-Kuhn-Loeb-Harriman alliance versus the Morgan's. This is a big Titanic struggle, which helps explain American politics,

8:39from 1900 till through World War II. It's more or less the paradigm. Much more, by the way, explanatory than the Republicans versus Democrats, who have us to run each year and that sort of stuff, which is more or less the puppet show of the public. And one of the things that comes into this picture, I think one of the keys, the beginning of this kind of analysis, is if you see a, you see, you notice what somebody is doing in government. Somebody, some president or cabinet minister or Secretary of the Treasury, or whatever, or Federal Reserve Chairman, and you notice what they're doing, most historians, what they say is, so-and-so entered government, you know, whatever, 1900, 1940, whatever, he did such-and-such for about four years or eight years, then he disappears. In other words, it's as if the government official dropped out of heaven or somewhere, and did things, and then left, and then disappears from the scene.

9:30With that kind of analysis, it seems to me what your competing view of this, I think This is the orthodox view. You read about John Foster Dulles or whoever you're talking about, Robert Cleveland or whatever. They do things in government and they leave. They come into the picture. They do things in government and they leave. And that's it. And nobody ever connects this up with what they did before or after. What would they do? Do they have a life before they entered government and after they left government? If you read the average orthodox story, they don't have a life. They just pop up from Mount Olympus and they do things and disappear. Once you, once you look at the, all you have to do is look at the situation, what did these guys do before they entered, they were president or secretary of treasury, or whatever, and what did they do afterward? And once you bring that into the picture, you get a whole, if it's so-called conspiracy analysis, pops out, almost leaps out at you, it becomes almost evident.

10:18This is one example, I can give hundreds of examples in American history, but one of the examples, Grover Cleveland, who actually happened to like, certainly a better president than anybody who succeeded him, there's no doubt about that. Robert Cleveland was in favor of laissez-faire, so out, he was very consistent, except on the railroad question. The railroad question was in favor of the Interstate Commerce Commission, passed in his administration, which of course set up the first regulatory commission for railroads. If you look at it from an abstract point of view, you might say, well, how is it that Robert Cleveland is great at everything except he somehow waffled on railroads? Well, it might be connected to the fact, if you look at what Cleveland did before he became a president, between his two terms, and after he left, who was he? Did he have a life before that, in addition to being a nice guy named Grover Cleveland?

11:07He indeed was a top railroad attorney in Buffalo, he was connected with Morgan-dominated New York Central Railroad, and his big buddy and partner, law partner, before and after he was president, was none other than Francis Lynn Stetson, who was the top personal attorney for JP Morgan. to Morgan. Once you look at that, and once you look at the fact also that Morgan was the major driver for the Interstate Commerce Commission, the major person pushing it, then everything begins to clarify, right? It's a light up. Or the fact that John Foster Dulles and his brother Allen, who ran American foreign policy for about 40 years, at least it seemed like it, about less than that. If I say 20 years, who were the Dulles brothers? Why did the Dulles brothers own American foreign policy? Is it connected with the fact that they were both top, before that, were top lawyers for Standard Oil in New Jersey and the Rockefeller royal empire.

11:58Do their policies have some connection with that fact? I think they did. So that opens up the whole interconnection of the power elite. Okay, if we look at that, that picture, and look at the fact that the various presidents and so forth, connected with either Morgan's or the opposition of Rockefellers during this whole period. And as I say, it clarifies an enormous amount about American political history, particularly because, and by the way, even more, I can't go into this, but what happens is, this is a tragic event. To me, the most tragic single event in American history was in 1896 when the Democratic Party, which had been the party of laissez-faire, an ideologically committed party of laissez-faire, is captured by the extreme status under William Jennings Bryan, and the whole thing then, the whole Democratic Party as a laissez-faire party disappears.

12:53In those days, political parties were very different from them. It's totally different. It must have been great for those of us who are political junkies. It must have been magnificent because the political parties were strongly ideological. They're not totally consistent, but remarkably consistent ideologically. They were organized around a certain key values and policies. So their members were very loyal, their members, when they socialized their members, the general public got interested. Everybody was either a Democrat or a Republican. There were no independent voters. Those were saying they were independent. You were committed to that, you grew up as a Democrat or a Republican, and you were loyal to it. And the reason was they had an ideology. It wasn't just, you know, scrambling for office or looking good on television. So therefore, and if you're a candidate waffle, if you're a Democrat or a Republican, your candidate waffle is unprincipled, you don't vote for them.

13:39The candidates were more militant, more ideological during the campaigns than they were the rest of the time. They were totally opposite from the present situation. So this is what happened before 1896. After 1896, when the laissez-faire lost its political voice, everybody forgets most of the public had a high amnesia approach politically. and so people forget, and then this left a vacuum of the fact that then on the party system from 1896 on was more or less like it is now, in other words, non-ideological, centrist, semi-status and all that. Because of that, it means the parties are no longer important and this left a vacuum, a political power vacuum for technocrats, bureaucrats and big business types that take over, a power elite to move in, which they couldn't do as well before that.

14:34So what you've got is all of these guys wanted cartelization by 1900. Not just the Morgans, but also the Rockefeller-Harriman group. None of them, they all have now committed to this concept. The problem is, how do you put this across to the average voter? The average voter, after all, the American voter has a tradition, tradition in the United States of anti-monopoly, pro-free market, pro-competition, anti-monopoly. Many state governments, for example, had in their constitution, an original state government had a constitution outlawing monopoly. By outlawing monopoly, they did not mean outlawing big business or having a flowing demand curve. What they meant was grants of monopoly privilege by the government, outlawing any grants of monopoly exclusive privilege to sell or produce by the government.

15:24So America was raised in an anti-monopoly tradition, as well as an anti-status tradition. How did they get away? How do the Morgan types get away with this? How do they put across cartelization of the market of the system? The way they put it across was to form an alliance with the opinion-molding groups of class and society, the opinion-molding class and society of intellectuals, intellectuals, academics, writers, journalists, media, what we now call the media. They form an alliance with them to put this across. It so happened that by 1900, the intellectuals and the media were right for this kind of alliance. For one thing, a lot more of them. In other words, technocrats were a tremendous technocratic explosion in the late 19th century. Engineering schools, PhDs came in for the first time, and engineering schools and social workers became a profession.

