WHAT IS WAR, ---AND WHY?
Note: The following was sent to his minister son-in-law, R.N.Stumpf, by
M.I.McCreight on Dec. 9, 1945, with notation "My today's sermon-M.I.M."
To
an oldster who has lived through four of them nearby, and has had an
active part in one, the picture-compositive, is something like this:
A
few of us--politicians and statesmen (?) make the laws to govern us;
they say when war is to be fought--with whom and how--and then, they
enforce their own made laws on the rest of us to do the fighting. And
then enforce their own laws on the rest of us to pay the bill. It is
not the people who want to fight each other--not at all--if that were
the only reason for war, there would be none at all; masses of people
do not get angry enough at other masses of people to take up guns and
shoot them, or be shot at by them; that is not human nature! It is only
because we let a few politicians--whom we elect and pay big salaries
to,--make rules for us and become tyrannical bosses regarding war. Big
Business and Big Politics, not the masses, make wars--and compel the
masses to fight them. Politicians who make the laws exempt themselves
from service--they merely tell the rest of us to do the fighting, and
defy us to refuse to obey--then settle the case with a firing squad at
9 A.M.
And, it is all because we have not common sense enough to
manage affairs in a better way--or because we think other nations are
not competent to manage theirs in a better way--and thus arises
conflict of opinion,--and that is notice to the pluto politician to
order out the military,--under the power we therefore gave him--and war
is on.
But, when the war is over the same crowd tries to enforce
peace--and that is a bigger job than to enforce war itself--too many
sore spots in too many places--and so war goes on--and on, until the
people can no longer carry the costs,--until all are exhausted,--and
all bankrupt! And that is just the situation today!
World War II
was a hideous and inexcusable blunder on the part of all world peoples!
Looking back upon it, all the peoples of the world wish it had not
been--all have paid dearly for their mistakes--and hope it will be the
last.
And, we of America, because of our riches, came out best;
we boast of it. We call ourselves free, and our plan of management, a
free country--a republic. Once in four years, the people have a chance
to select a manager-not their own choice, but one of two selected by
the politicians who fix and pay themselves big salaries levied as taxes
against the people in billions every year. It is the plan we made for
running our country--and we cannot complain; we, at least have this
opportunity to change it to some degree, which few other countries can.
To
look out upon the world after four years of war, when all the efforts
of all the people was directed to the slaughter of each other and the
destruction of property, is bewildering to the human mind! It is not
understandable to civilized man! Yet, it was the most highly civilized
nations who began and carried through the diabolic crusade that brought
ruin to a progressive race! Kings, presidents and dictators, each with
a different set of rules, each determined to lead---and the others
follow.
Murderer Hitler snaked his way into power amongst the
Germans, got possession of the books, banks and cash, assumed
dictatorship, picked his own gestapo, killed off his ambitious
competitors, and proceeded to bring the rest of the world under his
personal domination---that was World War II. And what a price to
prevent it! A thousand years of peaceful progress of the population of
the earth, the slaughter of millions of men, the destruction of their
properties centuries in the making, and leaving them in despair,
starvation and death in a desolated world! An awful penalty to pay!
And
that price was the cost of stopping one man's attempt to force his own
rule of law and management upon other people! Terrible to contemplate
in a civilized age! We can and do, boast of having stopped him, but we
now grope in a wilderness of wreck and ruin, facing the task of
reconstructing a broken world filled with remnants of broken men and
women,--a task greater than fighting and winning the war. And the cost
will be as great or greater if it can be done! And it falls largely if
not wholly upon us--U.S.A.
Beginning to write, the author asked
himself,--'What is War and Why' and the answer seems to be beyond
analysis. Whether Science and Theology proves or not, the Biblical story
of the creation of Man and Animals is as logical as any; with the
overpowering instinct of 'survival of the Fittest' as a primary
characteristic of all. We say and try to believe,--that Man was given a
higher order of intelligence. That has not yet been wholly proven, for,
as we look back over the late war, the savagery with which it was
conducted, could not have been exceeded by any rabid beast!
