by Henry Ford

(Reprinted from the 25 June 1921 Issue of the house journal of the Ford Motor Co., the Dearborn Independent and slightly edited by Raymond Bray to eliminate the numerous uses of "which" for "that" in the original.)

The last view the reader had of Paul M. Warburg in the preceding article was as "an alien not naturalized" secretly closeted with Senator Nelson W. Aldrich and a party of bankers on an obscure island off the southeastern coast of the United States, all the members of the party concealing their identity even from the servants by calling each other by their first names.

That conference in its ultimate results was of the utmost importance to the United States, for then and there were formulated those fiscal devices, those financial methods, those "monetary reforms" that have exerted an influence on every citizen, rich and poor, of the Republic.

Much history was made in that little trip. It irresistibly calls to memory that other trip made in 1915--almost two years before America's entry into the war--by Bernard M. Baruch. As readers of THE DEARBORN INDEPENDENT of November 27, 1920, will recall, Mr. Baruch had been financial backer of the Plattsburg camp, and in his testimony he said he thought that General Wood would admit this. Then-- "I went off on a long trip, and it was while on this trip that I felt there ought to be some mobilization of the industries, and I was thinking about the scheme that practically was put into effect and was working when I was chairman of the board. When I came back from that trip I asked for an interview with the President . . . . The President listened very attentively and graciously as he always does." Mr. Baruch was an authority on the President's demeanor, for there was a long period in 1917 and 1918 during which he called at the White House every afternoon.

Two momentous trips in our recent history, both of them signalized and given their principal meaning by the presence of Jews. Not that there should not have been Jews in either case; to insist upon their total exclusion would be going too far. The Jew as a citizen, bearing his part, is one matter; the Jew as a master, directing the national show, is quite another thing. It is by no means agreed that Barney Baruch was the only man in the United States who could have run this nation's war business. That is the explanation made of the high place he took--that he was the only man who could do it. Nonsense! If that be so, let us close up the nation and hand the keys over to the New York Kehillah. Mr. Baruch could say-- "I probably had more power than any other man did in the war; doubtless that is true,: but he had that power be cause he was for the time the head and front of the Jewish group for war purposes.

If the explanation of Jewish mastery at critical moments were "brains," well and good, but if it were, it would be more evident to the people; brains do not need to be advertised, they advertise themselves. There is another reason.

The British public recently awoke to the fact that not Lloyd George but Mr. Montagu and Sir Alfred Mond were in charge of the recent negotiations over the German indemnities. These gentlemen are both Jews, one of the of German descent. Of all the British Empire are they the only two men to advise the premier in a great crisis? If they are, why is it? The Montagus, we know, control the silver of the world; Sir Alfred Mond, we know, turned a very neat trick of keeping the sign of the Cross off the war memorials raised to the soldiers of the empire; their Jewishness always so apparent. Both financiers; both the close advisers of the premier; as Baruch to Wilson, so they to Lloyd George.

Apparently there are no Anglo-Saxons on either side of the sea capable of managing these deep matters, if we are to judge from the war administrations--those that have passed off the stage and those that still linger. Lloyd George, for once stung to the quick by the criticism of the British public of his tendency to closet himself with Jews when confronted with a crucial question, retorted bitterly--with what? With the old outworn Jewish propagandist boast, that it ill became people who sang Jewish psalms in church to rag the race that wrote them! A most illuminating defense! The world would give a good deal for a true psalm from Sir Alfred Mond, Mr. Montagu, or even Sir Philip Sassoon, who is soon to become the premier's son-in-law.

In our own history, Barney Baruch boldly claims his place, he unhesitatingly asserts that he had more power than any man in the war. If Allenby in Palestine needed a locomotive, if the Americans in Russia needed clothing, if the munition mills needed copper--it was Baruch who gave or withheld the word.

Mr. Warburg, being of somewhat finer grain, probably due to his having less than Mr. Baruch of the rough experience of "the street," does not make the claim that he is the chief factor in the present monetary system of the United States, nor does THE DEARBORN INDEPENDENT undertake to make if for him lest the cry of "anti-Semitism" wax wrathful again; but fortunately the fact is amply attested by a Jew whose knowledge of the matter is unquestionable.

Readers have doubtless become aware by this time that for a non-Jew to say that a certain Jew is a most important factor in any field is to be guilty of anti-Semitism, while for a Jew or a "Gentile front" to say it is perfectly proper. It is a rather odd etiquette in which simple minds sometimes become confused.