16:16and shrinks, positions, all these people want to expand their base and they all want to restrict the supply of their profession. Everybody want to keep the other guys out, have a licensing and all the rest of it. So they want a licensing and they also want to be able to staff a new interventionist society, a new order. They want to have jobs in a new order which, for one thing, under a free market capitalism, Many intellectuals don't get the jobs to which they think they should become accustomed. There's not much of a role there for historians and economists and all that. And one of the problems with Austrian economics in general, in the economics profession, if you get to the nitty-gritty, is what jobs can we offer? What jobs in the Austrian world offer economics?

17:03Well, not much in teaching, of course, but you can't offer much in any place else. I can't offer forecasting, you know, big forecasting jobs in government, or forecasting models and all the rest of it, because we just, you know, sort of most outlaw nonsense. So this is, it restricts the opportunities open for job opportunities for economists, there's no question about that. So, and these people saw that, they saw, hey, this is great, government can offer them, they can offer them jobs in the, economists in particular of course, they can offer them jobs apologizing for new order, The New Interventionist Order, and jobs in the order, planning it, or historians writing peons of the presidents and things like that. There's lots of jobs for intellectuals in the New Interventionist Order, which is not only just in the free market. Also, many of these people are well-known. Before we could get PhDs here, there were PhDs in Germany.

17:51They went to Germany to get PhDs, the first academics in the late 19th century. They were all in view of the spirit of the New Interventionism, the New Organic Statism, transcending the alleged evils of laissez-faire on the one hand and proletarian Marxism on the other. These people, there were statists that didn't like proletarians, but they go anyway. They didn't like the trouble of Marxism to make sure you have the rebel as a lot of sort of ruby types. This gives you a statism of a higher level, monarchical statism, big business statism, and the rest of it. So now we have the alliance that was now ripe for an alliance between these two new social groups, or the big business groups on the one hand and also the new intellectuals, and the other. You read some of the stuff I recommend. For example, the great book was written by James Gilbert in the late 1960s for designing the industrial state.

18:41He wanted to get a view of the intellectuals of the time. It's a wonderful, acidic, bitter book about these people. But he calls collectivist intellectuals the whole mindset. And one typical thing is not directly related to the Fed, but indirectly, Charles Steinmetz, who's a brilliant inventor, was a socialist. In 1905 he wrote a book about the importance of world socialism, I forget the title, around this period in 1905 or something like that. And the thing about Steinmetz, he was the big philosopher, inventor and theoretician for General Electric, which was a big Morgan company. And basically what he wanted was General Electric socialism. He wanted a world government run by General Electric, with him as the philosopher king, the philosopher-inventor. It's actually Steinmetz socialism, so that's the sort of, he symbolizes, well, two symbols for this new order, so to speak.

19:30One is Steinmetz and two is the New Republic magazine, which is still, unfortunately, with us, which was founded in 1914 as a big liberal, left-liberal, collectivist kind of electoral magazine. And the interesting thing is who founded it? It was founded by a Morgan partner, Willow Strait, and his life was a Morgan eros, a Whitney eros. In other words, to me, this also symbolizes Big Business, Dash, Socialist, Intellectual Alliance. A beautiful symbol of a Morgan-Dash Socialist intellectual order, so to speak. At any rate, the usual view, to get to the Federal Reserve System, the Federal Reserve System was part of the whole progressive movement. It's not just isolated, it has to be considered in context. Just as Big Business was reaching forward trying to get a Federal Trade Commission Act, which they did, to cartelize industry in general, to do for, the famous phrase at that point was, we need something to do, an organization to do for general industry, a general business, what the Interstate Commerce Commission did for, not to, but for railroads,

20:33and what the Labor Department does for unions, what the Agriculture Department does for farmers, in other words, to help them out, quote unquote. So that was, and the Federal Reserve system was conceived of by big bankers to cartelize the banking system. The American banking system had gotten a little too competitive by 1900. What happened is during the Civil War, the banking system had changed from a more or less free market to a more or less free banking system. From the 1840s on, after Jackson had destroyed the first bank, a more or less free banking system until the Civil War, and the Republican Party, which was a big statist party at that time, used the Civil War to push through their entire economic program, including high tariffs, huge subsidies on railroads and things like that, and part of which is destroying the competitive banking system, replacing it with a status banking, a centralized banking system called the National Banking Act, National Banking System, which monopolized the issue of banknotes in national banks instead of state banks. So it's semi-centralized, sort of a halfway house to a central bank.

21:45In the 1890s, Wall Street and especially Wall Street banks were running it, with a pyramid of credit on top of several Wall Street banks. By the 1890s, the control was slipping away from them. There were too many upstart banks in St. Louis and Chicago and places like that. And also, they were writing about the fact that there was so-called inelasticity in the money supply. In the last few decades, there was a clover of not enough money being poured out, and they couldn't create enough money, especially during the recession. During the recession, they had to contract. They'd expand during boom, creating a boom period, and then when things would get too hairy, they'd have to contract that the banks might go under. They needed a central bank, imported from Europe, they needed a lender of last resort to bail the banks out, and decentralized reserves that could all expand together, and would expand even during the recession.

22:38In this particular banking area, the two big clashing elite powers, the Morgans on the one hand and the Harriman, Rockefeller, Kumo, Carmbi on the other, were in agreement. There was no problem. They both agreed that we needed a central bank. So the question was, how to How to maneuver this? In other words, if they were in agreement, how to get the dumb masses to go along with it? This is the basic approach. The Orthodox view is that the drive for Federal Reserve started after the panic in 1907. People got scared, the bankers got scared, decided they needed a simple bank.