Physically,
we need but compare a man, or even most women, with their ugly crooked
legs and feet, hairy breast, Simian faces and ears,--to the beautiful
figure of the cat, dog or horse, or to the graceful form of the
leopard--and for intelligence in managing his life,--not superior to
any of them. In the insect world, where is man to match the wisdom of
the ant or the bee--and for beauty of dress none can parallel that of
the peacock, the hummingbird, the wood-duck or the ring-neck pheasant!
Only Man, fails to appreciate that God-given intellect and the
incomparable splendor and charm of animal, insect and bird life! He
sinks below them in intelligence, succumbs to savage instinct, and
kills them on sight! He does what their intellect forbids them to do.
How then, can we hold that Man is superior in intelligence--we proclaim
it but it is not true!
At a cost of billions, we produced and
launched upon an unsuspecting people, killing a hundred and a half
thousand of them in a flash! Can it be conceived that this was the
result of superior intelligence?--rather it was superior
savagery--brutality far beneath any attributable to the animal kingdom!
God, did not--would not, approve such an engine of destruction--nor its
use against any of His creatures that make up life on earth! Why then,
should Man pose as superior to his Maker? He has provided himself means
to destroy all animal and human life--and the very earth itself; will
his intelligence let it survive?
NEW YEARS, 1923, THE WIGWAM To Members of the Tribe
They ask you who I am and where I live. Pray tell them
I'm a brother to the last great chieftain of the Sioux, - inglorious
remnant of once proud and happy owners of this vast country.
My wigwam stands a crown upon her mountain foothills
where to the east I witness the rising sun creep shade out of the
Unknown and spread ethereal gladness over the pall of night and paint
o'er all a scene entrancing, - serene and holy, radiant in a splendor
that tells a tale of things supreme.
And looking west I see her sink down midst stately
trees as if entangled and was rending her to shreds. Follows then the
twilight and the whippoorwill, mournful messenger of dying day, - the
harbinger of night.
Lest one becomes despondent at dissipation of these
glories of the day, oft comes the silvery moon to pierce the darkness
and fill the landscape with soft and glow sweetly serene.
From our tepee we see the struggles of Mother Nature
when she marshals her storm clouds and posts her titanic troops of war
in battle array across the heavens. The flash and boom of her artillery
make music for the gods, while the distant rumble of her giant drums
lull to sleep the angels. And when command and action comes she opens
battery of brass and bronze that sends the universe atrembling as if in
her majestic madness she would destroy it all.
Then passion ends in sadness and remorse as forth she pours her
lamentations in a flood of tears seeming the very earth to wash away.
And so when field and forest and flowered glen and all the living
things in air and earth are drenched in deepest gloom, an unseen hand
with magic wand waves curtain clouds aside to let the smiling sun peek
from behind her battlements and flood the panorama with a message of
love and forgiveness; a kiss upon earth's eyelids brings to life and
happiness the things she call her own.
Forth from the Council Lodge behold the Red Man's world
again in peace and joy and gladness; all Nature's family outstriving
every other member in answer to Her call to be; each working out the
aim and purpose of Her creed; busy and happy in the smile of summer's
sun. From here we witness all Nature's life and death; we see her
birth, her growth and here we watch her die. We see the wither and
decay of all her beauty but know not the mystery that enshrouds it all.
We see the flight of birds, the fading flowers, the waning light and
falling leaves. We see the turn of green to brown, the lowering heavens
and the chill blasts of winter when the great white blanket covers all
for the long sleep; and we know that Mother Nature's resurrection will
occur again at the rising of next Summer's Sun.
SNAKE TRACK
About three weeks ago a man came out to pick pears from the ground. He
said that he met a snake, a big black one, on the road at the big curve
coming through the woods. He said it was five feet long and thick as
his wrist.
That was a pretty big snake.
