Boycott Poundland: Forced Slave Labour Firm rakes in 27% profits

Poundland profits up 27% as squeezed shoppers try to save money

Chain opens 400th store and plans more in continental Europe

Julia Kollewe
guardian.co.uk, Monday 2 July 2012 17.31 BST
http://www.guardian.co.uk/business/2012/jul/02/poundland-profits-up-squeezed-shoppers

An influx of squeezed middle-class shoppers has propelled profits at Poundland 27% higher, as the discounter – which sells everything from Fairy washing-up liquid to Nestlé After Eights for £1 – opened its 400th store.

The chain has also opened 13 stores in Ireland under the Dealz name, and plans to double that within the year. It will then begin plotting its first foray into continental Europe.

Jim McCarthy, the chief executive, said he suspected the proportion of AB shoppers, who made up 12% of Poundland’s customers more than a year ago, was now higher. Recession-induced penny-pinching has taken hold in the national psyche and will carry on even when the economy recovers from its four-year downturn, he believes.

“Waste of any kind has become abhorrent. In 1990, when Poundland was created, there weren’t many Aldis and Lidls, TK Maxxes and Poundlands. Now there are price comparison sites and people shop with their smartphones. There is definitely some structural shift going on in shopping values.”

Poundland, which sells a range of 3,000 items, including 1,000 branded goods, now serves more than 4 million customers each week, up from 3.5 million in 2010-11.

“Poundland is a great business in good times, and a good business in times of tough economic conditions. We have the benefit of those who choose to shop with us, and those who need to shop with us,” said McCarthy.

Turnover at the chain, which is owned by the private equity house Warburg Pincus, climbed 21.6% to £780m in the 53 weeks to 1 April, lifting underlying earnings 26.5% to £40.1m. Like-for-like sales were up 2.3%. Sales of essentials such as food and drink along with household goods and health and beauty products have been strongest, those of discretionary items less so – apart from affordable treats such as confectionery. Poundland sold more than 6m boxes of Maltesers, 2m umbrellas, more than 2.5m CDs and 500,000 garden gnomes during the past year.

In good times 40% of people who come in make impulse purchases. In a
recession that number falls to around 30%.

A new warehouse will open in Hoddesdon, Hertfordshire, next month in addition to Poundland’s two Midlands warehouses, and is expected to reduce fuel costs.

The West Midlands-based retailer has opened 62 new stores during the past year, including its largest to date, with 1,200 sq metres (13,000 sq ft) of shop space, in Wolverhampton, and plans to keep expanding at this rate until it reaches 1,000 shops. Stores are also getting bigger – McCarthy believes sales have benefited from wider aisles in the larger shops, which enable shoppers to spot products more easily.

While most of its new store openings are still on the high street, Poundland has been one of the fastest-growing chains in out-of-town shopping malls, and now operates in more than 20 retail parks.

It has also set its sights on continental Europe, and has drawn up a shortlist of countries where it wants to launch, although this is not imminent. The discounter will use the Dealz name under which it trades in Ireland, as this has proven popular in consumer research with continental shoppers too. “Euroland” might have been the obvious choice – but “we found that consumers are not happy with anything associated with the euro in Ireland and continental Europe,” said McCarthy.

4 comments

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    LARGE RESOURCE OF DATA ON THE DWP
    SLAVE LABOUR WORKFARE SCHEMES

    http://theunhivedmind.com/wordpress/?p=24583

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    Warburg Pincus

    https://en.wikipedia.org/wiki/Warburg_Pincus

    Type Limited liability company
    Industry Private Equity
    Founded 1966
    Headquarters New York City, New York, United States
    Key people Henry Kressel
    Senior managing director and partner
    Products Investments, private equity funds
    Total assets $30 billion
    Website http://www.warburgpincus.com

    Warburg Pincus, LLC is a global private equity firm with offices in the United States, Europe, Brazil, China and India. It has been a private equity investor since 1966. The firm currently has approximately $30 billion[1] in assets under management and invests in a range of sectors including consumer, industrial and services (CIS), energy, financial services, health care, technology, media and telecommunication TMT and real estate. Warburg Pincus is a growth investor and its active portfolio of more than 125 companies is highly diversified by stage, sector and geography. Warburg Pincus has raised 13 private equity funds which have invested more than $40 billion in over 650 companies in more than 30 countries.[1]