23:25It started long before that. It started about 1896. And what the Morgans wanted, and the Morgans essentially wanted the following, they were afraid of Brian because Brian was in favor of sort of government inflation and not bank credit inflation, so they didn't like Brian at all. The Morgans had to leave the Democratic Party and they made an alliance with the Rockefellers who were running the Republican Party at the time. And what the Morgans wanted basically was a continuing gold standard. They wanted a gold standard because they wanted an illusion of soundness, but they wanted expanding bank credit on top of the gold standard and a central bank also. And it was basically one of the Federal Reserve systems. And the idea was because the previous system was not elastic enough, quote unquote.

24:13So first they got the gold standard through by the 1890s from McKinley's victory and also the 1900s. But by 1897, they decided they needed to stimulate a phony grassroots movement. How do you get a Federal Reserve? You can't have Morgan mentioning a pronouncement. That's not going to work. Most of the public, for some obscure reason, suspicious of Wall Street and Morgan. They thought they were edgy. They had to stimulate a phony grassroots movement. And they searched for the Middle West. The Middle West in those days was the heartland. Good old boys from the Middle West. So they set up a phony Indianapolis Monetary Convention, the first session in 1896. There was a great book on this when we left historian Jim Livingston called The Origin of the Federal Reserve System.

25:00It goes into this at some wonderful lengths about how exactly this thing worked. So they pretend there's only small businessmen in Indianapolis and Indiana and across the country. It's a heartland. It has nothing to do with Wall Street banks. It's only a heartland. However, if you look into who actually was running it, it was the Morgan people. It was Morgan from beginning to end. So they have an Indianapolis Monetary Convention in 1896, another one in 1997. They pioneered what we can call a phony questionnaire technique, which was very effective from a public relations point of view. They sent out questionnaires to various bankers and businessmen all over the country, with sort of loaded questions that would get the right answers, and then they'd get the answers back, In 1897, two secretaries of the treasury, the first one under McKinley, was a Rockefeller The first, I think number one, McKinley bailed out of bankruptcy when he was governor of Ohio by the Rockefeller Combine, so he was beholden to the Rockefeller people.

26:18And McKinley's secretary of the treasury, Lyman J. Gage, was a Rockefeller Chicago banker, I think the first national banker in Chicago, basically was a Rockefeller bank. And so he tried to use, he was promoting the idea of a central bank, he was pushing for that, and after Teddy Roosevelt got in to a lone nut assassin, one of the many lone nuts in American history, popping off keenly, so Teddy Roosevelt was a Morgan person, he was shoelaces up, suddenly becomes president, he puts in a Morgan person named Leslie Shaw from Iowa, and he's trying to act as a central bank, as a treasury act as a central bank. and it didn't seem to work too well and finally I had to stop.

27:06So at that point, when it stopped working, when it was obvious the treasury couldn't function as a central bank, you have to have a central bank, central bank, at that point they got very serious by 1906 and put on the big push for a Fed or a central bank. Interestingly enough, they started the idea of a parity, two-two-one parity system. The New York Chamber of Commerce, the final drive for the Central Bank starts with Jacob Schiff, the powerful head of the King Loewen Company. He makes a speech before the New York Chamber of Commerce urging the Central Bank, calling for more elastic money and all that. And they set up a committee to study it. The committee is headed by Frank Vanderlip, who is Mr. Rockefeller in banking. He's vice president of the National City Bank of New York, which is a total Rockefeller controlled bank.

27:55And he sets up a committee, or I think they call it a commission, of five people who should try to study the banking problems, always study, I mean the solution is always written in advance more or less. Five experts get together and think about something for a couple of weeks and by God they come up with a simple bank idea. So the parody was this, it was sort of like watching this armament conference in the 1920s. Two Rockefeller people, two Morgan people and one Kuhn-Lower person, two, two, one. So the committee was, originally the committee was supposed to be Vanderlip for the Rockefellers, George Baker, who was Morgan's closest ally for, practically, boyhood of the First National Bank of New York, Jacob Schiff, and Lyman Gay, who was Secretary of Treasury, and JP Morgan himself, but they couldn't make it, you know, so you wind up with Vanderlip, plus four other guys who were indeed two, who constituted two Morgan people, two Rockefeller people, and one Kulowa person.

28:48and they come out with a report, calling for a simple bank once again, and in the meantime the American Bankers Association, now they have to convince the American Bankers Association, not that easy because the small bankers were suspicious. So you start with the American Bankers Association, set up their own committee with staff of Morgan and Rockefeller people and they come up with their report and they meet together with the other New York State Chamber Commerce Group, all the same people, all buddy-buddies, and they come up, 10 independent experts at this time, and they come up with a pro-central bank report. So then comes the panic of 1907, which is an extra, more of a push to the whole thing. It really starts by the end of 1906, the whole thing is really pretty well set.

29:40Anyway, this particular outfit, which we celebrate here this weekend, is the site of the famous secret conference in the summer of 1910, where the five guys got together and write the Federal Reserve Act. Not just think about it, just so they finally get to that stage, and these are, let's see what these, it should be a shrine and a song and story, as they are. These are, first of all, it was organized by Nelson W. Aldrich, a senator from Rhode Island, majority leader. He said he charters the car, of course there was no plane, and it couldn't fly down here. It was a car chartered in Newark, stationed near New York.

30:26And everybody had a fake name, because the reporters were very interested in this whole thing. They were trying to throw the reporters off. They all signed themselves on by Professor Jones, something like that. and Aldrich said we're just going down to Jekyll Island for a duck hunting expedition this is a big duck hunting place so apparently one reporter actually found out about the purpose of this for some reason somehow Aldrich was able to silence them in one way or the other that hasn't been explored yet keep them quiet so the guys that went down to this thing, presumably the headquarters were provided by J.P. Morgan who was one of the founders of the Jekyll Island Club Aldrich, who is Aldrich? Again, you look at who the guy is in real life and what he is in politics. In politics, he was the majority leader of the Senate for many years.