This morning when I got up and went for a bucket of coal, I saw the
track. I traced it from below the big oak on the road, the War Trail,
back up and around the kitchen window, between the cistern and the
garden, on across the lawn to the corner of Bart's house and then to
the road past the garage and on to the road leading down the hill.
I got the shotgun and followed it clear to a point where it left the
road and went down to Moroni's house next to the Osburn barn. Its tail
was just like a 2-inch garden hose had been pulled through the snow. I
had to leave it and help the plumber fix the boiler pipe and door. I
could not follow it longer to see if it went back down the big road or
if it came that way.
I've got to watch for it now and when you can get here we might know
where to look for it and shoot it. I phoned Monella's to look out for
it. I never supposed that a snake crawled in the snow but kept in its
burrow all winter. And so we learn about wild things all the time. It
was a snake, all right. Nothing else could make a track like it.
Nov. 19, 1949 - M. I. McCreight - Tchanta Tanka
WHAT IS THE MATTER WITH MODERN BANKING?
By an Old Time Banker FARCICAL FINANCES
Modern Banking as Compared to Old Time Banking
By M.I.McCreightWhat Is The Matter With Modern Banking
A Round-Table Discussion On American Banks, Old and New of Particular Interest to School and College Students
Friendly
Round-Table discussion of banking's place in the economic affairs of
the country, an effort to eliminate confused thinking on the subject of
money and banking.
At a modern college, the
class in Finance recently invited a member of the Old Guard in banking
to address it on the subject of old-time banking as related to modern
banking. Instead of the formal lecture daily heard from the expert
professor, this was to be a friendly "round-table" discussion of banks'
place in the economic affairs of the country. By way of introduction of
the gray-haired pioneer of a half century experience in country
banking, the class leader announced their desire to try to clear up
confused thinking on the subject of money and banking and proposed a
series of simple questions, beginning with:
Q.--What is money, and why?A.--Originally,
money in Africa was ivory and slaves; in Mexico, featherwork, silver,
paint, etc: in North America, shell wampum; in Europe, bronze, iron,
gold or what have you. Anything of small compass easily carried, such
as gems, etc. As civilization came, gold, silver, bronze and brass
metals were stamped as coins indicating fixed value or price tokens
for exchange in payment of merchandise or debt. The reason for adopting
such tokens or money was merely a convenience in trade or the
simplification of barter. Money then, had no value in itself, and has
none now, except as gold or silver has value when modeled into some
desirable and useful thing, as a watch, vase, dentistry and adornment. Q.--How and why were banks first conceived? A,--It
is well to remember that highly civilized races lived and prospered for
thousands of years before banks were known; a bank, as we know it, is a
relatively modern institution. We must give credit to the Jew--if
credit is due anyone--for first discovering how to get something for
nothing; he was noteworthy for seeking a living without the hard labor
of rending it from the soil; he used his head rather than his hands; he
was by nature, a trader. Expert in merchandising, the Jew found himself
constantly accumulating coin beyond his need for trading; to avoid
annoyance and danger of carrying it on his person or hiding it in
doubtful stongholds, he began depositing it with the London goldsmith
for safety and convenience; the goldsmith saw his chance to get
something for nothing by loaning out some of the gold to his friends,
who always returned it, and with it, a gratuity for the accommodation.
