Driving Out the Money Changers
Charles E. Coughlin
THE MARCH OF THE WORKERS
Two weeks ago this afternoon I had occasion to address this audience on the nineteenth article of the proposed Glass bill.
This bill intended to legalize branch banking throughout the entirety of the United States. It aimed eventually to assimilate all the small independent banks throughout any given State into one or two mighty central banks resident in the State’s financial capital. It proposed to make possible the centralization of all banking eventually within the confines of lower Manhattan, New York City.
In a word, this short-sighted bill aimed at cornering all the credit of the nation in the hands of a few. More will be heard about that in the present Senate investigation.
I pointed out how the head of the Catholic Church lamented this concentration of wealth and of credit in the hands of a few and regarded it as one of the major economic evils of our day. I reminded this audience that the Glass proposal originated in the minds of those who for generations have grown fat upon the exploitation of the American public and was being advocated by a certain banking house whose ancestor multiplied his millions in the days of the Civil War by selling guns to the Federal Government ; guns chat did not shoot and could not shoot, thereby prolonging the sufferings of that lurid conflict ; thereby proving his patriotism to posterity in being partly responsible for the needless sacrifice of thousands of men.
If I may digress at the outset of this afternoon’s lecture, let me express a few words relative to war. They come to my mind as associated with this mention of the Civil War. Already you are appraised of the fact that there are existent in this nation almost $12-billion of Government Bonds whose origin is traceable to the commercial war which was fought between the years 1914 and 1918. They are bonds upon which you citizens of this nation are paying approximately 3½ per cent interest both to the banks and to the individuals who hold them against you. Your yearly tribute is almost $400-million in taxes to those who have invested in the debts which we have piled up to make the world safe not for democracy but for chaos, not for prosperity but for depression, not for liberty but for species of economic slavery where money, the medium of exchange, has been transformed into a scourge of control.
Meanwhile, the civilized nations of the world are at present spending approximately $4-billion each year in preparation for the next war—for the next commercial war that appears to be inevitable because we do not know how to trade in justice and in equity with each other ; because the nations persist in upholding a policy of exploitation, of narrow nationalism both abroad and at home.
You are a patient people. But there are times when patience, ceasing to remain a virtue, degenerates into a vice.
You are a childish people who grow enthusiastic over empty victories. You become emotional with tears over needless slaughter. You will permit again, I presume your husbands and your sons to be conscripted body and soul but you lack sufficient courage and leadership and intelligence to demand legislation that if ever another such war shall break upon the tranquillity of our nation not only men shall be conscripted but money and gold must likewise be conscripted to defend our shores. Wake up !
Does it not seem most incongruous that both ex-service men and widows and sons of the slain victims be burdened with war debts when already they have sacrificed the best years of their existence and their most precious possessions before the altars of international, commercial greed ? Does it not appear equitable that if precious lives shall be conscripted, we shall not fail to conscript precious dollars ? Let us cease inflicting with starvation and confiscation a docile people who have borne the burdens of war and now are prostrate upon life’s Calvary Hill—prostrate and exhausted from carrying the Cross of Depression !
That is why the prophet Nehemias said when he beheld the misery of a stricken people—a misery that had been increased by burdensome debts :
“ And I was exceedingly angry when I heard their cry according to these words. And my heart thought with myself; and I rebuked the nobles and magistrates, and said to them : ‘ Do you every one exact usury of your brethren ? ’ And I gathered together a great assembly against them. . . And I said to them : ‘ The thing you do is not good. . . Both I and my brethren, and my servants, have lent money and corn to many. Let us all agree not to call for it again : let us forgive the debt that is owing to us. Restore ye to them this day their fields, and their vineyards, and their oliveyards, and their houses. And the hundredth part of the money, and of the corn, the wine, and the oil, which you were wont to exact of them, give it rather for them.’ ”
So spoke the prophet of old according to the Scriptures of God, when the Jewish nation emerged from a war.
And so do we contrary in modern times according to the philosophy and devisals of godless man.
My friends, the time has come when like Nehemias we shall gather together a great assembly against the nobles of wealth and the magistrates who serve them !
II
But let us return to the Glass bill which supports the theory of the concentration of credit in the hands of a few. After twenty-one precious days of what most news journals called filibustering, this bill passed the Senate in a modified form. It has not yet even got into the halls of the Lower House. Its viciousness was well advertised throughout the nation. Only nine States in the Union which hitherto permitted branch banking will be permitted to continue this practice. So passed the bill in the Senate.
