American Economy and the End of Laissez-Faire – 10 of 13 – Cartelization of Banking: The Fed

The American Economy and the End of Laissez-Faire: 1870 to World War II

10. Cartelization of Banking: The Fed
Lecture by Murray N. Rothbard

Bernard Baruch ran WWI as an absolute collectivist controller. The Federal Reserve was created in 1913 by Morgan men to cartelize the banking system and limit competition. Production and prices were regulated via the corporate state. Morgan men wrote the FTC- Federal Trade Commission Act. Progressive means statist and corporatist. The New Republic, a proto-fascist magazine- appeared.

Banks create fake warehouse on-demand receipts. One was a note, but the more sophisticated way was by having open-book accounts by which you have a demand deposit, not a bank note. The check is a transfer order and the temptation for counterfeiting fake warehouse receipts was great. This is fractional reserve banking. Rothbard thinks it is fraud. It increases the money supply in an inflationary manner by creating money out of thin air. All banks are technically insolvent. The Central bank system is a partnership between government and private banks. It is a coercive monopoly cartel.

Lecture 10 of 13 presented in Fall of 1986 at the New York Polytechnic University.

This lecture as a Podcast: http://enemyofthestate.podomatic.com/

Sourced from: https://mises.org/library/american-economy-and-end-laissez-faire-1870-world-war-ii

Source: American Economy and the End of Laissez-Faire – 10 of 13 – Cartelization of Banking: The Fed – YouTube

http://www.readrothbard.com/american-economy-and-the-end-of-laissez-faire-10-of-13-cartelization-of-banking-the-fed

TRANSCRIPT

00:00
and what was the election of Woodrow
00:01
Wilson’s Democrats for the first time
00:03
since Cleveland Democratic Party all of
00:05
a sudden gets in because a Republican
00:07
Party was split wide open when the
00:09
Morgan deliberately destroying Taft and
00:12
unlock afar wonderful a person’s half
00:15
paving away from Wilson himself with
00:17
also a Morgan person can went Ascot in
00:20
temper this a was the heir apparent of
00:22
Teddy Roosevelt and perfectly get in as
00:24
a successor to keep the st. people more
00:26
or less for a while so his his uh anti
00:31
Morgan policies didn’t show up for a
00:32
while he had Secretary of State a Morgan
00:36
guy Secretary of State the land or not
00:37
she was a really a melon person but
00:39
Mellon in Pittsburgh but none of the
00:41
Morgans were of course allied Anna
00:45
Morgan guy’s secretary of the Treasury
00:46
he’s on the board of mutual life
00:48
insurance company which has always been
00:50
Morgan at least was a long time probably
00:52
still is but but as Attorney General
00:57
reports filed antitrust him
00:59
yeah a guy named George W wicker shown
01:02
with a Wall Street lawyer he hasn’t been
01:07
studied much not too much known about
01:10
what there’s him but we do know he was
01:13
on the board of New York’s Wall Street
01:16
lawyer in the Board of Directors the
01:18
interval level pollen company which is a
01:19
big transit holding company along with
01:23
him on the border Olga’s Belmont and
01:25
Rothschild agent and the Guggenheim we
01:34
can tell we saw one Guggenheim so my
01:38
suspicion has a look at it looking to
01:41
them especially if they’re too little
01:43
guggenheim interests we now come to a
01:45
point where the Guggenheim family has
01:51
been highly under written about under
01:53
study there’s a very important family
01:55
gets
01:55
prominent around late 19th early 20th
01:58
century whose our own family was sissy
02:03
discovered copper and their German
02:05
Jewish peddler I think my our Guggenheim
02:09
the original one and went to the west
02:11
and discovered copper
02:13
anyway they wound up penis I think
02:16
Daniel Guggenheim was a sort of a
02:17
patriarch of the second generation even
02:21
the owner all the copper in the United
02:22
States there every copper company was
02:24
originally you can company and the
02:25
American smelting and refining Kennecott
02:28
an anaconda three top copper companies
02:30
were originally you get higher loan so
02:32
extremely wealthy yet nobody talks much
02:34
about them they haven’t been written a
02:35
much about they were didn’t have a
02:37
player of the Lehman Brothers of to mow
02:39
of the temperate extremely important
02:40
under rip the under scholarly under
02:42
study be very important what really
02:47
controlling the Wilson administration in
02:48
many ways and along with Morgan so an
02:54
independent group and and we’ll see when
02:57
you get a little bit later on
02:58
essentially leave the control of Bernard
03:01
Baruch the absolute bizarre and World
03:04
War one economic czar and not only not
03:09
only was Robert Rubin
03:10
right now not only was the head of the
03:15
war production board totally running the
03:18
whole whole economía World War one
03:20
he was a beloved figure ran everything
03:22
top of presidential advisor until about
03:25
the 1989 teen forty in other words for
03:26
thirty years I was really running the
03:28
whole country well regardless of the
03:30
political party of the president in
03:32
other words he was Democrat but he was a
03:34
powerful advisor to Hoover and everybody
03:36
else knows everybody
03:37
Eisenhower as a matter of fact when
03:40
Eisenhower became president in 452 the
03:45
first thing he did was gave a dinner in
03:47
honor of Bernard Barone he said
03:48
everything I oh I am that I owe to mr.
03:49
baroque it turns out that he was a major
03:51
at West Point in the 40s
03:54
he’s part of baroque study group the
03:59
family who has been major nobody know
04:01
anything about so I think he was
04:04
literally true knows I think I found
04:05
especially baroque creation along with
04:07
the Morgans and other Wall Street people
04:09
the here’s Veruca me and not only was he
04:12
very strange phenomenon the route
04:14
because he suddenly he was unknown more
04:18
or less until World War one when I say
04:20
it becomes the economic czar out of the
04:21
war production board well I’m absolutely
04:24
collectivist control
04:25
economy running production and prices
04:27
and everything else in collaboration
04:29
with big business groups I haven’t
04:31
gotten the world wall won yet but since
04:32
I’m on Guggenheim I’m anticipating a
04:35
little bit the question always entered
04:36
my mind when I was growing up was here’s
04:39
this guy was running everything the
04:41
advisor every president why did he get
04:42
that powerful who the hell was he anyway
04:44
and the usual answer of Orthodox
04:46
historian is well you he made a million
04:48
dollars on a stock market well okay
04:50
lots of people make a million dollars
04:51
before they don’t become total czars of
04:54
the economy and totally beloved by
04:55
everybody in other words it was
04:56
considered impossible for anybody to
04:58
criticize Baruch and the press he knew
05:01
above criticism you make idiotic
05:03
pronouncements on the park bench in New
05:05
York Times was before every word he’s
05:08
sit on a park bench in several park was
05:10
they didn’t get the bug aloft on a
05:11
central park he said on the park man
05:13
issue pronouncements and they take a
05:15
lady video I statements he like books
05:18
nor of ography example totally and
05:20
totally worthless autobiography what
05:22
he’s saying there is my advice to every
05:24
young man trying to get make a million
05:25
dollar stock market is he said there’s
05:28
very seriously the pump pump of that
05:30
he’d say my advice is buying when a
05:33
stocks are cheap and sell them when
05:34
they’re in a high great advice any moron
05:38
knows that question when are they gonna
05:40
be cheap and then they gonna be high up
05:41
see that anyway how did he get so
05:45
beloved how did he get something out of
05:46
the holes in the power and why did he
05:48
say he’s bristling rather than do many
05:49
ways he organized a farm block a whole
05:52
farm price support for a man has Nibiru
05:54
creation he seated people as a
05:57
government he was always mentor various
06:00
people government into power really ran
06:04
the NRA and AAA so his agent so the
06:06
question is why do i they so problem why
06:08
is he about criticism and the the answer
06:14
it only came out first of all he didn’t
06:16
know biography of baruch he wouldn’t
06:17
give us paper sunny milan allow anybody
06:19
to have them he finally got a moderate
06:21
Coiro tomography was fairly worthless
06:23
it’s finally good biography after after
06:26
all this time a few years ago there
06:29
Peter Barbee by Jonathan Schwartz called
06:34
Speculator Thanks yeah thank you had a
06:36
story of Barbara excellent liar if he
06:38
really has a lot of stuff in there more
06:40
than he realizes
06:41
that’s that’s pretty clear from his
06:44
lithography as well the speculator came
06:48
out a few years ago it’s pretty clear
06:50
from ography is that you know the lousy
06:53
stock market speculative Baroque he lost
06:55
money every time he invested those
06:56
thoughts market but one thing he was a
06:58
big railroad fan and he would invest in
07:01
railroads heavily and he saw that
07:02
investing railroads after 1900 when
07:04
railroads enter the big secular decline
07:06
other was he stopped heavily investing
07:08
real or just about kind of railroads
07:10
punking out as an investment without a
07:12
lousy investor so if he’s a lousy
07:14
investor how did he make a lot of money
07:15
have you become the Big Shot well he
07:18
turned out to be a friend and the cycle
07:23
woman to Amenti protege of the
07:26
Guggenheim in other words his father dr.
