Driving Out the Money Changers

Charles E. Coughlin
Over a National Network
1933

Foreword

This book contains the chief lectures delivered from the Shrine of the Little Flower beginning January 1st and ending April 16th, 1933.

It is a complement of a previous book published last year entitled “Eight Discourses on the Gold Standard.”

It was my aim to treat as plainly as possible the vital moral-economic financial condition which, more than anything else in a material sense, has caused our present misery.

The principles which are applied throughout these discourses are based on the teachings of Leo XIII and Pius XI. Contrary to a subversive propaganda which is widely spread throughout our country, be it stated that a clergyman has not only the right but also the duty to speak on such subjects.

Throughout these lectures which were broadcast through the voluntary subscriptions of Catholics and Protestants, Jews and Gentiles, there is a purposeful development of thought which centers around the one idea of economic justice and liberty.

Today we are living in the hopes of a new deal.  This hope is founded not only upon the promise of such but upon the actual presence of new men without whom the new deal would be impossible.

The people of this nation at present are filled with confidence and with determination.

The confidence is vested in our President, Franklin D. Roosevelt.

The determination is founded so securely that only deeds and not words will suffice to satisfy the nation.

It is my opinion that our confidence has not been misplaced.  It is also my observation that unless this economic liberty can be quickly achieved under our present system of government, there is no other prospect facing us than to alter that system if necessary in order to obtain justice and equity.

HONEST LEGISLATION ?

For three years the undeniable facts which I have expressed over this radio have been well known to the Seventy-Second Congress of the United States.  Sad to say have been artfully side-stepped by this august body.

Our national debt has risen to $235-billion.  Our losses directly due to the depression have approximated $265-billion—$96-billion more than the total cost of the World War.

Suffering and sorrow, idleness and poverty we submit to the outrages of a money famine.

Our leaders have become obsessed with the cult of gold worshipping.  Its sanctity must not be violated even though millions upon millions of victims are offered up within its fiery furnace.

II

For two months this last session of our Seventy-Second Congress has proven itself more interested, I fear, in beer than in bread ;  more interested in the liberation of the Philippines than in the restoration of prosperity to the United States. Meanwhile it becomes disheartening to read how our Representatives will spend time discussing everything from the correct spelling of Puerto Rico to the placing of a label, if any, that will be glued upon a can of macaroni !

Yet is becomes absolutely alarming when we read of the most dangerous discussion of all, which found its way to the floor of our Senate, in the nature of the Glass bank bill.  It takes its name from Senator Carter Glass of Virginia.

Every person in this nation realizes that from an economic angle, our depression was primarily caused by an injudicious, unintelligent and sometimes immoral financial system which not only produced a famine of money but which destroyed our credit and which almost has succeeded in reducing our nation to bankruptcy.

There must be a substantial corrective for these financial abuses which were responsible for marketing questionable bonds ;  for gambling with depositors’ money ;  and for turning the stock exchange of Wall Street into a resort alongside of which Monte Carlo and the corner crap game are sanctimonious exercises of virtue.

Now, instead of facing this problem with courage and with vision, it has been side-stepped and neglected.

In its place there has been injected into the discussion of the Senate the smoke screen called the Glass bill.  It is a bill, which in many of its articles, is commendatory, but which in its nineteenth article is the most subtley vicious bill that the entire Seventy-Second Congress has ever considered.

It is only just that those in this audience be appraised of the importance associated with the nineteenth article of the Glass bill in order to learn of the desperate effort being made by the organized minority to perpetuate their plunder.

Briefly, this bill pretends to abolish the financial abuses from which you have suffered so grievously, by establishing branch banks.  Briefly, it looks forward to the destruction of small independent local banks ;  it visualizes the establishment of great central banks with branches throughout the State ;  it presupposes the existence of the same banking system which we have today, including all its inherent abuses.

But before explaining any portion of this nineteenth article, let me first remind you that one of the current complaints which was voiced by Pius XI relative to the financial system of our civilization is identified with the cruel, unjust concentration and manipulation of credit in the hands of a few.

That this Glass bill in its nineteenth article is endeavoring to perpetuate this abuse is evident.

III

Before criticizing, let us pause for a moment to discover the history of this brilliant idea which, according to its sponsors, will eliminate our financial worries.

Scripture tells us that an evil tree cannot produce good fruit.  Well let us examine the tree.

