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This is a mirrored article
From our original proof of mathematically
perfect economy, 1979.
Mathematic PROOF: Federal Reserve CAUSED Great Depression
Part 1: Mathematic PROOF the Federal Reserve CAUSED the Great Depression.
Part 2: Congressman Louis T. McFadden's famous 1932 Congressional Address.
Nature and iniquitous history of the private international banks deceitfully called The Federal Reserve System. A blueprint for irreversible multiplication of debt in proportion to commerce, until world-wide economic collapse under insoluble debt.
Tens of thousands of visitors voted this page a Starting
Point Hotsite award, November 7, 1998. Hopefully, mathematic proof of a
singular prescription for perfected economy will ultimately serve as the
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FOREWORD PART 1
Responsible, legitimate representative government apprises the public of relevant issues. True representative government is neither the product of deceit or circumvention.
Against just this measure, we live in a day where the public neither understands or is privy to an obligatory knowledge of how their "economy" is designed or managed.
Nor are they allowed a hand in its management. Instead, a publicly approved economy is purposely excluded from democratic processes, and the vital issues of managing an economy in the public interest are purposely avoided or discussed in the most shadowy, deceptive terms as necessary to conceal from the public their "economy" is actually a system whereby a handful of usurers are permitted not only to condemn their economy to incredible, unnatural instability and restricted prosperity... but to rob them of most of their production while not providing in return any bona fide service whatever.
Representative or responsible government are breached where a class of political actions exists which are not mandated by the general population; where the public is not fully apprised of the ramifications and nature of such actions; where such actions violate the very promises for which political officials were elected; and particularly where said developments conflict with the consistent and inherent interests of society as would preclude such actions from ever being mandated by the general public.
Exactly so, has every central bank "economy" been imposed upon the present world. The "Federal Reserve" was established only by circumventing democracy; and only to profit the 12 privately owned banks which comprise it.
Nothing more clearly evidences the nature of a central bank "economy" than the events by which it was created; the affairs by which it is retained upon the people; and the perpetual, careful, engineered aversion of all truths which attest to the central fact a central bank "economy" is an imposed system of usury.
Central bank "economies" can only multiply debt, and the costs of debt, to our ever greater detriment . Merely to maintain a circulation, the subjects of such systems must re-borrow periodic payments against principal and interest as a new sum of debt increased so much as periodic interest.
It is mathematically impossible for debt not to multiply in any "economy" comprised of interest-bearing debt. But as debt is multiplied in proportion to the commerce which can be sustained by a circulation, every such system multiplies its takings from its subjects until it ultimately makes prosperity impossible.
Banking is about profit. It is about profit taking without provision of product or service. The causing of the 1929 stock market crash and Great Depression are but examples of the methods of that taking.
A "central banking" system is a system of usury. Throughout its existence, its profits are multiplied in proportion to commerce, without attendance, by the mere fact in order to maintain a circulation, its subjects must borrow back payments of interest and principal as a new sum of debt, increased so much as periodic interest. Debt is irreversibly multiplied in proportion to the commerce which can be sustained by a circulation, regardless of rate of interest.
On this ever greater sum of debt, the "central banking system" collects ever greater sums of interest in proportion to a commerce which is crippled to an equally ever greater degree, under the weight of mounting debt.
During the perpetual, irreversible multiplication of debt inherent to a circulation subject to interest, the central bank also takes advantage of the artificial conditions it imposes on otherwise viable commerce. It alone is master of the circulation, and the immediate and long-range costs of that circulation. It alone makes credit available, denies credit, or makes credit too costly. It thus manipulates the circulation without any regard to what prescription would instead provide for full, unimpeded prosperity. In fact it can only deprive prosperity because any inherent function of a central bank takes from prosperity without providing any bona fide service whatever. Thus it can only deprive prosperity to a greater or lesser degree.
