Charles Lindbergh
Banking and Currency


There is a man-made god that controls the social and industrial system that governs us.  We know him as the “Money Trust.”  He is offended if given or called by his true name, and being jealous of his power, he opposed an investigation of its sources.  At the present time he has an almost illimitable influence upon our daily actions and is seeking to increase it by framing new currency and banking laws to suit his purposes.  For that reason our first study will be of the banks and the Money Trust, in order that we may understand their power and the meaning of money.

A few of us have bank accounts, but the most of us have none.  Some of us borrow from the banks, but most of us do not and cannot.  But, we are all concerned with the accounts and the loans, because they affect business, and, consequently, the conditions of us all.  In fact, they control the general business with which we are materially concerned, regardless of our occupation and whether we are rich or poor.

Bankers Personally.

Bankers are well-informed and enterprising business men, and are generally good citizens who take a great interest in the welfare of the communities in which they live.  They are our acquaintances—the same kind of people that we are, and they generally accommodate and aid us whenever it is possible.  That entitles them to a consideration equal to what we expect for ourselves, but they should receive no special favors, and neither should we.  They should be under the necessity of responding to the com mon welfare, and we should be also.  But if we were on an equality with them in doing business, we, as well as they, could go on through the journey of life and all would secure better results than even they do now.

It does not require any unusual capacity to become a banker.  Any one who possesses ordinary intelligence and common sense can learn to conduct a banking business as easily as he can learn almost any other particular branch of work.

The actual money with which bankers conduct their business belongs largely to the depositors.  It is the money that some of us have deposited.  The banks merely loan it out.  This money is used in business and speculation.  We shall see how it is used to control prices.  These prices affect us.  We get less for what we sell because the speculators manipulate the markets against us, and what we buy costs us more because the speculators control the prices of commodities.  We take the losses and they take the profits both ways.

Anyone who can impress the citizens of a locality with confidence can start a bank.  It has often been done without capital.  Even strangers can present to business men letters of introduction and, after securing their confidence and aid, start banks.  It is true that permission must be obtained from the Comptroller of Currency in order to start a national bank, but until I opened my fight on the Money Trust, even that had been a mere matter of form, and it is very seldom that anyone is refused permission when the application is accompanied by recommendations which are easily obtainable.

Bank Capital.

When a bank is organized the letter of the law requires that fifty per cent of the capital should be paid in cash, but that is often a mere matter of form, for the stockholders choose their own directors and officers and sometimes accept their own notes instead of cash.  Strings of banks have been organized by individuals associating in that way.  Of course, in order to do so, they must in some way secure the confidence of at least a part of the people in the places where they organize, and a sufficient amount of cash with which to pay the expenses of organization and buy the required bonds on which to base bank notes, but temporary loans are often secured for that purpose, and they frequently depend upon the deposits to pay these loans.  Further, the law makes it legal to make loans equal to one-tenth of the capital to a single person, and if there are enough associates they are enabled, in addition to borrowing the capital, to borrow the deposits as well, even including the greater part of the reserve, if reserve banks be included in the scheme.  Such loans may even be made to certain of the organizers who are without capital.

You might ask, “What are the bank examiners doing if banks can be filled with paper originally worthless ?  It would require very many more examiners to be given the time to learn the value of bank assets ;  in fact, so many more that each would have time to tabulate the assets and make inquiries into the solvency of the makers of the paper held by the banks.  They would require time to check up and detect the kiting of notes and accounts going on between those who manipulate that game.  Bank examiners ordinarily visit banks only three or four times a year, and often examine banks with even a million dollars assets (consisting of hundreds, and sometimes thousands, of notes), list their amounts, subtract payments, count the cash, and examine the books, all in a day.

Almost all banks, however, organize with substantial capital ;  that is, what we commonly accept as such.  Banks never start with intent to defraud depositors.  But there is no law to prevent them from starting without substantial capital, and they often do.  The system itself has robbed us, and the bankers themselves are not, as a rule, aware of it.  But they are the beneficiaries of a false system, one that makes them rich, very rich as a class.  Their wealth is created through a burden placed upon us, and the wonderment of it all is that we should be so foolish as to supply other individuals who possess no more intelligence than ourselves, with both the law and the deposits on which to base issues of currency, and systems of credit that tax our life necessities more than all other things combined.  That is not an extravagant statement.  It is the absolute truth, and the object of our first study is to make it so clear that everyone will understand it.

Banks are not generally organized by the note-kiting system, but they can be, and many are and have been.  Even dummy notes are sometimes used, and the extent to which these practices have been resorted to, directly and indirectly, is considerable ;  but the general public has never realized that it has been done at all.

