LETTER OF TRANSMITTAL

SEPTEMBER 21, 1964

To Members of the Subcommittee on Domestic Finance:

Transmitted herewith for the use of the Subcommittee on Domestic Finance of the Banking and Currency Committee, and other members of the committee and the Congress, as well as the general public, is a series of questions and answers on the basic workings of our monetary system. It is a supplement to "A Primer on Money" and is designed to highlight in question and answer form the basic points brought out in the "Primer."  It has also been indexed so as to facilitate its use.

It is hoped that "Money Facts" will prove useful to students and all others interested in further study of and improvement in our monetary system and that it will stimulate serious thought, research and discussion of the critical issues involved.

WRIGHT PATMAN, Chairman

CHAPTER II

22. What is money?
Money is anything that people will accept in exchange for goods or services, in the belief that they may, in turn, exchange it, now or later, for other goods or services. Any number of different materials—including paper I 0 U’s—may serve as money. How money functions and what money represents are its important aspects and not simply what it is made of. Today, the American people use coins, currency (paper money) and bank deposits (checkbook money) as money.

23. What did Americans use for money in earlier times?
In the beginning, they used wampum more than anything else. Surprising as it may seem, a bunch of clamshells strung like beads were valuable as money in settler days. But the Indians used wampum as money, and when the settlers wanted to trade with the Indians—as they frequently did—wampum had to be used. So the settlers themselves began to use wampum as money.

24. Did the colonists use coins at all?
Yes. Since the colonists traded with Europe as well as the Indians, they used coins, too. Naturally, there was a rate of exchange between wampum and coins since both were used. In 1641, the New Amsterdam Council fixed the rate of exchange between wampum and Dutch money. As time passed the colonies started minting their own coins and the general use of wampum died out.

25. What was “tobacco money”?
When coin money became short—and this happened—the colonies devised all sorts of money. One—prevalent in Virginia, Maryland, and North Carolina—was the use of tobacco warehouse receipts as money. These receipts were originally issued to tobacco growers when they placed their crop in storage awaiting sale. The owners simply made these receipts transferable much as endorsing a check today. Of course, as tobacco prices fluctuated from year to year, the value of the tobacco receipt also fluctuated, making it an imperfect medium to hold as savings or by which to designate long-term debt. This illustrates the difficulty of making any commodity—tobacco or gold—the basis of money.

26. What is legal tender?
Legal tender is any form of money which the U.S. Government declares good for payment of taxes and both public and private debts.

27. What is the most important form of money in the United States today?
"Checkbook money" that is, demand deposits in commercial banks. They account, for 80 percent of all the money circulating in the country.

28. Who issues money?
Since the Revolutionary War, the U.S. Government. has minted coins and printed paper money, currency. Other goods, including tobacco receipts, have circulated as “money” although they were not legal tender. But, in the 19th century, the Government delegated its right to print legal tender money first to State banks, then to national banks.

29. Today, who issues coins?
Only the U.S. Treasury has the right to mint pennies, nickels dimes, quarters, half dollars and silver dollars. Then they are issued through the Federal Reserve Banks. The pennies are made of copper; the rest of alloys. Since 1934, the Treasury has minted no gold coins.

30. What is currency?
Currency is paper money, or folding money. Americans use several forms of currency: National Bank Notes, Federal Reserve Notes, Silver Certificates, Treasury Notes of 1890, U.S. Notes and Federal Reserve bank notes. About 94 percent of the currency in circulation today consists of Federal Reserve Notes, issued by the Federal Reserve banks.

32. Why was the National Bank Act passed?
The Government wanted a reliable money with uniform value issued by reliable institutions in every section of the country, to finance the growing production and trade. National banks only lost the privilege of issuing bank notes in 1913, when the Federal Reserve System was established.

33. Do private banks issue money today?
Yes. Although banks no longer have the right to issue bank notes, they can create money in the form of bank deposits when they lend money to businesses, or buy securities. (The next chapter will explain how banks create money.) The important thing to remember is that when banks lend money they don’t necessarily take it from anyone else to lend. Thus they “create” it.

34. What backs U.S. currency?
Federal Reserve Notes are backed by the credit of the U.S. Government. American citizens, holding Federal Reserve Notes, cannot demand anything for them except (a) that they be exchanged for other Federal Reserve Notes, or (b) that they be accepted in payment for taxes and all debts, public and private. But, since certain foreign banks may exchange dollars for gold, gold does, in the last analysis, back U.S. dollars. Presently there is a 25-percent gold “backing” for Federal Reserve Notes.

35. Has the United States gone off the gold standard?
Yes, except in its international transactions.

36. Does this change the basis of our money?
In reality, no. The action, which Con took in 1934, merely formalized what had been true all along, which is this: since the 19th century checkbook money, now 80 percent of our money supply, has replaced notes as the most important form of money. And check-book money is created on the basis of all kinds of valuable assets. When a bank makes a loan to a business firm, secured by inventories of machinery, or to a farmer, secured by farm assets, it has, in effect, created a dollar “backed” by inventories, machinery, or farm goods.

37. So, what kind of dollar do we have?
We have a “managed paper currency”—managed because an agency of the Federal Government, the Federal Reserve System, consciously determines and controls the maximum amount of money which can be created by bank lending.

38. To whom does the Constitution give the power over money?
The Congress. The Constitution provides “the Congress shall have power to coin money, regulate the value thereof.” The Supreme Court interpreted this clause, again and again over a period of 150 years, to mean that “whatever power there is over the currency is vested in the Congress.”

39. Why must money he managed?
“Money does not manage itself” is a famous saying of British bankers. It is a saying which Chairman Martin, of the Federal Reserve Board, likes to quote and it sums up the matter quite well. Since the purpose of money is to make it easier for a nation to produce real goods and services, easier to divide the income from this production, and easier to save and invest for the future, the money system should be designed and controlled in ways which serve these purposes best. For example, it is very important to have the right amount of money available at all times. Too little money and too much money are both bad.