By manipulating the potential for prosperity, a central banking system imposes yet a further method of taking. Inherent, irreversible multiplication of debt alone will ultimately convert all assets into properties of banks which produce nothing. But in the competition between bankers to acquire greater shares of this profit, a productive society is subjected to yet greater abuse.
In the several decades following the Civil War, bankers contending for dominance inflicted such abuse to multiply their power.
Typically, they loaned considerable currency to circulation as necessary to sustain new industry. They then withdrew or made too expensive the continual stream of credit necessary to maintain a circulation vital to that industry, and took over the industry bankrupted by the crippling circulation or credit conditions imposed.
Twenty years of such artificially-induced banking crises preceded the 1912 elections and a recognized need for banking regulation, or even financial reform.
The same powerful bankers which would soon become the so-called Federal Reserve had lent money into circulation as necessary to sustain increased commerce and when commerce was then dependent on the maintenance of this circulation, the banks manipulated credit and foreclosed on the collapse which could only ensue under a circulation incapable of sustaining both the new commerce and the perpetually multiplied debt obligations inherent to such a system.
The country was outraged.
The Republicans, dedicated to grafting themselves to these wealthy capitalists, proposed a most incredible solution: concentration of these same bankers' powers under one "central" bank comprised of a collection of the perpetrating banks together. Understandably, the Democrats were elected to power in 1912 on a platform explicitly declaring opposition to the establishment of a central bank.
The Republicans were defeated in this election for strong public distrust of their proposal to concentrate powers beyond democracy or any thought of representative government in the central bank advocated by their Aldrich Plan. Just such powers however, were eventually inherited in an incredible chain of events which soon afterward created the Federal Reserve on the eve of December 23, 1913 circumventing unlikely passage by a contrived, orchestrated emergency session predominantly marked by the Christmas absence of those who opposed the incredibly corrupt proposition.
Representative government was usurped; and never again would the public be permitted, by the perpetual servants of the usurers, to contest the rectitude of that oppressive system. Despite the explicit 1912 platform of the Democrats being declared opposition to the creation of a central bank, the "Federal Reserve" nevertheless virtually the same Aldrich/Republican entity re-dressed under a purposely misleading name was created only a year later, in 1913, as an energetic project under Democrat President Woodrow Wilson.
The Federal Reserve System began operation in 1914, and, true to vigilant public anticipation, accomplished both principal ownership and ruin of the economy in 1929 just 15 years afterward. The careless rode a wave of inflation, straight to the doom of all.
The collapsing of the securities market is the same takeover ruse which the proposed Aldrich Central Bank was promised to prevent in the propaganda of the carefully re-named "Federal Reserve" System. As history continues to prove, a huge volume of unrepealed, financial legislative acts were thus based on purposed deception.
Competing in acquisition of assets, the same private, international usurers would withdraw or diminish the availability of credit necessary to sustaining a sector of commerce. The trade dependent on that circulation could only collapse as obligations to pay on existent debt deplete the circulation. Without the re-borrowing vital to maintaining the circulation, the sector expires as soon as debt obligations cannot be met. The bankers then foreclose on debt, saying the sector over-extended its credit-worthiness. By this ruse, central bankers had already become the real owners of most of the world's production.
Over its first 15 years, up to Black Friday, incredible quantities of securities had been traded on short-term credit provided by the Federal Reserve. With the Federal Reserve's blessing, stocks were typically bought "on margin" with the purchaser having only some 10% of the funds, and borrowing the remainder from funds provided by the Federal Reserve. Purchases were necessarily turned over on equally short terms, to repay the debt.
If you had $100, you could buy $1,000 worth of stock on $900 of short-term credit made available by the Federal Reserve. On a 15-day promissory note, you sold the stock two weeks later, for perhaps $1,100. Much as today, the Federal Reserve gladly granted another buyer the credit necessary to re-purchase the stocks. Prices were consistently elevated by the very proportions of credit sanctioned by Federal Reserve policies.
