Congressional Record 1932

Bound Edition

William Jackson

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June 10, 1932 Vol. 75, Part 11 — 72nd Congress - 1st Session

CONGRESSIONAL RECORD - BOUND EDITION

1. June 10, 1932

Volume and Section: Vol. 75, Part 11 - House of Representatives

Pages: 12564-12653

Google: "private credit monopolies" site:gpo.gov

Transcript

The CHAIRMAN. The time of the gentleman from Massachusetts has again expired.

Mr. McFADDEN. Mr. Chairman, how much time have I

remaining?

The CHAIRMAN. Twenty-five minutes.

Mr. McFADDEN. Mr. Chairman, at the present session

of Congress we have been dealing with emergency situations. We have been dealing with the effect of things

rather than with the cause of things. In this particular

discussion I shall deal with some of the causes that lead

up to these proposals. There are underlying principles

which are responsible for conditions such as we have at

the present time and I shall deal with one of these in particular which is tremendously important in the consideration that you are now giving to this bill.


Mr. Chairman, we have in this country one of the

most corrupt institutions the world has ever known. I

refer to the Federal Reserve Board and the Federal reserve

banks. The Federal Reserve Board, a Government board,

has cheated the Government of the United States and the

people of the United States out of enough money to pay the

national debt. The depredations· and the iniquities of the

Federal Reserve Board and the Federal reserve banks acting

together have cost this country enough money to pay the

national debt several times over. This evil institution has

impoverished and ruined the people of the United States;

has bankrupted itself, and has practically bankrupted our

Government. It has done this through the defects of the

law under which it operates, through the maladministration

of that law by the Federal Reserve Board, and through the

corrupt practices of the moneyed vultures who control it.

Some people think the Federal reserve banks are United

States Government institutions. They are not Government

institutions. They are private credit monopolies which prey

upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory

money lenders. In that dark crew of financial pirates there

are thdse who would cut a man's throat to get a dollar out

of his pocket; there are those who send money into States

to buy votes to control our legislation; and there are those

who maintain an international propaganda for the purpose

of deceiving us and of wheedling us into the granting of

new concessions which will permit them to cover up their

past misdeeds and set again in motion their gigantic train

of crime. 


Those 12 private credit monopolies were deceitfully and.

disloyally foisted upon this country by bankers who came

here from Europe and who repaid us for our hospitality by

undermining our American institutions. Those bankers

took money out of this country to finance Japan in a war

against Russia. They created a reign of terror in Russia with

our money in order to help that war along. They instigated

the separate peace between Germany and Russia and thus

drove a wedge between the allies in the World War. They

financed Trotsky's mass meetings of discontent and rebellion in New York. They paid Trotsky's passage from New

York to Russia so that he might assist in the destruction

of the Russian Empire. They fomented and instigated the

Russian revolution and they placed a large fund of American dollars at Trotsky's disposal in one of their branch

banks in Sweden so that through him Russian homes might

be thoroughly broken up and Russian children flung far

and wide from their natural protectors. They have since

begun the breaking up of American homes and the dispersal

of American children. 


It has been said that President Wilson was deceived by the

attentions of these bankers and by the philanthropic poses

they assumed. It has been said that when he discovered the

manner in which he had been misled by Colonel House, he

turned against that busybody, that "holy monk" of the

financial empire, and showed him the door. He had the

grace to do that, and in my opinion he deserves great credit

for it.

President Wilson died a victim of deception. When he

came to the Presidency, he had certain qualities of mind

and heart which entitled him to a high place in the councils

of this Nation; but there was one thing he was not and

which he never aspired to be; he was not a banker. He

said that he knew very little about banking. It was, therefore, on the advice of others that the iniquitous Federal

reserve act, the death warrant of American liberty, became

law in his administration.

Mr. Chairman, there should be no partisanship in matters

concerning the banking and currency affairs of this country,.

and I do not speak with any.

In 1912 the National Monetary Association, under the

chairmanship of the late Senator Nelson W. Aldrich, made

a report and presented a vicious bill called the National

Reserve Association bill. This bill is usually spoken of as the

Aldrich bill. Senator Aldrich did not write the Aldrich bill.

He was the tool, but not the accomplice, of the Europeanborn bankers who for nearly 20 years bad been scheming to

set up a central bank in this country and who in 1912 had

spent and were continuing to spend vast sums of money to

accomplish their purpose. 


The Aldrich bill was condemned in the platform upon

which Theodore Roosevelt was nominated in the year 1912,

and in that same year, when Woodrow Wilson was nominated, the Democratic platform, as adopted at the Baltimore

convention, expressly stated: "We are opposed to the Aldrich

plan or a central bank." This was plain' language. The

men who ruled the Democratic Party then promised the people that if they were returned to power there would be no

central bank established here while they held the reins of

government. Thirteen months later that promise was

broken, and the Wilson administration, under the tutelage

of those sinister Wall Street figures who stood behind Colonel House, established here in our free country the wormeaten monarchical institution of the "king's bank" to control us from the top downward, and to shackle us from the cradle to the grave. The Federal reserve act destroyed our

old and characteristic way of doing business; it discrimi- -nated against our 1-name commercial paper, the finest in

the world; it set up the antiquated 2-name paper, which is

the present curse of this country, and which has wrecked

every country which has ever given it scope; it fastened

down upon this country the very tyranny from which the

framers of the Constitution sought to save us. 


One of the greatest battles for the preservation of this

Republic was fought out here in Jackson's day, when the

Second Bank of the United States, which was founded upon

the same false principles as those which are exemplified in

the Federal reserve act, was hurled out of existence. After

the downfall of the Second Bank of the United States in

1837, the country was warned against the dangers that

might ensue if the predatory interests, after being cast out,

should come back in disguise and unite themselves to the

Executive, and through him acquire control of the Govern·

ment. That is what the predatory interests did when they

came back in the livery of hypocrisy and under false pretenses obtained the passage of the Federal reserve act.

The danger that the country was warned against came

upon us and is shown in the long train of horrors attendant

upon the affairs of the traitorous and dishonest Federal

Reserve Board and the Federal reserve ba:P..ks. Look

around you when you leave this chamber and you will see

evidences of it on all sides. This is an era of economic

misery and for the conditions that caused that misery, the

Federal Reserve Boatd and the Federal reserve banks are

fully liable. This is an era of financed crime and in the

financing of crime, the Federal Reserve Board does not play

the part of a disinterested spectator. 


It has been said that the draughtsman who was employed

to write the text of the Federal reserve bill U.sed the text

of the Aldrich bill for his purpose. It has been said that

the language of the Aldrich bill was used because the

Aldrich bill had been drawn up by expert lawyers and

seemed to be appropriate. It was indeed drawn up by

lawyers. The Aldrich bill was created by acceptance bankers of European origin in New York City. It was a copy

and in general a translation of the statutes of the Reichsbank and other European central banks.

