History of the Federal Reserve

A powerful cartel of financiers held a meeting at Jekyll Island in Brunswick, Georgia in 1910 to protect themselves from banking losses by using tax revenue instead of their own money.

Here were their challenges:

1. How to stop the growing influence of small, rival banks and to insure that control over the nation’s financial resources would remain in the hands of those present;
2. How to make the money supply more elastic in order to reverse the trend of private capital formation and to recapture the industrial loan market;
3. How to pool the meager reserves of the nation’s banks into one large reserve so that all banks will be motivated to follow the same loan-to-deposit ratios. This would protect at least some of them from currency drains and bank runs;
4. Should this lead eventually to the collapse of the whole banking system, then how to shift the losses from the owners of the banks to the taxpayers. [my emphasis]
5. How to convince Congress that the scheme was a measure to protect the public.

The cartel would operate as a central bank.

Source: The Creature from Jekyll Island. A Second Look at the Federal Reserve. 4th Edition. (2002) by G. Edward Griffin.