THE WORLD’S BANKER.
THE WORLD’S CREDITOR.  WORLD’S CONTROL.



Like Alexander the Great, they are seeking more worlds to conquer.

Emboldened by their success in 1907, and their endorsement in the elections of 1908-10-12-14, the House of Morgan, feeling secure in their control of American industry, promptly took advantage of the war in Europe to extend their tentacles to include all of the world—to become THE WORLD’S BANKER.

The policy of their special representatives—the Federal Reserve Board—is, then, concerned more in preparing for this world extension and control than for home development.

To accomplish their purpose the two main factors to develop are :

First :  To loan to, or in foreign countries a sufficient amount of their credit—not money, just credit—and making the obligations payable in American gold coin of the present standard, weight and fineness.

Second :  To secure a monopoly of American gold coin, and have it stored in their own vaults.

I have dealt with this quite fully, so will not need to repeat.  The principle will apply as fully to foreign loans as to domestic loans and obligations.

They are melting and putting into bars all foreign coin coming to this country.

The amount of obligations payable in American gold coin is incalculable, or incomprehensible to the average mind ;  and the concentration of gold in their control, rapid beyond belief.


The Policy of Control.


The plan was that of Paul M. Warburg, but Geo. M. Reynolds, Vice President of the National Bankers’ Association, was selected as the advocate to appear

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before the state bankers associations.  The addresses were specially for the banking fraternity, and not public, hence freer from what is generally termed “bunk.”

I quote from his Dallas, Tex., address of May 16, 1911, p. 17:

“However, it is believed by those who are familiar with the plan that in time this association will hold the major portion of the lawful money of the banks of the United States, as under the operation of the plan it will not be necessary for the banks to carry in their vaults an amount greater than their needs for counter use.”

First annual report Federal Reserve Board, page 7:

“The Board was also, however, firmly of the opinion that in undertaking thus early to establish the Federal Reserve banks it would be necessary to enlist the hearty co-operation of all the member banks in two matters which were deemed of fundamental importance :  (1) Payment by the member banks in gold out of their own vaults of the reserves they were required to contribute to the new banks, thus diffusing the burden of providing the cash resources of the Federal Reserve Banks.”

This is emphasized again on page 9, and also in a circular, No. 10, issued October 28th.  This was to try to prevent the transfer of reserves then held in the large reserve banks.  They wanted it out of the gold held in the member banks’ own vaults.  They were sure of the other, and wanted all the gold.

We will now quote from the author of the plan, Paul M. Warburg’s address in Minneapolis at the conference of the Governors of the Federal Reserve banks, the inner circle to whom he could talk frankly, October 22, 1915 :

“It is to your interest to see the Federal Reserve banks as strong as they possibly can be.  It staggers the imagination to think what the future may have in store for the development of American banking.  With


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Europe’s foremost financial powers limited to their own field, with the United States turned into a creditor nation of all the world, the boundaries of the field that lies open for us are determined only by our power of safe expansion.

“The scope of our banking facilities will ultimately be limited by the amount of gold that we can muster as the foundation of our banking and credit structure.  Gold that is carried in the pockets of the people, gold that accumulates as excess reserves in the member banks’ vaults, does not afford the maximum service that the country is entitled to expect.

“Excess balances and idle gold should accumulate in the Federal Reserve banks.  They should not control $300,000,000 of gold, as they do now, or $450,000,000, as they will another year, but they should control a billion or two of gold.  The stronger the Federal Reserve banks become the stronger will be the country and the greater its chance to fulfill with safety and efficiency the functions of a world banker.”

The foregoing is very ably and plausibly put.

IT IS TO YOUR INTEREST to see the Federal Reserve banks as strong as they possibly can be.”  “For the good of all”?  N0.  That you, the inner circle, may levy tribute on the labor of the world as well as that of the United States.

“It staggers the imagination to think what the future has in store”—for us, for the interests we represent, when we are in position to tax the world’s labor.

“With the United States turned into a creditor nation of all the world.”  What jingo nonsense !  The United States will not be a creditor nation.  It will not loan one dollar to any foreign country, and will not collect one cent of tribute for itself.

We have through the Federal Reserve system and law “taken the government out of the banking business,” and delegated all of its power of issue and control to the House of Morgan, as per the plan of this


  Pressure of Dire Necessity 253

same Mr. Warburg.  They can issue, or retire ;  contract, or expand ;  hoard, or loan ;  increase or lower interest rates at will ;  ignore or violate our laws with impunity ;  encourage industry in which they are partners, and discourage industry where they are not ;  tax American labor, that they may exploit foreign labor.