    Warburg Pincus also has a long history as a leading investor in the information and communication technology sectors, including investments in Avaya, BEA Systems, Bharti Tele-Ventures, Cassatt, Harbour Networks, NeuStar, Systinet, Telcordia and VERITAS Software.[2][3]

    Founding and early history

    The firm traces its history to 1939, when Eric Warburg of the Warburg banking family founded a company under the name E.M. Warburg & Co. Its first address was 52 William Street, New York, the Kuhn Loeb building. Throughout the early post-war period, the firm remained a small office of not more than 20 employees. In 1966, E.M. Warburg merged with Lionel I. Pincus & Co, forming a new company that eventually became known as E.M. Warburg, Pincus & Co.[4] In 1965, when Eric Warburg retired to Germany, control was handed to Lionel Pincus, a partner in the Ladenburg Thalmann investment bank, and the working language of the office switched from German to English. Lionel ran the company from 1966 to 2002, and died in 2009. [5]

    Warburg Pincus began investing in Europe in 1983 and opened its first office in Asia in 1994. It has invested more than $5 billion in Europe; more than $3 billion in India[6] and more than $3.3 billion in China. The firm is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Mumbai, San Francisco, São Paulo and Shanghai, with administrative offices in Amsterdam, Luxembourg and Mauritius.[7]

    The firm is structured as a global partnership led by co-presidents Charles Kaye and Joseph Landy.[8] Kaye has been with Warburg Pincus since 1986 and worked to launch the Asian operations. Landy has been with the firm since 1985, focusing on investments in information technology, communications applications and structured investments. Approximately 40% of the firm’s investments are outside of the U.S.

    Initial public offerings

    Warburg Pincus has completed more initial public offerings with its companies than any other global private equity firm.[9] More than 120 Warburg Pincus companies have listed on exchanges, raising approximately $15 billion in public markets. In each of these IPOs, the firm was the principal financial investor in the portfolio company. The companies have listed on 12 exchanges, including more than 20 IPOs outside the U.S. In August 2010, a six-year partnership between management and Warburg Pincus led to MEG Energy’s successful IPO.[10]

    Venture capital

    Warburg Pincus has a long history of successful venture capital investing, including the firm’s historic investment in the founding of BEA Systems[11] in 1995, partnerships with Kosmos Energy[1] and Bridgepoint Education in 2004 and Lepu Medical in 2007. The firm is a founding member of the venture capital associations in the U.S. and China, and offers a global entrepreneur in residence program to nurture innovation and help start up new businesses. Warburg Pincus participates in the creation of companies with high growth potential by combining the firm’s capital with managerial and technical expertise in sectors such as energy, technology and healthcare.

    Growth capital

    Growth capital can enable transformational events, such as funding acquisitions or driving organic growth by expanding geographically or bringing new products and services to market. Investments by Warburg Pincus have fostered growth around the world in companies such as Harbin Pharmaceutical in China,[12] Bharti Telecommunications in India, AmRest in Poland[13] and Nuance Communications in the U.S.[14]

    Late-stage and special situations

    Warburg Pincus brings scale, global capabilities and domain knowledge to mature companies and special situations. The firm invests in best-in-class companies with market-leading positions such as Aramark,[15] Bausch + Lomb,[16] Neiman Marcus, Scotsman Industries and Ziggo.

    Fight over the Warburg name

    During the post-war period, Eric Warburg vied with his cousin Siegmund Warburg, founder of S.G. Warburg, over the use of the Warburg name in New York. Siegmund wished to expand the S.G. Warburg franchise into New York but was blocked by the existence of E.M. Warburg & Co. Following the effective sale of the business to Pincus, Siegmund Warburg accused Eric of prostituting the Warburg name. “Complicating matters was that Siegmund thought Pincus the wrong kind of Jew – of Eastern European ancestry, with a garment-district background. Professionally, he thought Pincus well below haute banque stature in the venture capital world.”[17]