In two weeks, after selling your $1,000 purchase for $1,100 and paying your $900 debt, you had doubled your $100 savings which of course were immediately re-invested on further short-term credit. With a dramatically inflating circulation, no one could truly afford to leave their money outside of circles which did not directly swallow this stream of credit. The real value of money depreciated against a circulation perpetually inflated in proportion to real production. Obviously, the real value of commerce was not doubling or increasing 10% in the same 15 days. And so there were no savings, as no one could truly afford to save. Spare money rode the "securities" market.
Swelled consistently by this steady stream of ever greater credit, the market would re-purchase the stocks. A perpetually inflated circulation alone made this both possible and necessary to fulfill the obligations of the ever greater debt simultaneously incurred.
As the exchanges closed one Black Friday however, suddenly the very same bankers who seemed to see fit to inflate the costs of securities upon so much debt, now withdrew further credit from the market. Speculators were advised no more short-term credit would be made available to their graft.
Stockholders suddenly had the weekend to contemplate the prospect of selling their indebted stocks by necessity liquidated in the least of time to a market which would now be deprived of the credit absolutely necessary to buy them as would fulfill the debt incurred in their purchase. Only 10% of the currency necessary to do so existed and even this was in the hands of the same bankers.
Tremendous short-term debt existed all soon due. Virtually no circulation existed to redeem this debt. Further credit, absolutely necessary to redeem the current debt, would no longer be available.
Hence, the following Monday could only see, all at once, the precipitous crash of the market; real ownership of commerce and real property fall into the hands of the very twelve private corporations proposed to stabilize economy by foreclosure and dispossession which ensued; and the initiation of the Great Depression.
It was mathematically impossible for the market not to crash.
In the immediate wake of the initial crash followed a vast wave of foreclosure further multiplying the gains of the Federal Reserve and subordinate banks at an incredible expense to the people.
The crash of the stock market and the "Great Depression" however were only initial consequences of the bizarre capacities endowed the "Federal Reserve." In the midst of the Great Depression and while he could not yet know "The Federal Reserve" was financing the military expansions of Germany and Japan for a World War soon to follow Congressman Louis T. McFadden asked for repeal of the Federal Reserve Act and enforcement of the Constitution.
Congressman Louis T. McFadden served twelve years as Chairman of the Committee on Banking and Currency. He was perhaps the foremost expert of the time on banking and currency matters, including the subversive developments creating the Federal Reserve.
Two attempts were made to take Mr. McFadden's life, including an attempted poisoning at a Congressional cafeteria. He passed away in 1935 under circumstances which many still contend are suspicious. With his passing, "somehow", for the while, so too passed serious opposition to the Federal Reserve.
On June 10, 1932, in the midst of the Great Depression, he addressed the House of Representatives asking for investigations of criminal conspiracy to establish the privately owned "Federal Reserve System." He requested impeachment of Federal officers who had violated oaths of office both in establishing and directing the Federal Reserve imploring Congress to investigate an incredible scope of overt criminal acts by the Federal Reserve Board and Federal Reserve Banks. He fingered the Federal Reserve Banks' conspiracy to remove the gold behind our currency to the foreign principals of these banks and their financing of foreign military expansion in Germany and Japan to the degree of sixty billion dollars annually, with the very same gold removed from our public reserves.
Mr. McFadden reports sufficient evidence the Federal Reserve understood beforehand the stock market would crash, and that the ramifications of the crash were such as a premeditated event designed to reap incredible gains at the cost of the people. But there is no doubt it is mathematically impossible the securities market could have survived the Federal Reserve's termination of short term credit. Yet to this day, the obligatory investigations courageously requested by Mr. McFadden have never been carried out by the Federal Reserve's partners in government.
Nonetheless there is little doubt that on the one hand, the Federal Reserve planned to crash the market and foreclose upon vast wealth or on the other, that this very act could otherwise only have demonstrated the complete incompetence or unfitness of such an entity as a "regulatory" body governing beyond democracy, yet ostensibly on behalf of the people... while, by its very nature, profiting from them to an ever greater degree without providing any qualifiable or quantifiable service whatever.
