Senate of the United States
November 22, 1922.

A Farmers' Rural Credit Bank -- Who Shall Control it, Farmers or Bankers ?


Mr. Ladd. [Edwin Fremont Ladd (1859--1925) North Dakota, R; chemist]  Mr. President, there has come to my attention a copy of a program of the forty-second annual meeting of the Academy of Political Science, to be held in Hotel Astor, New York City, on the 23d and 24th of this month.  According to the program this annual meeting is to be given over to the discussion of the money problem.  I make no apology for taking the time of the Senate to make certain observations at this time, because I believe there are certain movements going on that are of tremendous import to the people of this country.  They demand discussion now;  a little delay and it will be too late.

First, I desire to call to the attention of the Senate the personnel of the committee on program and arrangements for this forty-second annual meeting.

Samuel McCune Lindsay is chairman ex officio.  Professor Lindsay is an author and educator on economic and financial matters, and his activities date back many years.  In 1892 he was a special agent of the Senate Finance Committee to report on wholesale prices in Europe.  His writings place him on record as to his financial theories, beliefs, and alignments.

E.E. Agger is another educator connected with Columbia University.

Irving T. Bush, of New York, of the Bush Terminal Co. and other Bush interests, is a business man with connections of great international trade interests.

Nicholas Murray Butler, the president of Columbia University, has been sufficiently eulogized on this floor, and very little speculation is necessary to determine as to his sympathies and connections.

Waddill Catchings, of 60 Wall Street, New York City, formerly in the export department of J.P. Morgan & Co. and now of important connections in the iron and steel industry, was a member of the advisory council of administration of war labor of the Department of Labor and was chairman of the war committee of the chamber of commerce.

Frederick Cunliffe-Owen, connected with the New York Tribune.

Will H. Hays, a lawyer, of Sullivan, Intl., who became distinguished when he was appointed chairman of the Republican National Committee, and later official sponsor of the motionpicture industry.

J.W. Jenks, an economist whose views and affiliations are very well known.

Joseph French Johnson, formerly financial editor of the Chicago Tribune, and rather prominently identified with the now more or less discredited monetary commission.

E.W. Kemmerer, another economist who was connected with the monetary commission, and who holds the distinction of having been in 1917 financial adviser to the Government of Mexico.  The financial affairs of Mexico are still in a very bad condition, I believe.  They probably will be so long as Mexico depends upon the international bankers of Wall Street to set her house in order.

Big Financiers Interested.

Thomas W. Lamont, another bulwark of the house of Morgan.

Ogden L. Mills, who was a member of the Joint Commission of Agricultural Inquiry, and who probably obtained his experience as a practical farmer in connection with the handling of his affairs in the Atchison, Topeka & Santa Fe Railroad, the Lackawanna Steel Co., the Mergenthaler Linotype Co., Shredded Wheat Co., Crex Carpet Co., the New York Trust Co., and various other matters in which his millions are interested.  As a practical farmer, conversant with the needs of the farmer, he should be amply qualified --from the bankers' viewpoint.

George W. Perkins, jr., the son of another financier of J.P. Morgan distinction, and known to the International Harvester Co., United States Steel Corporation, great maritime and railway interests, and various other of the biggest interests in the country.

L.S. Rowe, the popular head of the Pan American Union, whom the Washington newspapers' society columns note as being very busily engaged in the giving and attending of Interesting dinners and other social events.

Henry R. Seager, another economist --spelled in capital letters-- connected with Columbia University.

E.R.A. Seligman, another professor and economist, whose hand has been laid heavily upon the American people and about whom more will be said later.

Federal Reserve Interested.

Benjamin Strong, the governor of the Federal Reserve Bank of New York, and who figured so prominently in the hearings before the Joint Committee of Agricultural Inquiry, and who has the courage to believe that his bank is not a governmental but a private institution.

