A Fraudulent Standard



THE basis upon which all our industries, trade, and commerce are conducted, is the legally established “ standard of value,” represented by the golden sovereign or “ pound,” which is supposed to “ measure ” the values of all labour products.

As will hereinafter be shown, this “ standard ” is founded upon a most egregious fallacy, and although it occupies a position in the domain of trade of similar importance to that of the standards of length, weight and capacity in the manufacturing and industrial world, unlike them, it is extremely variable, and purposely made so by the great financiers of this and foreign countries, who are able to juggle with prices to an almost unlimited extent, and by so doing reap enormous fortunes from the producing classes.  It has placed the fortunes of all engaged in trade and industry, wholly at the mercy of the world’s money dealers.  These men exercise, by means of the legal privileges accorded to gold and the banking profession, far greater influence over economic conditions than any potentate, ruler or government.  They have the power to stimulate industrial prosperity, and to destroy it by increasing or diminishing the available gold supplies as well as by the mere manipulation of credit.  They are the world’s real autocrats.

Just now a few of their number are contemplating the most gigantic “ deal ” that has probably ever been conceived, and one which if perpetrated by any other class of the community, even on a very much smaller scale, would be denounced as barefaced robbery.

And it is in regard to this projected crime particularly that I desire immediately to sound a note of warning to the British public as well as to those of all our Allies engaged in the present war.  This “deal” is nothing less than doubling the national and, incidentally, all other debts by doubling the present value of our monetary units !

The object of this, is to double the value of their War Loan investments, regardless of the terribly disastrous industrial and social results which must ensue.  This robbery will be accomplished, if it is not checked in time by public sentiment, in a perfectly legal manner by a complacent Chancellor under the guise of a measure for the public welfare, for the sole purpose of removing “ inflation ” and reducing prices which have risen mainly through the creation of the very currency and credit constituting the War Loans.  The measure will aim at restoring, what the money dealers term our “ good, sound, honest gold currency ” by destroying the Treasury notes and reducing bank credit to its pre-war proportions.  The effect will naturally be to double the purchasing power of the pound at the expense of every wage earner, producer, merchant, manufacturer, tradesman, and taxpayer in the country.

The great banking and financial companies that have invested large sums in the War Loans, will thus, by the mere stroke of the pen, enormously add to their fortunes without any further expense or effort on their part.

If we imagine the whole of the War Debt placed in one scale of a balance, and the total volume of the money and credit which have been loaned to the Government in the other scale, what these men are plotting to do is, to tamper so with the scales as to double the weight of the money side of the balance and thus double the amount of the debt in the other scale.  Nominally, of course, the amount of the War Debt will undergo no change.  The figures will remain the same.  The amount of the National Debt will probably be not less than £6,000,000,000, even if the war is terminated within a year, which is still doubtful.  By altering the value of the pound, which is very easily accomplished, the trick is done and the debt, although nominally £6,000,000,000, becomes in reality £12,000,000,000 in terms of the present purchasing power of money, corresponding to that of the money actually loaned !  Similarly, although the nominal rate of interest is 5 per cent., by this method of tampering with the value of the pound, these investors will actually receive 10 per cent. on their original investment.  The interest charges on the actual loans together with the expenses of Government, including the soldiers’, sailors’ and old-age pensions, etc., which will have to be paid out of taxation after the war, will, even if the value of the pound remains unaltered, inflict a burden upon the British taxpayers which will be almost intolerable, and will heavily handicap us in the coming economic struggle for trade supremacy, particularly as it is probable that Germany will either repudiate her war debts or fix the rate of interest at very nearly zero.  If, however, the value of money is raised as suggested, if the plotters succeed in persuading the Government to accede to their demands, it will mean either the complete enslavement of the people of this country to a soulless money despotism for ages, or compulsory repudiation of the debt.

Now these War Loans have been subscribed in very cheap pounds.  Practically all that the Government received, in the form of subscriptions, were bank cheques constituting credit entries created in the books of the banks.  These credit pounds have no material existence.  They are merely legal claims against firms and individuals.  Moreover these are the very pounds to which the “ inflation ” resulting in the rise in prices, is largely due.