The law providing for bank capital has been of comparatively little protection to depositors.  The bankers themselves have protected their depositors and charged for doing so.  Bankers are under the necessity of protecting themselves from failure, and it is due to their diligence and their self-interest that there has been so little direct loss to depositors.  Many banks were originally started and capitalized on the paper of individual makers which was worthless at that time, but these banks got our deposits and charged those who borrowed them so much that the profits finally made the paper good.  The careful banker usually becomes rich regardless of the fact that he often starts without capital.  In other words, the business itself is carried on according to a system which allows the public to be so heavily taxed that failure, generally speaking, is visited on the careless and incompetent only.

It is impossible to determine how many banks started without the actual amount of required capital, but since most banks so started have become financially strong by reason of their accumulated profits, no great good could come from a knowledge of which of the existing solvent banks were originally organized on paper which was actually worthless at the time of the organization.  We wish principally to understand the system because it is a false one.  Even if the letter and the spirit of the law were followed, still the using of the system is a greater wrong by a thousand times than the more technical violation of its law.  The fact is that our laws are so ridiculous that the bankers have often warped the law to the advantage of the public when it involved no loss to themselves as a consequence.

The Greatest of all our Burdens is the Banking and Currency System.

The speculation and gambling that is incidental to our banking and currency system is simply appalling, and it is absolutely ridiculous that we should tolerate it, and pay the cost of its continuance.  Before considering a few of its details let us make a partial review of the burdens that accrue to us as a result.  When we examine our losses, even in part only, and see how great is our sacrifice because of our stupendous stupidity in supporting such a system, no doubt we shall be more interested in the manner in which it is operated.  Of course it is not a pleasure for one to feel that he has been fooled, but our appetite for information ought to increase when we realize that we could double, yes multiply many times, the advantages we would receive in return for our daily expenditure of energy if a proper system were to be instituted.

It is worth while to know that there are simple remedies which would, if applied, overcome certain conditions that are immensely complicated and tremendously cumbersome because of their falsity.  It is always easier to deal in truth and honesty and follow these to their legitimate ends, than it is to construct and adjust a false superstructure upon a false base.  But even if no remedy were possible we should still seek to know about the game that is being played by the speculating interests.  We certainly do not wish the financially fat fellows to be able to look beguilingly into our eyes, and with the concealment of their innermost amusement and delight at our stupidity in permitting ourselves to be so bamboozled, talk brazenly about the game that they are playing, knowing all the time that we do not understand it.  We wish to know the truth about this even if we do feel humiliated because of our having previously been ignorant of it.

Here are some figures.  In the year ending June 14th, 1912, the 7,372 national banks cost us $450,043,250.04 to operate, pay their losses, dividends, surplus, etc.  Up to June 14, 1912, 17,823 State and private banks had reported, and approximately 4,000 banks had failed to make any report.  The 25,195 reporting banks operating in 1912 held individual deposits of $17,024,067,606.  Including those not reporting there were 28,995 banks conducting business in 1912, and the sum it cost the people to operate these, pay losses, dividends, surplus, etc.  (I believe it a conservative estimate) would exceed $1,300,000,000, or approximately $14 for every man, woman and child.  This is more than it costs to run the U.S. Government, all things included.  But large as this sum is, it does not include any report of the operations entered into by the bankers for their individual consideration.  That, no doubt, far exceeds the mentioned sum, because bankers have unusual opportunities to speculate and many of them do speculate on a large scale.

On January 1, 1911, the report of 7,140 national banks showed that they had $1,005,740,915 of capital stock paid in, and $662,090,881.82 surplus.  The surplus is that part of the profits not declared as dividends.  On September 4th, 1912, there were 7,397 national banks, and their capital stock was increased to $1,046,012,580, their surplus to $701,021,452.71, and their undivided profits on the last date, less expenses and taxes, were $242,735,174.37.  The dividends on the stock of national banks in 1912 were 11.66%.  But large as these dividends, surplus and undivided profits are, we have not reached the climax of this system of extortion.

The Juggling of Credits to Create Capital.

We seem never to have learned the value of credit or to know that we ourselves form the basis for it.  We are capitalized as so much stock on hand owned by the trusts.  A few of us get into the deals, some on a small scale, and a comparatively few on a large scale, and a half dozen or so have become the real kings of finance.  Of course, it is necessary for the kings of finance to have scattered throughout the land underlings who help them gather in the products of our applied energies, and these involuntary contributions of ours are afterwards distributed among the favored.  Naturally the underlings are given some crumbs and some of them even fair slices, but considered in a general way all of the crumbs and slices are distributed in proportion to the capacity the underlings possess for playing the game well.  The whole loaves are only handled by the kings of the system, and it is through the expenditure of our united energy that they are enabled to amass this so-called wealth.