Half a million dollars was spent on one part of the propaganda organized by those same European bankers for the

purpose of misleading public opinion in regard to it, and

for the purpose of giving Congress the impression that

there was an overwhelming popular demand for that kind

of banking legislation and the kind of currency that goes

with it, namely, an asset currency based on human debts

and obligations instead of an honest currency based on gold

and silver values. Dr. H. Parker Willis had been employed

by the Wall Street bankers and propagandists and when the

Aldrich measure came to naught and he obtained employment from CARTER GLAss to assist in drawing a banking bill

for the Wilson administration, he appropriated the text of

the Aldrich bill for his purpose. There is no secret about

it. The text of the Federal reserve act was tainted from

the beginning. 


Not all of the Democratic Members of the Sixty-third

Congress voted for this great deception. Some of them

remembered the teachings of Jefferson; and, through the

years, there have been no criticisms of the Federal Reserve

Board and the Federal reserve banks so honest, so outspoken, and so unsparing as those which have been voiced

here by Democrats. Again, although a number of Republicans voted for the Federal reserve act, the wisest and most

conservative members of the Republican Party would have

nothing to do with it and voted against it. A few days

before the bill came to a vote, Senator Henry cabot Lodge,

of Massachusetts, wrote to Senator John W. Weeks as follows: 


NEW YoRK CITY, December 17, 1913.

MY DEAR SxNATOR WEEKs: • • • Throughout my public life

I have supported an measures designed to take the Government

out of the ban.ldlllg business • • •. This bill puts the Government Into the banking business as never before tn our history and makes, as I underStand 1\, an notes Government notes

when they should be bank notes. 


The powers vested tn the Federal Reserve Board seem to me highly dangerous, especially where there is political control of the

board. I should be s·orry to hold stock in a bank subject to such

domination. The blll as !t stands seems to me to open the way

to a vast inflation of the currency. There is no necessity of

dwelling upon this point after the remarkable and most powerful

argument of the senior Senator from New York. I can be con- tent here to follow the example of the English candidate for

Parliament who thought it enough "to say ditto to Mr. Burke."

I wm merely add that I do not like to think that any law can be passed which will make tt possible to submerge the gold

standard in a flood of irredeemable paper currency.

I had hoped to support this bill, but I can not vote for it as It stands, because it seems to me to contain features and to rest

upon principles in the highest degree menacing to our prosperity,

to stabiltty in business, and to the general welfare of the people

of the United States.

Very sincerely yours, HENRY CABOT LoDGE. 


In the 18 years which have passed since Senator Lodge

wrote that letter of warning all of his predictions have come

true. The Government is in the banking business as never

before. Against its will it has been made the backer of

horsethieves and card sharps, bootleggers, smugglers, speculators, and swindlers in all parts of the world. Through the

Federal Reserve Board and the Federal reserve banks the

riffraff of every country is operating on the public credit of

the United States Government. Meanwhile, and on account

of it, we ourselves are in the midst of the greatest depression we have ever known. Thus the menace to our prosperity, so feared by Senator Lodge, has indeed struck home.

From the Atlantic to the Pacific our country has been :ravaged and laid waste by the evil practices of the Federal

Reserve Board and the Federal reserve banks and the interests which control them: At no time in our history has the

general welfare of the people of the United States been at

a lower level or the mind of the people so filled with

despair. 


Recently in one of our states 60,000 dwelling houses and

farms were brought under the hammer in a single day. According to the Rev. Father Charles E. Coughlin, who has

lately testified before a committee of this House, 71,000

houses and farms in Oakland County, Mich., have been sold

and their erstwhile owners dispossessed. Similar occurrences have probably taken place in every county in the

United States. The people· who have thus been driven out

are the wastage of the Federal reserve act. They are the

victims of the dishonest and unscrupulous Federal Reserve

Board and the Federal reserve banks. Their children are

the new slaves of the auction block in the revival here of the

institution of human slavery.

In 1913, before the Senate Banking and Currency Committee, MJ.·. Alexander Lassen made the following statement:

But the whole scheme of a Feder~l re~erve ban.f with its com- mercial-paper basis is an impractical, cumbersome machinery, is

simply a cover, to find a way to secure the privilege of issuing money and to evade payment of as much tax upon circulation as possible, and then control the issue and maintain, instead of

reduce, interest rates. It is a system that, if inaugurated, will

prove to the advantage of the few and the detriment of the people

of the United States. It will mean continued shortage of actual

money and further extension of credits; for when there is a lack

of real money people have to borrow credit to their cost.


A few days before the Federal reserve act was passed Senator Elihu Root denounced the Federal reserve bill as an

outrage on our liberties and made the following prediction:

Long bef ore we wake up from our dreams of prosperity through

an inflated currency, our gold, which alone could have kept us from catastrophe, will have vanished and no rate of interest will

tempt it to ret urn.

If ever a prophecy came true, that one did. It was impossible, however, far those luminous and instructed thinkers to

control the cow-se of events. On December 23, 1913, the

Federal reserve bill became law, and that night Colonel

House wrote to his hidden master in Wall Street as follows:


I want to saj a word of appreciation to you· for the silent but no doubt effective work you have done in the interest of currency legislation and t o congratulate you that the measure has finally

been enacted into law. We all know that an entirely perfect bill,

satisfactory to everybody, would h ave been an impossibility, and

I feel quite certain fair men will admit that unless the President

had stood as firm as he did we should likely have had no legislation at all. The bill is a good one in many respects; anyhow good enough to start with and to let experience teach us in what

direction it needs perfection, which in due time we shall then get.

In any event you have personally good reason to feel gratified

with what has been accomplished.


The words " unless the President had stood as firm as he

did we should likely have had no legislation at all," were a

gentle reminder that it was Colonel House himself, the

"holy monk," who had kept the President firm.

The foregoing letter affords striking evidence of the manner in which the predatory interests then sought to control

the Government of the United States by surrounding the

Executive with the personality and the influence of a financial Judas. Left to itself and to the conduct of its own legislative functions without pressure from the Executive, the

Congress would not have passed the Federal reserve act.

According to Colonel House, and since this was his report to

his master, we may believe it to be true, the Federal reserve

act was passed because Wilson stood firm; in other words

because Wilson was under the guidance and control of the

most ferocious usurers in New York through their hireling,

House. The Federal reserve act became law the day before

Christmas Eve in the year 1913, and shortly afterwards the

German international bankers, Kuhn, Loeb & Co., sent one

of their partners here to run it.


 In 1913, when the Federal reserve bill was submitted to

the Democratic caucus, there was a discussion in regard to

the form the proposed paper currency should take.

The proponents of the Federal reserve act, in their determination to create a new kind of paper money, had not

needed to go outside of the Aldrich bill for a model. By the

terms of the Aldrich bill, bank notes were to be issued by the

National Reserve Association and were to be secured partly

by gold or lawful money and partly by circulating evidences

of debt. The first draft of the Federal reserve bill presented

the same general plan, that is, for bank notes as opposed to

Government notes, but with certain differences of regulation.