Twenty-one days spent in hatching an empty egg !
Twenty-one days “destroying” the fundamental causes of our national misery !
Twenty-one days in refusing to admit that we are suffering from a famine of money !
Twenty-one priceless days which were crowned by the same Senator Glass who, defeated in the nineteenth article of his bill, introduced a motion on the floor of the Senate to table all inflationary proposals, everyone of which was designed to rid this country of the famine of money. He even refuses to discuss this thing further !
Oftentimes, my friends, I have drawn to your attention the universally known fact that if there is hunger in our midst it is not due to a lack of foodstuffs ; if there are idle factories it is not due to an absence of desire on our part to use their products ; if there were more than one million farms confiscated during the past few months, this may not be attributed either to laziness or to inactivity. The American agricultural class is too industrious to suffer this charge.
It is all due to a stupid, vicious and radical philosophy on the part of certain nobles of wealth that money must be used as a medium of control.
Any proposal to destroy this famine of money is called radical and unsound. Any attempt to restore the purchasing power of the dollar to what it was when these damnable war bonds were launched upon a defenseless people is considered inflationary. By force of logic it is therefore unsound for men to work, it is unsound for a farmer to earn enough from his produce to save his home. It is unsound to clothe the naked, to feed the hungry, to keep open our schools. It is unsound to earn enough money whereby the products of our factories can be purchased. It is doubly unsound and heretical to cease worshipping at the altar of the man-made god of gold.
By the way, did your local newspaper comment upon the fact that any attempt not at inflation, which is a hypocritical word as used in this instance, but at normalization of the American dollar—did your newspapers carry an account that the United States Senate by a vote of 56 to 18 has refused to consider any proposal to increase our currency ?
If not, this is what was carried in the columns of “ The Detroit News” on Thursday, January 26th. Mr. Jay Hayden, its representative in Washington, writes as follows :
“ The Democratic and Republican leaders on Capitol Hill, all opposed to any sort of direct tampering with the currency, now are agreed that there will be no further serious threat of legislation to debase the gold standard, at least until the beginning of the first regular session of the new Congress in January, 1934.”
Well, my friends, there is optimism for you—an optimism that tells you to tighten up your belt ; an optimism that bids you smile and smile and be a devil as you look forward to the prospect of another year of idleness, of another year of profitless crops ; of another year of confiscation ; another year of closed factories ; another year of loss to our industrialists !
Three years ago, in the face of incontestable facts, you were a radical if you even whispered aloud the word “depression.” Today you are worse than a red Bolshevist if you even permit yourself to think that there is such a thing as a famine of money which can be corrected.
III
Is there a famine of money in this country or are we all deceived by a heinous misunderstanding ?
Before answering this question, let me once more remind you that money is divided into three parts. First, there is your basic coin which you do not use directly : this is called gold. Secondly, there is your pocket money represented by silver coins and by paper bills : this is called currency. And, lastly, there is your check money, or your bonds, or your mortgages called credit or debt money.
Now all political economists agree that for every unit of basic money or gold which we possess, we may have in circulation 2½ units of currency money and not more than 12 units of debt money.
This formula of 1 to 2½ to 12 is the formula of sound money just the same as H2O in chemistry is the formula for pure water.
Now in our nation we have approximately $4½-billion of gold. Work out your formula. This permits us to have approximately $11-billion of currency and $54-billion of credit or debt money.
Well what are the facts existing at the present moment in this country ? Instead of having approximately $11-billion of currency, we have in circulation nominally $5-billion of currency. But if you subtract the money that has gone into hiding, the money that has been destroyed, we have no more than $3-billion in real currency.
On the other hand we have the stupendous sum of approximately $235-billion of debt money instead of $54-billion actually supported by our $4½-billion of gold.
The sound and scientific formula has been thrown aside by the modern manipulators of finance. Against all precedent and experience they attempt to tell us that sound money exists in the ratio of 1 to 11/3 to 117—just as sensible to say that the formula for water is C6H5OH, which, by the way, is the chemist’s terminology for carbolic acid. Try to drink that for water and see what happens. And try to use our present formula of money and watch the “march of the workers.”
Now there is actually more than $7-billion of a famine of currency money in this nation. There is approximately an overweight of $180-billion of credit or debt money in circulation. More than we can conservatively carry.
