Charles Lindbergh
Banking and Currency


The discussion of so important a problem as that of Banking and Currency will naturally cause many questions to arise in the minds of readers and I will undoubtedly receive many letters of inquiry.  In the last three years I have received several thousand.  After a reasonable time I shall revise this volume and cover all of the important inquiries that are made hereafter.  One question has been asked with such frequency in the last few days as to justify its answer now by Appendix A, which consists of a resolution, a letter (which I have selected from letters that I have received from bankers), my answer to that letter and an article from The North American of Philadelphia.  Following this explanation, these are quoted in the order named.  They are :

H. RES. 80.
In the House of Representatives.
April 29, 1913.

Mr. Lindbergh submitted the following resolution;  which was referred to the Committee on Rules and ordered to be printed.


Whereas there is general need of legislation on banking and currency, and also a general understanding that such legislation is to be enacted soon, possibly at this extra session of Congress, but that notwithstanding that fact no Committee on Banking and Currency has been selected by the House;  and

Whereas this proposed legislation on banking and currency is of great importance—exceeding in importance that of tariff or any other legislation contemplated by this Congress—and therefore should receive the most careful and impartial consideration, especially having in view the following facts :

Ever since the Civil War Congress has allowed the bankers to control financial legislation.  The membership of the Finance Committee in the Senate (now the Banking and Currency Committee) and the Committee on Banking and Currency in the House have been made up chiefly of bankers, their agents, and their attorneys.  These committees have controlled the nature of bills to be reported, the extent of them, and the debates that were to be held on them when they were being considered in the Senate and the House.  No one not on the committee is recognized under the practice of the House as long as a member on the committee wishes recognition, and one of them is sure to hold the floor unless some one favorable to the committee has been arranged for.  In this way the committees have been able to control legislation in the interests of the few.

The men who have appointed the committees in the last fifty years have not had the clear and earnest viewpoint of our forefathers.  On Tuesday, January fourteenth, seventeen hundred and ninety-four, the following resolution was introduced in the United States Senate :

“Nor shall any person holding any office or stock in any institution in the nature of a bank, for issuing or discounting bills or notes payable to bearer or order, under the authority of the United States, be a member of either House whilst he holds such office or stock.”

It passed the Senate two days later, after being fought by the bankers, and amended at their instigation in order that they might be allowed to sit in Congress, but it still remained a protest to bankers controlling legislation in which they were personally interested.

Our finances, including the actual control of legislation in Congress.  have been surrendered to the bankers, their agents, and attorneys.  At the earlier date above stated, when people were less commercial and more determined to have all public acts removed from the influence of personal interest than people are now, they feared to trust the bankers, even as plain Members of Congress, to frame legislation.  We of this age allow them to absolutely control all of the committees in Congress that make the laws governing financial operations.  Some of the members of these committees belong to banking associations that lobby in Congress as a means of securing action favorable to the bankers.

The English money lenders have co-operated with those of our country, and in eighteen hundred and sixty-two an agent, quietly and under a sort of confidential seal, distributed among the aristocrats and the wealthy class a circular.  It was called the Hazard Circular and related in a way to the Civil War.  It read :

“Slavery is likely to be abolished by the war power and all chattel slavery abolished.  This I and my European friends are in favor of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led on by England, is that capital shall control labor by controlling wages.  The great debt that the capitalists will see to it is made out of the war, must be used as a means to control the volume of money.  To accomplish this the bonds must he used as a banking basis.  We are now waiting for the Secretary of the Treasury to make this recommendation to Congress.  It will not do to allow the greenback, as it is called, to circulate as money any length of time, as we can not control that.  But we can control the bonds and through them the bank issues.”

Near the close of the war, eighteen hundred and sixty-five, Mr. Jay Cooke, the fiscal agent for the Government, published a circular and in it stated, among other things :

“We lay down the proposition that our national debt made permanent and rightly managed, will be a national blessing.  The funded debt of the United States is the addition of $3,000,000,000 to the previously realized wealth of the Nation.  It is three thousand millions added to the actual available capital.”

