​Mr. Binderup. Mr. Speaker and fellow Members of Congress, I first wish to take a few moments to pay tribute to Governor Murphy, of Michigan, prompted by the disparaging remarks recently made by the gentleman from Michigan [Mr. Hoffman], who preceded me on the floor. I believe I am just one of the many millions of citizens of the United States who honor and appreciate Governor Murphy ​for what he did in the settlement of the General Motors strike. I believe that I am just one of the millions that appreciate his humanitarian plan and method whereby he settled a strike when we were trembling for fear that it might lead to bloodshed and revolt.

This recent history of Michigan's honored Governor reminds me of a great citizen of France. The people called him Mirabeau the Peacemaker, and they said of him, "If only our Mirabeau could have lived, there would have been no French revolution." And I believe they were right. I believe in offering a tribute to Governor Murphy and President Roosevelt in the peaceful settlement of this threatening strike that I speak the sentiment of 80 percent of the people of our Nation.

Mr. Knutson. Mr. Speaker, will the gentleman yield?

Mr. Binderup. Not now. I know what the gentleman wants to say. But just wait until I get through and then I will give him the privilege of saying it.

Mr. Knutson. The gentleman must be very wise; I am sure he knows what I am going to say.

Mr. Binderup. I do know, because I have listened so much to the gentleman from Minnesota for several years, and I know what he is going to say, and I would like to answer it a little later, after I finish.

Now, Mr. Speaker, I desire that my subject should not be considered a political issue. I would like to refer also to the gentleman from Pennsylvania [Mr. Focht], who spoke immediately before me. He asked a very striking question, honestly and conscientiously I believe, when he called attention to the fact that we have not eliminated the poverty and misery of the United States, and asked why we had not been able as yet to bring our great Nation back to normal. I wish to give my own reasons for that. It is because we have never analyzed the case, and we have never yet discovered the cause in this Congress of this depression.

But the Republicans and the Democrats are alike to blame. I remember a few years ago when the Republicans were trying to cure this depression, and they suggested as a remedy to build prosperity from the top and down, telling us that in this way the money would dribble down to the farmers and the working people, and thus prosperity would be returned. I have often said, and I wish to repeat it once more, that you cannot build prosperity, my friends, from the top and down, any more than you can build a 10-story brick house and build the top story first. You have to build from the bottom and up. We tried it during the Republican administration. We experimented.

First we gave to Mr. Dawes' bank $90,000,000, and waited and hoped that it would dribble down. But it never dribbled. It stayed right in Mr. Dawes' bank, locked up. It never moved. Then do you remember that they gave to the Missouri Pacific Railroad millions of dollars because, we said, the money would dribble down and give work to the laboring people? But it never dribbled.

And then do you remember that J. Pierpont Morgan stepped in and said, "I'll just take that money myself"? We said, "Wait a minute, John. Now listen, you can't do that. We gave those millions of dollars to the Missouri Pacific in order to create work, in order to make the railroads safe, that the public might travel in confident safety, in order that labor might have employment. You can't take that away from us." But Mr. Morgan replied, "The bonds are due." And we said, "All right. I guess that's right, Mr. Morgan. Go ahead." And do you remember he invested this money in Europe? Again we went to Mr. Morgan and said, "Now, listen, John, you can't take our money and invest it in Europe. That money belongs down there in Missouri. That's what we gave it for. You can't take that money and send it over to Europe." Mr. Morgan replied, "Investments in Europe are safer now than they are in the United States." And again we said, "I guess that's right. Investments are not very safe here."

We did not take the trouble to stop and tell J. Pierpont Morgan who it was that had made investments unsafe over here, who it was that had taken the money away from the people and wrecked our Nation.

The crime of 1920

And now, Mr. Speaker and fellow Members of Congress, I wish to return to the subject I had intended to discuss this afternoon. There is an old, old saying that peace has its horrors as much as war, and by this I mean to refer once more to the crime of 1920, the greatest crime that was ever committed against the people. On former occasions and appearances before this House, on February 16 and March 4, and more or less at other times, I told you of this crime that was committed at 12 o'clock noon on the 18th day of May 1920 in the office of Governor Harding, Governor of the Federal Reserve Board of the Federal Reserve bank, where a secret meeting was being held, consisting of 53 of the large banking representatives of the United States, international bankers and representatives of Wall Street, and also Mr. Houston, the Secretary of the Treasury, and John Skelton Williams, the Comptroller of the Currency, ex-officio member of the Federal Reserve Board of the Federal Reserve bank at that time. Since that time, however, the Comptroller of the Currency and the Secretary of the Treasury, the representatives of the people, have been removed, as they were apparently in the way of the large bankers and interfered with their program.