07:29
Simon burrows of the Georgia physician
07:32
migrated in New York City around 1989
07:35
whoever was and became a big shock
07:38
position of Park Avenue physician sort
07:39
of thing one of his clients one of his
07:41
patients was Daniel Guggenheim the
07:43
mentor of the Salomon which was I think
07:45
I think anyway the patriarch of a family
07:48
at the time and since the Guggenheim’s
07:50
liked him the Guggenheim’s are immensely
07:51
wealthy and they took him under there
07:53
seemed like a bright young man took one
07:55
of their wing and I gave him the first
07:56
job at a spot on Wall Street etc and he
07:59
became sort of a sort of a running fan
08:02
of the Guggenheim’s and they tell them
08:03
and they would tell him when to invest
08:04
we’re gonna bet them X such a such a
08:06
stock and he’s investing with them
08:08
whenever he did that he made a lot of
08:09
money when he got someone who’s only
08:10
lost money that was Nikita was the key
08:13
to his stock market acceptance following
08:14
the Guggenheim living there protege and
08:16
general Angharad
08:18
so essentially booth was equal
08:20
Guggenheim and was around Berg music for
08:23
episodes Ugin Arnage accounts for his
08:25
holdings of fame as we’ll see in a
08:28
minute
08:28
Woodrow Wilson was essentially a
08:30
Guggenheim Morgan person and Cleveland
08:34
Dodge
08:36
mostly major industrial and tour Heather
08:40
the Phelps dodge company which is a
08:41
copper involvement copper and hole
08:43
Guggenheim related Ally with a live in
08:46
Heinz
08:48
graeme revealing thing and the who of
08:50
marthy best photography of who Herbert
08:52
Hoover one of the best ones like Davis
08:54
burner I just mentioned they just
08:56
mentioned this in passing it’s like a
08:58
throwaway line they said Hoover was
09:00
invited to become Secretary of Commerce
09:02
by Daniel guggenheim and they turned it
09:04
down
09:05
you know I stopped I mean I stopped
09:07
being from your life is that you are is
09:09
this and why well why doesn’t Guggenheim
09:11
have the power over somebody I prepared
09:12
a camera a cabinet post moving on so
09:15
obviously we have a great power in this
09:17
administration it’s all soggy for the
09:19
must have been in Wilson administration
09:20
because there’s no other relevant wanna
09:23
me Hoover was secretary to come up
09:24
during the 1920s then became president
09:26
laugh of that so it must have been the
09:28
wolf administration and therefore it’s
09:30
pretty clear a little behind is a great
09:31
power obviously through haruchan and
09:33
also we won’t dodge ooh
09:37
power Wilkins anywhere I get the line
09:39
I’m gonna finish demonstrating the
09:41
Guggenheim a great power my suspicion of
09:44
the Wickersham and basically a
09:44
Guggenheim tool and the wickersham who
09:47
have passed the hessed
09:49
started around the second two years of
09:51
administration when i my teens he gets
09:53
in the 1980 by 1910 path starts filing
09:57
through Wickersham antitrust suits
09:59
against international harvester and us
10:01
feel
10:03
Morgan’s truck two awards fuck I think
10:06
Allen knows Chalmers of a Morgan company
10:10
anyway in other words it stopped wanting
10:13
a lot of antitrust suits so so task if
10:16
you only be interpreter that’s saying
10:18
here’s what happened remember during the
10:20
Teddy Roosevelt administration we have a
10:22
savage attempt by the Morgans and
10:24
smashed it rocker for William Howard
10:27
Taft all hi all Republican therefore
10:29
basically in with the rocker colors.i
10:33
uses Wickersham I think it settles in
10:36
there in 1910 using wickersham Attorney
10:38
General a file a whole bunch of
10:39
antitrust suits against Morgan
10:41
company to try to break them up now they
10:44
did they fail I mean Supreme Court threw
10:46
them out eventually but the point is for
10:48
several years here for at least the last
10:50
two years with Katherine ministration is
10:51
a custom of tax on the tax on the on the
10:56
morgan trusts other guys I can mention
10:58
the Supreme Court judge who casts
11:01
makes appoints as remember at Supreme
11:04
Court with Charles Evans Hughes who have
11:07
been with New York Governor Cuomo
11:11
governor of New York who was a lawyer
11:14
for they ban a lot of company New Jersey
11:17
so later a new Neal period becomes a
11:21
chief justice Supreme Court Rockefeller
11:23
person so with half coming in we have a
11:26
spammer a retaliatory thrust Calipari
11:30
like and I have to break up Morgan
11:35
sold on Morgan you think in other words
11:37
the Sherman Act so it has but that’s
11:39
from 1992 liking Heather the Sherman Act
11:41
is dead letter not being used somebody
11:42
cares about then 1900 watered so to
11:46
whatever occurred Teddy Roosevelt brings
11:48
a Sherman Act out of the closet using
11:49
the club the smash Standard Oil on
11:51
behalf of the Morgans and then what tap
11:53
gets in he starts using the antitrust
11:55
law but potala Tory Club against the
11:57
rock of I guess the Morgans on the
11:58
handle of Rockefellers so this happened
12:03
the Morgans are very powerful Morgans we
12:05
act very very badly on this thing very
12:07
very very very very very pio at this
12:10
that’s supposed to be nothing to do this
12:12
in the Morgan and so the boys create a
12:14
whole new party third party the
12:17
Progressive Party 3 down a senator 1912
12:21
the object wishing to destroy past half
12:25
of course got the we nomination to be
12:26
incumbent president so I create a new
12:29
party called present party secretary
12:31
treasurer and lastly head of the
12:32
executive committee a thing that’s cool
12:34
but guess who George W Perkins Morgan
12:36
partner who’s also been called Secretary
12:39
of State from the Morgan Empire the
12:44
Perkins sets up a recipe rings Teddy
12:46
Roosevelt out of the closet so to speak
12:48
tell you Roosevelt was off in Africa and
12:50
Safari usually two years Teddy Roosevelt
12:53
go upset that the half is attacking
12:55
Morgan by the way he says it so politely
12:57
terrible things book on my agreement
12:59
with Morgan’s you never to you know
13:01
number those to use antitrust against
13:03
Morgan Thurgood trust and here here tap
13:06
daring doesn’t break with me and so for
13:07
instance Teddy Roosevelt comes back out
13:09
of comes gonna come back come back out
13:11
of acquirement of unto another term a
13:13
third term
13:14
19:12 forgot supporting labeling
13:17
interestingly enough he’s the
13:19
Progressive Party they’re a platform of
13:21
very progressive in the sense of a very
13:22
corporate this all the planks in the
13:24
National Civic Federation the idea of
13:26
government total regulation of Industry
13:30
eliminating lays a fair is never they
13:33
call for strong national regulation of
13:34
corporations preferably having have
13:40
corporations incorporated by the federal
13:43
government on up anyway here’s what they
13:46
say we demand a federal commission such
13:49
as the Interstate Commerce Commission
13:50
once again that’s being repeated to
13:53
attack quote unfair competition on quote
13:55
and forth capitalization quote unquote I
13:57
wasn’t me in other words we needed a
13:59
government Bureau to regulate
14:01
competition right where I get all of
14:02
industry rather unlike the ICC so
14:05
eliminate unfair competition laws unfair
14:07
competition it’s a cold war ii mean
14:09
competition unfair accomplice means
14:10
competition means you have to get rid of
14:12
competition have restricted
14:14
cauterization unfair means are cutting
14:16
prices doesn’t mean full capitalisation
14:20
was that mean me too much catalyzation
14:21
or if it was strict the amount of
14:23
capital no end industry in other words
14:25
the cut production another again another
14:27
way of cooking or by cartelization again
14:31
quoting from the press apart a platform
14:34
again they call for compulsory publicity
14:36
an old thing we’ve been mentioned before
14:37
that is lemonade secret price cutting
14:39
and they said quote the recipe party of
14:42
classical in 1912 he got more votes than
14:46
passes race became a powerful party for
14:49
that moment they they they scuttle of
14:51
that in the election that’s the
14:54
businessman will have certain knowledge
14:56
of the law the investor will find
14:59
security for his capital was that made
15:00
me feel restricted competition that’s
15:02
final fine security dividends will be
15:04
rendered more certain on the such a
15:06
system of constructive regulation
15:08
coatings though legitimate business
15:11
freed from confusion uncertainty and
15:14
further litigation will develop normally
15:16
unquote so in other words of a sans
15:18
polite language well will stabilize
15:21
industry will caramelize it won’t be
15:23
more competition and won’t be any
15:24
confusion uncertainty we will make the
15:27
world what
15:27
cure for businessman like are wising it
15:30
the reservoir he goes on a site Germany
15:32
Bismarck Jews an archetype Germany as
15:34
the ideal example a model to follow for
15:38
in Germany quote this is not something
15:40
about the indictment from favouring war
15:42
with Germany of course in a couple two
15:43
years anyway that’s they cite Germany’s
15:46
of the meze
15:47
for the basic policies and Germany quote
15:51
their policy of cooperation between
15:52
government and business has a
15:54
comparatively few years made them a
15:56
leading competitor for the Commerce of
15:57
the world and again quote the time has
15:59
come and the federal government should
16:00
cooperate with manufacturers and
16:02
producers and expending on following
16:04
cameras on close traffic to tell us
16:06
selling out to Morgan on the field plus
16:08
that’s the thing by the way you’ll find
16:10
out about the only way you’re ever
16:11
planted by what’s going on politics is
16:13
when during campaigns when each party
16:15
you really feel some of the dirt done
16:17
the other opposition both party of using
16:20
right so any right the Wilson of course
16:26
also came out for government regulation
16:28
of reasonable competition and reasonable
16:29
combination all right so they all they
16:31
all now agreed was professor Jeremiah
16:34
Jenks after the election was over a
16:36
court economist the Cornell one of the
16:39
profits of this new week new economics
16:40
said now the campaign is over quote we
16:43
have to get on with a constructive work
16:44
of stabilizing the system unquote so now
16:48
the breath of party backed by almost all
16:51
a big businessman by whole bunch of them
16:55
ninety percent of a Union League club of
16:58
Chicago which is the auto top
16:59
businessmen and the Chicago
17:01
ninety percent back Teddy Roosevelt on
17:03
this street corner election it was Teddy
17:06
Roosevelt in the Progressive Party
17:08
Kaplan Republican and Woodrow Wilson
17:11
mention that when I clap any rate the so
17:15
George W Perkins right so I need to say
17:17
the business of she Neely Club Chicago
17:19
macking Teddy Roosevelt two-thirds of
17:23
the leaders of the rest of party
17:24
two-thirds with big business venom a big
17:26
business lawyers and the other third
17:28
were professionals and educators and
17:30
there was everybody in that party with
17:31
urban upper middle-class or upper-class
17:34
almost all wasps and with all
17:36
Republicans or X Republicans so where W
17:39
Perkins really set up the poor
17:41
and thanks another powerful person who
17:43
was frank Muncie was a big newspaper
17:46
publisher he was heavily invested in
17:48
Morganton companies know was associated
17:50
a Morgan how many of us in the u.s. feel
17:52
International Harvester so we have
17:55
Muncie with a Morgan person and Perkins
17:57
of the Morgan partner meeting the dry
18:00
for Teddy Roosevelt let’s say two-thirds
18:02
of the from the progressive leadership
18:06
that’s a party leadership were this men
18:10
and they I mentioned it actively the
18:15
Progressive Party convention 1912 was
18:18
with solidly combination Morgan’s
18:22
quietest social workers Jane Adam the
18:25
leaf people technocrats as nears
18:28
historians economists all over all the
18:32
interventionist all all gather there and
18:34
and with progressed with him singing I’m
18:37
singing starting the whole speech I
18:39
think I mentioned some Teddy Roosevelt
18:40
gave his keynote address he deliberately
18:44
used the prision quietest imagery he
18:47
said we went up with his famous