31:11He was a public and wholesale grocer from Rhode Island and started as fairly, you know, fairly modestly wealthy and leads the Senate in a multi-millionaire, even though his salary is fairly low. He's never been really investigated how he came about this. Anyway, the thing about Aldrich, the interesting thing about Aldrich was that his daughter, Abby, married John D. Rockefeller, Jr. It's always good to have your daughter marry a Rockefeller. So he is Mr. Rockefeller from then on in the Senate. And so he's organizing the thing. He had a National Monetary Commission, which he put through Congress. They have scholarly studies showing why you have to have a Federal Reserve System. That's how he set the stage in April of this. He brings with him the following people. There's two Morgans, two Rockefellers, one Cunlola. This is four years after the original paradigm. Old Rich Rockefeller person, another Rockefeller person is Frank Vanderlip, I already mentioned, Vice President of the National City Bank, and two top Morgan people, Henry P. Davison, partner of AP Morgan Company, the top Morgan partner, Secretary of State of the Morgan World Empire.

32:15Some of the partners are interested mostly in either politics or merging. Others are regular banker-bankers. Davidson was the top for external bankers. And Charles Norton, president of the First National Bank of New York, which is a Morgan-Baker bank. Those are the two Morgan people, and Paul Warburg, Kuhl and Lohr were partners in the fifth god. Paul Warburg was brought over by Jacob Schiff in about 1897 as a partner from Germany. They were all related, and Warburg and Schiff were related in a very obscure and incestuous way. They were like, everybody was each other's father or something like that, or cousin, it was very complicated. Anyway, they were all closely related, and Warburg comes over, apparently getting a salary of about $500,000 a year, which in those days was like five million or six million a year now, precisely for the purpose of bringing us the central bank, bringing us the joys of the German Reichsbank.

33:13I don't think he did anything else. I think it was his function. So he was there. He had been given a famous speech in 1907 in favor of the central bank. So these are the five guys. And also as an economist, they have the five guys plus a technocrat. The Harvard Economist actually liked the specific clauses, and David Tan asked me earlier who he was, and now I know his name, A. Piot Andrew, a Harvard Economist and a big fan of the Federal Reserve System. These six people sat there for a week and drafted the whole legislature. And there's been lots of... everybody's trying to take credit for the Federal Reserve System, so everybody writes his memoirs and claims, I really wrote it and he really wrote it. It's been conclusively proven by Milton Friedman and others that this is the same stuff. It's really virtually the same. What was passed three years later is virtually what they wrote here in Jekyll Island. Almost no changes.

34:05The reason they had to wait three years is the Democrats won the election in 1910 in Congress, and of course, Wilson won in 1912, so they had a weak tool. They couldn't have Aldrich's red name on the bill because he was a Republican. The Republican, the big Republican, they had to have a Democrat, they had to suck the Democrats into this too. They had to have glass, suck some of the glass. They had to re-sink it, re-tool it. And also they had to propagandize the masses about why this is really a grassroots movement. And J. Lawrence Loughlin, a Chicago economist who's a big fan of the Federal Reserve, was appointed or hired to set up a grassroots movement in Chicago.

35:15Willis' memoirs later on said this whole thing was fun for New York bankers. He admitted it. He turned against the Morgans anyway by that, honestly. He was fairly bitter about it. He thought it had been used. So at any rate, so they set up a phony grassroots thing. They converted businessmen, they converted small bankers of the American Bankers Association, and then they're ready for the big push in Congress. By late 1913, it's almost unanimous. They get everybody on this thing. They run through it, and that was it. Okay, so the Morgans, the Rockefellers, and the Kualoa forces win, then this question, what do you, okay, now, as many of the cartelists said, it's not enough to pass the legislation, you have to have sound people on the board, who's running it? So then you have jockeying for power, we're going to run this thing. And of course we generally accepted the Morgans were going to run it, and indeed they did.

36:01The Federal Reserve Board in Washington is largely Morgan, they had other influences there too, they were about seven people or whatever, there was a coalition. The Rockefeller guy was Frederic Delano, that's something I'll remember for a few minutes later. You have to realize that the Roosevelt family is very important for 20th century American history. The Theodore Roosevelt branch of the Roosevelt family, it's the Oyster Bay Manhattan branch, has always been Morgan connected, I mean, since almost his birth. Teddy Roosevelt, he went to college in Harvard and immediately married Alice Lee, he was an Austin Brahman type. The Boston Brahman was a little Morgan-oriented. So, he was a, and his mentor, his beloved political mentor was Henry Cabot Lodge, a virtually Morgan tool. So you have the Theodore Roosevelt wing of the family where he's been Morgan.

36:47On the other hand, the Franklin Roosevelt wing, the beloved Franklin Roosevelt wing, the Hyde Park Roosevelts, were allied to their neighbors in the Hudson Valley and the Astors and the Harrimans. The Harrimans were the operative people. The Harrimans were an underplayed group in American 20th century history. And they kept a low profile for some reason, because, you know, Eberle was the governor and ambassador to Russia and everything else. He was a key figure, an extremely wealthy person in the Harriman fortune, member of the Harriman-Wachafella Kumo of connection. So, at any rate, so we have Franklin Roosevelt's uncle, Frederick Delano, was also a member of the Federal Reserve, where he was connected with a Rockefeller railroad, The Federal Reserve Board, Benjamin Strong, Milton Friedman's favorite banker, Well, he doesn't really want it because he thinks it won't be powerful enough.