Now the actual value of this money when subscribed, may be readily traced by studying the daily market quotations for all kinds of commodities.  The value of the pound in wheat at the time of the last loan, was from 2 to 3 bushels ;  in potatoes, from 50 lb. to 60 lb. ;  in butter, from 8 lb. to 10 lb. ;  in eggs, from 80 to 100 ;  in steel, from 20 lb. to 30 lb. ;  in rolled brass, from 12 lb. to 20 lb., etc. To the average mechanic, a pound to-day represents from 20 to 25 hours of labour, to the tool maker, from 10 to 15 hours, and so on.  Now what the War Loan subscribers have really furnished, and what the nation has received, is the means of securing commodities and services under the above conditions and at the above prices.  Having loaned these “ cheap ” pounds to the nation in its crisis, certain of our financiers are expecting to be repaid their principal and interest, not in the pounds they actually subscribed, but in pre-war pounds—in dear pounds !  That is to say, having supplied the Government with one kind of pound with which to buy guns, munitions, commodities and services generally for carrying on the war, they expect their interest and loans to be repaid in another kind of pound which will buy twice the goods and services their money has furnished.  This will mean that every taxpayer will have to give at least twice the amount of his goods and labour to meet his taxes, than that which he has had to furnish under present conditions.

A part of this plot has already been rehearsed in the published statements appearing in the Press by various financial writers, to the effect that the gold standard has not been really discarded since the war started.  It is said that we are still doing business on the gold basis.  If this statement is true, why do the bankers contemplate altering it after the war ?  And why all this talk of “ inflation ” ?  The fact is, that the present basis consists of probably 1 per cent. gold and 99 per cent. credit.  To call this basis gold is sheer deception !  The object of these writers is plain enough.  It is to reconcile the public to the contemplated robbery when the time arrives for making the grand coup.

Let us, however, clearly understand what this conspiracy means to our social and industrial conditions.  You cannot increase the purchasing power of money without decreasing the value of all goods and services proportionately.  If the moneylenders are to be granted their demands for the “ dear ” pound, the merchant, the manufacturer, the farmer, the wage-earner, will all be compelled to sacrifice the value of their goods and services to a similar extent.

If the gold currency is restored and prices put back to where they were four or five years ago, wages will have to go down with them.

You cannot reduce prices generally, as certain politicians are urging, and retain the same banking facilities and the same currency circulation.  Now mark what will inevitably follow such an attempt.  To reduce prices you must reduce the volume of the currency, including bank credit.  This means reducing banking accommodation, over-drafts, loans, etc., and consequently curtailing trade and depressing industry.  It means reducing employment and both wages and salaries.  This will add to the depression by reducing still further the demand for goods, since the wage-earners are the great consuming classes, and if you reduce their wages you reduce their power of purchasing commodities—in short, reducing prices, or what is the same thing, raising the value of money, means trade depression, lock-outs, strikes, emigration, starvation, pauperism, riots, with the possibility of civil war !

The crime proposed is not a novel one.  It has been perpetrated in all countries usually during their most serious crises.  Moreover the men who do these things are usually the pillars of society, whose names figure in the highest circles, who support many of our national charities, and after plunging hundreds of thousands into social want and misery, ease their consciences by donating a mere fraction of their ill-gotten gains to some church, hospital, or orphan asylum !

Now whilst the great financiers, the members of that mysterious circle—the real “ hidden hand ”—who exercise an all-powerful sway over the world’s economic conditions, are fully alive to the consequences of their financial jugglery, it is only fair to say, that the majority of their tools, the politicians and Cabinet Ministers, are wholly ignorant of these effects.  Finance, under present conditions, is an extremely abstruse and difficult study, and it is hardly possible for a man whose knowledge is confined to reading the money market report in his daily paper, to obtain, any real grasp of monetary science.  Most of these men would be horrified if a deputation of taxpayers were to interview the Chancellor for the purpose of urging a measure for inflating the currency, in order to lighten the burden of taxation.  Whilst they are quick to see the injustice of paying the national debts in a depreciated currency, they are singularly blind to the injustice of increasing the public burdens by paying debts in an appreciated currency.