Now, in 1913, there are approximately 30,000 banks.  Their number, capital and surplus continually increases.  On the basis of that fact the Wall Streeters tell us that the capital of the banks is less concentrated now than it was formerly.  They intend by that assertion to lead us to believe that they have less control.  I shall prove, however, that the banks are merely the nests from which the Wall Streeters gather the people’s financial deposits ;  that these deposits and the credits built upon their use as a means of amassing capital and levying interest are ever so much more serviceable to the bankers than the capital stock.  A large part of the capital stock is consumed in the purchase of natures and buildings that serve the banks for offices.  The more numerous the banks are, and the more widely scattered through all communities, the greater is the control the Wall Streeters obtain.  The people deposit their money in these banks and a large part of the money is used by the Wall Streeters as if they actually owned it, and upon its use they base an enormous credit system.

No bank is organized with the idea that its capital is the basis upon which it secures its main profits.  No bank would be organized unless its organizers believed that they could secure the use of the people’s savings in a larger amount than the bank’s capitalization.  Take, for instance, the following six banks in New York City :  First National;  Chase National;  Hanover National;  National Bank of Commerce;  National City, and National Park.  Their deposits on September 4, 1912, amounted to $839,444,143, while their capital stock was only $73,000,000.  Approximately the deposits equal 11½ times their capital, exclusive of surplus.  Is it not very foxy of them to try to divert our attention from this fact to a consideration of the location of bank capital ?  When I use the phrase “Wall Streeters” I do not confine it to those having offices in Wall Street.  The Wall Street system is maintained in all of the large cities, and I include within the term Wall Streeters all those supporting the Wall Street system, wherever they may be.

In 1900 there were 13,977 banks, which includes non-reporting banks.  In 1912 there were 28,995 banks and in that time the deposits increased from $7,688,956,450 to $17,494,067,606.  Their surplus increased in a still greater ratio and in the meantime they paid large dividends.  It must be apparent to anyone that the money with which to pay the expenses incurred by operating this system (by which I mean to include the whole system of trusts) is collected from the people by capitalizing the products of our energy and even discounting the future in the form of stocks, bonds, and securities issued, on which they collect dividends and interest.  This is being accomplished by a reduction of our wages and of the prices for which we sell our products, or the services we render as well as by increasing the price of what they control that we must buy.  By inversion this prevents a proper reduction in the hours of labor.  These have not decreased, nor has our pay increased proportionately with the new mechanical devices and the new methods of application which have immensely increased our productive energy, but the additional product which has resulted from their use has been capitalized in order that the dividends which we pay shall increase.  All of these things were scientifically figured out, then commercialized, then speculatized, and finally gamblerized both as to the present and the future.  All have been overdone and all pooled as a common charge against the products accruing from the expenditure of our life’s energy.

Many of us were children when the extortion began, and we can hardly blame our parents for permitting the initiation of what we have allowed to be developed into a full-fledged, scientific, legalized system of extortion.  But now, since we understand its effects, our children ought to look back on us with shame if we permit its continuance.  It is not the bankers who have primarily fastened upon us this system of capitalizing our life energies for their own selfish use.  It is the banking and currency system, which we have allowed to remain in operation, and create special interests.  The people alone have the power to amend or change it.  Therefore we and not the bankers are responsible for the existence of the present system.

Omitting the banks not reporting, of which there were more than 4,000 in 1911, the 25,195 that did report up to June 14, 1912, showed,

Capital stock paid in ........ $2,010,843,505.43
Surplus ....................... 1,584,981,106.44
Undivided profits ............... 581,178,042.47
Total accumulations, capital included ...... $4,177,002,654.34

Over four billion dollars bank capital !  That is approximately $44.40 for each man, woman and child, and the bankers actually believe we owe them that, notwithstanding that it is practically a capitalization of ourselves, the same as a farmer capitalizes the growth of his hogs, but with the advantage to the hogs, because the farmer takes good care of the hogs until they are sold to be slaughtered.  And what is more, this $44.40 is the nest egg only.  We have already paid several times that to them in dividends.  But greater than both combined are the profits from the speculation and gambling indulged in by the king bankers, and by many of those to whom they loan the people’s deposits.  We shall study their operations at another time.  The banks are merely the nest eggs of the whole system.  Those who gather from these nests have the greatest opportunities.

If we were to look into the banks just before they close, we would find in them persons from the business houses depositing their daily collections.  In the earlier banking hours we would find such people making deposits as the farmers, wage earners, and others who do not collect each day the returns of their labor and business affairs.

