Chapter III
What the Leaders of Men Have Said About Money

In the past those who have tried to change our monetary system, have been “greenbackers,” “Free Coinagers,” and “ 16-to-oners.”  These reached their highest altitude of absurdities in “Coin” Harvey, who wanted to load the buyer down with tonnages of “Silver Dollars” beyond the power of the transportation system to carry from buyer to seller.

All of them have kept their eyes and their readers’ eyes so close to currency (bills and coins) that they could never see either the fallacy of thinking of money in terms of “cash,” currency, or of trying to carryon modern business by transporting tons of currency back and forth between buyers and sellers, living in remote points from each other.

But it has been necessary to keep the people believing that cash is the real money of the Nation in order that bankers may continue to hide behind the lie that they are lending the depositors’ money.  That they have had many columns of deposits, but only a fragment of the total deposits to the credit of all of the people, appears in the only two items mentioned in their “meaningless public statements.”

You will find listed “Demand deposits, subject to cheques” and “Time deposits against which no cheque can be drawn.”  The totals of these two deposit accounts, let me repeat, are miniature in comparison to the total of other accounts, which are hundreds of billions of dollars to the credit of Bankers (the bank), of the rich who have non-chequeing accounts of the saving institutions, of the many lending agencies.

Then there are billions in the forms of investment obligations (United States bonds, Promissory Notes, Mortgages, Deed of Trust, etc.) which may be quickly transmuted into deposit credits, subject to cheques.

And these hundreds of billions of deposits and investment obligations (nascent money) are money, and may be used in the buying of anything of value, services and pleasures.  They lie there, for the most part, dormant, ready to emerge from their hibernation to crowd the production dollar, the earned dollar out of the markets.  But let’s quote some of these men who have talked about money, banking:

“Let me have the power to issue and control a Nation’s money, and I care not who writes its laws.”

He was a top stock market gambler, and loved the game because of its hazards and its easy takes for the ins.

“As an ex-banker and one who has scuttled quite largely about this country of ours, I give you my solemn word of honour that I have never seen any other class more corrupt, conscienceless, and thieving than bankers.”

“The Government, under the Constitution, has the power to create all the money.  It issues both money and bonds, and sells the bonds to the bankers that create deposit money.  If banks need the cash to pay the depositors, the Treasury supplies it free.  In that way, Congress has farmed out to private bankers the nation’s credit free, and Congress’ power to create money, the greatest and most profitable privilege our Nation had, absolutely free;  and of course, unconstitutionally.

“Congress has farmed out to selfish private banking corporations the credit of the nation free, and empowered them to create all of the people’s money.  Some day the American people are going to blame this 1943 Congress for not changing the system at this time as we are entering on a $300 billion war program.”

Mr. Eccles, then the Chairman of the Reserve Board, said in replying to a question asked him when he was testifying before the Ways and Means Committee of the House, in February 1943:

“Mr. Eccles, the $20 billion of United States Bonds the bankers now own — they created at the time they bought the bonds the money that they paid for them did they not?

“That is the function of a bank.  When a bank makes a loan to a utility, or a farmer, it creates the money that it lends at the time the loan is made.”

“The Government should create money, not lend it;  banks should lend money but not create it.”

“I voted against the Federal Reserve Act because it gives the bankers the power of life and death over every person in the nation.”

“Andy, I can make or break any business man in the Nation.”

“And how can you do that Nick?”  And Nick replied:  “By extending or withholding a loan.”  And Andy shot back, “Then, Nick, by the eternal I’ll kill your bank”;— and he did.

And that was exactly what he wanted Andy to do because Nick’s heart was set on private banking;  and from that calamitous act of Andy in the 1830’s, the Nation has lived a hectic life at the mercy of private banks that would organize, issue money far beyond their ability to “redeem,” use this money to buy property and pleasures, then bust, leaving the depositors broke.

Sir Josiah Stamp, while in Austin in the 20’s, in an informal talk to about 150 professors of the University of Texas, said:

“Banking was conceived in iniquity and born in sin. . . . Bankers own the earth.  Take it away from them but leave them the power to create money, and, with a flick of the pen, they will create enough money to buy it back again. .. . Take this great power away from them and all great fortunes like mine (he was the second richest man in Great Britain, and president of the Bank of England) will disappear, and they ought to disappear, for then this would be a better and a happier world to live in. . .. My sons are well educated;  they should not hesitate to take their places in the ranks of humanity, and forge their own fortunes. . . . BUT, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control Credit.”