Professor E. R. A. Seligman of Columbia University, is the sponsor of this great honor for Mr. Warburg. What Professor Seligman says is of such importance, both as to its source and its subject, that quotation is justified: (the italics in all cases are ours)

"It is in a general way known to the public that Mr. Warburg was in some way connected with the passage of the Federal Reserve Act, and his appointment to his present responsible position on the Federal Reserve Board was acclaimed on all sides with a rare degree of approval and congratulation; but I fancy it is known only to a very few how great is the indebtedness of the United States to Mr. Warburg. For it may be stated without fear of contradiction that in its fundamental features the Federal Reserve Act is the work of Mr. Warburg more than of any other man in the country. . . .

"When the Aldrich commission was appointed it was not long before Senator Aldrich--to his credit be it said-- was won over by Mr. Warburg to the adoption of these two fundamental features. The Aldrich Bill differed in some important particulars from the present law . . . . The concession in the shape of the twelve regional banks that had to be made for political reasons is, in the opinion of Mr. Warburg as well as of the writer of this introduction, a mistake; for it will probably, to some extent at least, weaken the good results that would otherwise have followed. On the other hand, the existence of a Federal Reserve Board creates, in everything but in name, a real central bank; and it depends largely upon the wisdom with which the board exercises its great powers as to whether we shall be able to secure most of the advantages of a central bank without any of its dangers . . . .

"In many minor respects also the Federal Reserve Act differs from the Aldrich Bill; but in the two fundamentals of combined reserves and of a discount policy, the Federal Reserve Act has frankly accepted the principles of the Aldrich Bill; and these principles, as has been stated, were the creation of Mr. Warburg and of Mr. Warburg alone.

". . . . It must not be forgotten that Mr. Warburg had a practical object in view. In formulating his plans and in advancing slightly varying suggestions from time to time, it was incumbent on him to remember that the education of the country must be gradual and that a large part of the task was to break down prejudices and remove suspicions. His plans, therefore contain all sorts of elaborate suggestions designed to guard the public against fancied dangers and to persuade the country that the general scheme was at all practicable. It was the hope of Mr. Warburg that with the lapse of time it might be possible to eliminate from the law not a few clauses that were inserted, largely at his suggestion, for educational purposes.

"As it was my privilege to say to President Wilson when originally urging the appointment of Mr. Warburg on the Federal Reserve Board, at a time when the political prejudice against New York bankers ran very high, England also, three-quarters of a century ago, had a practical banker who was virtually responsible for the idea contained in Peel's Bank Act of 1840. Mr. Samuel Jones Lloyd was honored as a consequence by the British Government and was made Lord Overstone. The United States was equally fortunate in having with it a Lord Overstone . . . .

"The Federal Reserve Act will be associated in history with the name of Paul M. Warburg . . . . . ."-- (pp.387-390, Vol. 4, No. 4, Proceedings of the Academy of Political Science, Columbia University).

It surely cannot be considered invidious for THE DEARBORN INDEPENDENT thus to introduce to the people of the United States a gentleman whose influence upon the country is so vital. Just how vital can be understood only by those who have studied the puzzle of a country filled with the good things of life, and still unable to use them or to share them because of a kink in the pipe line called "money."

But that Mr. Warburg himself is not entirely unaware of his position is indicated on page 56 of his testimony quoted last week. Mr Warburg had just told the Senate Committee that he was making a heavy financial sacrifice to accept the position on the Federal Reserve Board offered him by President Wilson, and into the fitness of which appointment the Senate was carefully inquiring:

Senator Reed - "May I ask what your motive is, or your reason for making that sacrifice"?

Mr. Warburg - "My motive is that I have, as you know, taken a keen interest in this monetary reform since I have been in this country.

"I have had the success which comes to few people, of starting an idea and starting it so that the whole country has taken it up and it has taken some tangible form."

Professor Seligman advises us of the strategy that was used to get the whole country to take up Mr. Warburg's idea, and of the fact that some of the items inserted to appease the public might easily be removed when the public shall have become accustomed to Mr. Warburg and the Federal Reserve Board; but Mr. Warburg adds another hint, to the effect that you can do some things by administration that you cannot do by organization.

For example: Mr. Warburg wanted only one central bank, which should be the sole arbiter of finance in the United States. The United States Government would have almost nothing to do save to make the money and stand back of it; the bankers of the United States, and the people thereof, would have nothing to do except what they were told; the one central bank would be the real financial governing authority.

When asked by Senator Bristow to state the fundamental difference between the Aldrich plan and the present Federal Reserve plan, Mr. Warburg replied:

"Well, the Aldrich Bill bring the whole system into one unit, while this deals with 12 units and unites them again into the Federal Reserve Board. It is a little bit complicated, which objection, however, can be overcome in an administrative way; and in the respect I freely criticized the bill before it was passed."

There is evidently, then, a method of administration for which severe critics might even use the word "manipulation," by which the plain provisions of a banking law, whatever they may be, may be, if not evaded, then somewhat adapted.

This idea is brought to mind by a more colloquial expression of Mr. Warburg's to be found in his address on "bank acceptances" delivered in 1919: