Gertrude Coogan
Money Creators

Chapter VI

THE MONEY CREATORS’ HARVEST

The Great War

The Federal Reserve Act was passed December 23, 1913.  Some parts of that Act seem to have been altered at the instigation of those who apparently knew that a great war was being planned.  Financing a war would require a great central bank, which would manufacture billions of new “credit money” to finance the huge production for destruction.

The World War had not progressed very far when, lo and behold, great England began to borrow in America.  The American national debt to foreign nations, which Americans had been so carefully taught was a “blessing” to our nation, and which had existed for many decades through the operations of the London bankers who needed to keep our money system closely geared to the British System in order to bring about depressions at their pleasure, had been wiped out by our shipping goods to Europe.  America was no longer in debt to the foreign bankers.  America was soon to become their creditor.  It was a great moment in history which has never been even mentioned in our schools of Business Administration.

All of the community bankers issued as many promises-to-pay as possible, and these promises-to-pay went to ammunition manufacturers, and various producers of food and clothing.  As soon as the community bankers had reached their limit of safety, the great Federal Reserve System was brought in to help with its super “credit money” expansion franchise.  Some of the private bankers in the largest city had already made advances to England.  One of the private bankers, it is reliably reported, had advanced credits beyond the bonds that had been sold to Americans, to the extent of four hundred million dollars.

If the war were to go on, it was necessary for the American tax payer to begin paying the piper.  Therefore, America had its first “Liberty” Loan Drive.  The process through which this financing was done was really very simple, due to the fact that we had this great Central Banking System.  The community banks advanced 5% of the amount of the proposed loan to the Central Reserve Bank.  The Government printed the bonds and sent them out to the community banks.  Upon the receipt of bonds, the community banks credited to the deposit account of the United States Government the total amount of the bonds.  It was simply a legalized method, whereby the community banks created by making bookkeeping entries 95% of the funds advanced to the United States Government.  The United States Government, of course, was magnanimous and was willing to pay interest to these community banks in return for their great privilege of creating money to lend to the United States Government.  After all, it is a magnanimous government that allows a few private individuals to create its money for it, and then allows the dear hard-working private citizens to buy those creations, and pay tribute ever after in interest.

As soon as the Government began to spend these enormous amounts of money for ammunition, food, clothing, etc., prices began to rise very rapidly.  As prices began to rise, business men began to expand their facilities.  The community bankers, upon pressure from the Central Banks, expanded their promises-to-pay and advanced to business men the loans with which to expand their plants and inventories.  A really worth-while credit cycle was created.  As business profits increased enormously, due to the rising price structure, and as wages also began to rise, peoples’ incomes began to be sufficient to permit them to absorb some of the Government bonds.  The banks thereupon sold these Government bonds to the American public.  In many cases the banks loaned the entire amount of the purchase price of Government bonds to individuals.

The bonds carried a 4¼% coupon and the banks charged an individual 6% or 7% on the unpaid balance of the purchase price of the bonds.  Of course, it was patriotic, and an American patriot didn’t mind paying 2 or 3% extra into the huge coffers of the unpatriotic banks.  After all, the bands played every day, and occasionally some bank contributed toward the Red Cross fund.  It was only being a good citizen to help the banks make the profits from which to supply an occasional check to the Red Cross.

The war went on and on.  Government obligations piled higher and higher.  Millions of the world’s young soldiers were losing their lives.  The war was really a huge success.

The “Federal” Reserve “credit” money not only “paid” for Europe’s war supplies, but America’s as well.  All together the American Government had borrowed “Federal” Reserve Credit and had given its interest-bearing bonds to create a debt of billions for goods sent to the Allies and other billions for our own share of the war destruction.

During the course of the War, it never occurred to the great bankers of the United States that, after all, our participation in the World War was a community affair and the only just way to have financed it would have been to print good constitutional government currency bearing the imprint of the United States, and have the United States issue it in exchange for war supplies and to defray war costs.  That, of course, would have been an honest way, because it would have spread the burden of payment equally by diluting the purchasing power of every one’s dollar equally and would not have created a gigantic collapsible structure absolutely controlled by international bankers, plus an unbearable burden of debts, the proceeds of which were used to buy consumer goods destroyed in conducting the War.

(The writer wishes to emphasize parenthetically the grave necessity of the United States maintaining at all times a great army, navy and air force for self protection and defense, at least until the money power, which also is the war power, is destroyed.  Those with sinister purposes are preaching “Pacifism” in America for one reason only—to have us entirely unprotected while Russia and the European nations are fully armed and ready to destroy us if we refuse to submit to the rule of the international money exploiters.)

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Chapter VII
“COOPERATION”
London “Cooperation” Became Exploitation

The War was over.

America had made “the world safe for democracy.”  Agricultural prices were high, as were also costs of production.  In the World War America had been called upon to supply raw materials.  Farmers had been told that the success of the war depended upon them, for a soldier had to have a full stomach.

The “Peace” Treaty of Versailles had been signed, Germany would “never again” threaten the world with autocracy and militarism.  She had been drawn and quartered;  her gold taken to Paris and London (that was all-important to the manipulators), her Saar iron and coal region was gone;  her colonies lost, her sources of raw materials placed under the control of others.

But England’s position as the world’s financier had been destroyed forever unless the great America would again “cooperate.”

Why ?  Because England was no longer the world’s creditor.  America was now the world’s creditor to the amount of about fifteen billions in private credits and loans, and twelve billion dollars in war debts;  a gigantic lever, greater than England ever possessed.  With this lever, if honestly used, America could enforce world peace for a Century.

We had been cooperating many years, in fact, we had been “cooperating” ever since we started to allow our agricultural price levels to be determined in Liverpool, London and Manchester;  ever since we had been foolish enough to believe back in the 1860s and 1870s that we had to borrow and pay interest on England’s promises-to-pay in order to buy our own raw materials and hire our own workmen to build our own railroads and factories.  Our “cooperation” with England had really been most magnanimous.

During the 50 years which climaxed with the beginning of the World War, England had controlled not only her colonies but the United States, through her control of the London gold market and through placing international loans in various countries.  Her international loans made it possible for her to play one country against another, for the collapsible banking structures in all of her colonies and the United States made it possible for her bankers, the Rothschilds and other internationalists, to create or lift business depressions at will.

So before the close of the World War the United States was in a position for the first time since Civil War days, to have bid good-by to London control and operate her money system for the benefit of the American people.  This important fact was never emphasized in our university schools of business or in the press.  Unfortunately, America was betrayed by those who were vested with power to determine and carry out the policies of the privately owned Federal Reserve System;  that gigantic accordion-like banking structure which can create or destroy prosperity at will.

During the course of the World War, America had not only paid her debt to England—but had become a huge creditor to England and all of the Allies.  The international bankers had now perpetrated the trick of having the Allies borrow our private bankers’ promises-to-pay.

Some of the British colonies were also practically out of debt to London.  This was due to the fact that London had been calling upon them to supply vast amounts of raw materials, and there was less finished goods going back to the colonies.

Our Central Bankers’ Part in the “Cooperation” with London

A secret bankers’ meeting was held on May 18, 1920, in Washington, D.C.  In the name and style of The Orderly Deflation Committee of the American Bankers Association, a secret resolution was passed declaring for the contraction of money and credits.  The published proceedings of this secret bank meeting show that it was held in the name and style of the Federal Reserve Board, the Federal Advisory Council and the Class “A” Directors of the Federal Reserve Banks.  The action prescribed was taken on a resolution assuming to be presented by the American Bankers Association.

The names of all men present at that meeting, and the statements made by them, can be obtained by any one who will take the trouble to write to the Superintendent of Documents, Washington, D.C., and request Document No. 310 of the 67th Congress, 4th Session.  Those who attended were warned to hold the proceedings in sacred secrecy.

Those who have the Congressional Record are referred to Page 4858, Proceedings of February 28, 1923.  An account of the secret meeting will be found in Volume 64, Part 5 of the 67th Congress, Fourth Session.  Hon. Finly H. Gray described the meeting :

“The manipulating financiers and bankers, the master minds of frenzied finance, engineering this gigantic secret movement, were not there, present and in person, but were pulling the wires, directing and prompting their tools, puppets and catspaws from afar.  Maybe these catspaws were not fully aware of the destruction they were bringing down upon their unsuspecting fellow men.  The Chairman of the meeting said :

“‘We all know that if the bankers in any community, large or small, were to clasp the screws on tight, they could bring disaster upon the community which might spread to other communities.’

“A Mr. Smith was there and said, ‘Of course, contraction of money and credits would result in low prices and an easing up of business.’  These bankers knew the effect of the contraction of money and credit upon farm values and price levels.  Another Mr. Smith was there, claiming to have secured the farmers’ consent to reduce farm values and the price level, and, assuming to speak from personal conversation directly with farmers said :  ‘The farmers with whom I have talked are in thorough accord with it.’

“Now this Mr. Smith had probably met these farmers standing around on the streets of New York, wearing overalls and cowhide boots, carrying their forks and scoop shovels, and there he secured their consent to reduce farm values and the price level.

“Mr. John Skelton Williams, Comptroller of the Currency, when this contraction of money was proposed, explained his efforts to stop the resolution being drawn.  In relating his efforts to the late John A. Simpson, he said :  ‘I told the other members of the board, Do you know that this will break lots of little country banks ?  They cold bloodedly answered me, They ought to break—there are too many of them.  I then told them, Don’t you know it’s going to ruin lots of farmers, and they cold bloodedly replied to me, They ought to be ruined—they are getting so prosperous they will not work.’” Congressional Record, May 2, 1933.

I wonder if these members of the Federal Reserve Board had in mind the farmers’ “failure to work” to produce the food supplies necessary in carrying on the War by which the world money creators were enriched ?

Thus, the Federal Reserve Banks, under orders of the Federal Reserve Board, pursuant to the secret resolution of May 18, 1920, without notice or warning, began to raise the rediscount rates from 2% to 5% , to 7%, to 8% , to 9% and until, for some farm banks, the rates were much higher.

Simultaneously with this drastic increase in the rates, the Central Reserve Banks began selling Government bonds.  This selling continued until the price of “Liberty” bonds dropped to 80.  The people who remember their own efforts to get anything like the price they paid for Liberty Bonds, which they had to sell to live, will recall the type of purchasers who opened over-the-counter places in which these bonds were bought at bargain levels.  Had these bond buyers been particularly noted for their patriotism during the War ?

Falling bond prices decreased the “reserves” of the community banks.  Decreasing reserves made it imperative that the community banks call in their local loans and force all borrowers to pay.  This brought a terrific liquidation of all agricultural products.  Almost in the twinkling of an eye, agricultural prices tumbled to ruinously low levels.

Within seven months farm prices dropped to ruinous levels.  In May 1920, the United States Bureau of Labor Statistics showed farm products at 244 contrasted with 100, the average price in 1913.  From 244 the farm products index dropped to 136 by January 1, 1921.  In eight months wheat fell from $3.00 to $1.60 per bushel.  Corn fell from $1.50 to 35c.

At the same time, the finished goods which the farmer had to buy, and his interest and taxes, did not drop accordingly.  By May, 1921, the index of farm products stood at 117.  In other words, the farmer was getting only 17% more for his products than he was receiving in 1913 before the War.  But the indices of clothing were 181;  fuel and lighting 194;  lumber and building material 202, and house furnishings 262.  Thus, the farmer was robbed of his purchasing power.  This was premeditated :  the farmer had to be ruined and kept ruined if Americans were to be financially subjected and eventually bolshevized.

Rural banks could accept farmers’ deposits, but could not loan farmers’ money to farmers;  such loans were “unsound” by decree of the Federal Reserve dictators.  Thus the sluices were prepared for draining the rural money to industrial centers, and thus via speculation into the hands of the internationalists.

On this sudden fall of the price levels, the confiding and unsuspecting farmers and other citizens of the agricultural districts, saw their property, crops and produce sinking in a vortex of falling values, forcing down and destroying their buying power, their taxpaying power, their interest, debt and mortgage paying power.  These things were done for two reasons :  (1) to “cooperate” with London because London wanted low agricultural prices, and (2) to undermine the entire economic fabric of the United States;  but with the knights of finance still in the saddle.

The United States is a 95% self-contained country.  Thirty-five million people are directly dependent upon agriculture for purchasing power, and twenty million additional citizens of small communities are indirectly dependent upon the prices of agricultural products for purchasing power.  Destroying raw material prices, and forcing them down below the cost of production drained all purchasing power of the agricultural sections, and made it impossible for those people to meet their obligations and be customers of the industrial world.  This destructive policy was pursued intentionally.  It was not an experiment.  Hon. Finly Gray said that they knew exactly what the result would be.

It was done to further cooperate with England—not the real English people, for honest English statesmen were very much opposed to England’s deflating the Empire sufficiently to allow the pound sterling to be brought back to its former gold parity.  They knew that the best interests of humanity should be paramount, but others sacrificed humanity in order to bring the price of an ounce of gold back to its former arbitrary price.  This was done to deflate all raw material producing countries and enable the internationalists to foreclose on real property.

It is interesting to note that at the time of the agricultural collapse in the United States, some in charge of the destructive policies sent their paid agents out into the agricultural states to misinform and mislead farmers.  The purpose was to promote dissension and radicalism.  Those who instigated these movements were the paid agents of the very ones who were responsible for placing the terrible economic pressure on farmers.  Their object was to make the American farmer lose faith in his own institutions and innocently become a party to the destruction of his own country.

If the Federal Reserve policies had been honest, we would never have cooperated with England in such a deflationary movement.  If England’s policy had been right, England would have left the raw material prices high, because the debt structure piled up on all of the Allies made a high raw material price level imperative unless the whole economic and social fabric of the countries were to be undermined.

A number of Britons were strongly opposed.  They knew that England should have repriced the ounce of gold at that time and gone forward with the relatively high price levels throughout the world.  In that case deflation would have been unnecessary.  Viscount Rothemere, British publisher, on September 27, 1931, said :  “We were fools to force the pound up to its old gold level of six years ago.  It benefited only the bankers by restoring prestige to our currency and all the international money lending and the money dealings that go with it.”

By mid-year 1921, all of the agricultural sections had been paralyzed.  Their undermining had been started and has been continued right down to the present time (1935).

In July 1921 the Central Reserve Banks reversed their process.  They began to buy Government bonds in the open market and they lowered the rediscount rates.  This process increased the reserves of the city banks.  However, agricultural banks were not benefited, due to the fact that our price levels for agricultural products were, as of old, being determined in Liverpool and Manchester, and were kept low by the manipulations previously described and by the banks being prevented from extending local loans.  England saw to it that the banking structures of all of the colonies were kept in a weakened condition.

When the bank reserves in the cities of the United States had been increased, it was possible for the city banks to again begin creating additional promises-to-pay, in other words, to start another upward phase of the “business cycle.”

In 1923 the United States began some of the most disastrous financing that could have been conceived in human minds, no matter what degree of trickery one could imagine.  The promises-to-pay in the United States were used to buy bonds of foreign countries.  We began to play a game for the benefit of the money lender in London.  We were keeping our agricultural prices low, which was undermining all of our agricultural sections, and we were making foreign loans in order to create foreign exchange for the benefit of England.  We made loans to many countries of Europe and South America.  Many of these loans were for fantastic purposes and the borrowers had no intention of ever paying them.  To begin with, this country had no business making foreign loans, because we did not desire to control the people of any other country, and honestly operated governments never need foreign money to pay for domestic purchases.

Again, Europe already owed us many billions and was “welching.”  What could we possibly gain by increasing the already uncollectibles ?

The only logical reason England ever had for making foreign loans was to control the price levels and, hence, the people in all of her colonies.  She had made loans to us for that reason alone.  What stupidity, therefore, or rather, what dishonesty, was manifested in the “cooperation” which we have given England from 1920 down to date !

The internationalists had failed in their efforts to conquer the world through militarism.  Now they would conquer it by destroying the financial and social fabric of every country.  They deliberately set out to do that, and are continuing the process right down to the present moment.

America’s Further “Cooperation”

In August of 1927 America presented a queer spectacle.  Her agricultural sections were continuing to deteriorate because her agricultural price levels were artificially and constantly kept below the cost of production.

Industrial sections of the United States were in a vicious phase of an upward swing in a business cycle.  It was vicious because the prosperity created was reaching only a small section of society and the “credit” money structure was being forced toward a very dangerous pinnacle.

The strength of the stock market drew money here from all over the world.  This caused a flow of gold from Europe to the United States greater than had existed before.  England had returned to the old gold value of the pound sterling (driven by the Rothschild controlled Bank of England and in face of the opposition of patriotic British statesmen who knew what the result would be).  So the Governor of the Bank of England, Montagu Norman (Norman Montagu) came to New York and persuaded the Federal Reserve Board to agree to reduce the rediscount rate.  This reduction of the rediscount rate—when every honest banker knew that it was in direct opposition to what should have been done, as had been promised when the Federal Reserve Act was passed in 1913, was literally forced down the throats of the eleven Reserve Banks outside of New York City.  It constituted a public scandal at the time, well remembered by every banker and many others who watch events and marvel at the audacity of the hidden few.

In August of 1927, despite opposition from eleven of the twelve Federal Reserve Banks, who saw the danger, the Central Federal Reserve Banks were ordered to lower their rediscount rates and buy additional Government bonds.  In other words, the steps were taken to increase the reserves of the city banks.  City banks responded by increasing their promises-to-pay (loans).  These loans went almost entirely to finance stock purchases.  Loans were made on any and every kind of collateral.  It became a very common practice for corporations to issue rights to buy additional stocks, and for individuals exercising those rights to borrow the entire amount at their banks, using the stock as collateral.  In other words, banks were creating promises-to-pay and the funds thus created were flowing into the treasuries of corporations, there either to lie idle as deposit cash or to be used in building plants.  Of course, these loans were unsound.

This was the actual method of financing the terrific stock market speculation of 1928-29;  it was not “prosperity” as many supposed.  The rural sections were being deliberately drained of their money by coercing country bankers into calling their local loans and purchasing very questionable domestic bonds and international loans.  These orders came from the bank examiners acting under the authority of the United States Treasury which, of course, was dominated by the Federal Reserve policies.  Honest country bankers protested that their communities needed whatever funds existed, but they were told to either comply with the examiners’ orders or get out of the banking business.

In response to the stimulation of bank loans (promises-to-pay) flowing into the stock market, the price of securities rose higher and higher.  Stocks of corporations which had very little property and whose earnings were small, sold at from 20 to 50 times their earnings.  Conditions grew more dangerous and spectacular each day.

Thinking people knew that some day the bankers would begin to curtail their privately created money, loaned at interest—and when they did, the securities markets would suffer a terrific crash.  That crash would destroy billions of dollars’ worth of then existing purchasing power; would cancel the credit money then in use, and wreck countless individuals and businesses.

The newspapers and well publicized paid “Economists” repeated deliberate falsehoods telling the people that America was in a “new era.”  We were assured eternally rising prices and all of the old measurements of stock values were out-of-date.  The New York Stock Exchange was an Aladdin’s lamp.  The newspapers did everything possible to fan the flames and 16,000,000 people in the United States were active participants in the purchase and sale of securities.

The Day of Reckoning

Rumblings began to sound in September 1929.  The Hatry failure in London in September precipitated heavy selling from “informed” sources abroad.  Of course, these could not have been the international bankers who could know the day and hour which would record a terrible collapse.  All during September and up until the third week of October, while some securities were making new highs, there was heavy liquidation.  European sellers of securities were converting into cash and transferring their balances abroad.  Gold began to flow to Europe.

On October 24, 1929, at 11:00 o’clock sharp hundreds of thousands of shares in hundreds of issues were offered for sale “at the market.”  It was a very strange thing that this could have been a mere accident.  It was most unusual that thousands of people decided to sell at the same instant.  It was also strange that they all decided to sell “at the market.”  Inexperienced stock traders do not put in “market” orders.  That’s a trick known only to the “wise boys”—the internationalists and their cohorts, the type of government adviser speculator who says “a speculator has to be right.”

The market continued to crash day after day.  The new era was over.  The internationalists had squeezed the money accordion.  It was they who had pumped the air into it and it was now their privilege to let it out.  They had no responsibility whatever to inform Mr. and Mrs. American that they had decided to curtail the credit.  After all, it was their privilege to contract the volume of promises-to-pay (loans) outstanding;  to pull gold out of the country, and to collapse the whole “price” and money structure.

Was it not they who had expanded it ?  It was “legally” their instrument;  theirs was the exclusive franchise to play it for private pleasure and personal profit.

You know, business men are a dutiful lot.  They take the responsibility of building great factories, of furthering science and invention, making it possible for many less enterprising human beings to have the physical where-with-all to live.  Such ideals as those are entirely too civilized, and if business men were not controlled, it would not be long until labor would really be very independent, because laboring men, if constantly employed at high wage levels, can soon accumulate property.  It is therefore necessary that hard working, sincere business men have the wind taken out of their sails by the great guardians of the nation, the international bankers.

American business men, farmers and laborers struggled on.  Nearly every day some so-called leader proclaimed loudly;  “America is fundamentally sound,” and that a “Buy Now Campaign” would solve the nation’s problems.  Be patriotic—buy now.  After all, there is nothing the matter !!  Confidence alone is lacking.  Confidence must be restored.  After all, the whole business cycle is based on “confidence,” (misplaced confidence, unfortunately).  We have business cycles because for some “mysterious” reason people suddenly, in great numbers, lose “confidence.”

The only real mystery however, is why the people have never been told the truth, which is that our very money itself (over 95% of it) is a matter of confidence;  it is purely psychological.  It exists when certain minds so will it; and it similarly disappears.  The adviser to Presidents was summoned.  He had already been the “adviser” to Presidents Wilson, Harding, Coolidge and now President Hoover.  It’s strange, with his “great knowledge of economics and finance” that he did not advise President Wilson to properly issue new honest constitutional non-interest bearing currency, having thereon the imprint of the United States Government.  Had he, in his “great wisdom” done that, America could never have suffered the terrific collapse that was brought about in 1920, and America could never have had the “farm problem” about which he concerns himself so frequently in the “respectable” press.

This adviser relates that he has devoted great mental effort since 1921 to the “solution” of the farm problem: his word must have influenced much of the farm “relief” legislation for his advice was “sought by Presidents.”  Certainly his friends got the job plums.  Are the farmers pleased with results ?  The records also show that since 1920 “the adviser” has exerted considerable influence upon legislation enacted “to regulate” the commodity exchanges which until 1920 had functioned very efficiently for the farmer.

It was also strange that with his great knowledge, he did not advise President Coolidge against allowing the United States to make unsound international loans.  His great knowledge of international money movements should have enabled him to know that we were simply drawing the resources out of all of the agricultural sections, and that we were playing a magnanimous international game—manufacturing products and financing their sale to foreign countries by taking the actual money to pay for them away from our own people.

He did not appear to advise President Coolidge in August 1927, when the Federal Reserve Board decided to put new steam into the boilers and push a galloping stock market to higher and higher levels.  There were many government offices gathering statistics for him, and he certainly must have known that many stocks were already selling far in excess of the value which the earnings of the corporations warranted.  Besides the Government’s able services, he might also have consulted Dr. Goldenweiser, Director of Research of the Federal Reserve Board.  That able doctor could have furnished him with many valuable statistics pointing out the dangerous road ahead.

Of course, at that time, there was a great question as to whether the United States would be able to manufacture stock certificates fast enough to sup ply the great need.  Perhaps he was advising President Coolidge as to just how the paper and engraving companies could turn out these certificates fast enough.

In the “adviser to Presidents”’ own writings, the people are told that he got out of the stock market before the crash in October 1929.  It is strange that he did not share his feelings of uncertainty with President Hoover.  It is strange, if he had the wisdom to sell his own stocks, that he did not inform President Hoover that there was something “fundamentally wrong.”  If President Hoover had understood, he would never have so frequently repeated “America is fundamentally sound” or “A business recovery is just around the corner.”

Upon word from the “adviser,” President Hoover would not have made the great error of calling an “Economic Conference” in January of 1930, at which he urged business men to go ahead spending money for plant extensions.  A few sincere business men followed the exhortation of the President and paid for their cooperation by losing their businesses.

And yet, this same adviser continues on and on as adviser to Presidents.  He is “unofficial President” in this administration, we are told.  We change Presidents but never advisers.  Americans should question the next presidential candidate and try a change in advisers.

The Moratorium—June 1931

The business depression went on and on.  Bankers’ promises-to-pay continued to be contracted.  Thousands upon thousands of banks failed.  Foreclosures and more foreclosures took place;  and the Courts grew more weird, but the perpetrators of the Sunshine Campaign lost no heart.

In June of 1931 America was called upon to make another noble sacrifice.  The great Bank of England, the great Bank of France (bursting with gold), also the Reichsbank, the Bank of Italy, and others would be unable to make their war loan payments due June 15, 1931.

President Hoover summoned “the adviser” and the members of the Federal Reserve Board.  Presto !  America would grant a moratorium to the hard pressed bankers of Europe in their great hour of need.  We had cooperated to the extent of getting ourselves into a World War;  into collapsing our agricultural sections;  into building up a stock market condition which meant only disaster to all but the “informed few,” and now we were willing to grant a moratorium.  But why was the public not told that an official had privately promised such a moratorium months before ?

This meant that America would tell the Allies that, after all, we didn’t expect them to pay.  We were not a crude, selfish, bloodsucking lot.  Our tax payers, consisting in fact of our farmers and laboring people, could sympathize with the plight of the international bankers.  They had hoarded their gold in the vaults under the Seine River.  To do so, they had collapsed Europe’s banking structure, but that made no difference—their gold was safe in a specially constructed vault under the Seine.  Then too, the American people really never did expect these international connivers to pay their honest debts.  It would be much simpler to have Mr. Hoover and the Ministers of Finance exchange a few high-sounding notes.  Wrote Garet Garrett :

“Only the United States had the resources to save Germany.  England alone was helpless to avert the calamity.  France was obscure ... such were the circumstances under which President Hoover proposed an international debt holiday ... and besides that effect, international finance at the same time made a direct loan of one hundred million dollars to the German Reichsbank to meet any emergency.  The money was provided by the Federal Reserve Bank of New York, the Bank of England and the Bank of France.  On this day’s work, international finance heaved a great sigh ... Then European exporters had been in the habit of leaving their profits on deposit in American banks, thinking the money was safer here than in Europe ... For the same reason private European capitalists had been sending money to New York to be employed in short-term paper which they could sell at a moment’s notice and some of Europe’s credit balances in this country were simply the untouched proceeds of recent American loans;  even the ambulance loans we had made in the summer [of 1931 ] to avert a financial collapse in Europe ... There lay the great American gold reserve—five billions of it—exposed and unprotected.  She [Europe] had keys to it.  The keys were those credit balances in New York banks payable in gold on demand.  And where these balances represented, as many of them did, the untouched proceeds of recent American loans to Europe, the keys she had to the American gold were keys we had ‘unwittingly’ handed away.  The American gold reserve was defenseless ...

“True, we had enormous bank balances in Europe, but these were either frozen ... or now payable in paper money ... The curious and final illustration would be this :  that a British holder of a pound sterling note could not go to his own Bank of England and get gold for it, but he could send it to New York, sell it in the foreign exchange market, and take the proceeds in gold ... We had eased Europe of its obligations to us, without limiting in any way our obligations to them — one way grace — thus the abnormity that owing us more than ten billions in the form of public debt, on which we had granted a one year moratorium; in the form of private debt on which we could get nothing in gold even where it was not in default;  in the form of overdue short-term credits in Germany and Austria which we had agreed not to demand payment of;  in the form of bank balances all over Europe that were simply frozen — owing us all of this, Europe nevertheless could demand payment forthwith and payment in gold of all her credit balances in New York, amounting, as we have supposed, to a billion dollars more or less ... How preposterous !  Debtors owing us in all manner of ways ... them, selves protected by grace, by moratorium or by insolvency, are yet able to descend upon the American gold reserve and deplete it wholesale.

“During July and August (1931) Europe swallowed up a billion and a half of American gold ... In September she is making a run on the American bank system for gold, and the American bank system is helpless.”

Every dollar of gold which Europe was withdrawing from America had the effect of collapsing up to thirty dollars of the promises-to-pay outstanding and, hence, the volume of money.  Where was “the adviser” at that time ?

Resuming with Mr. Garrett :

“Europe wanted the gold for its own sake, wanted it while she could get it — the gold itself !  The power of possessing it !  The American gold ! ... England was not getting it ... France alone took more than one-third — nearly one-half — she did not need it at all, for already she had actually more gold in her possession than any other country, save only the United States, and relatively more than we ourselves possessed.”

But, after all, France does have the world’s strongest vaults.  We are plainly told that those who conspire to control through World Dictatorship will do so with the power of gold.  Can we not see that they are concentrating that gold in the specially constructed vaults under the Seine River to keep it safe — for whom ?

“... France has built since the war a treasure chamber unique in the world.  Every country has massive burglar-proof vaults for its gold reserves, but France decided, after the War, to make one so deep and strong and mysterious that not even a victorious modern army could break into it.  You might blow the Bank of France away with bombs and its gold would be all the safer.  The chamber is two and one-half acres in extent;  it lies two hundred feet deep in the earth.  Over it, first, is forty feet of water, which is a lake they made by damming the subterranean river that flows beneath Paris, and then above the water fifty feet of solid rock.  The way to it is through six steel towers with revolving doors moved by electric engines, and the passage of descent can be flooded at a moment’s notice.  At the signal of alarm a detail of defenders would instantly van time, or for the duration of a war, because everything has been thought of beforehand.  They would find in the gold chamber a kitchen, provisions enough for two or three arctic expeditions, dishes, linen, beds, all the facilities for comfortable housekeeping.” (Garet Garrett).

America !  Will all of your gold reach those vaults under the Seine River ?  Will it be sent there by those who plan with their international cohorts to enslave loyal Americans ?  The Gold Bill of 1934 (surreptitiously forced through Congress in January 1934) gives the Secretary of the Treasury power to place America’s gold out of this country !!

Continuing the events of the Fall of 1931 : ...

“... who could have foreseen that parallel to the raid on the American gold reserve there would run in Europe a campaign of rumor, innuendo and propaganda against the value of the American dollars ? ... In France the campaign was subtle and ingenious;  in England frank and brutal.  As the Bank of France took gold from New York, rumors of an imminent financial collapse in the United States spread from Paris throughout Europe and the French papers kept saying with one voice that the franc was the sound gold money of the world ... The British campaign was led by the Rothemere newspapers ... Day after day these papers printed big headlines ... proclaiming the downfall of American credit, together with the exhortation to sell dollars and [American] securities while yet there was time to convert them into gold.  Examples :  ‘Bring Your Money Back To Britain’ — Advices from America indicate a serious state of affairs.  This, therefore, offers a favorable moment to sell dollar securities and bring back the money to this country.’  Again :  ‘Sell Dollar and Franc Securities’ — Don’t be trapped.  When the break on Wall Street comes, the reaction may be far-reaching.’  Another day :  ‘Who Will Go Off the Gold Standard Next.’  ‘The American banking position shows no sign of improvement.’  And so on, in such taste and meaning, day after day, with the Bank of England and the British Treasury together owing New York 350,000,000 gold dollars.”

Americans !  This was our reward for the “cooperation” we had given.  They (International Bankers) purposely did everything possible to further collapse our banking structure and bring suffering and chaos in the great America — the simple cooperator, whose officials and advisers had repeatedly betrayed her.

“With the Premier of France on the high seas [coming to America], and the newspapers running big headlines ... suddenly we were astonished by the news that the Bank of France had served an ultimatum on the American banking system.  The ultimatum is this :  France cannot afford to leave her credit balances in New York any longer unless the rate of interest is raised.  If the rate of interest is not raised she will feel obliged to call the remainder of her credit balances home [in gold].  And the remainder of these credit balances is $600,000,000.”

Apparently, those who own and control the private and misnamed Bank of France, the world’s newspapers, munition plants, etc., were not satisfied with the progress of destruction in America.

“... At all events, the effect,” Mr. Garrett goes on to say, was, “... to lead to large withdrawals here by other important European countries, more particularly Holland, Belgium and Switzerland.”

In September 1931 England was no longer able to meet the demands for gold.  England thereupon announced suspension of gold payments and proceeded to carry out the repricing of gold.  Any one who can look behind the scenes knows that this was a part of the great scheme to destroy the financial and social fabric of all countries.  We now readily understand why it was necessary to put England into the condition she was placed in September 1931.  England herself has been betrayed by the same forces that are preying upon America.

____________________

Chapter VIII
EFFECTS OF REVALUATION
Changing the Currency, Paper Money Units, Exchangeable for an Ounce of Gold

In September 1931, due to the fact that internationalists had maliciously exported gold, London was forced to suspend gold payments.  Few people realize that the barbaric gold standard cannot function at all when internationalists are allowed to ship huge amounts of liquid capital in the form of gold from one country to another, wherever they see an opportunity to reap the greatest profit thereby.  We know there have been several billion dollars worth of liquid capital which has been transferred about from one country to another since the close of the World War.  This has been done to shift gold and create trouble.  Moving gold into a country permitted that particular country to expand its monetary structure, so that whenever these internationalists got ready to withdraw the gold they could thereby collapse the money structure and it would fall like a house of cards.

The price levels of practically all countries were controlled by the bankers in London for many years.  The two levers used in operating those controls were, first :  Control of the movements and the price of an ounce of gold, and second :  Through those weapons, control of the price of wheat and other raw materials.  Liverpool is still the world’s wheat pricing center.

Until recent years the cotton market was controlled at Manchester.  Today the New York Cotton market is a more important market than the Manchester market for Americans.  This is one case where the internationalists over-reached themselves in their efforts to strangle America.

Since the Napoleonic Wars London has controlled the basic sources of gold (mines).  Gold was called the “base” of the collapsible money structure in all of the Colonies and the United States.  London had made loans (promises-to-pay) to the Colonies and to the United States.  Whenever the Internationalists wanted to collapse the money structure of the United States or the Colonies, they needed only to call some loans or sell some securities — to convert part of their promises-to-pay, or securities bought therewith, into cash;  turn the cash into gold, and ship the gold out of New York or the principal financial center of any of the Colonies.

As soon as gold began to leave New York, money became “scarce,” as $1.00 of gold “supported” a maximum of $30.00 of bank money.  When gold be gan to move out of the country, all of the community bankers were forced to call in their promises-to-pay, and they were under initial agreements to contract not only the demand loans (their promises-to-pay), but also the currency (bill fold money) within the community by retiring Federal Reserve Notes.

We trusting Americans, and especially our “economists,” have been taught that gold leaves a country when price levels begin to fall and trouble seems imminent; the exact reverse is the case.  It is not a “natural” and “mysterious” force that causes gold to move from one country to another, but the deliberate intention of manipulators to cause price fluctuations and the resultant instability.  Any kind of instability, whether on the “up side” or “down side” is profitable to the few who cause the instability and who know by long experience what direction prices will take.

Contracting the volume of bank money forces a drop in prices.  The decrease in the volume of money not only disturbs the balance between the quantity of money and quantity of materials, but also cuts the demand for raw materials, for when the people have less money they can buy less food supplies, etc.  Therefore, it is not only the supply of raw materials (wheat, etc.) that counts, it is also the volume of money.  The volume of money is, in reality, the important element, because the volume of money (currency and bank credit) determines how much raw materials can be purchased and consumed domestically and, consequently, how much is left for export.

London controlled prices both by fixing the price of an ounce of gold and by manipulating the quantity of deposit money, in the British Colonies and the nations comprising what is called Sterlingaria.

As long as Liverpool controls the situation, it is the price of export wheat which determines the price of the entire amount of wheat, and, therefore, in directly of all farm products consumed in the United States.

The great fallacy in allowing Liverpool to control the price of raw materials is that the cost of production varies in different parts of the world.  Yields differ widely.  In some parts the average yield of wheat per acre is two or three times what it is in others.  Hence, the growers of wheat in those countries normally have lower costs.

When the world price level is determined at Liverpool, it is very simple to establish price levels which might be adequate for some parts, but be well below the cost of production in others.  Few people realize that even in the United States the cost of producing wheat in various areas differs very widely.  There is a fallacy in adding up a series of costs, taking a single average, and stating that the general average cost is so much per bushel.  Unless the selling price covers the cost of production and a reasonable profit for the great majority of farmers, the all-important wheat growing sections cannot function properly as a part of the economic structure.

Imagine the administrators of the United States Department of Agriculture stating that the average cost of raising a bushel of wheat was 95c;  yet the Hoover administration took no steps at all when the average selling prices in 1930-31 and ’32 were well below that figure.

The Liverpool market operating as a world clearing house for wheat at times established prices well below the cost of production for the majority of wheat growers throughout the world, even in the areas of lowest production costs.

Also, few Americans realize the influence that Russia has had upon the Liverpool wheat market.  Under the present Russian Reign of Terror, Stalin can and does force the Russian people to give up whatever wheat he desires.  They can be starved and have been so starved for years.  He can use that wheat to glut the Liverpool markets or to sell directly to countries that would otherwise buy in the Liverpool market.  That is one of the reasons why those who set out to destroy the economic structure of the world saw the great necessity of first controlling Russia.  Russia’s condition during the past seventeen years is a warning to the rest of the world — it will meet the same fate if the international money yoke is not cast off.

Russian products have been used as a hammer to strike at the marketing machinery of other nations.  In 1929 Russia announced to the world that it was not interested in starting a military war at that time, for a military war was, in her opinion, unnecessary.  The Soviet Government proposed to smash the price structure of the capitalistic world which, when accomplished, would produce chaos.  This policy had a very far-reaching effect upon the price structure of all countries — including the United States.

One could write volumes showing how easy it is to wreck the price structure by the simple expedient of collapsing the money structure of the nations, thereby curtailing domestic consumption and forcing wheat, which would otherwise be consumed at home, into the export market.  When wheat and cotton can, not be consumed in the domestic market, due to the lack of purchasing power, the only “out” for them is the world market, prices for which are controlled at Liverpool.  Through this method wheat and cotton can be taken away from people who really need them, and forced on to a weakened market at prices well below the cost of production.  America could use much more cotton than we have ever produced if only the money system were honest.

Besides controlling the volume of wheat which will come into the world market, it is very simple to do additional damage through manipulation of the currency price of an ounce of gold in various nations.  Gold brokers, it is reported, meet daily in London at the office of the Rothschilds.  The Rothschilds are very conveniently the agents for the Royal Mint.  The following firms appear to constitute the assembly of gold brokers :

Samuel Montagu & Company, 114 Old Broad Street, London, E.C.2
Mocatta and Goldsmid, 7 Throgmorton Ave., London, E.C.2
Pixley and Abell, Palmerston-house, Old Broad St., London, E.C.2
Sharps and Wilkins, 19 Great Winchester Street, London, E.C.2

After England suspended gold payments in 1931 the gold brokers began to change the purely arbitrary price of an ounce of gold in London and in the British Colonies.

The few gold buying firms quietly raised the price of gold.  It was raised from its former level of $20.67 per ounce (in terms of American dollars), to, roughly, $28.00 per ounce.  When gold was $28.00 per ounce in London, but still $20.67 per ounce in New York, the pound sterling (in terms of dollars) dropped proportionately from $4.86 to approximately $3.50.

It is easy to see what influence that had on American raw material producers.

If an exporter had credit in London which entitled him to one ounce of gold as long as it was in London, his claim on gold could be converted into a purchasing power of $28.00.  But when he attempted to bring his money to New York, his credit in London could only be exchanged for $20.67 purchasing power in New York.  It is simple to see the great disadvantage which the United States exporters—and that means all raw material producers — suffered under that arrangement.  Argentina began to raise the price of gold in December 1929.  This accounts for the following fact: “Argentina grain exports are doubled over last year” — New Outlook, Oct. 1934, p. 44.

While London was raising the price of gold, from September 1931, she was also raising the currency price of gold in all of the British Colonies.  The price of gold in most of the Colonies and in Argentina was raised much higher than the price even in London.  This arrangement made it possible for exporters of raw materials from Argentina, or any of the Colonies, to convert their London credits into the currencies of their own countries and receive even more purchasing power in the Colonies or in Argentina than they had in London.

From the Fall of 1931 until April 18, 1933, the currencies of the British Colonies, Argentina, and Japan were convertible into gold on a more favorable basis than the currency of the United States.  In other words, gold commanded a higher price per ounce than in the United States.  This placed the American farmers and all export manufacturers at a great disadvantage, and also forced an enormous drain of gold out of the United States, thus furthering collapse.

It was the fact that England and the Colonies had raised the price of gold that forced the United States to take the same step.  Yet, the controlled newspapers continually shout that England is recovering without a change in her currency, whereas it is being juggled daily.

Always remember that the price of an ounce of gold in terms of the currency of any nation, is purely arbitrary:  it is fixed either by law, as in so-called fixed-conversion countries (U.S., Holland, France), or by open market bidding by the gold brokers (England, the Colonies, Argentina, etc.).  In the latter case, they are “off the gold standard,” which, despite the blare of propaganda, means prosperity, not stagnation.

Through connivery and intrigue engineered by the internationalists of foreign countries and their brethren in the United States, the so-called Gold Standard Bill was passed in March 1900.  Under this tricky piece of legislation, Congress ostensibly agreed to make U.S. obligations payable in dollars exchangeable for a fixed number of grains of gold for each dollar.

Imagine a sovereignty agreeing to pay its debts, or wanting private individuals to pay debts, in dollars exchangeable for quantities of gold which never did exist.  All obligations of the United States Government, or of any private individual should always have been payable in United States legal tender, without any reference whatsoever to any number of grains of gold or any other one commodity into which those dollars were supposedly convertible.

Conversion of United States legal tender dollars into any specified number of ounces of gold always was a physical impossibility.  How could Congress legally agree to pay in dollars convertible into a commodity, sufficient volume of which was impossible to provide ?

The Gold Clause, on the face of it, is a complete farce.  The factual history connected with the legislation involved is contained in a later chapter of this book.  It suffices to state here that the so-called Gold Clause is merely another dishonest weapon which internationalists are attempting to use.  Do humans earn dollars to buy goods or gold ?

“Reconstruction”

In January 1932, Congress was asked to create the Reconstruction Finance Corporation.  Destruction had now reached the stage where even the largest banks in New York City had to seek some place to unload their frozen loans.  Via the Reconstruction Finance Corporation the large city banks were able to remove the frozen loans from their own portfolios and put them on to the taxpayers of the United States.  Meanwhile, the closing of the smaller banks throughout the country continued ruthlessly.  Human suffering and loss of properties went on and on.  In June of 1932, just prior to the national political conventions, a large loan to one of the mid-western banks saved the entire banking structure temporarily.

From the time of the elections in 1932 until mid-February 1933, the destruction continued.  Every one was waiting for the new President and the promised steps to bring about recovery.  In mid-February a large chain of Michigan banks was denied a loan by the Reconstruction Finance Corporation.  The closing of those key banks, tied up the biggest industries in the United States, and precipitated bank runs throughout the country.  On March 3, 1933, every bank in the United States was closed.  The timing was well done by those who were behind the scenes setting the stage for the triumphal entry of the new administration.  Americans were terrified, and rightly so.  They realized that large cities could not be tied up for more than a few days without causing a social breakdown.

The new President, in his inaugural address, promised “to drive the money changers out of the temple.”  However, he has yet to carry out his promise.  He also said “the only thing we have to fear is fear itself.”  Can he really be afraid of the private money power ?  He started well, but faltered after a few months.  An old, old, inexpensive remedy for fear is plain courage.

In a very reassuring tone of voice on the eve of reopening the banks, March 15, 1933, President Roosevelt told the people it would take several more days before all of the banks could be prepared for reopening, but no one was to worry if his bank did not open the first day.  People believed and waited patiently.  After eighteen months many of them are still waiting.  Several billion dollars worth of bank deposits, frozen because of the Bank Holiday, are still enjoying a “holiday.”  The owners of those accounts are also having a holiday from purchasing food and clothing.  It is impossible to conceive how the United States Government could go ahead as it has, handing out billions of dollars to socialistic interests, and still pretend it could not open more banks closed on March 3, 1933.

A striking example of inconsistency was the defeat of the McLeod Bill of June 1934 (which would have released one billion in closed banks) upon orders from the President.  At the same time he ordered that a one billion dollar housing bill be passed.  This money is being spent mainly in the lower East Side of New York, yet the great middle-western farmer cannot have the money that was taken away from him through the closing of the rural banks in the general moratorium on March 3, 1933.

Shortly after the inauguration, the Ministers of Finance of France, Italy and Great Britain rushed to the United States.  Each of them had a zealous wish to “honor” the President.  Each wanted a promise that the United States would not suspend gold payments.  Apparently, the advisers to President Roosevelt agreed that he should grant that request.  In mid-April 1933 he changed his mind and announced the suspension of gold payments.  Norman Montagu, the Governor of the Bank of England, was on his way to India when the news was flashed.  He changed vessels in mid-ocean.  Need we wonder why ?

As soon as this step was taken the raw commodity markets of the United States began to rise, and in the succeeding three months America had a taste of freedom from European financial strangulation.  Our farmers began to buy the products of industry with their newly acquired buying power.  We witnessed history’s greatest economic recovery in terms of time and percentage.  But, simultaneously, the newspapers began to tell the American people that America must settle all difficulties at an “Economic Conference” to be held in London.  Of course, informed Americans know that some of the “Adepts” had had their representatives in Europe for some time planning to ensnare America at this Economic Conference.

President Roosevelt refused to agree to the very unfavorable terms demanded from America by the international bankers of Europe at the London conference in June 1933.  The President’s refusal broke up the conference.  On July 3, 1933, the President addressed the people over the radio and told them that he was going to go ahead and raise the price levels, that is, raise the price of gold in the United States to a parity with the price of gold in London and the colonies.  This would have enabled the United States to attain a raw commodity price level commensurate with the cost of production and the debt structure of the country.

However, private mysterious forces appear to have thwarted Mr. Roosevelt’s plans.  In mid-July was a secret agreement made with the Bank of England, with no authority from the United States Congress ?  The day the news was flashed to the United States all New York banks raised the stock margin requirements simultaneously.  The tactics of the crash of October 1929 were repeated.  The stock and commodity markets broke wide open.  A greater percentage was lost in the value of stocks than had been lost in the initial crash of October 1929.  Had America again been betrayed ?  President Roosevelt and other speakers then notified the people “that the speculators were the cause of the drop.”  They didn’t say which speculators.  It would be very enlightening if they would be a little more specific, but informed people drew the correct conclusion.  It was not little Mr. Speculator, who had been told by the President to go ahead and make commitments, as he was going to raise the price levels.  Mr. Little Speculator believed the words of the President of the United States.  Did Mr. Big International Money Speculator force the President of the United States to break faith with the people who had elected him to drive those very big money changers from the Temple ?

More Promises

From mid-July 1933 until October 22nd, the President allowed the currency price of gold in the United States to be well below the currency price of gold in London and the Colonies.  He took no steps whatever, but the people were showered with a lot of mysterious articles emanating from Washington stating that the President was going to restore the raw commodity price levels.  The American people had to be deceived — kept silent by fond but baseless expectations that effective money measures were under way.

On Sunday evening, October 22nd, after the agricultural section had arrived at another real crisis, President Roosevelt made another radio speech.  Here he made more definite promises :

“No one who considers the plain facts of our situation believes that commodity prices, especially agricultural prices, are high enough yet.  Some people are putting the cart before the horse.  They want a permanent revaluation of the dollar first.  It is the Government’s policy to restore the price level first.  I would not know, and no one else could tell, just what the permanent valuation of the dollar will be.  To guess at a permanent gold valuation now would certainly require later changes caused by later facts.  When we have restored the price level, we shall seek to establish and maintain a dollar which will not change its purchasing and debt paying power during the succeeding generation.  I said that in my message to the American delegation in London last July and I say it now once more.  Because of the conditions in this country, and because of events beyond our control in other parts of the world, it becomes increasingly important to develop and apply the further measures which may be necessary, from time to time, to control the gold value of our own dollar at home.  Our dollar is now altogether too greatly influenced by the accidents of international trade, by the internal policies of other nations, and by political disturbances in other continents.  Therefore, the United States must take firmly in its own hands the control of the gold value of our dollar.  This is necessary in order to prevent dollar disturbances from swinging us away from our ultimate goal, namely;  the continued recovery of our commodity prices.

“As a further effective means to this end, I am going to establish a Government market for gold in the United States.  Therefore, under the clearly defined authority of existing law, I am authorizing the Reconstruction Finance Corporation to buy gold newly mined in the United States at prices to be determined from time to time, after consultation with the Secretary of the Treasury and the President.  Whenever necessary to the end in view, we shall also buy or sell gold in the world market.  My aim in taking this step is to establish and maintain continuous control.  This is a policy and not an expedient.  It is not to be used merely to offset a temporary fall in prices.  We are thus continuing to move toward a managed currency.”

In this speech the President promised to go ahead and raise the price of an ounce of gold.  That would have been the right policy.  Had he proceeded, raw material price levels would have increased.  Our raw material exporters could have competed with exporters from other countries.

But immediately the newspapers throughout the country released a terrible campaign of terror and intimidation.  Mr. Baruch had already favored the United States with a terrifying article on Inflation, in which he wisely warned against repetition of the German inflation.  It is so strange “experts” do not explain that raising the price of an ounce of gold is not inflation in any sense of the word.  Raising the price of an ounce of gold is revaluation.  Did Mr. Baruch explain that throughout the entire history of money, the only time inflation, as he described it, took place, was when the internationalists wanted to destroy not only the value of the currency but also the government of a country ?  Never has any government itself conducted such an inflation.

A vicious inflation is produced only by printing an enormous amount of paper money and putting it into the money stream of a nation without any regard to the actual amount of money required to conduct the nation’s business at price levels which are honest and equitable.

The “German” inflation which “Economists” describe, apparently intending to prejudice the American people against the gold revaluation policy, will be exactly what the American people will suffer if control of the United States money system is not taken out of the hands of the internationalists.  Was it the international bankers, who know no patriotism, who were responsible for the German currency destruction in 1922 and 1923 ?  It was a private money inflation of Reichsbank Notes perpetrated upon innocent Germans.  This was intentionally done to dispossess the great middle class of German people.  The same thing will be done to the middle class of American people if they do not arise and restore their money creation powers to the jurisdiction under which it belongs—the Congress of the United States.

Mr. Roosevelt raised the price of gold about $2.50 between the latter part of October and the 1st of December.  Then suddenly, the propaganda against the gold revaluing policy ceased and raising the price of gold also stopped.  People were now told that every Congressman should do exactly what the President wanted done at the next Session of Congress.  Mr. James A. Farley, the Postmaster General, as well as many others, took the role of threatening Congressmen with being left at home in the 1934 elections if Mr. Roosevelt were not given dictatorial powers.

Congress convened on January 3, 1934.  The President delivered his message personally on the state of the Nation to both the Senate and the House in joint session.  But that message lacked frankness and clarity; it was broadly generalized.

The first week of Congress passed uneventfully.  At the end of that time several Congressmen who knew that the principal key to the destruction was the money system made speeches demanding that the President set forth his policies.  Immediately a secret session was called at the White House on Sunday evening, January 14th.  On that occasion the President presented the 1934 Gold Bill.  The following day the Congressmen who really had honest United States’ money policies at heart, raised their voices in protest.  They had asked to have some open hearings on the subject of money and they wanted to understand thoroughly and exactly the nature of any legislation that was passed.  But all efforts on the part of members of both the House and the Senate to delay the Bill long enough to learn its contents were thwarted.  The Bill was not even printed and circulated in Congress as required by all Congressional precedent.  Congressmen voted like marionettes.  Only a few sincere men protested.  Congressman Beedy of Maine made the following speech :

“I am not going to vote for this Bill.  I do not know what is in it.  The House has had no benefit of hearings and is without authentic information as to the provisions of the Bill.  I cannot be a good legislator and proceed in the darkness of an utter lack of information.  Is there a man here who knows what this blanket covers ?  Is there a man here who knows what act his vote for this Bill containing such a section covers ?  Is there a man here who could go to his constituents after voting thus blindly and say, ‘I knew what I was doing when I voted for the President’s Monetary Bill’ ?  I venture to say there are not ten men here who could intelligently explain such a vote.  I am not going to vote for this legislation and swallow this thing.  I want the chance to sit in committee and question the proper authorities.  I want the benefit of regular hearings upon important legislative proposals.  Through such procedure are the liberties of the American people secure.  Thus, and thus alone, may we as legislators, hope to contribute to the stability of representative government.” (January 20, 1934, U.S. Congressional Record, Page 1001.)

For his courage, Mr. Beedy was defeated in the election of September 1934.  The high priests of international finance apparently decreed his political crucifixion.

The strange thing about the Gold Bill of 1934 is that no one will claim authorship.  After signing it, President Roosevelt publicly admitted that he had never read the Bill and yet he was unwilling to tell sincere Congressmen who the authors were.  He signed it on the same day that the American people were tendering all of the birthday parties in his honor.  How sad was that spectacle.  Sincere Americans paying the President homage and at the same time being given away into subjection to the un-American international bankers.

Before the passage of that Bill several Senators tried to introduce an amendment which would make silver an important part of the monetary base of the United States.  They were thwarted.

The reason the international bankers do not want silver a part of the money base is that it would destroy the gold control of the Rothschilds and their fellow international bankers in Germany and France.

The Gold Bill gives the President power to raise the “price” of gold to $41.34 per ounce.  It has been $35.00 per ounce since the Bill was signed on January 30, 1934.  At the present time, the price or purchasing power of an ounce of gold in the Colonies, Japan and in Argentina, is higher than in the United States.  Therefore, all of the raw material producers in those countries have a great advantage over the raw material producers of the United States, where gold is worth only $35.00 in purchasing power.  Our gold price being fixed at $35.00, the London gold price jugglers can name their own price at will to the continued destruction of American industry of all kinds.

Revaluation means changing the price of an ounce of gold.  It has little effect on general domestic finished goods prices, but does affect the price of raw stuffs and finished goods entering world markets.  One can readily see that the currencies of all the raw material exporting countries are now “stacked” against the United States.

The parrot newspapers of our country have been used, intentionally, to befuddle the people as to just what revaluation means.  They tried to make them believe that changing the gold equivalent of the American dollar and making it correspond with the gold equivalent of the currencies of other countries, was robbing the widows, orphans and bondholders.  That was a malicious and deliberate lie.  Its back-of-the-scenes perpetrators know better.

Revaluation means changing the number of currency units for which an ounce of gold may be exchanged.  It is very simple once the lies and “mystery” are torn away.  A specific illustration will help explain.

Prior to December 1929 an ounce of gold could be exchanged in the world market for 21.5 pesos (Argentina money) or 20.67 dollars (U.S. money).  In December 1929, the private gold brokers, the super financiers, began quietly to bid more pesos for an ounce of gold.

When the number of pesos was increased from 21.5 to 32.25 per ounce of gold, while the number of currency units per ounce of gold in the United States remained at 20.67, a purchaser of wheat or other raw materials in the world market at Liverpool would have to give up 50% more gold to buy anything in the United States, than in Argentina.  (32.25 is 50% greater than 21.5.)

Liverpool importers will not give more gold to buy wheat in America than in Argentina.  To meet this artificial condition American farmers must give as much wheat per ounce of gold as the Argentina farmers do.

They must sell their wheat at a serious discount below the natural and fair domestic price.  They must sell at a loss which deprives them of any profit or excess of income over outgo, which they must have to buy the products of industrial centers.  Thus industry is deprived of the purchasing power of over fifty million people dependent upon farm income.

In considering this colossal fraud upon America, we must always remember that under the existing scheme of things the price of the “surplus” (that which is exported) is the price of the whole crop, despite various efforts to remedy this foolish condition, which efforts mysteriously die aborning.

So wheat, under present conditions, must continue to sell below its natural and fair price, and the farmer obtain less than true value rendered.  The very simplicity of the fraud has insured its success, although newspaper blindness or intimidation may have played a part in allowing the fraud to continue.  We have been led by lying innuendo to believe that a “drop” in the gold buying power of our currency was bad, if not actually crooked, as though people used currency to buy gold instead of the real needs of life.  The cart was put before the horse again, for the exact opposite is true.

Holding “high” the gold buying power of our currency is the real fraud.  As shown above, when a skillful play on words (typical un-American deception) has been replaced by ordinary language, the simple truth can be understood by everyone.  Beware of those who say their “economics” and monetary systems are too deep and mysterious to be penetrated.

When the United States was raising the price of gold, from April 19th to July 19, 1933, raw material prices were rising.

HOW AND WHY AMERICAN PRODUCERS ARE SHUT OUT OF WORLD MARKETS
How gold prices are juggled against American farmers, laborers and industrialists

NOTE :  The price of wheat, which governs all farm prices, is set in England, where world “surpluses” go to market.  Now, at London, an ounce of gold will buy less U.S. currency than foreign currencies.  American farmers are shut out of export markets.

How Foreign Currencies are “Stacked” Against the United States

The above figures show that while the number of U.S. dollars exchangeable for an ounce of gold has been raised from 20.67 to 35, which is 69%, the currencies of competing raw material countries, and of Japan, our chief finished goods export competitor, have been increased a greater percentage.  For example: Argentina has increased 117% and Japan 191%.

This unfair competition has been arranged by the London “gold crowd.” It causes a downward spiral for America.  American farmers’ buying power is decreased.  Less factory goods can be bought.  Factory labor is reduced.  Labor buying power is cut; labor can buy less farm products and manufactured goods.  Farm “surpluses” mount.  Farmers are coerced to cut production, which means smaller food supplies and higher prices.  Labor can then buy less food — more malnutrition and starvation ensue, etc., etc.  Unless this condition is corrected violence is inevitable, which is what the international schemers—the aspirants to World Dictatorship, seek that they may destroy our government.

REMEDY :  (1) Renounce gold forever as part of domestic money structure.  (2) Raise the price of gold to full parity with other countries to settle international trade balances.  (3) Give silver important place in settlement of international trade balances.

Over fifty million rural residents had a margin of income over outgo, with which to buy the output of the industrial centers.  That accounted for the business acceleration which we had in the Spring of 1933.  Finished goods prices were not rising, except a few which entered the export markets.

Raising the currency price of an ounce of gold was simply bringing the raw material price levels into line with the previously distorted range of prices for finished goods, so that producers could exchange their raw materials for finished goods on a basis of fair exchange.  Every farmer knows only too well that he has been cheated outrageously by the amount of time, labor, etc., which he has had to exchange by way of his products for the manufactured articles which he needed and deserved from civilization for his contribution toward keeping it alive.  Many farm leaders know that the price of an ounce of gold in the United States must be on a parity with the price of gold in London and the colonies.  However, their voices are, as yet, too weak to overcome the power of those who forced the President’s hand in favor of their own money strangulation policies in July 1933.  What is needed is a mighty blast from twenty or thirty million farmers and rural workers !!