 When the provision for the issuance of Federal reserve

notes was placed before President Wilson he approved of it,

but other Democrats were more mindful of Democratic principles and a great protest greeted the plan. Foremost

amongst those who denounced it was William Jennings

Bryan the Secretary of State. Bryan wished to have the Feder~l reserve notes issued as Government obligations.

President Wilson had an interview with him and found him

adamant. At the conclusion of the interview Bryan left

with the understanding that he would resign if the notes

were made bank notes. The President then sent for his Secretary and explained th~ matter to him. Mr. Tumulty went

to see Bryan and Bryan took from his library shelves a book

containing all the Democratic platforms and read extracts

from them bearing on the matter of the public currency.

Returning to the President, Mr. Tumulty told him what. had

happened and ventured the opinion that Mr. Bryan was

right and that Mr. Wilson was wrong. The President then

asked Mr. Tumulty to show him where the Democratic Party

in its national platforms had ever taken the view indicates!

by Bryan. Mr. Tumulty gave him the book, which he had

brought from Bryan's house, and the President read very

carefully plank after plank on the currency. He then said,

"I am convinced there is a great deal in what Mr. Bryan

says," an·d thereupon it was arranged that Mr. Tumulty

should see the proponents of the Federal reserve bill in an

effort to bring about an adjustment of the matter.


The remainder of this story may be told in the words of

Senator GLASs. Concerning Bryan's opposition to the plan

of allowing the proposed Federal reserve notes to take the

form of bank notes and the manner in which President Wilson and the proponents of the Federal reserve bill yielded

to Bryan in return for his support of the measure, Senator

GLASs makes the following statement:

The only other feature of the currency bill around which a conflict raged at this time was the note-issue provision. Long before I knew it, the President was desperately worried over it.

His economic good s..:nse told him the notes should be issued by

the banks and not by the Government; but some of his advisers

told him Mr. Bryan could not be induced to give his support to

any bill that did not provide for a. "Government note." There was in the Senate and House a large :Bryan following which, united with a n!.turally adversary party vote, could prevent legislation. Certain averconfident gentlemen proffered their services 1n

the task of" managing Bryan." They did not budge h1m.. • • •

When a decision could no longer be postponed the President sum- moned me to the White House to say he wanted Federal reserve notes to " be obligations of the United Stat es." I was for an instant speechless. With all the earnestness of _my being I remon- strated, pointing out the unscientific nature of such a thing, as well as the evident inconsistency of it.

" There is not, in truth, any Government obligation here, Mr.

President," I exclaimed. "It would be a pretense on its face.

Was there ever a Government note based primarily on the property of banking institutions? Was there ever a Government issue

not one dollar of which could be put out except by demand of a bJ.nk? The suggested Government obligation is so remote it could never be discerned," I concluded, out of breath.

"Exactly so, GLAss," earnestly said the President. "Every word

you say is true; the Government liability is a mere thought. And

so, if we can hold to the substance of the thing and give the

other fellow the shadow, why not do it, 1f thereby we may save our bill?"


Shadow and substance! One ·can see from this how little

President ·Wilson knew about banking. Unknowingly, he

gave the substance to the international banker and the

shadow to the common man. Thus was Bryan circumvented in his efforts to uphold the Democratic doctrine of

the rights of the people. Thus the" unscientific blur" upon

the bill was perpetrated. The "unscientific blur," however, was not the fact that the United States Government,

by the terms of Bryan's edict, was obliged to assume as an

obligation whatever currency was issued. Mr. Bryan was

right when he insisted that the United States should preserve its sovereignty over the public currency. The "unscientific blur " was the nature of the currency itself, a nature

which makes it unfit to be assumed as an obligation of the

United States Government. It is the worst currency and

the most dangerouS this country has ever known. When the

proponents of the act saw that Democratic doctrine would

not permit them to let the proposed banks issue the new currency as bank notes, they should have stopped at that.

They should not have foisted that kind of currency, namely,

an asset currency, on the United States Government. They

should not have made the Government liable on the private

debts of individuals and corporations and, least of all, on

the private debts of foreigners.

The Federal reserve note is essentially unsound.

As Kemmerer says:


The Federal reserve notes, therefore, in form have some of the

qualities of Government paper money, but, in substance, are almost a pure asset currency possessing a Government guaranty

against which contingency the Government has made no provision

whatever.

Hon. E. J. Hill, a former Member' of the House, said, and

truly: .

• • • They are obligations of the Government for which

the United States has received nothing and for the payment of

which at any time it assumes the responsibility looking to the

Federal reserve bank to recoup itself.

If the United States Government is to redeem the Federal

reserve not.es when the general public finds out what it costs

to deliver this flood of paper money to the 12 Federal reserve

banks, and if the Government has made no provision for

redeeming them, the first element of their unsoundness is

not far to seek.

Before the Senate Banking and Currency Committee,

while the Federal reserve bill was under discussion, Mr.

Crozier, of Cincinnati, said:


In other words, the imperial power of elasticity of the public

currency is wielded exclusively by these central corporations owned

by the banks. This is a life and death power over all local banks

and all business. It can be used to create or destroy prosperity,

to ward otf or cause stringencies and panics. By making money

artificially scarce interest rates throughout the country can be

arbitrarily raised and the bank tax on all business and cost of

living increased for the profit of the banks owning these regional

central banks, and without the slightest benefit to the people.

These 12 corporations together cover the whole country and mo- nopolize and- use for private gain every dollar of the public cur- rency and all public revenues of the United States. Not a dollar can be put into circulation among the people by their Government

without the consent of and on terms fixed by these 12 private

money trusts.


In defiance of this and all other warnings, the proponents

of the Federal reserve act created the 12 private credit corporations and gave them an absolute monopoly of the currency of the United States, not of Federal reserve notes

alone, but of all the currency, the Federal reserve act pr:>-

viding ways by means of which the gold and general currency in the hands of the American people could be obtained

by the Federal reserve banks in exchange for Federal reserve

notes, which are not money but merely promises to pay

money. Since the evil day when this was done the initial

monopoly has been extended by vicious amendments to the

Federal reserve act and by the unlawful and treasonable

practices of the Federal Reserve Board and the Federal

reserve banks.


Mr. Chairman, when a· Chinese merchant sells human

hair to a Paris wigmaker and bills him in dollars, the Federal reserve banks can buy his bill against the wigmaker and

then use that bill as collateral for Federal reserve notes.

The United States Government thus pays the Chinese merchant the debt of the wigmaker and gets nothing in return

except a shady title to the Chinese hair.

Mr. Chairman, if a Scotch distiller wishes to send a cargo

of Scotch whisky to the United States, he can draw his bill

against the purchasing bootlegger in dollars; and after the

bootlegger has accepted it by writing his name across the

face of it, the Scotch distiller can send that bill to the

nefarious open discount market in New York City, where

the Federal Reserve Board and the Federal reserve banks

will buy it and use it as collateral for a new issue of Federal

reserve notes. Thus the Government of the United States

pays the Scotch distiller for the wliisky before it is shipped;

and if it is lost on the way, or if the Coast Guard seizes it

and destroys it, the Federal reserve banks simply write off

the loss and the Government never recovers the money that

was paid to the Scotch distiller. While we are attempting

to enforce prohibition here, the Federal Reserve Board and

the Federal reserve banks are financing the distillery business in Europe and are paying bootleggers' bills with the

public credit of the United States Government.