40. Why is the right amount of money so important?
The right amount of money is as important to the economic system as the right number of tickets is to the financial success of a theatrical performance. The theater has only a certain number of seats and distributing too many tickets will cause a scramble for seats when the patrons arrive. Selling too few tickets will leave empty seats. The same holds for money. When the Federal Reserve does not allow enough money to be created, there will be in effect, empty seats in our economy. The economy’s growth will be stunted by monetary deficiency—high interest rates with accompanying unemployment and underutilization of plant capacity. Real wealth which might have been created is not created. On the other hand, an economy can suffer from too much money relative to its needs. An overabundance of money, by spurring demand, pressures the economy to produce beyond its capacity. When this occurs, inflation erupts.

CHAPTER IV

WHY WAS THE FEDERAL RESERVE ACT PASSED?

71. What is a central bank?
A central bank has two essential functions. One is to serve as a bankers’ bank, i.e., a bank which gives credit to the commercial banks and also holds their official reserves. The other is to adjust the money supply through the power to create reserves or to regulate the commercial banking system’s ability to manufacture money. A bank which performs these and other related functions is called a “central bank.” The Federal Reserve is a central bank.

72. How does the Federal Reserve System differ from other central banks?
First, it is a system of 12 separate regional banks. Second, membership in the System is not compulsory for private commercial banks, except for national banks.

73. Was the Federal Reserve the first central bank in the United States?
No. Both the First and Second Banks of the United States were chartered to combine central and commercial banking. After 1836, however, when Andrew Jackson refused to extend the Second Bank’s charter, the United States was without a central bank.

74. In what ways did American banking experience during this period lead to passage of the Federal Reserve Act?
During the 19th century, the fractional reserve system, operating without central bank supervision led to money panics, bank crises, and depressions. Furthermore, the monetary system proved unable to provide the money necessary for the country s growing volume of industry and trade on a rational basis. National banks could create deposit money and notes, but were limited by their gold reserves. This meant that the total money supply was unresponsive to the needs of trade. Moreover, since it was customary for country banks to keep their reserves in New York, there were nationwide shortages of money periodically, as at harvest time. And at all times, the New York banks used the pyramided funds in the stock market in New York. As a result, between the end of the Civil War and passage of the Federal Reserve Act, the country suffered from four major money panics: 1873,1884,1893, and 1907.

75. In what specific ways did the panic of 1907 lead to central banking in America?
Public indignation at the banking manipulations which led to the panic stirred Congress to authorize a National Monetary Commission, headed by former Senator Nelson Aldrich. The results of the commission’s study were published in 20 volumes, and in 1912, a bill was introduced in Congress embodying reforms, of which the most important was the proposed establishment of a central bank with powers to regulate banking.

76. Was the Aldrich Commission alone in suggesting a central bank?
No. The House of Representatives had begun the famous “Pujo Committee” hearings which gave the public a picture of the “money trust,” a network of holding companies and other interlocking relationships which gave a small group of Wall Street tycoons control, not only of all the big banks of New York City, but of most of the financial power of the whole country.

77. What were the main purposes of the Federal Reserve Act?
First, it was intended to mobilize reserves—to strengthen the fractional reserve system—and thus increase public confidence in the banking system. Second, it was designed to provide an “elastic currency” responsive to the needs of local business and trade. Third, it was to provide central bank supervision, to insure sound banking practices, and to safeguard against insolvency and loss of depositors’ money. Fourth, it was to provide a system by which the banks could clear checks promptly and uniformly throughout the Nation.

78. Was the Federal Reserve System established as a private or public agency?
The Federal Reserve was established as a public agency. But private banks were given control of the 12 regional Federal Reserve banks that is, they were given the privilege of electing six directors of each bank, and these directors—a 2/3 majority—in turn, selected the presidents and other chief officers of the bank.

79. Did the powers given to the Federal Reserve include discretionary control over the quantity of money?
No. It was expected that increases and decreases in the money supply would be ‘automatic.” Private banks would continue to increase—and extinguish—money by making loans to business in their locality, under safeguards prescribed by the law. The “automatic” feature was that the regional Federal Reserve banks were now available to increase reserves for member banks when and as these needed more lending power to finance the short-term needs of farmers and businessmen in bringing their goods to market.

80. What other powers were given to the Federal Reserve?
The Federal Reserve was given the right to discount “eligible paper” for member banks, that is lend money to the banks on the basis of the commercial paper arising from loan transactions with their customers. The minimum amount of reserves which member banks were required to keep on deposit with the Federal Reserve, however, was prescribed by law.

81. Were any powers given the Federal Reserve Board in Washington?
Yes. The most important was the right to review and determine the discount rate—the interest rate charged by the regional banks when they loaned the commercial banks money on eligible paper. Other powers included formulating new rules to safeguard the banks against dangerous practices.

82. Who must join the Federal Reserve System?
State-chartered banks are not compelled to become members of the System. All National banks, however, must join as a matter of law. Membership in the System requires meeting certain minimum standards prescribed by the Board of Governors of the Federal Reserve.

83. In what ways was the Federal Reserve System an improvement upon the Preceding monetary system?

1. It permitted mobilizing reserves where they were needed in times of difficult and eliminated the pyramiding of reserves in New York.
2. The Federal Reserve, although a central bank, was also in part decentralized, operating in 12 regions throughout the country.
3. The Federal Reserve Act provided virtually uniform regulation for all the banks of the Nation. (Although almost half of the banks of the Nation are not members, banks accounting for 85 percent of all commercial bank deposits are members)
4. The Federal Reserve System was designed to provide an adequate money supply, one which expanded and contracted with the needs of trade.

84. How is the Federal Reserve System organized?
The Federal Reserve System is composed of the Board of Governors, the 12 Federal Reserve banks. Approximately, 6,100 private commercial banks are members of the System. The most important Policy making group is the Federal Open Market Committee.