The announcement of this most important theory is recorded in The New York Times under the date of December 8th, 1932.  It shall go down in the annals of politics as the climax of achievement ;  as the high water mark of do-nothingism which characterized the golden Mellon age through which we have passed.

Let me read it to you as it appeared in the paper.

“ Ogden Mills Urges a Move for Branch Banking” —that is the headline.  The article reads as follows :

“ In dealing with reforms in, the banking situation Mr. Mills suggested immediate authorization for trade area branch banking as a temporary expedient to aid national banks, and recommended that a joint committee of Congress study all available data with a view to legislation ‘that will remedy the fundamental weakness of our banking structure’.”

Secretary Mills is quoted as follows :

“ The developments of the last decade”, says he, “ have uncovered unmistakable defects in the American banking structure.  They constitute a source of weakness in our economic life and have been an important factor in the present depression.  They call for fundamental reforms.”

Mr. Mills agrees that the banking system has been “an important factor” in this poverty, this idleness, this confiscation that surrounds us.

Mirabile dictu !  What a wonderful expression !

The reform which he suggested in his own words is this :

“ I renew the recommendation looking to the extension of branch banking.”

This, then, is the curative for the financial sins which have demoralized our nation.  This is the restorative of peace and contentment and prosperity in our land !

Well has Mr. Ogden Mills lived up to his reputation.  On the eve of his departure from, perhaps, the most important cabinet post in our Government, he sings his swan song in the same key and in the same pitch which characterized the Melody of Mellon for a period of nearly 14 years ;  the chorus of which always ends with the couplet :  “ financial welfare is preferred to human welfare.”

If you trace it back far enough, perhaps this song will be found to originate in the heart of that great Tin Pan Alley known as Wall Street.

To be exact, it was sometime about the month of March, 1930, when Mr. Thomas W. Lamont, of the firm of J.P. Morgan and Company, expressed the identical idea that he was in favor of branch banking as the method of banking reform.  Thus you plainly see, my friends, that the music is by Mills ;  the lyric by J.P. Morgan and Company; and the obligato is by Carter Glass.

All this reminds me of a convention held inside the walls of Sing Sing Prison.  Everyone admitted that there was need for prison reform.  The citizens outside were complaining because of the laxity of the prison and because of the effeminancy of its rules.  The prisoners were complaining because of the raspiness of the radio.  Their laundry, so they charged, was returned improperly ironed.  Their food was not so tasty as that served in the better hotels.

Well, the outcome of it all was that the prisoners themselves were actually devising ways and means to reform the iniquitious system of prison punishment.

I am sure that the authorities of New York State Department would be as ready to adopt the decisions of the prisoners as the people of the United States would be willing to acquiesce to the suggestions made by those who, more than any other group, have caused this depression.

Now, let us see (since we have traced this fruit back to the original tree from which it has fallen) if this brilliant suggestion is in keeping with the spirit of the new day.

Speaking to the New York Legislature in January, 1930, President-elect Roosevelt issued a statement which is counter to the proposal of the nineteenth article of the Glass bill, the bill that proposes to abolish all our abuses by establishing branch banks.  He said :

“ We must by law maintain the principle that banks are a definite benefit to the individual community.  That is why a concentration of all banking resources and all banking control in one spot or in a few hands is contrary to a sound public policy.

“ We want strong and stable banks, and at the same time each community must be enabled to keep control of its own money within its own borders.”

That, my friends, was the opinion publicly expressed by the gentleman whom we have elected to give us a “new deal”.  We have no reason to believe that Mr. Roosevelt has altered this conviction in the face of the fact that branch banking is no curative to the financial ills which have aided and abetted the famine of money now threatening to overwhelm us.

Branch banking is no guarantee for the money of the depositor.  I dare say that the 4,850 failures which have marked the history of our financial institutions during the past few months would not have amounted to such great numbers had they not been encouraged both directly and indirectly through the initial failure of one of the great branch banks in the City of New York.