Again, in eighteen hundred and seventy-seven, a circular was issued by authority of the Associated Bankers of New York, Philadelphia, and Boston.  It was signed by one James Buel, secretary, and sent out from two hundred and forty-seven Broadway, New York.  It was sent to the bankers m all of the States.  It read :

“DEAR SIR:  It is advisable to do all in your power to sustain such prominent daily and weekly newspapers, especially the agricultural and religious press, as will oppose the greenback issue of paper money;  and that you also withhold patronage from all applicants who are not willing to oppose the Government issue of money.  Let the Government issue the coin and the banks issue the paper money of the country, for then we can better protect each other.  To repeal the Act creating bank notes, or to restore to circulation the Government issue of money, will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders.  See your Congressman at once and engage him to support our interests, that we may control legislation.”

Again, in eighteen hundred and ninety-three, a circular was sent out by the American Bankers’ Association, an organization in which most bankers hold membership.  It is known as the “Panic circular of eighteen hundred and ninety-three;”  bears date March eleventh, eighteen hundred and ninety-three, and was mailed to the national banks.  It reads as follows :

“DEAR SIR:  The interests of national banks require immediate financial legislation by Congress.  Silver, silver certificates, and Treasury notes must be retired and national-bank notes upon a gold basis made the only money.  This will require the authorization of five hundred millions to one thousand millions of new bonds as the basis of circulation.  You will at once retire one-third of your circulation and call in one-half of your loans.  Be careful to make a monetary stringency among your patrons, especially among influential business men.  Advocate an extra session of Congress to repeal the purchasing clause of the Sherman law and act with other banks of your city in securing a large petition to Congress for its unconditional repeal, per accompanying form.  Use personal influence with your Congressman, and particularly let your wishes be known to your Senators.  The future life of national banks, as fixed and safe investments, depends upon immediate action, as there is an increasing sentiment in favor of Government legal-tender notes and silver coinage.”
---[Thomas Cushing Daniel, in his book, High Cost of Living, published in 1912, claims a certain Mr. Solomon, partner in Speyer &co. published this circular in a (monthly?) publication called "Forum" in July 1895, in an article titled "Sound Currency and the Dominant Issue".  In 1894 Gordon Clark, in his book Shylock as banker reffered to this circular a year earlier than Daniel claims Solomon published his article and revealed the scheme of bankers....... Gordon Clark stated that "the 'Panic Bulletin' may not as yet have been absolutely traced to its source".]

At about the time of the formation of the National Monetary Commission, in nineteen hundred and eight, certain interests formed a league with branches in many of the States, all of which have since been and still are actively engaged in an attempt to influence Congress in favor of legislation in substance the same as that recommended by the National Monetary Commission, the membership of which commission was chiefly composed of bankers, their agents and their attorneys ;  and

Whereas because of so much personal financial interest and the influence on the part of persons with such interest it is important that the Committee on Banking and Currency should be made up from Members of Congress who have no personal financial interest in the results of the legislation to be enacted ;  and

Whereas the present practice of the House in the formation of its committees is to have recommendations of Members for the committees made from three certain different sources, and invariably the House pro forma elects the Members as thus recommended :  Now, therefore, be it

Resolved, That it is the sense of the House that no Member should serve on the Banking and Currency Committee who is a banker, or agent or attorney of any bank or banks, or who is the owner of any bank stock or other interest in a bank, or who is directly or indirectly interested in the profits of any banking business.

The following is one of the letters that I received from bankers ;

Capital and Surplus $45,000.00

J.W. Benson, Prest.
C.M. Doughty, V. Prest.
W.H. Jarmuth, Cash.
Paul Benson, Asst. Cash.
The First National Bank of Heron Lake,
Heron Lake, Minnesota,

April 30, 1913.

Hon. Rep. Lindbergh,
Washington, D.C.

Dear Sir:— The enclosed clipping from the St. Paul Dispatch, in reference to your resolution regarding, appointment of committee on banking and currency, explains itself.  If the press is correct in stating your attitude in regard to this committee, we would suggest that we have several men in this town who would unquestionably qualify for the position ;  they have no direct connection with banks, do not participate in the profits of banking, are neither depositors, and very much against their will, are neither borrowers, and no doubt would consider the interests of the common people in serving on your committee.

Seriously do not believe that your theory will work out in practice, and in working out banking reform in this country, believe the advice and counsel of our best bankers is imperative.