85. How many members of the Board of Governors are there?
There are seven members of the Board of Governors. They are appointed by the President for terms of 14 Years, with one term expiring each 2 years.

86. Where are the 12 Federal Reserve banks located?
In Boston, New York, Philadelphia, Richmond, Atlanta, Cleveland, Chicago, St. Louts, Dallas, Kansas City, Minneapolis, and San Francisco.

87. Who are the members of the Federal Open Market Committee?
The Federal Open Market Committee consists of 12 members, 7 members of the Board of Governors plus 5 of the 12 presidents of the Federal Reserve banks. These are the voting members. But all of the regional bank presidents participate in policy discussions of the Committee. In that sense it is a 19 member Committee.

88. What are some of the routine operations of the Federal Reserve System?
Check clearing, furnishing currency, acting as fiscal agent for the U.S. Government (by issuing all notes and bonds of the Federal Government).

90. What are the important policy operations of the Federal Reserve System?
The Federal Reserve has the power to determine the money supply and thus strongly influence the level of economic activity and the general level of interest rates. It controls the money supply through its control over the, within limits, percentage in reserves member banks are required to hold behind their deposit liabilities and by controlling the amount of reserves actually available to member banks. The most important tool for controlling the amount of member bank reserves is in the hands of the Federal Open Market Committee.

91. What are the sources of revenue of the Federal Reserve?
By far the largest is interest on its holdings of U.S. Government securities. This accounts for almost 99 percent of Federal Reserve income.

92. How much of the Federal Reserve earnings must be returned to the Treasury?
No law or regulation specifies how much of the Federal Reserve’s earnings must be returned to the Treasury, but in practice the Federal Reserve spends all of the income it cares to spend, pays dividends to member banks on their “stock” and sets aside a large amount as “surplus.” The remainder is then returned to the Treasury. It usually returns an amount several times the amount of its expenses.

CHAPTER V

WHO DETERMINES THE MONEY SUPPLY?

93. Who appoints members of the Federal Open Market Committee?
Seven of the nineteen members of the “discussion” Committee are appointed by the President of the United States and confirmed by the Senate of the United States. Their term is 14 years. The other 12 participants at Open Market Committee meetings are elected through votes of private commercial bankers; specifically they are the presidents of the 12 Federal Reserve banks, elected to their posts indirectly by bankers from banks which are members of the Federal Reserve System.

94. What are the most important Open Market Committee powers?
The Open Market Committee has the power to determine the Nation’s Supply of money and credit, and therefore, the general level of interest rates, among other things.

96. Why is the Federal Open Market Committee one of the most powerful groups of men in our country?
Because in many ways their power is equal to that of the President in deciding how the world’s greatest economic mechanism will operate. By regulating the supply of money, the Committee can control the general level of interest rates. This in turn is one of the major determinants of the level of business activity in the country. The Committee, then, has the power to offset any action taken by anyone to stimulate or restrain the country. This indeed is power.

97. Are current open market operations what the founders of the Federal Reserve System intended?
No. It was expected that in monetizing “eligible” short term commercial paper, the Federal Reserve would provide sufficient liquidity to sound banks in periods of need (or restrain excessive credit expansion). While the Federal Reserve was expected to exert supervisory powers, it was expected that the money supply and interest rates, would be fully responsive to business conditions. Thus the discount rate, rather than open market operations was regarded as the Federal Reserve’s most important tool.

98. Why was the discount rate regarded as an important regulatory tool?
Because under the original Federal Reserve arrangement, no specific limits were placed on the amount of money the system could create. After all, if the banks had eligible paper to rediscount, then the regional bank would automatically create reserves. This raised the possibility of infinite money creation provided the banks’ lending rates and the system’s charges were in a fixed favorable relation. But if the system could control the discount rate, it could discourage rediscounting or borrowing from it simply by raising its discount rate high enough. At a high enough rate, the commercial banks would find no businessmen willing to borrow. Thus the supply of eligible paper available to the commercial banks would dry up and, in turn, the commercial banks would be unable to acquire more reserves by discounting. The automatic system than had a regulator; namely, the discount rate.

99. Is eligible paper discounted much today?
Very rarely.

100. Why have open market operations replaced discounting as the most important means of regulating the money supply?
Basically, because the Federal Reserve found open market operations a more sensitive tool to control the money supply. And through the years the Federal Reserve has decided that its responsibilities were not consistent with the authorization of an automatic money supply.

101. Precisely what does the Federal Open Market Committee do?
It determines the amount of government securities the Federal Reserve will buy and sell, in order to influence the level of bank reserves. In essence, the Committee determines U.S. monetary policy.

102. What functions have been left to the regional banks?
Now that discounting eligible paper is rarely used, the regional Federal Reserve banks clear checks and gather statistics and other economic data.

103. Have the intentions of the founders of the Federal Reserve System been altered by the turn to open market operations?
Yes, when the System was originally founded a struggle was waged over who would control the Federal Reserve—public or private interest. The solution was a compromise. But what (in 1913) was the master switch governing the money Supply—the discount rate—was left in the hands of a totally public body—the Federal Reserve Board in Washington. This was a deliberate act. President Wilson rejected the notion of diluting the public nature of the Board when he said, “Which one of you gentleman would have me select the presidents of railroads to be on the Interstate Commerce Commission to fix passenger rates and freight rates?” But when Congress in 1933 and 1935 authorized the Open Market Committee, which in effect succeeded to the policymaking role of the Board, it gave private interests a firm foothold in determining monetary policy—the money supply and the general level of interest rates. Five of the twelve voting members of the Open Market Committee are regional bank presidents. These men hold their offices through the votes of bank directors, two-thirds of whom are elected by private bankers. The other seven bank presidents, of course, participate in the discussions of the Open Market Committee. The upshot is that men whose views must meet the test of the private bank-selected directors help determine the Government’s monetary policy. A purely public group has given way to a mixed body with questionable qualifications to represent the public interest.