Senator Robert L. Owen of Oklahoma in a preface to a book written by Winslow and Brogham, wrote:

“It would appear that there could be no subject of more supreme importance to the people of the United States than an understanding of money and its powers.  It is remarkable, and a fact of surpassing importance, that the provision of the Constitution of the United States authorizing Congress exclusively to coin money and regulate the value thereof has been overlooked by American statesmen.  Their failure to perceive the deep significance of this language of the Constitution has resulted in the indefensible expansion and contraction of money by private persons, bringing on monetary depressions periodically.”

Mr. Owen was chairman of the Senate Banking Committee in 1913, and managed the Federal Reserve Act legislation.  It is strange that he, a then “statesman,” overlooked the Constitutional provision that said definitely that Congress could not surrender its powers to a private corporation.

President Lincoln, after he had been compelled to give Great Britain control over the finances of the United States in exchange for Great Britain’s financing the Civil War, and following the banking act of 1863, said:

“As a result of the Civil War, corporations (Banking) have been enthroned and an era of corruption in high places will follow and the money power of the country will endeavour to prolong its reign by working on the prejudices of the people until wealth is aggregated in the hands of a few, and the republic is destroyed.  I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.”

“The death of Lincoln is a disaster for Christendom.  I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to corrupt modern civilization.  They will not hesitate to plunge the whole world into wars and chaos, in order that they may inherit the earth.”

How prophetic.  The three world wars, and this cold war;  and the present stringency of credit, invoked by the Federal Reserve authorities.

The President of the American Bankers Association, speaking in their convention, in 1931, almost two years after they pulled the stock market down into one of its worst crashes said:

“We the men in this hall, who control the economic destiny of the Nation, knew in 1927 that this terrible depression was coming, and we did nothing about it.”

Of course they did nothing about it.  They planned it, and carried it to a successful (for them) conclusion.

And he could have quoted the American Bankers Association as having said, in 1891:

“We authorize you (our loan agents in the western states) to loan funds on good real estate to fall due not later than September 1, 1894, and at no time thereafter.  And on and after that date we will not renew our loans under any consideration.  But on September 1, 1894, we will demand our money.  We will foreclose and become Mortgagees in possession.  We can in this way take two-thirds of the farms west of the Mississippi and thousands of them east of the Mississippi as well, at our own price.  We will own three-fourths of the farms of the West and the money of the nation.  Then farmers will become tenants as in England.”

Comment:  Thus they planned panics of 1893, and reaped harvests of farms in 1894, as planned in 1891.  In fact every panic, “depression,” and the present threatened “recession,” which will be in the language of a Dallas banker, “A honey,” was blueprinted and managed by the bankers of America directed by the bankers of London, Berlin, Paris.

The American Bankers Association, one week after Grover Cleveland was inaugurated, on March 11, 1893, sent the following letter to all bankers:

“Dear Sir:  The interest of National Banks requires immediate financial legislation by Congress.  Silver, silver certificates and U.S. Treasury notes must be retired.  National Bank Notes on a gold basis must be made the only money.  This will require the authorization of $500 million to $1 billion new U.S. Bonds as basis of circulation.  You will — MUST retire at once one-third of your circulation, and call in loans.  (They got this in 1934!  They never quit.)

“Be careful to make a monetary stringency among your patrons, especially among influential business men.  Advocate extra session of Congress to repeal the silver purchasing clause of the Sherman Law.  Act with other banks of your city in securing a large petition to Congress for its repeal.  Use personal influence with your Congressmen, and particularly let your wishes be known to your Senators.  The future of National Banks, as fixed and safe investments, depends on immediate action, as there is an increasing sentiment in favour of Government legal tender notes-bills and silver.”

Ex-President John Adams wrote to his friend Ex-President Thomas Jefferson, and said:

“All the perplexities, confusion and distress in America arise not from defects in our Constitution;  not from want of honour or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.”

“Finance, money, credit, International Banking knows no boundaries of nations, no tongue, no colour, no creed.  It is the universal language of exploitation and tyranny.  It robs the American farmer, the Welch miner, the Czech glass workers the toiling, serving and producing men, women and children, with equal complacency.  It knows no mastery but its own, no service but to itself, no means but money:  it will brook no opposition.”

