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work done at such cost cannot be ignored, but, having examined 

the extensive literature published by the Commission, the Banking 

and Currency Committee finds little that bears upon the present 
state of the credit market of the United States. We object to the 
Aldrich Bill on the following points:

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Its entire lack of adequate government or public control of the 
banking mechanism it sets up.

Its tendency to throw voting control into the hands of the large 
banks of the system.

The extreme danger of inflation of currency inherent in the system.

The insincerity of the bond-funding plan provided for by the 
measure, there being a barefaced pretense that this system was to 

cost the government nothing.

The dangerous monopolistic aspects of the bill.

Our Committee at the outset of its work was met by a well-defined 

sentiment in favor of a central bank which was the manifest 
outgrowth of the work that had been done by the National 
Monetary Commission."

Glass’s denunciation of the Aldrich Bill as a central bank plan 
ignored the fact that his own Federal Reserve Act would fulfill all the 
functions of a central bank. Its stock would be owned by private 

stockholders who could use the credit of the Government for their 
own profit; it would have control of the nation’s money and credit 

resources; and it would be a bank of issue which would finance the 
government by "mobilizing" credit in time of war. In "The Rationale of 
Central Banking," Vera C. Smith (Committee for Monetary Research 

and Education, June, 1981) writes, "The primary definition of a 

central bank is a banking system in which a single bank has either a 
complete or residuary monopoly in the note issue. A central bank is 

not a natural product of banking development. It is imposed from 

outside or comes into being as the result of Government favors."

Thus a central bank attains its commanding position from its 
government granted monopoly of the note issue. This is the key to its 

power. Also, the act of establishing a central bank has a direct 
inflationary impact because of the fractional reserve system, which 
allows the creation of book-entry loans and thereby, money, a