I have in my possession the records of the minutes of that meeting. There is no longer any question about it. It is strange to me that the people of America have not long since known exactly how it is, and why it is, that this disastrous calamity, this depression, was brought upon us. This was the twenty-fifth time that we had suffered from these depressions, all coming from the same source, all man-made. Every depression is man-made, and yet we did not understand.

Everybody said and whispered to each other, "Isn't it strange? What in the world is the matter? We seem to have too much of everything, and yet we are in want. We have too much to eat and to drink, too much of the necessities of life, too much of the luxuries, and everything, but we can't have it." Yes, my friends, we are sitting upon the largest pile of gold that has ever been accumulated in the history of the world in any nation; actually sitting upon this pile of gold, surrounded by all the natural resources that an Almighty God could give to man, in a nation with unlimited credit and unlimited wealth, and yet the farmer is losing his farm and the laboring man is losing his home. Fifteen thousand banks failed, destroyed eight billions of the people's savings. And all about us there are bankruptcies and misery and want and despair, soup kitchens, and bread lines.

And then the people of our great Nation would look at each other in surprise and say, "I can't understand it. It's the strangest thing that I ever heard of. How can it happen that we are suffering of poverty in the midst of plenty?"

My friends, believe me, there is only one reason. It is because they had that meeting on the 18th day of May 1920 in Governor Harding's office, where they took away from the people their money, the lifeblood of trade and industry and the wheels of commerce. I wish I could shout this from the mountaintop until the people of our great Nation might know and understand. I assure you that there would then be a change before morning if the people only knew.

It was Henry Ford who said, in substance, this: "It is perhaps well enough that the people of the Nation do not know or understand our banking and monetary system, for if they did I believe there would be a revolution before tomorrow morning."

I told you in my last talks the substance of the conversation that took place at this meeting, and one of the first days direct from this floor I will tell you the name of every banker who was there, representing the interests of the Morgans and the Mills and the Myerses and the Mellons and the Rockefellers and the Du Ponts and the large corporations and money monopolies.

I will tell you this emphatically and definitely, taking it from the records of that meeting. I told you that John Perrin, of California, arose and suggested that we could take away from the people two billions of their money, money that measures the sweat of the brow of man, money ​that measures the remuneration of labor and the products of labor, according to its own abundance, by comparison. I told you why they wanted to make money scarce, as thereby they could increase the purchasing power of interest, so it would crowd down the price level of labor and the products of labor, and so that interest could buy more, as it was a fixed charge.

I told you of the objections to this from John Skelton Williams, the Comptroller of the Currency. And let me add that there were two of the big bank representatives there who objected strenuously, also, because they thought it too drastic a measure, but they were in a vanishing minority. I told you how these bankers meant to crush down the price level. They did not mean to destroy the Government exactly. No; they rather disregarded the Government and disregarded the people. All they wanted to do was to enrich themselves.

I told you about the great inflation that we had during the war and after the war, when we were on a single gold standard that they preached so much about, that was so safe, when we had the greatest uncontrollable inflation this country has ever had, and yet, let me remind you again, on a single gold standard. And we had another cause and we still have it, that silly, strange, foolish, incompetent, childish monetary system and banking system, whereby the banker was allowed to deposit these bonds in a certain drawer in any Federal Reserve bank, draw his interest in full semiannually, and draw every dollar in cash besides, and then take these dollars and loan them 10 times to the public, each time drawing interest on every dollar, even the dollars he did not have. Such a monetary system cannot possibly mean anything but bankruptcy every few years.

Now, these bankers knew they could not change the figures on their bonds and obligations, but they knew another way. They tried 24 times before in the United States and in other nations. Every economic writer told them, "Just crush down the price level, and interest, remaining stationary, will have the purchasing power back again."

And, friends, I want to repeat once more and warn you that you cannot crush down a price level, after you have done business for a number of years on a certain price level. You bought and sold your farms and homes and your goods on the shelf. Every obligation and future contract is based on this price level. You cannot crush a price level down unless you bring in return to the people starvation and deprivation and misery and want and soup kitchens and bread lines.

But these men were not considerate of the Nation. They belonged to the class that say by their actions, "We do not care for the Almighty God. Just give us the almighty dollar. All we want is that interest must have a greater purchasing power." Let me once more repeat the words of Governor Harding. It is so striking, my friends, that I know you will welcome a repetition. Mr. Harding was the Governor of the Federal Reserve Board of the Federal Reserve banks, and presided at the meeting on this, the 18th day of May 1920. Let me once more quote from the record of the meeting, as follows: First, "We must have a reduction in credit, a credit contraction" (meaning thereby taking the money out of circulation. And then he added (again quoting from the record of the meeting), "This is a drastic remedy, but we believe it is necessary."

He knew and they all knew, and we know it now, that this was a drastic remedy. He knew what it meant to crush down the price level. He said, "It is a drastic remedy, but we think it is necessary." We know that it was not necessary, except for those who wanted to enrich themselves at the expense of suffering humanity. The words I have given to you, remember, are copied from the records of the meeting.