    In January 1970, Siegmund finally got the name changed to E.M. Warburg, Pincus & Company to differentiate it from S.G. Warburg & Company. “In the end, however, Lionel Pincus had the last laugh on Siegmund. He expanded Eric’s tiny firm into a giant, thriving business, with three and a half billion dollars of venture capital partnerships.”[17]

    In 1999, they attempted to purchase English Premier League football (soccer) team Everton.[18]

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    SECRETS OF THE FEDERAL RESERVE

    The London Connection

    By Eustace Mullins
    http://www.apfn.org/apfn/reserve.htm

    CHAPTER ONE

    Jekyll Island

    “The matter of a uniform discount rate was discussed and settled at Jekyll Island.”–Paul M. Warburg1

    On the night of November 22, 1910, a group of newspaper reporters stood disconsolately in the railway station at Hoboken, New Jersey. They had just watched a delegation of the nation’s leading financiers leave the station on a secret mission. It would be years before they discovered what that mission was, and even then they would not understand that the history of the United States underwent a drastic change after that night in Hoboken.

    The delegation had left in a sealed railway car, with blinds drawn, for an undisclosed destination. They were led by Senator Nelson Aldrich, head of the National Monetary Commission. President Theodore Roosevelt had signed into law the bill creating the National Monetary Commission in 1908, after the tragic Panic of 1907 had resulted in a public outcry that the nation’s monetary system be stabilized. Aldrich had led the members of the Commission on a two-year tour of Europe, spending some three hundred thousand dollars of public money. He had not yet made a report on the results of this trip, nor had he offered any plan for banking reform.

    Accompanying Senator Aldrich at the Hoboken station were his private secretary, Shelton; A. Piatt Andrew, Assistant Secretary of the Treasury, and Special Assistant of the National Monetary Commission; Frank Vanderlip, president of the National City Bank of New York, Henry P. Davison, senior partner of J.P. Morgan Company, and generally regarded as Morgan’s personal emissary; and Charles D. Norton, president of the Morgan-dominated First National Bank of New York. Joining the group just before the train left the station were Benjamin Strong, also known as a lieutenant of J.P. Morgan; and Paul Warburg, a recent immigrant from Germany who had joined the banking house of Kuhn, Loeb

    __________________________

    1 Prof. Nathaniel Wright Stephenson, Paul Warburg’s Memorandum, Nelson Aldrich A Leader in American Politics, Scribners, N.Y. 1930

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    and Company, New York as a partner earning five hundred thousand dollars a year.

    Six years later, a financial writer named Bertie Charles Forbes (who later founded the Forbes Magazine; the present editor, Malcom Forbes, is his son), wrote:

    “Picture a party of the nation’s greatest bankers stealing out of New York on a private railroad car under cover of darkness, stealthily hieing hundred of miles South, embarking on a mysterious

    launch, sneaking onto an island deserted by all but a few servants, living there a full week under such rigid secrecy that the names of not one of them was once mentioned lest the servants learn the identity and disclose to the world this strangest, most secret expedition in the history of American finance. I am not romancing; I am giving to the world, for the first time, the real story of how the famous Aldrich currency report, the foundation of our new currency system, was written . . . . The utmost secrecy was enjoined upon all. The public must not glean a hint of what was to be done. Senator Aldrich notified each one to go quietly into a private car of which the railroad had received orders to draw up on an unfrequented platform. Off the party set. New York’s ubiquitous reporters had been foiled . . . Nelson (Aldrich) had confided to Henry, Frank,

    Paul and Piatt that he was to keep them locked up at Jekyll Island, out of the rest of the world, until they had evolved and compiled a scientific currency system for the United States, the real birth of the present Federal Reserve System, the plan done on Jekyll Island in the conference with Paul, Frank and Henry . . . . Warburg is the link that binds the Aldrich system and the present system together. He more than any one man has made the system possible as a working reality.”2

    The official biography of Senator Nelson Aldrich states:

    “In the autumn of 1910, six men went out to shoot ducks, Aldrich, his secretary Shelton, Andrews, Davison, Vanderlip and Warburg. Reporters were waiting at the Brunswick (Georgia) station. Mr. Davison went out and talked to them. The reporters dispersed and the secret of the strange journey was not divulged. Mr. Aldrich asked him how he had managed it and he did not volunteer the information.”3

    Davison had an excellent reputation as the person who could conciliate warring factions, a role he had performed for J.P. Morgan during the settling of the Money Panic of 1907. Another Morgan partner, T.W. Lamont, says:

    “Henry P. Davison served as arbitrator of the Jekyll Island expedition.”4

    __________________________

    2 “CURRENT OPINION”, December, 1916, p. 382.

