<P> In 1913, the Pujo Committee unanimously determined that a small cabal of financiers had gained consolidated control of numerous industries through the abuse of the public trust in the United States . The chair of the House Committee on Banking and Currency, Representative Arsène Pujo, (D--La . 7th) convened a special committee to investigate a "money trust", the de facto monopoly of Morgan and New York's other most powerful bankers . The committee issued a scathing report on the banking trade that concluded that a community of influential financial leaders had gained control of major manufacturing, transportation, mining, telecommunications and financial markets of the United States . The report revealed that no less than eighteen different major financial corporations were under control of a cartel led by J.P Morgan, George F. Baker and James Stillman . These three men, through the resources of seven banks and trust companies (Banker's Trust Co., Guaranty Trust Co., Astor Trust Co., National Bank of Commerce, Liberty National Bank, Chase National Bank, Farmer's Loan and Trust Co .) controlled an estimated $2.1 billion . The report revealed that a handful of men held manipulative control of the New York Stock Exchange and attempted to evade interstate commerce laws . </P> <P> The findings of the committee inspired public support for ratification of the Sixteenth Amendment in 1913, passage of the Federal Reserve Act that same year, and passage of the Clayton Antitrust Act in 1914 . </P> <P> A private conglomerate prevented the Panic of 1907 by establishing themselves up as "lenders of last resort" to banks in trouble . This effort succeeded in stopping the panic, and led to calls for a federal agency to do the same thing . In response, the Federal Reserve Act of 1913 created the Federal Reserve System, a new quasi-federal central bank intended serve as a formal "lender of last resort" to banks in times of liquidity crisis--panics where depositors tried to withdraw their money faster than a bank could pay it . </P> <P> The legislation provided for a system that included twelve regional Federal Reserve Banks and a seven - member governing board . All national banks were required to join the system and other banks had the option to join, whereby those banks came under its authority as a quasi-federal regulator . Congress created Federal Reserve notes to provide the nation with an elastic supply of currency . The notes were to be issued to Federal Reserve Banks for subsequent transmittal to banking institutions in accordance with the needs of the public . </P>

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