Out of the 94,000,000 of us, all who are engaged in work or business of any kind for which we receive cash, are trotting immediately to the receiving windows of the 30,000 banks and trust companies and passing over their counters our hard-earned cash.  This cash is flowing from these 30,000 banks into Wall Street and other speculating centers like a flood stream.  It is the use of these deposits by the speculators that gives the Money Trust its power over the people.  Indeed the Wall Streeters have had all the greatest opportunities, for this practice has been going on for a long time.

You may say, “Yes, but the banks loan part of the people’s deposits back to them.”  That is true, but eventually it works out to the satisfaction of the Wall Streeters.  Of course, they want enough cash left back in the respective communities from which it pours in, so that our country’s industries, whatever they may be, may be operated.  That is on the same principle that a farmer will always keep breeders to replenish his live stock.  The Wall Streeters know that the harder we work in order to produce commodities of whatever kind, the more we will have to turn over to the rich.  The industries must be active everywhere in order to concentrate the cream of their products into the vaults of the banks and finally into the control of the trusts and special interests.  In our studies this will become as plain as the noonday sun on a clear day.

Yes, there are 30,000 banks in the small towns, villages, and great cities, that serve as nests into which the eggs are dropped,—that is, our cash.  The total of our individual deposits for the year of 1912, in the banks making reports to the Comptroller of Currency, was $17,024,067,606.  Add to that the deposits in banks not reporting, and the total will be correspondingly increased.  That enormous amount was supplied by us as a result of the expenditure of our energy and labor, and it is important that we should know what good, if any, comes from our supplying these banks with working material to be used under the present system.

Banks are divided into three classes :

First, New York, Chicago, and St. Louis form a class by themselves, and are called the Central Reserve Banks.

Second, 47 of the other large cities are Reserve Cities, and in those, banks are designated as Reserve Banks.

Third, all of the banks not in the first two classes are called Non-Reserve Banks.

This classification gives the greatest elasticity to the system of speculating and gambling with the deposits.  It is this classification also that gave the Money Trust its start.  It secured the use of the people’s money just the same as if it had actually owned it.  How, you ask ? . . . Simple enough !  It is worked by a rule of self interest—profit to the banks.  The law requires the non-reserve banks to keep 15% reserve.  This they are prohibited from loaning to borrowers in the locality from which the banks get their deposits, but they may keep 3/5 (or over half) of it in reserve banks, and the latter may loan 75% of that 3/5 out to anybody.  Further, the Reserve Banks offer the Non-Reserve Banks 2% interest and that inducement secures for them the greater part of these reserves, and much of the time even more than is required for the reserve.

The Reserve Banks are required to keep 25% reserve, but all except those in the three Central Reserve Cities, New York, Chicago and St. Louis, may keep 50% of their reserves in these three cities.  From this it will be seen that a practical working out shows that the actual reserves of the banks are, in non-reserve banks, approximately 6% of their deposits ;  and in the other banks, except New York, Chicago and St. Louis, 12½% of their deposits.  The rest is principally sent to the banks in Central Reserve cities which pay 2% interest and loan it out largely to speculators and promoters.

To those not knowing the tricks of the business, the practice of keeping reserves in other banks may seem harmless.  But upon examination we find it to be a most clever device, and operated in order that the banks generally shall supply the financial speculators and gamblers with the people’s money.  It is true that that is not the real purpose of most bankers, but it results in that.

Editorials in that portion of the press that is subservient to the Money Trust, state that we plain people have billions of dollars deposited in the banks, and seek to make the list of depositors appear to be a general one.  But any one person having deposits in two or more banks was listed as many times as his name appeared in the list of depositors in different banks, and some business houses have hundreds of accounts in one form or another.  After this process they boldly proceed to ask, “Who is the Money Trust ?” . . . This is their brazen answer to their own question :  “The people are.”  Thousands of newspapers are supported by the interests for the very purpose of beguiling us into believing the things that these interests want us to believe.  This question of who owns and who uses the money is the one on which they expend the greatest efforts in order to deceive.

It is a fact that the people own a part of the bank deposits, but the banking system is so cleverly arranged in the interest of the banks that the people have comparatively little benefit from their own deposits.  On the contrary, the people’s money placed in the banks is principally used as a basis for credit and on that credit the banks collect the interest which operates to reduce the prices of what we sell and increase the prices of what we buy.

General business is transacted on approximately $24 credit to each dollar in cash, . . . and under the highly specialized system of Wall Street there is a still greater elasticity of credit.  We all know that business is not carried on wholly with the actual money, in fact, business is almost wholly conducted on credit.