    3 Nathaniel Wright Stephenson, Nelson W. Aldrich, A Leader in American Politics, Scribners, N.Y. 1930, Chap. XXIV “Jekyll Island”

    4 T.W. Lamont, Henry P. Davison, Harper, 1933

    2

    From these references, it is possible to piece together the story. Aldrich’s private car, which had left Hoboken station with its shades drawn, had taken the financiers to Jekyll Island, Georgia. Some years earlier, a very exclusive group of millionaires, led by J.P. Morgan, had purchased the island as a winter retreat. They called themselves the Jekyll Island Hunt Club, and, at first, the island was used only for hunting expeditions, until the millionaires realized that its pleasant climate offered a warm retreat from the rigors of winters in New York, and began to build splendid mansions, which they called “cottages”, for their families’ winter vacations. The club building itself, being quite isolated, was sometimes in demand for stag parties and other pursuits unrelated to hunting. On such occasions, the club members who were not invited to these specific outings were asked not to appear there for a certain number of days. Before Nelson Aldrich’s party had left New York, the club’s members had been notified that the club would be occupied for the next two weeks.

    The Jekyll Island Club was chosen as the place to draft the plan for control of the money and credit of the people of the United States, not only because of its isolation, but also because it was the private preserve of the people who were drafting the plan. The New York Times later noted, on May 3, 1931, in commenting on the death of George F. Baker, one of J.P. Morgan’s closest associates, that “Jekyll Island Club has lost one of its most distinguished members. One-sixth of the total wealth of the world was represented by the members of the Jekyll Island Club.” Membership was by inheritance only.

    The Aldrich group had no interest in hunting. Jekyll Island was chosen for the site of the preparation of the central bank because it offered complete privacy, and because there was not a journalist within fifty miles. Such was the need for secrecy that the members of the party agreed, before arriving at Jekyll Island, that no last names would be used at any time during their two week stay. The group later referred to themselves as the First Name Club, as the last names of Warburg, Strong, Vanderlip and the others were prohibited during their stay. The customary attendants had been given two week vacations from the club, and new servants brought in from the mainland for this occasion who did not know the names of any of those present. Even if they had been interrogated after the Aldrich party went back to New York, they could not have given the names. This arrangement proved to be so satisfactory that the members, limited to those who had actually been present at Jekyll Island, later had a number of informal get-togethers in New York.

    Why all this secrecy? Why this thousand mile trip in a closed railway car to a remote hunting club? Ostensibly, it was to carry out a program of public service, to prepare banking reform which would be a boon to the people of the United States, which had been ordered by the National

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    Monetary Commission. The participants were no strangers to public benefactions. Usually, their names were inscribed on brass plaques, or on the exteriors of buildings which they had donated. This was not the procedure which they followed at Jekyll Island. No brass plaque was ever erected to mark the selfless actions of those who met at their private hunt club in 1910 to improve the lot of every citizen of the United States.

    In fact, no benefaction took place at Jekyll Island. The Aldrich group journeyed there in private to write the banking and currency legislation which the National Monetary Commission had been ordered to prepare in public. At stake was the future control of the money and credit of the United States. If any genuine monetary reform had been prepared and presented to Congress, it would have ended the power of the elitist one world money creators. Jekyll Island ensured that a central bank would be established in the United States which would give these bankers everything they had always wanted.

    As the most technically proficient of those present, Paul Warburg was charged with doing most of the drafting of the plan. His work would then be discussed and gone over by the rest of the group. Senator Nelson Aldrich was there to see that the completed plan would come out in a form which he could get passed by Congress, and the other bankers were there to include whatever details would be needed to be certain that they got everything they wanted, in a finished draft composed during a onetime stay. After they returned to New York, there could be no second get together to rework their plan. They could not hope to obtain such secrecy for their work on a second journey.

