Driving Out the Money Changers
Charles E. Coughlin
THE TRUTH MUST BE TOLD
I
Of course there is no topic for discussion which currently bears half the interest as does the financial question.
It is one which is far reaching. The past is strewn with the wreckage of mismanaged banking institutions. The future is lighted by the lamp of a new hope, of a new deal, which gives promise of the return of a sane prosperity.
Naturally, the present is disturbed. It is a period of transformation of social conflict. Old prejudices, worn out systems, impractical methods and immoral ideals have been washed aside by the flood-stream of righteous indignation.
On the one side tenaciously clinging to the past were the speculative bankers, the credit inflationists, the gamblers with other peoples’ money. Opposing them were the battalions of the exploited—the deceived investors, the small depositors, the anxious industrialists, the hard pressed merchants, the laborer and the farmer.
The inevitable happened !
Armed with the weapons of truthful facts, the exploited rose in their might to overwhelm in the first pitched battle the forces of the exploiters. History will record this victory as the birthday of the first Federal controlled bank in the United States of America.
As far as Detroit is concerned, its two most important old banks are hopelessly insolvent—$150-million insolvent according to the Detroit Times, which is now about to run an expose. They have gone forever.
Just as all important sections of the United States have been interested in this conflict, so, too, they will be doubly interested in its aftermath. Now is the time to repeal the false ideals of the old system.
Now is the time to insist, first, that stockholders in these old banks shall pay their double liability to the depositors as demanded by the law of the land.
Now is the propitious time to outlaw once and for all the holding companies which were part and parcel of the old system—holding companies which last Sunday I termed “hide-out” companies behind whose corporate walls widows and orphans and small depositors were artfully and cruelly despoiled.
II
What was said on this subject of “holding companies” in last Sunday’s discourse I neither retract nor modify. Today it is my aim to amplify these statements with concrete reference to the Detroit Bankers Company.
My approach to the dissolution of the Detroit Bankers Company is necessarily along the tortuous pathway which leads to the editorial rooms of “The Detroit Free Press.” Its publisher is at once the President of the Bankers Company. I refer to Mr. E.D. Stair, who is now enjoying the clemency of Florida weather.
“The Detroit Free Press,” be it known, has functioned in this City for over one hundred years. Its traditions were moulded in the sands of a former age.
Older institutions have outgrown it because in their veins there flowed the virile blood of progress.
Younger organizations whose pulses beat in the tempo of the new day have discovered new outlets for their energy, new services for their clients. Not unkindly do I characterize this institution of “The Detroit Free Press” as moribund. In journalism it lacks the vivacity of its local contemporaries. In policy it appears to be wedded to silly class supremacy. It does not seem to comprehend that no longer is it possible to hide behind the walls of its pressroom and dominate the thought of the community where it functions.
Someone has quoted these verses for its epitaph :
“Pillars are fallen at thy feet,
Fanes quiver in the air.
A prostrate city is thy seat,
And thou alone art there !”
Unconscious of the far flung influence of the radio, this relic still carries on its warfare for the continuance of the obsolete, for the preservation of the corpses of the past.
Ladies and gentlemen, in our contest against the old banking system we were not disappointed in finding the forces of “The Detroit Free Press” arrayed against us.
Nor were we chagrined at its tactics. To become angry and disturbed because of these tactics on my part would be to betray intemperance where sympathy is rather required.
I regretfully understand why this journal all week long expended both its maximum effort and talent in assailing me with personalities because I of necessity was forced to identify its banker-publisher in my condemnation of the holding company, the hide-out company, over which he presides.
More headlines, more space have been wasted by “The Detroit Free Press” in one week in an effort to villify me, than were devoted to the relief of the poor, of the starving thousands in this year of our sorrowful man-made famine.
Morning after morning my name and my “nefarious” activities were held up to the hatred of many while some 270,000 fellow citizens were forced to eat the scanty crumbs which fell from the table of the Lord, and not one paragraph to defend them.
This was the only forceful argument which this journal could employ to defend the integrity of holding companies.