Yes, . . . the people do own considerable of the money deposited in the banks, but they do not use the credit that is based upon it.  They deposit the money, but the banks in conjunction with the speculators, appropriate and manipulate the credit based upon that.  We support that credit and during normal times that practice has a vastly greater effect in the control of business than does the actual money.  That is where we plain folks get left.  If any of us wish to use the credit we must pay the banks 6% and upwards, and yet the value of that same credit is based upon the products of our own energy.  The banks do not, ordinarily, part with the money when they make loans.  The borrower gives his note and the sum for which it calls is placed to his credit on the bank books, after which he checks on that account to pay bills.  These checks are usually deposited by the payee in the same or some other bank and in the general average of business each bank gets back as much as it loans.  The money that we deposit forms the basis for an amount of credit many times greater than the amount of actual money.  The bankers have the advantage of all that, . . . and it is pyramided and sold and resold many times.  The banks are specialists in the manipulation of that credit and as a matter of fact they are required by the exigencies of business to be so, as long as we allow the present ridiculous system of money and credit supply to continue.

On June 14, 1912, all told, there was only $1,572,953,579.43 of actual money in the reporting banks, but in these same banks there was credited to individual depositors over seventeen billions.  The banks have never had, at one time, much in excess of one and one-half billion dollars of real money.

The banks are properly the clearing housed for money and credit exchanges, but they have misapplied their trust and have become our commercial masters.  Many of them have associated themselves with the gambling speculators and are now speculating for themselves.  Further, the people’s deposits are being used by them and those to whom they loan to pyramid in stocks, bonds, and other securities, which aggregate at the present time approximately amounts to $50,000,000,000 and is rapidly nearing the $100,000,000,000 mark.  Excessive dividends and interest are charged and compounded semiannually and annually on this sum.  That decreases our net earnings, increases the price of the commodities we buy, and prevents a proper reduction In the hours of labor required.  Against this $50,000,000,000 on which the Money Trust combination charges us exorbitant maintenance expense, in addition to interest and dividends, we own merely a part of the $17,000,000,000 of deposits, and a few of us are drawing 3% and 4% interest on small balances.

You can now begin to appreciate how comparatively insignificant the little deposits a few of us plain folks are able to make for ourselves are, when we measure the interest we get with the maintenance expense, dividends, interest and profits which the bankers, trusts, and speculators obtain on the credits they create on these deposits, and realize that all of these are supported by the products of our energy expenditure.

To give a concrete illustration, take, for instance, the increasing reserves held by the following central reserve banks :  Hanover National, National City, National Bank of Commerce, First National Bank, and Chase National.  These are the six principal banks in New York City and we can apply the principle that governs them with that which governs other banks without going into tiresome details.  Covering a period of 15 years, notice how diligently they have been skimming the country for the reserves of other banks.  The growth of these reserves held by the six banks are as follows for the period named :

September, 1898......................$ 94,394,210
September, 1899...................... 154,514,691
September, 1900...................... 176,731,918
September, 1901...................... 210,763,488
September, 1902...................... 253,515,055
September, 1903...................... 227,780,147
September, 1904...................... 258,558,149
August, 1905......................... 291,732,471
September, 1906...................... 334,560,214
August, 1907......................... 336,553,788
September, 1908...................... 311,499,877
September, 1909...................... 399,658,140
September, 1910...................... 400,740,817
September, 1911...................... 451,050,573

The capital of these six banks has been increased from time to time during the last fifteen years by means of adding a part of their profits.  In 1912 it was $73,000,000 (the larger part of which was the profits that had been previously made on a smaller capitalization), and in addition they had $82,000,000 surplus ;  in other words, profits piled up.  Besides all that, they had $26,332,698 of undivided profits, or profits that have not been declared as dividends or placed to the credit of surplus.  In the meantime, these six banks had paid enormous dividends to the stockholders.  The profits of the First National, one of the banks mentioned above, amounted to $56,000,000 in fifty years.  The original investment was $500,000.  The total deposits of the “Big Six” now, in 1913, approximates a billion dollars.  We should not overlook the fact that this is largely actual money, as the New York banks secure more of that than banks elsewhere, and that by Wall Street’s system of credits it may support many billions of credits for the Wall Streeters.

There is a group of banks in each of the large cities working the same game with the credit supported by the people, and yet, enormous as the aggregate amount of these bank profits may seem, they are almost insignificant when compared with profits that we pay the other special interests which have grown out of our monstrous banking and currency system.

We now have fixed, as a part of our knowledge, the fact that bankers have by law and by practice special privileges which enable them to handle the people’s money and juggle with credits in such a way that they become rich, but we have not yet seen the greatest of their advantages.  We have already found that bankers as a class are rich, made rich by the use of the credit that is supported by us, and they are organized for the very purpose of using that.