The Senators in Washington know this far better than do you in this audience recognize it. And yet they have the effrontery to tell you through the columns of the press that those who desire inflation, as they term it incorrectly, are seeking to establish an unsound currency, as if it could be more unsound than that which exists today.
The truth of it is the system which they are endeavoring to uphold is so unsound that to it more than to anything else you can attribute the starvation and the idleness and the discontent which are so universal in this nation.
My friends, that is why for several Sundays I have been proposing the recall of the billions of dollars of war bonds. That is why I have been advocating the issuance of currency money in place of these bonds. This would not create on inflation but would only normalize the abnormal currency from which we are suffering. Call that radical if you will. But if you do, likewise call the Word of God radical after what you have heard as written by the Prophet Nehemias.
And still, by a vote of 56 to 18, the omniscient Senate of the United States refuses, under the leadership of Carter Glass, to entertain any consideration aimed at removing this menace !
Of course, he and his supporters are ably seconded by many financial institutions in our midst. For this, they have their personal reasons—devastating and disconcerting reasons which you have not thought of : First, by accepting currency in payment of the bonds, the bankers and the bondholders would be compelled to invest in American property and industry. And secondly, these financiers who are opposing such a measure are playing hand in glove with the foreign debtor nations, hoping first to have our government make a readjustment or partial cancelation of these foreign debts ; and then in 1934 or late in 1933 to permit a revaluation or normalization of debt cut. This, so they think, is the only way possible to collect the private debts owed by foreign governments and individuals to these bankers. But in the meantime, let American people suffer while the bankers play financial politics at the price of our misery !
Do you realize, my friends, that in the banks of this nation the American people have on deposit approximately $45-billion ? Do you realize that these banks altogether have not more than $800-million of actual currency in their vaults ? In other words, they have only one-sixtieth of the money on hand which you deposited with them. This is the information made known to us in the pages of the Congressional Record for Jan. 24, 1933.
Of course, they have Government Bonds at par value, and municipal bonds, railroad and insurance bonds not at par value. Of course, their vaults are filled with first mortgages and with notes payable, all of which have depreciated. But from whom could these bankers expect to redeem in actual currency their bonds and their stocks and their notes to pay the American people who have deposited $45-billion with them ?
If the patient people of this nation have lost confidence in a Government whose Congress, according to the Constitution, has the right to coin and to regulate the value of money, and if the right, therefore the duty—a duty that they have tabled and side-tracked and refused to perform—if they have lost confidence, it is because this Congress has not only NOT exercised its duty, but now has gone on record with a resolution to discuss the normalization of the American dollar nevermore !
That is a most serious situation. It means that hardly a single bank in this country dares to lend a sizable sum of money over a period of more than a few days. It means that business is stagnant. It means that profits are a thing of the past. It means that debts must increase. It means that foreclosures and confiscations must continue. It means that our great industrial plants with their huge investments are seriously crippled.
How long can the banks of this nation survive if this famine of currency money continues ?
There are approximately 19,000 banking institutions within the boundaries of our country. In the year ending June 30th deposits to the amount of 11,500,000,000 were withdrawn from them. One more such critical year and it would require twenty Reconstruction Finance Corporations to keep open the doors even of the 42 banks of this country which hold 32 per cent of all its deposits or of the 195 banks which hold 47 per cent of the nation’s deposits.
I quote these astounding figures as a basis of argument against the mighty financial institutions of this nation who maintain so vigorously that we require no normalization of our currency, and yet who should be the first to recommend it if they desire salvation.
IV
The people are learning quickly.
The farmers of this nation realize that once before in our history we have had normalization of our currency. They realize that the Federal Reserve policy put into effect in 1920 deflated agriculture $32-billion—$18-billion of it in land values and the balance of it on the crops of 1920 and 1921.
Nineteen hundred and twenty was the year when we had the largest volume of money in circulation. It was the year when the dollar reached its lowest buying power. In fact at that date a dollar was worth only 64 cents.
Here is the story : Those were the days when the owners of Government Bonds were dissatisfied with the purchasing power of the dollar.
Thus, beginning with 1921 the bondholders and the financial powers of this country took out of circulation more than $100-million every month for seventeen months with the result that the buying power of the dollar increased. By the year 1926 the dollar became worth 100 cents.
