Who Wrote the Federal Reserve Act? Wall Street Did.

Published: 07-07-2026, 12:13 pm

Key Takeaways

• Representatives of J.P. Morgan, the Rockefeller-controlled National City Bank, and Kuhn, Loeb & Company drafted the Federal Reserve Act of 1913 in secret — the very banking interests the law claimed to regulate.

• In a 1935 Saturday Evening Post article, Frank Vanderlip wrote that had the public known who drafted the bill, it would never have passed.

• Since the Federal Reserve opened in 1914, the US dollar has lost more than 96% of its purchasing power according to BLS CPI data. An ounce of gold has preserved its purchasing power across the same period.

• The participants named their draft the Aldrich Plan. They later renamed it when Aldrich’s Wall Street ties made the name politically toxic. The structural content survived intact.

• Andrew Jackson defeated an earlier version of this banking structure in 1836. The banking interests returned 74 years later. This time they met on a private island, using code names.

In December 1913, Congress passed a law to rein in Wall Street.

The men who drafted it were from Wall Street.

Specifically, representatives of J.P. Morgan’s bank, the Rockefeller-controlled National City Bank, and the banking partnership Kuhn, Loeb & Company wrote it. Consequently, the legislation did not constrain these institutions. Instead, it handed them something no private entity had legally possessed in American history. That was the authority to issue the nation’s money.

In fact, the participants confirmed this themselves in their own memoirs years later.

Wall Street bankers drafted the Federal Reserve Act of 1913. They met in secret on Jekyll Island, Georgia, in November 1910. They presented it to Congress as banking reform. In practice, it created a privately designed central bank with the power to set interest rates and expand the money supply. Those powers have shaped every dollar in your wallet for the 112 years since.

What Was the Federal Reserve Created to Prevent?

The Panic of 1907 provided the political opening.

Bank runs swept the country that year. Depositors lost savings overnight. Businesses failed across the Eastern Seaboard. J.P. Morgan personally organized a private bailout that contained the worst of it. As a result, he was widely credited with preventing broader damage. Congress, in turn, recognized that a country dependent on a single private banker had a structural vulnerability.

The argument for a central bank followed directly. America needed a permanent mechanism to prevent future panics. Consequently, a proposal found ready political support.

Senator Nelson Aldrich chaired the commission tasked with designing the solution. Aldrich was the Senate Finance Committee chair. Notably, he was also the father-in-law of John D. Rockefeller Jr.

The bill that emerged promised Americans protection against concentrated financial power. The legislation would control the banks. Ordinary savers would be shielded from their excesses. That was the pitch. It worked. Congress passed the Federal Reserve Act on December 23, 1913.

That version still fills most textbooks today.

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Who Actually Drafted the Federal Reserve Act?

In November 1910, seven men boarded a private railcar in New Jersey under assumed names.

They traveled two days and a night to Jekyll Island, Georgia. The island was a private resort owned by Morgan, Rockefeller, and their associates. Specifically, the staff had been dismissed before arrival and replaced with temporary workers. The men arrived separately. They used first names only. Two adopted code names entirely.

Frank Vanderlip, president of the Rockefeller-controlled National City Bank, later explained the secrecy in a 1935 article in the Saturday Evening Post. Had the public known the proposed legislation was drafted by the very interests it was supposed to regulate, the bill would have been politically impossible. The public would have seen the contradiction immediately.

The core group included Paul Warburg, a partner at Kuhn, Loeb & Company, who designed the Fed’s structural architecture. Also present were Henry Davison, a senior partner at J.P. Morgan, and A. Piatt Andrew, the Assistant Secretary of the Treasury. Senator Aldrich and his personal secretary rounded out the delegation.

In nine days, they produced the draft that became the Federal Reserve Act.

Notably, the participants called their original draft the Aldrich Plan. They later renamed it because Aldrich’s visible association with Wall Street had made his name politically toxic. The structural content remained largely intact. Only the branding changed.

What Has the Federal Reserve Done to Dollar Purchasing Power?

Since opening in November 1914, the US dollar has lost more than 96% of its purchasing power, according to Bureau of Labor Statistics CPI data. In practical terms, what $1 bought in 1914 costs about $33 today.

By contrast, gold has preserved its purchasing power across the same period. An ounce of gold bought a quality suit of clothes in 1913. It still does in 2026. Consequently, the metal’s real purchasing power has remained essentially stable while the dollar’s has been almost entirely erased.

The Federal Reserve creates money by purchasing government debt. As a result, every dollar in circulation represents a claim against outstanding debt rather than against anything tangible. That is the “debt in, dollars out” architecture the Jekyll Island group designed.