We should mention something about the personalities of the bankers whom we meet upon the journey of life, and strive to learn by what rule or right, they secure the privilege of converting into their own control the credit that is necessary in order to carry on the business and commerce of the country.  Why should the bankers have the power to contract and expand at their pleasure, the credit that the people themselves support ?  Under the present order of civilization it is the greatest privilege in existence.  The manner of its exercise by bankers and speculators is continually sending to their graves thousands of poverty-stricken persons for each person that it aids to competency.  Is it not extremely important that we should know by what method these bankers become the arbiters of our destinies ?  They were not selected by us to do this.  Just so long as we allow them to dominate by the system they employ, the road to success is absolutely closed to the vast majority of farmers, wage earners, and others employed in different pursuits of life.

In the earlier part of our study we made some observations about bank capital.  We are now prepared to know more about it.  In order to obtain the controlling advantage in the banking business, it is not sufficient to own a little bank stock.  Many people own bank stock and some control banks without knowing much about their actual power.  These, however, are the ordinary banks, such as most of us patronize if we have occasion to do a direct business with banks.  These banks serve as supply stations for the larger city banks.  They are not designed for that purpose, but that is the result of the system under which they operate.

We have already observed that any person of ordinary capacity, bearing a fair reputation, and possessing actual nerve, can start a bank, without capital, in any place where a bank is needed, and that they frequently do at points where no additional bank is necessary.  We have also learned that the greater part of the banking capital has been created out of profits obtained from the use of the people’s labor and credit;  that the surplus of the six largest New York banks exceeds their stated capital, it being $73,000,000, while the surplus is $82,000,000;  that much of their stated capital was created out of earlier surplus accounts;  and that, in addition, they have $26,332,698 of undivided profits.  What is commonly thought of as actual capital is simply the notes, or the proceeds from the notes, of some of the principal incorporators who borrowed from banks, or from others, and paid them with money out of the dividend collections.  The whole thing is, and has been, based almost entirely upon a system of credit, and we have remained ignorant of the fact that instead of allowing a few men with average capacity, supposed fair reputation, and actual nerve, to appropriate the credit that the rest of us have supported by hard labor, we should have utilized that credit for the benefit of those plain people who really support it.

We should become firmly imbued with the truth of that statement.  Indeed, the most of us who are over 21 years old and have voted will become more and more humiliated as we proceed and realize how, we have been beguiled into supporting the very things that have robbed us of the best results of our life’s energy.  But it is better to be once humiliated and become thereafter ashamed of our own past stupidity, than it is to continue in ignorance and place the increasing burdens upon the shoulders of our children.  It is time that we realized that our banking and currency system is not only rotten in its application but that it is absolutely false in its basis, and must be changed.

It is because of that condition that I introduced a resolution providing for an investigation of the Money Trust.  The interests saw the danger in which such an investigation would place them if the public should learn the actual facts, and they immediately started that portion of the press controlled by the trusts to laughing at my resolution.  An attempt was made by those interests and the subservient political bosses, irrespective of party, to ridicule it out of Congress.  They recognized that the resolution was aimed at the very heart of all the trusts and combinations.

The political bosses do not always keep so well informed about the ways of business as they do about the jugglery of politics, nor the means by which the public may be prevented from understanding their operations, but they do juggle the rules of both Houses of Congress in order to restrain action against and promote action favorable to the trusts.  The trusts inform the politicians of how they wish them to act upon matters which affect the trusts, and in the case of my resolution they were induced to pigeon-hole it.  But the public had heard the alarm.  The independent press was insistent on information . . . sought to obtain facts from me, searched for other facts themselves . . . and heralded to the world the purposes of the resolution.  Thousands of letters and telegrams were sent to the Members of Congress from their constituents. . . . The political bosses soon found it necessary to cover the tracks the trusts had made when coming to their offices. . . . Something had to be done ;  and that quickly, or the indignation aroused at the failure of Congress to act would run riot and the heads of political bosses tumble.

Secret meetings were held by the representatives in Congress of the trusts and bosses.  The doors of the innermost and least suspected offices were barred to the public, and so guarded that none should enter who were interested on behalf of the public.  In these offices plans were laid for the drafting of a new resolution, the purpose of which was to defeat the appointment of a special committee, and to substitute for it the Banking and Currency Committee;  which was chiefly composed of bankers, their agents and attorneys, and the interests expected that that committee would faithfully protect the wrongs committed against the public, in so far as it could be done without arousing public suspicion.  It could not whitewash the whole of the Money Trust operations, but much could and would be concealed by that means, and was in fact, as was shown by subsequent developments.

