McFadden’s Early Life

Louis McFadden was born in Troy, Bradford County, Pennsylvania in 1876. In addition to attending public schools and a commercial college, at age 16 he was employed as an office boy at the First National Bank in Canton, Pennsylvania. McFadden became a cashier seven years later, and in 1916 he became president of the bank. He married Helen Westgate in 1898, by whom he had two sons and a daughter.[1]

McFadden began his political career in 1914 when he was elected to Congress as the Republican representative from the 15th district of Pennsylvania. He was appointed chairman of the influential House Committee on Banking and Currency in 1920. McFadden held this position until 1931.[2]

McFadden came to view the U.S. Federal Reserve System as a corrupt and evil organization, and he began to courageously challenge its operation. In 1922, for example, McFadden charged that the American Acceptance Council was exercising undue influence on the Federal Reserve Board and called for a Congressional investigation. Congress, however, was not interested in conducting an investigation.[3]

McFadden realized that under the Federal Reserve System, the American dollar is created out of nothing and is based on debt. The nation’s entire money supply would vanish if all debts were repaid. Charging interest on pretended loans is usury, and this practice became institutionalized under the Federal Reserve System.[4]

To further understand why McFadden was convinced the Federal Reserve was inimical to the interests of the American people, it is necessary to examine how the Federal Reserve was created.

Federal Reserve Creation

The Federal Reserve System was founded by deception. On the night of November 22, 1910, a delegation of America’s leading financiers left the railway station at Hoboken, New Jersey on a secret mission. The delegation left in a sealed railway car, with blinds drawn, to Jekyll Island, Georgia. The delegates included Senator Nelson Aldrich, Arthur Shelton, A. Piatt Andrew, and bankers Frank Vanderlip, Henry P. Davison and Charles D. Norton. Joining the group just before the train left the station were Benjamin Strong and Paul Warburg.[5]

This group went to Jekyll Island to write banking and currency legislation which the congressionally-appointed National Monetary Commission had authorized them to prepare. At stake was the control of the money and credit of the United States. Since Paul Warburg was the most technically-informed of the bankers, he did most of the drafting of the plan. Nelson Aldrich made sure the plan was drafted in a manner that could be passed by Congress. The group’s secret purpose was to ensure that the New York bankers obtained control over the nation’s money supply.[6]

The Jekyll Island group worked steadily for nine days to complete their assignment. Paul Warburg informed his colleagues that his main concern was to avoid the name “Central Bank.” Therefore, the group used the designation “Federal Reserve System” to allay suspicion that the new banking bill was a central bank plan. However, the Federal Reserve System functioned as a central bank because it fulfilled the three main functions of that tradition: 1) it would be owned by private individuals who would draw profit from ownership of shares and control the nation’s issuance of money; 2) it would have at its command the nation’s entire financial resources; and 3) it would be able to mobilize credit and mortgage the United States by involving the nation in foreign wars.[7]

The next deception was to conceal the fact that the proposed Federal Reserve System would be controlled out of New York. Paul Warburg accomplished this deception by creating the regional reserve system of four (later passed as 12) branch banks located in different sections of the country. The regional reserve system was farcical because the regional banks were all dependent on the amount of money and credit available to them from New York.[8]

The legislation drafted by the Jekyll Island group excluded congressional control over the administration of the Federal Reserve by making its officials entirely appointed officers. This made the legislation unconstitutional from its inception, since Congress is expressly charged in the Constitution with the issuance of money. Article 1, Section 8, Paragraph 5 of the U.S. Constitution states: “Congress shall have the power to coin money and regulate the value thereof; and of foreign coin.” The creation of the Federal Reserve System meant that Congress would lose its sovereignty, and that the system of checks and balances set up by the Constitution would be destroyed.[9]

The delegation returned to New York with a completed financial plan that was presented to Congress as “The Aldrich Plan.” The most important feature which Paul Warburg had successfully gotten into the plan was a uniform discount rate to be imposed on all the banks of the United States. This was the method used by the big European central banks that Warburg understood so well. A discount rate imposed by the Federal Reserve System on the entire nation meant that it had the power to make money shortages and panics a truly nationwide condition.[10]

The Federal Reserve Act was passed by Congress and signed into law by President Woodrow Wilson on December 23, 1913, drawing praise from its designers. Senator Aldrich boasted in the July 1914 issue of a magazine called The Independent:[11]

Before the passage of this Act, the New York bankers could only dominate the reserves of New York. Now we are able to dominate the bank reserves of the entire country.

The Federal Reserve System also provided the means by which the U.S. government and banking institutions could fund and promote wars.[12]

McFadden Fights the Fed

McFadden conducted a lonely crusade against the Federal Reserve System. On January 13, 1932, McFadden made a speech introducing a resolution to indict the Federal Reserve Board of Governors for criminal conspiracy:[13]

Whereas I charge them, jointly and severally, with the crime of having treasonably conspired and acted against the peace and security of the United States and having treasonably conspired to destroy constitutional government in the United States. Resolved, that the Committee on the Judiciary is authorized and directed as a whole or by subcommittee to investigate the official conduct of the Federal Reserve Board and agents to determine whether, in the opinion of the said committee, they have been guilty of any high crime or misdemeanor which in the contemplation of the Constitution requires the interposition of the Constitutional powers of the House.