All this they have the power to do now, are doing, and are rapidly extending that power.

They will not permit the issue of any more lawful money by the government, so long as they continue to control the government.

They can issue to themselves all the currency they need, and make them obligations of the government, without contributing one cent to the government, in interest or tax.

James A. Farrell, President of the United States Steel Corporation and Chairman of the National Foreign Trade Council at New Orleans, January 27th, 1916, before the National Foreign Trade convention said :

“Until the United States begins to finance the needs of those growing countries to which it desires to increase its exports the title of world banker would not pass to the Western Hemisphere.

“Foreign investment is a commercial preparedness measure, a source of protection for the whole industrial fabric of our country should the world recede to political-commercial policies of trade restrictions.

“Whatever may be the nature of the competition, our manufacturers will have to meet after the war, it would not be safe to conclude that would be less intense or less effective than heretofore.  If it be handicapped by the scarcity and dearness of money it will be stimulated by the pressure of dire necessity.”

I wonder if American labor fully realizes the meaning of that address, with all it means to American labor !


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Between the lines it is very easy to see what this great captain of industry sees.  If after the war, foreign nations “recede to policies of trade restrictions,” protective tariffs, etc., then we, the American manufacturers must make our investments in those countries, to escape those restrictions.  American labor is not taken into consideration.

“Foreign investment is a commercial preparedness measure.”

The more American money that is invested abroad, the dearer will be money at home and higher rates of interest.

Then what is the remedy ?  More money and lower interest rates ?  No.

If we are “handicapped by the scarcity and dearness of money it will be STIMULATED BY THE PRESSURE OF DIRE NECESSITY.”

“Dire necessity” will compel American labor to work for less compensation.

That is the natural, logical reasoning of private monopoly.

Then comes the appeal for all the gold in the country to be rushed in to the Federal Reserve vaults, that the House of Morgan can the more completely and promptly control, for their own private gain.

“Gold in the pockets of the people, or in the member banks’ vaults” cannot be invested in Europe by and for the inner circle, and hence does not do the “maximum of service” for our new Sovereign.

In the great world’s war, the government appealed to the loyalty and patriotism of the people to aid the mother country, or the fatherland, with their savings, to save their country from foreign aggression and they responded, accepting of government legal tender paper money for current use.


John Law and the Mississippi Bubble Outdone.


Our new Sovereign makes an urgent appeal to our people to give up their pocket pieces, their little hoards


  No Parallel in History 255

of savings, the business men their lawful money ;  and bankers to promptly give up their gold reserves to the Federal Reserve banks, that they may “become the stronger to fulfill with safety and efficiency the functions of a world’s banker,” for the private profit of a group of selfish, unpatriotic exploiters.

I know of no parallel in the world’s history of even a semi-civilized nation.


Whose Money is to Be Used ?


Whose money and credits are to be used for this foreign development and exploitation ?  Your individual savings ;  your deposits in your local banks, on whom they will bring pressure to bear to forward the same to the Federal Reserve banks, controlled by the Federal Reserve Board, and in turn controlled absolutely by the House of Morgan.

The peasants, the mechanics, business men and bankers of Europe receive in exchange for their savings government money ;  what will you receive ?

Not even Federal Reserve bank notes, obligations of the government, which would make them as good as the government itself, if they had been made a legal tender.  All you will get is credit on their bank ledgers.

Is the foregoing an exaggeration ?

I have quoted from the official report of the Federal Reserve Board, Mr. Warburg’s plea to all the Federal Reserve Banks.  I will now quote briefly from the press report of an address of Mr. Warburg to the New York State Bankers’ association June 9, 1916 :

“He recommended that all republics of the continent adopt a uniform monetary standard on the basis of a gold coin equivalent to one-fifth of an American dollar.”

Note.—Put all of Central and South America on a gold standard, something they will not have, but can borrow or buy from Morgan & Co. if they will pay the price.

256 The World’s Banker  

“Mr. Warburg warned against the practice of pyramiding reserves and of considering so-called excess reserves the basis for loan expansion.”

Note.—It is against their policy to loan money, just book credit.

“The process of absorption of our securities returning from abroad should be conducted on such a basis and scope as to turn the individual depositor into an investor, so as to free our gold reserves rather than increase loans on an enlarged floating supply of securities.”

Note.—J.P. Morgan has been appointed the agent of Great Britain to negotiate and handle the American securities owned or held by British subjects, and which the British government is forcing into its treasury by a super-income tax.  To force investments, will help Morgan to negotiate and leave more free gold for foreign exploitation.