The next step was to secure the passage of this substituted resolution, which really amounted to the investigation being made by the secret friends of the Money Trust.  This committee, as well might be expected, . . . because of the special personal interest of its members, . . . did not select an attorney to aid them from among the many able attorneys who are Members of the House and who would serve without further pay than that to which they are entitled as Members, . . . but they selected a Wall Street attorney, paid him a very high salary, allowed him to manage the whole investigation and practically draft the committee’s report.  I do not make that statement as a reflection upon the attorney so selected, but merely to indicate the fact that the Banking and Currency Committee did not view this subject from the standpoint of the general public.

At first it was supposed that the public would be appeased with such a proceeding, and the whole subject be easily handled under the sacred boss system.  A secret caucus was resorted to. ... In a later study we shall consider these secret caucuses and ascertain the method by means of which the politicians have so long served the trusts while being maintained in office by the public.

The caucus on the Money Trust resolution was attended by many well-meaning but misguided followers of bossism.  The substituted Money Trust Resolution was adopted, and on a later day passed by the House.  Those Members who bound themselves by the gag caucus rule were guilty of perjury and treason, but that has been so common a result of the caucus rule that it is no longer considered as such by them.  They believe that anything founded in precedent is justified, and each believes that he is justified and his conscience satisfied when once he yields his convictions to the will of the bosses.  But the people will awaken their asphyxiated consciences on this caucus system once they learn the cost it entails on national efficiency.

The Money Trust won, . . . of course, . . . and the Banking and Currency Committee took charge of the investigation on behalf of their masters, the bankers.  Probably not one of the men on this committee is really dishonest.  I believe that each one of them believes that he is conscientious and that he does not intentionally wrong the public.  But they have developed the selfish viewpoint to a degree that enables them to believe that the public is really mistaken.  That is almost always the case, however, with those who have become the beneficiaries of a system.

The Banking and Currency Committee had to be forced by public opinion to do more than make a pretense at action.  It was presumed by its members that the public was ignorant of the facts, but the truth was that too many things had already been exposed.  The public demanded proof.  A great political party was in danger.  The bosses saw the danger and they made a feint at investigation, as a result of which they gathered in a few morsels to be spread broadcast before the general election.  Then all was silent and the committee would meet and adjourn, and meet again and adjourn, and so on, over and over again.  While that continued the Money Trust and the subservient politicians were safe.  All was quiet until Congress convened.  Then, on December 2, 1912, I introduced the following resolution :

WHEREAS.  Congress created in 1908 a National Monetary Commission with authority to investigate monetary problems in general, and

WHEREAS, said Committee has been discharged, but first made and filed a report and recommendations for certain legislation embodied in a bill now pending in Congress and popularly known as the Aldrich plan, but the report failed to disclose any facts in relation to the monopolistic control exercised by certain great special interests of the principal money and credit that enters into commerce, business, and speculation;  and

WHEREAS, it is vital that Congress should know the facts relating thereto before permanent remedial financial legislation should be undertaken, and

WHEREAS, there is a pressing demand for early legislation, and for other good and sufficient causes, the House authorized the Banking and Currency Committee to investigate the Money Trust, which exercises a potential and injurious influence in the control of the principal sources of money and credit supply entering commerce, business and speculation, and

WHEREAS, the Committee, in the many months that have passed since it was so authorized, seems not to have undertaken the investigation for the purpose of securing facts to aid in framing early remedial financial legislation, but rather to have been planning an investigation as if for indictment or some other remote purpose, and in which it is blocked by offenders against honest and impartial rules of business and Government officials who deem the personal privileges of banks so sacred that their business shall not be inquired into even for the benefit of the public, and

WHEREAS, this action on the part of the special interests, supported by the refusal of the Government officials to help the committee, is important in itself, the facts should become a part of the committee report, but should in no way delay the investigation which is important in that its purpose is to secure the facts and circumstances that improperly interfere with legitimate commerce and business.  If the committee intends to secure information for other purposes and has not sufficient power, it nevertheless should secure the information which is of the most vital importance and which was the moving cause for its authorization ;  that is, information which will enable Congress to intelligently enact remedial laws relating to the control of money and credits;  and

WHEREAS, it has never been claimed that there is or ever was an organized or even an unorganized association that can be specifically pointed to and named as the Money Trust, it is therefore useless to undertake to prove such an organization exists for the purpose of punishing it.  Neither formal nor informal organization is necessary to its potential existence.  In fact, its power is the greater because it exists without actual material rules of organization, for by the methods of its existence it is immune from prosecution.  It nevertheless can and does by indirection what it could not do by direction.  The very fact that the business interests know that there is a money power which can make or unmake business for them gives that power its greatest efficiency of control.  Silently and surely that power is exerted, and its force is realized by all industrial agencies.  Because of its peculiar, yet potent, force, it is important that we have early legislation.  The main facts and circumstances by which the Money Trust is maintained may be easily proven to the intelligence and understanding of the public by a proper compilation of the facts that are now obtainable, and it was for that purpose principally that the committee received its authority from the House;  Now, therefore, be it

RESOLVED, That the Committee on Banking and Currency is requested to proceed without delay with an investigation of the Money Trust influence, for the purpose of securing all the practical information and data that may reasonably be had in regard to the influence exercised by the Money Trust in the control of banks and of money and credits.