38:06He was persuaded to take the job by his two closest friends in the world, as Henry P. Davison, Morgan partner, and his neighbor got him into the whole thing. He was strong with Vice President Banker's Trust Company, which was set up by the Morgans to engage in the trust business. And his mentor and his closest buddy in the world was Henry P. Davison, Morgan partner. His other two closest friends were Dwight Morrow, Morgan partner, and I think Thomas from a lot more important anyway they got they worked on they said don't worry you'll have the power don't worry about it and indeed he did and so he gets in he follows a policy from then on of a totally Morgan policy until he died in 1928 what was the policy of expanding the power tremendous power of that centralized in the banking system expanding inflating the money supply first to finance the war effort came along well first to finance exports of the Allies. When the World War I started, in August 1914, Thomas W. Lamont, I'm assuming

39:05Harold P. Davison, Morgan partner, hops the first boat to London. He couldn't take the Concorde, but he hopped the first boat to London. He makes an agreement with the English, the Bank of England and the English government, which were very closely connected. Morgan Grenfell and Company is one of the top English banks and so for many years. And so they make an agreement with the British and French governments as follows. For the duration of the war, the The Morgan Bank gets the monopoly underwriting of all British and French bonds in the United States and the monopoly purchasing of all British and French ammunition and food, everything else. In other words, all supplies in the United States is purchased by JP Morgan & Company. So they fed the contracts to their own Morgan, mostly their own Morgan industry, their own companies like US Steel and International Harvester and General Electric, got the lion's share of all this stuff.

39:54So, at any rate, so strong is of course, increasing the money supply, I can have to first finance the foreign loans, the foreign exports, and then to get us into the war and finance the war effort. After World War I, we have a situation, a very peculiar situation, which I know will go to a great length, but anyway, we have a situation where the Morgans are committed to the Tony Gold standard, which the British engineered in 1925, 1926. The British had a peculiar situation. The British situation was the pound had been depreciated. The pound was always $4.86. That had always been the pound. That was it. That was a God-given pound of $4.86. The pound depreciated during the war because of inflation. I mean, we inflated, but the Western allies inflated even more.

40:42The Germans also inflated even more because they were in the war longer, for one thing. They were in the war for four years and they were in the war for only a year and a half. So, at any rate, the pound had depreciated down to $3.20 by 1920, and the British wanted to go back to the gold standard, they didn't want to buy out money, but they insisted on going back at $4.86. We can't go back at $3.20, that's, yeah, that's going to make us a lesser power, we have to reestablish our great British, London is a great financial center in the world, and to do that, we have to go back at $4.86. Also, the bondholders were pushing for it, too, of course. So, they're committed to two things, one, they're going back to gold, but going back at $4.86. 3. In order to make this viable, they would have had to deflate a lot. In other words, at 486, it means that British goods were unsaleable abroad and they were too highly priced.

41:29They would have had to deflate. They would have had a tremendous contractionary-deflationary. But I think it's great. I love deflation. The point is, they didn't love it. They now have been converted to an inflationary and cheap money policy. They want to continue a policy of inflation and cheap money and go back to 486. It's only insane axioms. They started with several mutually contradictory and crazy axioms and within that they maneuvered brilliantly within it. They maneuvered everybody else. They forced every country to go back and overbagged currency and all the rest of it. They also went back to a phony gold standard. This is the ancestor of Bretton Woods. They didn't go back to a gold coin standard. They only had a gold bullion standard. You could only get bars worth $10,000. You couldn't get coins, so the average person couldn't get it. Plus, you're a British citizen, you couldn't even get a gold bullion, you had to be a foreign citizen getting only a bullion, so it wasn't really redeemable, it was a phony redeemability, very much like Bretton Woods, really the ancestor of Bretton Woods.

42:24And they forced all the other countries to go back at higher currency, but the United States had nothing to do with us, they couldn't force us, they didn't have any power over us, they had three League of Nations over Europe. So they induced, because of the Morgan connection, they induced strong to keep inflating, so to help quote help England, unquote, in other words to keep Britain from losing gold to us. So we were on a regular gold standard, Britain was on a phony gold standard, we kept inflating currency and credit and everything else to try to keep Britain, keep this thing afloat. At any rate, during the 1920s what we got, getting back to power idea now, is that we have a totally Morgan country, and the administration is totally Morgan, not just strong. After World War I, this is something which hasn't been really dealt with by most historians, World War I discredited not just internationals, it discredited American domestic policies because everybody was fed up with inflation and shortages and price controls and all the rest of it which Wilson had imposed.

43:18There was a tremendous reaction against the Democrats and the Republicans get in in 1920. Anyway, Wilson was an aberration to begin with because he only came in originally because Teddy Roosevelt Harding was used by the Morganists to split the Republican Party and crush Taft. He was a Rockefeller person. So at any rate, we have a Republican government, a dominant Republican administration in the 20s. Harding was a Rockefeller person largely, although he also had Ohio crooks around him. It's unlovable crooks playing poker all the time. I kind of like that. It's better to play poker than do a lot of damage. At any rate, so Harding was sort of a Rockefeller person. Harding then has a mysterious illness and dies quickly. Again, there's been no investigation of the death of Warren Harding, no exhumation.

44:05I'm going to say we're exhuming, by the way, every president who dies in office should be exhumed and deeply investigated with subpoena power. So a Secret Service guy in the Secret Service organization in the Harding administration wrote a book claiming that Mrs. Harding poisoned him. But that was never, he was considered dismissed as a nut. Well, he might have been a nut, but nobody ever really investigated the charge, and that's very much like the McKinley situation. McKinley was a Rockefeller person, a lone nut kills him, and he's suddenly succeeded by a Morgan person named Teddy Roosevelt. Harding was a Rockefeller person, and he's suddenly succeeded by Calvin Coolidge, who was a Morgan person. Now, Calvin Coolidge has been mislabeled by historians as being sort of a quiet, jerk type. He might have been quiet, but he was not just a jerk, he was a member of the Coolidge family, which one of his cousins was T. Jefferson Coolidge, the head of the and the United Fruit Company. They were in with a whole Boston financial group, the Boston

44:55Brahman Group, which was essentially almost completely Morgan-oriented. So Coolidge was a Morgan person. If you read this book by Chernow and the Morgans, you find out that J.P. Morgan Jr. loved Coolidge. He thought that Calvin Coolidge was the greatest statesman of the 20th century. So he loved Coolidge. And Coolidge's policies were Federal Reserve of Expansion, Whipping Up the Boom, etc. And his cabinet was a Morgan cabinet more or less completely. I'll give you down a list of that. And then when we get to Herbert Hoover, we have also Morgan, more or less Morgan. He wasn't as solidly Morgan as Coolidge was, but the Morgans wanted Coolidge to run to third term. That's really one that kept urging him. He didn't quite trust Hoover. He was all right, but anyway. They finally settled on Hoover. Hoover's control, as we say in the espionage business, The person we checked with was Dwight Morrow, a Morgan partner we checked with three times a week on policy and advice, things like that.

