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the commercial banks . . . Since 1917 the Federal Reserve has given 

the private banks forty-six billion dollars of reserves."

How this is done is best revealed by Governor Eccles at Hearings 

before the House Committee on Banking and Currency on June 24, 

1941:

ECCLES: "The banking system as a whole creates and extinguishes the 

deposits as they make loans and investments, whether they buy 

Government Bonds or whether they buy utility bonds or whether they 

make Farmer’s loans.

MR. PATMAN: I am thoroughly in accord with what you say, Governor, 

but the fact remains that they created the money, did they not?

ECCLES: Well, the banks create money when they make loans and 

investments."

On September 30, 1941, before the same Committee, Governor Eccles 

was asked by Representative Patman:

"How did you get the money to buy those two billion dollars worth of 

Government securities in 1933?

ECCLES: We created it.

MR. PATMAN: Out of what? 

ECCLES: Out of the right to issue credit money.

MR. PATMAN: And there is nothing behind it, is there, except our 

Government’s credit?