18:49
peroration he went out by saying we
18:50
standing on mageddon we battle for the
18:52
Lord and in between a shout Amen that’s
18:55
of where they suddenly sang Christian
18:57
hymn we shall follow follow follow
18:59
substituting Roosevelt for Jesus so the
19:02
whole thing was filled with Quietus
19:03
rhetoric and deliberate references to
19:06
quietest hymns and imagery if you had a
19:11
combination all these guys
19:12
Morgan’s big businessmen technocrats the
19:16
rest of social workers and Piatt tests
19:18
the only big business people for tasks
19:21
where were old rich Rockefeller people
19:24
of course senator Ulrich and
19:25
Rockefellers and I want here ooh that
19:30
was some reason was this enchanting he
19:32
wanted to be present after all and want
19:34
to get the nomination from how sore at
19:38
PR and I’m making him present whatever I
19:40
some personally peeve and Knox stuck
19:43
with half that’s about it so in other
19:46
words the Progressive Party with
19:47
organized in order to smash tap and I
19:50
like blokes in this was accomplished so
19:51
then the question is who was Wilson
19:52
we’re heading back
19:54
come from who else was not one of my is
19:56
not one of my favorite people and say
19:58
the least in American history I can’t
20:00
think of anybody ever be disliked more
20:02
he was a come by all of them well
20:05
coaches were talking about he was a
20:06
pious southern person Presbyterian
20:13
professor a PhD new progressive
20:15
progressive historian and interest level
20:20
scientists and imbued with not only the
20:23
idea of saving the soul by saving
20:25
everybody else also saving in the world
20:26
was in the world war one so
20:30
Christianizing the world as well as one
20:33
of the countries of the speech the his
20:39
major Pilate was president Kristen and
20:42
for several years now a lot of trouble
20:43
of principle he is major political
20:48
mentor to have almost vanes elected when
20:50
they mysterious split George Harvey is
20:54
the head of our firm huh firm brothers
20:56
publishing company and Harper’s Weekly
20:58
magazine my 19:6 and he is still
21:01
president president Harvey despite of
21:03
the groom ran for president and a whole
21:05
thing whole campaign making governor in
21:06
Jersey 1910 and getting him nominate
21:09
1912 Harvey was in New York at the city
21:12
executive he was came president Harper T
21:14
also business executive in general he
21:17
was closely connected with when you see
21:19
Whitney and Thomas fortune Ryan New York
21:22
of a Morgan oriented action magnate and
21:27
also order Oakland it was a big Morgan
21:29
Pike should be mentioned here the
21:31
president of Guaranty Trust Company
21:32
Morgan major bank Marshall Bank so he’s
21:37
heavily and heavily hip-deep in the
21:39
morning the close friend of Morgan and
21:42
in 1900 Morgan was owned Harper’s Weekly
21:45
and Hubbard weathers publishing company
21:47
1900 in bad financial shape Morgan asked
21:50
his old buddy Harvey to become president
21:52
take it over and run it so Harvey and
21:55
Morgan were very closely allied so we
21:58
have in other words Morgan pushing both
21:59
Teddy Roosevelt and Wilson and they say
22:02
Harvey gets out of favors Wilson to
22:05
throw the end of the 1912 but basically
22:07
it’s go
22:07
I’m enforcement so like we stole weight
22:09
1912 another thing that happens was a
22:13
little great peculiar thing about Wilson
22:17
is that he meets my team love him I
22:21
think probably is beginning to run for
22:23
president campaign is gearing up late
22:26
1911 early 1912 he meets Colonel Colonel
22:30
mint Edward Mandell house the Texas
22:34
businessman and politician first of all
22:39
it’s Colonel I’m like there’s always a
22:40
great time he’s not really as a fake
22:42
Colonel as many southerners I gave him
22:44
saw the title Colonel I that Colonel
22:46
wasn’t a colonel at all okay so her
22:51
location what the house is a Texas
22:53
politician II like the Babylon Texas
22:55
politics and okay Texas is an important
22:58
statement after what something top state
23:00
in the Union and he meets meets what
23:03
role well thing was what make must be a
23:05
president maker also people like to be
23:07
president maker and he says he’s gonna
23:08
help both you know like the dog guy
23:10
and then Wilson asked him what would you
23:12
like to do in my administration and Cass
23:14
says I like to run your farm policy and
23:17
okay and what kind of thing is that
23:20
means they tease me a rational person
23:22
reading this will say stop say what the
23:24
hell is going on you know meet some
23:25
kernels in Texas okay colonel and say
23:29
yes yes sir you need to take over my
23:31
farm policy so it’s very weird nobody’s
23:33
really or no there’s nobody survivor
23:35
your house even today it was very very
23:37
little study and his diaries were
23:42
published by Seymour yeah but these are
23:44
just diary just sort of do any fans
23:47
there’s one biography of him in Texas
23:50
years and another couple of Versailles
23:52
Treaty but there’s no real biography of
23:54
house means amazing thing there’s 10,000
23:56
American historian each of which they
23:57
have to get a PhD so they have to write
23:59
something and nobody’s got a biography
24:01
in the house anything credible he was I
24:03
was running the entire foreign coffee
24:04
wolf administration even though he had
24:06
though no office he never was a
24:08
government official he’s just sitting in
24:09
the White House all the time
24:10
he’s the absolute master of foreign
24:13
politics secretaries say to no power
24:14
he’s making appointments for Wolfson
24:16
almost all Wilkin camera the points are
24:18
clear still house house advisor me
24:20
so for attorney general don’t go too
24:22
close manager what listen to him
24:24
abject tool Colonel house so who the
24:26
hell was trying to have to say anything
24:27
technical politician and make this
24:29
pretty to weird
24:30
I’ve been also psycho psycho babble
24:33
studies that Wilson and and house why is
24:37
broken
24:37
I wasn’t dominated by house right what
24:39
was its Feng gali like power house out
24:42
of the wolf
24:43
Freud I think wrote a study Wilson in
24:46
the house
24:48
another Stephanie older all the stuff
24:50
took me a meaningless there’s no good
24:53
there’s there’s no real though the
24:56
monster will reason why wasn’t you the
24:57
dominant my hapless he’s a pretty tough
24:59
character and sillens house and so we
25:02
have to look for houses more deeper
25:04
connections here not only that but now
25:07
know the house even though supposed to
25:09
be a loyal to of Oakland that was a
25:11
carry out all of your order to master it
25:13
sort of thing he’s Presley going behind
25:14
Wilkins back in ordered I guess in the
25:16
war I’m inside of England with you
25:18
yeah cuz almost unofficially the British
25:20
agent he would conspire with a British
25:22
ambassador and the British secret
25:23
service and look them was a little bit
25:26
reluctant again on the war as we say we
25:27
couldn’t see we finally did hasslein
25:30
maneuver with a British
25:31
disloyal against her behind Wilson’s
25:33
back as foursome in doing so it’s a very
25:35
strange situation and say is well if I’m
25:39
some kind of psycho babble isn’t doesn’t
25:40
fit so who was half he wasn’t just a
25:44
Texas politician even personally the
25:45
multimillionaire
25:46
his father was a third largest sir
25:50
wealthiest person in Houston Texas some
25:52
moment he had a lot of cotton land he
25:55
had a lot of he’s a banker and also
25:57
railroad owner and you know the text
25:58
Trinity and Brazos Valley Railroad
26:01
important railroad on Texas of which the
26:03
colonel was the manager and raela of
26:08
course means if you hear the word
26:10
railroad immediately suspect Morgan by
26:12
this time
26:13
sure enough as we’re always financed by
26:15
the Old Colony Club copy of Boston
26:18
Boston financial interests which are
26:20
heavily involved with Morgan’s and now
26:21
have a Morgan connection also houses
26:24
daughter Mary Gordon Alcon loss of a
26:28
famous alcoholic family which from which
26:29
Jackie Kennedy Onassis the marine has
26:32
emerged
26:34
Gordon applecross of the number of
26:39
partner are assuming a director of the
26:41
Illinois Central Railroad which of
26:43
course Morgan we have definitely Morgan
26:44
connections for the tunnel and it’s
26:48
better it’s an easy sound the fourth is
26:50
more amenable to the public because some
26:52
technical issues
26:53
nobody searches Association was Morgan
26:55
as they would have la Rosa Morgan lawyer
26:57
so here he comes any it takes over the
27:00
government as Wilson Wilson gets in who
27:05
recommends at the house of Wilson anyway
27:07
how the hell you get him you gotta you
27:08
gotta met him through Harvey so we have
27:11
a Harvey the Morgan Harvey House
27:12
connection or as Harvey says talk to
27:15
Carl happy thing you know this no one is
27:17
Michael Wilson himself before he became
27:22
president was a before yeah the whoops
27:25
himself there other key advisors of
27:27
Wolf’s position of Colonel house of
27:28
George Harvey it was Cleveland Dodge
27:30
already mentioned was a post Dodge cover
27:34
magnate in with a Guggenheim and
27:37
Morgan’s and George Peabody who is New
27:41
York City banker and everywhere he
27:45
mentioned that’s a Peabody Peabody taken
27:48
old Watson’s family one of the Peabody’s
27:53
was a Peabody family is Singlish old
27:56
important family one of the Peabody’s
27:58
was a partner and a banker
28:01
Morgan’s father was a partner on way
28:03
back at mid 19th century Junius morgan
28:04
banker the partner of same bank and
28:06
George Peabody as one of his ancestors
28:09
and another Peabody was the best-managed
28:10
ap Morgan’s wedding if you weren’t a
28:12
we’re not a high school chum of Morgan
28:14
araga thought it’d be a good thing to be
28:15
a best man at his wedding
28:16
so anyway have very strong Peabody
28:19
exactly morgan parts and dodge is sort
28:21
of morgan guggenheim area and houses
28:28
probably morgan harvey was Morgan
28:30
so his whooping us surrounded by Morgan
28:32
people now Wilson before he becomes
28:34
president was one of board of directors
28:36
of two companies to he was a scholar and
28:38
all that stuff he’s also a member of the
28:40
board
28:40
he’s never bore the Carnegie Foundation
28:43
he’s also a member of what a Mitch
28:45
mutual life insurance company
28:46
Morgan company we’re going to talk life
28:48
insurance company so here we see Woodrow
28:53
Wilson academics PhD the only PhD has
28:55
ever become president total disaster
28:57
watch out for phd’s funding for Walker
29:01
PhD professor and Morgan tool and also
29:05
in with the Guggenheim’s okay what’s so
29:08
what closes cabinet I’m looking at then
29:11
they say Wilson gets then he squeaks
29:13
then because Teddy Roosevelt’s put the
29:14
Republican vote and by the way looks
29:16
really like the 1916 he just beat out
29:19
Charles Evans Hughes the rocket our
29:21
person for president by a sweet real
29:24
squeaker I mean Republicans almost won
29:26
even though Wilson was called president
29:30
so what’s the Wilson Cameron like well
29:32
he has to make make sure when your
29:34
Jennings Bryan Secretary of State he has
29:36
to do that because Bryan so loud
29:38
lion shipping from Camp Clark Elizabeth
29:42
Russell I’m a crappy GUI GUI the last
29:46
ballot or shifted closes support the
29:48
Wolfman is obviously a deal with the
29:50
name Brian gets regenerated sake so
29:53
what’s gonna have to do that I would
29:54
find those how much power paper I stay
29:57
anywhere houses running the whole thing
29:58
from one of the unofficial Oval Office
30:02
so to speak and he makes it’s a great a
30:04
Treasury which is more important from
30:06
economic affairs here at Treasury
30:10
great arresting guy we haven’t given
30:13
McAdoo the maggot is from New York City
30:15
and was most historian said well I’m
30:17
sort of just a regular progressive of
30:19
something baloney
30:20
I could do was the president of hooker
30:23
Manhattan Railroad which used to run
30:25
lean tubes from New York and New Jersey
30:28
up the tubes
30:29
it was Nikola Hudson in Manhattan
30:31
Railroad with a very big railroad how
30:33
does a 20 million dollar capitalization
30:35
very big in that period one of the
30:38
largest company or something like that