Mr. Chairman, if a German brewer ships beer to this

country or anywhere else in the world and draws his bill for

it iii dollars, the Federal reserve ·banks will buy that bill and

use it as collateral for Federal reserve notes. Thus, they

compel our Government to pay the German brewer for his

beer. Why should the Federal Reserve Board and the Federal reserve banks be permitted to finance the brewing industry of Germany, either in this way or as they do by compelling small and fearful United States banks to take stock

in the Isenbeck brewery and in the German bank for brewing industries?

Mr. Chairman, if Dynamit Nobel of Germany wishes to

sell dynamite to Japan to use in Manchuria or elsewhere,

it can draw its bill against its Japanese customers 'in dollars and send that bill to the nefarious open discount market in New York City, where the Federal Reserve Board and

the Federal reserve banks will buy it and use it as collateral

for a new issue of Federal reserve notes, while at the same

time the Federal Reserve Board will be helping Dynamit

Nobel by stutfing its stock into the United States banking

system. Why should we send our representatives to the

disarmament conference at Geneva while the Federal Reserve Board and the Federal reserve banks are making our

Government pay japanese debts to German munition

makers?


Mr. Chairman, if a bean grower of Chile wishes to raise

a crop of beans and sell them to a Japanese customer, he

can draw a bill against his prospective Japanese customer

in dollars and have it purchased by the Federal Reserve

Board and the Federal reserve banks and get the money

out of this country at the expense of the American public

before he has even planted the beans in the ground.

Mr. Chairman, if a German in Germany wishes to export

goods to South Am~rica or anywhere else, he can draw his

bill against his customer and send it to the United States and get the money out of this country before he ships or

even manufactures the goods.

Mr. Chairman, why should the currency of the United

States be issued on the strength of Chinese human hair?

Why should it be issued on the trade whims of a wigmaker?

Why should it be issued on the strength of German beer?

Why should it be issued on a crop of unplanted beans to be

grown in Chile for Japanese consumption? Why should the

Government of the United States be compelled to issue

many billions of dolla:rs every year to pay the debts of one

foreigner to another foreigner? Was it for this that our

national-bank depositors had their money taken out of our

banks and shipped abroad? Was it for this they had to

lose it? Why should the public credit of the United States

Government and likewise money belonging to our nationalbank depositors be used to support foreign brewers, narcotic

drug vendors, whiskey distillers, wigmakers, human-hair

merchants, Chilean bean growers, and the like? Why should

our national-bank depositors and our Government be forced

to finance the munition factories of Germany and Soviet

Russia? 

 

 Mr. Chairman, if a German, in Germany, wishes to sell

wheelbarrows to another German, he can draw a bill in

dollars and get the money out of the Federa~ reseTve banks

before an American farmer could explain his request for a

loan to move his crop to market. In Germany, when credit

instruments are being given, the creditors say, "See you, it

must be of a kind that I can cash at the reserve." Other

foreigners feel the same way. The reserve to which these

gentry refer is our reserve, which, as you know, is entirely

made . up of money belonging to American bank depositors. ~ think foreigners should cash their own trade paper and

not send it over here to bankers who use it to fish cash out

of the pockets of the American people.

Mr. Chairman, there is nothing like the Federal reserve

pool of confiscated bank deposits in the world. It is a pubUc

trough of American wealth in which foreigners claim rights

equal to or greater than those of Americans. The Federal

reserve banks are the agents of the foreign central banks.

They use our bank depositors' money for the benefit of their

foreign principals. They barter the public credit' of the

United States Government and hire it out to foreigners at a

profit to themselves.

All this is done at the expense of the United States Government, and at a sickening loss to the American people.

Only our great wealth enabled us to stand the drain of it as

long as we did. ,


l believe that the nations of the world would have settled

down after the World War more peacefully if we had not

had this standing temptation here-this pool of ,our bank

depositors' money given to private interests and used by

them in connection with illimitable drafts upon the public

credit of the United States Government. The Federal ,Reserve Board invited the world to come in and to carry away

cash, credit, goods, and everything else of value that was

movable. Values amounting to many billions of dollars have

been taken out of this country by the Federal Reserve Board

and the Federal reserve banks for the benefit of their foreign principals. The United States has been ransacked and

pillaged. Our structures have been gutted and only the

walls are left standing. While this crime was being perpetrated everything the world could rake up to sell us was

brought in here at our own expense by the Federal Reserve

Board and the Federal reserve banks until our markets were

swamped with unneeded and unwanted imported goods

priced far above their value and thus made to equal the

dollar volume of our honest exports and to kill or reduce

our favorable balance of trade. As agents of the foreign

central banks, the Federal Reserve Board and the Federal

reserve banks try by every means within their power to reduce our favorable balance of trade. They act for their

foreign principals and they accept fees from foreigners for

acting against the best interests of the United States. Naturally there has been great competition among foreigners

f9r the favors of the Federal Reserve Board.


What we need to do is to send the reserves of our national

banks home to the people who earned and produced them

and who still own them and to the banks which were compelled to surrender them to predatory interests. We need

to destroy the Federal reserve pool, wherein our nationalban..'!{ reserves are impounded for the benefit of foreigners.

We need to make it very difficult for outlanders to draw

money away from us. We need to save America for

Americans.

Mr. Chairman, when you hold a $10 Federal reserve note

in your hand you are holding a piece of paper which sooner

or later is going to cost the United States Government $10

in gold, unless the Government is obliged to give up the

gold standard. It is protected by a reserve of 40 per cent,

or $4 in gold. It is based on Limburger cheese, reputed to

be in a foreign warehouse; or on cans purporting to contain

peas but which may contain no peas but salt water instead;

or on horse meat; illicit drugs; bootleggers' fancies; rags

and bones from Soviet Russia of which the United States

imported over a million dollars' worth last year; on wine,

whisky, natural gas, on goat or dog fur, garlic on the

string, or Bombay ducks. If you like to have paper money

which is secured by such commodities, you have it in the

Federal reserve note. If you desire to obtain the thing of

value upon which this paper currency is based-that is, the

Limburger cheese, the whisky, the illicit drugs, or any of

the other staples-you will have a very hard time finding

them. Many of these worshipful commodities are in foreign countries. Are you going to Germany to inspect her

warehouses to see if the specified things of value are there?

I think not. And what is more, I do not think you would

find them if you did go.