Do not forget that the first important bank failure in this country during the present depression was the Bank of the United States with its 59 branches.  It was followed by the Federal National Bank of Boston with its 8 branches.  In succession there are chronicled the oiher branch bank failures, namely, the Banco Kentucky group, with 7 branches ;  the A.B. Banks of Arkansas with 27 branches ;  the Manley chain of Georgia with 87 branches ;  the Bain Banks of Chicago with 12 branches ;  the Bankers’ Trust Company of Pennsylvania, with 20 branches ;  the United States National Bank of Los Angeles with 8 branches ;  the Security Home Trust of Toledo with 10 branches ;  the Peoples State Bank of South Carolina with 44 branches ;  the Arizona State Bank with 5 branches ;  the Foreman National group of Chicago with 6 branches.

Of course there is no necessity of even mentioning the other branch banking institutions, some of which would most certainly have failed had not the Reconstruction Finance Corporation poured millions of dollars into their vaults in preference to helping the small, individual banks such as we had in the municipality where I live.  Every bank in the City of Royal Oak exploded with disastrous effects to the depositors.

Branch banking which is confined to a city or to a municipality is in no wise harmful.  But when it is extended to the boundary lines of the State, it simply means the concentration of the wealth and of the credit of that State in the hands of a few for them to control ;  for them to use.

How in the name of justice, can the little farmer living at the extremity of the State line ask for a loan from some big bank in the State Capital.  He is not known and he is not cared for.  Certainly the farmers should have learned this lesson after three years of having been neglected.

More than that, it means that through the subterranean channels of the financial system which has been established in this nation it will be rendered more feasible for the several great national and international banks in lower Manhattan to control the credit of the entire country.

The advocates of this system of branch banking will point to Canada and to its financial institutions as a paragon of perfection.

Fortunately for the citizens of Canada their financial institutions are still banks where the depositors’ money is practically guaranteed by the Government ;  where the depositors’ money is limited to investment and not to speculation as happens in ninety-nine cases out of a hundred in this country where some branch banks have too often become bucket-shops and peddlers of worthless securities.  And to extend them throughout the United States is the cure of the Glass bill !

Already we have learned of the origin of national banks in this nation.  We are not ignorant of the fact that despite the Constitution of our country which maintains the right of Congress “to coin and regulate the value of money,” this substantial right was handed over fifteen years after our country was founded to private financiers and private corporations whose printed paper money we are forced to use in order that they may acquire profits, and from whom we are asked to beg credit.

We are not ignorant of the fact that the originators of national banks in this nation themselves subscribed to the theory that their institutions grow fat on bonds and blood debts which arise from war.  That is a matter of history.

And now like a simple little Red Riding Hood, do you think that the American public, bled white by this war of golden bullets, will stand before this wolf of the Glass bill and say in all simplicity :  “ What great teeth you have, grandmother! ”

If it should, the answer will be as of old :  “ The better to eat you with, my child ! ”

IV

Perhaps it would be appropriate to mention at this moment another attempt on the part of the banking monopoly of this United States to put through a bill similar to the proposed Glass bill.

I know that I am speaking heretically so far as the dogmatic teachings of bankers are concerned.  But it is about time somebody does.

The year is 1907.  The chief actors in the drama are Charles Augustus Lindbergh, father of the famous aviator, Senator Aldrich, and Congressman Vreeland, the latter two being identified with mighty New York banks.

It was well known that ever since the Civil War, Congress had allowed the bankers to completely control financial legislation.  This is what Congressman Lindbergh, the father of the “Lone Eagle,” had maintained.  This is what every one knows who is acquainted with the history of our country.

Now in 1907 our nation was in the throes of a money panic.

Hundreds of millions of dollars of watered stock and of depreciated bonds were stored away in the vaults of the great banks of this country.

Day by day the market value of these bonds and stocks was being depreciated.  Day by day the owners of national banks were becoming more and more excited because of the possibility and probability of their financial structures tumbling upon them.

At last they conceived a plan whereby they could be saved.  Here is the plan :

Cooperating with each other, Senator Aldrich and Congressman Vreeland proposed what was known as the “Emergency Law” to the United States House of Representatives.  The nature of this law was to permit national banks to deposit not only Government Bonds with the Government for their privilege of printing money at the face value of these bonds, but also the privilege of depositing industrial bonds and municipal bonds in our Treasury with the right to print money against their face value.

What a calamity had that Bill been passed !  Some of these industrial and municipal bonds were actually selling on the open market in 1907 for fifteen cents on the dollar and few of them as high as fifty cents on the dollar !

What a proposal to permit the bankers to print paper money not at the market value of their deposited municipal bonds but at their face value !

