"...We have what is known as the Federal Reserve Bank System. That system is not owned by the Government. Many people think that it is, because it says 'Federal Reserve'. It belongs to the private banks, private corporations. So we have farmed out to the Federal Reserve Banking System that is owned exclusively, wholly, 100 percent by the private banks --we have farmed out to them the privilege of issuing the Government's money. If we were to take this privilege back from them, we could save the amount of money that I have indicated in enormous interest charges."
--Wright Patman, Democratic representative from Texas
The above quote was from a 1941 speech by U.S. congressman Wright Patman, a fierce critic of the Federal Reserve. A Primer on Money, released in 1964 by the Congressional Subcommittee on domestic finance, explains in Patman's introduction "in simple, everyday language how the US monetary system works and indicates where it needs reform." It describes specifically:
- What is money?
- How is money created?
- The role of the Federal Reserve System
- Money supply and Monetary policy
- Improvements in the Money System
Although this publication is over fifty years old and changes have been made to the Federal Reserve System since then, it is a testament to Patman's insights that this report is still relevant and important to today's discussion about the role of the Federal Reserve in the U.S. economy.
This report is essential reading for students of monetary policy, academics, policymakers, journalists, and anyone interested in learning about the basics of money and the Federal Reserve.
WRIGHT PATMAN (1893-1976) was a U.S. congressman from 1928 to 1975, the chairman of the powerful United States House Committee on Banking and Currency from 1963 to 1975, and a life-long populist in the good sense of the word. He defended the little guy, farmers, veterans, and small businessmen against big business, big chain stores, big banks, and especially the Federal Reserve system. Patman believed that the Federal Reserve, due to it being controlled by private bankers, did not support the interests of Main Street but rather those of Wall Street, and that it therefore should be brought under control by Congress.
The U.S. House Committee on Banking and Currency, named the Financial Services Committee since 1968, was founded in 1865 to replace the Ways and Means Committee. It is a committee from the House of Representatives that oversees the entire financial services industry, the Federal Reserve, the Department of the Treasury, the Securities and Exchange Commission, and other financial services regulators.