Now, just consider what happened to the people of the United States after this meeting on the 18th day of May 1920, that I have described to you. In order to show you the direct reflex, the effects, of that meeting, let me take myself for an example, for I represent one of the 125,000,000 people that suffered thereunder. In stating my own experiences I am merely stating yours. In fact, I am just reviewing and reminding you of what took place in your own community, in your own home, and on your own farm.

I had always been a big borrower in my home bank. I was always quite a developer, doing considerable building, and employing quite a few men. One bright summer morning, in the following month of June, I came in to my banker as usual, to renew my note and to pay my interest. My good old banker, with whom I had done business for 20 years———

The Speaker. The time of the gentleman from Nebraska has expired.

Mr. Hill of Washington. Mr. Speaker, I ask unanimous consent that the gentleman from Nebraska [Mr. Binderup] may proceed for 10 additional minutes.

The Speaker. Is there objection?

There was no objection.

Mr. Binderup. My old banker said to me: "Charlie, how about paying this note?" I looked at him in surprise. I said, "Why? Do you not want me to do business with you? You are not afraid of me, are you? I have just given you my property' statement. I am worth more than I have ever been worth before in my life, and business is wonderful. Profits are good. Do you not want to do business with me any more, or why do you want me to pay this note?"

The old gentleman smiled and turned to his desk and got a letter. He handed it to me and asked me to read it. The letter was from the Federal Reserve Bank of Kansas City; that is our bank in my district. I read the letter, and now let me tell you what was in that letter. Let me repeat that every banker, member bank of the Federal Reserve, and most other banks, received a similar letter. Those that did not belong to the Federal Reserve bank were supposed to be influenced by the letter just the same.

The letter from the Federal Reserve Bank of Kansas City said to my banker, and to your banker, that they were restricting credits; that they had raised their rediscount rate to 7 percent minimum in Kansas City and as high as 20 percent, considered penalty interest, if the borrowings were not reduced, loans classed by the Federal Reserve banking system as "unessential loans." Seven percent minimum— that was more than I was paying my banker for the use of the money. The letter also said that they had restricted the number of loans that were called these "nonessential loans"; that there were many things whereon they had rediscounted paper before that they would not rediscount any more. This made it impossible for my banker to rediscount a great deal of his paper, and so he had to collect and pay up.

After I had read the letter my old banker said to me, "Now you understand. Don't you see why it is I am asking you to pay your note? It is so that we can pay our obligations to Kansas City, in order to eliminate the impossible interest that we have to pay, and reduce our indebtedness with them." I understood, so I started to spread the fire of contraction of credit and money. I went out and said to everybody who owed me. "Pay up. You must pay up." And everybody else went out—hundreds went out, thousands went out, millions went out. Everybody said to everybody else, "Pay up. Pay up." And so we began to" force collections among each other. We sued each other. We abused each other. We trampled upon each other in the mad scramble for money, in order to get hold of a little miserable cash, so that we could pay up. I sold the last house I built for less than co6t, in order to pay up, sacrificing, as everybody sacrificed, to follow the edict that had issued forth from that meeting of the Federal Reserve Board of the Federal Reserve bank at 12 o'clock on the 18tb day of May 1920, which edict was issued to the 12 Federal regional reserve banks of the United States.

And with this demand to pay up, farmers threw everything they had on the market. They sold their eggs finally for 5 cents a dozen, their butter for 10 cents; they sold their hogs for 2 cents, shoats for 1 cent a pound. They sold wheat for a quarter, and oats for 11 cents. They threw everything they had on the market and congested the market, in this campaign to pay up that issued from the Federal Reserve Board of the Federal Reserve banks In Washington, D. C.

And the merchants sold their goods, emptied the shelves, and congested the market, In an effort to pay up. They ​discharged their clerks to pay up, and, since they were unable to buy for lack of money, the factories closed down and discharged their employees, and thus was once more crucified on the cross of gold—money—the farmer and the laboring man, their purchasing power and consuming power paralyzed because they had that secret meeting on the 18th day of May 1920, these wizards of finance, these hounds of monopoly and vultures of greed.

They took away from us the circulating medium of exchange, the lifeblood of trade and industry, our money and our credit. And so the campaign to pay went on and on. Every time we paid the banker a dollar, he sent it to the Federal Reserve banks to be destroyed, burned up, or perhaps not exactly burned, but thrown into a vault and locked up. which means the same thing so far as the money is concerned. It might as well have been burned.