30:40
okay country it was a top hundred anyway
30:43
500 fortune 100
30:46
so who was on who love the who was
30:48
running the Hudson and railroad well
30:49
Hudson Manhattan Railroad McAdoo was
30:51
president for many years almost went
30:53
bankrupt around 1900 and the save of her
30:56
back up the turns was also his buddy JP
30:58
Morgan
30:59
so more than okay my son I will bail you
31:02
out it would turn to which the entire
31:08
cook the fire offers all the officers in
31:10
the quarter a row or more than people
31:12
pop more than people
31:13
vice-presidents would the sky oakland
31:15
already mentioned with the president
31:17
guaranteed trust company which is the
31:19
morgan the major morgan commercial bank
31:20
a truck it’s not right now they have a
31:25
Morgan Guaranty Morgan and JP Morgan
31:27
merged with guaranteed trust them not
31:28
Morgan Guaranty Trust the other of ice
31:31
forever
31:31
everyone comes Edward converts who was a
31:33
the president of Bankers Trust Company
31:35
which Morgan set up in 1990 no one to do
31:38
the trust business you know the whole
31:40
trust instrumented a modern instrument
31:42
port instrumentally we’re gonna set up
31:45
the Bankers Trust having specialized in
31:46
that there’s a to vice president of
31:49
customer hands who the both hot morgan
31:51
people not just secondary warranty with
31:54
top people Oakland and Congress and
31:56
other fish other directors included
31:58
judge gray I mean shooting judge Geary
32:01
head of US Steel top Morgan person
32:03
Frederick Jennings partner stepson
32:08
Jennings in rouxelle of the top Morgan
32:09
law firm member franklinb sets and
32:11
gunning movie partner of his and so on
32:14
down the line whole bunch of people
32:15
vice-president Garrity trust violently
32:18
brother-in-law George Baker head of the
32:20
First Bank of New York First National
32:21
Bank New York which is a top morgan bank
32:24
along with guaranteed frogs so we have a
32:27
whole thing the whole every director of
32:29
a pop Morgan person so when when he
32:32
become Secretary of Treasury
32:35
McAdoo right quickly cements his
32:38
position by marrying a daughter what do
32:41
I welcome he becomes a son-in-law will
32:43
later on and then will stand during the
32:45
war he becomes the head of the
32:46
nationalized railroad system and he also
32:50
becomes by the way in nineteen twenties
32:52
he runs her he almost becomes the
32:55
Democratic nominee for president he 24
32:57
running on a Ku Klux Klan ticket it’s
33:00
time you moved Alabama and the Ku Klux
33:01
Klan’s all a favor and why are they on
33:03
favorite if he was because he was Pyat
33:04
test they were prohibition they were
33:06
questioning Catholics and all the rest
33:08
of the stop with you now
33:09
cook what cranny of realize I’m not just
33:11
anti black
33:13
when I sematic ago so I’d like half like
33:14
a key thing I think funny pose very
33:16
powerful I think twenties not only no
33:18
Stavros on the North Oregon Indiana New
33:21
Jersey things like that anti and if I
33:23
can’t like ticket like I like plank I
33:25
fall so 1924 though it’s funny because
33:29
we run for Democratic Party nomination
33:32
skipping ahead here for the b-24 so they
33:35
work really take over here McAdoo
33:37
running in the southern another Ku Klux
33:38
Klan ticket progressive Morgan’s who car
33:41
Klan ticket running against there’s a
33:43
furtive East Smith governor in New York
33:46
Romek half Irish Roman Catholic and the
33:49
only in the convention took place in New
33:51
York City all these Southern Baptists
33:52
and methods are coming up thinking of
33:55
the Jesuits gotten like some at any
33:56
moment from behind left from behind the
33:58
hour
33:58
so they yes coming up and H Omega has a
34:02
wonderful description the convention it
34:03
was very hot no air conditioning
34:05
remember and he spent over 104 ballots
34:08
put on two or three weeks of voting
34:10
right in history it was very hot under
34:13
the green heat every day yeah it was a
34:17
great you know packed crowds and there’s
34:18
really good reasons thing very hot and a
34:20
fantastic struggle with England between
34:22
southern southern biases and Irish
34:25
challenge in New York neither of them
34:27
gets in that so-called cover life
34:29
candidate win in the last minute and 100
34:31
is fourth ballot now you’re lucky to go
34:32
to ballots you know for presidential
34:34
nomination and the highs and fourth
34:36
ballot
34:37
you wanna W David we have Mike Kennedy
34:40
who is gonna be David Morgan Morgan a
34:42
partner more a lawyer top lawyer from
34:45
Morgan for making more than company
34:46
becomes a candidate so I right leaping
34:55
ahead that’s okay good shows you how
34:57
well these near the continuity in this
34:58
whole business everybody else the whole
35:00
camera is certainly selected by Colonel
35:02
house
35:03
McReynolds from Tennessee’s attorney
35:05
general Franklin lanes the Californians
35:11
the interior the pro chipper the
35:15
interesting thing about him is he to
35:16
them how does this go chipper what’s
35:19
happening now by the way in the railroad
35:21
industry the shippers beginning to take
35:22
over the Interstate Commerce Commission
35:24
the railroads have been running in :
35:26
hundred shippers other words the people
35:28
wanted low freight rate beginning to
35:31
take over Franklin Lane was one of the
35:33
people had been a member of the ICC and
35:36
the retinol is the ICC’s not something
35:38
out of railroad control until they
35:40
control the shippers and so I think he
35:42
was looking for other other ways of
35:45
fertilizing the system Postmaster
35:49
General was selected by Carl Haas was
35:51
expecting maybe a fuck about don’t have
35:53
the agriculture is also Secretary of
35:59
Agriculture is essentially David Houston
36:03
who was a Texas person you know I came
36:05
from Missouri
36:06
he’s originally presently at the in
36:08
sexual president Texas A&M; selected by
36:11
Colonel house is listed for analyst
36:13
house the Secretary of Commerce booklet
36:17
Leah Rockefeller person is a trustee is
36:19
when you read field conceived equitable
36:21
life insurance companies is sort of rock
36:23
afar for celery and a Secretary of Labor
36:26
which is a new post and make the made
36:29
effects of a department I was a union
36:31
official the first Union official ever
36:32
to be Canada member when he looks into
36:35
Pennsylvania the secretary treasurer of
36:36
the United Mine Workers was nominated by
36:38
Gompers was the ask conferences do what
36:41
he wouldn’t do any for likely so that’s
36:43
the eighth of El Post says they’re
36:45
labeled show the tie-in of the corporate
36:47
doesn’t medieval of labor unions the
36:50
ambassador to Great Britain becomes very
36:51
important than getting out getting us
36:52
into the war Walter Hines page the
36:57
Virginia newspaperman old friend of
37:00
Wilson and I’m virtually a British agent
37:03
he acts as if he were a British agent
37:04
sort of that way he was a very wealthy
37:10
and his vice-president double of a
37:12
company is the salary was fifty people
37:14
and I Cleveland God old
37:16
subsidy and know that in Willa Morgan
37:21
interest it’s like your folk tools home
37:23
house selected my house once again
37:25
and so houses page form a team to get us
37:29
into the war so I’m skipping Helen
37:30
Levitt six weeks well one I guess sort
37:34
of World War one the most important
37:35
event of the 20th century most important
37:36
political event permit everything ever
37:39
since everything
37:40
everything is having World Affairs and
37:42
foreign policy and 20 centuries the
37:44
result of World War one I was over the
37:45
whole somebody would be a little bit
37:46
with that either today or next time and
37:52
math accent well and well that’s 104
37:56
Michaels are crying teachers 2012 104
37:59
centerpiece of one of those World War
38:01
one that’s really the key Restless
38:03
playing out the other drama happen then
38:07
okay so those are the personnel and
38:09
we’ll see there the two major the two
38:12
major events of the wolf administration
38:15
before the war that is like folks
38:17
happening 1913 as soon as he gets men
38:19
it’s about pushing these things two
38:21
major things he doesn’t he put in at
38:23
comme si Commerce Commission for
38:25
industry in other words he finally
38:27
achieved the the agitation the cheese of
38:32
as the goals sought by the natural civic
38:34
corporations all these guys from 14
38:37
years he achieved a Federal Trade
38:39
Commission puts in a 1913 to do her
38:43
industry why the ICC had done for
38:46
railroads in living department
38:48
agriculture had done for agriculture a
38:50
separate subject puts in a Federal Trade
38:51
Commission and also changing the whole
38:53
banking system I don’t I get some
38:54
technical on how many changing the
38:55
entire banking system by putting in a
38:57
Federal Reserve System
38:58
nationalizing the banking system reading
39:01
a wolf a national engine for inflation
39:03
support about federal government those
39:05
are two major Benson before the war 1913
39:09
and what’s working to really drive
39:13
slowly the Federal Trade Commission has
39:17
driven a four by by only people we’ve
39:21
been talking about all a morgan type
39:22
school a National Civic Federation
39:25
well they do is they outlaw unfair
39:27
competition have a Federal Trade
39:29
Commission to regulate industry and all
39:31
that one of the main people who wrote
39:35
will help like the legislation in other
39:37
words actually physically writing in and
39:40
then he grabbed some of author editor
39:41
Aniston character was a big shot Chicago
39:45
corporate lawyer
39:47
author Eddie wrote a book called no
39:51
competition in 1912
39:53
and many of many additions I think five
39:56
or six of dishes in my last few years
39:57
very interesting book I read this book I
40:00
got a hold of a copy and remember he was
40:03
one of the writer the author of the
40:05
Federal Trade Commission little act and
40:07
he said the slogan and also the special
40:11
of creating trade association creating
40:13
cartel cauterizing devices and industry
40:17
which would set quotas young increased
40:20
fighting and cut production he writes
40:24
them in this book he says he’s a slogan
40:28
on top of the book and we start off our
40:30
reading a new competition slogan here
40:32
this program so competition is war and
40:34
war is hell that’s a scene of his life
40:37
in other words if we you know let’s get
40:38
rid of competition and he says we have
40:42
to have more trade associations more
40:44
cartel that will appeal of Sherman Act
40:45
passes federal licensing law which was
40:48
organized cartels directly set up a
40:51
Federal Trade Commission so of that end
40:53
and enforce it have a government and
40:56
forth twice agreements that he prices up
40:58
production agreements keep the cuts
41:00
eruption is the fourth one looking we
41:02
need then later than there was after
41:03
World War one listen we need adopts this
41:06
policy factually can only cause you know
41:09
the corporate safe especially adopts the
41:13
Morgans Rockefellers type rocked round
41:17
pipe corporate systems in organize all
41:21
of Italian industry into associations
41:24
creating unions to represent labor
41:26
workers industry association represent
41:29
industry and have a government and force
41:31
the whole thing and set up these
41:32
agreements to regulate production and
41:35
prices so in the the Roman Catholic
41:39
Church in the 1920s light friendly this
41:42
idea I guess I’ll cure those of those we
41:44
another name class conflict by having a
41:46
harmony through
41:48
corporatism from corporate state Dolphus
41:52
regime in Austria 1930 is essentially a
41:55
fascist a corporate state hunts of and
41:57
many many countries in Western and
42:01
Eastern Europe and also for the Nazi
42:02
regime took over the doctrine and I’ve
42:05
invented
42:06
Stewart completely he says for example
42:08
adhesive competition selfish unless you
42:11
replace my cooperation when he meant by
42:12
cooperation of what the cartel
42:14
competition terrible things destroys
42:16
destructive the stable prices or present
42:19
crisis prices have the fall or
42:21
combination stabilizing prices in other
42:24
terms a cold war for keeping prices up
42:26
it’s like those like bush by the way I
42:29