Its pretext for assailing me was founded on the assumption that I had made a personal attack upon its editor and others.
As a matter of record, I referred to Mr. Stair as the publisher, as the banker. I regarded him as much a public character as was, for instance, the indicted Mr. Charles Mitchell of New York or Mr. Insull, because he was President of an institution which controlled the destinies of hundreds of thousands of depositors.
To this public gentleman I referred last Sunday in rather strong but rather truthful language. But to the private Mr. Stair, as yet, I did not even allude.
Ladies and gentlemen, this broadcast that is coming to you today would have been prevented if “The Detroit Free Press” had been successful in its devisals. I regret that the journal which proudly bears the appellation of “Free Press” forgot itself to such an extent as to endeavor to intimidate free speech.
In desperation its editor wrote a letter to every interested radio station and to the Federal Radio Commission intimating legal proceedings, for my alleged libelous statements regarding Mr. Stair and others.
This journal which has constantly belittled the activities of broadcasting is to be pitied in its futile attempts to sustain the dead past ; in its attempt to impede the establishment of an honest banking system. Little heed is paid to these senile tactics by the intelligent American who has grown weary of this type of decadent journalism, a type which in the mirror of today is reflective of the actions of yesterday.
Yesterday ! May I open for you the pages of our State history to substantiate this assertion.
It was the year 1912. The Honorable Chase Osborn was then Governor of Michigan. That year was identified with the obnoxious saloon. That year was notable for the many discussions on woman suffrage.
In Michigan, there was an organization known as the Knights of the Royal Ark.
This order petitioned the State Legislature to oppose any liquor legislation designed to clean up the saloon and the bar-flies that inhabited it ; to oppose the bonding laws’ changes, woman suffrage, referendum, recall, etc. Saloon born politics were distasteful to more progressive minds. It was high time for progress to seek its ideals and to select its direction from sources other than the cuspidors and the brass rail which give impetus to many editorials.
Thus, in an official document filed in the State archives, Governor Osborn makes the following record :
“The Order of the Knights of the Royal Ark is composed of saloon-keepers. These saloon-keepers are all dependent upon the Michigan Bonding and Surety Company for their bonds. . . . .The connection between the Knights of the Royal Ark and the Michigan Bonding and Surety Company and the large brewers. . . . . is unbroken. They might be warranted in taking a position in opposition to the proposed brewery and bonding legislation ; but when they extend their influence to such questions as the..... referendum. . . and woman suffrage, it proves that they fear the wholesome public voice and are disposed to smother it wherever possible.”
So speaks the official document.
Governor Osborn continues with the observation that :
“The Detroit Free Press” and “The Detroit Journal (now defunct) are active supporters of the Michigan Bonding and Surety Company and of the brewery-owned saloon.”
Later on in this public document that is filed in our archives, the Governor states that :
“E. D. Stair, a large owner of these papers, won his money from the cheap and vulgar and suggestive theatre business. So illy-conducted were some of them that one at least became known to the police and public of Detroit as ‘the Crime Academy’.”
And so this official document asks the question of the State Legislature :
“How many of us will flock with the Michigan Bonding and Surety Company, the brewery-owned saloon and Mr. Stair, and who will foregather with those who are standing and hoping for better things in Michigan.... The agents of evil obtained their profits from the common people by selling them things that excite sensual debaucheries (referring to the saloon and the melodrama) and then use the same money to prevent their emancipation and improvement, thus keeping them in a state of sad bondage wherein they are most easily preyed upon. Thus are the masses made to forge their own shackles and wear them.”
In such forceful language did the former Governor of Michigan strongly speak of “The Detroit Free Press” and its former affiliates.
The point is, to requote the former Chief Executive of our State : “It proves that they fear the wholesome public voice and are disposed to smother it wherever possible.”
The unerring pen of history continues to record this characteristic of the “Free Press”—a characteristic that is linked with opposition to reform. Reverently I approach this blemished page of modern history which tells of the only journalistic disgrace perpetrated during the Presidential campaign.
Need I rehearse for the people of the country the glorious platform of President Roosevelt ? His more glorious progress ?