The news report closes with this paragraph :

“Wise statesmanship to my mind, therefore, would indicate that everything should be done by the federal reserve system and by all the banks that are interested in our strength to watch carefully further expansion at this time, and to accumulate the floating gold supply in the hands of the Federal Reserve banks so as to enable them when the time comes, if necessary, to spare large sums without thereby crippling their lending power.”

Note.—June is the month when the banks of the West and Northwest must begin preparation for the moving of our crops.  Perhaps I should now say, that was the custom before the enactment of the Federal Reserve Act.  Then the policy of contraction, practiced in 1915 (see page 39), may be considered the permanent policy of the Federal Reserve Board.

A great expansion of products, the crop of 1916, is to be exchanged, is to be met by a great contraction of the medium of exchange ;  with the inevitable result—a sacrifice of the things to be exchanged.


  Preparing For Grand Coup 257

Well, that is the logical position for men to take, whose only aim is private profit.  They have the power, and intend to use it.

“To accumulate the floating gold supply in the hands of the Federal Reserve banks, so as to enable them,” etc.  The eight thousand member banks are not to be trusted with the investment of this gold, nor is it good management to hold it in their vaults to meet emergencies, as in the past, or to loan for American development, production or distribution ;  Messrs. Morgan & Co. want it stored in their own vaults, secure for a grand coup, whether it be for foreign investment, or a premium for gold, as per the CONSPIRACY.

Free (?) American labor has given them that power to use ;  and they intend using it.


Reserves in National Banks.


The reserves held in the national banks on dates nearest May and December each year for ten years past ;  legal requirements, and amounts held.

For the eight years prior to the enactment of the Federal Reserve law the average reserve held in excess of legal requirements was $250,589,000.  Usually larger in the spring than in autumn.

The Federal Reserve law was put in operation November 16, 1914 ;  now mark the change.  March 4, 1914, the excess reserve was $302,177,000 and on December when there was greatest need for money to move the crop, the excess reserves had increased to $549,914,000.

By May 15, 1915, in face of an unusual increased demand for manufacturing, they had increased to $727,343,000, and December 31, with an enormous crop at good prices to move, the excess reserves had actually increased to $876,082,647.  That is, they had hoarded that vast amount when a very much larger amount was needed on account of the great increased demand.


258 The World’s Banker  

Total Reserves—Where Were They ?


The total money in the country was $4,401,988,337

In other than national banks, June 30th ... $599,945,292
Gold held in the treasury .............. 215,242,005
In Federal Reserve banks ............... 345,260,000
Federal Reserve agents ................. 202,351,713
In national banks ................... 2,046,256,000
............................................. $3,409,055,010
Leaving in circulation less than one fourth, or ...... $992,833,327

A remarkable concentration in less than fourteen months after the organization of the Federal Reserve system.


Concentration of Gold.


The rapidity with which gold is being concentrated in the vaults of the Federal Reserve system is shown in the report of the Federal Reserve Board of date December 31, 1915 :

“The amount of gold held by the Reserve agents increased from 12.5 millions at the end of 1914 to 70.6 about the middle of 1915 and 197.4 millions at the close of the year.  The increase for the year in the total gold reserves of the system was over 301 million dollars, the larger portion of which represents the gain in the Reserve agents’ gold holdings.”

Concentration in New York.


“Of the total gold reported at the end of the present year, 406.5 millions or nearly 75 per cent are held in the banks, or in the reserve agents’ vaults, while 135.9 millions are either in the gold settlement or in the gold redemption funds at Washington.”


  No Desire to Issue Currency 259

“About one-half of the system’s gold is held by the New York bank and its reserve agent, less than 7.5 per cent by Chicago, less than 6 per cent each by Cleveland and Richmond, over 5 per cent by Boston, while the remaining 25 per cent is distributed among seven banks and reserve agents.”


No Desire to Issue Currency.


For 214.1 millions of circulation, the Federal Reserve agents hold 197.5 millions of gold and 16.7 millions of paper.

They could issue two and a half times as much currency, or $505,500,000.  They had issued $214,125,000.  What better evidence do we need, that it is their credit they want to loan, and not money, or even currency.


Agriculture Recognized (?).


“Agriculture and live stock paper in the hands of the banks aggregate at present over four million dollars, and constitute 7.4 per cent of the entire bill holdings.”