Frank A. Vanderlip, about whom volumes could be written.  We will have to content ourselves with saying that the records will show that he first came into prominence while holding a fiduciary position as Assistant Secretary of the United States Treasury.  He negotiated a most questionable sale of the United States custom-house to the National City Bank of New York, of which he subsequently became president.  The unrefuted statements in the public press prove this to have been a most unconscionable transaction, in which Frank A. Vanderlip, as Assistant Secretary of the Treasury, acted in the interest of the National City Bank and against the interests of the Government and the people of the United States.  Since this occurrence he has consistently aligned himself with the money power.

Eliot Wadsworth, now Assistant Secretary of the Treasury, in charge of foreign loans, and railroad advances.  We can not help but sympathize with the poor railroads;  they will not have had enough of advances until the vaults of the Treasury have been turned over to them.

The Federal Reserve and Wall Street for the Farmers.

Paul M. Warburg, a prince of the house of Kuhn, Loeb & Co., another Money Trust firm of international bankers.  It is asserted Warburg is the father of the present financial system known as the Federal reserve system.  He is the gentleman who devised the trap into which was led the entire American Nation;  both the Democratic and Republican Parties were entangled in the meshes of the International bankers, and they succeeded in writing into law a financial system that is rapidly forging the bonds of debt slavery upon the American people, and these two organizations, having been parties to the crime, are now silent and wedded to the system.  Warburg even had the nerve and courage to boast before a Senate committee that he had been successful in his plans.

H. Parker Willis, another economist, who was pushed to the front in the enactment of the Federal reserve act, and who translated onto paper and defended the ideas promulgated by Paul M. Warburg.

There are a few others on this committee about whom I have no special information.

It seems to me, Mr. President, that anyone who had given any serious study to economic conditions in this country would find no hesitancy in reaching the conclusion that this committee on program and arrangements -- with the possible exception of a few who might be mingled in for "trimmings"-- is constituted, of minds entirely, in accordance with the banking interests.  Any program arranged by this committee for the discussion of "the money problem" would naturally be arranged with a wievpoint of developing the ideas of the big bankers.  There is one satisfactory and interesting observation, however, and that is that the bankers themselves realize that there is a money problem up for discussion in this country.  They are not dilatory in their preparation to meet it, but seem to be feverishly trying to direct it into channels of which they approve.  In view of the statement of the bankers upon the conclusion of the recent meeting of the American Bankers' Association, held in New York City, that the bankers were ready to lead the people, it is not improper to presume that this conference to be held this week is but one of their bids for leadership.

There is, however, Mr. President, one particular phase of this proposed conference that is of particular interest at this time, and it is for that reason that I am taking this opportunity to discuss it.  I refer to the third session of the conference, to be held Friday afternoon at 2.30 p.m., in the north ballroom of Hotel Astor, and the topic for discussion will be "The agricultural credit problem."  One would not expect to hear much of the language of the real dirt farmer amid the splendors of the north ballroom, especially when those who gather around the board possess such illustrious financial antecedents and connections.

It is, of course, not contended that the big banking interests of the country do not have a right to gather in such a discussion, but those who have the real interests of the farmer at heart also have the right to warn him against accepting such advocates for their leadership.

Saving the Farmer for the Banks.

Let us notice for a moment the program for this third session.  It is to be presided over by Edwin R.A. Seligman, already referred to.  The program is as follows:

1.  Introductory address of the presiding officer.
2.  Agricultural financing. -- Eugene Meyer, Jr., managing director War Finance Corporation, Washington, D.C.;  Sydney Anderson, public business permitting, Congressman from Minnesota, chairman Joint Commission of Agricultural Inquiry.
3.  Fall in agricultural prices, causes and remedies. -- George E. Roberts, vice president National City Bank, New York City.
4.  Should the farmer have additional credits to enable him to hold his crops for better prices ? -- Jesse E. Pope, Washington, D.C.
5.  Discussion. --Thomas P. Gore, former United States Senator from Oklahoma.  Every cloud has a silver lining, and in this connection we are heartened that the name of former Senator Gore appears among the galaxy of intellectuals on the program.  We are glad to learn that the farmers will have a friend in court and that their cause will be better and more favorably known because of his presence at the conference.