A few weeks before his election to the Presidency, Mr. Roosevelt visited the City of Detroit.
Disparagingly “The Detroit Free Press” referred to him.
Contumeliously they insinuatingly compared his importance and popularity to those of a convalescent chimpanzee, Joe Mendi, by name. No wonder you gasp !
Twenty thousand citizens interested in the President, insinuated their article. Forty thousand persons interested in the monkey !
Need I now explain the reason for this journal’s personal attack upon myself ? Arguments spun out of billingsgate ; insinuations coined in the mint of desperation ; headlines set in the type of deception—all because I allegedly attacked their publisher’s personal character when I merely scratched the surface of the official activities.
All I am interested in when disclosing these well known facts is that “The Detroit Free Press” is today as of yesterday, interested in obstructing the establishment of wholesome progress.
Yesterday, it defended the obnoxious saloon and opposed woman suffrage. Today, it defended a rotten financial corpse and opposed the Federal banks.
Yesterday it advocated the retention of the old deal, the Mellon deal, by stooping to insult our beloved leader.
Today it argues for the sanctity of holding companies by painting me as a scoundrel.
While I thank “The Detroit Free Press” for their compliment in so classifying my efforts, nevertheless I am inclined to absolve them for any intended hurt aimed at me either through the activities of their investigators or through the paragraphs of their editorials.
But bear in mind, “The Detroit Free Press” which has undertaken to be the defender of stockholders and holding companies is offering no defence for its cause when it dodges the issue to indulge in personalities.
It accuses me of uttering falsehoods and cannot substantially prove its own statements.
It defames the Radio League of the Little Flower and myself for investing in productive Michigan industry, which we will do again, while it canonizes the gambling organization which pertains to the Detroit Bankers Company.
My friends, as we approach the end of this broadcasting season, it is apposite that I restate the position of the Catholic Church and of its clergy relative to their officially discussing economic questions—a question that was forced upon me by “The Detroit Free Press”.
For several years I have addressed you on topics dealing with social justice—labor, the concentration of wealth, exploitation, taxation—subjects which are of paramount importance to all of us.
I wonder how the gentle Christ would make answer to this question ? Supposing that this year, this very day, He returned in the flesh to walk amongst His brother men.
Where would you find Him ?
Wintering in the soft effeminacy of a southern isle or mingling with the unfed, the unclad in Union Square ?
Behold your Christ as He mingles with the unfortunate !
Once more He would gather around Him the cold, thin forms of little children !
Bread for the hungry, the medicine of miracles for the sick, consolation for the outcast—these are His immediate gifts.
“Why,” asks He, “must men starve in the midst of plenty ? Why must there be luxury, and ease and lenten holidays ? Why must the poor be trampled upon ?
“Why must God’s brothers be treated like servile beasts ? Why ?”
Of old did He not break the sinful silence of cowardly conservatism to inveigh against the Pharisees ?
And now, will He not wax eloquent against the Pharisees of concentrated wealth ?
Tell me not that Christ will speak in platitudes when fifteen million men are unemployed ! when twenty million families are burdened with unbearable debt.
If an Annas or a Caiphas must be assailed as unworthy leaders in the sight of heaven, will not Christ condemn them ?
If the princely lords of Wall Street try to catch Him in His speech—call Him the friend of Beelzebub, call Him demagogue, call Him radical, will He the fearless, peerless One hold a sinful peace—when there is no peace !
Not he ! “Woe to you Scribes and Pharisees, ye hypocrites—Ye who bind heavy and unsupportable burdens and lay them on men’s shoulders ! Ye who devour the houses of widows ! Well do ye make void the commandment of God, that you may keep your own tradition.”
Hear ye ! Hear ye the words of the courageous Christ proclaiming His doctrine of brotherhood, even at the expense of the lashings of malefactors ! “The poor shall have the gospel preached to them ;” for neither Christ nor His Church, in the words of the great Leo, “are so concerned with man’s spiritual welfare that they neglect his temporal good.”