It is safe to say that very little if any of that was loaned to a single practical operative farmer.  It is called agricultural paper, because loaned on warehouse receipts, of agricultural products stored.  What little was secured in that line was only after a strong effort by the Secretary of the Treasury to aid the cotton growers to tide over an unexpected emergency.  It might perhaps be called a forced loan, which will not be repeated.  The Secretary loaned $15,000,000 in gold to the three Southern Reserve banks, and all they loaned on commodity paper was $3,548,293, which would leave only half a million for stored grain, and you may be sure that that was not to any farmer, but to the grain speculators.

“About 77 per cent of all acceptances on hand are credited to the three Eastern seaboard banks, and nearly 9 per cent to Chicago.”

260 The World’s Banker  

These are the two per cent loans to encourage foreign trade.

Eighty-six per cent for the four banks, and sixteen per cent for the rest of the country.  It is not hard to note the trend.


Legislative Preparedness.


You will now readily see the advantage of legislative preparedness so long in advance, in taking the government out of the coining, issuing, and banking business ;  the substitution of currency for lawful money ;  and the demonetization of lawful money by decoinage.

I will not repeat, just refer you back to “Our Unit and Standard of Value,” and you will be able to read that chapter with a new light.  It is so much easier for them to secure control of the money of the country, when they can stop the supply, and destroy for the use of the people so vast an amount of the money previously provided, and that without any loss to the system responsible for its destruction.


A Wonderful Lesson in Efficiency.


To place the exception clause in the greenbacks.  To discontinue the coinage of the legal tender silver dollar.

To substitute the silver certificate for the silver dollar.

To make the silver certificate money for the banker but not for the people.

To limit the legal tender quality of the minor silver coin.

Issuing gold certificates for gold coin and, bullion, and making them money for the bankers, but not for the people.

Converting gold coin into bullion, with provision for use as money for the bankers, but not for the people.

The discontinuance of the issue of national bank notes.


  Turning Gold Coin Into Bullion 261

The retirement of national bank notes.

The payment of a premium for retiring national bank notes.

The practical discontinuance of coinage of gold.  Every change made under a false pretense, that it was in the interest of the people, and that all of these many kinds of currency was in fact money.

The products to be exchanged are increasing by leaps and bounds, and our money medium of exchange decreasing faster than our products are increasing.

We are demonetizing by decoinage twelve dollars of gold coin to the one dollar coined.

We have retired from circulation, permanently, two dollars of national bank notes to one of Federal Reserve bank notes issued.

Since January 1, 1916, to June 1, we have withdrawn from circulation of national bank notes $22,658,035 and instead of replacing this by Federal Reserve notes we have withdrawn from circulation $29,785,950, a contraction of currency from these two sources of $52,443,985 in five months.

The government has not only ceased to issue paper money, but is rapidly retiring it and has practically discontinued the coinage of money.  The House of Morgan has a “clear track” for a more profitable control of American labor than if they owned the physical body of labor ;  all secured legally by the votes of the independent (?) American citizenship.

It is surely time to reverse the legislative engine.  What do you think ?







WILL INTEREST RATES BE HIGHER ?



What impression was intended to be made on the public mind by the advocates of financial reform ?

What influenced you to support the Federal Reserve bank system ?

Was it not that the change would give us a financial system freed from private monopoly and controlled wholly by the government, in the interest of the whole people, or to repeat the statement of the Federal Reserve Board, “A public trust, for the common welfare—for the good of all.”

To the average mind that meant lower, steadier, more uniform rates of interest, controlled by the government, in the interest of the people, the whole people, to facilitate exchange and prevent extortion.

A great play was made on government control ;  take control away from Wall Street, etc.

What other meaning could be taken from President Taft’s appeal to the Governors ?  (See p. 147.)

Or what did President Wilson mean ?  (See pp. 152-154.)

After sixteen months of operation, here comes Messrs. Rich and Wold of the Minneapolis Federal Reserve bank, who say :  “The view that the Federal Reserve bank is to produce cheap money is erroneous ;  such a purpose has never been seriously considered.”

Messrs. Rich and Wold state now what was the real intention and is the actual practice of all of the Federal Reserve banks, the Federal Reserve Board, and the whole system.

Now it is evident from the foregoing, that either one of two things must be true ;  and either one is very unpleasant to contemplate.  President Taft, President Wilson, and their co-workers were either wholly ignorant of the intent, or purpose, or contents of the Federal Reserve bank plan and the bill as presented,

  Would Reap Fortunes Over Night 263

and enacted, or they were guilty of deliberately misrepresenting, and trying to deceive the people.

Of this deception they are plainly accused by Messrs. Rich, Wold and Warburg, and the whole system in official statements and actual practice since the system was put in operation.