mean which comes out has a nerve the
42:30
corporate or tax cheaper oil and and
42:34
Bush being as in Texas oil man of course
42:36
and just follow the techies woman and we
42:38
come from Connecticut preppy the second
42:42
one man so he will he’s because he’s
42:44
worried about the tiger oil is finally
42:45
cheap at long last the psyche first time
42:48
since 1972 so competition says that he
42:54
is inhuman and erratic and so for and so
42:56
on and he said his other great great
43:02
quote from Eddie competitions free and
43:05
unfettered is absolutely destructive
43:07
destructive thought ability of – price
43:10
it can’t be kept up before the
43:12
interstate commerce law regulating a
43:14
railway race competition resulted in
43:17
consuming competition rein to a certain
43:20
extent the railroads from time to time
43:21
cooperated to control conditions by
43:24
pools and associations and since it’s
43:26
sort of summing up the terms of war but
43:28
non-eternal government stepped in and
43:29
call a halt of vicious competition where
43:32
we regulated in any permanent manner
43:34
unquote so he’s probably something up
43:36
with rather than told him in other words
43:37
here we had a competition business I
43:40
don’t like hovers and they turn on the
43:41
government they try to achieve monopoly
43:42
prices at cartel pricing the free market
43:44
doesn’t work
43:45
eternal government federal government
43:47
particularly to do was for them in the
43:48
name of name something else names
43:50
democracy or whatever so as n he says
43:54
he’s we have that legislation to do for
43:56
gel business of the ICC just in Aurora
43:58
ok so and he says he likes the part of
44:04
socialist those he likes the post so
44:06
evocative socialists writer in the
44:07
cooler or not Marx listing who we hail
44:10
who the favor of the truck and the
44:12
forerunner of socialism and like that
44:14
it’s good to have you have government
44:15
regulating trustee can work with them
44:17
these are cold
44:19
light wing socialist in the period who
44:22
are pro safe see the thing about the
44:24
left wing doesn’t Marcus lemonis I the
44:27
attendant will pose the government
44:28
although this thing government
44:30
lightly so those whose work happily with
44:32
sort of the selecting it was easy the
44:35
cooperative left-wing opposition his
44:37
Majesty’s royal on the list they call
44:38
thing or not imagine people opposition
44:40
so that’s okay to have that well you
44:43
don’t got the current concurrent break
44:44
up this happy harmonious set up the only
44:48
class of a country so the benefits of
44:50
free competition I like this is a
44:51
marvelous statement the only class in
44:54
the country the benefits of free
44:55
competition on the non producer is what
44:56
fixed income what are you talking about
44:58
sort of my not somebody’s humor the
45:01
people look but the people who benefit
45:03
people benefit in long slices every one
45:06
of us but the humor he says of the class
45:08
small numbers I question that
45:11
anyway after the pizzas hurled paid
45:13
Commission Act was passed and I think 13
45:15
II like this several additions it was
45:17
look and I think Christine he writes
45:19
another edition 4th edition and he says
45:24
he hails the Federal Trade Commission as
45:26
a step forward because it quote outlaws
45:30
unfair methods of competition unquote
45:31
it’s gonna end cutthroat competition to
45:34
another spray code words of competition
45:35
and also he says it’s gonna leave your
45:37
resale price maintenance a fair trade it
45:40
allows the government to set up minimum
45:42
price regulations for industry this is
45:44
gonna be different retail they finally
45:46
did in nineteen thirty along with the
45:47
Patent Act which it’s a long time and
45:51
fourth legal prices minimum product
45:55
Lord he charged less than ten dollars
45:59
per bottle of vitamins here it declared
46:02
illegal things like that it’s only done
46:04
the speak only declare that
46:05
unconstitutional about 1970 or late late
46:08
60s up like so so many years about for
46:11
decades and sort of doctrine prevailed
46:15
to benefit they organized retailers but
46:18
the benefits at the expense of the
46:19
public know what the kartalija we tell
46:21
mr. you keep prices up told we sale
46:25
quite maintenance great term terms are
46:28
always pretty pretty shrewd
46:33
so the Federal Trade Commission Act
46:35
paves the way for that the first step
46:39
resale price maintenance and also the
46:42
eliminate possible unfair competition so
46:45
all business almost all business groups
46:47
and the FFA Commission was being passed
46:49
love there this is great stuff it’s a
46:50
regulated industry it’s gonna it’s gonna
46:55
it’s gonna stabilize the system and so
46:58
for and so on to people to lawyers to
47:01
play a very prominent role in setting up
47:03
the Federal Trade Commission in Victor
47:05
Marton more out more alerts for the
47:08
Morgan where actors in Topeka and Santa
47:10
Fe lawyer and Francis one specimen I
47:13
mentioned many times in this course a
47:14
powerful figure and Morgan pop attorney
47:17
attorney for JP Morgan a company JP
47:20
morgan personally Cleveland Grover
47:23
Cleveland pour oil partner pops up
47:26
constantly in at home period
47:28
Francis once cut some Morgan’s lawyer
47:31
they essentially wrote thing these two
47:33
guys and mainly wrote the Federal Trade
47:35
Commission Act also helped by George W
47:37
Perkins Morgan partner Morgan himself
47:40
Belmont dumpers James W Jenks Cornell
47:43
University professor all these guys are
47:45
in on this finally comes to fruition
47:49
under under under Wilson also the when
47:53
the FTC with past doesn’t this group
47:56
tale of the Chicago Association and
47:58
commerce praised that the National
48:00
Chamber of Commerce by the way the US
48:02
Chamber of Commerce interesting little
48:04
fact was created by President passed
48:06
it’s before you retire from office and
48:09
late nineteenth twelve weeks and we need
48:10
a an organization of businessmen will
48:13
speak for business so essentially he
48:14
promoted promoted that’s and they came
48:16
into being as a result of government
48:18
encouragement so the Chamber of Commerce
48:20
of course blood was New York State
48:24
Chamber of Commerce love that the
48:26
National Association of Manufacturers we
48:28
should even a late-day fair after was
48:30
split they were not sure they were
48:31
ambiguous on this to it but everybody
48:34
else of course the National Civic
48:35
Federation love the Chamber of Commerce
48:36
slug that Eddie love that Stetson love
48:39
that you know to hold the whole gang but
48:41
they wrote it and they loved it anyway
48:42
another question is who
48:43
remember we have the real I have to
48:45
always assesses the so for Ralph Nader I
48:47
call the Ralph Nader mythos all these
48:49
things were set up by progressive
48:50
anti-business forces and then the
48:52
businessmen took it over later well who
48:54
wrote it we’ve already seen who wrote it
48:55
Marlon Stetson editing these people who
48:58
was appointed who became member of the
49:00
Farrell creaking like five-man
49:02
Commission who’s running it from the
49:04
very beginning
49:04
well the key figure the Chairman rather
49:07
was with Joseph a babies it was a young
49:12
Democratic leader I think life insurance
49:15
lawyer
49:16
nothing Wisconsin who Punk that after a
49:19
very short period of time really wasn’t
49:22
Morrison Foreign Affairs even if it’s a
49:25
very soon of getting up in the war and
49:27
so he’s sort of more or less left the
49:28
Commission so the figurehead that he
49:30
look at Joseph V Davies he was had been
49:33
head of the Bureau corporations which
49:34
should we saw lovely Teddy Roosevelt
49:37
creation of the predecessor the Federal
49:40
Trade Commission for the beginning of it
49:42
obviously sympathetic goes whole concept
49:44
his later whenever he well having them
49:47
later is he happen to marry more jury
49:48
post the heiress of the post post
49:52
toasties fortune and became the fourth
49:54
multi-millionaire and he later in World
49:59
War two became the bachelor of the rush
50:00
Roosevelt the matter of Russia we can
50:03
implement look whole mission of Moscow
50:06
if you claim of Stalin with a great guy
50:07
I rowing rowing
50:09
Democrat that was the period where the
50:13
Morgans won’t favor of Russia they have
50:15
to realize that Thomas W Lamont Morgan
50:17
partner well a great powerful Morgan
50:22
partner later on actually started
50:25
missing the World War one to putting any
50:29
idea that Russia was a great democratic
50:31
country in World War two he’s not a
50:35
communist the Morgan person anyway the
50:40
the real head of the Federal Trade
50:42
Commission was a vice-chairman that they
50:44
do babies quickly especially became
50:47
inactive so the vice-chairman has the
50:50
key role he was Edward Hurley he was
50:52
head of the Illinois Manufacturers
50:53
Association later became head of the
50:56
National ID
50:57
World War one he was a vice chairman and
51:00
he would be president the only
51:03
manufacturing Association and really
51:08
running a thing in the first few years
51:11
he was the founder of the pneumatic tool
51:14
in this straight there’s an important
51:15
Chicago manufacturer so he was giving he
51:21
gave all very interesting speeches I
51:22
think he’s running this thing and he was
51:24
praised overwhelmingly by businessmen
51:25
they liked he loved them in return so
51:29
for example give you a couple of quotes
51:31
from Hurley he said that he addressed
51:33
the appreciation of national advertisers
51:35
December 1915 and he said quote through
51:42
a period of years the government has
51:43
been gradually extending its machinery
51:45
of helpfulness I like that she rebuffed
51:47
all’s railroads and shivered he said how
51:51
the ICC the same theme of that am the
51:53
oldest guy’s name more like the same
51:54
thing well rows and shippers have the
51:56
ICC for many years the Interstate
51:57
Commerce Commission the bankers have the
51:59
Federal Reserve System what to get to in
52:00
a minute
52:02
performers have a part of my rococo
52:04
general business needs to have something
52:05
done to them before that so quote from
52:09
Hurley to do for general business that
52:11
which these other agencies do for the
52:13
groups for which I have to which I refer
52:15
none of these guys to write very well
52:16
anyway to do produced which to which I
52:19
refer was the thought behind the
52:20
creation of the Trade Commission unquote
52:23
will fully support early on it’s also it
52:25
sent messages early think you’re doing a
52:27
great job and we would all be saying
52:28
also one of the things he would do is
52:31
Hoover did the same thing Harley would I
52:33
write a speech for whooping praising
52:35
hurling you know if he’s right there
52:37
really would like the speech saying it
52:39
really is only great job will some of
52:40
them deliver the speech during World War
52:43
one Hoover to the salmon you write a
52:44
speech for vocal things who were doing
52:45
great job but if you want to get
52:49
endorsed by the president write the
52:50
endorsement yourself at least if you’re
52:53
early of Hoover you also address the
52:56
National Industrial Conference Board
52:57
which is a group that still exists of
52:58
course which is the group set up by
53:00
business to bring statistical
53:02
information of bear on our government
53:04
planning any and he said it’s kind of
53:08
cute you won’t need feathers of July 16
53:10
I don’t know anything about the law and
53:12
then applies to a Clayton Act of the
53:14
Federal Trade Commission I don’t know as
53:15
he doesn’t know anything about the law
53:16
which even administering in my position
53:19
on the FFA Commission I’m there as a
53:21
businessman when I was over the place I
53:24
told the president all I knew was
53:25
business I knew nothing about the new
53:27
laws or the old ones and I would apply
53:30
the force that I sought that I might
53:31
have in the interest of business I think
53:34
that the business man in this country
53:35
will bear me out when I say that I try
53:36
to work wholly in the interest of
53:38
business so nobody would make that kind
53:40
of a flat statement nowadays when people
53:41
more public relations oriented but here
53:44
he’s flat out that’s what he’s doing so
53:47