 Immense sums belonging to our national-bank depositors

have been given to Germany on no collateral security whatever. The Federal Reserve Board and the Federal reserve

banks have issued United States currency on mere finance

drafts drawn by Germans. Billions upon billions of our

money has been pumped into Germany and money is still

being pumped into Germany by the Federal Reserve Board

and the Federal reserve banks. Her worthless paper is still

being negotiated here and renewed here on the public credit

of the United States Government and at the expense of the

American people. On April 27, 1932, the Federal reserve

outfit sent $750,000, belonging to American bank depositors,

in gold to Germany. A week later, another $300,000 in gold

was shipped to Germany in the same way. About the middle

of May $12,000,000 in gold was shipped to Germany by the

Federal Reserve Board and the Federal reserve banks. Almost every week there is a shipment of gold to Germany.

These shipments are not made for profit on exchange since

German marks are below parity against the dollar.

Mr. Chairman, I believe that the national-bank depositors

of the United States are entitled to know what the Federal

Reserve Board and the Federal reserve banks are doing with

their money. There are millions of national-bank depositors

in this country who do not know that a percentage of every

dollar they deposit in a member bank of the Federal re .. serve system goes automatically to the American agents of

foreign banks and that all of their deposits can be paid away

to foreigners without their knpwledge or consent by the

crooked machinery of the Federal reserve act and the

questionable practices of the Federal Reserve Board and the

Federal reserve banks. Mr. Chairman, the American people

Should be told the truth by their servants in office.


In 1930 we had over half a billion dollars outstanding

daily to finance foreign goods stored in or shipped between

foreign countries. In its yearly total, this item amounts to

several billion dollars. What goods are those upon which

the Federal reserve banks yearly pledge several billion dollars of the public credit of the United States? What goods

are those which are hidden in European and Asiatic storehouses and which have never been seen by any officer of this

Government, but which are being financed on the public

credit of the United States Government? What goods are

those upon which the United States Government is being


obliged by the Federal reserve banks to issue Federal reserve

notes to the extent of several billion dollars a year?

The Federal Reserve Board and the Federal reserve banks

bave been international bankers from the beginning, with

the United States Government as their enforced banker and

supplier of currency. But it is none the less extraordinary

to see those 12 private credit monopolies buying the debts of

foreigners against foreigners in all parts of the world and

asking the Government of the United States for new issues

of Federal reserve notes in exchange for them.

I see no reason why the American taxpayers should be

hewers of wood and drawers of water for the European. and

Asiatic customers of the Federal reserve banks. I see no

reason why a worthless acceptance drawn by a foreign

swindler as a means of getting gold out of this country

should receive the lowest and choicest rate from the Federal

Reserve Board and be treated as better security than the

note of an American farmer living on American land.

The magnitude of the acceptance 1·acket, as it has been

developed by the Federal reserve banks, their foreign correspondents, and the predatory European-born bankers who

set up the Federal reserve institution here and taught our

own brand of pirates how to loot the people-! say the magnitude of this racket is estimated to be in the neighborhood

of $9,000,000,000 a year. In the past 10 years it is said to

. have amounted to $90,000,000,000. In my opinion, it has

amounted to several times as much. Coupled with this you

have, to the extent of billions of dollars, the gambling in

United states securities, which takes place in the same open

discount market-a gamble upon which the Federal Reserve

Board is now spending $100,000,000 a week.


Federal reserve notes are taken from the United States

Government in unlimited quantities. Is it strange that the

burden of supplying these immense sums of money to the

gambling fraternity has at last proved too heavY for the

American people to endure? Would it not be a national

calamity if the Federal Reserve Board and the Federal reserve banks should again bind this burden down on the

backs of the American people and, by means of the long

rawhide whips of the credit masters, compel them to enter

upon another 17 years of slavery? They are trying to do

that now. They are taking $100,000,000 of the public credit

of the United States Government every week in addition to

all their other seizures, and they are spending that money

in the nefarious open market in New York City in a desperate gamble to reestablish their graft as a going concern.

They are putting the United States Government in debt

to the extent of $100,000,000 a week, and with this money

they are buying up our Government securities for themselves

and their foreign principals. Our people are disgusted with

the experiments of the Federal Reserve Board. The Federal

Reserve Board is not producing a loaf of bread, a yard of

cloth, a bushel of com, or a pile of cordwood by its cl1eckkiting operations in the money market.


 A fortnight or so ago great aid and comfort was given

to Japan by the firm of A. Gerli & Sons, of New York, an

importing firm, which bought $16,000,000 worth of raw silk

from the Japanese Government. Federal reserve notes will

be issued to pay that amount to the Japanese Government,

and these notes will be secured by money belonging to our

national-bank depositors.

Why should United States currency be issued on this debt?

Why should United States currency be issued to pay the debt

of Gerli & Sons to the Japanese Government? The Federal

Reserve Board and the Federal reserve banks think more

of the silkworms of Japan than they do of American citizens. We do not need $16,000,000 worth of silk in this

country at the present time, not even to · furnish work to

dyers and finishers. We need to wear home-grown and

American-made clothes and to use our own money for our

own goods and staples. We could spend $16,000,000 in the

United States of America on American children and that

would be a better investment for us than Japanese silk purchased on the public credit of the United States Government.


Mr. Speaker, on the 13th of January of this year I addressed the House on the subject of the Reconstruction

Finance Corporation. In the course of my remarks I made

the following statement:

In 1928 the member banks of the Federal reserve system borrowed $60,598,690,000 from the Federal reserve banks on their

15-day promissory notes. Think of it! Sixty billion. dollars payable upon demand 1n gold 1n the course of one single year. The

actual payment of such obligations calls for six times as much

monetary gold as there is in the entire world. Such transactions

represent a grant in the course of one single year of about

$7,000,000 to every member bank of the Federal reserve system.

Is it any wonder that there is a depression 1n this country? Is it

any wonder that American labor, which ultimately pays the cost

of all the banking operations of this country, has at last proved

unequal to the task of supplying this huge total of cash and

credit for the benefit of stock-market manipulators and foreign swindlers?


 Mr. Chairman, some of my colleagues have asked for more

specific information concerning this stupendous graft, this

frightful burden which has been placed on the wage earners

and taxpayers of the United States for the benefit of the

Federal Reserve Board and the Federal reserve banks. They

were surprised to learn that member banks of the Federal

reserve system had received the enormous sum of $60,598,-

690,000 from the Federal Reserve Board and the Federal reserve banks on their promissory notes in the course of one

single year, namely, 1928. Another Member of this House,

Mr. BEEDY, the honorable gentleman from Maine, has questioned the accuracy of my statement and has informed me

that the Federal Reserve Board denies absolutely that these

figures are correct. This Member has said to me that the

thing is unthinkable, that it can not be, that it is beyond

all reason to think that the Federal Reserve Board and the

Federal reserve banks should have so subsidized and endowed their favorite banks of the Federal reserve system.

This Member is horrified at the thought of a graft so great,

a bounty so detrimental to the public welfare as sixty and

a half billion dollars a year and more shoveled out to favored banks of the Federal reserve system.