What have they done, and what are they doing to make amends, or to punish the betrayers of the people ?

Report of the New York Federal Reserve bank, page 158, second annual report :

“In the belief that a period of easy money was at hand, the directors of the Reserve bank adopted the policy of keeping its rediscount rates slightly above the market rates for commercial paper, so that, unless member banks really needed them, its resources, most of which had hitherto been kept in the vaults of the member banks, should not be forced upon a market already over supplied with funds.”

Federal Reserve Board, page 6 :  “Money rates have been unprecedentedly low, and any attempt of the Federal Reserve banks to attract business by further reduction of rates might only have produced a further reduction of rates and increased the danger of inflation of credit without, at the same time, bringing additional business to the Federal Reserve banks.”

Where were the rates of interest so very low during 1914-15 ?

Foreign traders, Eastern brokers (gamblers), and Western speculators, in whose business ventures the men who control were personally interested.

Who will be benefited when higher rates for money again prevail ?

I will place another witness on the stand :  Mr. H.R. Lyon, president of the Scandinavian National Bank of Minneapolis in a review of the May, 1916, statement of the Minneapolis banks :

“Our loans went up $600,000, and the demand for money is getting better.

“There is a staggering amount of money in the country.  This naturally tends to lower the rate of


264 Will Interest Rates Be Higher  

interest, 4 to 6 per cent being the rule now with a vast quantity of 4 per cent paper being handled.

“The banks are in splendid condition, although they aren’t making money as fast as they would if the demand strengthened [interest rates increased].

“Bankers are viewing peace rumors with great hope of their proving correct.  If the war ended tomorrow, bankers in the United States would reap their fortunes over night, for Europe will want all the capital she can get.  American bankers aren’t going to show the least hesitancy in giving it to them either and the rate will be high.”

In their exuberance of hope, they will occasionally “let the cat out of the bag.”  “There’s a staggering amount of money in the country.”

While as a matter of fact, the amount of money and currency in the country increased during the year (July 1st, 1916) by $474,000,000, almost all from importation of gold, the amount of lawful money in circulation increased only $42,000,000.

That imported gold, with much more in addition, is being decoined, demonetized and stored to ship back to Europe very quickly after the close of the war.


Law of Supply and Demand.


“Where interest rates are very low it is, safe to assume that not only banking resources, but capital as well, are temporarily at least in excess of the local requirements, and where rates are very high the reverse may fairly be assumed to be true.”
Note.—“Where interest rates are very low”, the system can now very promptly raise them to a satisfactory rate.  There will be no more competition amongst the bankers.  The Federal Reserve Board will attend to that.

“Where interest rates are very high.”  Pshaw !  Whoever heard of the bankers trying to remedy that ?  (See page 24).

As to law of supply and demand, see page 48.


  Home Producers to be Sacrificed 265

Mr. Lyon states a very important, far-reaching fact.

The American bankers’ interest in world peace is that it will open up a new avenue for investment of American money in Europe, at higher rates of interest and the American banker will not “show the least hesitancy in giving it to them.”  Whose money ?  Why, your deposits.

That means that the American borrower will have to pay higher rates of interest.  In other words the American producer will be sacrificed and will have to compete with the impoverished European producer, for the use of our American money, issued to our Federal Reserve banks free of interest or tax.

“The discount rate of the Minneapolis Reserve bank runs from one-half to one per cent higher than the rates of other Reserve banks.” * * * “The fact that the Minneapolis rate is higher is indicative of a healthier financial status in the Northwest.”
Note.—For whom does it indicate a healthier status ?

The man who pays the higher rate, or the bank that receives it ?

The perjured, law violating bankers to whom the Comptroller of the Currency referred (see page 24-5-6) must have been extremely healthy ;  but how about the poor widow who paid those extortionate rates ?

Health for the banker means misery for the borrower, and always will.  It is very absurd to claim that the higher the rate of interest the producer pays, the more certainly is his prosperity assured.

“The view that the Federal Reserve bank is to produce cheaper money is erroneous, such a purpose has never been seriously contemplated.”

It is a trite but effective answer to such an argument that “money is worth what it is worth.”

Note.—So is a postage stamp.  Both the postage stamp and money are issued, or used to be, before the passage of the Federal Reserve Act, by the same government and for the same purpose of serving the public needs of exchange.

266 Will Interest Rates Be Higher  

Who ever heard of the postage stamp varying in price because of increased, or decreased demand ?  The sole difference is in the administration.

The postoffice is “administered as a public trust for the common welfare—for the good of all”;  without private profit, and the price is the same to all, in all parts of the United States, all the time.