Why labor when he could make a better living by loaning other peoples'
money? Q.--Did our present system of
credit grow from this?>P>A.--The goldsmith's practice of letting
his friends have the use of his depositor's gold for a limited time was
to hand out the amount in gold, which in due course was returned in
gold, was improved upon by the goldsmith honoring written orders of the
borrower; this saving him the trouble of taking out the coin and
carrying it about on his person; this was so much more convenient that
others took advantage of it, and soon money exchanges were opened by
firms to accommodate those engaged in merchandising. This was the
beginning of the art of creating something for nothing and selling it
at a profit--making credits and selling them--modern banking. Q.--What period in history? A.--It
may be fairly said that modern banking began with the chartering of the
Bank of England in 1694; and that, it must be remembered, was two
hundred years after America was discovered--nearly seventeen hundred
years after the time of Christ, and when human history was five
thousand years old. Q.--Where does America come into the picture? A.--In
the two centuries before, the Bank of England was doing very well, thank
you! Massachusetts, New York, Virginia and Florida were flourishing,
with tobacco, beaver skins, corn, tallow and beeswax for money. William
Penn was rapidly developing Pennsylvania, and Maryland was going
strong--all without any banks. In the first months of Penn's
administration, an Act was passed making hides, lumber, grain, corn,
tobacco and flaxseed legal money. The thirteen original colonies were
well settled and prosperous; the Revolution was fought and won;
articles of confederation, and finally the long-debated Constitution
was adopted making them into the United States of America--a time almost
a hundred years AFTER the bank was first chartered in England. And all
this was accomplished in America, without any banks whatsoever! Q.--When and why did U.S.A. authorize banks? A.--For
eight years there had been in effect thirteen different governments
with thirteen different kinds of money, without any binding and
enforceable agreement uniting the colonies in one common cause, the
Revolution was carried on at great disadvantage and suffering. Each
colony furnished and subsisted its portion of troops, but there was no
common treasury and no authority existed to raise money or establish
credits for the support of the army and its campaigns Toward the end of
the war an attempt was made to do so, and a currency was issued on the
credit of the combined colonies, called Continental Currency; but as
each colony had already issued Bills of Credit beyond ability to pay,
there was little to sustain the Continental Currency, and it rapidly
went into depreciation, and became worthless as a circulating medium.
From this incident came the expression: not worth a Continental. But,
in spite of the lack of money and credit facilities, the war was won.
After the adoption of the articles of confederation, Hamilton urged the
refund of these war debts into a general Colonial debt, and the Bank of
North America was organized to facilitate this work. Then, as always,
there were profiteers who became rich in buying up these outstanding
war debts at outrageous discounts and paying themselves through the
bank, at par. Thus, in 1781,the "money changers" invaded the temple in
America--and have held possession ever since. Q.-Do
we understand that banking thereafter became a part of United States
history?--A vital influence in her economic or political life? A.--Yes,
and a very important part; the new government started out in debt, and
with the new bank, began its career with the machinery for increasing
public debts as, if, how and when the politician decided. There were
two or more factions then as now, claiming the sole right to govern;
Hamilton represented the class we now call the "money power" and
Jefferson stood for the ones we now refer to as the "Common
People,"--and Washington stood for both sides. The Constitution, in
effect from 1787, provided that Congress provide a system of weights
and measures; coin the money and fix the values thereof; the dollar
took the place of the pound; a mint was established at Philadelphia for
stamping the English guineas and Spanish jo into gold and silver
dollars; here was brought goodly supplies of old family plate,
earrings, watch cases, broaches and bracelets to be melted down into
useful coin. But it was not enough to carry on the business of the new,
vast and vigorous nation just beginning to exploit a great continent.