Thus, my friends, from Christ’s example, I dare pass on to the supreme authorities in the Catholic Church, Leo and Pius, the noblest pontiffs of them all ! From them every cleric gains added authority to speak on matters economic in the name of Christ and of religion.
In his letter named “Quadragesimo Anno” (Forty Years After) Pius XI says :
“We lay down the principal long since clearly established by Leo XIII that it is our right and our duty to deal authoritatively with social and economic problems ..... Indeed the Church believes that it would be wrong for her to interfere without just cause in such earthly concerns ; but she never can relinquish her God-given task of interposing her authority, not indeed in technical matters, for which she has neither the equipment nor the mission, but in all those that have a bearing on moral conduct.”
This is the earthly concern of the moment—one particularly “in defence of the poor and the weak,” as Pius characterizes it, wherein “Every minister of holy religion must throw into the conflict all the energy of his mind and all the strength of his endurance.” That is the doctrine of the Catholic Church and not the doctrine of “The Detroit Free Press.”
This is the same economic conflict which caused the head of the Catholic Church to oppose the immoral conditions of his time when laborers were paid insufficient wages—a condition which he then termed little better than slavery.
What would Leo XIII say today when fifteen million men are idle in this country with no wages at all ?
Little better than slavery in 1891 when there was work.
Worse than slavery today when there is no work.
My friends, in a simple manner I have dared to defend the poor and the exploited ; dared to do my duty, cost what it may ! For this I gladly stand condemned by those who refuse to understand the Christ of the cross Who was crucified because He assailed the Pharisees.
If occasionally then, I have used the scourge of rhetoric to help drive out of public leadership those who have controlled the policies of poverty, of idleness, of worn-out and disgraced financialism, I have done less by far than did the patient, loving Master Who scourged the money changers from the temple, the Master Who had compassion on the multitudes, the Master Whom they crucified because the high priests of compromise framed Him with fake witnesses.
My friends, every age has its proper problem. Every age should find the Church always alert to cope with peculiar difficulties, always courageous to lead.
Thus it was that Pius remarked that “At this moment the condition of the working population is the question of the hour and nothing can be of higher interest to all classes of the State than that it should be rightfully and reasonably solved.”
How harmonious is this thought to the one expressed by his predecessor of 1891, namely : “It must not be supposed that the solicitude of the Church is so occupied with the spiritual concerns of its children as to neglect their interests temporal and earthly !”
It is for that reason that I have considered it a beautiful privilege to apply the principles of my leaders to the problems of our day—“our day”, says Pius XI, “when it is evident that wealth is accumulated by immense power, and despotic domination is concentrated in the hands of a few, and that those few are frequently not the owners but only the trustees and directors of invested funds who would minister them at their own good will”— the will which dominated the activities of crap shooting bank affiliates and their hide-out holding companies.
This is my commission. These are but suggestions from the leader of the flock.
If I be a demagogue, so must be Leo and Pius. Whatever I am, I am not important. But my doctrine is of paramount importance.
Briefly, then, this is a struggle between right and wrong ; between worn-out capitalism and Christian democracy ; between threatened Communism and distributive justice.
The only answer for our economic salvation is to oust the money changers from the temple of God and within its hallowed precincts to re-establish the virtues of Christian morality.
This, I swear to God, has motivated my attack on the money changers, by name, if you will ; by specific activity, if you please, because they were hidden behind the pages of purchased propaganda and meretricious publicity where the uninformed citizen could not discern them.
Thus, the unpleasant task devolved upon me to make mention of “The Detroit Free Press” and its banker-publisher, as obstacles in the way of sound banking.
The penalty for doing this was obvious. I could expect little less than was received by the prophet Isaias who was sawed in two for having disclosed the wickedness of King Manasses—sawed in two, to destroy the doctrine that I preached ; sawed in two, so that the Manasses of journalism could survive !
And so I return to my indictment of the gambling company and of the Detroit Bankers Company.