The alleged reason for urging the member banks was to mobilize the resources in the Reserve banks, to enable them to supply the credit and currency, to the member banks, as needed by their customers.

Since the organization of the Federal Reserve banks, they have made every effort possible, by persuasion and mild coercion, to gather in the gold of the member banks’ reserves.  The member banks were still holding back too much, and Mr. Warburg was sent out with another persuader.  He was not talking to the public.  He was talking to the bankers.  To the Governors and prominent representatives of the Federal Reserve banks at Minneapolis October 22 1915 :

“I shall not tire you by enumerating the benefits of the system.  I believe that those who think already know them ;  while those who do not think will learn them by actual experience.  [Yes, the victims will learn, when too late].

“That will be conspiciously the case when excess reserves are next reduced and when higher rates for money again prevail.”

The constant and persistent efforts by the Federal Reserve Board and Federal Reserve banks to persuade and coerce the member banks to send in their gold reserves, has been a puzzle to many.  The member banks were supposed to own and control the Resexwe banks.

And the public servants tell the employer what to do.  Be good now, send in your reserves to us.  We need them to lend in Europe ;  that will force interest rates up here, and you do not need to lend money, in fact there will not be any money to lend.  All that we have not loaned in Europe will be in our vaults,


  Rates Permanently Advanced 267

and we will not lend it, so long as we can loan our credit.

That is the thing for you to do.  Lend your credit and we in turn will lend you ours, if you need it.

The applicant who wants to borrow money is a crank ;  let him worry.

Loan only to those who will accept of a credit on your books, and a check book.  Then we will help you put up the rate of interest, and everybody will be prosperous.

In the St. Paul press dispatches of date June 16th, we find :

“Bank loans in St. Paul are at the highest point in their history and a continuation of the present prosperity in business is predicted by the leading bankers. * * * The next call is expected to show the banks have held their own, and that the loans will exceed anything ever known.  As a result of the increased demand for money, the higher rates announced several days ago will likely prevail for a long time.”

I note as this goes to press the following confirmation of my claim comes to hand :

“Reserve Board sets new discount rates.

“Washington, July 13.—An increase from four to four and a half per cent on thirty to sixty day commercial paper for the Chicago district was announced today by the Federal Reserve Board, and new rates were set for the Kansas City district of three and four per cent on commodity paper, three and a half to four per cent on trade acceptances and four to four and a half per cent on ten day paper.”


E. W. Decker.


E.W. Decker, President of the Northwestern National Bank of Minneapolis, June, 1916 :  “It is apparent that large loans to European nations will again be made.  Russia is to borrow $50,000,000.  There will be no hesitancy on the part of financiers here in subscribing to the loans as every fighting nation is regarded as being `good’ for vastly larger amounts than


268 Will Interest Rates Be Higher  

they have already borrowed.  As a matter of fact, they can have all they want.

“The East is pleased over the result at Chicago.  Hughes has come up to the preparedness mark as strong as could be desired.

“Money conditions are looking up.  Rates are already stiffening and have gone fully half of one per cent higher.  They will stand up right along, at least through the autumn.”

“The East,” by which he means the House of Morgan, is so well pleased with the nomination of Hughes, that they are promptly boosting the rate of interest.  The nomination of President Wilson is assured, and they feel secure for another four years.

Again he is speaking for the Twin City bankers :  “They will not hesitate to loan the Allies of Europe all they want.  They are good for vastly larger amounts than they have already borrowed.

Another $100,000,000 to France is just being floated.







A THRIFT CAMPAIGN



The National Bankers’ Association, having secured all the legislation needed to give them control of the money of the country, and their Federal Reserve Board having carried out the program, and fixed the policy for a concentration of the currency so as to make a dearer dollar, and also having fixed the policy for higher interest rates, and their faithful Congress having permanently shelved any prospect of long time land loan investments, so long as they are in control, realize fully that it will require more labor and labor products to buy the dollar, and greater economy and saving to enable the debtor to pay the increased interest, they must have, or think they must.

“With their usual efficiency, and this is worthy of a Warburg, the National Bankers’ Association, having settled the rural credits matter, have now decided that the agricultural committee shall turn their attention to a nation-wide campaign to teach the farmers thrift.  J.H. Rich, of Minneapolis, has opened the campaign in North Dakota and an agent of the National Bankers’ Association is organizing South Dakota.

This is well timed for the farmer in debt will have to not only work harder, but also live more economically if that interest is to be paid with cheaper products.

