"He causes all, the small and the great,
the rich and the poor, and the free and the slave,
to be given marks on their right hands, or on their foreheads" 
Jacob Schiff and Paul Warburg were the masterminds behind the creation of the Federal Reserve Act in 1913. Both men were cultivated for the job. Schiff controlled things from behind the scenes with the help of Alfred Rothschild's wealth and connections, while Warburg actually wrote the manuscript under the watchful eye of Lord Alfred.
Earlier in 1910, Warburg and a small group of elite moneymen clandestinely boarded Senator Nelson Aldrich's private railway car. Their destination was Jekyll Island, an exclusive hunting resort just off the coast of Georgia.
In addition to Warburg and Aldrich there were present: Frank Vanderlip, president of National City Bank; Harry P. Davison, a J.P. Morgan partner; Benjamin Strong, vice president of Banker's Trust Co.; and A. Piatt Andrew, former secretary of the National Monetary Commission and now assistant secretary of the Treasury. All swore oaths of secrecy.
Under the guise of a weekend hunting trip, the group of elite moneymen were working out the details of the blueprint for what came to be The Federal Reserve Act.
Senator Nelson Aldrich of Rhode Island, chairman of the Senate Finance Committee, was the political point man for the elite group of moneymen. He was also head of the National Monetary Commission. He was most fortunate to have married one of the Rockefeller daughters.
On May 11, 1911, the National Citizens League for the Promotion of a Sound Banking System publicly announced their support for Aldrich's Bill. The Bill, however, was defeated. The public knew of Aldrich's close connections both with Rockefeller and with J.P. Morgan and that, both men were part of the inner sanctum of the money trust.
Colonel Ely Garrison wrote in his book Roosevelt, Wilson and the Federal Reserve Act:
"Mr. Paul Warburg is the man who got the Federal Reserve Act together after the Aldrich Plan aroused such nationwide resentment and opposition." 
Aldrich's plan was creating too much heat, and all those involved, unanimously agreed to drop Aldrich's name from the bill, to make a few superfluous changes, and then to resubmit the bill under a different guise.
As a result, a new plan (in name at least) began to take shape in Congress with the presentation of a bill proposed by Sen. Robert Latham Owen in May 1913.
Next, Carter Glass, chairman of the House banking committee, and H. Parker Willis, the committee's expert became involved with The Bill. It passed to the Senate Banking Committee; next, it went back to the Senate on November 22, 1913.
The Bill was now the Glass-Owen Bill. Senator Owen, who opposed the Aldrich Bill, had made some additional changes. The Senate passed the Bill on December 19.
Note that several different versions of this bill were presented: the original Aldrich Bill, the Aldrich Bill with changes, The Owen Bill, The Glass Bill, The Glass-Owen Bill, The Glass-Owen Bill with changes, etc. The basics of the plan had always remained the same.
Rights of Passage
For whatever the reasons, the bill was hastily prepared without any public hearings.
On December 23, 1913, two days before Christmas, when most Congressmen and Senators had already departed Washington, to return home for the Holidays, the bill went to the House of Representatives, where it passed 298-60, and then on to the Senate, where it passed by a vote of 43-25 (with 27 absent or abstaining).
One hour after the Senate vote, Wilson signed the Federal Reserve Act into law.
One other minor detail:
The Nation's Gold and Silver Holdings Were Now Owned by the Federal Reserve.
So now we had a central banking system, and all the niceties that go with it: an elastic supply of money; an elastic supply of credit; continually expanding debt levels ad infinitum; centralization of banking; the establishment of the monopolization of the money power; and for good measure they threw in a graduated income tax. Not bad for one fell swoop. That is some serious order being established.
Rule of Order
Below is a list of the 10 central points to the Communist Manifesto:
Manifesto of the Communist Party
Karl Marx and Frederick Engels
1. Abolition of property in land and application of all rents of land to public purposes.
2. A heavy progressive or graduated income tax.
3. Abolition of all rights of inheritance.
4. Confiscation of the property of all emigrants and rebels.
5. Centralization of credit in the banks of the state, by means of a national bank with
State capital and an exclusive monopoly.