Warburg, Seligman, and Farmers.

Mr. President, according to that eminent authority on big financiers, Mr. B.C. Forbes, in his book, Men Who Are Making America, at page 403, it was in the home of Edwin H.A. Seligman where the decision was made that Paul M. Warburg should publish his views on the central bank idea, and that the propaganda should be started for the purpose of writing into our laws a financial system based upon the central bank idea as the ideal corner stone.  This decision was made at a time when the country was in the throes of the financial stringency of 1907, and when the people were declaiming against the money power centralized in Wall Street -- and whose ideas were to be put forth as the basis for the new currency system ?  Those of Paul M. Warburg, a descendant of International bankers, schooled and trained for an international banker, imported from Germany for the purpose of giving expression to the evolution of the international bankers' idea of a currency system, and a man who having come here in 1902 and become a member of that powerful firm of international bankers, Kuhn, Loeb & Co., did not file his citizenship papers until he was ready to take his fight before the public, and then did not become a citizen until 1911.

Bank Credits and Paupers.

What happened ?  In an attempt to distract the American people and satisfy their demands for monetary reform the monetary commission was authorized and sent abroad to investigate European systems and report to Congress a monetary plan.  The commission went abroad and proceeded to interview bankers and financiers and investigate European banking systems, but they did not investigate the economic condition of the peoples who lived under the domination of these banking systems;  neither did they report to Congress a monetary measure, but a bank credit measure.  They found ideal banking systems, from the bankers' viewpoint and from a standpoint of banking prosperity, but they failed to show the pauperizing effects of those systems upon the peoples who endured them.

The next step was the Aldrich report, which was secretly written on Jekyll Island, and in which Mr. Warburg had such a prominent part.  The Aldrich bill followed, and the Democrats rose in arms and defeated it.  They deservedly received the plaudits of the Nation for their fight against the Aldrich bill and for the magnificent stand they took against the central bank idea.  The people rewarded them by placing them in power, with the mandate to effect financial reform, and that mandate was clearly against any such idea as embraced in the Aldrich bill.  They conducted the Pujo investigation and exposed, in part, the Money Trust, and that disclosure showed that the firm of Paul M. Warburg --Kuhn, Loeb & Co.-- was declared to be a member of that Money Trust.  Notwithstanding that fact, they immediately nestled to their bosoms this self same Warburg that had been the directing hand behind the Aldrich bill.  The Aldrich bill was worked over, camouflaged, and disguised and placed before the people as a great achievement and as the means of emancipation of the people from financial slavery.  The Republicans could not, had they desired, fight the measure effectually, because they were compelled to recognize the fact that it was the same proposition they had sponsored in the Aldrich bill.  The result was that the voices of opposition were silenced, and the international bankers had captured both of the big political parties.

I do not know that the throwing over of George Harvey, with sympathies for the house of Morgan, and the taking on the ship of Paul M. Warburg, of the house of Kuhn, Loeb &. Co., by the Wilson forces had anything to do with the capture of both parties, but I have long had my suspicions that it did have a great deal to do with it.  It has long been rumored that there are two groups of the big international bankers who are continually battling silently against each other for financial domination, and there are many indications that such is true.  However, that does not mean to say that they are at variance as to the system to be used, or that there is difference of opinion when it comes to the necessary legislation for their operations.  In these matters they usually present a solid front, save where it obviously would be prudent to adopt a different method of procedure.  Obtaining authorization for their system through legislative channels is entirely different from a fight between themselves for control of the system.

Who can Tell.

All of this talk about who is the author of our present financial system is principally chatter.  Some day I may deem it advisable to say something to this body about Mr. McAdoo and his connections with Kuhn, Loeb & Co.

But back to this proposed meeting in New York.  We do know that Edwin R.A. Seligman, who is to preside over this rural credit discussion, was one of the first men to figure in the plans for "putting across" the system, and he has faithfully awaited its beck and call ever since.