Britain, the mother country, was reaching over the world for trade; why
not follow her financial policy? And we did. Q.--Was not a bank a real necessity in such a situation? A.--There
was loud and insistent clamor for more money and for credit; for
shipping, for building roads, for merchandising and for settling the
frontier, which required military protection from the Indians. To meet
this demand, Congress authorized the establishing of the United States
Bank in Philadelphia. It was given wide powers and used them. It was
given power to issue money. This was the first real important violation
of the newly adopted Constitution. The Congress dodged its
constitutional obligation to create the country's money and regulate
its value. It handed over that duty to the bank which it had chartered
for ten years and which was largely owned and operated by private
persons. This placed the control of the peoples' money and credits in
the hands of the bankers--the very thing that the framers of the
Constitution and all the states, by its adoption, had deliberately
placed in the sole power of Congress. Q.--Was this the only bank? When did other banks come? A.--The
United States Bank was not approved by several of the states, which saw
a great money monopoly to grow from it, in the interest of the few who
owned and controlled it, and so the states chartered banks in great
numbers; these banks also issued currency, and so again there was
confusion in the conduct of trade. The War of 1812 came on with England
trying to destroy the growing prosperity of the infant government and
to gain control of its trade and finances; fighting ended with the new
country much involved, and, as the former bank's charter had expired,
the Congress created a new one in 1816; this was the so-called Second
United States Bank, and its charter was for twenty years and had the
handling of all government business; to most all effect, it was the
government. Through its possession of all public funds, it was
practical dictator of government activities, and could control and
regulate the use of money and credits of all the people; it could and
did substantially dictate to the state banks, what they might or may
not do; it became so powerful that President Jackson said it must be
destroyed or or it would destroy the government. Its life came to an
end in 1836 when Congress refused to renew the charter. Then Jackson
walked across the White House lawn, stuck his cane into the ground and
ordered the building of an independent United States Treasury on that
spot, and there it stands today. Q.--What happened then? A.--Panic
followed the sudden closing of the big institution, and there were
"hard times" for a few years; the bank crowd was sullen and defiant,
and while they had the money, Jackson had been elected and still
represented the common people, and the people were violently opposed to
centralized control of their money and their credits. With the
adjustment of the new method of handling public funds through an
independent treasury, the state banks participated in the vast volume
of funds which had formerly been limited to the bank now closed, and
more and more local banks were established; as a consequence the
country prospered more than ever. It was the period of canal, highway
and railroad building, and the rapid addition of new states, as the
course of Empire took its way westward. Then came the slavery
agitation, finally ending in a split between the north and the south
and the Civil War was on. Q.--How was it financed? A.--The
big United States was suddenly divided into two countries. The North's
finance and economic machinery was demoralized; the South had to set up
a new government and a new financial system; both had to raise armies
and support them in the four long years of bloody struggle--one that
never should have been. The North was in possession of the public
treasury and the public affairs at Washington, and it had a great
advantage, both in credits and access to loanable funds, and it
borrowed heavily; the South could borrow only from its own people whose
loaning power was limited, and commanded a higher rate of interest.
When the Federal Government's credit was nearly exhausted and its bonds
could no longer be sold, Mr. Lincoln exercised his constitutional
right, and issued government money to meet the strain of keeping the
army fed and clothed, and the other government expenses which
constantly increased as the war progressed. This was the "greenback"
money, much criticized by the bankers because it was not especially
redeemable in coin; merely the open promise of all the people to redeem
it, without interest. But President Lincoln saw that a government note
without interest was just as certain of redemption as a bond with
interest could be--and he was right, for these greenbacks were in
circulation for fifty years after the war was over. Q.--In
reorganizing after the Civil War, like was done after the Revolution
and the War of 1812, why was not a New United States bank established,
or was one not necessary? A.--Past
experience had been disastrous for the country in trying to manage
finance and banking from one central institution, and the people were
on record against it. But government credit was low and there was great
need for some plan that would rebuild it, and a new scheme was advanced
by Secretary Chase to accomplish that necessary thing , and in 1864 the