104. Who should be members of the Committee?
All members of the Committee should be public servants. There is absolutely no reason why they should not be. Private influences—especially private bank influences—have no place in setting the Nation’s monetary policies.

105. What is the Open Market Account?
It is the unit of the Federal Reserve Bank of New York that carries out sales of bonds and bills for the Treasury. The manager of this account acts as agent for the Treasury, the Federal Open Market Committee and seven foreign banks.

106. How does the open market work?
The actual operations are as follows: the Treasury determines each week how much money it will need during the week following and notifies the manager of the Open Market Account. All interested parties, including the 20 dealers are notified and bids are made on Monday. On the following Tuesday, the Treasury announces to whom the securities have been sold.

107. How much business does the Open Market do?
The annual volume of dealings in Government securities in New York amounts to over $400 billion. Of this the Open Market Committee of the Federal Reserve accounts for roughly $20 billion.

QUOTES - FROM PROMINENT PEOPLE - ABOUT MONEY

VOLTAIRE (1694-1778)
"Paper money eventually returns to its intrinsic value ---- zero."

PRESIDENT JAMES A. GARFIELD
"Whoever controls the volume of money in any country is absolute master of all industry and commerce."

HORACE GREELY
"While boasting of our noble deeds, we are careful to control the ugly fact that by an iniquitous money system, we have nationalized a system of oppression which, though more refined, is not less cruel than the old system of chattel slavery."

SIR. REGINALD MCKENNA (former President of the Midland Bank of England)
"Those who create and issue money and credit direct the policies of government and hold in the hollow of their hands the destiny of the people."

SIR JOSIAH STAMP (President of the Bank of England in the 1920's, the second richest man in Britain)
"Banking was conceived in iniquity, and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen, they will create enough deposits, to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in. But if you wish to remain the slaves of Bankers, and pay the cost of your own slavery, let them continue to create deposits."

ROTHSCHILDS BROS. OF LONDON
"Those few who can understand the system (check book money and credit) will either be so interested in its profits, or so dependent on it favors, that there will be little opposition from that class, while on the other hand, the great body of people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear it burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests."

ANSELM ROTHSCHILD
"Give me the power to issue a nation's money; then I do not care who makes the law."

PRESIDENT WOODROW WILSON
"A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the Nation and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world--no longer a government of free opinion, no longer a government of conviction, and vote of the majority, but a government by the opinion and duress, of small groups of dominant men." Just before President Woodrow Wilson died, he is reported to have stated to friends that he had been "deceived" and that "I have betrayed my Country". referring to the Federal Reserve Act, passed during his Presidency.

PELATIAH WEBSTER
"Paper money polluted the equity of our laws, turned them into engines of oppression, corrupted the justice of our public administration, destroyed the fortunes of thousands who had confidence in it, enervated the trade, husbandry, and manufactures of our country, and went far to destroy the morality of our people."

WILLIAM PATTERSON
"The bank hath benefit of interest on all moneys which it creates out of nothing."

POPE PIUS XI
"In the first place, then, it is patent that in our days, not wealth alone is accumulated, but immense power and despotic economic domination are concentrated in the hands of the few, who for the most part are not the owners but only the trustees and directors of invested funds, which they administer at their own good pleasure. This domination is most powerfully exercised by those who, because they hold and control money, also govern credit and determine its allotment, for that reason supplying so to speak, the life blood of the entire economic body, and grasping in their hands, as it were, the very soul of production, so that no one can breathe against their will."

IRVING FISHER
"Thus, our national circulating medium is now at the mercy of loan transactions of banks, which lend, not money, but promises to supply money they do not possess."

MAJOR L. L. B. ANGUS
"The modern banking system manufactures money out of nothing. The process is, perhaps, the most, astounding piece of sleight of hand that was ever invented. Banks can in fact inflate, mint, and un-mint the modern ledger-entry currency".

RALPH M. HAWTREY (Former Secretary of the British Treasury)
"Banks lend by creating credit. They create the means of payment, out of nothing."

ROBERT H. HEMPHILL (Credit Manager of Federal Reserve Bank, Atlanta, Georgia)
"This is a staggering thought. We are completely dependent, on the Commercial Banks. Someone has to borrow every dollar, we have in circulation, cash or credit. If the Banks create ample synthetic money, we are prosperous; if not, we starve. We are, absolutely, without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity, of our hopeless position, is almost incredible, but there it is. It is the most, important subject, intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse, unless it becomes widely understood, and the defects remedied very soon."

CONGRESSMAN LOUIS T. McFADDEN and former Chairman of the Committee on Banking and Currency.
" ... we have in this Country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks.... This evil institution has impoverished and ruined the people of the United States.... Some people think the Federal Reserve Banks are United States Government institutions. They are private credit monopolies which prey upon the people of the United States for the Benefit of themselves and their foreign customers. ..." "The Federal Reserve (Banks) are one of the most corrupt institutions, the world has ever seen. There is not a man, within the sound of my voice, who does not know that this Nation is run by the International Bankers". "Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks, hereinafter called the Fed. The Fed has cheated the Government of the United States and the people of the United States out of enough money to pay the Nation's debt.... The wealth of these United States and the working capital have been taken away from them and has either been locked in the vaults of certain banks and the great corporations or exported to foreign countries for the benefit of foreign customers of these banks and corporations. So far as the people of the United States are concerned, the cupboard is bare."