Then the program provides that we shall get some more instruction for the farmer from Eugene Meyer, jr., head of the War Finance Corporation, and another Wall Street manipulator.  There are many indications that Mr. Meyer is greatly interested in the various cooperative movements throughout the country, and I have been informed that he has been in close cooperation with Mr. Aaron Sapiro, who has accomplished a great deal in the organization of these cooperatives, and is supposed to represent a great many of them as attorney, which representation affords a comfortable source of revenue.  I have also been advised that Mr. Sapiro is very influential in obtaining aid for the cooperatives from the War Finance Corporation.

I would like to say this, Mr. President, the farmers have a great opportunity for helping themselves through the cooperative organizations;  I have devoted a great deal of my life to a study of the problems of the farmer and I have long ago come to the conclusion that if he is to realize any permanent relief or aid through the cooperative movement he must be careful of his leaders.  He must be sure to always keep control of his organization.  Forbid the time may ever come when the unseen hand of Wall Street or any special group of financiers has the control of organized farmers in their grasp.  If such come true, then their organization will prove a boomerang to come back and strike, a viper to curse and wound them in their adversity.

Then Mr. Roberts, of the great National City Bank, will also hand out some advice about the farmers;  and so on, it goes.

Mr. President, I do not know whether or not this meeting proposes to go on record as favoring any special legislation, whether it will indorse a bill drawn by Mr. Meyer or one sponsored by Mr. Warburg or Mr. Roberts or anyone else.  Perhaps they may now consider it inadvisable to do so.

I am convinced of this, however, that any recommendation they may make looking toward legislation for the farmer will be from the viewpoint of what is good for the bankers and not what is the best thing for the farmers.

According to the Washington Times, edition of November 21, 1922, on financial page, in an article by Harry Gusack:

Credit requirements of the live-stock industry as one phase of the rural-credits problem were discussed at a conference between Eugene Meyer, managing director of the War Finance Corporation, and a committee of the American National Livestock Association.  The meeting probably will continue until to-morrow before a program adequate for that industry has been worked out to be included in the rural credit legislative program.

As a basis for the discussions, Mr. Meyer outlined three plans for farm financing as the basis for the rural-credits program.  These are:

1.  Provide financing through a centralized Government banking institute, operating with large Government capital and making loans somewhat as the War Finance Corporation has done -- through branches or agencies.

2.  Financing farm requirements through a number of financial corporations, each with moderate capital furnished partly by the Government, operating within a limited district, and relying upon its ability to sell bonds or debentures to the investing public in order to raise the necessary funds.  Under this type of organization it is proposed to facilitate the sales of securities through tax exemption.

3.  Take care of the financing of cooperative marketing organizations through existing financial machinery by modifying the laws and regulations governing the eligibility requirements of the Federal reserve system, and the financing of the live-stock industry by amending the national bank act so as to authorize the creation of federally chartered loan companies, operating with private capital under the supervision of the Comptroller of the Currency or the Federal reserve system.

Mr. President, all of these methods depend entirely upon the Federal reserve system for their success, and they can be defeated in their intended purposes by the power centralized in the 12 Federal reserve banks;  and I might even say by the Second Federal Reserve Bank of New York alone, for that bank is, in practical effect, the central bank of the United States.  It is also contended that it is now a private banking institution.

If either of these methods are adopted it will eventuate in further enslavement for the farmer and a pyramiding of more debts, when another period of "drastic deflation" could wipe out the remaining equities of the farmers.

However, it is not my purpose to discuss this phase of the situation at this time, but I intend to do so if either of the propositions reach this floor.

This is but further evidence to my mind, Mr. President, that a studied effort is now being made to get a well-fortified scheme brought before this Congress that will sail right through because it will have a long list of stereotyped indorsements behind it when it reaches Congress.  As usual, the plan comes through some of the same old Wall Street crowd.