And yet this has been the practice for the past two centuries.  The bulk of the national debts created represent double and treble the actual values originally subscribed.  British taxpayers are still paying interest charges on the munitions supplied to defeat Napoleon’s armies a century and more ago, because of the similar trick played upon them by the financiers to that now contemplated.  And yet the nation has paid the actual cost of those wars in interest charges alone at least ten times over without seriously reducing the original debt !

Whilst science and discovery have added little to the prolongation of human life, finance has long since solved the problem of immortality !  Need one ask, “ O debt ! where is thy sting ” ?  The sting of debt is usury—the author of its eternal life !

The most notable parallel to the present conspiracy, was that which followed the American Civil War.  The international moneylenders bought the war-bonds issued by the United States Government at from forty to sixty cents on the dollar.  They bought them during the period of inflation, and succeeded later in bribing Congressmen and Senators to vote for a “sound and honest ” currency, which meant raising the value of the dollar by slaughtering the prices of all commodities.  These bondholders trebled and quadrupled their wealth as if by magic.  But as a Senator once told me, the American people went through an industrial hell to satisfy the insatiable appetites of these financial cormorants !

Lest it be thought that I am using terms abusively, I would refer the reader to the terms adopted by the financial classes to describe those who have at various times in the past, seriously suggested the redemption of national obligations in legal tender without specifying the kind of legal tender.

If the repayment of the National Debt in a currency less valuable than the money originally loaned, is to be classified as robbery, is not the compulsory repayment in a more valuable currency a greater robbery, since the economic effects are far more disastrous—the evils far more widespread ?  But in this present instance I am pleading merely for justice.  Let repayment be made in tokens of exactly the same value as those subscribed.  And if the bankers are determined to bring back all the restrictions and consequent horrors which must follow the re-adoption of a gold currency, let the Government institute an honest standard and scale all debts incurred during the era of inflation, down to their proper dimensions in relation to the more valuable currency.

This would be strictly honourable in every sense of the word.  The War Loans would then be represented according to the index numbers, at probably one-half of their original dimensions.

If these terms are insisted upon, the nation will soon see a considerable moderation of the present outcry against inflation and high prices.

At present the country is indignant over the disclosures regarding profiteering.  But the fortunes made by all the shipowners and commodity merchants since the war started, are a mere pittance compared to the profits which the financial magnates will win by raising the value of the monetary pound.

It may be asked, “Will not the Government and Parliament particularly, watch the people’s interests and protect them from this threatened financial raid ? ”

The answer is that neither Parliament nor the Government will move a finger to save the public, unless the public protest is made so effective as to engender fear in the minds of the majority of the members.  This is not so much the result of corruption or any lack of honesty on the part of the average politician, as to his incredible inertia.

When the opening of the great conflict suddenly rent the veil which had served to hide the truth from the British public, it brought us all to the realization of our two greatest dangers, the one foreign and the other domestic.

The former was our mortal enemy, with the organized and well-drilled hatred, ambition and unscrupulousness of his seventy million subjects under the leadership of a clever, cunning, blood­thirsty fiend utterly devoid of any moral or humane sentiment !

The other was the lofty and appalling conceit, ignorance, inefficiency and apathy of our so-called governing classes, comprising all shades of party politics.  And of these two, the latter will most probably prove to have been the more dangerous and costly in the long run.

Our national unpreparedness for war, our diplomatic failures through the supineness, the sublime innocence, simplicity and trustfulness of our Foreign Office officials, and the public indifference to the warnings given by events which were hastening the advent of the great crisis, are being paid for not only by the people throughout our Empire, but by all our Allies in the sacrifice of millions of precious lives and untold millions of wealth.  The education of a nation’s rulers is often a costly undertaking.  But where the education has to be provided by actual object lessons, the costs are apt to be ruinous.  Where advice, history and organized knowledge are disregarded, where the lessons of the past go unheeded, there remain only the methods of experience.