McFadden argues there is no power whatever to delegate control of the economy and currency to 12 private corporations with the inherent and proven interest in profiting from the economy. His efforts however fall short of proposing or qualifying perfected economy, and thus he does not argue against the indefensible position that such an entity as the Federal Reserve can only multiply debt to the ever greater detriment of its subjects. Nonetheless, even if the establishment of the Federal Reserve were not precluded by the Constitution, its very essence is in complete conflict with the inherent interests of productive, self-determined society. No society has ever benefited as the subject of usury.
Under the pressures of the time, and despite the threat to his safety, McFadden details the consequences of this incredible, inadvisable, undemocratic, and oppressive Federal Reserve Act. His address is perhaps most important as a detailing of crimes. Measured in terms of human misery, deprivation, injustice, and loss of life, it records to posterity a truly appalling scope of evil.
The majority of his speech is presented here. Less significant areas have been omitted or densified. To avoid confusion, a few minor omissions have been made of assertions that retaining the gold standard could have saved us from all this. In fact the gold standard existed to this time, but would have been impossible to honor while inflating the circulation as required to support greater degrees of production and prosperity. The mere inconsistent quantities of monetary gold and silver... and evolving prosperity... indeed make any precious metal monetary standard impractical to honor while supporting prosperity exceeding the quantity of the supposed standard. This is the critical flaw in the concept of a precious metal monetary standard itself.The only reasonable object constituting the value of money representing the value of production is the production itself .
As Mr. McFadden's speech itself attests, and contrary to his sentiments of returning to a gold standard, neither did this standard protect us, nor is it possible now to uphold such a standard.
As the Honorable Congressman McFadden concludes, economic rectitude is improbable until the people are ready to assert their dominion over an economy which does serve them. This itself would require a formula for proper economy; a formula for converting the present system into proper economy and vigorous understanding and disposition, commensurate to their vital objective.
Which of course are the very purposes of
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bank "economies" can only multiply debt, and the costs of debt, to our
ever greater detriment: See our page, WHAT
IS Mathematically Perfected Economy for further explanation of the
irreversible multiplication of debt inherent to "economies" subject to
only reasonable object constituting the value of money representing the
value of production is the production itself: See Gold,
Silver: The Real Prospects Of Precious Metal Monetary Standards for
further explanation of the potentials of monetary standards..
Congressional Record, June 10, 1932
Congressman Louis T. McFadden before the House of Representatives, 1932
Congressional Record, June 10, 1932
Mr. Chairman, at the present session of Congress we have been dealing with emergency situations. We have been dealing with the effects of things, rather than 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 you are now giving 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 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 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 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 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. 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
with Germany and Russia, and thus drove a wedge between the allies in the
World War. [WW I]
They financed Trotsky's mass meetings of
discontent and rebellion in New York. They paid Trotsky's passage from
New York to Russia so 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 was 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.
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 of European-born bankers who for nearly 20 years had 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 the 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 for 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 power.
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 worm-eaten, 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 discriminated against our one-name commercial paper the finest in the world; it set up the antiquated two-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 Sates which was founded upon the same false principles
as those which are exemplified in the Federal Reserve Act was hurled
out of existence.
Popular war-hero of the Battle of New Orleans, President Andrew Jackson.
Not long after Thomas Jefferson stood against the central bankers at the founding of the United States, Jackson waged a heroic battle to cast away the Second Bank of the United States. Jackson told the bankers publicly, "You are a den of vipers and thieves. I intend to rout you out. And by eternal God, I WILL rout you out."