Yours respectfully,
W.H. Jarmuth,

The following is my answer to Mr. Jarmuth :

House of Representatives
May 5, 1913.

Mr. W.H. Jarmuth,
Cashier, First National Bank,
Heron Lake, Minnesota.

My Dear Mr. Jarmuth :

Replying to your letter enclosing article from St. Paul Dispatch, commenting on my resolution, you will notice from the resolution itself, a copy of which I inclose, that you can get a better understanding by reading it in connection with the article.

My interest in this subject is that of a citizen together with the additional responsibility of now representing the people as one of their many officials.  Many bankers and other people from all of the States have written me very many letters on the subject of banking and currency.  Some have expressed themselves from the same viewpoint that you do, but as a rule they do not take that position.  Of course any of us can be mistaken, and I shall at all times be ready to correct any mistake that I may make.  Therefore I am glad to receive these letters.  You have not, however, convinced me that I am mistaken about the propriety of the passage of my resolution by Congress.

Of course it is not a matter of concern to the public what your and my personal affairs and those of the persons to whom you refer in your letter are.  As for myself, no banker has ever refused to make me loans on my personal notes without security.  The bankers generally know that my activity in these matters of banking and currency is not a personal affront to them.  I am simply doing what I believe to be my duty as an official and I number among my best friends many bankers.  I have no prejudice in the matter.

As to the unnamed persons to whom you refer, not knowing them, of course I cannot express an opinion about their fitness, but I think people generally would agree with me in my belief that there are many citizens in your community as well as in all other communities whom it would be wiser for the public generally to have determine what laws and rules should govern the banking and currency business than to have you do it.  I do not make that statement as a reflection upon either your ability or your absolute honesty and integrity, but because I believe that all persons sitting in judgment on any matter should not have a personal financial interest other than that of citizens in general.  I have observed that most people are influenced by their personal interest.  History proves that to have always been so.

You know that no juror or judge would be allowed to sit in trial on a case who had a personal financial interest in the decision to be given.  I know that the bankers have a personal financial interest in the banking and currency laws that are to be enacted.  They should not be allowed to decide what those laws are to be.  But of course, it is their privilege and right to appear before an impartial committee and give advice and testimony.  Every interest should have representatives before the committee who would give information, but the committee should be the representative of the general public, which includes all of the people in all kinds of business as well as those who are not in business.  That is necessary in order to have general consistency, so that all may be on an equality in the enactment and administration of the law.

On the same day I received your letter, it happened that an editorial which is germane to this subject, appeared in the Washington Herald, D.C.  I quote a few sentences from it :

“Secretary McAdoo and the Banks.

“The new Secretary of the Treasury has interfered with one of the long standing privileges of the national banks in requiring them to pay 2 per cent interest on deposits of the national funds.

“From the day of the foundation of the national banks they have had the free use of these funds and have, as a result, profited many millions out of the transaction. * * * Now, when it comes down to proper business methods and requirements, it is very difficult to understand why the banks should not be obliged to pay over to the Federal Treasury all of the profits they are making continually out of Uncle Sam’s funds intrusted to their care, and incidentally strengthening their ready cash assets, whenever pushed for currency.

“It is the nature of man to acquire all the privileges that come his way.  To paraphrase a well-known quotation on ‘greatness’;  ‘Some are born privileged, some acquire privilege, and some have privilege thrust upon them.’  Our national banks have had privilege thrust upon them.  The whole scheme was so cleverly devised and applied that it was many years before even well-informed men had any idea of the ‘cinch’ hold which these institutions had secured upon the business and finances of the country.  The government is back of them.  It supplies them with all the currency they require free of charge and, besides, pays them interest on the securities upon which their note circulation is based.  Come to look at this with closer scrutiny it must be admitted that the protection granted certain lines of industry and manufacture by the tariff is a mild thing when compared with that which the Federal Government spreads over the national banks.”

In order that you may see further that it is no fancy in my mind that caused me to introduce the resolution, I am enclosing you an article from the North American of Philadelphia, which comments on the resolution.

Trusting that with these explanations you will understand that this work on my part is fully justified by existing conditions, I am,

Sincerely yours,
C.A. Lindbergh.