6. Centralization of the means of communication and transport in the hands of the
7. Extension of factories and instruments of production owned by the State; the
bringing into cultivation of waste-lands, and the improvement of the soil generally in
accordance with a common plan.
8. Equal liability of all to work. Establishment of industrial armies, especially for
9. Combination of agriculture with manufacturing industries; gradual abolition of all
the distinction between town and country by a more equable distribution of the
populace over the country.
10. Free education for all children in public schools. Abolition of children's factory
labour in its present form. Combination of education with industrial production, &c.
More serious order being established.
Federal Reserve Act
Dispersed throughout 12 USC; ch. 6, 38 Stat. 251 (December 23, 1913)
To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes.
FEDERAL RESERVE ACT
SECTION 2A -- Monetary Policy Objectives
The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.
FEDERAL RESERVE ACT
SECTION 16 -- Note Issues
1. Issuance of Federal Reserve Notes; Nature of Obligation; Where Redeemable Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth and for no other purpose, are hereby authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank.
Gold Standard Act, 1900:
"An Act To define and fix the standard of value, to maintain the parity of all forms of money issued or coined by the United States, to refund the public debt, and for other purposes." 
United States notes became redeemable for gold at the historical rate of $20.67 per ounce. While the statute continued to allow for the use of silver coinage and urged an international agreement on bimetallism, this Act secured the primacy of gold in United States monetary policy.
"SEC. 3. That nothing contained in this Act shall be construed to affect the legal-tender quality as now provided by law of the silver dollar, or of any other money coined or issued by the United States." 
Without a constitutional amendment to change the Silver Standard of the Constitution and the bimetallic hard currency system of the Coinage Act of 1792 we remain on the silver standard, whether or not it is followed by the government or the people - it still remains on the books and is valid, as the above section 3 alludes to.
The Fed & Debt
So how has the Fed fared since taking control in 1913? Let us look and see how well they protected and guided the United States monetary system, and with it the wealth of the Nation - of We The People.
National Debt Outstanding
The above chart shows the national debt outstanding at the beginning of the Federal Reserve's Regime was just under 3 Billion Dollars.
Twenty-two year later in 1934, the annual outstanding debt was 27 Billion Dollars or 9 times what it was when the Fed took control of monetary policy.
As we read earlier on, one of the main reasons for creating the Fed was to supply an elastic money supply. It would seem that they confused outstanding debt with the money supply - then again, perhaps they didn't. Either way they sure as hell expanded the debt.
If one reads the various papers explaining the supposed importance of an expandable money supply - one of the main reasons touted about was it was supposed to put an end to the boom and bust cycles the economy kept repeatedly going through, the most recent being the bust in 1907, see Panic of 1907 - Wikipedia, the free encyclopedia.
So, how did the Fed do in regards to their main raison d'etre - well within 20 years of taking over our monetary system, the United States experienced the worst financial depression in its history, see Great Depression - Wikipedia, the free encyclopedia.
Perhaps we should chalk the first couple of disasters up to being new on the job and a bit inexperienced with handling such sisyphian tasks. With time and experience, however, even the most incorigable deviants can undergo amazing transformations.
Fast forward to the present year of 2006. Let's see how the financial situation of the U.S. is now that the Fed has had 93 years - almost a full century to practice and perfect their interventional handicraft.
According to the US National Debt Clock the national debt now stands at 8.3 TRILLION DOLLARS.
But that is just the national debt. Total outstanding debt is $44 TRILLION DOLLARS, see America's Total Debt Report - summary page - by MWHodges.
And this does not include the unfunded pension fund debt , see my series on Social Security: The Whole Truth, Part 1-10.
The United States was the largest creditor nation in the world when the Fed took control.
We are now the largest debtor nation in the world. How did this happen?
"In the first seven years after the Federal Reserve came into full operation in 1914, wholesale prices in the United States rose more than 240%. Between 1914 and 1920, currency in circulation had increased 242.7%."
"With the establishment of the Fed, gold certificates began to be replaced with the new Federal Reserve Notes. Unlike the older gold certificates that had 100% gold backing, Federal Reserve Notes had only a 40% gold reserve behind them, enabling a dramatic expansion of currency. Member banks in the new system were required to transfer a portion of their gold reserves to the Fed to "economize" on gold in the system. At the same time, reserve requirements on deposit liabilities were lowered by 50% from the pre-1914 average level of 21% to 11.60%; and they were lowered even further in June 1917 to 9.67%. Reserve requirements on time deposits were set at only 5% and diminished still more to 3% in June 1917.
The decreased reserve requirements on outstanding bank liabilities created a tidal wave of available funds for lending purposes in the banking industry. And, indeed, between 1914 and 1920, bank loans increased by 200%. Much of the additional lending ended up being in U.S. government securities, especially after American entry in the First World War in April 1917. Between March 1917 and June 1919, bank loans to the private sector increased by 70%, while investments in government securities went up by 450%." 
All of this excessive money supply and stimulation resulted in the roaring twenties - the epitome of the boom in boom and bust cycles. Life was good - money was everywhere, business was thriving.
The Coming War
The American dream was alive and well, or so it seemed. The best parties eventually die out, the last drinks from the punch bowl disappear, the music fades, and the lights turn low, as the last reveler saunters off to mend the inevitable hangover that always follows such excessive deviant behavior.
After the Great Depression of the 30's, World War II appeared on the horizon - the war to end all wars. The entire world clenched within its grasp. It sorely tested the metal of all men, woman, children, nations, and races. Nothing went untouched or unscathed.
As it always does, the human race emerged out of the storm clouds stronger than it was before. It was time to rebuild all that was destroyed - and so mankind did, as he must - to survive.
Going into World War II, most developed counties were on gold or silver standards. War costs a tremendous amount of money. This one was no different. The cost was irreverent. In order to finance the war - almost all major nations involved in the war went off the gold exchange system.
After the war had ended the leaders of the major industrialized nations involved in the war meant at Bretton Woods in New Hampshire. The purpose of the meeting was to establish a new world monetary system to replace the gold exchanged system that the Great Depression and WWII supposedly destroyed.
The U.S. Dollar was declared the reserve currency of the world. All countries defined the value of their currency in U.S. Dollars. In return, the U.S. agreed to redeem all dollars held by foreign governments in gold on demand.
At the end of the war, the U.S. had most of the world's gold in its possession. This allowed the system to work reasonably well into the mid sixties and seventies. Slowly but steadily, the quantity of dollars held by foreign governments began to exceed U.S. gold holdings by significant amounts.
Closing The Gold Window
By the early 1970s foreign government holdings of U.S. dollars were five times greater than the U.S. gold stock. Foreign countries, especially France, demanded that the U.S. settle their foreign accounts in gold as they agreed to at Bretton Woods.
Gold was exiting the U.S. in ever-larger quantities. The US gold reserves declined from 21,682 tonnes in 1948 to 15,821 tonnes by 1960. By 1971, US gold reserves had dropped to 8,500 tonnes.
In 1971, President Nixon closed the gold window by announcing to the world that the U.S. would no longer honor its agreement and obligation at Bretton Woods to redeem foreign trade accounts in gold. This was essentially declaring national bankruptcy by breaking its financial obligations with the world.
Now the Fed was capable of expanding the money supply without the checks and balances the gold exchange system had provided. In 1971, the monetary base was approximately 800 billion dollars, and the total US federal debt was $436 billion.
In 1987 when Greenspan became chairman of the Federal Reserve, the M-3 money supply was 3.6 TRILLION dollars. This was a huge number but much more was yet to come. When Greenspan recently retired, the money supply was an incredible 10.2 TRILLION DOLLARS.
The following chart illustrates that the Fed is doing a terrible job at protecting the purchasing power of the U.S. Dollar, as it continually expands the money supply by irreverent amounts, which debases the currency through loss of purchasing power.
The excess credit creation by the Fed is responsible for all problems financial, monetary, or economic; and for all the various bubbles: asset prices, real estate, etc. Where did all of these dollar bills go?
A lot of them went overseas to China, Japan, and other Asian countries in exchange for imported goods. How do we know that - by looking at the trade deficit.