In July 1934, George L. Harrison, Governor of the Federal Reserve Bank of New York, went on another visit to Europe, this time to the Bank for International Settlements.  If he made another private agreement, without knowledge or consent of Congress, we have further proof of the high-handed and unpatriotic methods of international bankers.

The Two Billion Dollar Secret Fund — The “Stabilization Fund”

The Gold Bill of 1934 provided for a stabilization fund of two billion dollars to be managed by the Secretary of the Treasury.  The Congress and the people are not permitted to know anything about the operations of this fund until January 1937, and even the President is not empowered by law to exercise any control or influence.  He is entitled to annual audits — after things have happened.

When the bill was passed, the American public was fed an enormous amount of false theorizing on the need of a Stabilization Fund.  We were told that since England had a great Stabilization Fund, America certainly must also have one.

Before discussing the Stabilization Fund the writer wishes to mention that the American people have been misled as to what was actually done when the so-called nationalization of the gold took place.  The people were told that the United States Government actually took control of the gold away from the privately owned Federal Reserve Banks and placed it in the sole possession and control of the Treasury of the United States.  That is not the case.  The Federal Reserve Banks can retake the gold from the United States Treasury under a number of very broad provisions in the 1934 Gold Bill.  Of course, these provisions can only be carried out with the sanction of the Secretary of the Treasury.

Under the provision of Section 3 —

“The Secretary of the Treasury shall, by regulations issued hereunder, with the approval of the President, prescribe the conditions under which gold may be acquired and held, transported, melted or treated, imported, exported or earmarked : ... (b) by the Federal Reserve Banks for the purpose of settling international balances;  and, (c) for such other purposes as in his judgment are not inconsistent with the purposes of this Act.”

SECTION 5 — “All gold coin of the United States shall be withdrawn from circulation, and, together with all other gold owned by the United States, shall be formed into bars of such weights and degrees of fineness as the Secretary of the Treasury may direct.”

This is exactly what was previously done in England, where, if you had $8,000 in gold demand notes you could get a gold ingot of such value;  but which, for ordinary exchange purposes, would be no better than a gold brick.  The coin withdrawn from circulation had been remelted into ingots, which cannot circulate.

SECTION 6 — “Provided however, that gold certificates owned by the Federal Reserve Banks shall be redeemed at such times and in such amounts as, in the judgment of the Secretary of the Treasury, are necessary to maintain the equal purchasing power of every kind of currency of the United States ... No redemptions in gold shall be made except in gold bullion bearing the stamp of a United States mint or assay office in an amount equivalent at the time of redemption to the currency surrendered for such purpose.”

You, Mr. Patriotic American Citizen, cannot have gold, but the internationalists can obtain it.

SECTION 10 — “For the purpose of stabilizing the exchange value of the dollar, the Secretary of the Treasury, with the approval of the President, directly or through such agencies as he may designate, is authorized, for the account of the fund established in this section, to deal in gold and foreign exchange and such other instruments of credit and securities as he may deem necessary to carry out the purpose of this section.  An annual audit of such fund shall be made and a report thereof submitted to the President.”

This annual audit that is submitted to the President shall not be seen by any other officer of the United States.  It’s a strange thing that such an important audit cannot be examined by other officers of the United States, nor by the Banking and Currency Committee of either the U.S. Senate or of the House of Representatives.

SECTION 17 — “All Acts and parts of Acts inconsistent with any of the provisions of this Act are hereby repealed.”

Every American who thinks about the matter, will see that the misnamed “Stabilization Fund” may be a back-handed method of “legalizing” the disappearance of two billion dollars in gold, and Uncle Sam’s two billion eight hundred million revaluation “profit” may be largely sunk in frozen foreign credits.

The United States is now a creditor nation.  We do not need or want to control the currencies or price levels of any other nation.  England has had a stabilization fund because she is a vast importer of raw materials and she wants to control and dominate the financial systems of the colonies.

If the administration were acting for the best interests of the American people, the Secretary of the Treasury would allow no foreign exchange transactions except in settlement of actual trade balances or for modest remittances such as travelling expenses or relatives sending small sums to their people in other countries.  The remittances of funds to take care of actual importations of goods and reasonable remittances to cover travelling or funds to dependent relatives, should be taken care of, but there should be no export of large amounts of capital permitted.

It is general knowledge that from September 1931, when England suspended gold payments, to April 19, 1933, billions of “wise money” belonging to the internationalists was being used to buy gold bars (which were shipped to Europe) and to buy billions of dollars worth of the currencies of foreign countries.  Many unpatriotic Americans bought the currency of Belgium, France, Holland and Switzerland.  Those balances cannot be brought back to the United States unless some one is now willing to sell dollar balances.

The foreign exchange market is like any other market.  If there is a greater demand for promises-to-pay dollars than there is demand for promises-to-pay pounds, francs, guilders, etc., the dollar will rise.  Therefore, when those individuals bring their balances back to New York, some one has to sell dollar balances, otherwise, the price of New York exchange would rise very high in relation to the price of the pound, franc or guilder, promises-to-pay.  Unless some one supplies American dollar balances, either gold must be shipped from those European countries or the price of the dollar in terms of them must rise.

Under the “Stabilization Fund,” Uncle Sam is the victim.  With the taxpayers’ money he must now buy foreign currency balances to let these internationalists bring their credits back to New York from various foreign countries.  Why should the American taxpayers’ money be frozen in sterling, francs, guilders and lira ? — only because the operation of this fund permits this.  Once these balances are back in New York, the owners of them can send them back to Europe again in the form of gold.  The provisions of the Bill permit this.

It is strange that the Treasury Department was never interested in learning the names of those who brought gold back to the United States, particularly in the few weeks following the passage of the Gold Bill in 1934.  These people received $35.00 per ounce, while the American who had $100 in gold, and the poor people who had a few gold coins, were threatened by the President if they did not bring back their gold and get $20.67 per ounce.  It certainly pays to be an internationalist.

The Mystery of the Gold Bill of January 1934

The Chief Executive was very careful, when signing this bill, to make it clear to those standing around, including the newspaper reporters, that he had nothing to do with writing it, and had not read it before signing; that he was taking it on faith from the Secretary of the Treasury.  The Secretary of the Treasury, in turn, also stated that he had not read it but that it was what the “experts” wanted.

Well may we wonder why the Chief Executive and his cabineteer, the Secretary of the Treasury, have not been willing to tell who wrote this bill.  Of course, it could be that a bill of this nature could have originated in New York, because it so favors the money creators there who have, since its passage, been taking advantage of its generous provisions for dealers in foreign currencies: but that would be a violation of the Chief Executive’s promise “to drive the money changers from the temple.”

If the President learned, for instance, that the Gold Bill of January 1934 was written by a man who had become rich on advice and arbitrage — fractional point scalping of international money transfers, the intricacies of which only the money creators are familiar with — it should be reasonable to suppose that the President would be fired to intense ire.

And if it were announced to the patient and trusting American people that the Gold Bill of 1934 was written by a money changer and that the preparation of it took place at this man’s office in Wall Street, it is reasonable to suppose that the patient American people would begin to get an Insight into the money creators’ skullduggery.  They would certainly demand a real investigation, as well as an explanation as to why the most important pieces of legislation were jammed through Congress without reading or debate; signed by the President in ignorance of what the bills contained, and advised by the Secretary of the Treasury who acknowledged similar ignorance of the contents.

Just suppose, for instance, that the people learned that when the money changers were thrown out of the temple they took the temple’s “precious” contents with them !  Just suppose that the man who actually wrote the Gold Bill of 1934 sits in the councils of other individuals who are honestly trying to fight the money creators, and who do not recognize the dual role of certain individual players.  He sits in the councils of the money creators and then in the councils of men who are trying to fight the money creators and give the American people an honest deal.  Such insincerity and duplicity is common among money creators.

“Presto-Chango Allimagesto”
Say the slick money “mystery” men —
The money bookkeeping is ours,
The people pay in lovely showers !

Abracadabra, my gold dollar,
When they took it I did not holler :
Shipped to Europe, bought for a song,
They brought it back, near twice as long.

Tomorrow it will leave again
On a sea of rolling green,
Then the People will be told —
“The trouble is, we have no gold !”

Then some Rothgeld will demand
We recognize his mighty hand —
Clack our foreheads on his stoop,
Each one stamped “A Nincompoop.”