After the downfall of the Second Bank of the United Sates in 1837, the country was warned against the dangers that might ensue if these same predatory interests, after being cast out, should come back in disguise and unite themselves to the Executive, and through him acquire control of the government. 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 Banks. 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 which caused that misery, the Federal Reserve Board and 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
House, the President's financial/'economic advisor' - a banker's man, was largely responsible for the establishment of 'The Federal Reserve.' House could be seen constantly at the president's side, mystifying him with unqualified 'economic' jargon. The president himself jested House had become his alter ego. In truth, House dominated the president without ever laying a true science before him. The aftermath is a legacy we should never forget.
It has been said that the draftsman who was employed to write the text of the Federal Reserve Bill used 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 Reischbank, 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 there was an overwhelming popular demand for that kind of banking legislation, and the kind of currency that goes with it...
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 Aldrich Bill for his purpose. 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.
Senator Henry Cabot Lodge wrote:
"The bill, as it stands, seems to me to open the way to a vast inflation of the currency."
In the 18 years which have passed since Senator Lodge wrote that letter of warning, the government is in the banking business as never before. Against its will it has been made the backer of 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 Rev. Father Charles E. Coughlin, who has lately testified before a committee of this House, 71,000 houses and farms in Oakland County, Michigan have been sold, and their erstwhile owners disposed. 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, Mr. Alexander Lassen made the following statement:
"But the whole scheme of the Federal Reserve Bank, with its commercial 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 the circulation as possible and then to 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 further extension
of credit for when there is a lack of money, people have to borrow credit,
to their cost."
Unemployed Chicagoans during Great Depression.
What virtues of an 'economic' system could render a prospering nation, fully capable of continuous production, jobless?
A few days before the Federal Reserve Act was passed, Sen. Elihu Root denounced the Federal Reserve Bill as an outrage on our liberties; and made the following prediction:
"Long before we wake up from our dreams of prosperity through an inflated currency, our gold will have vanished, and no rate of interest will tempt it to return."
If ever a prophecy came true, that one did.
It was impossible however, for those luminous and instructed thinkers to control the course 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 say a word of appreciation to you for the silent but no doubt effective work you have done in the interest of currency legislation; and to congratulate you that the measure has finally been enacted into law. We all know that an entirely perfect bill, satisfactory to everybody, would have been an impossibility; and I feel quite certain that 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 be gratified with what has been accomplished.
The words, "unless the President had stood 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 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
"...and a great protest greeted the plan."
The popular William Jennings Bryan, Secretary of State, understood the proposed nature of the Federal Reserve Note was markedly amiss. The insightful Mr. Bryan, here seen after resigning his position under protest.
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 Federal 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 the 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
Tumulty and Wilson. The history teacher-president who knew nothing about finance or banking, who evidently had never taken serious notice of the many historic dissertations of Jefferson, Franklin, Jackson, and Lincoln before him and who never either contemplated the mathematic ramifications of a currency subject to interest. A man far too easily confused and disuaded by unqualified dogma.
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 indicated by Bryan. [The President was unapprised even of the party position on the issue.]
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," and 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 by be told in the words of Senator Glass [proponent of the Federal Reserve Act]:
"The only other feature of the currency bill around which a conflict raged at this time was the note-issue provision. [which is the central issue of all] Long before I knew it, the President was desperately worried over it."
"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 naturally adversary party vote, could prevent legislation."
"Certain overconfident gentlemen [banking representatives] proffered their services in the task of 'managing Bryan.' They did not budge him."
"When a decision could no longer be postponed, the President summoned me to the White House to say he wanted Federal Reserve Notes to be 'obligations of the United States.'"
"I was for an instant speechless. With all the earnestness of my being I remonstrated, pointing out the unscientific nature of such a thing, as well as the evident inconsistency of it." [How could it have been more consistent that private, international bankers be obligated to deliver nothing?
"There is not, in truth [A plain lie.] 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? [The basis of the note was to be the property and production of the people NOT of banking institutions.] Was there ever a government issue, not one dollar of which could be put out except by demand of a bank? [... in truth, indicating the banks provided no service whatever.] The suggested government obligation is so remote it could never be discerned, I concluded, out of breath." [The government obligation was, and is, to see that what circulation is issued will sustain commerce. By arguing the government had no obligation or responsibility, and convincing the President so, the ploy here was to relieve the central banks of accountability to the government or people.]
