Driving Out the Money Changers

Charles E. Coughlin

THE SUICIDE OF CAPITALISM

Last Sunday I had occasion to quote a passage from the Old Testament relative to the existence of war bonds and usury.

To refresh your memories the Scripture was taken from the second Book of Esdras.  The prophet Nehemias is addressing himself to the nobles and magistrates of Israel.

In no mild terms he rebukes them vigorously because they persisted in profiteering upon the misery of their countrymen who had just emerged from a war.

He said :  “ And I was exceedingly angry when I heard their cries” (meaning the cries of the people).  “ 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. . . .’ ”

Now, it is generally upheld in modern America that it is sound and legitimate for our Federal Government to issue Liberty Bonds and similar war bonds to those who can afford to buy them.  They are tax free.  They are interest bearing.  Thus they are lucrative to those who can afford to buy them.  But in their analysis it means that the laboring and the farming class of America are bound to pay interest to their wealthier fellow citizens for the privilege of having fought and bled in the last destructive commercial war.  In its logical analysis it further means that the wealthy class of our country, or rather those able to purchase such war bonds have invested in the destructive debts incurred by their fellow citizens.

At the outset, may I draw to your attention the point which I have been stressing so insistently, namely, that we are engaged in dealing with each other in dishonest dollars, which our Federal Bureau of Statistics admits are equivalent anywhere from 163 to 203 cents in every dollar.

I have been pointing out to this audience that we are suffering from a famine of currency money ;  that our real currency has gone into hiding ;  has been traded for bonds ;  and has brought about a condition of affairs where we are starving in the midst of plenty.  Here is proof, then, that the fundamental law of supply and demand upon which economists are eternally harping has been sunk beneath the quicksands of indecision and unintelligence.  Starving in the midst of plenty !

The problem, therefore, which immediately confronts us is to restore currency money to our fellow citizens—not directly, not through any Bolshevik method, but through the channels of trade and commerce, of industry and of agriculture ;  to restore it so that supply and demand can operate.  This is the natural channel of restoration.  Unnatural means such as trying to borrow ourselves out of debt are unsound and fraught with disaster.

To solve this problem I advocated recalling these interest bearing war bonds ;  to pay off their present holders in non-interest bearing currency which would soon find its way into circulation and also save us approximately $400-million per year in taxation.

To this proposal considerable opposition was aroused because it was said my argument was based upon an obsolete doctrine of religion.

I was not so much surprised as one might suspect to discover this attitude among a group of men who conscientiously believe that the practices of religion should find no place outside the walls of a church or perhaps beside the hearth of a home.

For we have long grown accustomed to the modern financial policies which have divorced themselves from Christian charity and, therefore, from the less important teachings of the Master.

But I was greatly surprised when the conclusion was forced upon me that many of our modern bankers and economists failed to understand and to comprehend both the essence and the nature of usury and interest even from an intellectual and rational standpoint.

I fear too many men have succeeded in getting themselves appointed to the chair of bank presidents and to the board of financial directors who were better equipped to manage affairs where less learning, less education and less thoughtfulness are required.

This conclusion has been forced upon us in the last two years.  And because of this the American public has lost confidence in a leadership which is well characterized by the biblical expression of “the blind leading the blind.”

Before confidence can be restored—and our whole financial structure is built upon that one word of confidence—those engaged in the banking profession had better revise the personnel of their staffs and establish at least a primary school of economics within the halls where directors meet to manage the financial affairs of a nation.

If you will bear with me, I shall try to advance an argument from reason to advocate the recalling of interest bearing war bonds.  It is an argument based upon the nature of capitalism and upon the principles underlying interest.

Abstract and dry as it may appear, I am of the opinion that every citizen should acquaint himself with it.

But, before endeavoring to explain the principle which underlies the practice of renting out money for gain, let me rehearse briefly the attitude of the ancient world towards interest.  I shall do this only with the hope of elucidating the major cause of our present chaotic condition ;  only with the hope of pointing out specifically what immediate and scientific procedure must be taken if we seriously entertain any thought of removing the dire economic effects which we are experiencing and which, if allowed to continue, will shortly destroy our system of capitalism.