    The Jekyll Island group remained at the club for nine days, working furiously to complete their task. Despite the common interests of those present, the work did not proceed without friction. Senator Aldrich, always a domineering person, considered himself the chosen leader of the group, and could not help ordering everyone else about. Aldrich also felt somewhat out of place as the only member who was not a professional banker. He had had substantial banking interests throughout his career, but only as a person who profited from his ownership of bank stock. He knew little about the technical aspects of financial operations. His opposite number, Paul Warburg, believed that every question raised by the group demanded, not merely an answer, but a lecture. He rarely lost an opportunity to give the members a long discourse designed to impress them with the extent of his knowledge of banking. This was resented by the others, and often drew barbed remarks from Aldrich. The natural diplomacy of Henry P. Davison proved to be the catalyst which kept them at their work. Warburg’s thick alien accent grated on them, and constantly reminded them that they had to accept his presence if a central bank plan was to be devised which would guarantee them their future pro-

    4

    fits. Warburg made little effort to smooth over their prejudices, and contested them on every possible occasion on technical banking questions, which he considered his private preserve.

    “In all conspiracies there must be great secrecy.”5

    The “monetary reform” plan prepared at Jekyll Island was to be presented to Congress as the completed work of the National Monetary Commission. It was imperative that the real authors of the bill remain hidden. So great was popular resentment against bankers since the Panic of 1907 that no Congressman would dare to vote for a bill bearing the Wall Street taint, no matter who had contributed to his campaign expenses. The Jekyll Island plan was a central bank plan, and in this country there was a long tradition of struggle against inflicting a central bank on the American people. It had begun with Thomas Jefferson’s fight against Alexander Hamilton’s scheme for the First Bank of the United States, backed by James Rothschild. It had continued with President Andrew Jackson’s successful war against Alexander Hamilton’s scheme for the Second Bank of the United States, in which Nicholas Biddle was acting as the agent for James Rothschild of Paris. The result of that struggle was the creation of the Independent Sub-Treasury System, which supposedly had served to keep the funds of the United States out of the hands of the financiers. A study of the panics of 1873, 1893, and 1907 indicates that these panics were the result of the international bankers’ operations in London. The public was demanding in 1908 that Congress enact legislation to prevent the recurrence of artificially induced money panics. Such monetary reform now seemed inevitable. It was to head off and control such reform that the National Monetary Commission had been set up with Nelson Aldrich at its head, since he was majority leader of the Senate.

    The main problem, as Paul Warburg informed his colleagues, was to avoid the name “Central Bank”. For that reason, he had decided upon the designation of “Federal Reserve System”. This would deceive the people into thinking it was not a central bank. However, the Jekyll Island plan would be a central bank plan, fulfilling the main functions of a central bank; it would be owned by private individuals who would profit from ownership of shares. As a bank of issue, it would control the nation’s money and credit.

    In the chapter on Jekyll Island in his biography of Aldrich, Stephenson writes of the conference:

    “How was the Reserve Bank to be controlled? It must be controlled by Congress. The government

    was to be represented in the board of directors, it was to have full knowledge of all the Bank’s,

    affairs, but a majority

    __________________________

    5 Clarendon, Hist. Reb. 1647

    5

    of the directors were to be chosen, directly or indirectly, by the banks of the association.”6

    Thus the proposed Federal Reserve Bank was to be “controlled by Congress” and answerable to the government, but the majority of the directors were to be chosen, “directly or indirectly” by the banks of the association. In the final refinement of Warburg’s plan, the Federal Reserve Board of Governors would be appointed by the President of the United States, but the real work of the Board would be controlled by a Federal Advisory Council, meeting with the Governors. The Council would be chosen by the directors of the twelve Federal Reserve Banks, and would remain unknown to the public.

