147

meet the demands of the war. And the conflict also assisted the 

putting into effect of the Federal Reserve System, likewise in the nick of 

time."70

One may ask, in the nick of time for whom? Certainly not for the 

American people, who had no need for "mobilization of credit" for a 

European war, or to enact an income tax to finance a war. Hull’s 

statement affords a rare glimpse into the machinations of our "public 

servants".

The Notes of the Journal of Political Economy, October, 1917, state:

"The effect of the war upon the business of the Federal Reserve Banks 

has required an immensedevelopment of the staffs of these banks, 

with a corresponding increase in expenses. Without, of course, being 

able to anticipate so early and extensive a demand for their services in 

this connection, the framers of the Federal Reserve Act had provided 

that the Federal Reserve Banks  should act as fiscal agents of the 

Government."

The bankers had been waiting since 1887 for the United States to 

enact a central bank plan so that they could finance a European war 

among the nations whom they had already bankrupted with 

armament and "defense" programs. The most demanding function of 

the central bank mechanism is war finance.

On October 13, 1917, Woodrow Wilson made a major address, stating:

"It  is  manifestly  imperative  that  there  should  be  a  complete 

mobilization of the banking reserves 

 

of the United States. The burden 

and the privilege (of the Allied loans) must be shared by every banking 

institution in the country. I believe that cooperation on the part of the