I sympathize with Mr. BEEDY. I would spare him pain if

I could, but the facts remain as I have stated them. In

1928, the Federal Reserve Board and the Federal reserve

banks presented the staggering amount of $60,598,690,000

to their member banks at the expense of the wage earners

and taxpayers of the United States. In 1929, the year of

the stock-market crash, the Federal Reserve Board and the

Federal reserve banks advanced :fifty-eight billions to member banks.

In 1930, while the speculating banks were getting out of

the stock market at the expense of the general public, the

Federal Reserve Board and the Federal reserve banks advanced them $13,022,782,000. This shows that when the

banks were gambling on the publie credit of the United

States Government as represented by Federal reserve currency, they were subsidized to any amount they required by

the Federal Reserve Board and the Federal reserve banks.

When the swindle began to fail, the banks knew it in advance and withdrew from the market. They got out with

whole skins and left the people of the United States to pay

the piper.

On November 2, 1931, I addressed a letter to the Federal

Reserve Board asking for the aggregate total o1 member

bank borrowings in the years 1928, 1929, 1930. In due

course, I received a reply from the Federal Reserve Board,

dated November 9, 1931, the pertinent part of which reads

as follows:


MY DEAR CONGRESSMAN: In reply to your letter Of November 2,

you are advised that the aggregate amount of 15-day promissory

notes of member banks during each of the past three calendar

years has been as follows:

1928-------------------------------------- $60,598,690,000 

1929-------------------------------------- 58, 046, 697, 000 

1930-------------------------------------- 13,022,782,000

• • • • • • •

Very truly yours, CHESTER MoRRILL, Secretary.


This will show the gentleman from Maine the accuracy of

my statement. As for the denial of these facts made to him by .the Federal Reserve Board, I can only say that it must. have been prompted by fright, since hanging is too good

for a Government board which permitted such a misuse of

Government funds and credit.

My friend from Kansas, Mr. McGuGm, has stated that he

thought the Federal Reserve Board and the Federal reserve

banks lent money by rediscounting. So they do, but they

lend comparatively little that way. The real rediscounting

that they do has been called a mere penny in the slot business. It is too slow for genuine high flyers. They discourage it. They prefer to subsidize their favorite banks by

making these $60,000,000,000 advances, and they prefer to acquire acceptances in the notorious open discount market in

New York, where they can use them to control the prices of

stocks and bonds on the exchanges. For every dollar they

advanced on rediscounts in 1928 they lent $33 to their favorite banks for gambling purposes. In other words, their

rediscounts in 1928 amounted to $1,814,271,000, while their

loans to member banks amounted to $60,598,690,000. As for

their open-market operations, these are on a stupendous

scale and no tax is paid on the acceptances they handle;

and their foreign principals, for whom they do a business

of several billion dollars every year, pay no income tax on

their profits to the United States Government.

This is the John Law swindle over again. The theft of

Teapot Dome was trifling compared to it. What· king ever

robbed his subjects to such an extent as the Federal Reserve Board and the Federal reserve banks have robbed us?

Is it any wonder that there have lately been 90 cases of

starvation in one of the New York hospitals? Is it any

wonder that the children of this country are being dispersed and abandoned? 


The Government and the people of the United States have

been swindled by swindlers de luxe to whom the acquisition

of American gold or a parcel of Federal reser.ve notes presented no more difficulty than the drawing up of a worthless acceptance in a country not subject to the laws of the

United States, by sharpers not subject to the jurisdiction

of the United States courts, sharpers with a strong banking

" fence " on this side of the water-a " fence " acting as a

receiver of the worthless paper coming from abroad, indorsing it and getting the currency out of the Federal

reserve banks for it as quickly as possible, exchanging that

currency for gold, and in turn transmitting the gold to its

foreign confederates.

Such were the exploits of Ivar Kreuger, Mr. Hoover's

friend, and his hidden Wall Street backers. Every dollar

of the billions Kreuger and his gang drew out of this country on acceptances was drawn from the Government and

the people of the United States through the Federal Reserve

Board and the Federal reserve banks. The credit of the

United States Government was peddled to him by the Federal Reserve Board and the Federal reserve banks for their

own Pt:ivate gain. That is what the Federal Reserve Board

and the Federal reserve banks have been doing for many

years. They have been peddling the credit of this Government and the signature of this Government to the swindlers

and speculators of all nations. That is what happens when

a country forsakes its Constitution and gives its sovereignty

over the public currency to private interests. Give them the

flag and they will sell it.


The nature of Kreuger's organized swindle and the bankrupt condition of Kreuger's combine was known here last

June when Hoover sought to exempt Kreuger's loan to

Germany of one hundred twenty-five millions from the operation of the Hoover moratorium. The bankrupt condition of

Kreuger's swindle was known here last summer when $30,-

000,000 was taken from American taxpayers by certain bankers in New York for the ostensible purpose of permitting

Kreuger to make a loan to Colombia. Colombia never saw

that money. The nature of Kreuger's swindle and the bankrupt condition of Kreuger was known here in January when

he visited his friend. Mr. Hoover, at the White House. It

was known here in March before he went to Paris and committed suicide there.


Mr. Chairman, I think the people of the United States are

entitled to know how many billions of dollars were placed

at the disposal of Kreuger and his gigantic combine by the

Federal Reserve Board and the Federal reserve banks and

to know how much of our Government currency was issued

and lost in the financing of that great swindle in the years

during which the Federal Reserve Board and the Federal

reserve banks took care of Kreuger's requirements.

Mr. Chairman, I · believe there should be a congressional

investigation of the operations of Kreuger and Toll in the

United States and that Swedish Match, International Match,

the Swedish-American Investment Corporation, and all related enterprises, including the subsidiary companies of

Kreuger and Toll, should be investigated and that the issuance of United States currency in connection with those

enterprises and the use of our national-bank depositors'

money for Kreuger's benefit should be made known to the

general public. I am referring, not only to the securities

which were floated and sold in this country, but also to the

commercial loans to Kreuger's enterprises and the mass

financing of Kreuger's companies by the Federal Reserve

Board and the Federal reserve banks and the predatory

institutions which the Federal R_eserve Board and the

Federal reserve banks shield and harbor.


A few days ago the President of the United States, with a

white face and shaking hands, went before the Senate on

behalf of the moneyed interests and asked the Senate to

levy a tax on the people so that foreigners might know that

the United States would pay its debts to them. Most Americans thought that it was the other way around. What does

the United States owe to foreigners? When and by whom

was the debt incurred? It was incurred by the Federal Reserve Board and the Federal reserve banks when they peddled the signature of this Government to foreigners for a

price. It is what the United States Government has to pay

to redeem the obligations of the Federal Reserve Board and

the Federal reserve banks. Are you going to let those thieves

get off scot free? Is there one law for the looter who drives

up to the door of the United States Treasury in his limousine

and another for the United States veterans who are sleeping

on the floor of a dilapidated house on the outskirts of

Washington?