JAMES MADISON
"The prime function of government is the protection of the different and unequal faculties of men for acquiring property." "History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance." "The extension of the prohibition to bills of credit must give pleasure to every citizen, in proportion to his love of justice and his knowledge of the true springs of public prosperity. The loss which America has sustained since the peace from the pestilent effects of paper money on the necessary confidence between man and man, on the necessary confidence in the public councils, on the industry and morals of the people and on the character of republican government, constitutes an enormous debt against the States chargeable with this unadvised measure, which must long remain unsatisfied; or rather an accumulation of guilt, which can be expiated no otherwise than by a voluntary sacrifice on the altar of justice of the power which has been the instrument of it. In addition to these persuasive considerations, it may be observed that the same reasons which show the necessity of denying to the States the power of regulating coin, prove with equal force that they ought not to be at liberty to substitute a paper medium in the place of the coin."

Number 44 of the Federalist Papers. "Paper money may be deemed an aggression on the rights of the other states."

ALEXANDER HAMILTON
"To emit an un-funded paper as the sign of value ought not to continue a formal part of the Constitution, nor even hereafter to be employed; being, in its nature, pregnant with abuses, and liable to be made the engine of imposition and fraud; holding out temptations equally pernicious to the integrity of government and to the morals of the people."

ANDREW JACKSON
"If congress has the right under the Constitution to issue paper money, it was given them to use themselves, not to be delegated to individuals or corporations.

"The bold efforts that the present bank has made to control the government and the distress it has wantonly caused, are but premonitions of the fate which awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it...If the people only understood the rank injustice of our money and banking system there would be a revolution before morning."

FROM A SECRET AGENT - 1862
"Slavery is likely to be abolished by the war power and all chattel slavery abolished. This I and my European friends are in favor of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led on by England, is that capital shall control labor by controlling wages. The great debt that the capitalists will see to it is made out of the war, must be used as a means to control the volume of money. To accomplish this the bonds must be used as a banking basis. We are now waiting for the Secretary of the Treasury to make this recommendation to Congress. It will not do to allow the greenback, as it is called, to circulate as money any length of time, as we can not control that. But we can control the bonds and through them the bank issues."

ABRAHAM LINCOLN
"There should be no war upon property or the owners of property. Property is the fruit of labor; property is desirable; is a positive good in the world. That some should be rich shows that others may become rich, hence, is just encouragement to industry and enterprise." "I have two great enemies: the Southern Army in front of me, and the financial institutions to my rear. Of the two, the one in my rear is my greatest foe..."

"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.

"Yes; we may all congratulate ourselves that this cruel war is nearing its close. It has cost a vast amount of treasure and blood. The best blood of the flower of American youth has been freely offered upon our country's altar that the Nation might live. It has been, indeed a trying hour for the Republic; but I see in the future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war."

"I see in the near future a crisis approach which unnerves me and cause me to tremble for the safety of my country. Corporations (of banking) have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in a few hands and the Republic destroyed."

SALMON P. CHASE, (Lincoln's Secretary to the Treasury) who was the pilot of the 1863 banking act in the US never forgave himself, subsequently saying: "My agency, in promoting the passage of the National Bank Act, was the greatest mistake in my life. It has built up a monopoly which affects every interest in the country. It should be repealed, but before that can be accomplished, the people should be arrayed on one side, and the banks on the other, in a contest such as we have never seen before in this country."

OTTO VON BISMARCK, German Chancellor (1815-1898)
"The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt modern civilization."

LONDON TIMES -1865
"If this mischievous financial policy [of creating a debt-free currency], which has its origin in the American Republic, shall become permanent, then that government will furnish its own money without cost! It will pay off its debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous without precedent in the history of the world. The brains and the wealth of all countries will go to America. That government must be destroyed or it will destroy every monarchy on the globe!"

JOHN C. CALHOUN
"A power has risen up in the government greater than the people themselves, consisting of many and various powerful interests combined in one mass, and held together by the cohesive power of the vast surplus in the banks."

LEON N. TOLSTOY
"Money is a new form of slavery, and distinguishable from the old simply by the fact that it is impersonal -- that there is no human relation between master and slave."

Frederic Bastiat, The Law
"When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it."

WN. COBBETT
" I set to work to read the Act of Parliament by which the Bank of England was created in 1694. The inventors knew well what they were about. Their design was to mortgage by degrees the whole of the country, all the lands, all the houses, and all other property, and even all labor, to those who would lend their money to the State-the scheme, the crafty, the cunning, the deep scheme has produced what the world never saw before-starvation in the midst of plenty."

DARRYL R. FRANCIS, former President of the Federal Reserve Bank of St. Louis
"Since the direct method of printing money to finance government expenditures is prohibited in the United states, the monetization of government deficits has occurred indirectly... government debt is ultimately being financed by the creation of new money... I doubt that monetization of debt has a conscious act... I can find no benefits accruing to the whole of society from debt monetization, but the risks are very serious and can be expressed in one word, inflation" "In the case of debt monetization the immediate and even the short run impact is neither an increase in interest rates, and yet real resources are still being transferred from private to government use."

Page 24 "Federal Reserve System" Board of Gov.'s
"...in the practical workings of the banking system the bulk of deposits originates in the granting of loans..., and his ability to make loans and investments arises largely from the receipt of his depositorsâ money." "As we realize that banks create their own deposit debts...we begin to see why these institutions are often referred to as monetizers of debt..."

Federal Reserve Bank of Chicago, Modern Money Mechanics
"The actual process of money creation takes place in commercial banks. As noted earlier, demand liabilities of commercial banks are money.", p.3. "Confidence in these forms of money also seems to be tied in some way to the fact that assets exist on the books of the government and the banks equal to the amount of money outstanding, even though most of the assets themselves are no more than pieces of paper--.", P.3.
"Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU.", p. 19. "The 12 regional reserve banks aren't government institutions, but corporations nominally 'owned' by member commercial banks.", p. 27.

St. Louis Federal Reserve Bank, Review, Nov. 1975, p.22
"The decrease in purchasing power incurred by holders of money due to inflation imparts gains to the issuers of money--."

Federal Reserve Bank of Philadelphia, Gold, p. 10
"Without the confidence factor, many believe a paper money system is liable to collapse eventually."