45:53So anyways, you have a solidly Morgan, you have Benjamin Scorn, you have Coolidge, you have Andrew Mellon, the Secretary of Treasury who was allied to the Morgans. So we have a solidly Morgan administration. And what happens during the 1920s is other financial groups are going to get kind of bitter. kind of bitter. First of all, the Rockefellers are bitter anyway. And they're getting bitter at Morgan domination. The Chicago bankers are bitter and largely Rockefeller because of the New York Fed domination. So there's a tremendous shift, beginning to be a tremendous shift of financial groups toward the Democrats. In late 1920s, in 1928, for example, the DuPonts, who had always been Republican, been protectionists, break with the Republicans and set up the and the Alice Smith campaign. The DuPont executive, John Raskov, was the national chairman of the Alice Smith campaign.

46:43And they were bitter for various reasons. They were bitter, first of all, because of chemical patents, which the United States had stolen from the Germans in World War I. I'd say stolen. It's part of a war booty. They had these chemical patents. The United States grabbed them. The question is who should get them? The Morgans and the Rockefellers wanted to return them to the Germans so they could set the Germans up. Germany will be able to export again or things like that. DuPont wanted to keep the kempf of the patent. So DuPont's got very bitter about this. They're sort of aced out. Also, DuPont's had a big argument. DuPont's was a major shareholder of the General Motors. In collaboration with the Morgans, they had a big falling out in the 20s. The Morgans wanted to charge them too high a price for finance and all sorts of stuff. There was a big break with the Morgans. The DuPont started trying to take over US Steel,

47:28which was a big Morgan corporation. And the FTC stops them, and the FTC blocks the takeover a bit. This is 1926, and the FTC enforces a federal government Morgan-dominated company. So the DuPonts are very bitter. They shifted Democrats. Also, they hated prohibition being Catholic, so there was extra incentive. And by the 1930s, the Rockefellers shift also. First of all, Rockefellers are bitter in Morgan domination, too. The Rockefellers take over the Chase National Bank, which had been a major Morgan bank, seized control over in 1930, and Winthrop Woolrich, the son of Nelson Woolrich becomes the chairman of the board and the oil industry is in fairly bad shape, they find this tremendous new oil in Texas and Oklahoma oil prices are down on the bottom and they decide in favor of inflation so what you have now is a general alliance by many business groups in favor of not just cartelism, which they all now are in favor of but also radical inflation, getting off the gold standard, paper money, devaluing gold and all the rest of it

48:31The drive for setting up, for getting off the gold standard was headed up by the Committee for the Nation, which was set up for that purpose, which had on it retail store people, retail owners who wanted, retail people like Remington Rand and Filene and people like that, they thought the consumers should get more purchasing powers, they could buy their stuff, so they were in favor of inflation to give more money to consumers, that was their gig. But farmers, of course, always want more inflation, farmers want to increase and some price supports, and the farmers were agitating for inflation and paper money, and also the Rockefellers who won a higher price for oil, gasoline as a retail product. So the committee for the nation was heavily financed by Standard Oil of New Jersey, plus the Royal Dutch Shell Group was agitating for free silver, all these groups got together to get us off the gold standard.

49:27When Roosevelt, Roosevelt's famous breakup of the London Economic Conference, I've written on this, I didn't know, from the time I wrote on this, I didn't know about these details, the key forces behind the scenes. When Roosevelt sent a delegation, the Warburgs at the London Economic Conference, they were in favor, they were essentially the Morgan Group, they wanted to reestablish, not exactly a gold standard, but some kind of a fixed exchange rate with England. England's always their main buddy, maybe anyway. So they wanted to fix the exchange rate with England and the superinflationists wanted to cut that out and have all that inflation. And so the Rockefellers and the pre-silver people induced Roosevelt to send the famous telegram, the molly, whatever it's called, cancel negotiations, ending the London Economic Conference. And that's what happens in the first New Deal. The early New Deal is essentially the brilliant writings on this by Thomas Ferguson, the new left political scientist, who's writing a great book which hasn't been published yet, hasn't been finished yet.

50:23I'm waiting for great anticipation for the tentative title of the full of the House of Morgan on the coming of the New Deal. But he interprets, I think, that was the big Morgan thing, to have both together. together and was put in by the Rockefellers and others who wanted to smash them and cut the tie between commercial investment and banking. So that was the big Glass-Steagall Act and also the Public Utilities Holding Act 1935 to break up the Morgan-run public utilities company. The Morgan is the holding company's public utility, also successfully accomplished. It was a big smash of the Morgan. It was essentially the crushing of the Morgan royal empire. The guy who succeeded, and also centralizing power in the Washington Fed, the New York Fed was still Morgan-oriented, so they moved a ton of this in the Banking Act of 1935, and coming in as the dynamic New Deal head of the Fed was Mariner Echols. Mariner Echols was a Utah banker.

51:23The interesting thing about Echols, which hasn't been pointed out enough, everybody's praising Echols for being a pretensionist. The American Economic Review had an article about seven years ago saying that Eccles was a great guy, he was a pre-Keynesian, but not even leading Keynes, he was a 14, he existed or whatever, he was writing stuff about the need for deficit spending and more consumption and the rest of it. He wasn't just that, he was also in favor of everything else, social security and unemployment insurance schemes and going back to World War I collectivism and the rest of it. He was an all out status. At any rate, who was he? Again, if you look at Eccles, he wasn't just a guy who suddenly pops out from Utah, and he's there for bath from 1934 as head of the Fed until 1948. So what he was was the richest person in Utah, he was the head of a fleet of bank holding companies, and very opposed to the Morgans because they were antagonistic to him by being able to use the New York Fed as a power center.