To teach such people the explosive effects of dynamite, half a dozen factories and warships must be blown up, together with hundreds of human lives !  To force them to realize the danger of trusting and harbouring a treacherous foe, the safety of a whole nation must be jeopardized.  To make them understand the folly of opposing the diabolical cunning, ferocious cruelty and barbarism of a powerful enemy, with the strict observance of international regulations, peace­conference rules and church principles, whole nations must be sacrificed !  To get them to admit the necessity for reprisals and air defences, thousands of their own people must be starved, tortured, torn, mangled, and their homes blown to atoms.  And similarly to knock financial wisdom into their heavy intellects, to show them the evil results of a fraudulent money standard, the public must be cheated, robbed and starved into revolt !

In short, amongst the world’s ruling classes generally speaking, the only method of instruction which is at all effective, is the calamity method.  It required the martyrdom of thousands who suffered death by fire and suffocation, to get the governing authorities to compel theatre managers to adopt the simple fire-proof curtain.  The education of such people involves a system of political vivisection.  Our present great financial peril is due entirely to similar official ignorance and stupidity.

One has but to read the speeches of our Chancellors for the past few years to realize that they are all, irrespective of parties, merely the mouth­pieces of the great bankers.

The financial arrangements of this country are entirely controlled by a class whose first object is to make dividends for themselves and their shareholders.

Every politician accepting the responsibilities of the Chancellorship of the Exchequer, realizes that he dare not run counter to the rapacious demands of the financial octopus whose lair is Threadneedle and Lombard Streets.  Even so pronounced a democrat as Mr. Lloyd George, had to bow the knee to Baal, so that his most enthusiastic admirer will never be able to detect the slightest trace of democracy’s influence in his dealings with the money power !  And yet no one ever had greater opportunities for destroying this soulless monopoly and saving the nation untold millions of money, than our present Prime Minister.

Had he exercised the same patriotic spirit and energy, the same disregard of private monopolies and privileges which he displayed as the first Minister of Munitions, he might have nationalized the whole of the private joint stock banks of Great Britain, and obtained precisely the same credit with which the war has been and is now being financed, with but a mere fraction of the costs already incurred.

If and when the inside history of the financial methods which have been employed to carry on the war is ever published, it will probably cause widespread amazement.  Possibly also the public may then begin to realize the truth of what several writers have been endeavouring to point out for many years past, viz., the terrible dangers to which our trade and industries are always exposed by the maintenance of Peel’s suicidal Bank Charter Act of 1844, and especially when they learn how near to the brink of financial and industrial ruin the country was brought in 1914, through the facilities afforded our enemy for our undoing.  It only required a cunning and unscrupulous nation like Germany to seize the end of the financial rope which our Bank Act has so long, so freely, and so temptingly dangled in front of her and other trade rivals, in order to tighten the noose round the throat of the British nation and, metaphorically speaking, hang us all !  And Germany came within an ace of doing it !  We escaped by ignoring Peel’s Act, just as we escaped on three former occasions and by similar means ;  just as we have escaped the destruction of our Empire by ignoring a similar piece of Governmental folly—the Declaration of London—although only after its authors had been taught their lesson by the terrible disasters and incredible losses which it inflicted upon the Allied cause.

The financial education of the average Briton seldom goes beyond the occasional perusal of the daily press columns of the money market, where finance is regarded as a great game of gamble.  The result is that any book or pamphlet on this tremendously important branch of economics, is apt to be received with about as much warmth of interest as a treatise on Strains or Ouaternions.  And yet its importance to every individual can be scarcely exaggerated.  The subject confronts one at every stage of life, in every occupation, in every class of society.

Finance is the arithmetic of trade and commerce, and an understanding of the subject should be generally regarded quite as essential to the average business man, as the knowledge of the science of numbers is to the accountant.  It is the key to the knowledge of practically all other branches of economics.  The interminable dispute between the various trade schools, which are to-day apparently as far from a settlement as ever, is largely due to the failure of both parties to consider the financial aspect of international trade.

