Loading ...FOREWORD
Twenty-five years ago today Woodrow Wikon, in the presence of members of his Cabinet, chief executive officers, and leaders of the United States Senate and House of Representatives, approved the Federal Reserve Act. Three solid gold penholders and pens had been prepared for the occasion. Three original copies of this act were printed in parchment and signed by Hon. Champ Clark, Speaker of the House of Representatives; Hon. Thomas R. Marshall, President of the Senate; and the President of the United States.
One of these copies went to the Secretary of State, Hon. William. Jennings Bryan, for permanent record. One of the copies was presented to Hon. Carter Glass, chairman of the Committee on Banking: and Currency of the House of Representatives, and one was presented to the chairman of the Committee on Banking and Currency of the United States Senate. One of the gold pens was given to Hon. William Gibbs McAdoo, Secretary of the Treasury; one to Hon. Carter Glass ; and one to the chairman of the Senate committee.
This act was generally regarded as the greatest achievement of that administration.
Under this act $40,000,000,000 of liquid money was created to finance the World War. It financed not only the United States but financed to the extent of billions of dollars Great Britain, France, Italv, and their allies. “That one act won the war,” said John
Skelton Williams, the Comptroller of the Currency.
The United States came out of this war in a highly prosperous condition. This prosperity was the result of the expansion of credit and currency which enormously stimulated production and employment.
In 1921 those in control of the Federal Reserve System contracted credit and currency by the use of the great powers of the Federal Reserve Act. It resulted in depression.
Again in 1929-32 another depression followed the contraction of the money supply. And a third depression took place in 1937 from a similar cause.
The Federal Reserve System is supported by men of all parties. Under no circumstances should it be considered in a partisan light. Its operation vitally affects the economic and financial condition of the entire country, including the Government itself.
There is lacking in the United States an informed public opinion as to the cause and cure of depression.
With the hope of laying the foundation for a better understanding of the principles of the Federal Reserve System and the use of its powers to restore prosperity and prevent future depression, this commentary is submitted for the considerate judgment of leaders of public opinion in the United States.
Trusting that this vital matter may not be clouded by any attempt to fix the blame on anybody, or to attempt to gain partisan advantage, I remain
Your faithful servant,
R. L. O.
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