II

It is true that throughout the Bible the word “usury” is synonymous with the word “interest”.  This identification of the two terms resulted from the fact that in ancient times money was not regarded as being something fruitful, as something which could generate profits in the same way that a grain of wheat buried in the bosom of the earth could generate and multiply other grains of wheat.

Despite this ancient concept of money we discover, however, that about the year 2000 B.C. the practice of charging usury became common amongst the Babylonians.  The interest charged by these people sometimes attained the rate of 33¹/₃ per cent.

To the credit of the Babylonians, their great lawmaker, Hammurabi, outlawed this piratical practice.

In Egypt the custom of charging interest became prevalent about the year 718 B.C. and remained one of their pampered theories of civilization until eventually that nation was subjugated by the Romans.

Remembering that the Jewish people had been led captive into Egypt, it is easy to comprehend how the progeny of Father Abraham readily acquired the evil habit of dealing in usury.

But if you open your Old Testament you will read in the Book of Exodus, the twenty-second chapter, in the Book of Leviticus, the twenty-fifth chapter, and in Deuteronomy, the twenty-third chapter—you will read that the practice of charging interest was regarded as immoral and unsound.

In fact you will find that this economic principle, namely, that money in itself was not fruitful and therefore interest charged on money must not be tolerated—you will find that this economic principle was upheld by the prophets and the kings of Israel and Judea who were very open in their condenmation of usury whenever it appeared.

Thus, in this brief review of the early history of usury and interest it is sufficient to remind this audience that the exaction of money for the hire of money was a pagan custom.

Wherever religion flourished, we find that its leaders always took up afresh the campaign against usury.  This was true for at least twenty-five uninterrupted centuries of the Jewish and Christian history.

While the Greek and Roman philosophers theoretically condemned usury or interest ;  while in the year 412 B.C. it was Abolished by a plebiscite in Rome, yet we find its practice flourishing in the days of the Caesars.

No wonder the great historian of Rome has exclaimed that the system of slavery wedded to the practice of usury planted the seeds of decay which ruined the ancient world.

III

Up to this moment I have been speaking of what took place in the ancient world in order to give us a clearer background on the question of modern interest.

Bear in mind that usury and interest for the ancients were identical terms for the simple ;  single reason that money was considered as something non-productive.

In modern times money is no longer considered non-productive.

In modern times there is an essential distinction between usury and interest.  This distinction arises, if I may bore you with repetitions, from the capitalistic consideration that money is now productive.  Please remember that word.  Money is productive !

Of course, everyone who is interested in the history of banking or in the history of economics well understands that the Catholic Church for twenty uninterrupted centuries has fought relentlessly against usury.  The Church adopted this attitude not only because it was fortified by the many texts of Scripture to which I have just alluded, but because reason itself dictated that no gain may be morally had from a non-productive thing.

Today the Church has not ceased its opposition to this unscientific and destructive usury any more than it has withdrawn its opposition to adultery or to murder.

But with the birth of capitalism, scarcely more than one hundred and twenty-five years ago, theologians, philosophers, economists and scientists began to distinguish between the two words “usury” and “interest”.  The distinction was not one of conventionality.  It was one based upon fact ;  founded upon the nature of things.

Money began to assume a new role in the affairs of life.  While it was still regarded only as a medium of exchange ;  while it was never looked upon as a medium of control, nevertheless, it appeared evident from the nature of the new structure called capitalism that money began to be fruitful, to be productive.

In the past, expenses of government had been conducted through the medium of taxation.  Portions of wheat, of oil, of wine were exacted by the feudal lords from their tenants.  Taxation was levied on the actual possessions of the citizens.  Wars were fought, universities were built, cathedrals were erected, roads were paved, all at the expense of the present wealth of the country.  Seldom was its future wealth ever thought of much less employed.

Perhaps this “pay as you go” method was accountable for the relatively slow progress achieved by our ancestors.

However, the system of capitalism under which we live today was partly predicated upon the theory that now it is possible for the present generation to expand, to build highways and railroads, to cultivate limitless acres of land, to erect churches and shrines of learning, to accomplish a multitude of things in the name of progress mostly at the expense of future generations.  Do you get the difference ?  Formerly it was present money, actual money.  Today it is future money, rented money.

