William Woodin was the man who wrote the Banking Act of 1933, which took the United States off the gold standard.
Woodin was Roosevelt's Secretary of the Treasury and on March 4, 1933, was put in charge of writing emergency banking legislation. Robert Goldston writes:
Under the tireless supervision of Secretary Woodin, a strange combination of individuals worked around the clock at the Treasury. They included Hoover's former Secretary of the Treasury, Ogden Milles, and his staff; New Dealers such as Raymond Moley (now an Assistant Secretary of State); economists from universities, and scores of worried desperate bankers. (The Great Depression, p. 112, emphasis added)
This was the bill which was passed by the House in forty minutes of debate with no copies available for the members to read and no committee hearings.
Woodin was from an extremely wealthy family and is best known as President of American Machine and Foundry. His obituary listed presidencies -- and directorships -- of more giant corporations than most people work for in a lifetime including a position as director of the Federal Reserve Bank of New York. Woodin was a Republican all his life (although he supported Smith in 1928 and FDR in 1932).
In the Senate, where copies of the bill were finally available, objections were raised by "certain Progressives who found the bill too conservative." But, Goldston admits, "It was a bill which met with the approval of bankers and even of the most conservative members of Hoover's old administration." (In addition to setting up our present paper money system, the Banking Act of 1933 wiped out a large number of the nation's smaller banks, thus reducing the competition for the big bankers who assisted Woodin.)
Using the provisions of this bill the Federal Reserve began to issue "lawful money," stimulating "the economy" (i.e., the banks and the big corporations), bulling the stock market and depreciating the currency -- a process which has continued for the past forty-five years.
Nevertheless, the myth was propagated that the abandonment of the gold standard was a leftist measure, harmful to the bankers, the conservatives and the big business interests, and beneficial to the poor.
The Federal Reserve System
key excerpts from the Fed's expository booklet (<http://www.bog.frb.fed.us/pf/pf.htm>, p.17 and p.18):
The income of the Federal Reserve System is derived primarily from the interest on U.S. government securities that it has acquired through open market operations.
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After it pays its expenses, the Federal Reserve turns the rest of its earnings over to the U.S. Treasury. About 95 percent of the Reserve Banks' net earnings have been paid into the Treasury since the Federal Reserve System began operations in 1914.
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The Reserve Banks, like the Board, are subject to audit by the GAO, but certain functions, such as transactions with foreign central banks and open market operations, are excluded from audit. Each Reserve Bank has an internal auditor who is responsible to the Bank's board of directors.
The FOMC is charged under law with overseeing open market operations, the principal tool of national monetary policy. These operations influence the amount of reserves available to depository institutions (see chapter 3). The FOMC also sets ranges for the growth of the monetary aggregates and directs operations undertaken by the Federal Reserve in foreign exchange markets.
The FOMC is composed of the seven members of the Board of Governors and five of the twelve Reserve Bank presidents. The president of the Federal Reserve Bank of New York is a permanent member; the other presidents serve one-year terms on a rotating basis.1 All the presidents participate in FOMC discussions, contributing to the Committee's assessment of the economy and of policy options, but only the five presidents who are members of the Committee vote on policy decisions. The FOMC under law determines its own internal organization and by tradition elects the Chairman of the Board of Governors as its chairman and the president of the Federal Reserve Bank of New York as its vice chairman. Formal meetings are held eight times each year in Washington, D.C. Telephone consultations and other meetings are held when needed.
Cont ...