Revolutions do not always start with fireworks. Others begin on cloudy, secluded islands with the sound of whispers rather than the drums of war.
In the year 1910, a meeting, secretive in nature was held in the small and windy getaway at Jekyll Island lying along the coast of Georgia. Those men who assembled there did not do so to have a leisure. They arrived to create something that will change forever the financial pulse of America, the Federal Reserve.
It makes you think of the plot of a conspiracy thriller, rich bankers, oversimplified handshakes, code names, but this tale is exceptionally real. And weirdly, it is a part of history that most people never hear about.
An Invitation to Secrecy
United States of America was on the verge of financial crisis. The runs on banks were usual, panic spread like fire through the markets and the crashes had no effective safety net to seal them. It was brittle, spotty and dangerously unpredictable.
In walks Senator Nelson Aldrich, a man who knew the political and the financial elites very well. He was of the feeling that America had to have a central banking system- one that could balance the economy, and print money, and most importantly regulate the flow of credit. The thing is that Americans hated the thought of financial concentration. The European central bank scars were deep. Something that even remotely smelled of a banking monopoly was bound to spark the ire of the masses.
And so, Aldrich acted like any self-respecting power broker can and will do–he set a meeting, way out of view.
The Jekyll Island Gathering
A small, hand-picked export of bankers and economists, disguised as quail hunters, were taken by Aldrich in his private railcar, under the strictest secrecy. They included J.P. Morgan heavies of his empire, the National City Bank representatives, and several financial architects whom they trusted.
Their destination? Jekyll Island Club the isolated resort of the wealthiest American families.
Their mission? To develop the central bank of America.
Behind closed doors these men debated and drafted and dissected the structure that would become the Federal Reserve over a period of nine days. They needed a system that was so strong that it would be able to secure the financial breakdown but was friendly to the populace to the extent that they would not by all means reject it. What was produced was a proposition that tacked sensitively between public control and private power, a beautiful compromise which omits to leave the fingerprints of the giants of Wall Street.
Secrets in Plain Sight
By the time that the Federal Reserve Act was finally enacted in 1913 the Jekyll Island story was still under wraps as only those involved knew of it. The details were not revealed decades later, and this was because of participants who later came out and gave their parts.
What was the need to carry on secretly? Since they were the same men that the populace was afraid of, the banking elites, who wrote such blueprint. Had it been known that the central bank was being designed by the titans on Wall Street, there would have been an outcry and no mercy on them.
By so it was figuratively bound with envelopes of silence and the statute brought forth with the odours of governmental leadership.
The Power and the Paradox
Nowadays, the Federal Reserve has become a constituent part of contemporary finance. It fixes interests, regulates the supply of money and it is also the lender of the last resort. It has its sway over everything, how much your morning coffee costs, to the destiny of whole economies.
However, the origin has a strange paradox, a solution that would safeguard the people to have a silent debut in a closed door.
Was it a necessary act of pragmatism? Or a carefully veiled power grab? The answer, perhaps, is both
Lessons from the Island
The secrecy that surrounds the Jekyll Island story may not be the only thing that makes it so fascinating; it could have been the fact that it remains relevant today. It makes us beg the question: Who are the rule writers of our financial world? And when the systems get too complicated then who does it serve?
Although the Federal Reserve can be traced as once a backroom plan, its influence could not be less secretive. It beats through every deal, every debt, every dip on the market. So perhaps there is a lesson after all, and perhaps it is this, that the most effectual forces are usually set on foot not with a bang but with a blue book carefully drafted and parleyed through in the background of a nation that is too absorbed to notice it.