This bill was rushed through Congress.  Our representatives evidently were blinded to the fact that it was giving the national bank corporations of this nation the right to extend not only rubber credit money but to print rubber currency money.

Into the fray rushed Charles Augustus Lindbergh, who, in one sense is a greater hero in the eyes of this nation than is his illustrious son.

To this noble father and patriotic Congressman we owe the thanks of a grateful nation for exposing this terrible, nefarious plan which would have made a despot of Wall Street and a slave land of America.

Twenty-six years later we are witnessing an attempt on the part of this same group to do a similar thing by monopolyzing in an indirect manner the banking facilities of the nation along with its credit.  And that is something that the majority of you did not even suspect because they do not advertise.

Now as of then the Glass bill is being proposed to us as was the Aldrich-Vreeland bill as the means of rescuing a nation from a famine of money.

Now as of then, the bloated branch banks, wish to rewrite their bank stocks at double their value and enter them as such upon their books.  A system of dropsical bookkeeping !

But now as of then, some new Charles Augustus Lindbergh, please God, shall have the courage to rise in the seats both of Congress and of the Senate to prevent this “lame duck” assembly from rushing through in the last few hours of its mortal existence its so-called curative for the financial ills of the nation.

A “lame duck” Congress and Senate that for the last few years have closed their eyes to the starving, to the unemployed, to the distressed citizens of this nation while telling us that there was no depression and while preaching to us that prosperity was just around the corner !  At its best, the Glass bill is a half measure.  Like a half truth, which is worse than a whole lie, it bodes no good !

If the House of Morgan advocated such a measure in the year 1930 ;  if Ogden Mills proposes it in the year 1932, the people of the United States know from what tree this fruit has come.  They prefer to await the policies of their newly elected President and Congress who soon shall assume office ;  who promised to bestow upon every one of us a fair and equitable deal.

Thus, while people are starving to death ;  while industry is prostrate ;  while foreign trade has vanished ;  while the values of real estate have been decimated ;  while to every school boy in this nation it is a matter of common knowledge that we are suffering from a money famine mostly due to the manipulation of the mighty banks which are greatly responsible for flooding the country with worthless credit money and with spurious bonds, we witness a group of Senators today—pretending that they represent the people—a group of them devising ways and means to help, to protect and to extend the power of this financial octopus whose tentacles are grasping at the throat of our nation.

No wonder that the Independent Bankers Association has gone on record in a letter to Senator Thomas Schall with the following statement.  It says :

“ If section 19 of the Glass bill passes, it is going to place in the hands of the very few the entire credit machinery of the Nation.  Section 19 is so utterly opposed to the spirit of the times that it is bound to bring ruination to its sponsors.  The large banking interests o f the country should realize that legislation is becoming more and more socialistic ;  that if banking is concentrated into the hands of the few, the rank and file will eventually rise up against them ;  that it will give the common people something to shoot at ;  and that eventually the structure, which they are trying to raise to get domination of the credits of the country, will collapse, carrying the sponsors to ruination.”

If mass-productionism is a menace to our country the way it is being handled today, mass-financialism should hold greater terrors.

Certainly the American people are looking forward to a financial reform, but not the kind of reform that is couched in words of half truth.  The American people are not overly anxious that this reform come from the selfish suggestions which emanate from lower Manhattan and which are fostered by certain legislators who are devotees of the principle that this nation shall remain a financial Republic.

Concentration of wealth in the hands of a few can no longer be tolerated.

Concentration of credit by a small group must no longer exist !  These are reforms which we demand along with a sane inflation of money.

Thus, if there are mismanaged small banks existing throughout the State or throughout the nation, that is no argument why their charters eventually should be assimilated by mismanaged giant banks of the great cities through the agency of the Glass bill which refuses to rescue us from the real financial abuses.

It is about time, my friends, that we have some honest legislation.  It is about time that this wizardry of Wall Street and this double acting, half truth bill and measure similar to the Glass bill be eradicated from the seats of the Senate and from the Halls of Congress.  Lincoln did not say in vain that “this nation is of the people, by the people and for the people.”

Lincoln’s words will be put into practice despite what it is going to cost us.

The theories that have been expressed are rather peculiar.