Money, therefore, becomes not only the medium of exchange.  It also becomes the ambassador of future wealth.  It represents the labor to be expended by the future generation borrowed by the present generation.  It presupposes that we of today can use the unborn things of tomorrow—the wheat that is to be grown next year in our fields, the dwelling house which we are unable to pay for today but which we would be able to pay for ten years hence.  Now, instead of waiting for next year’s crop to grow ;  instead of suffering from inconvenience within the walls of a cabin until such labor could have been expended to erect a modern dwelling, capitalism devised a system of progress and of credit and of prosperity by which the present generation can enjoy at least part of the benefits of the future ;  by which a young man need not wait necessarily for old age before he can establish himself in comfort.

Capitalism was a new scientific advance.  The nature of money underwent a change.  Without capitalism and its power to borrow upon the future where would be such tremendous blessings as the Panama Canal, as our mighty railroads, as our paved highways, as our sanitary cities, as our modern dwellings, as those myriad things which we have called into being through our system of credit, through our confidence in the future both of which are identified with this thing called capitalism ?

If we borrow the labor from the future ;  and if the laborer is worthy of his hire, then interest money becomes the wage which we owe the future.

The “pay as you go” policy in ages gone by has been superseded by the “pay as they come due” policy in the age of the present.

In a word, the principal article of the faith of the capitalist is predicated upon the theory of debt, lending and borrowing against the future for productive purposes.  I hope I have made that plain.

In this theory there is nothing immoral, nothing unsound.  Likely it is the best theory that has been advanced for financial purposes.

The Christian Church was quick to realize what had happened.  She was just as quick to distinguish between usury and interest—usury which is identified with sterility and non-productivity ;  and interest which is associated with fecundity and progress.

I know this is frightfully abstract.  But, it is tremendously important to the citizens of this country to comprehend the principles which I am about to lay down.

My friends, the vulgar notion identified with usury is only a half-truth.  Most men, and perhaps not a few bankers as well as statesmen in this as in other nations, are of the improper opinion that usury merely means an overcharge of interest.  I restate that such a notion is only a half-truth, because usury is substantially related to the lending of money for gain on some project which is non-productive.  Of old money could not breed money because it was merely the medium of exchange.

Today money can breed money because it is not only the medium of exchange, it is also the ambassador of future wealth, of future crops, of future labor, which we of the present pledge to repay ;  use and promise not to destroy.

I feel that I am risking much in dealing with this dry as dust discussion.  But it is a risk well taken for I fear that unless we understand the true nature of capitalism, which during the last few years has gone on a financial spree, we are liable to fall into the error that to cure the headache which has followed on the morning after, we had better employ the services of a surgeon to cut it off and replace it with the block-head of Communism.

Then the Scriptural text which tells us that “the last state of this man will be worse than the first” will be quoted with much fervor.

My only aim is to invite capitalism and those who control its destiny to use the structure which our forefathers have builded for us ;  to cease abusing it before the same philosophy which predominated in the minds of well-intentioned prohibitionists regarding the use and abuse of wine and spirituous liquors shall once more crop up in our midst with dire results.

But let us return to our subject.

Now that money is fruitful, it becomes evident that it is just and ethical for the lender of money to be repaid for his services, as it was of old for the farmer who loaned his neighbor a bushel of seed to be repaid not only with the seed with which he accommodated his neighbor but also with a small measure of the fruitful crop which sprang from it.

In other words, interest is associated with loaning money for some productive enterprise—for building a factory designed to produce either the necessities or luxuries of life, for constructing railroads, for making possible tremendous public improvements, for accomplishing all the magnificent things which have marked the progress of this last one hundred and twenty-five years.  Usury, however, is identified with exploitation, with injustice, with the rental of money for non-productive enterprises.

May I emphasize that word “productivity”.  It is essentially associated with the morality of lending money at interest.  It is essentially related to the principle expressed by the prophet of old in his condemnation of usury, to the teachings of the Christian Church for twenty centuries, and to the sound principles of capitalism and political economy which should exist today.