The Baltimore & Ohio Railroad is here asking for a large

loan from the people and the wage earners and the taxpayers of the United States. It is begging for a hand-out

from the Government. It is standing, cap in hand, at· the

door of the Reconstruction Finance Corporation, where all

the other jackals have gathered to the feast. It is asking

for money that was raised from the people by taxation, and

it wants this money of the poor for the benefit of Kuhn,

Loeb & Co., the German international bankers. Is there one

law for the Baltimore & Ohio Railroad and another for the

needy veterans it threw off its freight cars the other day?

Is there one law for sleek and prosperous swindlers who call

themselves bankers and another law for the soldiers who

defended the United States flag?


Mr. Chairman, some people are horrified because the

collateral behind Kreuger and Toll debentures was removed

and worthless collateral substituted for it. What is this

but what is being done daily by the Federal reserve banks?

When the Federal reserve act was passed, the Federal

reserve banks were allowed to substitute "other like collateral " for collateral behind Federal reserve notes but by

an amendment obtained at the request of the corrupt and

dishonest Federal Reserve Board, the act was changed so

that the word " like " was stricken out. All that immense

trouble was taken here. in Congress so that the law would

permit the Federal reserve banks to switch collateral. At

the present time behind the scenes in the Federal reserve

banks there is a night-and-day movement of collateral. A

visiting Englishman leaving the United States a few weeks

ago, said that th.irigs would look better here after " they

cleaned up the mess at Washington." Cleaning up the mess

consists in fooling the people and making them pay a second time for the bad foreign investments of the Federal

:Reserve Board and the Federal reserve banks. It consists in moving -that heavy load of dubious and worthless foreign paper-the bills of wigmakers, brewers, distillers, narcotic-drug vendors, munition makers, illegal finance drafts,

and worthless foreign securities, out of the banks and putting it on the back of American labor. That is what the

Reconstruction Finance Corporation is doing now. They

talk about loans to -banks· and railroads but they say very

little about that other business of theirs which consists in

relieving the swindlers who promoted investment trusts in

this country and dumped worthless foreign securities into

them and then resold that mess of pottage to American

investors under cover of their own corporate titles. The

Reconstruction Finance Corporation is taking over those

worthless securities from those investment trusts with

United States Treasury money at the expense of the American taxpayer and wage earner.


It will take us 20 years to redeem our Government, 20

years of penal servitude to pay off the gambling debts of

the traitorous Federal Reserve Board and the Federal reserve banks and to earn again that vast flood of American

wages and savings, bank deposits, and United States Government credit which the Federal Reserve Board and the

Federal reserve banks e_xported out of this country to their

foreign principals.

The Federal Reserve Board and the Federal reserve

banks lately conducted an anti-hoarding campaign here.

Then they took that extra money which they had persuaded the trusting American people to put into the banks

and they sent it to Europe along with the rest. In the last

several months, they have sent $1,300,000,000 in gold to

their foreign employers, their foreign masters, and every

dollar of that gold belonged to the people of the United

States and was unlawfully taken from them.

Is not it high time that we had an audit of the Federal

Reserve Board and the Federal reserve banks and an examination of all our Government bonds and securities and

public moneys instead of allowing the corrupt and dishonest

Federal Reserve Board and the Federal reserve banks to

speculate with those securities and this cash in the notorious

open discount market of New York City?


 Mr. Chairman, within the limits of the time allowed me,

I can not enter into a particularized discussion of the Federal Reserve Board and the Federal reserve banks. I have

singled out the Federal reserve currency for a few remarks

because there has lately been some talk here of "fiat

money." What kind of money is being pumped into the

open discount market and through it into foreign channels

and stock exchanges? Mr. Mills of the Treasury has spoken

here of his horror of the printing presses and his horror

of dishonest money. He has no horror of dishonest money.

If he had, he would be no party to the present gambling

of the Federal Reserve Board and the Federal reserve

banks in the nefarious open discount market of New York.

a market in which the sellers are represented by 10 great

discount dealer corporations owned and organized by

the very banks which own and control the Federal Reserve Board and the Federal reserve banks. Fiat money,

indeed!

After the several raids on the Treasury Mr. Mills borrows

the speech of those who protested against those raids and

speaks now with pretended horror of a raid on the Treasury. Where was Mr. Mills last October when the United

States Treasury needed $598,000,000 of the taxpayers' money

which was supposed to be in the safe-keeping of Andrew

W. Mellon in the designated depositories of Treasury funds,

and which was not in those depositories when the Treasury

needed it? Mr. Mills was the Assistant Secretary of the

Treasury then, and he was at Washington throughout October, with the exception of a very significant week he spent

at White Sulphur Springs closeted with international bankers, while the Italian minister, Signor Grandi, was being entertained-and bargained with-at Washington.


What Mr. Mills is fighting for is the preservation whole

and entire of the bankers' monopoly of all the currency of

the United States Government. What Mr. PATMAN proposes

is that the Government shall exercise its sovereignty to the

extent of issuing some currency for itself. This conflict of opinion between Mr. Mills as the spokesman of the bankers -and Mr. PATMAN as the spokesman of the people brings the

currency situation here into the open. Mr. PATMAN and the

veterans are confronted by a stone wall-the wall that

fences in the bankers with their special privilege. Thus the

issue is joined between the hosts of democracy, of which the

veterans are a part, and the men of the king's bank, the

would-be aristocrats, who deflated American agriculture and ,

robbed this country for the benefit of their foreign principals.


 Mr. Chairman, last December I introduced a resolution here

asking for an examination and an audit of the Federal Re- •

serve Board and the Federal reserve banks and all related

matters. If the House sees fit to make such an investigation,

the people of the United States will obtain information of

great value. This is a Government of the people, by the

people, for the people, consequently nothing should be concealed from the people. The man who deceives the people

is a traitor to the United States. The man who knows or

suspects that a crime has been committed and who conceals

or covers up that crime is an accessory to it. Mr. Speaker,

it is a monstrous thing for this great Nation of people to

have its destinies presided over by a traitorous Government

board acting in secret concert with international usurers.

Every effort has been made by the Federal Reserve Board

to conceal its power but the truth is the Federal Reserve

Board has usurped the Government of the United States.

It controls everything here and it controls all our foreign

relations. It makes and breaks governments at will. No

man and no body of men is more entrenched in power

than the arrogant credit monopoly which operates the Federal Reserve Board and the Federal reserve banks. These

evil-doers have robbed this country of more than enough

money to pay the national debt. What the National Government has permitted the Federal Reserve Board to steal

from the people should now be restored to the people. The

people have a valid claim against the Federal Reserve Board

and the Federal reserve banks. If that claim is enforced,

Americans will not need to stand in breadlines or to suffer

and die of starvation in the streets. Homes will be saved,

families will be kept together, and American children will not be dispersed and abandoned. The Federal Reserve Board

and the Federal reserve banks owe the United States Government an immense sum of money. We ought to find out

the exact amount of the people's claim. We should know

the amount of the indebtedness of the Federal Reserve

Board and the Federal reserve banks to the people and we

should collect that amount immediately. We certainly

should investigate this treacherous and disloyal conduct of

the Federal Reserve Board and the Federal reserve banks.