Orthodox finance is undoubtedly both difficult and abstruse, due mainly to the unscientific and often contradictory theories which have been incorporated into it.  We have been taught to believe in the essential harmony of science, and I agree with Proudhon when he says—

“ It is surely a sad symptom for a science when, in developing itself according to its own principles, it reaches its object just in time to be contradicted by another, as for example when the postulates of political economy are found to be opposed to those of morality, for I suppose morality is a science as well as political economy ?  What, then, is human knowledge if all its affirmations destroy each other, and on what shall we rely ? ” (System of Economical Contradictions.)

Those who are uninitiated into the mysteries of finance, doubtless imagine that when they incur a debt, all that is necessary to fix the amount, is to obtain a written statement expressed in pounds, shillings and pence.  But the financier knows better.  The pound to-day can be made to equal two pounds next month or next year without the debtor knowing what has really happened !  A miner in Australia or South Africa, may be the innocent cause of reducing the volume of debts throughout the world in a very sensible degree, whilst a riot or civil war in some South American republic, may have the opposite effect.  In short, finance as it exists, pertains far more to the realm of mystery like astrology and to what has been called the “ Science of the Infinitely Absurd,” than to any of the exact sciences.

Imagine what confusion would ensue, if some day the secret of gravitation and some available means for seriously affecting it were discovered, so that any unscrupulous individual possessing the secret, could at will cause all our standard weights to sensibly increase or decrease !  Would not the passion of greed compel many to use such knowledge and power to enrich themselves at the expense of others ?  Well, there are several great financiers and groups of financiers, who hold similar power in the world of finance, so that they can raise or lower the purchasing power of money, and they use it as a means of self-enrichment at the expense of others.  Now supposing this condition existing in regard to gravitation such as that suggested, what sort of a legal system of measuring the weights of bodies would that be which paid no heed to these frequent interferences with gravitation ?  And what would be the public attitude if the Government forced us to continue to employ our present standard weights, regardless of these continual variations in the force of gravity ?  Possibly those interested might procure hired writers and professors, to instruct us that such fluctuations were not of the least importance.  This is somewhat analogous to our financial system as established by law.

The very term “ Money Market,” discloses the speculative and irrational character of our monetary system.  What should we say if the Government permitted postage stamps to be issued exclusively by certain privileged firms, and a “ stamp market ” were established by which the prices of stamps were arbitrarily arranged from day to day and week to week, by a stamp committee appointed by these private firms, in order to swell their dividends ?

It is difficult to see anything more startling in the creation of a postage stamp “ market,” or a railway-ticket “ market,” than in the existence of a money market.  A money market practically means a debt market, where debts both public and private are from time to time raised and lowered, because debts being payable in money (i.e., legal tender) naturally vary with the money unit.  And since the money markets are largely controlled by the great international gold and credit dealers, the debts of both nations and individuals are similarly under the same influence.  In short, no one can exactly foretell what his debts will be in terms of his own services and products at any future period !  A more dangerous and unstable system upon which to build a nation’s trade and industries, it is impossible to conceive.  We cannot afford to continue a system that has been tried and found wanting at every crisis of our history during the last two centuries !

We are now in the midst of the greatest economic revolution that has taken place in our history for ages.  Our most venerable institutions, our most cherished theories, are either being swept away or are undergoing minute scrutiny and amendment.  Many have already been condemned to the scrap heap, and many more must follow.  Not only our future supremacy but our very existence as a great industrial nation is at stake.  We are being tried by fire, and most of our old heirlooms must go.  The reign of tradition and conservatism is over.  We can no longer afford to maintain economic systems merely because they support certain private or class interests.  If an institution—no matter how sacred by reason of its antiquity—blocks the path of national progress, woe betide us if we hesitate to get rid of it !  The seriousness of the economic struggle ahead of us leaves no room for either apathy or false sentiment.  We are living in a new world, in which new conditions are continually appearing, and we shall have to construct our political and trade methods to suit these conditions.  No matter how successful policies may have been under former conditions, this is no argument in favour of retaining them under new ones.

Those who talk of “ fixed principles,” as applied to political and economic systems, should remember that principles are only “ fixed ” so long as the conditions to which such principles are applicable are “ fixed.”  And as conditions are rapidly changing, it is evident our economic policy must be governed by the new conditions.  We cannot solve dynamic problems by the application of static laws.