More dollars chasing the same goods means each dollar buys less over time. In other words, the purchasing power loss is not a malfunction of the system. It is how the system was built to operate.

That said, the pace of erosion has accelerated during specific episodes. The 2008 quantitative easing program expanded the Fed’s balance sheet from about $900 billion to $2.3 trillion within months. The 2020 pandemic response pushed it past $8 trillion. In both cases, gold’s price in dollar terms rose sharply in the years that followed.

Why Did Andrew Jackson Call the Central Bank a Den of Vipers?

This problem is not new.

President Andrew Jackson confronted an earlier version of the same structure in the 1830s. The Second Bank of the United States held a federal charter but operated under private control. Jackson called it a den of vipers. Consequently, he dedicated his presidency to dismantling it. The bank’s charter expired in 1836, and Jackson refused to renew it.

As a result, 77 years passed without a central bank in the United States. By contrast, gold and silver convertibility constrained government spending and maintained purchasing power across that period. Notably, the era was not without financial turbulence. Ultimately, however, the systematic monetary debasement that followed the Fed’s creation had no equivalent in those decades.

In 1910, 74 years after Jackson’s victory, the same banking interests began meeting on a private island off the Georgia coast. Specifically, they used code names. They dismissed the staff. For years, they denied the meeting had occurred. Consequently, when the denials became unsustainable, they changed the story. They said they had gone duck hunting.

In fact, one attendee had borrowed a shotgun for the trip. He had never owned one. In fact, he was afraid of guns. The prop was purely for the cover story.

Watch the Full Story

The origin of the Federal Reserve, from the private railcar to the code names to the nine days on a privately owned island to the law that followed, is the subject of GoldSilver’s latest video.

G. Edward Griffin, the historian who spent decades uncovering this record, narrates the full account. The video runs about ten minutes.

Watch it here.

Share it with one person who still thinks the Federal Reserve exists to protect them.

People Also Ask

Who wrote the Federal Reserve Act?

Six men drafted the Federal Reserve Act, meeting in secret on Jekyll Island, Georgia, in November 1910. They included Paul Warburg of Kuhn, Loeb & Company, Frank Vanderlip of the Rockefeller-controlled National City Bank, Henry Davison of J.P. Morgan, A. Piatt Andrew of the US Treasury, and Senator Nelson Aldrich. Vanderlip later confirmed the meeting and its purpose in a 1935 article in the Saturday Evening Post.

Why was the Federal Reserve created in secret?

The participants understood that publicly disclosing who wrote the legislation would have made it politically impossible to pass. The banking interests sold it to Congress and the public as a law to control the banks. Had Congress known that bank representatives drafted the bill, they would never have passed it. Secrecy was therefore essential to the political strategy, not incidental to it.

What has the Federal Reserve done to the purchasing power of the US dollar?

Since the Federal Reserve began operations in November 1914, the US dollar has lost more than 96% of its purchasing power according to Bureau of Labor Statistics Consumer Price Index data. What $1 bought in 1914 costs about $33 today. This erosion built gradually across 112 years. The pace accelerated sharply during the 2008 and 2020 quantitative easing programs.

Who was Paul Warburg and what role did he play in creating the Federal Reserve?

Paul Warburg was a German-born banker and partner at the New York firm Kuhn, Loeb & Company. He is widely credited as the primary architect of the Federal Reserve’s structural design. Warburg had studied European central banking systems, particularly Germany’s Reichsbank, and advocated for a similar institution in the United States. His design proposal formed the core of the draft produced at the Jekyll Island meeting in 1910.

What was the Aldrich Plan and how does it relate to the Federal Reserve Act?

The Aldrich Plan was the original name for the draft legislation produced at the Jekyll Island meeting. Aldrich named it after himself. He chaired the National Monetary Commission. Because Aldrich’s close associations with Wall Street had made his name politically toxic, the plan was later repackaged under different sponsorship and renamed. Congressman Carter Glass and Senator Robert Owen introduced the revised version, which passed as the Federal Reserve Act in December 1913. The structural content remained substantially similar to the original Aldrich Plan.

How has gold preserved purchasing power where the dollar has not?

Gold’s purchasing power has stayed essentially stable across the same 112 years. A standard example: an ounce of gold purchased a quality suit of clothes in 1913. The same ounce purchases a comparable suit today. This stability reflects gold’s fixed supply relative to the expanding supply of paper money. No central bank can create gold by purchasing government debt.

SOURCES
1. US Bureau of Labor Statistics — CPI Inflation Calculator
2. Saturday Evening Post — Frank Vanderlip, “Farm Boy and Wall Street,” November 1935
3. Federal Reserve — History of the Federal Reserve
4. London Bullion Market Association — Historical Gold Price Data

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions.

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