Federal Reserve Bank, New York
"Because of 'fractional' reserve system, banks, as a whole, can expand our money supply several times, by making loans and investments." "Commercial banks create checkbook money whenever they grant a loan, simply by adding new deposit dollars in accounts on their books in exchange for a borrower's IOU."

Federal Reserve Bank of Chicago
"The actual process of money creation takes place in commercial banks. As noted earlier, demand liabilities of commercial banks are money."

ROBERT HEMPHILL (former Credit Manager of the Federal Reserve Bank in Atlanta)
"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash, or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless situation is almost incredible-but there it is."

WALTER WRISTON (former chairman of the Citicorp Bank)
"If we had a truth-in-Government act comparable to the truth-in-advertising law, every note issued by the Treasury would be obliged to include a sentence stating: "This note will be redeemed with the proceeds from an identical note which will be sold to the public when this one comes due." When this activity is carried out in the United States, as it is weekly, it is described as a Treasury bill auction. But when basically the same process is conducted abroad in a foreign language, our news media usually speak of a country's "rolling over its debts." The perception remains that some form of disaster is inevitable. It is not. To see why, it is only necessary to understand the basic facts of government borrowing. The first is that there are few recorded instances in history of government-any government-actually getting out of debt. Certainly in an era of $100-billion deficits, no one lending money to our Government by buying a Treasury bill expects that it will be paid at maturity in any way except by our Government's selling a new bill of like amount."

MERRILL JENKINS SR.
"The right of distribution over private property is the essence of freedom."
"Force- modern Money, then, has the power to create debt since it can command other goods, but is valueless itself. Money has purchasing power, but no value -- without purchasing power.. Fed. "Notes" must be accepted as a tender for debt, but are not "money" -- so therefore --do not have money's unique ability called purchasing power, what thing has purchasing power? what thing can force the public to offer its property and rights. Offer means to present for action or consideration; propose; suggest; it is a voluntary act. What thing can 'forceâ anyone into a voluntary act of offering. The words force and voluntary are exactly opposed and it is by the acceptance of this impossible concept of 'voluntary force' being 'purchasing power' that makes the public believe that something must be 'money' and have this unique power."

RUSSELL L. MUNK (former Assistant General Counsel, Department of the Treasury)
"Federal Reserve Notes are not dollars."

PRESIDENT JOHN ADAMS
"All the perplexities, confusions and distresses in America arise not from defects in the constitution or confederation, not from want of honor or virtue, as much as from downright ignorance of the nature of coin, credit and circulation."

THE CONSTITUTION OF THE UNITED STATES OF AMERICA
"No State shall enter into any treaty, alliance, or confederation; grant letters of masque and reprisal; coin money; emit letters of credit; make any thing but gold and silver coin a tender in payment of debts; pass any bill of attainder, ex post facto law, or law impairing the obligation of contracts, or grant any title of nobility." (Article I, Section 10)

U.S. Supreme Court, Craig v. Missouri, 4 Peters 410.
"Emitting bills of credit, or the creation of money by private corporations, is what is expressly forbidden by Article 1, Section 10 of the U.S. Constitution."

George Bancroft
"Madison, agreeing with the journal of the convention, records that the grant of power to emit bills of credit was refused by a majority of more than four to one. The evidence is perfect; no power to emit paper money was granted to the legislature of the United States."

JOHN FISKE
"It was finally decided, by the vote of nine states against New Jersey and Maryland, that the power to issue inconvertible paper should not be granted to the federal government. An express prohibition, such as had been adopted for the separate states, was thought unnecessary. It was supposed that it was enough to withhold the power, since the federal government would not venture to exercise it unless expressly permitted in the Constitution. "Thus," says Madison, in his narrative of the proceedings, "the pretext for a paper currency, and particularly for making the bills a tender, either for public or private debts, was cut off." Nothing could be more clearly expressed than this. As Mr. Justice Field observes, in his able dissenting opinion in the recent case of Juilliard vs. Greenman, "if there be anything in the history of the Constitution which can be established with moral certainty, it is that the framers of that instrument intended to prohibit the issue of legal-tender notes both by the general government and by the states, and thus prevent interference with the contracts of private parties." Such has been the opinion of our ablest constitutional jurists, Marshall, Webster, Story, Curtis, and Nelson. There can be little doubt that, according to all sound principles of interpretation, the Legal Tender Act of 1862 was passed in flagrant violation of the Constitution."

CONGRESSIONAL RECORD, MAY 11, 1972
"Some people think the Federal Reserve Banks are United States government institutions, they are not government institutions, they are private credit monopolies."

CONGRESSIONAL RECORD, JUNE 10, 1932, p. 12595
"The Federal Reserve Board, and the Federal Reserve Banks are private Corporations."

JOHN MAYNARD KEYNES, (chief architect of our current fiat-paper money system)
"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens" "If governments should refrain from regulation... the worthlessness of the money becomes apparent and the fraud upon the public can be concealed no longer" "Lenin is said to have declared that the best way to destroy the Capitalistic System was to debauch the currency... Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million can diagnose."

CHARLES LINDBERG
"Ever since the Civil War, Congress has allowed the bankers to control financial legislation. The membership of the Finance Committee in the Senate (now the Banking and Currency Committee) and the Committee on Banking and Currency in the House have been made up chiefly of bankers, their agents, and their attorneys. In this way the committees have been able to control legislation in the interests of the few."

"This Act (Federal Reserve Act) establishes the most gigantic trust on earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized... The worst legislative crime of the age is perpetrated by this banking and currency bill. The caucus of the party bosses have again operated and prevented the people from getting the benefits of their own government."

BENJAMIN DISRAELI (former British Prime Minister)
"The world is Governed by very different personages from what is imagined by those who are not behind the scenes."

WILLIAM JENNINGS BRYAN
"Money power denounces, as public enemies, all who question its methods or throw light upon its crimes."