National Bank Act was passed by Congress. Q.--What was the National Bank Act and was it necessary? A.--Financial
interests were opposed to the government issuing money which did not
have provision for its redemption in coin; they wanted to control money
issues through the banks, since that meant the control of credit and
credit was their business and big source of profit. They did not
cooperate with Mr. Lincoln--and as a consequence public credit
suffered; becoming more and more difficult to maintain as bonds
depreciated and fear spread. Banks cooperated to control the stock of
gold, in which they were in position to dictate to the President. To
secure their favor and aid in bolstering public credit, the National
Bank Act was proposed and passed by Congress. The new Bank Act--whether
wise or not wise--was a surrender to the bankers. It provided legal
means for making extra profits but it compelled those taking out
Federal charters for banks to buy government bonds; when they did this
they were permitted to deposit the bonds with the government and
receive an equal amount in currency which they could loan out at
interest; thus they drew double interest on that sum--on the bonds from
the government, and on the currency which they loaned out; there were
many other ways under these charters to make profits, but there were
provisions in the act for certain regulations by the government, and
periodic examinations by government representatives called examiners. Q.--Did this solve the money question? Slow
to take effect, but when once started, banks were organized in all
parts of the country under the new law; the secured national bank notes
soon became popular and facilitated business and extended credit widely
and rapidly; the forced purchases of government bonds stabilized their
prices and there was great national progress for a few years. But the
bankers were not content. They hoarded gold and looked upon the paper
currency as unsound as long as it was not redeemable in gold; those of
the international class held the corner on gold; they envied the vast
development that was carried on with currency backed only on government
faith and credit. Before ten years had passed the country was torn
almost to shreds with the money quarrel over gold, in 1873. European
trade required gold for settlements of imports and exports, and
naturally there was more or less difficulty in this country when it had
a credit money system. The international bankers, controlling gold and
international trade and credits refused to cooperate with Federal
authorities to sustain the vast credit grown out of and depending on
credit money--and so the panic came. As price for their aid in
reconstructing the ruined commerce and trade of the country, the
bankers demanded a hard money base for U.S. currency, and a forlorn
Congress yielded. Q.--What is meant by the term "wealth?" A.--Wealth
is property one has left, if any, after allowing for interest charges,
taxes and depreciation of values. Or, in the case of individuals,
wealth may be in money, so long as the government is able to make it
good for exchange into property. National wealth is the collective
assets of all the people, less the debts of all the people. National
net income is the value of all the peoples' earnings after deducting
all the costs of production including interests on credits. Q.--What is the government's income? A.--The
government has no income; it does not produce wealth; it only consumes
wealth; it draws it support from the people in the form of assessments
called taxes; in the last few years it has failed to collect enough
taxes to support itself, and has created debts by borrowing money from
the people on which it pays interest, now amounting in all to about
forty billion dollars, or, nearly double what it was six years ago;
this enormous debt must be paid by the people. Each man, woman and
child in the United States, owes public debts of more than $400. Thus a
man with a wife and family of five children--seven in all--must count
himself in debt $2,800, before he may begin to consider his personal
desire and opportunities to do business, for in selling him credit, the
banks must count this sum in his liabilities. Q.--How
did it happen that the country grew into such a wonderful nation after
the Revolutionary War and was prosperous until long after the World
War, since we had banks all through that time? A.--During
all that time, we had what is known as Constitutional Government; the
people ran their own business; they were free to do what they wished, so
long as they did not interfere with the rights of others; they
organized and managed their own local banks for the needs and
upbuilding of their own local communities; the people lived on the
basis of home rule in all things--and they prospered. Everybody was
interested in the home town and in their state and in their country;
they established local industries with local capital and kept the
payroll money at home, and with the profits, built more industries and
more payrolls, thereby constantly creating more wealth. And it was this
kind of government and banking that made the United States the greatest
nation in the world. Q.--What took place to stop that progress? A.--During
the year 1907 there had been a bankers' panic caused by a shortage of
currency. The eastern industry was active and required large sums of
cash to make up payrolls for the manufacturers; at the same time the
western harvests were under way and it took large sums of actual
