1941 a rather interesting exchange took place between the Governor of
the Federal Reserve and a member of the House Committee on Banking and
Currency, Mr. Wright Patman.
Patman: Do you believe that people should pay their debts
generally when they can?
Eccles: I think that depends a good deal on the individual; but of
course, if there was no debt in our money system - there would
not be any money. [emphasis added]
Patman: Suppose everyone paid their debts, would we have any money
to do business on?
Eccles: That is correct. [i.e., No, there would not be any money
on which to do business.]
Patman: In other words our system is based entirely on debt.
little later another astonishing admission emerged. The Federal
Reserve, at the time, held over 2 billion dollars in government
securities - government IOU's. How did they get the money to buy all
these securities when their stock was a tiny fraction of that amount?
According to the Governor of the Federal Reserve, they simply created
it out of a congressionally granted right.
Eccles: "We created it."
Patman: "Out of what?"
Eccles: "Out of the right to issue credit
it be nice if Congress would allow your corporation to obtain interest
bearing negotiable securities out of thin air simply with the stroke
of a pen? You would never have to work another day in your life -
except to keep everyone else from ever discovering your secret.