Here is a Federal reserve note. Immense numbers of

these notes are now held abroad. I am tbld they amount to

upward of a billion dollars. They constitute a claim against

our Government and likewise a claim against the money

our people have deposited in the member banks of the Federal reserve system. Our people's money to the extent of

$1,300,000,000 has within the last few months been shipped

abroad to redeem Federal reserve notes and to pay other

gambling debts of the traitorous Federal Reserve Board and

the Federal reserve banks. The greater part of our monetary stock has been shipped to foreigners. Why should we

promise to pay the debts of foreigners to foreigners? Why

should our Government be put into the position of supplying money to foreigners? Why should American farmers

and-wage earners add millions of foreigners to the number

of their dependents? Why should the Federal Reserve

Board and the Federal reserve banks be permitted to finance

our competitors in all parts of the world? Do you know why

the tariff was raised? It was raised to shut out the :flood of

Federal reserve · goods pouring in here from every quarter

of the globe-cheap goods produced by cheaply paid foreign labor on unlimited supplies of money and credit sent out

of this country by the dishonest and unscrupulous Federal

Reserve Board and the Federal reserve banks. Go out in

Washington to buy an electric light bulb and you will

probably be offered one that was made in Japan on American money. Go out to buy a pair of fabric gloves and in-conspicuously written on the inside of the gloves that will

be offered to you will be found the words "made in Germany " and that means '' made on the public credit of the

United states Government paid to German firms in American gold taken from the confiscated bank deposits of the

American people."

The Federal Reserve Board and the Federal reserve banks

are spending $100,000,000 a week buying Government securities in the open market and are thus making a great bid for

foreign business. They are trying to make rates so attractive that the human-hair merchants and distillers and other

business entities in foreign lands will come here and hire

more of the public credit of the United States Government

and pay the Federal reserve outfit for getting it for

them.

Mr. Chairman, when the Federal reserve act was passed

the people of the United States did not perceive that a world

system was being set up here which would make the savings

of an American school-teacher available to a narcotic-drug

vendor in Macao. They did not perceive that the United

States was to be lowered to the position of a coolie country

which has nothing but raw materials and heavY goods for

export; that Russia was destined to supply man power and

that this country was to supply financial power to an international superstate-a superstate controlled by international

bankers and international industrialists acting together to

enslave the world for their own pleasure.


The people of the United States are being greatly wronged.

If they are not, then I do not know what " wronging the

people" means;· They have been driven from their employments. They have been dispossessed of their homes. They

have been evicted from their rented quarters. They have

lost their children. They have been left to suffer and to die

for the lack of shelter, food, clothing, and medicine.

The wealth of the United States and the working capital

of the United States has been taken away from them and

has either been locked in the vaults of certain banks and

great corporations or exported to foreign countries for the

benefit of the foreign customers of those banks and corporations. So far as the people of the United States are concerned, the cupboard is bare. It is true that the warehouses and coal yards and grain elevators are full, but the

warehouses and coal yards and grain elevators are padlocked and the great banks and corporations hold the keys.

The sack of the United States by the Federal Reserve Board

and the Federal reserve banks and their confederates is the

greatest criine in history.

Mr. Chairman, a serious situation confronts the House of

Representatives to-day. We are the trustees of the people

and the rights of the people are being taken away from

them. Through the Federal Reserve Board and the Federal reserve banks, the people are losing the rights guaranteed to them by the Constitution. Their prope1·ty has

been taken from them without due process of law. Mr.

Chairman, common decency requires us to examine the pulllie accounts of the Government to see what crimes against

the public welfare have been or are being committed.


What is needed here is a return to the Constitution of the

United States. We need to have a complete divorce of Bank

and State. The old struggle that was fought out here in

Jackson's day must be fought over again. The Independent

United States Treasury should be reestablished and the Government should keep its own money under lock and key in

the building the people provided for that purpose. Asset

currency, the device of the swindler, should be done away

with. The Government should buy gold and issue United

States currency on it. The business of the independent

bankers should be restored to them. The state banking

systems should be freed from coercion. The Federal reserve

districts should be abolished and State boundaries should be

respected. Bank reserves should be kept within the borders

of the States whose people own them, and this reserve money

of the people should be protected so that international bankers and acceptance bankers and discount dealers can not

draw 1t away from them. The exchanges should be closed

while we are putting our financial affairs in ocder. The Federal reserve act should be repealed and the Federal reserve banks, having violated their charters, should be liquidated immediately. Faithless Government officers who have

vioiated their oaths of office should be impeached and

brought to trial Unless this is done by us, I predict that the

American people, outraged, robbed, pillaged, insulted, and

betrayed as they are in their own land, will rise in their

wrath and send a President here who will sweep the money

changers out of the temple. [Applause.]


Mr. STRONG of Kansas. Mr. Chairman, I shall use the

remaining four minutes that I have at my disposal. There

is a disease that afilicts mankind which is very vicious. It

warps the judgment, it narrows the vision, it even causes

men to see red, to make mountains out of mole hills. This

disease has sometimes been referred to as B. A. Ladies may

refer to it as " tummy " ache, but out in the wide-open

spaces men call it the " belly " ache, and I know of no man

of my acquaintance that has this disease in so violent a

form as the gentleman from Pennsylvania [Mr. McFADDEN].

I have not the time to refer to the many charges he makes

against the Federal reserve system, but I call attention to

the fact that for 12 years he has been the chairman of the

Banking and CUrrency Committee of this House and did

not see fit during that time to try to remedy any of the

evils of which he now complains. It seems to me entirely

out of place to wait until he is retired as chairman of that

great committee and then assault all of the institutions of

which it has control.


I think this is a good bill. It is a bill that has been

proposed by the President and has been approved by the

Democratic chairman of the Banking and Currency Committee, on which there is a majority of Democrats, and

brought before this House with the approval of that committee. It seeks to make possible protection to the small

home owner. It seeks to make it possible for him to save

his home by the renewal of his loan, or to build a small

home and secure a loan upon it.

If there ever was legislation that is justified it is this bill,

to establish these home-loan banks. This bill bas been

very, very carefully considered. The gentleman from Wisconsin [Mr. REILLY} has been the very able chairman of the

subcommittee, and he and the gentleman from Massachusetts [Mr. LucE] who introduced the bill in this House h-ave

spent weeks with the subcommittee in holding hearings on

this bill. They have brought it here with their entire approval. I ask my friends on both sides of this House to

accept the judgment of those gentlemen and to pass this bill

with a splendid majority. We need it in this country. All

over this broad land the little home owner is being threatened with foreclosure on the home he loves and lives for.

This bill will give him relief, and I ask you to vote for the

bill. Be not led astray by those who have a violent disease,

to attack everything of a financial nature in the country.

[Applause.]


The CHAIRMAN. The time of the gentleman from

Kansas has expired.


Source: congress.gov

Source: congress.gov

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