John Skelton Williams, Comptroller of the Currency, said to the Deflation Committee of the American Bankers Association, in 1920, in protest of their resolution to contract money and credit (exactly what bankers of 1957 are doing):

“Don’t you know that this will break every little bank in the country?”

And the bankers replied cold-bloodedly:  “They ought to break;  there are too many of them.”

“Don’t you know that it is going to ruin lots of farmers?”

“They ought to be ruined;  they are getting so prosperous (following World War I) they won’t work.”

You only have to recall the late 20’s and 30’s to remember how thoroughly the bankers busted the little banks, the farmers, and the small business men.

“Here is a nation that might be the richest nation on earth, when actually we haven’t enough of anything, because there is not enough production.  The need is here.  The ability to produce is here.  The people are eager to produce — willing to work.  The stoppage is the system that puts profits before production — and that is the money system.”

A final personal story:  A local linotype operator in Austin, who is steadily employed, got a notice from a local finance company (and all of them are children of bankers, through whom they shunt their mountains of deposit credits in their surplus and undivided profits columns) informing him that he had a $400 loan without investigation or bother, for him, if he would come in and claim it.  Well, the working man’s family never have their wants satisfied;  so he went down and was met with glad hands and unction dripped from the lender’s jowls.

Without “investigation” for the lender had done that, finding the man regularly employed, a loan agreement (not a note) was laid before him, for his signature, with the assurance that he (the lender) would complete all the papers, and send them to him in a few days.  The man couldn’t suspect such a nice man’s being tricky;  so he signed the loan agreement, for that is what it amounted to, and the lender handed him a cheque, and wished his victim on his way.

Said the borrower to me:  “In a few days I got the papers and found that my life had been insured, the debt had been insured, and costs of making the loan had been added;  and instead of my loan agreement calling for my payment in instalments of $400 and interest, it called for a total payment of $676 in instalments,” and that loan agency is a department of an Austin bank.

Article 1. Section 1:  All legislative power herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and a House of Representatives.

Section 8:  The Congress shall have power . . . to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.

Section 10:  No state shall . . . coin money, emit bills of credit, make anything but gold and silver coin tender in payment of debt.”

Then, Constitutionally, there could be no state bank chartered.

“The Government of the United States, under the Constitution, has the power, and it is the duty of the Government, to CREATE ALL MONEY. . . . This being true, why should Congress sit idly by and allow the (private) banks to expand $20 to $1, or even $50 to $1, in order to finance the war and the other costs of Government when it is nothing more nor less than Congress permitting the credit of this Nation to be farmed out for the selfish benefit of private banking corporations?  The Treasury issues both money and bonds.  Under the present system it sells (deposits) the bonds to a (the) bank(s) that creates money (bank deposits)!  Then, if the bank needs the actual money, the actual printed greenbacks (or coins) to pay the depositors, the Treasury will furnish that money to pay the depositors.  In that way Congress farms out the use of the government’s (nation’s) credit absolutely free.

“It is the duty of Congress to issue — coin or create-money and regulate its value under the Constitution.  This great privilege has been farmed out free to the privately owned banks by Congress.  This privilege is worth billions of dollars a year to those exercising it under laws passed by Congress.

“The United States Treasury prints and issues both the interest-bearing bonds and the money (bills and coins) which is another form of Government obligation, not interest-bearing.

“The Reserve banks are owned by the private commercial banks, including the bank that bought the bonds.  The Federal Reserve banks are Federal in name only;  they are owned lock, stock and barrel by the private commercial banks, which have invested a very small sum of money upon which they get 6% per annum.

“Remember, the U.S. Treasury has caused the Bureau of Engraving and Printing to print and deliver to the Federal Reserve Bank a million dollars in U.S. Government bonds, interest bearing, and then it added a million dollars in currency.  Each is a Government obligation.  The Federal Reserve Bank delivers to the local commercial bank the million dollars in bonds and obtains for the Government a million dollars in bank deposits which it cheques out to pay its debts.  Then the Reserve Bank delivers to the local commercial bank the million dollars in cash.

“The present banking system, thru the use of the Government’s credit, as now (1943) proposed to finance the war can issue more than $240 billions in money, and every bit of it will be issued on the banks’ $8 billions capital and surplus and the Government’s credit.  Of course, it will be the Government’s credit that will make it secure, as the $8 billions will be insufficient for that purpose. . . . The Government pays interest for the use of its own credit.