The South Dakota Bankers’ Association at their late annual meeting the latter part of June was very much interested.  The Secretary in reporting for the agricultural committee, said :

“While we still desire and will aid in this essential work [better farming, greater production] we suggest that details be left to those who have made a life study of the subject and that we as bankers consider more especially better banking and thrift.  Waste is the crime of today.  The greatest service the bankers can perform at this time is to impress upon every individual the virtue of thrift.”


270 Thrift Will Be Needed  

And accordingly the Association passed the following resolutions :

“Resolved, Whereas, the need for inculcating the thrift habit to maintain American prosperity is obvious, and

Whereas, the most effective method of teaching and promoting thrift is through a nation-wide effort being made, and

Whereas, the American Bankers’ Association is conducting a nation-wide thrift campaign furnishing concrete plans of action ;  therefore, be it

Resolved, that the South Dakota Bankers’ Association heartily endorses the campaign of the American Bankers’ Association and in every way endeavor to support the movement.”

Of course the farmer, whether in or out of debt, should encourage this great educational campaign in favor of thrift.  He will need it.

Example is better than precept ;  the bankers have given the precept, now for the example.  The nest time you go to town, better take a rainy day so that you will not have to hurry home, and be sure to take your wife with you ;  have something as an excuse to call at the bankers’ homes, all of them, nothing better perhaps than to get some ideas of thrift and economy, and on your way home decide that in future you will not build a more comfortable home than the banker, nor dress any better than the banker’s family, nor drive a finer automobile, trade off your limousine for a Ford ;  in fact, that you will pattern after the bankers and be content to live, dress and drive as economically as they do.

Remember “Waste is the crime of today”;  thrift the greatest virtue.  You will have to stop the one and practice the other to meet the higher rates of interest decreed to insure “better banking.”







NATIONAL BANKS—MEMBER BANKS



The national banks were made to believe that the Federal Reserve bank system was intended to be organized by them for their own special interest, and controlled by them, for themselves.

Mr. Reynolds in his Sioux Falls address said :  “The association will be nothing more nor less than a voluntary association of bankers, a voluntary association of bankers of the United States, just as this is a voluntary association of bankers of South Dakota.”

Page 55, it was to be made impossible for “any clique of men to control it.”

The Aldrich plan starts out with the caption “A BANK FOR THE PEOPLE,” and then on page 19 Mr. Reynolds says :  “Let it be reiterated again that the Reserve Association is primarily a bank of banks.”

Query.  Who are the people ?

In introducing the revised bill, Senator Owen said :  “All of these considerations urge that the Federal Reserve banks should be banks for banks, bankers’ banks.”

Mr. Warburg, speaking for the Federal Reserve Board, to bankers, said :  “The Federal Reserve bank is the member banks’ bank ;  it is your bank, your fire engine.”

After outlining the plan to secure control by the country banks Mr. Reynolds said (page 55) :  “You will agree with me that two at least of the great objections to any centralized organization has been removed.  First, this ingenious means of selecting these members is an assurance against political intrigue.  And second, it gives assurance that none of the large interests of the country would find it possible to have control of the institution.”

As usual, and in accord with their invariable custom, when the law was enacted, it was the very oppo-

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site of what was promised, and for this Mr. Reynolds more than any other man was responsible.

Instead of being a voluntary association it was made compulsory, under penalty of forfeiture of charter.

The national banks were also deprived of their power to issue bank notes on government bonds or other security.  Here again gross deception was practiced in that they were led to believe that one of the chief functions of the Federal Reserve bank was to issue to them Federal Reserve bank notes, on commercial paper, endorsed by the member bank ;  but the Act does not provide that they “SHALL.”  It is MAY.

The Aldrich plan provided (Sec. 30):  “The Reserve Association shall issue, on the terms herein provided, its own notes as fast as the outstanding notes secured by such bond so held shall be presented for redemption.”

Mr. Reynolds approved of this provision and said :  “There is also considerable force in the suggestion that the notes issued to replace the outstanding bank notes should be free from all taxation.”

There was a choice tidbit for the national bankers, the saving of the tax of one-half of one per cent, but even that saving does not now inure to the national banks as promised, but to the Federal Reserve banks, and instead of the one-half of one per cent tax paid for national bank notes, the member banks have to pay from four to six per cent for Federal Reserve bank notes.

They are so used to practicing deception to secure legislation that it has become a fixed habit, and they practice it on their allies just as quickly as on any one else.

It has been said by someone that “there is honor among thieves.”

If that be true, then the inner circle, the men who control the Federal Reserve system, have demonstrated beyond successful contradiction, that they are not thieves.


