It is natural to feel that this mistaken view has been encouraged by most of the men who are competent to write for the public on this question. Take up the standard encyclopedias, and while you will find no misstatements of fact in them, you will find no direct statement that the Federal Reserve System is a private banking system; the impression carried away by the lay reader is that it is a part of the Government. The Federal Reserve System is a system of private banks, the creation of a banking aristocracy within an already existing autocracy, whereby a great proportion of banking independence was lost, and whereby it was made possible for speculative financiers to centralize great sums of money for their own purposes, beneficial or not. That this System was useful in the artificial conditions created by war—useful, that is, for a Government that cannot manage its own business and finances and, like a prodigal son, is always wanting money, and wanting it when it wants it—it has proved, either by reason of its inherent faults or by mishandling, its inadequacy to the problems of peace. It has sadly failed of its promise, and is now under serious question. Mr. Warburg’s scheme succeeded just in time to take care of war conditions, he was placed on the Federal Reserve Board in order to manage his system in practice, and though he was full of ideas then as to how banking could be assisted, he is disappointingly silent now as to how the people can be relieved. However, this is not a discussion of the Federal Reserve System. General condemnation of it would be stupid. But it is bound to come up for discussion one day, and the discussion will become much freer when people understand that it is a system of privately owned banks, to which have been delegated certain extraordinary privileges, and that it has created a class system within the banking world which constitutes a new order. Mr. Warburg, it will be remembered, wanted only one central bank. But, because of political considerations, as Professor Seligman tells us, twelve were decided upon. An examination of Mr. Warburg’s printed discussions of the subject shows that he at one time considered four, then eight. Eventually, twelve were established. The reason was that one central bank, which naturally would be set up in New York, would give a suspicious country the impression that it was only a new scheme to keep the nation’s money flowing to New York. As shown by Professor Seligman, quoted in the last number, Mr. Warburg was not averse to granting anything that would allay popular suspicion without vitiating the real plan.