I trust that I have made the principle plain.  It is the same today as in the beginning.  It must be the same tomorrow if our system hopes to endure.  Whatever is productive can continue gaining for its owner even though absent from its owner’s hands.  Such is money which is now considered not only as the medium of exchange but as the ambassador of future wealth.

These propositions are valid independent of the particular order which exists, be it the Mosaic Law, be it early Christian law, be it the law of feudalism, or be it the law of capitalism.

These principles were valid when the Church laid its veto on usury.

IV

But what has happened to capitalism during these last one hundred and twenty-five years or so ?

Why have I entitled this discourse “The Suicide o f Capitalism” ?

The answer is brief.  From the days of the Napoleonic Wars until our own day we have persistently and legally abused interest.  We have been guilty of loaning money for non-productive enterprises.

Is is a notorious fact that the Rothschilds clinging to the Egyptian heresy, disparaging the teachings of their forebears, despising the precepts of their great leader, Moses, mocking the doctrines of the Talmud and the precepts of the Old Testament, these Rothschilds re-established in modern capitalistic life the pagan principle of charging interest on non-productive, or destructive debts.  Under the flag of their leadership there assembled the international bankers of the world who first forsook the principle of gaining interest through productive loans and adopted the heresy of loaning money at interest for destructive purposes.  The horrible, hated word spelled “W-A-R” was the secret of their success.

Practically every war since the birth of Capitalism has been a destructive war.  The wealth of a nation has either been sunk in ships at sea or buried in bullets in the soil of battlefields.  Farms destroyed, cities razed, churches mutilated, industry diverted into false channels of activity, lives sacrificed !  This has been the gruesome record of most wars since the birthday of capitalism.

The Napoleonic Wars, for the most part, as well as the Great War, both absolutely non-productive and destructive, were fought on the basis of bonds and of reparations payable in gold for interest.

Are you not aware that the destructive war which bears the ignominious name of “Great” was organized and fought on gold interest bearing bonds ?  Need I rehearse for you again that due to that Great War we have issued among our own people approximately $12-billion of debt money payable in gold to heal its economic wounds ?

That, my friends, is the greatest modern abuse to which interest has ever been put.  That has been the greatest mistake capitalism has ever made.  That is usury.  In the words of the prophet Nehemias, “That is not good.”  In the mind of every sound economist that is a disastrous thing.

Here we have billions and billions of dollars represented by bonds-interest bearing bonds—which are held by the banks and the wealthy individuals of our nation.  For these bonds bearing interest, we, the people—the farmers, the laborers and the unemployed—must pay tribute to our own fellow citizens for a purpose that was non-productive ;  for the privilege of having speeded up our factories, drained our fields, sacrificed our young men on an altar of destruction.

For having entered so fool-hardily into this spree of spending, of wasting, of destroying, we have accumulated tremendous debts which are rendered more immoral because to these debts there is attached interest ;  because on these debts we have squandered the productive labors of the future.  We have stolen from the future rather than borrowed from it—the future with its wealth that may only be used for productive purposes.

I trust that you are patient with this abstract discussion.  It is necessary, my fellow citizens, that you spur your intellects to that point of comprehending where you can grasp and understand what it is my privilege to tell you.  It was not taught to you in your school days and it will not be printed in your newspapers.

Whether you dwell in an humble farm house ;  whether you are a renter or a home owner in a city ;  whether you sit at ease in your club or in your hotel, you cannot afford to be ignorant of these philosophic facts.

The future salvation of our nation and the continuance of the existence of the system of capitalism depend upon how well we shall grasp this principle and put it into practice.

To quote from a book entitled “The Twelfth Hour of Capitalism” written by the learned Kuno Renatus, we find expressed the ideas which I have been stressing for the last few Sundays.  He says :

“ Relatively young as capitalism still is, it has already entirely forgotten the conditional nature of the law of productivity on which its whole system rests.  ‘ Thou shalt only incur debts for productive purposes.’ ”  Capitalism has been false to itself.

Well have the international bankers of the world learned by rote the heresy which was re-established by the Rothschilds in the early nineteenth century.