  Control Passes to a "Clique" 273

The first paragraph of Section 16 is full of “shalls,” but the second paragraph begins to hedge with “mays,” and the control by the country promised by Mr. Reynolds passes to the very interests that were to be controlled.  The national bankers were deprived completely of their independence and cannot withdraw as independent national banks.

They are rapidly losing their gold and lawful money, and still the Federal Reserve banks are not satisfied ;  they want all in, before the close of the war in Europe that they may “make their fortunes over night.”  Not the member banks.  Oh, no, Mr. Warburg says, “They [the Federal Reserve banks] should control a billion or two of gold.  The stronger the Federal Reserve banks become, the stronger will be the country and the greater its chance to fulfill with safety and efficiency the functions of a world banker.”

As the country has been taken out of the banking business by the enactment of the Federal Reserve laws, how can it become the world’s banker ?


Standardization.


The regulations for eligibility of rediscount paper as contained in circular No. 13 would seem to have been for the special purpose of discouraging rediscounts, and the issue of Federal Reserve notes.

It is not a question of security at all.  Loans for improvements, or investments of any kind are strictly eliminated, no matter how good the security.

Page 183:  “The Federal Reserve Board proposes, however, to prescribe the following basic principles for the guidance of Federal Reserve banks and member banks.”  The public servant becomes an exacting master.

Quotation from circular of Federal Reserve Board, page 184, first annual report :  “The required statement as outlined above should be signed under oath and should contain a short general description of the character of the business, the balance sheet, and the profit and loss account.  Assets should be divided into


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permanent or fixed investments, slow assets, and quick assets.  On the liability side should be shown capital, long term loans, and short term loans.  Short term loans should be in proper proportion to quick assets, and the statement should contain satisfactory evidence that short term paper is not being sold against permanent or slow investments.  The statement should furthermore show the maximum aggregate amount up to which the concern supplying this paper expects to borrow on short credit or sale of its paper, and the concern giving the statement should obligate itself to obtain the member banks’ consent before exceeding the agreed limit.  And the member bank indorsing must also affirm in a solemn and binding declaration.”

Now one would naturally think that the foregoing was stringent enough to protect the most exacting creditor.  But who is this creditor ?

Why, your public servants, chartered, and authorized by you to handle your deposits, which you hand in voluntarily, without any guarantee, or instructions whatever, now when it comes your turn to borrow, presto ;  a great change.  Your wealth, your business ability, your personal character, counts for nothing.  Your statements are worthless ;  they must be signed under oath, so that you will be criminally liable for any mistake, no matter how slight, or unintentional.  Your oath is not sufficient, your statements must be backed by the sworn statement of a certified accountant, and even that is not sufficient ;  the member bank must also “solemnly affirm,” etc.

Character, industry, honor, property, none of these count.

The Federal Reserve Board will not trust the Federal Reserve banks.

The Federal Reserve banks will not trust the member banks.

The member banks will not trust their customers.  Every statement must be verified under oath, and backed by the verified statement of a public accountant, before you can secure the use of a public utility,


  Are You One of Them ? 275

from your public servants, for the purpose of exchange and not at all for production or development.

That is the declared official policy of the system and the men to whom you have delegated the full constitutional power “to coin money and regulate the value thereof”;  to decoin or demonetize the money already coined ;  to substitute their bank credit for government money ;  and for their own private gain, tax American labor to the limit of endurance for its use in exchanging labor and labor products.

Is it possible to have independent development, production and distribution under such a system ?

Think it over before you indulge in profanity.

It has all been done legally, by and with the consent of an overwhelming majority of independent (?) American citizens.  ARE YOU ONE OF THEM ?


A Peculiar Custom.


Under this rigid system of control of credits has grown up what would seem to the unsophisticated layman a peculiar custom.

Preference is given to the borrower who keeps a good checking account in the bank.  The borrower is expected to keep at least 25 per cent of what he borrows to his credit in the books of the bank.

He is paying interest on a credit that he does not expect to use, and is not expected to use.  This is deemed necessary to keep his credit good at the bank.

It is good business—for the bank—as it increases their interest 25 per cent, but how about the man who borrows and pays interest on credit that he does not need and will not use ?

Suppose the farmer bought 25 per cent more machinery, seed and twine than he expected to use, or the manufacturer bought 25 per cent more raw material than he expected to use ;  what would the paternal banker think of it as a good business proposition ?

It certainly would not pass the standard for rediscount paper with a Federal Reserve Bank as per Circular No. 13, just quoted.