so big business man they loved Hurley
53:50
they loved the proto Trade Commission
53:51
they loved to be regulated so one of the
53:53
things of this court from the basic
53:54
themes of the business it’s mostly
53:56
thought by most people I think the
53:58
businessman always the favorite ladies I
53:59
said always against government
54:00
intervention ain’t true it certainly was
54:02
not true in this whole period from
54:04
nineteen hundred on of the late 19th
54:06
century on quite quite the opposite of
54:09
the drive of these business owners to
54:10
try to create government of the court
54:12
illusion of life government come in
54:13
there
54:14
regulate with strict control limit
54:17
competition and raise profits so Wilson
54:20
himself in favor of this kind of price
54:22
fixing thing and the Wilson gave a
54:26
speech also 1916 Orissa the Federal
54:28
Trade Commission has transformed the
54:30
government United States from being at
54:32
agonist of business there to being a
54:33
friend of those all the only
54:35
mole thing is it was never it wasn’t it
54:36
never really been an antagonist but any
54:38
right other people on the Federal Trade
54:40
Commission or the other three people at
54:42
Davies and Hurley George rubley
54:45
was a George Roebling was a big-shot the
54:49
Progressive Party 1912 and also a
54:52
lobbyist he not say Chamber of Commerce
54:54
and was the top official US Chamber of
54:57
Commerce a Wall Street lawyer and a
55:02
friend for many years a Victor marwat’s
55:04
Morgan Morgan lawyer
55:07
Dwight Morrow with a Morgan partner by
55:10
the way there’s several key Morgan
55:11
partners I should mention now Morgan is
55:12
getting older as a son also comes in
55:15
they have the more the P Morgan partners
55:16
so far Perkins of worth we know of that
55:19
we’re going to be Perkins Morgan Fortner
55:21
as Robert bacon Morgan
55:24
State Park atomically on the month
55:30
partner there’s white tomorrow who’s the
55:36
father of all Charles Lindbergh no Anne
55:38
Morrow Lindbergh married Charles
55:40
Lindbergh was was the daughter like
55:42
tomorrow and there’s Henry P Davison see
55:48
in a minute and Willard straight it
55:51
comes out of State Department and tell
55:54
us that we aren’t gonna be I’m long
55:57
these are the Morgan partners to whom
55:59
important in politics I’m not concerned
56:01
with a straight morning part there’s a
56:03
whole bunch of them work doing other
56:05
things in politics and and merging well
56:07
there’s straight comes out of State
56:09
Department it becomes the more your
56:10
partner sets up this is very interesting
56:12
thing is going to symbolize the alliance
56:15
between government and progressives
56:17
Morgan people and progressive
56:19
intellectuals socialists therefore
56:20
recommend electro it’s decided top a new
56:23
magazine and weekly magazine to promote
56:25
liberal and progressive ideas they’re
56:26
representing state at the corporate so
56:29
they set up a new republic owned by the
56:31
Willard’s great most of all its straight
56:34
in addition to being more important how
56:35
they have a advantage of marrying of a
56:36
very wealthy woman with the Whitney
56:38
Faris Dorothy Whitney sorter the top
56:43
Whitney people so Whitney V Morgan and
56:45
Rockefeller connected Pratt Pratt
56:49
wouldn’t he connected you start off with
56:50
a lot of money from his wife Dorothy he
56:52
want to get to want to be successful in
56:53
life marry a rich rich era anyway be my
56:59
you Dorothy straight money and becomes
57:01
such that the numeral public which sets
57:05
up as editors we have a pop corporate
57:07
test corporate state neo-fascists was
57:10
gonna fall proto-fascist intellectual of
57:11
the country and edit this it’s still
57:14
around the corner in public and they
57:17
when we entered World War one they were
57:19
the major people pushing these people
57:21
pushing for the war effort three editors
57:23
were major out of a perfect of you
57:26
Crowley
57:28
my least favorite people Gary is a big
57:33
shot of the lecture he was a Hamiltonian
57:36
cutting those articles
57:37
famous book called the new nationalism a
57:39
the big pallet Teddy Roosevelt applying
57:41
Teddy Roosevelt was intellectual
57:43
ammunition favorites big state strong
57:46
state executive tyranny Hamilton was
57:50
against Jefferson against individual
57:52
liberty between Marquette and on and on
57:54
they were corporatism the whole bit
57:57
favor war over a fire storm staffing
58:01
you’d probably pay for eugenics – when
58:05
his father was a think Simoni and the
58:07
Gaston did real technical exactly french
58:11
socialist fascist socialist
58:13
intellectuals Sansom all believed was a
58:16
socio could believe in dictatorship by
58:18
the elite especially bankers so the
58:22
bankers who Shula beautifully with
58:24
Morgan why not submit by the way one of
58:26
the top socialist intellectuals those
58:28
countries are superior George a man
58:30
mentioned Charles Steinmetz famous
58:33
electrical and let her sign messes the
58:38
key fella Alec electrical theorists
58:40
electrician we pull out no engineer for
58:42
General Electric Morgan Company and Sean
58:46
Steinmetz wrote a couple of books
58:47
calling from socialism it turned out
58:49
what he meant by socialism was was a
58:51
world run by one big corporation General
58:58
Electric
58:59
with himself supplying the ideas in
59:02
other words all like we listen to a
59:03
theoretician like himself especially
59:05
what he wanted was fine month world
59:06
social it’s fine mister the world social
59:09
with big hair so it’s a very good book
59:12
on electron though I hadn’t thing you
59:13
want to read in this was a guy named
59:15
David Gilbert for an excellent book but
59:17
you’ve been sort of and lectin called
59:19
designing the designing the Industrial
59:21
stink the other what he calls
59:24
collectivist intellectuals Gilbert
59:25
recover the new left destroying a 1960s
59:28
and he deals with proper acidity with
59:31
what he called collectivist
59:33
intellectually technocrats hikes and
59:35
people like Stein met his whole chapter
59:38
on Steinmetz
59:42
going in a sardonic detail in the
59:45
character anyway so I mean any right so
59:49
Kohli is a that kind of a guy he was
59:52
also nineteen twenties and he was editor
59:54
Renu Republic he hailed Malini’s regime
59:56
has been an excellent marvelous solution
59:58
okay let’s big poke fashion but you have
60:00
to realize that liberals and business
60:02
men all during nineteen twenties early
60:03
thirties of favor little weenie great
60:05
strong had everything I had class
60:07
harmony is that a class struggle he had
60:10
sort of having Port Perry and types you
60:13
have the whole whole country integrator
60:14
than big government fixing production of
60:18
fixing prices car lysing the system
60:20
creating organic with the organic nation
60:22
running everything and they love that
60:26
mean so fascism was really liked by most
60:28
American the apparent mark establishment
60:30
fully are long as the Ethiopian tell me
60:34
at onion have a city in war and I can
60:36
thirty-five with it until then they all
60:38
loved it
60:38
and so the fact that few people were
60:40
tortured here in there with those left
60:42
over so he’s one of our good he would
60:45
not be considered a good thick pair the
60:47
free world advocate a free world
60:50
dictatorial I looked at who the
60:52
authoritarian was opposed out hearing
60:54
against at Corinth Georgia so any rate
60:58
so it only as I say with the Ethiopian
61:00
war there’s everybody turned against
61:01
them Salinas well that’s the kolya total
61:04
caloric editorial no Republic praising
61:06
McQueen users runs great guy
61:07
maybe the trains run on time the famous
61:09
afraid of the views been any rate the
61:13
other two guys were water while and
61:16
Walter Lippman
61:17
he then became a famous pundit and
61:21
columnist and all that so we had then
61:25
this to me that symbolizes the Morgans
61:27
the rest of intellectual alliance and a
61:29
living embodiment in the New Republic
61:31
magazine which was founded in 1912 but
61:37
neither hail the Wilson administration
61:38
so Lippmann gets to belittle the
61:40
youngest one of that go be just
61:42
graduated from college couple years
61:43
before Big Sean the Intercollegiate
61:45
socialist society and then he yet to be
61:48
you’re a big shot in love there’s a very
61:49
good book I’m looking and by mile steel
61:51
very warm
61:52
deals with him in some detail for
61:55
reserve systems another again another
61:57
story it gets I want to get to technolon
61:59
Federal Reserve extremely important
62:01
development well heaven was a Coco
62:04
points out the banks were getting too
62:06
competitive in other words the banks
62:08
were getting from the time of civil war
62:12
which set up a quasi several eyes
62:14
government banking system with the
62:17
outlawing of State banknotes second wise
62:19
in Wall Street Wall Street is getting
62:21
less and less strong other words your
62:22
cargo is having an important banking
62:24
center and its own hook a Kansas City
62:26
isn’t coming in for a magnet sister
62:27
system people using the state back
62:29
remorse against the national banks so
62:32
the Wall Street max we’re gonna lose
62:33
control over the banking system also I
62:37
wasn’t inflationary enough in other
62:39
words there wasn’t they wasn’t they
62:41
weren’t able into play soon as a
62:42
insulator there be a recession there’d
62:44
be prices would go up people will call
62:46
upon the max for redemption and gold
62:47
would be recession and then the banks
62:50
were collapsed so 1907 of the big
62:52
banking panic and so the Morgans once
62:56
again and plus the other people listen
62:58
to this case everybody agreed all the
63:00
time the lack of color is the Morgan
63:01
Khun lo of the Audrey you have to have a
63:03
central bank Michael about the
63:06
progressive system which have been
63:07
pioneered by England in late 17th
63:10
century and adopted by almost other
63:11
countries and I think country need a
63:13
central bank do what to prop up the bank
63:16
to ensue and active able have inflation
63:18
cheap credit and play shirring thanks
63:20
reddit
63:20
controlled by the government so no one
63:23
Bank and it will collapse in the what
63:24
the sort of support the whole system the
63:26
central bank to be with the English
63:29
thank you here at all the badges so the
63:32
land lender of last resort
63:34
it was the bailout thanks in trouble
63:36
okay so we several mags a lender of last
63:39
resort accept Eliza’s reserve of the
63:42
place
63:42
it also can purchase government bonds
63:45
you know finance government deficits of
63:48
necessary in several bank is an
63:50
inflationary and several izing the vise
63:53
and it was the public doesn’t like it
63:58
the public generally suspicions of the
63:59
wall street with good reasons pushing
64:01
banks at the cellars of the public and
64:03
they sold this likely establishment sold
64:06
the Federal Trade Commission of
64:07
meatpacking stuff and all the rest of it
64:08
as ways to check big business where it
64:12
really was monopolized in the right they
64:13
sold it as a way to a little competition
64:16
similarly they sold a simple bag of
64:18
silver federal versus them as a way to
64:19
check inflation to keep a lid on
64:22
equation of banks with two inflationary
64:24
we needed several bank prevent inflation
64:27
to regulate the system so in other words
64:29
it’s Federal Reserve System operated and
64:31
still operates as a carnal eyes II
64:32
device for banks it does for banks what
64:36
the Federal Trade Commission did for
64:38
general business what the ICC did for
64:40
the railroads of the simple silver
64:41
league Aeronautics or Aeronautics Board
64:43
and has did for the airlines are fooling
64:45
around doesn’t it last year all these a
64:47
facility they car Liza system they
64:49
restrict production raise prices keep
64:52
out and from new entry so the federal
64:55
reverses in the way of car lysing the
64:57
banking system so the banks love that
64:59
here the banks are being allegedly
65:01
restricted right in other words the
65:03
court has a pup again the banks there
65:06
are being mistress
65:07
they’re being curb and limited by the
65:08
Fed do you think they hate the Fed it
65:10
what look at that why they’ll next
65:12
protocol the Fed cartilages on the same
65:14
