“Which was?”
“To create a banking monopoly that would tilt the playing field exclusively to their advantage and crush any competition by yoking the brute force of the U.S. government completely under their control. In short, they were headed to Jekyll Island to assemble the blueprint for the Federal Reserve.”
Harvath remembered being told by Jacobson, the Federal Reserve’s director of security, that this was the meeting so many conspiracy theorists like to point to. He wondered what it said about Bill Wise that he was drawing attention to it as well. “I hear their visit had everything but a devil worship mass and animal sacrifice.”
The man laughed heartily and caused Harvath to be even more reminded of Santa Claus. “If only that was the extent of what they were up to,” he said. “They stayed on Jekyll Island for nine days, crafting a master plan for an American central bank. Warburg was the sharpest and most knowledgeable about banking so he was given the task of writing the bill that would go before Congress. Aldrich rode herd to make sure the bill was crafted in such a way that it would be passed. The others at the meeting were there to make sure their respective interests were seen to and to help remediate any problems that might pop up.
“Because of the money panics that had so devastated the country, the men at Jekyll Island knew Congress was anxious to be seen doing something bold. They also knew that the public saw bankers as the reason for the panics and hated them with a passion. That meant that they had to put a lot more than just lipstick on their pig of a central bank. They had to dress it up so it looked like a racehorse.
“Warburg was a very smart man and suggested they avoid the words ‘central bank’ altogether. When his cohorts asked him what it should be called, he said the ‘Federal Reserve System.’
“To disguise it even more, Warburg suggested they put branches across the country, which could be helmed by prominent, and well-known locals in each region. Anything to minimize the appearance of the Federal Reserve being an operation of eastern bankers, who were a particularly detested class of bankers at that time.”
It was still a lot for Harvath to take in. “By all accounts, these men were already financial successes; big-time, even by today’s standards. Why go to all this trouble?” he asked.
“Simple. Self-defense. By 1910, banks in general were booming. They had more than doubled over the prior ten years and most of the new ones were out west and in the South.”
“Which meant that the New York bankers were seeing an ever-shrinking market share.”
Wise nodded. “The most alarming thing for the bankers, though, was that businesses at the time were doing very well and funding their own expansions out of their profits. Only thirty percent of businesses were coming to banks for loans. It was as if businesses didn’t even need banks anymore. You want to talk about panic? The bankers thought their world was coming to an end.”
“So what?” said Harvath. “Why shouldn’t people be able to make up their own minds about how they want to finance the growth of their own businesses?”
Wise put up his hands. “I agree with you. Then again, I’m not a banker. I actually believe in free markets.”
“So what happened?”
“The banks needed to change the way people thought. In particular, they needed people to adopt a ‘buy now, pay later’ mentality and encourage them to borrow rather than save. For that to happen, they were going to have to make it as cheap as possible to borrow money. That became one of four key items on their agenda at Jekyll Island.
“How to crush competition, how to control interest rates, how to be able to make as many loans as they wanted regardless of how much money they had in their vaults, and finally the big one.
“Everyone at that meeting knew that at some point, maybe not in twenty years, maybe not even in fifty years, but at some point all of it would come crashing down and the system would eventually collapse. When that happened, they needed a safeguard so that the bankers themselves wouldn’t be held financially accountable, but rather the taxpayers would be left footing the bill.”
The more Harvath learned about these people, the more they disgusted him. “Talk about morally bankrupt.”
“They not only invented too big to fail, they invented too big to jail. They were brilliant propagandists. J. P. Morgan was famous for handing out shiny dimes to street urchins. Paul Warburg was the basis for the character of Daddy Warbucks in Little Orphan Annie. Very few realized what all of these men were up to. In fact, you’re familiar with the massive hyperinflation of the Weimar Republic after World War I in Germany?”
“I am. I remember the images of people going to stores with wheelbarrows full of worthless currency just to buy a loaf of bread.”
“Exactly. What most people aren’t aware of is that the massive hyperinflation that crushed the German middle class, collapsed its economy, and laid the groundwork for the rise of Hitler was created by Germany’s central bank, the Reichsbank, which was one of the central banks our Federal Reserve was modeled after. But even better than that,” Wise added, “was that the director of the Reichsbank was Paul Warburg’s brother, Max.”
Harvath stared at him. “Are you serious?”
Wise nodded.
Although Wise had given him a crash course on the Federal Reserve, Harvath didn’t feel any closer to figuring out who was behind the kidnapping of the five chairmanship candidates. “So there are a lot of reasons not to like the Fed. I could say the same thing about Congress, yet we don’t have people out abducting and killing their members, ostensibly trying to blackmail them into dissolution.”
“Sometimes I wonder if that might not be a good thing.”
Harvath looked at him. “You’re joking, right?”
“Of course I am,” Wise replied. “I’m just not a fan. Listen. If you did have people going after members of Congress, you’d handle it the same way, right? You’d ask yourself who would benefit from any of the attacks and then look for clues.”
“True, but as far as who might benefit from shutting Congress down,” Harvath said, “that’s not going to narrow it down much. The entire country could benefit.”
Wise smiled. “I see you’re not much of a fan, either.”
“Not really.”
“Well, a lot of people could benefit from the Federal Reserve being shut down.”
“Sounds like the entire country could, which means I’m left with just over three hundred million suspects.”
“Actually, there’s more if you consider the fact that the dollar is the world’s reserve currency and any inflation created by the Fed is felt around the globe. Then there’s the fact that the U.S. government also spends much more than it brings in, so we have to make up the difference by selling Treasury bonds. If the Fed increases the money supply, then the dollars bondholders are being paid back with are worth less.”
Harvath shook his head and took another sip of his drink. Wise could tell he was frustrated. “Listen,” the man said. “I know this may feel like it’s not very helpful to what you are doing, but Peaches wanted to make sure you had a grasp of what the Fed was and how it operated. Are there a good number of pretty smart people out there who think the world would be better off without it? Absolutely. Are there a lot who’d be willing to murder to try to get it to go away? I don’t think so.”
“So how do we identify and narrow down who those people are?”
“That part’s simple.”
“It is?” said Harvath.
Wise nodded. “But you have to start with the actual crime itself.”
CHAPTER 21
Wise stepped out from behind the bar and took the stool next to Harvath’s. He offered to freshen his drink, but Harvath politely waved him off. His mind was spinning with all the information being crammed into it; he didn’t need to add to the effect with additional alcohol.