currency to keep the pay of the great army of harvest hands, who were
constantly on the move, paid up; this caused a shortage, and with the
failure of a large New York bank, a panic ensued making it necessary to
resort to clearing house certificates, and token money for a time. But
the trouble was soon over. This scarcity of real currency for payrolls
started a campaign amongst bankers for laws to prevent its recurrence;
it was for the establishment of a bankers' bank which could in time of
emergency re-discount bankers' loans and issue emergency currency to
meet such emergency, and to be retired when the special need was over. Q.--Why was such a bank not established? A.--Because
there had come a change in the Federal Administration; Woodrow Wilson
was elected president. Instead of enacting a law for one bank with that
one object in view, the Democratic leaders greatly enlarged the plan
and provided twelve great banks with much wider powers, with a
supervisory board over all of them with headquarters in Washington. The
Act was passed in 1913, and had hardly begun to operate when the World
War was on in Europe. The effect of this new system was to centralize
power over all the fiscal affairs of the country; it was supposed to
prevent the possibility of recurring depressions; there would be no
more panics and no more hard times; the bankers said so; they yelled it
from the housetops, and the people believed them. Four years of trial
of the new system proved that great possibilities for expansion of
currency and credit if needed, could be worked through its expert
manipulation, so when war seemed inevitable, there was no fear for
necessary financing of it through to the end. Before the declaration of
April, 1917, officially taking the country into the foreign struggle,
the new bank act had been tested and was not wanting in making huge
advances to the allies and for making war munitions for them--and
incidentally--millionaires in great numbers. Q.--Without the Federal Reserve System would we have gone to war? A.--Not
likely. Certainly we could not have joined on a big scale. With the
former independent banks, controlled and managed by local owners, there
could not have been raised the vast sums that it cost to raise, equip
and train a vast army, transport it three thousand miles and maintain
it, along with much of the maintenance cost of allied forces, during
the rest of the war and long after. Had it been dreamed that such
unheard of sums were to be expended by going to Europe's war, this
country could not have been induced to join. But when into the fight,
there was no limit placed on the new finance machine. The mess made out
of our entry into the World War is too deep and sad to need relating.
Estimates show that it cost fifty billions in money and thousands of the
best men the country had. Now, after twenty years, loans made to the
countries saved from defeat, remains at thirteen billions, with little
prospect that it will ever be repaid. Q.--Can
you explain to us why our country was prosperous for years after the
World War as over and then suddenly crashed in a tailspin? Was the
banking system responsible for it? A.--Yes. It
was not alone the mismanagement of a bad system that held us like a
plane suspended in mid-air during the war and for years after, without
a parachute, and then exploded; and it is not difficult to explain why.
Experience in the war itself was bad enough; it was a bitter lesson for
the American people, but a more bitter lesson was to come, apart from
the war itself-- a fifty billion dollar loss. The terrifying debt built
up during the mismanaged war venture in Europe frightened the Federal
bank system into adopting a most unwise attempt to force a prompt
liquidation of the overextended credits it had encouraged and granted.
Much of this credit was to farmers and stockmen who had constantly been
incited to raise more and more grain and meats to feed the army; it was
preached to them daily that only food could win the war--and the
farmers and stockmen met the call--and won the war. In return for their
patriotism, the Federal Reserve officials sent out the order to all
local banks to call loans and reduce credits in a forced campaign to
liquidate the war debt. At the same time, Federal bank credits were
substantially closed to all member banks. The results of this policy was
to cause the wreck of practically the whole of the grain raising states
and the wiping out of the livestock industry; and the failure of
hundreds of inland city and country banks. The loss and suffering thus
imposed on a large part of the country's population was greater that
that caused by the World War. Q.--With the war over, why was this possible? A.--President
Wilson was ill. War-torn Europe was starving; chaos ruled. Fear spread
in our own nation as the people surveyed the economic mess they found
themselves in. Desperation stalked the footsteps of Federal Reserve
Board members, who carried the terrible responsibility for the
threatened financial catastrophe; they were only human. To rake over
these old musty records, is not only unpleasant, but futile. Reference
is made to them only to show why the country is in a continuous and
seemingly deepening slough of despond. Only a long range review of
history can tell us of the errors we later suffer from. Q.--Following this deflation, why did the country not recover prosperity as most others did? A.--Realizing