The U.S. trade deficit narrowed in February 2006, according to the U.S. Bureau of Economic Analysis. The deficit decreased from $68.6 billion in January to $65.7 billion in February.
We would be well served to remember the most prescient of warnings given thousands of years ago:
"And that no one would be able to buy or to sell,
unless he has that mark, the name of the beast
or the number of his name." 
The current trade deficit is on course to reach $800 billion dollars this year - that is where a good deal of the money supply goes: to other foreign countries in exchange for their goods and services that we import.
Since we import much more than we export, we have a trade deficit. Nevertheless, the route cause is the excessive credit supply by the Fed that finances such excess consumption.
The current account is even worse off, as it is approaching the $1 TRILLION dollar level. This means that $1 TRILLION dollars must flow into our country to offset the deficit or there will be even more hell to pay.
$3.5 BILLION a day must flow into our coffers to fund the deficit. The Fed undoubtedly is on top of their game. It may be of consequence that they are involved in a different game, however. Rather than wealth creation, they are involved in wealth transference.
The U.S. current-account deficit increased to $804.9 billion in 2005 from $668.1 billion in 2004. As a share of U.S. GDP, the deficit increased to 6.4 percent. .
At its present rate of expansion the current account outcome is headed for $1 TRILLION for the year. Total indebtedness in the United States now amounts to $40 trillion. At interest rates of 5%, this requires annual financing costs of approximately $2 trillion.
Real disposable income edged up by 1.4% in 2005, while spending increased 3.5%.
What has all this emphasis on consumption beyond production done to the savings rate in our country - it is at record low levels - NEGATIVE levels. Wealth accumulation cannot begin until savings begins
An individual or a nation must produce more than they consume or their wealth dissipates. Once again, the Fed has done a wonderful job in wealth creation, as it like savings is in negative territory as well.
Wealth is created when a person or nation produces more than they consume. They are then able to accumulate the excess profits of production - they are able to SAVE. Savings accumulates wealth. Not spending, not consumption - SAVINGS.
This is a very serious subject not often mentioned or discussed: the net international investment position of the United States. This is the nation's bottom line - the ratio of what it has versus what it owes.
The above chart goes up to the year 2004. Presently the net international investment position is almost minus -3 TRILLION DOLLARS.
The GNP of the U.S. is approximately 12 TRILLION DOLLARS. This means that foreign entities own assets in our country of the approximate value of 25% of the GDP.
At the present rate of expansion, within a few years the value will be 50%. This begs the question: who is buying America? Who owns America? Just WHAT the hell is the Fed doing or thinking - if they are thinking.
Every major economic and financial figure we have looked indicates a deteriorating state of fiscal, financial, and monetary well being. It shows the standard of living to be speeding down hill at increasing negative rates.
The only records we are making are in debt accumulation, deficit accumulation, and lack of savings. In the private field of business, any corporate leadership resulting is such negative performance would be fired on the spot.
The fact that such negative performance is allowed to continue begs the question as to whether the Fed is answerable to anyone; and if they are - then that entities performance of oversight is obvious as bad as the Fed's performance.
The truth of the matter is rather obvious: the Fed is destroying the well being and wealth of the nation. Congress is obviously remiss in their ignorance, awareness and understanding of the matter. It is time to correct all that is wrong - before it is too late - before time runs out.
"The merchants of the earth weep and mourn over her,
for no one buys their merchandise any more" 
"They cast dust on their heads, and cried, weeping and mourning, saying, 'Woe, woe, the great city, in which all who had their ships in the sea were made rich by reason of her great wealth!' For in one hour is she made desolate." 
Come visit our new website: Honest Money Gold & Silver Report
And read the Open Letter to Congress
 Revelations - Bible 13-16
 Roosevelt, Wilson and the Federal Reserve Act
 Gold Standard Act, 1900
 Gold Standard Act, 1900
 Monetary Central Planning and the State, Part 3: The Federal Reserve and Price Level
Stabilization in the 1920s by Richard M. Ebeling, March 1997
 Revelations - Bible 13-17
 Revelations - Bible 18-11
 Revelations - Bible 18-19