52:16Center. He wanted to smash the New York Fed on the Morgans. He was an ally of the Rockefellers in doing it. Winfrey Bolgerich was also pushing for taking over, you know, smashing the New York Fed. So he was, and also in addition to that, Eccles was connected strongly to the Rockefeller interest. He had a construction, a Utah construction company, which built the Boulder Dam and lots of other stuff, in collaboration with the Standard Oil of California, the Bechdel Corporation, which in turn is heavily connected, has always been heavily connected with Standard by the way, when you look at Bechtel, when you look at the fact that two Reagan administration cabinet members, George Shultz and Castle Weinberg were both Bechtel's executives, things are coming out, this is a coincidence, who is Bechtel? Bechtel is the world's biggest construction company, also very strongly connected and attached to the Rockefeller world empire. When Rockefeller got the big concession in Saudi Arabia, the oil concession, Bechtel built the bases, they had to build stuff, they had to build pipelines and oil bases and stuff like that.

53:15So all these businesses are interconnected. So what you've got then in the first New Deal, in particular, you have the more or less smashing of the Morgan's rise to power of the Rockefeller plus retail interest plus the lower than the Harriman. Harriman was a big democratic contributor, of course, too, big in the New Deal. And collaboration was, of course, intellectual collectiveness. One interesting thing is that the Banking Act of 1935, which centered power on the Federal Reserve Board in Washington, was written both by Eccles and by Lachlan Curry, an extinguished quantitativeist in economics and also, of course, later translated, a Soviet agent. I'm not saying that the Soviet must and the Kremlin, they told Curry, push Federal Reserve to Varash or something like that.

54:06It's going along the same path, centralizing power in government and Washington, dominating, crippling any kind of free market system. So it all fits into this whole pattern. So, now, after the war, what happens after the war is over is that the, in general, in this titanic struggle between the Morgans on one hand and the Harriman, the Rockefeller, the Kummler, and the other, we have a detente, a permanent detente through World War II. World War II was a happy hunting ground, will we speak. Basically, what happened was that Morgan, once again, wanted an intervention in Europe. and connected with Britain and France and British and French finance, Morgan was always out to crush Germany, both of World War I and World War II. Ideology didn't seem to make a heck of a lot of difference here. On the other hand, the Rockefellers had no interest in Europe, as a matter of fact they had cartel arrangements with IG Farben, so they were isolationist in the German area and in Europe.

55:01in Europe. On the other hand, they wanted to crush Japan. Japan was evil. They were trying to take over rubber and oil in Southeast Asia, which the Rockefellers wanted. The Rockefellers were very interested in crushing Japan, stopping, quote, Japanese aggression, unquote, and from 1933 on, and 31 on, I should say. And meanwhile, the Morgans were sort of isolationists on Japan. As a matter of fact, the one person in the State Department in the 30s, against the war with Japan, was Joseph C. Groove, who was an ambassador to Japan. If you look at this and say, well, Jesus, he grew, you know, bastard, champion, must have been pro-Japanese, that's not really the point. The point is, he was not only a Morgan person, he was his cousin, JP Morgan Jr., Morgan married into the Groove family, a very close relative. So, is it conspiracy theory to say, well, look, you know, this guy's a cousin of Morgan, maybe his policies were also consonant, is it an accident, his policies going along with the Morgan financial interests?

55:55So at any rate, and by the way, John Foster Dulles, whom I already mentioned, is a Rockefeller lawyer for many decades. He was an isolationist in World War II, and after the war is over and the communist problem comes up, he all of a sudden becomes a world global crusader. We have to establish freedom everywhere, crush aggression everywhere, crush tyranny. How come he shifts so radically from 1940 to 1950? That could have been, of course, an intellectual shift. On the other hand, it seems to be going along with the fact that the Rockefeller interest also shifted from an isolationist or global to a stating position. At any rate, after World War II, we have a totally different line-up. The line-up is essentially the Rockefellers become the senior partners in the whole. The Rockefellers and Morgans become permanently allied, and the Morgans become junior partners in the Rockefeller Eastern establishment in 1945 or so on.

56:46And this is symbolized in many ways. One thing, the Council of Foreign Relations, which was set up by the Morgans, after World War I, to push internationalism and foreign loans and the rest of it, was taken over by the Rockefellers after World War II, and sort of a friendly takeover. It was not a hostile takeover. And the oil becomes the dominant situation in general, and the Rockefellers take it as a senior post in the so-called Eastern establishment. So from then on, the heads of the Fed become, doesn't make much difference than Morgan and Rockefeller, although it's interesting to cite it. The first guy is Thomas McKay, after Eccles leaves as Truman, kind of rush with Truman, Thomas McKay becomes head of the Fed for a few years. He was the head of Scott Paper Company, which is allies of the Morgan interests.

57:33After that, William McChesney Martin, a much beloved figure, becomes head of the Fed. William M. Martin Jr. came from St. Louis. I think the key thing is his father-in-law, Dwight Davis, was the secretary of war under Coolidge, was tied in with a Morgan interest. And after Martin, we have of course the beloved Paul Volcker, who was lionized by everybody, the press, the media, the academics, everybody else. He was 6'6", and he had a focus at the bar, the charismatic figure. I don't think that was the reason he was lionized. The fact that he was who he was, in other words, chairman of the Fed, and he was also, of course, long time connected with the Rockefeller royal empire. He was an economist for the Chase National Bank, he had been in the Manhattan Bank.

58:18He was an economist before that for Exxon Corporation, his whole life was in the Rockefeller ambit. Alan Greenspan, by the way, in addition to being an alleged ex-Randian, Alan Greenspan was also, before he became head of the Fed, the board of directors of the Morgan Guaranteed Trust Company, a big Morgan bank. There's also, of course, the neck of the Tri-Lateral Commission, which should be mentioned here as a post-Council of Foreign Relations is getting kind of unwieldy. So David Rockefeller set up the Tri-Lateral Commission in the early 70s as a very small group, I think 75 people in the United States, something like that, to sort of plan the world, to plan the world economic scene and make suggestions. By the way, I should say this also, what happens in Bretton Woods, for example, was set up.