For instance, the Glass bill subscribes to the principle that prosperity is associated with the thought that our national finances should be in the hands of a few.  Do you not see that it is identical with the principle stated by some, especially the adherents of George III in 1775, that our national politics should be controlled by a few ?  Both theories are counter to the democratic principles upon which our nation was founded.  Both theories are identified with an oligarchical form of government and with the error which we are striving to eliminate, namely, the concentration of wealth and of power in the hands of a few.

Today it is imperative that we de-centralize this wealth and this power of else the Socialists will do it for us.  Today we are struggling to destroy the famine of money by a policy of sound inflation.  Today we are aiming at restoring honest wages, honest prices and honest dollars through legitimate and constitutional means.  We are surfeited with bank failures, with cut wages, with increased taxation and with a financial system which regards money as the medium of control and not of exchange.

V

May I quote for you the sapient remarks of the revered ex-Senator Robert Owen, than whom no greater philosopher on finance exists in our nation.

He is an ardent advocate of sound inflation as the immediate salvation of our country.

He says :

“ It is futile to say that there is plenty of money and credit in our country when the money is congealed and the credit is frozen.

“ Those of you who desire to extend more currency money to the nation will be accused of advocating phony dollars.  You will be met with the cry of inflation.  But inflation means an unjustified expansion.  You are not inflating—you are expanding because of a great national exigency.

“ You will be met with the charge of fiat money.  But fiat money is money not redeemable in gold.  And the money you propose is redeemable in gold.

“ You will be met with the charge that there is plenty of money.  This is obviously untrue because the currency money of our nation has gone into hiding.

“ We all believe in an honest, sound dollar.  But the present dollar is not an honest dollar.  It is a dollar buying fifty cents more in commodities and 500% more in stocks and other forms of property than normal.  It is a thief stealing the profit of the debtor under the color and protection of law ;  it is stealing the savings of lifetimes from innocent people who are the victims of a financial mismanagement or worse.”

It is not pleasant to criticize those into whose hands the destiny of this nation has been placed.

But because we have had too much concentration of credit ;  because we have been victimized by a financial system which has brought about a famine of dollars ;  because we have grown weary of successful attempts to dodge the real issue of the day, it is about time that we demand our representatives to represent us and cease following the philosophy of the high priests of a broken down system of finance.

Not only the 12-million idle workmen ;  not only the 30-million partially employed laborers ;  not only the 40-million farmers and their families ;  not only the small banker and the industrialist whose factory is closed—every citizen is demanding legislation which will restore honest dollars to the entire nation.  We are weary of attempted legislation which aims at strengthening the position of those who control hoarded dollars and hoarded credit.

We are demanding legislation that will have some milk of human kindness in it ;  that will have some drop of God’s justice in it to care for a people of a land that is teeming with wealth, filled with wheat and corn, crowded with factories, all of which, as far as we are concerned, may as well be in the depths of the Atlantic Ocean as long as we are forced to worship at the altar of this god of gold.

Surely we are asking for nothing that is un-Christian or unconstitutional when we petition for work, when we raise our voices for an opportunity to pay our just debts or when we ask a guarantee for the savings of a lifetime which perforce we must deposit in some bank.

That there is a way to assist those Congressmen and Senators, who are fighting desperately to remove the cause of our sorrow, our poverty, our idleness, is certain.

Thus, I am trying to enlist your moral support ;  I am trying to marshal, into a solid army of action every voting citizen in this audience.

By your support I mean the assistance not only of every man but especially that of every woman in this audience.

Are you satisfied to suffer, to grumble, to raise your voice in childish complaint ?

You country bankers know not where to turn.  You industrialists are living on the bread of hope and on the milk of optimism not knowing how you can honestly pay your dividends or your taxes because the purchasing power of our nation has been ruined.

You farmers have become slaves of the soil forced to produce your wheat and your cotton, to raise your hogs, your sheep and your cattle at a loss ;  forced to face the sheriff who, perhaps, tomorrow morning will be on his way to put you out of your homestead.

You laborers in the city, I suppose, are satisfied to work incessantly at starvation wages ;  to raise your children in want and poverty ;  or to join the army of the unemployed.

You home owners and you landlords are happy, I presume, to see the value of our real estate melt under your eyes and the cost of your taxes mount month by month.

You women of this land, are you not anxious to help in this unequalled contest ;  are all of you willing to stand idly by ?  I believe the time has come to act in unison and in a constitutional manner.