Nations and societies are organisms, and are destined to progress or perish.

Our industrial classes have long been painfully aware of the fact that the economic system under which they toil generation after generation, with but a scanty return for their labour, whilst a large and growing class of non-producers and unemployed enjoy unlimited wealth, is founded upon injustice, although they are unable to understand the fundamental causes.  But the natural effects are disastrous to their industrial morale and engender discontent and class hatred, and seriously curtail the annual amount of wealth production.  It is safe to say that under a system in which labour received a just proportion of the produce, the annual output could easily be doubled, with the same number of producers.

Notwithstanding the fact that the vast majority of the people of all industrial nations are engaged directly or indirectly in what is often termed “ the creation of values,” to all but an extremely small circle, the science which deals with this subject, is as vague and as mysterious as the rites and theories of the Rosicrucians.

The industrial world presents to us the spectacle of millions of men and women constantly engaged in the production of commodities created for the use and enjoyment of all classes, but who are totally ignorant of what share in the general wealth their labour will entitle them to.  They bargain their labour for coins and tokens, which have no fixed or certain relation to any or all of the good things they need and produce.  During the process of exchange, these commodities undergo certain curious and apparently inexplicable metamorphoses, and by the time they reach their final destination—the consumers—their values have been transmuted into prices, and the producers find their remuneration will only buy a fraction of the produce their labour has created.  Between the farmer and dairyman who raise corn, potatoes, butter, eggs, etc., on the one side, and the hatter, shoemaker and tailor who manufacture hats, boots, and clothes, on the other side (each of whom needs some of the products of his fellow-producers), stands the market with its complicated system and mechanism of exchange, the chief function of which (so we are told) is to “ measure ” the values of all commodities.  But why the mere operations of “ measurement ” and exchange, should result in such frequent and vast changes in the prices of commodities, and therefore in the fortunes of their makers and dealers, and why they should raise a partial barrier between the products and their producers, are problems which the average man cannot fathom.  Under the old barter system where goods were exchanged directly for other goods, the producers received what they believed to be the full value for their labour.  And if we were to go back to that crude system to-day, it is probable that a greater measure of satisfaction would result to the producing classes.

These operations which affect the world’s markets and prices so mysteriously are, however, directly controlled by human agency, and behind the scenes there are certain individuals who can and do influence to an extraordinary degree the machinery of exchange, which determines the exchange relations of all commodities.

My personal interest in this subject, which led me to study the science, commenced more than a quarter of a century ago when, as a resident of the United States, business interests brought me in contact with certain high financial circles.  The experience and knowledge gained, led me to investigate the underlying cause of economic phenomena, with the result that I became convinced that the basis upon which the economic system of every nation has been established, is a fraudulent one.

Those who have read Thomas W. Lawson’s Frenzied Finance, will understand the methods by which a group of men were enabled to secure millions of wealth, not a single cent of which they themselves had ever created.  The history of the Copper Trust as related by Mr. Lawson, was merely an instance of scores of similar conspiracies perpetrated universally by leaders both in the financial and social world.  During my own experience I have seen half a dozen men at a private dinner party plan a financial “ coup ” which a few days later gave to them the possession of many millions of dollars of wealth without their investing a solitary nickel piece !  I was an unwilling witness of the ruin of a railway magnate who refused to sell his control of a certain railroad at the bidding of an all-powerful syndicate at the figure they offered.  Whereupon the syndicate ordered the bankers to call in all their loans on the shares and bonds of this road held by them as security, with the result that a panic ensued and the securities were thrown upon the market and bought by the syndicate at half the figure they originally tendered !  I have seen several firms whose assets were worth twice the amount of their debts, deliberately ruined by being thrown into the Bankruptcy Court ;  as they could not obtain sufficient legal tender to meet their liabilities on demand (their creditors being their own bankers, who were hoarding large sums of money) they were forced into liquidation.

I was one of four men who bought under the hammer, an entire railway system which had been previously ruined by a financial group to prevent competition with the system they owned.