"'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, if thereby we can 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 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. 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 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 Notes 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, then 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 off or cause stringencies or 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 without the slightest benefit to the people.
These 12 [private] corporations together cover the whole country, and monopolize and use for private gain EVERY dollar of the public currency 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. [Amen.]
In defiance of this and all other warnings, the proponents of the Federal Reserve Act created [vested this power in] 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 providing 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 this 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
Propaganda, blatant lies, or incredible stupidity?
Vote-for-Wilson re-election truck asks (top question on vertical side-panel behind cab), 'WHO BROKE THE MONEY TRUST?' About to become the real owners of the country... the central banking business would never be better. Certainly Wilson had not 'broken' the 'money trust.' On the contrary, he had ensured the money 'trusts' would have every power necessary to breaking the people.
Thus the Government of the United States pays the Scotch distiller for the whisky 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 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 stuffing 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 MUNITIONS MAKERS? [Prelude to WWII.]
Was it for this that our National Bank depositors had their money taken out of our banks and shipped abroad? Was it for this that they had to lose it?
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 Federal Reserve 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. I 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 public trough of American wealth in which foreigners claim rights equal to or greater than those of Americans.
The Federal Reserve Banks are 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.
I believe the nations of the world would have settled down after the World War [I] 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. 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 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 [thus] to kill 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 for the favors of the Federal Reserve Board.
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 [was] protected by a reserve of 40 percent, or $4 in gold.
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 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 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 Reserve System goes automatically to the American agents of foreign banks; and that all of their deposits can be paid away to foreigners without their knowledge 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.
The Federal Reserve Board and the Federal Reserve Banks have been international bankers from the beginning with the United States Government as their enforced banker, and supplier of currency. But it is nonetheless 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 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 racket, 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 pirate how to loot the people... the magnitude of this racket is estimated to be in the neighborhood of $9,000,000,000 [nine billion dollars] a year. In the past ten years, it is said to have amounted to $90,000,000,000 [ninety billion].
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. [Promoting the facade of prosperity.]
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 the means of the long rawhide whips of the credit masters compel them to enter into another 17 years of slavery? They ARE trying to do that now.
They are asking $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 discount 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.
Federal Reserve Note prior to removal of gold to foreign principals of the Federal Reserve Banks.
The words 'AND IS REDEEMABLE IN LAWFUL MONEY' refer to
original legal obligations of the Federal Reserve act. In the arguments
by which the Federal Reserve Act was passed, the notes were to be redeemable
in 'Lawful money' is still defined by the Constitution in units of gold
or silver. Ostensibly, the obligation to redeem the notes in lawful money
was to prevent the Federal Reserve Banks from abusive issues of currency.
A constitutional amendment is required to change the legal definition of
promised to pay lawful money, upon demand.
Note after removal of gold to foreign principals simply stripped of the
evidence of the obligation to redeem.
The Federal Reserve Banks removed gold to their European constituents from the United States Treasury, by redeeming worthless German paper issued by the constituents, in gold intended to back American depositors' money.
Although still called a 'note', and although the Federal Reserve Act obligated the Federal Reserve to redeem the paper in lawful money to the American people, the Federal Reserve note was now a promise to pay nothing.
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 [year prior to stock market crash], the member banks of the Federal Reserve System borrowed $60,593,690,000 from the Federal Reserve Banks on their 15-day promissory notes."
Think of it! Sixty billion dollars payable upon demand in gold in 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 in 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 $60,593,690,000 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 the figures are correct.
This member has said to me that the thing is unthinkable that it cannot 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 $60,593,690,000 to their member banks at the expense of 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, [with suspected forewarning of Federal Reserve plans to withdraw further credit from the remainder of the market] the Federal Reserve Board and the Federal Reserve Banks advanced them $13,022,782,000. [Enough to play their way out of the market, neatly.]