    The next consideration was to conceal the fact that the proposed “Federal Reserve System” would be dominated by the masters of the New York money market. The Congressmen from the South and the West could not survive if they voted for a Wall Street plan. Farmers and small businessmen in those areas had suffered most from the money panics. There had been great popular resentment against the Eastern bankers, which during the nineteenth century became a political movement known as “populism”. The private papers of Nicholas Biddle, not released until more than a century after his death, show that quite early on the Eastern bankers were fully aware of the widespread public opposition to them.

    Paul Warburg advanced at Jekyll Island the primary deception which would prevent the citizens from recognizing that his plan set up a central bank. This was the regional reserve system. He proposed a system of four (later twelve) branch reserve banks located in different sections of the country. Few people outside the banking world would realize that the existing concentration of the nation’s money and credit structure in New York made the proposal of a regional reserve system a delusion.

    Another proposal advanced by Paul Warburg at Jekyll Island was the manner of selection of administrators for the proposed regional reserve system. Senator Nelson Aldrich had insisted that the officials should be appointive, not elected, and that Congress should have no role in their selection. His Capitol Hill experience had taught him that congressional opinion would often be inimical to the Wall Street interests, as Congressmen from the West and South might wish to demonstrate to their constituents that they were protecting them against the Eastern bankers.

    Warburg responded that the administrators of the proposed central banks should be subject to executive approval by the President. This patent removal of the system from Congressional control meant that the

    __________________________

    6 Nathaniel Wright Stephenson, Nelson W. Aldrich, A Leader in American Politics, Scribners, N.Y. 1930, Chap. XXIV “Jekyll Island” p. 379

    6

    Federal Reserve proposal was unconstitutional from its inception, because the Federal Reserve System was to be a bank of issue. Article 1, Sec. 8, Par. 5 of the Constitution expressly charges Congress with “the power to coin money and regulate the value thereof.”. Warburg’s plan would deprive Congress of its sovereignty, and the systems of checks and balances of power set up by Thomas Jefferson in the Constitution would now be destroyed. Administrators of the proposed system would control the nation’s money and credit, and would themselves be approved by the executive department of the government. The judicial department (the Supreme Court, etc.) was already virtually controlled by the executive department through presidential appointment to the bench.

    Paul Warburg later wrote a massive exposition of his plan, The Federal Reserve System, Its Origin and Growth7 of some 1750 pages, but the name “Jekyll Island” appears nowhere in this text. He does state (Vol. 1, p. 58):

    “But then the conference closed, after a week of earnest deliberation, the rough draft of what later became the Aldrich Bill had been agreed upon, and a plan had been outlined which provided for a ‘National Reserve Association,’ meaning a central reserve organization with an elastic note issue based on gold and commercial paper.”

    On page 60, Warburg writes, “The results of the conference were entirely confidential. Even the fact there had been a meeting was not permitted to become public.” He adds in a footnote, “Though eighteen [sic] years have since gone by, I do not feel free to give a description of this most interesting conference concerning which Senator Aldrich pledged all participants to secrecy.”

    B.C. Forbes’ revelation8 of the secret expedition to Jekyll Island, had had surprisingly little impact. It did not appear in print until two years after the Federal Reserve Act had been passed by Congress, hence it was never read during the period when it could have had an effect, that

    __________________________

    7 Paul Warburg, The Federal Reserve System, Its Origin and Growth, Volume I, p. 58, Macmillan, New York, 1930

    8 CURRENT OPINION, December, 1916, p. 382

    7

    is, during the Congressional debate on the bill. Forbes’ story was also dismissed, by those “in the know,” as preposterous, and a mere invention. Stephenson mentions this on page 484 of his book about Aldrich.9

    “This curious episode of Jekyll Island has been generally regarded as a myth. B.C. Forbes got

    some information from one of the reporters. It told in vague outline the Jekyll Island story, but

    made no impression and was generally regarded as a mere yarn.”

    The coverup of the Jekyll Island conference proceeded along two lines, both of which were successful. The first, as Stephenson mentions, was to dismiss the entire story as a romantic concoction which never actually took place. Although there were brief references to Jekyll Island in later books concerning the Federal Reserve System, these also attracted little public attention. As we have noted, Warburg’s massive and supposedly definite work on the Federal Reserve System does not mention Jekyll Island at all, although he does admit that a conference took place. In none of his voluminous speeches or writings do the words “Jekyll Island” appear, with a single notable exception. He agreed to Professor Stephenson’s request that he prepare a brief statement for the Aldrich biography. This appears on page 485 as part of “The Warburg Memorandum”. In this excerpt, Warburg writes, “The matter of a uniform discount rate was discussed and settled at Jekyll Island.”