JOHN F. KENNEDY
"The great free nations of the world must take control of our monetary problems if these problems are not to take control of us."

ERNEST HEMINGWAY
"The first panacea for a mismanaged nation is inflation of the currency; second is war. Both bring a temporary (and false) prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunities."

THE RT. HON. REGINALD MCKENNA (one-time British Chancellor of the Exchequer,
                 and Chairman of the Midland Bank)

"I am afraid the ordinary citizen will not like to be told that the banks can, and do, create and destroy money. The amount of finance in existence varies only with the action of the banks in increasing or decreasing deposits and bank purchases. We know how this is effected. Every loan, overdraft or bank purchase creates a deposit, and every repayment of a loan, overdraft or bank sale destroys a deposit." "And they who control the credit of the nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people."

JOHN B. RARICK
"Mr. Speaker, the current efforts by our Government to hold down price increases have served to focus the attention of thoughtful students on a little discussed facet of our money system, this system, because of a long procedure of mis-education and studied silence, is not now understood as it was prior to the adoption of the Federal Reserve system more than half a century ago. It is based upon debt; has serious implications for the future of our country, and invites what may be the greatest war in history. Every debt Dollar demands an interest tribute from our economy for every year that Dollar remains in circulation. These interest costs force up the price of every commodity and service and contribute greatly to inflation. ..."

"Under the Constitution, the Congress has responsibility of issuing the nations money and regulating its value Art. 1, Sec 8, Cl. 5, in a recent brilliant analysis of our money system by T. David Horton, Chairman of the Executive Council of the Defenders of the American Constitution, able Lawyer and keen student of basic American history, he suggests a proven remedy for our current predicament that will enable the Congress to resume its Constitutional responsibilities to regulate our nation's money by liberating our economy from the swindle of the debt-money manipulators by the issuance of national currency in debt fee form. We have a certain amount of non-interest bearing money in circulation, all of our fractional currency, pennies, nickels, dimes, quarters, and half dollars. They are manufactured in our mints, and are paid into circulation, circulate freely, and provide the government with a valuable source of revenue. From 1966 through 1970 the amount of seignorage paid into the treasury by the mints amounted to in excess of 4 billion dollars the profit ratio on this type of currency is 6 to 1, or currency 6 times the cost of production. The cost ration for Federal Reserve Notes is 600 to 1; However, during these same four years, 1986 through 1970, 50 billion dollars in Federal Reserve Notes were manufactured by the bureau of printing and engraving and turned over to the banks; not one cent in seignorage was paid over to the treasury. Our Debt money system compels the government to spend more than it takes in, because this is the only way we can keep the economy going"

GEORGE WASHINGTON
"Every lover of his country will therefore be solicitous to find out some speedy remedy for this alarming evil. There is no possible substitute for the loss of commerce. Our first grand object, therefore, is its restoration. I presume not to dictate or direct. It is a subject that will require the deepest deliberations and researches of the wisest and more experienced men in America to fully comprehend. It probably belongs to no one man existing to possess all the qualifications required to trace the course of American commerce through all intricate paths and to those and only those that shall lead the United States to future glory and prosperity I am sanguine in the belief of the possibility that we may one day become a great commercial and flourishing nation. But if in the pursuit of the means we should unfortunately stumble again on un-funded paper money or any similar species of fraud, we shall assuredly give a fatal stab to our national credit in its infancy. Paper money will invariably operate in the body of politics as spirit liquors on the human body. They prey on the vitals and ultimately destroy them."

"Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice." (letter to J. Bowen, Rhode Island, Jan. 9, 1787)

JERRY JORDAN (Cleveland Fed Reserve Bank President)
"The failed attempts at influencing real economic activity during the late 1960's and 1970's are a clear warning of the damaging power of the central bank."

DENNIS KARNOFSKY (Chief economic adviser St. Louis Federal Reserve Bank)
"...what is a dollar its just something artificial we throw out there...what you're doing is you're fooling people."

LAWRENCE PARKS (Executive Director, FAME)
"Bypassing voters, taxpayers and the public at large, Congress has delegated to the Fed a power that the Congress itself does not have."

LUDWIG VON MISES
"Government is the only agency which can take a useful commodity like paper, slap some ink on it and make it totally worthless."

DANIEL WEBSTER
"No other rights are safe where property is not safe:" "Of all the contrivances devised for cheating the laboring classes of mankind, none has been more effective than that which deludes him with paper money. "We are in danger of being overwhelmed with irredeemable paper, mere paper, representing not gold nor silver, no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people."

MERRILL M. E. JENKINS SR. M.R.
"The right of distribution over private property is the essence of freedom."

THE BIBLE
"If thou lend money to any of my people that is poor by thee, thou shalt not be to him an usurer, neither shalt thou lay upon him usury." Exodus 22:25

"Take no usury of him, or increase...thou shalt not give him thy money upon usury." Leviticus 25:36-37

"Unto thy brother thou shalt not lend upon usury: That the Lord they God bless thee." Deuteronomy 23:20

"The rich rule over the poor, and the borrower is servant to the lender." Proverbs 22.7

"The stranger that is within thee shall get up above thee very high, and thou shalt come down very low. He shall lend to thee, and thou shalt not lend to him; he shall be the head, and thou shalt be the tail." Deut. 28:44-45

PELATIAH WEBSTER
"Paper money polluted the equity of our laws, turned them into engines of oppression, corrupted the justice of our public administration, destroyed the fortunes of thousands who had confidence in it, enervated the trade, husbandry, and manufactures of our country, and went far to destroy the morality of our people."

BENJAMIN FRANKLIN
"The refusal of King George to operate an honest colonial money system which freed the ordinary man from the clutches of the manipulators was probably the prime cause of the Revolution." "The Colonies would gladly have borne the little tax on tea and other matters, had it not been that England took away from the Colonies their money, which created unemployment and dis-satisfaction."

