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Morton Chaplin of London. He was a director of Equitable Life 

Insurance Company, Home Insurance Company, Guaranty Trust, and 

Newport Trust.

The astounding idea that the Federal Reserve System of the United 

States is actually operated from London will probably be rejected at 

first hearing by most Americans. However, Minsky has become famous 

for his theory of the "dominant frame". He states that in any particular 

situation, there is a "dominant frame" to which everything in that 

situation is related and through which it can be interpreted. The 

"dominant frame" in the monetary policy decisions of the Federal 

Reserve System is that these decisions are made by those who stand to 

benefit most from them. At first glance, this would seem to be the 

principal stockholders of the Federal Reserve Bank of New York. 

However, we have seen that these stockholders all have a "London 

Connection". The "London Connection" becomes more obvious as the 

dominant power when we find in The

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60 Matthew Josephson, The Robber Barons, p. 409

67

Capital City61 that only seventeen firms are allowed to operate as 

merchant bankers in the City of London, England’s financial district. All 

of them must be approved by the Bank of England. In fact, most of the 

Governors of the Bank of England come from the partners of these 

seventeen firms. Clarke ranks the seventeen in order of their 

capitalization. Number 2 is the Schroder Bank. Number 6 is Morgan 

Grenfell, the London branch of the House of Morgan and actually its