“Who created such a system that is costing the taxpayers $1,750,000,000 this year (1942) and will cost the taxpayer $4,500,000,000 a year (years and years ahead) when our anticipated expenditures for [our] war purposes are made?  The answer is that such a system was built up over a long period of years (from 1781 to 1942).  Congress (has) passed monetary laws without giving a great deal of attention to them, being told (by bankers who had written the bills) that money was (is) a mystery and that few people understood it and those understanding it were the ones wanting the laws.  It was (and is) smart (alecky) for a Congressman to say, 'All I know about money is that I don’t have enough of it,’ or some similar crack that invariably drew laughter and applause, and the bill was passed (practically as the bankers wrote it).  If some person who had given the subject thought and consideration attempted to show how the credit of the Nation was being farmed out FREE to privately owned commercial banks, he could be silenced very quickly by a whispering campaign that he was a monetary crackpot, or a greenbacker, who wanted to flood the country with worthless printing-press money.  Then, with a few references to continental currency, fiat money, and German inflation, the bill was sent on its way.  All such bills were referred to as a bill to further strengthen our sound currency.

“I am opposed to the Government, which has the sovereign and exclusive power to create money, paying private bankers for the use of its own money.  The private bankers do not lend their money to the Government;  they lend the Government’s money to the Government, and collect interest annually.  I want to say that the highest authority and best in our Government, the President of the Federal Reserve System, the Secretary of the Treasury, as well as all informed people, admit it.  The banks say they lend the depositors’ money;  'we’re responsible for it, and if we don’t get any interest for its use, we just won’t buy any bonds.’  But they know that is not so for the President of the Federal Reserve System, Mr. Eccles said, 'We create credit to buy bonds.  That is all we have ever done.  That is the way the Federal Reserve System operates.  It creates money.’  The Secretary of the Treasury, Mr. Morgenthau said:  'When commercial banks buy bonds they do not pay for them with real cash taken from their vaults (nor out of their capital or surplus - out of no existing funds), but by placing on their books newly created bank deposits to the credit of the Government.’ ”

I was reluctant to admit that the wrongs I found in the West bank were universally practiced;  yet I had heard all of my life of banks closing their doors, and the depositors losing all;  then came the deluge in 1933, just 20 years after the passage of the Federal Reserve Act, when every bank in the United States closed;  and while the depositors did not lose all, millions were lost to them.

Charley Dawes, ex-vice-president of the United States, and at the time head of the Reconstruction Finance Corporation, hung to his post until he was granted a $90 million Refinance loan to resurrect his Chicago Bank.

Then is when Congress should have said to the banking boys:  “We gave, you every law for 100 years that you wrote and asked us to pass.  Finally in 1913 we gave you the Federal Reserve Act, on your assuring us sound money, panic-free banking methods, and top to bottom prosperity for the people of the United States would follow.  But here you come up after a 20-year trial under this act, ask the President by Executive Order to close all banks for re-organization and “getting-our-breath” again.

“We shall return the creation of money to the hands of Congress where the Constitution reposed it;  and take over the mechanics of money (keeping of the depositors’ accounts, cashing and clearing their cheques), and return you boys to the actualities of money lending:  you will lend only the money you have to 'the credit of yourselves on the books of the United States Depositories, which we shall scatter over the United States as prodigally as post offices.”

After all this had taken place, and I had been crying for years that all banking laws are unconstitutional because the Founding Fathers said specifically:

Article I, Section 8:  (Sixth Power) “The Congress shall have power . . . To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.

And in Section 10:  “No state shall enter into any treaty, alliance, or confederation, grant letters of marque and reprisal ;  coin money;  emit bills of credit;  make anything but gold and silver coin a tender in payment of debts. . .”  Therefore, no state or private banks.

I want to prove to you with facts and figures., and documentary evidence, that our banking system is wholly wrong, unconstitutional, and wholly bad;  then I want you to understand that bankers, in order that they might continue to profit through their power to create money and control credit, have been doing three indispensable public services:  (1) creating money, (2) keeping the depositors’ accounts, and cashing and clearing their cheques, and (3) lending money.

The first two are Constitutional functions of Congress, the third is a private property right.  Return to the Congress the “coining of money,” and its control that it may regulate the value of money, and add the mechanics of money as developed by the Reserve System, and we will have the safest, soundest, most elastic and fluid money the world has ever known.

Then you have no bank failures, for there will be no banks — there will be only U.S. Treasury Depositories;  and bankers will then become just money lenders, not money creators.