Congress took no action on this resolution. McFadden addressed the House of Representatives on June 10, 1932:[14]

Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal reserve banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and the iniquities of the Federal Reserve Board and the Federal reserve banks acting together have cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States; has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.

Some people think the Federal Reserve Banks are United States Government institutions. They are not Government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man’s throat to get a dollar out of his pocket; there are those who send money into States to buy votes to control our legislation; and there are those who maintain an international propaganda for the purpose of deceiving us and of wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime…

McFadden then went on to explain how the Federal Reserve was committing one of the greatest crimes in history against the American people:[15]

The people of the United States are being greatly wronged. If they are not, then I do not know what “wronging the people” means. They have been driven from their employments. They have been disposed of their homes. They have been evicted from their rented quarters. They have lost their children. They have been left to suffer and to die for the lack of shelter, food, clothing, and medicine.

The wealth of the United States and the working capital of the United States has been taken away from them and has either been locked in the vaults of certain banks and great corporations or exported to foreign countries for the benefit of the foreign customers of those banks and corporations. So far as the people of the United States are concerned, the cupboard is bare. It is true that warehouses and the coal yards and grain elevators are full, but the warehouses and coal yards and grain elevators are padlocked and the great banks and corporations hold the keys. The sack of the United States by the Federal Reserve Board and the Federal reserve banks and their confederates is the greatest crime in history.

On December 13, 1932, McFadden introduced a motion to impeach President Herbert Hoover. This resolution failed, with only five congressmen supporting McFadden on his initiative. The Republican majority leader of the House of Representatives said, “Louis T. McFadden is now politically dead.”[16]

On May 23, 1933, McFadden introduced Articles of Impeachment against the secretary of the Treasury, two assistant secretaries of the Treasury, the Federal Reserve Board of Governors, and officers and directors of the Federal Reserve banks for their guilt in causing the Great Depression. This resolution never reached the floor. A whispering campaign swept Washington that McFadden was insane. In the 1934 congressional elections, McFadden was overwhelmingly defeated with the help of large amounts of money given to his opponent in his home district of Canton, Pennsylvania.[17]

McFadden’s Final Demise

In a speech to Congress on May 29, 1933, Louis McFadden alleged Jewish control of the U.S. financial system. McFadden asked: “Is it not true that, in the United States today, the ‘gentiles’ have the slips of paper while the Jews have the gold and lawful money?” McFadden even quoted Zionist Protocol XXII: “We [Jews] hold in our hands the greatest modern power—gold; in two days we could free it from our treasuries in any desired quantities.” McFadden demanded that the gold stock of the United States be taken from the Federal Reserve banks and placed in the United States Treasury. He also demanded an audit of United States government financial affairs from top to bottom.[18]

In a speech to Congress on June 15, 1933, McFadden said that staggering amounts of American money had been taken from the United States Treasury for the benefit of Russia. McFadden said that acting through the Chase Bank, the Guaranty Trust Co. and other banks in New York City, the Federal Reserve Board and Federal Reserve banks had given these United States Treasury funds to the Soviet government. He explained that Russia owed the United States a large sum of money. McFadden said that if the U.S. Treasury had what Russia owed us, American veterans would not need to fear the planned despoiling of their pension rights and privileges on July 1, 1933.[19]

On January 24, 1934, McFadden told Congress that the newly enacted Roosevelt gold bill was unconstitutional on its face because it sought to nullify the Constitution. McFadden said concerning this bill: “It attempts to legalize robbery. It attempts by force to deprive the people of the United States of their right to the currency of the Constitution. It gives the international bankers power to send the gold belonging to the people of the United States to a place of deposit reserved to themselves in Europe. Mr. Chairman, the gold bill cannot become a valid law by any constitutional means.”[20]

McFadden also documented the Jewish domination of Soviet communism. In a speech to Congress on June 15, 1934, McFadden said that the Soviet government in 1917 was composed of 565 persons as follows: 32 Russians, two Poles, one Czech, 34 Letts, three Finns, 10 Armenians, three Georgians, one Hungarian, 10 Germans, and 469 Jews. McFadden said that the Jews in the Russian government did not represent the thoughts and ideals of the 150 million Russian citizens. Instead, he described Jews in the Soviet government as aliens and usurpers who were not concerned with the welfare of the Russian people.[21]

McFadden remained in the public eye as a vigorous opponent of the financial system after losing his congressional seat. Unfortunately, McFadden’s enemies in high places made several attempts on his life. The first attack came when McFadden was shot at as he was leaving a cab in front of a Washington hotel. The next attempt on McFadden’s life came in the form of poison in his food at a political banquet in Washington, D.C. McFadden’s life was saved by a doctor who quickly and successfully had his stomach pumped.[22]

Unfortunately, the third attempt on McFadden’s life was successful. After attending a banquet in New York City, McFadden died suddenly at age 60 under very suspicious circumstances from a “dose” of “intestinal flu.”[23]

Conclusion

The details of Louis McFadden’s life and motivations have been largely obscured by history. However, McFadden obviously did not play the political game that has ruled American politics for generations. He courageously challenged the unconstitutional and evil U.S. Federal Reserve System, and acted in the American public’s best interest by exposing corruption in our government. Because of his courage in exposing corruption, McFadden was quickly taken out of the picture, both contemporarily and historically.[24]

A version of this article was originally published in the March/April 2020 issue of The Barnes Review.

Notes