the agricultural debacle resulting from the drastic deflation, the
governors of the money-control office opened the credit valves to
industry and business. Industrial prosperity came with a bang--just as
agricultural panic had come with a bang. But it was a one-sided
prosperity; industry boomed while agriculture lay prostrate--all
because money and credit were dictated by one bank board. Experience
had shown the managers of the great bank system that capital and credit
could be directed into any channels that they might select regardless
of what the desires of the masses, or the thousands of inland banks'
directors were. In this instance, money from the interior banks and
people was drawn from their use and placed at the disposal of big banks
and big business. It was the era of consolidations and centralization
of financial power into the hands of the few. Giant corporations merged
with other giant corporations, in industry, in finance, in
transportation and merchandising; inland towns were stripped of their
local capital and local factory payrolls, and local banks ceased to be
community builders and served as mere collectors for funds poured into
the Metropolis financial pipe lines. Wall Street had become the
financial headquarters of the entire world, through administering
credits born of the new banking system. International banks and the
larger commercial banks and bond houses freely loaned vast sums to
other nations, the funds for which were drawn largely from interior
banks. They guessed that loans to nations of people, wherever located,
would be paid, but their guesses were mostly wrong in this; and they
also failed to appreciate that the buying power of the interior, vast
as it was, could and would be exhausted soon. By the hundreds of
millions loans continued to go out to Germany, France, England, Brazil,
Argentine, Peru, Japan--for fat commissions and bonuses to Wall Street
operators was too great to resist; they trained returning war veterans
as strong-arm bond salesmen to comb the country for any funds that had
not already been drained from it. When the time came that bonds could
no longer be sold, traded or pledged, they turned to stocks. With the
immense sums of open credit available to it, industry had been so
enlarged and revitalized that its earnings made stocks attractive for
investment. The stock exchanges became popular with the people; so
popular, that the whole population flocked to gamble in the wildest
speculation craze that was ever known in history. Q.--Why did the Federal System with its wide powers permit this/ A.--In
the frantic orgy created by the millions who were involved, little
attention was paid to efforts of the Federal Board to try to control
them---indeed it could not control the right of the people or the banks
or the brokers, to buy and sell securities; it did restrict credits to
banks for speculative purposes. All its power and supposed control of
banks counted for nothing in this financial cyclone 0f its own
creating, and the explosion came in late October 1929, with such
violence as to shake the financial structure of the entire world from
its foundation. The United States had existed for 125 years to the
adoption of the Federal Reserve System and had become the greatest and
richest nation in all the world. The Federal Reserve bank system was in
effect 16 years to the crash of 1929; it is still in effect--and we
still have the crash, and a Federal debt twenty billion dollars bigger
than it was then. And it increasing fast! Q.--What can be done to correct this, or is it too late? A.--You
youngsters must answer that question; Andrew Jackson and Abe Lincoln
are dead; their kind are not bred anymore. You must first, get it
clearly pictured, that the leviathan institution belong to the
banks--some fifteen thousand of them--but it is practically controlled
by the government, as are the banks themselves. The Government's
financial Insurance Corporation guarantees depositors, in return for
which, it dictates policies and borrows the funds for government
expenditure. Banks are now operated by and for Government rather than
by and for the benefit of the people, as formerly. The situation can be
more readily understood by you young fellows when we reverse Lincoln's
immortal saying: "That People of the government"--as is now the case.
The roots of the present financial system are so deeply set and the
trunk so wrapped and tied with scientific form and red tape, that to
cure the national affliction. Political Government must be taken out of
the banking business! There are still some fifteen thousand banks in
the United States; they are scattered in every city, town and community
and have approximately two hundred thousand responsible directors and
officers, who know and understand the people and needs of their
representative communities. It is under their management of money and
credit that the country was developed and prospered until it became the
richest and best in the world. With the former, we prospered; with the
latter--what have we? If I were to advise you, I would tell you to put
your faith in two hundred thousand experienced business men who own,
direct and operate the local banks of the country, rather than in the
majority of a seven-member Board of Experts who play golf at Chevy
Chase and strut a marble hall in Washington.
The End
Sykesville (PA)Post-Dispatch Press
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