While they have succeeded in concentrating wealth in the hands of a few, this concentration of wealth was an immoral effect produced by an immoral cause.  And the cause was the issuing of bonds and the charging of interest on non-productive debts.

Once more I am constrained to quote for you the proof to substantiate this statement.  It is “The Hazard Circular” which originates from the Rothschilds of London in the year 1862 while we were engaged in the Civil War.  It reads as follows :

“ Slavery is likely to be abolished by the war-power, and the chattel slavery destroyed.  This, I and my European friends are in favor of, for slavery is but the owning of labor and carries with it the care for the laborer, while the European plan, led on by England, is for capital to control labor by controlling the wages.  This can be done by controlling the money.  The great debt that capitalists will see to it is made out of the war, must be used as a basis to control the volume of money.  To accomplish this, bonds must be used as a banking basis.  It will not do to allow the greenback, as it is called, to circulate as money any length of time, as we cannot control that.”

There you have it, my friends !  Bonds, debts and interest charged on unproductive enterprises !  You have it in their own confession.

Unproductive debts !

It was the same policy pursued by the international bankers who just a few years ago like sirens played their treacherous symphony of pretended patriotism upon the organ of American hearts while they sold us interest bearing bonds for destructive purposes.  And we in America went mad to buy Liberty Bonds.  God bless the word !  They should have been called “slavery bonds” !

Today the seemingly erudite bankers of our country have forgotten the very essence and substance which surrounds the nature of interest.  They have misconstrued the very fundamentals of their own system of capitalism to such a degree that they erroneously think that whenever money is loaned it must bear interest.  They have failed to distinguish between a productive loan and a destructive loan.

If this principle were thoroughly understood by the it would accomplish more in wiping the curse of war from the face of the earth than all their peace conferences and haphazard Leagues of Nations combined.

No wonder that financiers find themselves, in the words of Montague Norman :  “To have reached such a pass in the condition of human affairs that we know not where to turn.”

This condition has eventuated because unlearned man, into whose hands had fallen the guidance of the system of capitalism, misunderstood and mismanaged the child of their own devisals, preferring to follow the mandates of a group of international bandits who, careless of the peace and tranquillity of the world in which they live, preferred to amass personal gain at the expense of universal suffering.

Now that the world, and especially America, is beginning to reap the furor of the whirlwind, we seem incapable of stemming the cause of our misery.

Especially for the last four years we have listened to leaders whose only suggestions were centered around increasing taxation, lowering wages, instituting moratoria, beating down prices.  These are the childish suggestions which rush to their minds when forgetful of the law of compensation and unmindful of the repercussions of injured justice they refuse to admit the obvious thing, and blind themselves to the unfathomable canyon of unproductive debts into which they are hastening unto their own destruction.

Professor James Mavor, the eminent economist at Toronto University some years ago, once remarked that every war since the days of Napoleon tends to destroy capitalism.

The background for this remark, of course, is identified with the destructivity, the waste, the ruin, the unproductiveness which result from war.

Where are the monarchies which existed in 1914 ?

Spain is regulated by a Socialist Government and so is Portugal.  There is a Socialist premier of France ;  a Socialist premier of England.

Italy has its Mussolini with his Fascism.  Hitler sits in the saddle of German authority.  Stalin has driven Russia to the extreme of Bolshevism.  Our neighbor, Mexico, has gone Communist.  Almost two-thirds of the white race has divorced itself from capitalism.

Are we not conscious of the trend of the times when before our very eyes the political complexion of Europe has been changed over night ?

And has the sagacity of our financial world been so obtuse that it cannot comprehend the cause of this upheaval ?

Is it not attributable more to the immorality, to the unscientific polity of piling debt upon debt with interest bearing bonds for purposes of destruction ?

Oh, that the financiers and economists of this nation would interest themselves in the analysis of this entire situation by reading the 1931 edition of “The Twelfth Hour of Capitalism” by Kuno Renatus who is attempting to defend this system against its own suicidal proclivities !

Ladies and gentlemen, we are somewhat fearful of the radical Communists who prate their doctrines of atheism from the pulpit of their soap boxes.

