President John F. Kennedy was the last President on record to defy the Federal Reserve System and look what happened to him. The circumstances surrounding the assassination of President Kennedy, of course, remain unresolved at best. What is known, however, is that Kennedy was, in many ways, a maverick, who, as President, often acted independently, and at times, in direct conflict with the agendas of many powerful Washington insider interests. One of the most powerful of these interests was the Fed.
Economist Seymour Harris described Kennedy as “by far the most knowledgeable President of all time in the general area of economics.” Professor Donald Gibson, in his 1994 book “Battling Wall Street: The Kennedy Presidency,” documents much of the Kennedy economic program. These included:
– Tax proposals to redirect the foreign investments of U.S. companies.
– Making distinctions in tax reform between productive and non productive investment.
– Eliminating the tax privileges of U.S.-based global investment companies.
– Cracking down on foreign tax havens.
– Supporting proposals to eliminate tax privileges for the wealthy.
– Proposing increased taxes for large oil and mineral companies.
– Revising the investment tax credit.
– Making a proposal to expand the powers of the president to deal with recession.
President George W. Bush, to bolster his tax cut proposal, has accurately demonstrated how Kennedy, in 1961, passed a much larger and broader tax cut than the one he is presently proposing. At the time, Kennedy articulated a profound understanding of the economic principle of leaving the maximum amount of capital at the source of production, with the taxpayer. Most economists agree that the Kennedy tax cut contributed greatly to the prosperous economy of the 1960’s. President Reagan’s 1981 tax cut contributed as well to the prosperity of the 1980’s and 1990’s.
With regard to the Fed, James J. Saxon, Kennedy’s comptroller of the currency, encouraged a policy of broader investment and lending powers to be granted to non-Fed affiliated banks. This would involve allowing for the setting of interest rates, by these independent banks and lenders, that could compete with those set by the Fed and it’s affiliates. Saxon also decided that these non Fed banks and institutions could underwrite state and local bond issuances, an area that had been a bailiwick for Fed affiliated banks. These policies set the Kennedy administration at odds with the powerful central banking system. The Fed seeks to further increase it’s monopolistic prerogative over the issuance of currency and the setting of interest rates.
In June, 1963, President Kennedy authorized the issuance of more than $4 billion in debt free “United States Notes” through the US Treasury. This extraordinary act completely circumvented the Fed which expects to be called upon to loan currency, at interest accruing to themselves, to the US government. Perhaps Kennedy reasoned that this currency would reduce the national debt by avoiding the necessity of paying interest to the Fed. The last time a President tried this was in 1862, when Abraham Lincoln authorized the issuance of $450 million in debt free currency, through the US Treasury, known at the time as greenbacks, rather than borrowing money from the banking establishment at the time. Lincoln stated “Government possessing power to create and issue currency…need not and should not borrow capital at interest…The privilege of creating and issuing money is not only the supreme prerogative of the government but is the government’s greatest creative opportunity.” It is a fascinating coincidence that both Presidents Abraham Lincoln and John F. Kennedy were assassinated.
Kennedy opposed many powerful interests during his all too brief Presidency, not the least of which were those in his own government, such as the likes of McNamara, Rusk, Rostow, and the Bundy brothers, who were clamoring for war in Vietnam. The widow of accused assassin Lee Harvey Oswald, in a 1994 interview with author A.J.Weberman, said the following. “The answer to the Kennedy assassination is with the Federal Reserve Bank. Don’t underestimate that. It’s wrong to blame it on (CIA official) James Angleton and the CIA per se only. This is only one finger of the same hand. The people who supply the money are above the CIA.”