The story of the original design session of the Federal Reserve System has been recounted many times, notably in G. Edward Griffin's highly acclaimed 1998 The Creature From Jekyll Island. It was praised by no less than Ron Paul as: "A superb analysis deserving serious attention by all Americans. Be prepared for one heck of a journey through time and mind."
But where did the story of the gathering of bankers on Jekyll Island come from? All evidence points to B.C. Forbes, grandfather of noted gold standard advocate (and media titan) Steve Forbes.
Jekyll Island Clubhouse and Annex courtesy of JekyllIslandHistory.com
Jekyll Island's history website retells the telling of the story:
Soon after the 1907 panic, Congress formed the National Monetary Commission to review banking policies in the United States. The committee, chaired by Senator Nelson W. Aldrich of Rhode Island, toured Europe and collected data on the various banking methods being incorporated. Using this information as a base, in November of 1910 Senator Aldrich invited several bankers and economic scholars to attend a conference on Jekyll Island. While meeting under the ruse of a duck-shooting excursion, the financial experts were in reality hunting for a way to restructure America's banking system and eliminate the possibility of future economic panics.
The 1910 "duck hunt" on Jekyll Island included Senator Nelson Aldrich, his personal secretary Arthur Shelton, former Harvard University professor of economics Dr. A. Piatt Andrew, J.P. Morgan & Co. partner Henry P. Davison, National City Bank president Frank A. Vanderlip and Kuhn, Loeb, and Co. partner Paul M. Warburg. From the start the group proceeded covertly. ... In 1916, B. C. Forbes discussed the Jekyll conference in his book Men Who Are Making America.... This book as well as a magazine article by Forbes is the only public mention to the conference until around 1930, when Paul Warburg's book The Federal Reserve System: Its Origin and Growth and Nathaniel Wright Stephenson's book Nelson W. Aldrich: A Leader in American Politics were published.
Nathaniel Stephenson, in the Notes section of his biography on Senator Aldrich, suggests that B.C. Forbes learned of the Jekyll conference from an incident taking place at the Brunswick train depot. Stephenson writes, "In the station at Brunswick, Ga., where they ostentatiously talked of sport, the station master gave them a start. 'Gentleman,' said he, 'this is all very pretty, but I must tell you we know who you are and the reporters are waiting outside.' But Mr. Davison was not flustered. 'Come out, old man,' said he, 'I will tell you a story.' They went out together. When Mr. Davison returned he was smiling. 'That's all right,' said he, 'they won't give us away.' The rest is silence. The reporters disappeared and the secret of the strange journey was not divulged. No one asked him how he managed it and he did not volunteer the information." From the Brunswick train station the men boarded a boat and traveled on to Jekyll Island.
The Jekyll Island conference offered a secluded location to discuss banking ideas and enabled the development of a plan that eventually became the Federal Reserve Banking System. ... Paul Warburg in his book The Federal Reserve System: Its Origin and Growth explains the reason for secrecy behind the meeting. He states, "It is well to remember that the period during which these discussions took place was the time of the struggle of the financial Titans- the period of big combinations [of businesses], with bitter fights for control. All over the country there was a deep feeling of fear and suspicion with regard to Wall Street's power and ambitions."
Obtaining permission from J. Pierpont Morgan to use the facilities of the Jekyll Island Club, the conference attendees most likely resided in the clubhouse for about ten days. The meeting required long days and late nights of contemplation and reflection. European banking practices were assessed and numerous conversations held regarding the best way to craft a non-partisan banking reform bill. Paul Warburg in the book Henry P. Davison: The Record of a Useful Life recalls, "After we had completed the sketch of the bill, and before setting down to its definitive formulation, it was decided that we had earned 'a day off' which was to be devoted to duck shooting." The Jekyll Island Club was originally formed in 1886 as a hunting preserve and in the 1910s was well stocked with animals such as pheasants and wild hogs. Several ponds on the island attracted numerous game birds and wild ducks.
William Barton McCash and June Hall McCash in the book The Jekyll Island Club: Southern Haven for America's Millionaires offers this narrative of the Jekyll conference. They mention, "How long the surreptitious meeting lasted is uncertain, although the group spent Thanksgiving on the island, where they dined on 'wild turkey with oyster stuffing.' They worked throughout the day and night, taking only sporadic time out to explore Jekyl and enjoy its delights
A "struggle of the financial Titans ... bitter fights for control. ...deep feeling of fear and suspicion with regard to Wall Street's power and ambitions." A century later, financial titans continue bitter fights for control and the people again are suffused with a deep feeling of fear and suspicion toward Wall Street. All this under the fiduciary Federal Reserve Note standard, which our political and economic elites exalt while deriding, and even defaming, the classical gold standard.
Out of the frying pan and into the fire. The Fed was designed to operate under a classical gold standard and would do well to return to its relatively safe harbor.