But we are more fearful of those radicals who sit in the seats of the mighty ;  radicals who despise the fundamental science of their own system have waxed fat under capitalism and are now bent upon killing the goose that lays the golden eggs.

I repeat, we are fearful of them who, perhaps, in their ignorance as well as in their arrogance, clothe with linen and fine purple a body of festered philosophy which ultimately is destined to self-destruction.  And by the linen and fine purple I mean the paid propaganda of dressed up ignorance which spreads itself upon the pages of too many magazines and newspapers.

I am speaking as no prophet but as one who, at least, is schooled in the fundamental science of political economy and in the history of usury and interest ;  I am speaking as one who is sufficiently conversant with the facts existing about us to warn this nation that if it persists in maintaining the immorality of its blood bonds and unsound national war debts, there is only one inevitable outcome.  It is the suicide of capitalism, the birth of Socialism or worse.

Capitalism is on the straight road to ruin, not due to the Socialists, not due to the Communists, but due to itself.  It has turned the routine of production into destruction.  As to that there is no doubt.

The croakings of Communists who would like to begin digging its grave are by no means premature in their rejoicings.  Like a monk in the Trappist Monastery capitalism is daily digging its own grave.

The clock points to five minutes to twelve.  Only a rapid decision can now save capitalism from itself.

Already capitalism, beginning to find no further opportunity for investment that offers security against loss, can think of nothing better to do with its income than to invest it in the destructiveness of war debts.

As Disraeli said years ago in England :  “A country that invests in its war debts is a country decayed.”

May I take this opportunity to publicly applaud those industrialists of our nation who have invested their fortunes in factories and in mills rather than in blood bonds.  Of them be it said that they have risked their all in the future of our country.  Of the others be it noted they have risked nothing, but like leeches have invested in the blood money of its misery.

Of old I remember that Cato, that noble Roman Senator, was accustomed every time he ascended the rostrum to conclude his speeches with “Carthago delenda est—Carthage must be destroyed.”  Today we shall keep incessantly repeating that war bonds must be eliminated.  To them do we attribute the famine of currency money.  By them have been attracted the billions of dollars of this country’s capital from the fortunes of men who have lost faith in our prosperity.  They have invested in loss rather than in gain.  They have diced with death rather than with life.

Oh, there is patriotism for you—patriotism that sells our country short, patriotism that waxes fat upon poverty and destructive debt, patriotism, I suppose, that presumes that its bonds will be honored by a people who have been awakened to the perilous situation in which we find ourselves, and to the diabolical machinations of a group of international bankers whose object is to build up immense fortunes by controlling the wealth of a country at the expense of its war bond issues.  So true is this today that our Federal Government is actually borrowing money from the banks which hold $6-billion of war bonds—borrowing money from the banks to pay them back the interest it owes them on the bonds.

Call this Christianity if you will, or despise it as the utterance of an agitated mind.  But history will inevitably repeat itself.

What has happened to Europe but yesterday cannot be escaped by America tomorrow.

It is apposite for every American despite his creed or his political allegiance to stand four-square back of our courageous President-elect who knowing the secret of capitalism, and fully cognizant that it can only exist if predicated upon productive debts is willing to spend billions of dollars, if necessary, upon the development of Muscle Shoals where a new empire shall have its birth, a new land shall be reclaimed, a new liberty established.

Once more let us rid ourselves of this cursed famine of currency money which blights our progress and which multiplies starvation.  Call it not inflation for that is a lie.  Term it not cheap money for that is a falsity.  Belittle it not, for if you care to argue, argue with the truth.  Unless currency money can be re-circulated and unless we can bring back 100 cents in every dollar, there is little hope for the continued existence of the financial institutions or for our own prosperity.

In conclusion I appeal to the financial leaders of this nation to study the structure upon which their capitalism has been built ;  to operate it according to the laws of reason and of justice ;  and to desist from an activity which preceded the downfall of Babylon, of Egypt, of Rome, and which has been condemned by all the intelligence of the ages.

It is not that I would harm your banks ;  it is not that I would harm any of you with such a public statement.  My friends, I would save you from yourselves—from the suicide of capitalism.