    Another member of the “First Name Club” was less reticent. Frank Vanderlip later published a few brief references to the conference. In the Saturday Evening Post, February 9, 1935, p. 25, Vanderlip wrote:

    “Despite my views about the value to society of greater publicity for the affairs of corporations, there was an occasion near the close of 1910, when I was as secretive, indeed, as furtive, as any conspirator. . . . Since it would have been fatal to Senator Aldrich’s plan to have it known that he was calling on anybody from Wall Street to help him in preparing his bill, precautions were taken that would have delighted the heart of James Stillman (a colorful and secretive banker who was President of the National City Bank during the Spanish-American War, and who was thought to have been involved in getting us into that war) . . . I do not feel it is any exaggeration to speak of our secret expedition to Jekyll Island as the occasion of the actual conception of what eventually became the Federal Reserve System.”

    In a Travel feature in The Washington Post, March 27, 1983, “Follow The Rich to Jekyll Island”, Roy Hoopes writes:

    “In 1910, when Aldrich and four financial experts wanted a place to meet in secret to reform the country’s banking system, they faked a hunting trip to Jekyll and for 10 days holed up in the Clubhouse, where they made plans for what eventually would become the Federal Reserve Bank.”

    __________________________

    9 Nathaniel Wright Stephenson, Nelson W. Aldrich, A Leader in American Politics, Scribners, N.Y. 1930, Chap. XXIV “Jekyll Island” p. 379

    8

    Vanderlip later wrote in his autobiography, From Farmboy to Financier:10

    “Our secret expedition to Jekyll Island was the occasion of the actual conception of what eventually became the Federal Reserve System. The essential points of the Aldrich Plan were all contained in the Federal Reserve Act as it was passed.”

    Professor E.R.A. Seligman, a member of the international banking family of J. & W. Seligman, and head of the Department of Economics at Columbia University, wrote in an essay published by the Academy of Political Science, Proceedings, v. 4, No. 4, p. 387-90:

    “It is known to a very few how great is the indebtedness of the United States to Mr. Warburg. For it may be said without fear of contradiction that in its fundamental features the Federal Reserve Act is the work of Mr. Warburg more than any other man in the country. The existence of a Federal Reserve Board creates, in everything but in name, a real central bank. In the two fundamentals of command of reserves and of a discount policy, the Federal Reserve Act has

    frankly accepted the principle of the Aldrich Bill, and these principles, as has been stated, were the creation of Mr. Warburg and Mr. Warburg alone. It must not be forgotten that Mr. Warburg had a practical object in view. In formulating his plans and in advancing in them slightly varying suggestions from time to time, it was incumbent on him to remember that the education of the

    country must be gradual and that a large part of the task was to break down prejudices and remove suspicion. His plans therefore contained all sorts of elaborate suggestions designed to guard the public against fancied dangers and to persuade the country that the general scheme was at all practicable. It was the hope of Mr. Warburg that with the lapse of time it might be possible to eliminate from the law a few clauses which were inserted largely at his suggestion for educational purposes.”

    Now that the public debt of the United States has passed a trillion dollars, we may indeed admit “how great is the indebtedness of the United States to Mr. Warburg.” At the time he wrote the Federal Reserve Act, the public debt was almost nonexistent.

    Professor Seligman points out Warburg’s remarkable prescience that the real task of the members of the Jekyll Island conference was to prepare a banking plan which would gradually “educate the country” and “break down prejudices and remove suspicion”. The campaign to enact the plan into law succeeded in doing just that.

    __________________________

    10 Frank Vanderlip, From Farmboy to Financier

  •  
    The book: The Secrets of the Federal Reserve

    Read word for word for audio:
    http://www.apfn.org/audio/Secrets-of-the-Federal-Reserve.mp3

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