George Washington

A wagon load of money will scarcely purchase a wagon load of provisions.

Alexander Hamilton

The tendency of a national bank is to increase public and private credit. The former gives power to the state, for the protection of its rights and interests: and the latter facilitates and extends the operation of commerce among individuals. Industry is increased, commodities are multiplied, agriculture and manufactures flourish: and herein consists the true wealth and prosperity of a state.

Thomas Hart Benton

Wise and prudent was the conduct of those who refused to recharter the second Bank of the United States. They profited by the error of their friends who refused to recharter the first one. These latter made no preparations for the event – did nothing to increase the constitutional currency – and did not even act until the last moment. The renewed charter was only refused a few days before the expiration of the existing charter, and the federal government fell back to the State banks, which immediately sunk under its weight. The men of 1832 acted very differently. They decided the question of the renewal long before the expiration of the existing charter. They revived the gold currency, which had been extinct for thirty years. They increased the silver currency by repealing the act of 1819 against the circulation of foreign silver. They branched the mints. In a word, they raised the specie currency from twenty millions to near one hundred millions of dollars; and thus supplied the country with a constitutional currency to take the place of the United States Bank notes. The supply was adequate, being nearly ten times the average circulation of the national bank. That average circulation was but eleven millions of dollars; the gold and silver was near one hundred millions. The success of our measures was complete. The country was happy and prosperous under it; but the architects of mischief – the political, gambling, and rotten parts of the banks, headed by the Bank of the United States, and aided by a political party – set to work to make panic and distress, to make suspensions and revulsions, to destroy trade and business, to degrade and poison the currency; to harass the country until it would give them another national bank: and to charge all the mischief they created upon the democratic administration. This has been their conduct; and having succeeded in the last presidential election, they now come forward to seize the spoils of victory in creating another national bank, to devour the substance of the people, and to rule the government of their people.

Nicholas Biddle

My own course is decided. All other banks and all the merchants may break, but the Bank of the United States shall not break.

Nelson W. Aldrich

Before the passage of this Act [Federal Reserve Act], the New York Bankers could only dominate the reserves of New York. Now we are able to dominate the bank reserves of the entire country.

Louis T. McFadden

Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. The Federal Reserve Board, a government Board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, have bankrupted itself, and has practically bankrupted our government. It has done this through the defects of the law under which it operates, through the maladminisration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.

Ludwig von Mises

The Concept of money as a creature of the Law and the State is clearly untenable. It is not justified by a single phenomena of the market. To ascribe to the state the power of dictating the laws of exchange, is to ignore the fundamental principles of money-using society.

Franklin D. Roosevelt

Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

John William Wright Patman

The power to create money is an inherent power of government. As President Lincoln said:

“The privilege of creating and issuing money is not only the supreme prerogative of the government, it is the Governments greatest opportunity.”

During the past several centuries, various governments in the Western World have, at various times, delegated the money-creating power to private groups or had this power taken from them by default. In these situations, control of the Nations affairs has been not so much in the hands of the official head of state, but in the hands of the private groups controlling the money system. A famous British banker once summed up the matter this way:

“They who control the credit of the nation direct the policy of governments, and hold in their hands the destiny of the people.”

Reginald Mckenna, Chancellor of the Exchequer of Britain during the WWI period.

As we look over human history, we find the tribal chief, the king, the pharaoh, or the emperor has usually had direct or indirect control of the society’s money. In the modern, constitutional governments, one or another branch of the government is given responsibility for establishing and managing the money system. In the United States, the Constitution gives these powers to Congress.

Milton Friedman

There is enormous inertia – a tyranny of the status quo – in private and especially governmental arrangements. Only a crisis – actual or perceived – produces real change. When that crisis occurs, the activities that are taken depend on the ideas laying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.

Murray Rothbard

The Federal Reserve Act of December 23, 1913, was part and parcel of the wave of Progressive legislation on local, state, and federal levels of government that began about 1900. Progressivism was a bipartisan movement that, in the course of the first two decades of the 20th century, transformed the American economy and society from one of roughly laissez-faire to one of centralized statism.

Until the 1960s, historians had established the myth that Progressivism was a virtual uprising of workers and farmers who, guided by a new generation of altruistic experts and intellectuals, surmounted fierce big business opposition in order to curb, regulate, and control what had been a system of accelerating monopoly in the late nineteenth century. A generation of research and scholarship, however, has now exploded that myth for all parts of the American polity, and it has become all too clear that the truth is the reverse of this well worn fable.

In contrast, what actually happened was that business became increasingly competitive during the late 19th century, and that various big-business interests, led by the powerful financial house of J. P. Morgan and Company, tried desperately to establish successful cartels on the free market. The first wave of such cartels was in the first large-scale business — railroads. In every case, the attempt to increase profits — by cutting sales with a quota system — and thereby to raise prices or rates, collapsed quickly from internal competition within the cartel and from external competition by new competitors eager to undercut the cartel.

Paul Volcker

I want to leave you with one other thought, which may make some central banks inconsequential. What is the endgame in all of this, of open markets: the free flow of capitol around the world, a couple of hundred independent countries, some big, some small? I think the logical long-term result – extending far beyond my living horizon, but perhaps not yours – is a world currency. With a world currency, we will not have a lot of central banks. What I have not quite figured out is what the one remaining central bank will do, what instruments it will use, and how it will be controlled. But I think that is the direction in which economic and financial logic guide us.

Ron Paul

The Founders of this Country, and a large majority of the American people up until the 1930s, disdained paper money, respected commodity paper, and disproved of a central bank’s monopoly control of money creation and interest rates. Ironically, it was the abuse of the gold standard, the Fed’s credit creating habits of the 1920s, and its subsequent mischief in the 1930s, that not only gave us the Great Depression, but also prolonged it. Yet sound money was blamed for all the suffering. That’s why people hardly objected when Roosevelt and his statist friends confiscated gold and radically debased the currency, ushering in the age of worldwide fiat currencies with which the international economy struggles today.

Ben Bernanke

Like gold U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.