The fact that Mr. Meyer has received the indorsement of two administrations whose parties, according to the record, would seem to have surrendered to Wall Street on the money question, does not justify the farmers of this Nation in placing their destiny in his hands.

Confidence and Wall Street.

It is not very long to hark back to the time when there was a feeling in this country that Wall Street could not be depended upon to protect the best interests of the rank and file of the country.  Now it appears that all leaders, all molders of legislative thought, to be considered dependable, must hail from Wall Street.  There was a time when there would be many sincere and protesting voices raised against such a condition, but now there is silence where there should be indignation and wrath.  Public officials seem to be taking the viewpoint that if there is a financial task to perform it must be done by some one of Wall Street ability and qualifications.

Will we ever learn ?  We have accepted the bankers' idea in this country long enough.  They have always brought us to debts and hard times.  The bankers' system has patently proved a failure.  Will we continue to swear by it ?  When I say a failure, I mean a failure from the standpoint of the people.  It has been an eminent success from the standpoint of the banker.  Debts have piled up by the billions, and they continue to pile up, and they all bear interest, and the people pay the interest.  While the banks and bankers are increasing the reserves and assets, the people are going more into debt.  Our present financial system will never get us out, but will persistently mount the total of indebtedness.  There is not a better illustration of that fact than the increase of mortgage indebtedness upon the farms of the United States since the operation of the Federal reserve act, and not a clearer illustration of the powers of that act than the results of drastic deflation in wiping out of equities in farms throughout the entire country.

Shall We Predict the End ?

Yet, with it all, we are content to rest on our oars and let the international bankers perfect their system.  Not only that, but it is quite evident to me that there will be legislation offered to this body for the alleged purpose of giving the farmers a system of rural credits, and that such legislation will depend entirely upon the Federal reserve act for its success or failure.  Mr. President, there could not be a more effectual way of abandoning the interests of the farmer and setting another trap for his enslavement.

Mr. President, evidently there will be some rural credit legislation offered to this body within a short time;  I wish to place the farmers on guard at this time that if they are to get any legislation that will be of lasting benefit to them it must be on a basis of real money.  No system of loaning of bank credits, or rural credits, or whatever alluring name may be offered, will serve to do anything else than to push the farmer further into the quagmire of debt.

It might also be added that if there is a persistent attempt to foist such a system upon the people of this country, there will be more than 18 new faces in this body during the Sixty-ninth Congress.  The farmers are tired of being duped and fooled.  They have a very good idea of what they want, and they are determined to have it.

Mr. President, what I have said to-day is not designed as destructive criticism nor is it aimed at those who would honestly endeavor to restore agriculture to a profitable basis.  I have, however, endeavored to raise a warning voice against that type of class legislation too often enacted for the benefit of the little group of money and credit manipulators and at the expense of that larger group -- the American farmers.

Banking and financial legislation secured in the past by this same group of men, together with their administration of the laws, are now responsible for the farmers' present deplorable condition whereby they, as a class, are in five short years reduced from reasonable prosperity and modest comfort to bankruptcy.  These farmers must now resort, as other business men do, either to the Nelson cure or stagger under the load that will in the end completely crush them and drag down other business, including the bankers, with them.

Similar meetings to the one under discussion are now being held or planned for in other parts of the country, indicating that the bankers are about, as has been stated, to take the lead for better agriculture.  Will they do so ?  I am sorry to say the signs as indicated by the past are not good.  Unless the farmers are given constructive legislation and the control of their own banking and marketing affairs is left in their own hands, there will be worse than confusion, and if we adopt a system in place thereof which continues to exact a heavy tax from the producers for the benefit of the banker, the middleman, and the retailer, I predict it will not be satisfactory either to the farmer nor will it act as a panacea stimulating greater production, which means heavy losses to the producer, and the farmer will not be slow to discover the purport or to act in an effective manner as he is now being forced to do, not only for his own protection but likewise for the benefit of the consumer and that of all society and also of the State.