Mr. Baruch—“I called up the Secretary, because someone suggested to me—asked me to suggest an officer for the Federal Reserve Bank, and I called him up in reference to that, and discussed the matter with him, I think, two or three times, but it was suggested to me that I make the suggestion, and I did so.” (pp. 570–571)
Mr. Campbell—“Mr. Baruch, who asked you for a suggestion for an appointee for the Federal Reserve Bank here?”
Mr. Baruch—“Mr. E. M. House.”
Mr. Campbell—“Did Mr. House tell you to call Mr. McAdoo up and make the recommendation?”
Mr. Baruch—“I will tell you exactly how it occurred: Mr. House called me up and said that there was a vacancy on the Federal Reserve Board, and he said, ‘I don’t know anything about those fellows down there, and I would like you to make a suggestion.’ And I suggested the name, which he thought was a very good one, and he said to me, ‘I wish you would call up the Secretary and tell him.’ I said, ‘I do not see the necessity; I will tell you.’ ‘No,’ he said, ‘I would prefer you to call him up.’” (p. 575)
There we have an example of the Federal Reserve “kept out of politics,” kept away from government management which would not only be “dangerous,” but “fatal.”
Barney Baruch, the New York stock plunger, who never owned a bank in his life, was called up by Colonel E. M. House, the arch-politician of the Wilson Administration, and thus the great Federal Reserve Board was supplied another member.
A telephone call kept within a narrow Jewish circle and settled by a word from one Jewish stock dealer—that, in practical operation, was Mr. Warburg’s great monetary reform. Mr. Baruch calling up Mr. Warburg