As for the affiliate of the Detroit Bankers Company, let me read for you an astounding criticism of it made by Senator Carter Glass. The Senator records the following officially :
“I learned that one of the most distinguished lawyers at the American bar, at one time president of the American Bar Association, Solicitor General of the United States under President Taft, had given an exhaustive, searching opinion as to the legality of nationl bank affiliates. I have read the opinion. Although not a lawyer, I venture to pronounce it a legal classic, searching and sweeping. The opinion is, in effect, an unmistakable declaration that national bank affiliates are absolutely illegal, that they contravene the national bank act, that the parent bank contravenes the national charter, and the affiliate in many instances the State statute and the charter of the State from which it derives its existence. Court opinion after court opinion of both inferior courts and the Supreme Court of the United States are cited.
“No action was ever taken under this tremendously important opinion of the Solicitor General of the United States. Not only was no action taken, but it is within the confines of fact to say that the opinion was suppressed ; and few things have ever happened in this country that better illustrate the power and the blandishments of inordinate wealth, because the opinion dealt with institutions and individuals who had accumulated inordinate wealth. Not only did the Attorney General at that time fail to act, but another Attorney General, some years afterwards, elevated to a place of even higher distinction, declined to permit the opinion to be made public.”
I said that holding companies made it possible to cheat the widow, to rob the orphan and depress the poor while they enabled the artful dodger of high finance to escape the law.
Here are facts to substantiate this unthinkable assertion.
First : The Detroit Bankers Company in its series of reports to the stockholders failed to disclose by the balance sheets included therein the true statements of its capital structure.
In 1930 $8,300,000 of capital issued was concealed.
A serious statement ! I have proof for it.
In 1931 $6,100,000 of capital issued was concealed.
In 1932, in the report signed by Mr. E.D. Stair, the impeccable president, $5,601,960.00 of capital issued was not disclosed.
That, my friends, is deceit. That is falsification of the records (of which I spoke last Sunday and was called the tantamount of a liar for saying so)—records which have been handed every stockholder and copies of which I have in my possession.
Second : In this same series of reports to stockholders, the Detroit Bankers Company makes no mention of the balance sheet of the following subsidiaries or affiliates, namely,
The First Detroit Company.
The Detroit Company
The First National Company
The Assets Realization Company
The First National Building and Garage Company once owning an edifice costing millions has evidently lost the building ; for in the petition for a receiver filed March 29, 1933, the structure is not listed as an asset. If it were sold, let Mr. E. D. Stair tell us what become of the proceeds.
Third : Another subsidiary of the Detroit Bankers Company is the Detroit Trust Company, owners of thousands of shares of Detroit Bankers stock. Some was held for estates of the deceased, leaving widow and orphan protected with the penniless properties of the Detroit Bankers stock.
But the Detroit Bankers Company is not devoid of assets. They have stocks in various banks. But the majority of the banks are closed and the asset is a liability amounting to millions.
They have $51,000.00 balance in the First National Bank, but this is slightly offset by a loan from the same bank of depositors’ funds to the extent of $3,982,664.99. They also have $200.00 cash on hand.
The Detroit Bankers Company also have an asset of $4,270,000.00 in a note from the Assets Realization Company, whatever that is worth.
Again I find a $1-million note made by the Detroit Bankers Company to the First National Bank and one for $250,000.00 to the Detroit Trust Company, given in return for the hard earned dollars of the depositor to shear up the tottering structure of the holding company.
These loans were made on collateral—collateral worth today less than $400,000.00.
But on January 18, this year $180,000.00 was borrowed from the Detroit Trust with no security.
In other words, the Detroit Bankers Company looted the Detroit Trust Company for $800,000.00 and the value of the security is $110,000.00 as appraised by competent authorities just yesterday.
Fourth : Now pause to see what the Detroit Bankers Company did to the First National Bank. On two days in January of this year the holding company borrowed from the First National Bank $2,982,000.00 at 3 per cent interest with no security and owes an extra million secured by property worth today $300,000.00.
Fifth : The Detroit Company, another subsidiary once a great corporation, has its capital listed today at $1000.00. But it owns 41,211 shares of Detroit Bankers stock. How in the name of God can it meet its assessment of $804,220.00 as double liability ?
Sixth : The First National Company is another $1000.00 capital company. But it owns 5,465 shares of Detroit Bankers Company stock with a liability of $109,300.00.