THOMAS JEFFERSON
"The system of banking we have both equally and ever reprobated. I contemplate it as a blot left in all our constitutions, which, if not covered, will end in their destruction. I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." "The eyes of our citizens are not sufficiently open to the true cause of our distress. They ascribe them to everything but their true cause, the banking system; a system which if it could do good in any form is yet so certain of leading to abuse as to be utterly incompatible with the public safety and prosperity. I sincerely believe that banking establishments are more dangerous than standing armies... and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

"... we must not let our rulers load us with perpetual debt. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessities and comforts, in our labors and in our amusements, for our callings and our creeds our people must come to labor16 hours in the 24, give the earnings of 15 of these to the government for their debts and daily expenses; and the 16th being insufficient to afford us bread. We have no time to think, no means of calling the mis-managers to account; but be glad to obtain subsistence by hiring ourselves, to rivet their chains on the necks of our fellow sufferers. Our land holders, too, retaining indeed the title and stewardship of estates called theirs, but held really in trust for the treasury, this is the tendency of all human governments. A departure from principle becomes a precedent for a second; that second for a third; and so on, till the bulk of society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering. And the fore horse of this frightful team is public debt. Taxation follows that, and in it's train, wretchedness and oppression."

"I believe that banking institutions are more dangerous to our liberties than standing armies. Already they have raised up a money aristocracy that has set the government at defiance. This issuing power should be taken from the banks and restored to the people to whom it properly belongs. If the American people ever allow private banks to control the issue of currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers conquered. I hope we shall crush in its birth the aristocracy of the moneyed corporations which already dare to challenge our Government to a trial of strength and bid defiance to the laws of our country."

"I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale."

GEORGE BANCROFT
"Madison, agreeing with the journal of the convention, records that the grant of power to emit bills of credit was refused by a majority of more than four to one. The evidence is perfect; no power to emit paper money was granted to the legislature of the United States."

THOMAS A. EDISON
"People who will not turn a shovel of dirt on the project, nor contribute a pound of material, will collect more money, from the United States, than will the people, who supply all the material and do all the work. This is the terrible thing about interest (usury). But here is the point: If the nation can issue a dollar bond, it can also issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference, between the bond and the bill, is that the bond lets the money-broker collect twice the amount of the bond, and an additional 20%. Whereas the currency, the honest sort, provided by the Constitution, pays nobody, but those, who contribute in some useful way. It is absurd, to say that our country can issue bonds, and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the people. If the currency issued by the people were no good, then the bonds would be no good, either. It is a terrible situation, when the Government, to insure the national wealth, must go in debt and submit to ruinous interest charges, at the hands of men, who control the fictitious value of gold. Interest is the invention of Satan."

F.A. HAYEK
"The history of government management of money has, except for a few short happy periods, been one of incessant fraud and deception."

DR. PAUL HEIN
"Freedom and fiat are incompatible; slavery and scrip are bedfellows."

"Inflation (caused by paper money) is an evil which exerts its baleful influence throughout society. Gold and silver were gifts of God, and, short of the labor required to obtain them, were ours free. They didn't have to be returned to the source, much less with interest! Inflation, on the other hand, is borrowed into existence from a privileged clique who, by the very nature of the process, enslave those who use it."

Treasury Secretary Woodin, 3/7/1933
"Where would we be if we had I.O.U.'s scrip and certificates floating all around the country?" Instead he decided to "issue currency against the sound assets of the banks. The Federal Reserve Act lets us print all we'll need. And it won't frighten the people. It won't look like stage money. It'll be money that looks like real money." The Bank Holiday of 1933, p20.

John Kenneth Galbraith
"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it." Money: Whence it came, where it went - 1975, p15. "The process by which banks create money is so simple that the mind is repelled."
Money: Whence it came, where it went - 1975, p29.

BOB PRECHTER
"I cannot morally blame all Americans for allowing, for instance, the birth of the Federal Reserve System (a private cartel with full control over the issuance of national debt) and the money destruction that has followed. They are simply ignorant about it and don't know what happened or what is happening. They think that prices go up rather than that dollars go down. Unsound money imposes an environment of immorality, which in turn makes people behave in different ways for reasons they know not. Sometimes you can blame immorality for the imposition of bad structures (bad people do it with full knowledge of what they are doing), but sometimes it is simply stupidity. People revere democracy, but democracy ends in plunder by the majority. Are people immoral for supporting democracy? I think rather that they lack a deep understanding of its essence. At a very deep level, I would say that the reason such structures are created is due to both a lack of knowledge and a false morality, which in turn is due to a lack of knowledge."

REP. HOWARD BUFFETT
"The gold standard acted as a silent watchdog to prevent 'unlimited public spending.' Our finances will never be brought in order until Congress is compelled to do so. Making our money redeemable in gold will create this compulsion." " When you recall that one of the first moves by Lenin, Mussolini and Hitler was to outlaw individual ownership of gold, you begin to sense that there may be some connection between money, redeemable in gold, and the the rare prize known as human liberty. Also, when you find that Lenin declared and demonstrated that a sure way to overturn the existing social order and bring about communism was by printing press paper money, then again you are impressed with the possibility of a relationship between a gold-backed money and human freedom."

ALAN GREENSPAN
"The abandonment of the gold standard made it possible for the welfare statists to use the banking system as a means to an unlimited expansion of credit. In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value... [Gold] stands as a protector of property rights. This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the "hidden" confiscation of wealth. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Chart 1

The J. Henry Schroder Banking Company chart encompasses the entire history of the twentieth century, embracing as it does the program (Belgium Relief Commission) which provisioned Germany from 1915-1918 and dissuaded Germany from seeking peace in 1916; financing Hitler in 1933 so as to make a Second World War possible; backing the Presidential campaign of Herbert Hoover ; and even at the present time, having two of its major executives of its subsidiary firm, Bechtel Corporation serving as Secretary of Defense and Secretary of State in the Reagan Administration.