This shows that when the banks were gambling [or knowing what profits they could depend on extricating from American wealth] they were subsidized to any amount they required by 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 of member banks' borrowings in the years of 1928, 1929, and 1930. In due course I received a reply from the Federal Reserve Board, dated November 9, 1931 the pertinent part of which read 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:
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 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. McGugin, 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 they do has been called a mere penny in the slot business. It is too slow for genuine high flyers.
They prefer to subsidize their favorite banks by making these $60,000,000,000 advances. And they prefer to acquire acceptances in their 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 rediscounting
in 1928, they lent $33 to their favorite banks. In other words, their
rediscounting in 1928 amounted to $1,814,271,000 [1.8 billion], while their
loans to member banks amounted to $60,598,690,000. [60 billion]
Propaganda of the times. New York Times headlines promise sound conditions for further business, and help from the same bankers who crashed the market.
Everything you see today: "Closing Rally Vigorous" bottom right.
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 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 deluxe to whom the acquisition of American gold or a parcel of Federal Reserve 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 with a strong banking 'fence' on this side of the water acting as a receiver of worthless paper coming from abroad, endorsing 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 this government and the people of the United states through the Federal Reserve Board and the Federal Reserve Banks, for their own private gain.
That is what the Federal Reserve Board and the Federal Reserve Banks have been doing for many years. THIS is what happens when a country forsakes its Constitution, and gives the sovereignty over the public currency to private interests.
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 Columbia.
Columbia never saw that money.
The nature of Kreuger's swindle, and the bankrupt condition, 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 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 Reserve Board and Federal Reserve Banks shield and harbor.
[There was no investigation, and despite all the persistent improprieties of the Federal Reserve System, Congress is still not considering repeal of the Federal Reserve Act.]
A few days ago, the President of the United States [Hoover], 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 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 that debt incurred?
It was incurred by the Federal Reserve Banks, when they peddled the signature of this government for a price. That debt is what the people of the United States have 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?
Depression: US war veterans leave Capitol without answers to grievances
placed before the government. The destination of those who defended freedom
and the Constitution? Homelessness while the international banks called
the Federal Reserve sent our gold to Germany, building Hitler's military
clout for WWII.
Irony and abuse of power of the greatest kind. US veterans dispossessed by the first Great Depression, bravely fight with troops intent on evicting them from the outskirts of the Capitol, where they had assembled for peaceful protest. They answered bullets with rocks. After the so-called Federal Reserve crashed the world's economies under indebtedness, only ten years of deprivation would suffice to wipe debt away under failure; and only a world war would suffice to restore, adverse to the precepts of the system, adequate circulation to begin the multiplication of indebtedness anew, to further culmination of system-wide insoluble debt.
The Baltimore & Ohio Railroad is here asking for a large loan from the people and the wage-earners and taxpayers of the United States.
It is begging for a handout 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 to benefit Kuhn, Loeb & Co., the German International Bankers.
Is there one law for the 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 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 the law would permit the Federal Reserve Banks to switch collateral.
At the present time, behind the scenes there is a night-and-day movement of collateral.
A visiting Englishman leaving the United States a few weeks ago said things would look better here after "they cleaned up the mess at Washington." Cleaning up the mess consists of 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 of 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 of 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 the 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.
Mr. Chairman, within the limits of time allowed me, I cannot 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 open 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 ten 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 the 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 designated depositories of Treasury funds but 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.
Mr. Chairman, last December I introduced a resolution here asking for an examination and audit of the Federal Reserve 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, and for the people. Consequently, nothing should be concealed from the people.
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 our foreign relations. It makes or 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 bread lines. Homes will be saved. Families will be kept.
What is needed here is a return to the Constitution of the United States. The old struggle that was fought out here in Jackson's day must be fought over again.
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 violated their oaths of office should be impeached and brought to trial.
Unless this is done by us, I predict 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 from the temple.
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