way the second bank of the United States
65:16
in the early 19th century they love
65:19
these bankers he’s supposed to be
65:20
supposed to hate because they pop up the
65:23
fifth and they bail out banks in trouble
65:25
they cart Eliza inflate and all the rest
65:27
of it of course sometimes there’s
65:29
marginal disagreements obviously don’t
65:31
inflate enough for a certain bank but
65:33
basis of system they love the system and
65:35
all these guys supported it they had to
65:37
do they had to the bankers of the
65:42
American Bankers Association starts the
65:44
parade the Morgans love of the chamber
65:46
chamber of commerce love it they have to
65:50
jockey for the Harwich Aki for power
65:52
have a jockey for how to write this
65:54
thing and they have to worry about the
65:55
Republicans Democrats both liking it so
65:58
what happened was originally was the
66:00
original love supporter was notes an old
66:02
rich was the Rockefeller in-law senator
66:06
Nelson Aldrich and during the past
66:09
administration the Federal Reserve Bank
66:11
proposal is called the oil-rich plan
66:13
so it was a the classic meeting and the
66:22
bankers loved the head part of the chase
66:25
one of the key figures in this is a
66:27
Barton Hepburn or was head of the chase
66:29
National Bank which in those days was
66:31
Morgan they had a secret meeting was on
66:34
a classic things which exposed many
66:38
years later at Jekyll Island in December
66:45
1910 latter days with Captain
66:50
ministration little of that motivation a
66:52
seeker meeting Jekyll Island which is
66:54
the private islands have to offer Tokyo
66:57
South Carolina now excuse me our courts
67:01
of Georgia I think and they end up with
67:04
very hush-hush but they want to have a
67:05
secret meeting about the press finding
67:07
out about it they took her they charted
67:09
older it’s chartered a train from New
67:11
York train to go down in Jekyll Island
67:12
and he told them we’re going on told the
67:15
press are going on a duck hunting
67:16
expedition just a few bolting friends
67:19
duck hunting in Jekyll Island we still
67:22
don’t know that this day who do you have
67:24
to use with your private island like
67:25
that very swanky after using me invited
67:28
by some guests we don’t quite know whose
67:30
guest that cool guest house log Louise
67:32
with deep suspicion bucket of JPMorgan
67:34
he’s the only guy none of these guys
67:36
remember the Jekyll Island cover the JP
67:38
Morgan was if they use at home or
67:40
something anyone
67:41
so already shut the thing off of de
67:43
Morgan’s mansion down there and the
67:49
members rates just a few people and what
67:51
they did is they spent a whole week
67:53
there and they hammered out the federal
67:54
essentially the old rich final Federal
67:55
Reserve Commission Act you’re the look
68:01
rockefeller
68:07
Henry P Davison Morgan partner and Paul
68:12
Warburg Kuhn Loeb one of the relatives
68:17
of Jacob Schiff Warburg German has
68:20
brought over from Germany
68:21
and paid the partner come over I think
68:24
it his entire time was spent lobbying
68:26
for agitating for a Federal Reserve
68:28
System in other words that was things
68:29
isn’t he didn’t have any didn’t do
68:30
actually didn’t know actual banking work
68:32
whose pay to fix the player eight
68:34
hundred thousand dollars a year which of
68:35
those which now amounts to about six
68:37
million a year something like that paid
68:40
what in real terms of current dollar six
68:42
million a year to do nothing but lobby
68:44
for propellers of them so he he was a
68:49
relative of ship and human low up at
68:51
supper in the world I’m a famous Warburg
68:53
family so we have then these were
68:56
essentially these are the four guys with
69:00
like up at the meeting five guys know
69:03
he’s got any Norton okay Charles Norton
69:06
was a head of the First National Bank
69:08
which was all its own Morgan okay
69:12
one Morgan a to top banks Guaranty Trust
69:15
Company and and first nationally also
69:20
had he this is the morgue important so
69:23
we had Morgan partner JP Morgan
69:26
accompany investment bank
69:28
we had Charles Norton of the Morgans
69:30
First National Bank New York which is
69:34
now by the way tapered initial city and
69:41
it’s a to Morgan people to Rockefeller
69:43
people one Kualoa person the five for
69:46
the distribution of power plus one kept
69:49
professor door actually write out the AG
69:51
you have to have a technician an
69:52
economist thing eight PI an end rule
69:55
Harvard to actually write the thing up
69:59
so unknown professor nobody’s not very
70:05
well-known he cannot make circle he was
70:07
there to write then I drafted
70:08
legislation
70:09
well that so it’s a very small
70:14
conference race more a very high level
70:16
and they granted as I say this act
70:18
though it’s a jehanne here’s an
70:20
agreement okay hammer tap three forces
70:23
many of which were hated each other’s
70:24
guts at other levels Rockefellers Morgan
70:27
the cool novice is important this is the
70:29
banking system this is money
70:30
this is credit money Macke and all
70:32
agreed on the basics
70:34
basics of it they drew up the plan organ
70:36
start to push it through and what
70:40
happened then is the Democrats give me
70:43
the election of 1910 Democrats won the
70:46
election house representatives so they
70:49
had a wait old Rich’s plan with now
70:52
holders his name was was disliked by
70:55
Democrat so you have to have a head of
70:57
weight for a year and set up lobbying
70:59
institutions make it bipartisan they
71:01
have to bring the Democrats in Democrats
71:04
won the house represented like he can
71:05
they won the presidential election 1912
71:08
they couldn’t have a Republican name on
71:10
it you have to have Democratic name on
71:12
it so they waited until Wilson was
71:13
elected and then would when the
71:15
Democrats took control of Congress they
71:17
got Carter glass as a Democratic
71:19
congressman from Virginia to put his
71:21
name on them they on the legislation so
71:24
the they also set up a phony citizens
71:29
group in Chicago called a Citizens
71:32
League has sound money something like
71:33
that
71:35
calling to a Federal Reserve Sousa they
71:37
they they want to make make it as if
71:39
it’s a grassroots movement not just a
71:40
few bankers they want to see the public
71:42
to behind him and Chicago sounded safer
71:45
Danielle because East New York meant
71:47
Wall Street so they take it as Chicago
71:49
and they make and they have a J Lawrence
71:51
walk none of the English economist was
71:54
unfortunately a favorite Federal Reserve
71:55
System the major propagandist I’m half
71:58
of a Morgan of the joint bankers group
72:01
calling himself citizens and all that
72:03
actually he admitted later on fourth he
72:05
was pure tool the bankers just operating
72:08
a banker person in anyway so and finally
72:13
as I say when Wilson’s are likely they
72:15
pushed through what’s and they make they
72:18
say it’s not a central bank they
72:20
couldn’t make it
72:21
they had a straight separate man one
72:23
bank the rest of the public were
72:25
suspicious of the banks in general
72:26
wouldn’t like it they said it’d be
72:28
central law it’s not a central bank
72:29
throws their system the 13 chapter the
72:32
branches or whatever it is they had a
72:34
very cumbersome Pony decentralized
72:37
structures really quite centralized and
72:39
they made it seem as if a decentralized
72:41
p2p the congressman okay we’re getting
72:44
no exciting watershed and we World War
72:46
one
72:48
well before I get I shouldn’t mention
72:50
the Federal Reserve System she excuse me
72:52
for finish that up the fellas are bored
72:57
as I say which came in summer 1913 and
73:00
then really starts functioning around
73:02
the summer for 1914 you have to get
73:05
everything shakes up as a way of kurta
73:08
lysing of the banking system so at the
73:11
permit bank the continued inflating at a
73:14
controlled rate that was controlled by
73:16
the government so no the banks won’t
73:19
collapsing me a lender of last resort
73:21
and the bank’s confederal door can push
73:24
reserves into the system
73:26
reserve requirements were lowered
73:28
thereby committing an inflation of money
73:31
the way the banking system worked not
73:33
only do this very quickly because I
73:34
can’t go to the tech tech techniques or
73:37
technology or of the banking system here
73:40
but basically the banking system the
73:42
commercial banking systems chasing you
73:44
know a bank of kembang although there
73:47
are inflationary engines and there were
73:49
there ways to increase the money supply
73:51
there’s substitutes for counterfeiting
73:54
counterfeiters print money you know
73:56
could you take dollar bill when you
73:57
print money in these ten dollar bill you
73:59
spend them banks create fake warehouse
74:02
receipts in other words you deposit cash
74:05
in a bank okay so let’s say you deposit
74:08
account were going to quickly you then
74:12
have this is the balance sheet of the
74:14
bank right there’s a step and these are
74:17
the liabilities plus equity really means
74:23
and macro I go from money banking court
74:26
I go through this whole thing
74:27
step-by-step so basically what you have
74:29
is you deposit deposit $100 in cash in a
74:32
bank cash could be gold it could be you
74:35
know Treasury bills or whatever there’s
74:37
may any difference it’s cash okay you
74:40
get then the bank then has $100 say cash
74:45
the bank gives you a return for that a
74:48
warehouse receipt saying you will you
74:50
you can claim this at any time $100
74:53
anytime you want on demand like a
74:56
warehouse you know your depositor
74:57
watching the warehouse and say or
74:59
furniture or something get your
75:01
ticket your warehouse will seat you pay
75:03
thief works with storing it and you can
75:06
redeem the damn watch or chair at any
75:08
time so this is but so you have $100 and
75:11
we’re balanced $100 in warehouse
75:13
receipts which can take which we’ve
75:18
taken two forms over the centuries one
75:20
of them no physical note like a point
75:22
ticket or a warehouse receipt thing so
75:24
the the Bank of Oshkosh or the Bank of
75:29
Great Neck promises to give you on the
75:31
redeem of the man of pay you about and
75:33
demands a hundred dollars in cash on the
75:36
presentation of the ticket okay that’s
75:37
one way this is called a bank note the
75:40
other way and more sophisticated way
75:42
which is only when you originally only
75:43
done for large businessmen other words
75:45
this is a basic way the average person
75:47
had a bank note the other way which is
75:51
which is usually done for a large
75:53
merchants or big business of pipes or
75:54
international traders etc it’s by having
75:57
open book accounts in other words
76:00
instead of actually getting a physical
76:02
note you just got a record on the bank
76:04
or they owe you a hundred dollars and
76:05
you don’t get any physical record what
76:08
you get is a bunch of a transfer order
76:13
you get you have a deposit or demand
76:16
deposit our open book account with a
76:21
bang
76:22
of a hundred dollars instead of a bank
76:24
note and the old-age you can have a
76:25
combination you can have a $50 a night
76:27
notes at the seals of the van applause
76:29
whatever you want the way you the way
76:32
you transfer a warehouse receipt
76:35
you simply sell it to somebody you know
76:36
buy something with it you take the
76:39
hundred dollar you and demand on the
76:40
bank you have $100 if the bank is
76:42
considered honest and upstanding and
76:44
ever the warehouse receipt functions as
76:46
if it were cash different gold or
76:48
whatever it is they trust the bank or
76:50
bank a good reputation then a merchant
76:53
or somebody selling in something will
76:55
take the bank note instead of a sort of
76:57
either you or him having to go to the
76:59
bank it’s up to the magnet carry the
77:00
gold out let’s simply take the bank now
77:02
as a my traveler’s checks are done now
77:05
they could take a traveler’s check us
77:06
out of the actual cash traveler’s check
77:08
is like a warehouse receipt so either
77:10
that bank knows whether the manna
77:11
positon which case they accept the
77:12
transfer
77:13
order you say the transfer order says
77:17
mr. bank you know Banco ha
77:22
J Street magazine dear sir pay to the
77:26
order of Joe Jones 100 bucks