Seventh : The Detroit Trust Company has 71,682 shares of Detroit Bankers stock with a liability of $1,433,640.00.
Eighth : Then comes the stockholders’ list that Detroiters saw yesterday which was interspersed with hide-out names, with dummies legally owning thousands upon thousands of shares ; legally liable for hundreds of thousands of dollars that have gone forever !
Thus the roll call of every grand old name in Detroit.
With these people I deeply sympathize. They are people around whose names is woven the story of our progress, our culture and our stability ; people who unwisely permitted their fortunes to be melted in the fires of greed lighted too often by misunderstanding men !
Their estates are ruined not by the upheaval of a bloody revolution ; not by the red menace of the Communism we fear ; but by the unethical, unskilled banker—not the grand old conservative who was shelved to make place for lesser men—who, I repeat, were experts, gambling with loaded dice, with other people’s money.
These are the unthinkable charges still unthinkable to any man with a life-time of character behind him—charges that are proven.
The facts and figures are furnished, first from the reports of the Detroit Bankers Company to its own stockholders—reports that the executives were too careless to check for internal contradictions. The facts and figures are furnished from the Detroit Bankers own petition for a receiver filed in the Circuit Court of the County of Wayne in the State of Michigan, Friday, March 29, 1933, No. 214,667, an official document, officially condemning the holding company as a hide-out company to anybody who cares to read it through.
This is the proof that I was dared to produce. Any person who wants a copy of this official document can obtain it at the County Clerk’s office. Throughout the nation such progressive and honest news journals as “The Detroit Times” or “The Detroit News” will continue to work towards sound banking, honest banking and the return of prosperity. Dishonesty and knavery must be uncovered at any price.
The news journals of character must not forget their obligations to the public. Nor may clerics refrain from throwing into this struggle for economic freedom, the justice and charity for which Christ lived and died and the teachings of His spokesmen whose example condemn cowardly silence and plutocratic bourbonism.
Oh, there is so much to be done ! Away with our bickering ! Let the dead past bury its dead. Let’s look to the future and solve the mighty problems which needs must be solved !
Behold the forced idleness which is ravishing the flower of our country’s youth !
Shall that continue ?
Behold 50-million dependents who are wondering this evening where life’s bare necessities can be found !
Underfed babies, ragged children, closed factories, burdened farms, empty churches, soap box Communists !
Behold what is in our midst !
Of old Christ stood weeping on a hilltop as He gazed upon the Jerusalem which He loved. Its people had fallen into the hands of a foreign foe. There was poverty because there was exploitation.
There was injustice because of gold seeking Pharisees.
There was discontent, because of lying, cowardly leadership.
Now as of then, the same Christ looking down upon both crowded city and far-flung farmlands, says to the Jerusalem of America :
“Oh Jerusalem, Jerusalem, thou that killest the prophets and stonest them that are sent unto you, how often would I have gathered together thy children, as the hen doth gather her chickens under her wings, and thou wouldst not ?
“Behold, your house shall be left to you, desolate. For I say to you, you shall not see me henceforth till you say : Blessed is he that cometh in the name of the Lord.”
Fellow countrymen, think me not bold or arrogant if I plead with you to gather under the outstretched wings of Christ’s cross !
Our house must not remain desolate !
Our vision of prosperity and of Christian happiness cannot be realized until as a nation we dry the tears from the cheeks of the rejected Christ and welcome Him and His doctrines—His social justice, His economic liberty, His Christian democracy, His divine charity—to come in the name of the Lord !
Too long—much too long—have we followed the rules of error, of greed, in our mad endeavor to substitute for the laws of God and the doctrines of Christ the man-made legislation of financial slavery !
For God’s sake let us think of sound men—sound in body and in soul—rather than of that fiction of sound money—sound according to some wornout formula !
Clear the park benches of the derelict !
Empty the darkened hall rooms of the disconsolate ! Open wide the factory doors !
Give us this day our daily bread—bread that is earned by the sweat of the brow !
The bread that can save America from a catastrophe !