59:05The whole Bretton Woods system was planned ahead of time during World War II, like five secret groups headed by the Council of Foreign Relations. The Morgan people began to work their way back by late 30s, early 40s. For one reason, Norman Davis, who was head of the CFR, was a Morgan person, was also a close buddy of Franklin Roosevelt, so they had a personal relation.

59:55and the so-called right and the so-called left is a very respectable center. And so what you've got is an agreement on post-war setup and just minor differences in negotiating with things themselves. I think one more stuff with Britain and also a very minor negotiation. Everybody was very happy with the post-war monetary picture, where essentially the English system comes back with a dollar being a phony gold standard instead of the British pound. So, and as I said, with the power elite, we essentially have Rockefeller domination, largely, with the Morgans as junior partner. What's happened in post-World War II America is basically the other, there's always competition, both in economics and politics, and the Eastern establishment has been challenged by sort of maverick types from the 1950s on, maverick types mostly from either Texas or Southern California or Florida, The Sun Belt, New Self-Made Millionaires, Pop-Up, The Monkey Ranch of the System, The Cowboys, The Libertarian Reporter-Historian, Carl Oglesby, The Yankee Cowboy War, The Watergate on the Kennedy Assassination, The Watergate on the Kennedy Assassination, The Watergate on the Kennedy Assassination, The Watergate on the Kennedy Assassination,

1:01:19He looks at, I think it's a very interesting way to look at it, he looks at, for example, the Kennedy assassination, basically a coup by the cowboys to take over, take power against the Yankees. Kennedy, of course, being a quintessential Yankee and Lyndon Johnson being a quintessential cowboy. And once again a lone nut pops up and suddenly there's a change, a fundamental change in power elite rule. And then he interprets Watergate as a counter-attack by the Eastern establishment, using not violence but the media. The Media, it's respectable media, PBS, Washington Post, New York Times, that sort of stuff, using control and public opinion to oust Nixon, who of course is basically a cowboy top coming from Southern California. It's a very interesting kind of way of looking at it, because then you don't look at Republican versus Democrats so much, you look at who's the financial group here, what's going on, who are the power elite forces at work.

1:02:08work. And of course we need more analysis of this, we need more scholars. One of the problems in this whole field is, since the field is not considered respectable, the field of power and analysis, orthodox historians mostly work at it, academic types don't work at it, it's easier to talk about, you know, every battle of the civil war in great detail and talk about Morgan Rockefeller combined. And so what you get is the people, it leaves the field of analyzing this stuff to sort of more marginal types, independent scholars or Reporters and things like that tend to get, might make more mistakes and that's what they get jumped on, discrediting the whole approach. That's one of the problems in this whole area. It tends to be self-fulfilling profiteers. Wow, these guys made mistakes. But all fields make mistakes. That's the pioneering, having any kind of new discipline. This basically is.

1:02:56So anyway, that's the, this all comes from looking at what these guys were doing before they got into office and after they got out of office. And I think that's the kind of insights you get when you're looking at the, you know, what's inside this throughout his life, and as John Forster does, or any of these people, Mara Echols, or any of these people, gives you a totally new perspective, and needs to be brought out, brought out and, you know, discussed in a scholarship, and almost has never done that way, and so that's, I think, I'm going to throw open to you, this is a new way, you know, another way of looking at the Fed. It's not just people doing things that... I mean, everybody in Mises and Fettes sort of screwed up and made errors and things like that, but maybe the errors are also systemically related to who's doing it, and why they're doing it. Maybe it's not so much an error from their point of view. It might be perfectly rational from the point of view of the forces that are operating it. It's like the farm policy, you know, the agricultural policy. You look at agricultural policy, and I'll leave you with that. You look at the farm policy since the New Deal. It's actually since 1928 when Hoover started it. You look at the farm policy, not 1929, Hoover started it. You look at the farm policy

1:04:04It looks irrational. Many economists say it's irrational. Why is it irrational? Look, first you pay the farmers not to grow stuff. You pay them to grow less. You pay them not to grow food. And then, that's one thing, and then you also pay them, another division of the Department of Agriculture, pays them to grow more food. Presently irrigate, have to have more fertilizer and rural electrification and the rest of it. So it increases their production. On the one hand the Federal Government increases their production. production, the other hand, the federal government pays them to cut production. It seems irrational. It's irrational from our point of view. It's not irrational from the point of view of two groups. One, the Department of Agriculture, more and more bureaucrats, and two, the farmers. They get paid both ways. They get paid from producing more. They get paid from producing less. That's great. Those who are still left in there, the large farmers, will benefit from it. So irrationality is only from the point of view of which you're talking about.

1:04:52The point of view of the economy or the standard of living, of course, is irrational. The point of view of the forces at work, it isn't. I think, by the way, it's important in general Just to leave you with this thought, when we argue for the free market, we tend to look at it as intellectual error, which of course socialism, status, are intellectual errors. They're wrong and they lead to terrible consequences and all the rest of it. There's something else involved, namely economic interest. Many of these guys benefit from these policies. They're for it because they benefit from it. When I was growing up and entering the free market field, you look at Nelson Rockefeller and the Rockefeller family, statists to the hilt, and the usual explanation is why are they statists, the usual explanation is why they were brainwashed by left-wing professors or left-wing prep school teachers, that's one way to look at it. The other way to look at it is maybe they're benefiting from it, maybe that's why they're for it, maybe it's a tie-in, maybe they're not so crazy, maybe it isn't brainwashing, maybe it's perfectly, but if you're immoral, setting aside morality, they've sort of disappeared anyway,

1:05:50from their point of view. I think this needs deep investigation. Thank you very much.