77:28
I like signed Murray Rothbard but then
77:31
they take my $100 account and transfer
77:34
the open book instead of being done
77:36
through an actual physical vote transfer
77:38
it their liability there there they’re
77:41
all I believe from me to the John Jones
77:43
this is a course call a check but a
77:45
check is the transfer order to the bank
77:48
saying mr. bank please signed by me
77:52
please
77:53
take $100 you now owe me and transfer
77:56
them to John Jones if the bank is well
77:59
off I’m well known in this case the John
78:01
Jones will accept the check and then
78:03
deposit in his bank at any rate this
78:06
becomes over the years the man deposit
78:09
oil warehouse receipt becomes equivalent
78:11
the cash the the chances for counterfeit
78:17
I call counterfeiting unlimited is that
78:19
a free banking situation of this sort
78:20
the temptation for counterfeiting comes
78:23
about when the bank says look these
78:25
suckers though they trust me you know
78:28
they don’t come in the man the cash
78:30
anymore because they think that I have
78:31
money here and I owe it to them and the
78:33
other hand they’re great few of them
78:34
really show up anymore I mean let me
78:36
start either stealing the goal itself
78:38
and then lending it out or else printing
78:41
fake warehouse receipt and let me know
78:43
that it’ll be accepted as if they’re the
78:45
same thing as regular warehouse receipt
78:47
which is what the bank started to do
78:48
after centuries of getting reputation
78:51
for honesty and probity and all that
78:52
they started printing great where
78:54
happens let’s say let’s say 200 all the
78:56
warehouse receipt whichever either the
79:00
bank and positive don’t wear bank note
79:03
and they lend it out put the two in all
79:06
one’s an ass something and charge
79:07
interest so now they have three hundred
79:10
dollars in liabilities and demand
79:13
deposits or bank notes right they have
79:16
two hundred all Ohio used to I don’t
79:18
know Michelangelo over this so which
79:21
they get interest this is the white
79:23
banks expand they’ve sent it two ways
79:25
either by actually going
79:26
depositing their money in there or by
79:29
lending money lending money to the bank
79:30
and the ones of that or in the way of
79:32
creating fake warehouse receipts with it
79:34
which they didn’t learn that the banks
79:37
can get away with it so long as they
79:38
people don’t call for their their money
79:41
in any large amount okay so this is
79:43
called fractional reserve banking
79:46
contract to 100% reserve banking all the
79:48
banks actually keep the money there’s a
79:51
whole argument of between economist and
79:53
moral fear of the legal theorists that
79:55
whether this is true or not I think it
79:57
is and I mean raising the point is that
79:59
the factions their banking you now and
80:02
fight you create more dollars the way
80:04
you manufacture dollars and London Matt
80:06
this is an inflationary instrument know
80:08
where the increases the money supply not
80:10
by digging go around but just printing
80:12
tickets like creating money out of thin
80:14
air and the bank of can the bank books
80:16
of the bank so in a free market this is
80:20
limited limited play for this because if
80:24
I create it let’s not have a roll bar
80:26
back I start putting creating more
80:28
official warehouse receipts well I only
80:30
have a few clients mostly other
80:31
thousands of banks people if I write out
80:34
a cheque if I lend that IO use right if
80:38
I created bank deposit for people
80:40
they’ll throw out using the money to buy
80:41
things and soon as they do that the
80:43
other Bank their bank hold upon me for
80:45
redemption I ain’t got the money and I
80:47
go bankrupt so there’s no way the
80:51
individual banks can really make it
80:53
really have a play for this and a free
80:56
system free market system the only way
80:57
they can really accomplish this
80:59
systematically not to be afraid of going
81:01
under at any moment is I have me a
81:03
cartel and the only way it cartel get
81:06
sixy like 1/8 or any other industries by
81:08
the government enforcing it on the
81:09
government organizing the cartel and
81:11
enforcing a limiting competition and
81:13
pouring money in so that and bailing out
81:16
any bank in trouble as the whole banking
81:18
system inflates together happily
81:19
inflates together creates more money
81:21
grows out prices transfers wealth and
81:24
income from other people to themselves
81:25
in other words from people who are from
81:26
the average consumer for the guys who
81:28
were in on the credit system would
81:30
borrow the money and all sort of that
81:31
sort of stuff we’re in with the
81:32
government this is basically the way the
81:35
government’s have done this in the last
81:36
couple hundred years it to the central
81:37
bank central bank’s sister
81:40
which is a partnership of government and
81:43
private banking other words originally
81:45
the Bank of England the first central
81:46
bank organised in the 1690s but simply a
81:50
private corporation which the government
81:51
needed money the king always needed
81:53
money government always starting from
81:54
money the credit was exhausted the king
81:57
was confiscating or king of borrowed
81:58
money from the Goldsmith’s don’t have a
82:00
major amount of capital and they
82:02
confiscate of the gold of finances war
82:04
against the purity so obviously it’s the
82:06
you know they’re not ready and also he
82:08
stopped payment on various bonds of the
82:11
issue so if the king has no credit who’s
82:14
gonna borrow unto him so as a result and
82:17
he couldn’t tax anymore because the you
82:19
would have had his head chopped off when
82:20
III taxing those days there’s no way he
82:22
was trying from want to get money how do
82:23
you get it the the promoters of the Bank
82:26
of England came in with a scheme look
82:27
look sire you give us a monopoly in all
82:30
banking give us and one done and so
82:32
forth someone give us privileges and we
82:35
will then buyer you you’ll finance your
82:37
deficits we’ll give you a Bank of
82:38
England notes warehouse receipts you can
82:40
spend them and that’s what happens
82:41
there’s a racket by which the government
82:43
organised privileged the Bank of England
82:46
thereby and benefited from the fact Bank
82:49
of the banking would create money
82:51
excited the King of England printing of
82:53
money which looked bad looked
82:54
inflationary they have a private
82:56
corporation distinguished corporation
82:58
which then creates money out of thin air
83:00
who through this warehouse receipt
83:02
system fake warehouse receipt and uses
83:05
of the by government bonds which then
83:07
the Kings spend the government spends
83:08
everybody’s happy so the poor public of
83:10
finding the value of that of a pound of
83:11
going down they don’t know why and most
83:14
companies in the world except the United
83:15
States government deficits are financed
83:18
by the central bank in England Israel
83:20
most other countries it’s very easy to
83:23
have a definitely just something local
83:24
bank just buy them buy the bonds and
83:26
increases the money supply and a high
83:28
now in a very inflationary manner to do
83:30
it the Federal Reserve System doesn’t
83:31
done not quite as bad but it’s over one
83:34
night as I say had a semi centralized
83:37
banking system after the Civil War but
83:40
not really fully central and won’t speak
83:43
but separating the banks were collapsing
83:46
so in order to the bankers got together
83:48
a Jekyll Island other places well this
83:50
is all wings of the bankers Rockefeller
83:52
more
83:52
Kuhn Loeb they all agree you have to
83:54
have cheap credit you have the
83:55
government bailing out of the banking
83:57
system organizing a cartel and of course
84:00
another question who runs it I’m gonna
84:02
we’ll see central bank they get together
84:05
lowers the refraction reserve
84:06
requirement so that you can president
84:08
banks can create more money creates a
84:11
monopolist it through monopolizing bank
84:13
notes in other words before 1913 the
84:18
large National Bank Lord will speed Mac
84:20
spread of notes in other words you can
84:21
go to Chase Bank what’s their chemical
84:23
kind of Chase Bangor City Mac and one if
84:25
you can get Chase Bank notes which looks
84:27
like Federal Reserve notes now there’s a
84:30
chase bank will pay till you pay to the
84:33
paper though let me count on painter
84:37
that’s something huh pay to the payee or
84:41
anyway so so long as they have this
84:43
honor that’s the problem number I think
84:44
I pinned the order up the bearer one
84:47
hundred dollars in gold one hundred
84:49
Treasury though usually gold so so
84:52
though the Saudi there were individual
84:53
Bank the large bank before the Civil War
84:55
every bank had banknotes after the civil
84:58
wars you remember the state banks were
85:00
prevented from doing it only large Wall
85:01
Street banks at print banknotes now the
85:03
Fed only the Federal Circuit print
85:05
banknotes for the result of all about
85:07
people of money if you look at your
85:08
paper money says Federal Reserve Note
85:09
and the bank’s again were limited
85:12
creating demand deposits so if anybody
85:15
wants a bank note one for regular trans
85:18
back you’re not gonna pay a checking to
85:19
my newspaper I’ve got a sandwich if you
85:21
want a bank note of a paper of money you
85:23
have to go to your bank has to go to the
85:25
Federal Reserve to produce and sell a
85:28
bank so to speak the money so in other
85:30
words the way the central bank has
85:31
control over the banking system is like
85:32
having a monopoly a legal monopoly
85:34
coercive monopoly on the issue of notes
85:36
of paper money so the banks warn it’s
85:40
not that the banks don’t like them at
85:41
all they love it because this gives the
85:42
central bank controls in several racket
85:44
i inflate together all the maxi now and
85:46
play together when the central bank
85:47
doing most of the inflating the way the
85:49
central bank inflates
85:50
as my creating reserves feeding more
85:53
cash at a speaker
85:55
reserve on the several bank upon which
85:58
the banks can’t Bank in pyramid and
86:02
attract multiple fraction in other words
86:04
this is a Federal Reserve
86:05
system they have gold which they pyramid
86:08
and then the banks impairment on top of
86:10
that the pyramid right now ten to one
86:12
which is what I was nineteen thirteen so
86:14
in other words for every dollar of
86:16
reserves of the Fed creates the mansion
86:18
inflate ten to one on top of it creating
86:20
fake warehouse received Amanda posits
86:23
say multiplied on top of reserve which
86:25
then goes into the x part of the money
86:27
supply I’m not gonna go for the
86:30
mechanics of it you can check any money
86:32
in banking textbook let’s see how this
86:34
works
86:34
anyway the basically what happens in
86:37
other throws are live an app set per and
86:39
and get the positive in the bank then
86:43
the maximum term at ten to one
86:45
fake big warehouse receipts and they
86:47
can’t go under because every bank does
86:49
it together several bankers nuvaring the
86:52
whole thing and several bank bills them
86:54
out so it’s very important for the math
86:55
degree this I mean if the banks want to
86:57
inflate and we have to suffer the
86:58
consequences
87:01
the was a bipartisan thing is path very
87:04
heavily with that after a lot of
87:05
jockeying position as I said the end of
87:08
last hour in order to sucker in the
87:10
public which had a healthy destructive
87:12
Wall Street the creek plane is not
87:14
really a central bank’s really
87:15
decentralized so they’re twelve chapters
87:17
of whatever it is it’s really was
87:19
centralized it wasn’t over fight for
87:21
power at the beginning and in those days
87:24
the way the law was set up the head of
87:26
the Federal Reserve Bank of New York was
87:28
the dominate of the system after the
87:32
1930s during nineteen thirties law was
87:34
changing out the Federal Reserve Board
87:35
and Washington runs the whole thing the
87:38
throw a girl born you’re the present of
87:39
the Federal Reserve or New York within
87:40
the key figure what nominated a pointed
87:44
by the photo service system which is a
87:45
partnership of government and the banks
87:55
you

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