I instance these operations merely to show the almost economic omnipotence of those who control the money and credit of a community.

During Dr. Wilson’s first presidential campaign he said, “ The greatest monopoly in America is the `money monopoly.’”  To which the New York Times (which was then the organ of the late Pierpont Morgan) gave a direct denial.  The New York World then took up the cudgels in an article from which the following is taken :—

“ The same day the Times ingeniously asked Governor Wilson what he meant by the `money monopoly,’ the newspapers announced that Mr. Morgan’s ` Bankers’ Trust Company’ had bought from Mr. Morgan’s Equitable Life Assurance Society its holdings in the Mercantile Trust Company, and that by this transfer the aggregate assets of the banks dominated by J.P. Morgan & Co. exceeded $1,000,000,000.  This $1,000,000,000 is not Mr. Morgan’s money, but it is in the hands of the Morgan interests, which say who can borrow it and who cannot borrow it, how it shall be used and how it shall not be used.
      “ When Mr. Morgan took over the Equitable Company from Thomas F. Ryan, he paid more than $2,500,000 for stock that can legitimately earn only $3,514 a year, but what he really bought was control over the Equitable’s $400,000,000 of assets and $80,000,000 of surplus.  After this control was acquired, the statement was made in one of the financial newspapers, that no man could borrow $1,000,000 in New York, whatever the security, if Mr. Morgan objected to his having it.  No doubt this is true, for there are few independent bankers anywhere who would care to incur the hostility of the money trust that has been built up by the Morgan-Standard-Oil interests and their allies.
      “ The ` money monopoly’ controls more than money and credit.  It controls oil and steel and railroads and all manner of corporations, by means of interlocking directorates and a well-defined community of interest.  Its political activities are as far-reaching as its financial activities, working through railroad lawyers, corporation lawyers, country bankers, and political bosses.
      “ In fact there has been created in Wall Street what is practically a Central Bank, more formidable than the old United States Bank ever was or could be, wholly irresponsible in its use of power except as restrained by the merely technical provisions of the banking laws, and more dangerous politically than a whole regiment of Nick Biddles1 such as President Jackson crushed.”

Those who congratulate themselves that these powerful financial syndicates are confined to America, and therefore do not concern us, are harbouring a great delusion.  They exist in all countries to a greater or less degree.  And when our Chancellors and Cabinet Ministers are sometimes selected from such syndicates, the public ought to realize the gravity of the position.  Sometimes these syndicates are composed of citizens of the countries in which they operate.  Sometimes the members are aliens in race, religion, politics and national interests, as in Italy, and Russia, whose finances were, prior to the war, controlled entirely by German Jew firms.  Some years ago a friend of the writer sought the assistance of a well-known banking house in the establishment of a French industry, necessitating the employment of some millions of pounds of capital.  The head of the house, having examined the scheme, pronounced it excellent, but added that he could not offer any material help, as France was out of his “ sphere of influence.”  147; The financial world,” he said, “ is divided among the various international and financial firms.  Messrs. So and So handle France, and So and So Argentina, etc.  Had your enterprise been for Egypt we could have financed you.”

Now the most serious feature of this world-wide money monopoly, is the power it gives a few men to alter the purchasing power of money whenever it is to their advantage to do so.  The operation is extremely simple.  The business of the world is conducted chiefly upon credit by means of loans, so that the mere calling in of loans and the refusal to extend credit suffices greatly to increase the purchasing power of money.  A similar result can be obtained by withdrawing gold supplies from circulation, and by reversing these processes prices can be advanced and the danger from the previous operations relieved.  Hence the world’s financiers have the power to acquire unlimited wealth by merely juggling with prices.  And this dangerous power, this perpetual menace to economic peace and welfare, exists at the present time mainly by reason of the legal establishment of the gold standard.


1 “ Nick ” Biddle was president of the United States Bank during President Jackson’s first term, and exercised enormous political influence.  Biddle threatened to defeat Jackson for the Presidency for his second term, and Jackson replied that if he dared to corrupt the electors by promises of money, he would hang him “ as high as Haman ! ”