Had their program of inflation been concluded in the year 1926 there would have been no complaint. It would have succeeded only in normalizing the dollar. But by 1929 the dollar became worth $1.05. In 1930 it in creased to $1.15. And in 1932 it reached the price of $1.54. Today your dollar is conservatively worth $1.60. Today, therefore, we are suffering from a dishonest dollar !
As far as the farmer is concerned, the United States Department of Labor informs us that the dollar is approximately worth $2.03 in farm commodities. In other words due to the inflation of the dollar, the farmers of this nation are paying $203.00 for every 100.00 worth of taxes they owe, for every $100.00 on the mortgage which they owe. It also means that their 5 per cent interest has doubled to 10 per cent.
There, my friends, is a real demonstration of what inflation means. To reduce the 203 cent dollar to a 100 cent dollar by the issuance of the currency money which has been taken out of circulation and sunk in bonds is what we mean by the normalization of the dollar.
But we are told that we must not tamper with the fictitious value of gold.
Now, when the dollar was equivalent to 60 cents or thereabouts, I remember how the bondholders and the influential public utilities who had contracts to sell light and power for so much per kilowatt ; to carry passengers on street railways and on steam railways for so much either per ride or per mile—when these contracts were working to the disadvantage of the owners of street railways and public utilities, what happened ?
Bondholders and bankers approached the Supreme Court to have these contracts nullified on the grounds, to put it in plain English, that if the said contracts were maintained no profit would accrue either to the bondholders or to the public utilities themselves.
What did the Supreme Court decide when this case was presented to them ? It said that the contracts made between the general public and the public utilities were not binding. They decreed that the power to regulate can never be bartered away nor traded away.
Now when the shoe is on the other foot ; when the dollar is worth anywhere from 156 cents to 203 cents, these same gentlemen oppose its normalization through the regulation and revaluation of our currency. It was a blessed thing to regulate the value of money in 1920. But to tamper with it in 1933 becomes a financial mortal sin.
Let us not become stampeded by catch words or by obsolete phrases unscientifically spoken.
Let not the worshippers of the dishonest dollar deceive us by singing the battle hymn of sound money at one moment and then by practicing the policies of brigands at the next.
Sound money, as far as an American is concerned, means 100 cents in one dollar, not 160, not 203, but 100 cents. Unsound money is that which exists today and which cannot be ousted from our midst until the formula of the ages is readopted—1 to 2½ to 12. Otherwise your money is as carbolic acid is to water. Today it is 1 to 11/3 to 117.
Just yesterday Sir Reginald McKenna, perhaps, the greatest living economist and banker in Great Britain, has gone on record as stating :
“ Controlled inflation, from being a remedy of fools or knaves, has become widely regarded as the best solution of our troubles, since it has become realized that a substantial rise in wholesale prices need have no more than a slight effect upon the cost of living.”
It is the only sensible way and logical way to revaluate our gold ounce. And without revaluation there is only one thing left—at least three months ago there was only one thing left—and that was repudiation.
V
Are you not apprized of what is happening in Iowa, in Illinois, in Ohio, in Minnesota, in Michigan, and in the middle-west generally ? These men have rebelled against the dishonest dollar and those who attempt to use it.
Which one of you will condemn those hard thinking, hard working sons of toil from protecting their homes ; from rising in revolution, if you like against the iniquities of a law and man-made contracts that under present circumstances have proven themselves immoral, unsound, unchristian and un-American ?
More power to those farmers ! They still retain that spirit of independence, that love of liberty, and that determination for fair play and justice which characterized the patriots of 1776 who for a lesser reason rose up in mighty indignation against a system of taxation that was not half so iniquitous as this system of exploitation which stamps the financial structure of our present life.
The precedent of the Supreme Court of the United States is on the side of the farmers. The fundamentals of the moral law of God support them.
We have had enough of evictions. We have been surfeited with confiscations. We have been scourged long enough at the pillar of obsolete contracts and mortgages.
And the law of self-preservation, the first law that God gave to man and which ante-dates any man-made law, comes rushing with its support to the farmers in their righteous struggle.
A month ago or more we were satisfied with announcing the slogan of “revaluation or repudiation.” But within a few months from today that slogan will be changed to “revaluation or revolution” simply because the American people refuse to pay their debts with dishonest dollars.
