20
Another proposal advanced by Paul Warburg at Jekyll Island was
the manner of selection of administrators for the proposed regional
reserve system. Senator Nelson Aldrich had insisted that the officials
should be appointive, not elected, and that Congress should have
no role in their selection. His Capitol Hill experience had taught him
that congressional opinion would often be inimical to the Wall Street
interests, as Congressmen from the West and South might wish to
demonstrate to their constituents that they were protecting them
against the Eastern bankers.
Warburg responded that the administrators of the proposed central
banks should be subject to executive approval by the President. This
patent removal of the system from Congressional control meant
that the
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6 Nathaniel Wright Stephenson, Nelson W. Aldrich, A Leader in
American Politics, Scribners, N.Y. 1930, Chap. XXIV "Jekyll Island" p.
379
6
Federal Reserve proposal was unconstitutional from its inception,
because the Federal Reserve System was to be a bank of issue.
Article 1, Sec. 8, Par. 5 of the Constitution expressly charges
Congress with "the power to coin money and regulate the value
thereof.". Warburg’s plan would deprive Congress of its sovereignty,
and the systems of checks and balances of power set up by
Thomas Jefferson in the Constitution would now be destroyed.
Administrators of the proposed system would control the nation’s
money and credit, and would themselves be approved by the
executive department of the government. The judicial department
(the Supreme Court, etc.) was already virtually controlled by the
executive department through presidential appointment to the
bench.
Paul Warburg later wrote a massive exposition of his plan, The
Federal Reserve System, Its Origin and Growth7 of some 1750 pages,
but the name "Jekyll Island" appears nowhere in this text. He does
state (Vol. 1, p. 58):
"But then the conference closed, after a week of earnest
deliberation, the rough draft of what later