72

Senator Robert Owen, chairman of the Senate Banking and Currency 

Committee, had said, as quoted in The New York Times, August 3, 1913 

before passage of the act:

"The Federal Reserve Act will furnish the bank and industrial and 

commercial interests with the discount of qualified commercial paper 

and thus stabilize our commercial and industrial life. The Federal 

Reserve banks are not intended as money making banks, but to serve 

a great national purpose of accommodating commerce and 

businessmen and banks, safeguard a fixed market for manufactured 

goods, for agricultural products and for labor. There is no reason why 

the banks should be in control of the Federal Reserve system. Stability 

will make our commerce expand healthfully in every direction."

40

Senator Owen’s optimism was doomed by the domination of the Jekyll 

Island promoters over the initial composition of the Federal Reserve 

System. Not only did the Morgan-Kuhn, Loeb alliance purchase the 

dominant control of stock in the Federal Reserve Bank of New York, 

with almost half of the shares owned by the five New York banks under 

their control, First National Bank, National City Bank, National Bank of 

Commerce, Chase National Bank and Hanover National Bank, but 

they also persuaded President Woodrow Wilson to appoint one of the 

Jekyll Island group, Paul Warburg, to the Federal Reserve Board of 

Governors.

Each of the twelve Federal Reserve Banks was to elect a member of 

the Federal Advisory Council, which would meet with the Federal 

Reserve Board of Governors four times a year in Washington, in order to 

"advise" the Board on future monetary policy. This seemed to assure