RESOLVED FURTHER, That said committee shall report the results of its investigation to the House from time to time with reasonable promptness.

The press immediately published broadcast the substance of the above resolution.  As a result of the strong public sentiment, the committee was forced to act with more diligence.  (The same as the politicians in the old political parties became progressive when public opinion forced it.)  The party in control scented danger.  The fear of adverse public sentiment, the only thing that boss politicians fear, aroused them to action.  The committee was now forced to subpoena witnesses and hear their testimony, some parts of which were afterwards published by the press.

In the speech that I made in support of my first resolution, I disclosed the conditions that the subsequent evidence of the kings of finance proved to exist. . . . But the committee softpedaled, and brought out only those things that every student of the financial conditions already knows, and such information as had been substantially published in magazines and discussed in Congress by Senator LaFollette, myself, and others.  It was only the fact that it was furnished verbally by the fellows in the actual game that aroused a new and more general interest.

The committee did not seek out the most crafty arts of these speculators and gamblers in order that the public might secure a correct view of the false system of laws that govern the banking and currency business ;  but what was to be expected from a committee that was controlled by bankers, and whose chairman was a banker ? . . . Naturally, it avoided questions upon the most important economic truths which should have been disclosed as a result of the investigation.  The tricks of the witnesses will die with them, but the system that permits the tricks still remains for others to operate under until it shall be remedied.

A sub-committee was created to propose a remedy.  This committee is also controlled by the bankers, and has a banker for chairman.  These men have personal financial interests in the legislation.  Our—that is, the peoples’—concern in changing the system is to promote the general welfare. . . . The bankers have a special interest, and since they control the committee, . . . what show have we against them ?  Since their interest is to collect interest from us ! . . . They go as far as they dare without arousing a hurricane of public indignation as a result of the favors they extend to their own business.  The friendliness that the Banking and Currency Committee displayed toward the Money Trust was apparent to anyone who had given any time to the study of the problems placed before it for investigation.  Their work was as mere play when compared with the importance of the subject.  Nevertheless, it served a good purpose, although its service was of a weak nature.

Jacob H. Schiff, one of New York’s greatest financiers, and one of the witnesses who testified before the committee, is an example of a man with the kind of mind and overselfish viewpoint which prevails among the men who had a personal financial interest in the result of the Committee’s investigation, such as the banker members of the Banking and Currency Committee may be expected to have.  Mr. Schiff, under oath, told the committee in substance that :

If individuals can accomplish a monopoly he believed they should not be hampered by law !  The laws of nature, he told the committee, are best for preventing too gigantic projects;  and he cited the fall of the Tower of Babel as an example of the futility of human effort extended too far.  Among the articles expounded by Schiff in his creed of business and finance was the assertion that the minority in all corporations should not he allowed representation among the officers and directors by law.  “The majority should always rule,” he said, “and the minority should protect their rights as best they can.”

Is it not easy to see by this statement of Mr. Schiff’s that it is preposterous for Congress to appoint mostly bankers, their agents and attorneys on its Banking and Currency Committee ?  Mr. Schiff is not cut from a different cloth, nor by a different pattern than the rest of humanity.  Acting in our individual capacity, we look after our own interests, but in a collective sense we have not carried this interest far enough, and, consequently, we have such financial wizards as Mr. Schiff.

Now, let us analyze the last sentence of the quotation from Banker Schiff’s testimony to his brother bankers when the committee examined him.  He said :

“The majority should always rule and the minority should protect their rights as best they can.”

Now suppose we consider our own case—that is, the interests of the public—in the light of this statement of a king banker, which statement bears reference to the smaller stockholders in corporations.  There are 30,000 banks in this country.  There may be 200,000 bankers.  I do not know their exact number, but I know that there are approximately 94,000,000 of us.  In the percentage of human beings the bankers are not equal to 1 per cent of the population.  There is, on the average, perhaps not more than one banker to 2,000 other people.  Suppose we should take Mr. Schiff at his word and let the minority “protect their interests as best they can,” and we, the people, take the power which we possess,—and the Constitution contemplates that we should exercise as a government, and Lincoln proposed, . . . namely, “coin the people’s national credit,” . . . instead of letting the bankers coin it for their own selfish use.  What would happen to Mr. Schiff and his brother bankers who control the Committee on Banking and Currency if we did that ? . . . That is one of the questions that will be answered before this study ends.