Let me read you an editorial which appeared in “The New York World Telegram” dated Thursday, January 26th. It, too, is entitled “Workers on the March.” It reads as follows :
“ When President Green of the conservative American Federation of Labor declares that his legion of 2,500,000 unionists ‘soon will be on the march’ for ‘perhaps such a battle as no labor movement has fought before’ the government and business leaders of the country must listen.
“ When President Edward O’Neal, of the even more conservative American Farm Bureau Federation, says :—‘Unless something is done for the American farmer we will have revolution in the countryside in less than twelve months’ the government and business leaders of the country cannot ignore, the warning.
“ Yesterday both of these spokesmen of the toilers of the city and the farm unfurled their battle flags.
“ When, last fall, Mr. Green on the federation’s convention platform in Cincinnati threatened the use of ‘forceful methods’ in achieving the thirty-hour week and higher wages, his words had an ominous sound. Criticism broke forth. Censure did not drive him to cover, for in an interview in Nation’s Business, organ of the United States Chamber of Commerce, he repeats that he meant what he said and more.
“ ‘We shall,” he said, ‘fight with every legitimate weapon at our command to restore the kind of America in which a man can have a chance in his own right. There has been a fear that we are in earnest. Let me use this opportunity to double rivet the assurance that we are in earnest.’
“ American labor, he explains, has not gone wild ; it simply has come to what it is ‘determined shall be the end of the road of suffering.’
“ The significance of this defiant note is not that there is a new Mr. Green speaking. It is that a new union labor is speaking. Mr. Green never has marched ahead of his rank and file. That he now speaks militantly, desperately, shows that he has been forced by his members to do so.
“ The same is true of Mr. O’Neal and his farmers.
“ These warnings are not bluff. Behind them is the explosive desperation of a vast majority of American citizens.”
If that is not enough to disturb the smug complacency of individuals who think that man-made laws and man-made contracts take precedence over God’s laws and God’s contracts, we have come into desperate days.
You dare not impose more taxes upon a people whose back already has been bowed to mother earth. You dare not permit to continue the starvation and the suffering, the unemployment and the distress which is so universal in a country that is teeming with the real wealth of the soil, the real wealth of industry and the real wealth of manhood.
Cease prating of what happened to Germany when that nation had recourse to the printing press to flood its country with worthless marks. Germany and the United States are poles apart. Germany had no gold upon which to predicate the printing of its worthless paper money. America has more gold than all Europe put together ; possesses so much gold that her currency money today is at least one and one-half times short of what it should be according to the Federal Reserve Act passed in 1918.
Who is unconstitutional ? Who is illegal ? Those who seek redress through revaluation or normalization, or those who, to build up their argument’s to, perpetuate oppression, twist truth and deform facts to suit their purpose ?
VI
My fellow Americans, you are being victimized by misinformation which flows like poison into your arteries from the hearts of those who blindly cling to the presumed inviolability of bonds and contracts and deified gold. Once more human life and human rights are being conscripted on the battle front of depression to become food and fodder for the protection of a financial formula that is unscientific, unchristian and inhuman.
All that the prophet Nehemias said of old can be assigned to the scrap heap or to the gutter. All that Christ said, too, can be given to the gods of war as useless and poetic because man’s way has become more superior and more expedient than God’s.
Perhaps the United States Senate can table any resolution that aims at inflation, as they call it, but it cannot eradicate the determination from the minds of the American public who today are aroused to demand justice instead of impudence from their duly elected representatives.
In bestowing life upon the creature man, Almighty God likewise bestowed upon him the right to sustain his life by the sweat of his brow. The omniscient Creator conferred upon no man or upon no group of men the license to exploit, to starve or to curtail unjustly the efforts of an individual much less the activities of the agricultural and laboring class of a nation for selfish purposes.
The laborer is worthy of his hire. And the people of this country have a right to the products of this country. That right cannot be taken away from them by the obstruction of a man-made law of antiquated gold. It is the first duty of this or any other Government to erect laws and statues which will render possible and feasible the employment of every individual citizen who is honest enough to work. That is the business of every state.
That is Catholic doctrine—not socialism, not radicalism.
That is a doctrine that was born in the crib of Bethlehem and was sealed with the ruddy drops of Christ’s blood upon the cross of Calvary long before Karl Marx and his atheism ever attempted to gain the leadership of an injured people, and long before any act of Congress decided once and for all that gold is wealth, that gold has a certain value, while men and things that sustain their lives are valueless.