The Creature from Jekyll Island: A Second Look at the Federal Reserve

Content Warning: This section discusses antisemitism.

The economic environment following the Civil War was volatile. The late 19th century in America saw four major economic panics. Congress’s response to each was to reduce requirements of specie-backed loans. Legislation in 1874 allowed banks to solely back loans with government bonds. Although the panics were blamed on seasonal agricultural needs, Griffin points out that the panics happen roughly every 11 years, not every season. These panics resulted in hundreds of banks closing in a roughly 50-year period. During this time, the Morgan Firm didn’t just survive these panics but thrived in their wake.

The Morgan Firm was founded in 1837 by George Peabody who established an investment firm based on import/export business from the United States to England. In 1864, Peabody passed the firm on to Junius Morgan who changed the name to J.S. Morgan and Company. The company was based in London, but J.P. Morgan, Junius’s son, established the New York branch after working with American investment companies. Near the turn of the 20th century, J.P. Morgan Jr. went to London to learn British banking, specifically the central bank system in Britain and Europe.

Griffin insinuates that the connection between the Morgan Firm and the Rothschild House was established early on and allowed