The following are comments of The North American of Philadelphia on my resolution :

The North American,
Philadelphia, Wednesday, April 30, 1913.

By Angus McSween.


Exclusive of bankers or the representatives of banking interests from membership in the Banking and Currency Committee, as a step to prevent the bankers from further controlling legislation relating to banking and currency, is the purpose of a resolution introduced in the House today by Representative Lindbergh, of Minnesota.

Mr. Lindbergh is an independent Republican who has declared his intention of co-operating with the Progressives.  He introduced the first resolution calling for an investigation of the money trust, and more than any other man in Congress forced that investigation.

It is largely as the result of the money trust investigation and the disclosures made of money and business monopolization by a combination of New York bankers that Mr. Lindbergh has offered his resolution.

The reasons he gives are set forth in a preamble of important bearing upon the whole question of banking reform now engaging the attention of the President and his advisers.

Mr. Lindbergh declares in his resolution that all banking and currency legislation since the Civil War has been controlled by the bankers of the country.


He charges that they have controlled the Finance Committee of the Senate and the Banking and Currency Committee of the House.  Not only have they directed the shaping of legislation in these committees of direct advantage to themselves, but as members of the committees they have had charge of steering the measures framed by themselves through the two houses.

He cites three tremendously important instances in the history of the country since the Civil War, in which the bankers themselves have shown interests and views diametrically opposed to those of the general public.

The first of these was when Jay Cooke attempted to impose the bankers’ view of the public debt upon the public in a circular in which he declared that the debt was a public blessing, “making an addition of three billions to the wealth of the nation in the form of three billion of actual available capital.”

He quotes a circular issued by the bankers of New York, Philadelphia and Boston to the bankers of the country in 1877, in which they say :

“To restore to circulation the Government issue of money will be to provide the people with money and will therefore seriously affect our individual profits as bankers and lenders.

“See your Congressman at once and engage him to support our interest that we may control legislation.”

In 1893, Mr. Lindbergh says, the American Bankers’ Association sent out a circular to bankers urging them to work for the repeal of the silver purchase act, which, the circular declared, would force an issue of bonds to the amount of at least $500,000,000 and possibly as much as $1,000,000,000 and to advocate an extra session of Congress, all of which was effected.

In this circular the Bankers’ Association says to its members.

“Be careful to make a monetary stringency among your patrons, especially among influential business men.”


Mr. Lindbergh declares that the Aldrich Monetary Commission was composed of bankers or the representatives of great banking interests, and that the Aldrich banking and money plan put forth by that commission was solely in the interest of the bankers.

He charges that for the purpose of promoting the Aldrich plan there was organized an association by the bankers the members of which are still working in the interest of that scheme solely for the benefit of the bankers and in opposition to the interests of the general public.

In view of all these circumstances, and the fact that it is now proposed that there shall be framed a bill to reform the banking system, Mr. Lindbergh concludes that the credit of the Congress and of the bankers themselves requires that the committee to frame the proposed legislation shall be composed of men who can have no direct financial interest in the result of such legislation.


Mr. Lindbergh intends to demand consideration for his resolution, if possible, before the Banking and Currency Committee is appointed, and he expects to put the House on record respecting his proposition.

It will be urged upon the Democrats that since the country has now reached a point in its development where it is understood that the beneficiaries of a tariff law should not be permitted to write the tariff schedules, the application of exactly the same principle to the framing of legislation affecting banking interests makes it a monstrous impropriety to permit the bankers to write the law regulating themselves.

With his resolution and the strong arguments that can be advanced in its support, Mr. Lindbergh also raises the very important question of the right of the bankers to continue in control of the nation’s credit system.

The two questions are so nearly merged that they should be considered as one, for control of legislation by hankers necessarily means the continued control of credit by the bankers, whereas if the bankers’ influence in legislation can be reduced, there is a chance that President Wilson’s promise to make credit free can be realized.

The present situation is already causing fear that the President may not have given as much thought to the matter of credit control as the subject deserves and that men close to the administration are seeking to involve him in a scheme of proposed legislation for the benefit of the bankers.

One reason for this fear is that men out of Congress, but in close touch with great banking interests, appear to know more about the Democratic program for banking and currency reform than do the Democratic Congressional leaders.