The House of Representatives Committee on Banking and Currency conducted meetings in 1928 from March 19-21; April 30; and most of May (1-3, 4, 8, 9, 15-18, 23, 24, 28, and 29) regarding a bill to amend the Federal Reserve Act of 1913. The goal was to “define certain policies toward which the powers of the federal reserve system shall be directed; to further promote the maintenance of a stable gold standard” and to “promote the stability of commerce, industry, agriculture, and employment; to assist in realizing a more stable purchasing power of the dollar; and for other purposes.”
In Gary Allen’s famous book, “None Dare Call it a Conspiracy“, he gives a brief conclusion on some of the findings of these hearings:
The House Hearings on Stabilization of the Purchasing Power of the Dollar disclosed evidence in 1928 that the Federal Reserve Board was working closely with the heads of European central banks. The Committee warned that a major crash had been planned in 1927. At a secret luncheon of the Federal Reserve Board and heads of the European central banks, the committee warned, the international bankers were tightening the noose.
Montagu Norman, Governor of the Bank of England, came to Washington on February 6, 1929, to confer with Andrew Mellon, Secretary of the Treasury. On November 11, 1927, the Wall Street Journal described Mr. Norman as “the currency dictator of Europe.” Professor Carroll Quigley notes that Norman, a close confidant of J. P. Morgan, admitted: “I hold the hegemony of the world.” Immediately after this mysterious visit, the Federal Reserve Board reversed its easy-money policy and began raising the discount rate. The balloon which had been inflated constantly for nearly seven years was about. to be exploded.
On October 24, the feathers hit the fan. Writing in The United States’ Unresolved Monetary and Political Problems, William Bryan describes what happened:
When everything was ready, the New York financiers started calling 24 hour broker call loans. This meant that the stock brokers and the customers had to dump their stock on the market in order to pay the loans. This naturally collapsed the stock market and brought a banking collapse all over the country because the banks not owned by the oligarchy were heavily involved in broker call claims at this time, and bank runs soon exhausted their coin and currency and they had to close. The Federal Reserve System would not come to their aid, although they were instructed under the law to maintain an elastic currency.
The investing public, including most stock brokers and bankers, took a horrendous blow in the crash, but not the insiders. They were either out of the market or had sold “short” so that they made enormous profits as the Dow Jones plummeted.