Or else the banker locked it in his own vault, in order to make his bank safe, to increase his cash reserve. And even with their best efforts, 15,000 of our banks went broke, and all of them would have gone broke had we not come to the rescue in 1933. And the check-book money, based on credit—it vanished like the dew before a summer sun. And so the campaign went on and on, and in a short time it reflected more drastically on agriculture, because agriculture has no protection. Its prices are decidedly governed by supply and demand. The farmers were selling their products for one quarter of the cost of production. It could end only in bankruptcy. And so it followed; farm after farm was sacrificed on the block of bankruptcy. Thousands and hundreds of thousands went into bankruptcy, until at the present time, as I said in the beginning, peace has its horrors no less than war.

A dollar in the hands of selfish greed and money monopoly is more dangerous, more powerful than shot or shell, than sword or gun. The old unequal battle went on and on. The power of capital and predatory money monopoly, centralized in the modern Frankenstein, the Federal Reserve Banking System, privately owned, against the toiling masses, the great producers of all wealth.

Now let me reply once more to my good friend, the Congressman from Pennsylvania, Mr. Focht. In answer to his question, let me repeat that the reason we have not overcome this disastrous depression is because we have not all yet recognized what the trouble is. We do not know the cause. We are like children groping in darkness. And until we know the cause, we can never effect a cure. We have failed to recognize the fact that money measures value by its own abundance. We have failed to recognize the function of money that measures the sweat of the brow of man. We have failed to recognize the little old principle of Adam Smith. They called him the father of political economy, when he said, in common language—

When you double the amount of money in circulation, you double the price of everything, and thereby you divide your debt in two because it takes only half as much labor and the products of labor to pay the same amount of debt.

If you divide the amount of money in circulation, half as much, you divide the price of everything. By dividing the prices on everything, you double your debt, because it takes twice as much of labor or the products of labor to pay the same amount of debt.

A little simple example that is true in principle.

And now, my friends, I want to return and repeat once more those outstanding facts relative to the crime of May 18, 1920, when the people were robbed of their money, the lifeblood of their trade and commerce, that bankrupted the Nation. I want again to recall the words of the Comptroller of the Currency, our old, white-haired friend, John Skelton Williams, the ex-officio member of the Board, the great friend of humanity, when he once more warned the Federal Reserve Board of the Federal Reserve bank, and said to them, in substance, this: "Gentlemen, you cannot take away from the people their money. Don't you realize they have promised to pay in dollars, and even now there exists less than one-tenth of the amount necessary to meet the people's obligations? Don't you realize our banking system is built on a foundation hk* a mist, a cloud, or a shadow, a little spark called confidence, that exists only in the brain of man, and that when you take away from the people $2,000,000,000, one-fourth of the basic money of the Nation, you will snuff out this little spark, and the whole financial system will fall and you will bankrupt our banks and wreck our whole economic system?"

They answered him and said—and by the way, they are still saying the same thing, and there are those in Congress who are helping them say it; it is the sole object of Wall Street, and I speak of Wall Street as a symbol of human greed, as it is considered in the minds of the American people—they answered him and said, in substance, this: "We have too many small banks, and what we need is a strong chain system of banking", implying, with headquarters in New York and Wall Street, the cancer at the heart of our great Government.

And once more John Skelton Williams arose. Let me again repeat. It is so important. It sets out the fact so absolutely and definitely. He said to the members of the meeting in substance this: "Don't you see that the farmers and the laborers have mortgages on their homes and farms, and that they will wake up some morning and find all that is left of their homes and farms is the mortgage, and some day they will know that by creating this scarcity of money you thus wiped out their equity?"

But the meeting went on practically undisturbed except for the objections of John Skelton Williams and one or two other bankers who as yet had not had all of their conscience removed.

Mr. Hill of Washington. What was the reply to John Skelton Williams?

Mr. Binderup. Oh, yes; the reply to John Skelton Williams was in substance this: "The farmers and laborers have made a lot of money throughout the war and after the war, and they will stand the shock." They knew it was a shock. Yes, Governor Harding, of the Federal Reserve Board, said, at the meeting, "This is a drastic remedy, but we believe it is necessary."

Mr. Colden. Will the gentleman yield?

Mr. Binderup. I yield to the gentleman from California [Mr. Colden].

Mr. Colden. The gentleman has referred to a certain meeting May 18, 1920. I would like to ask the gentleman to include in his remarks a copy of those minutes which may be pertinent to the speech he is making, including the names of the representatives who were present.

Mr. Binderup. I thank the gentleman very much for his suggestion and his contribution. In reply, may I say that the minutes of this meeting are very long, and would take up a number of pages of the Congressional Record, which I fear might be objectionable.

Mr. Colden. Just include the parts that are pertinent to the gentleman's remarks.

Mr. Binderup. Yes, I am including these in my remarks; and one of the first days, from this floor of Congress, I will give you the name and business connection of each banker present.

Mr. Speaker, in conclusion may I say the remedy, it is a glorious remedy—the cure, and it is a simple cure—for these disastrous depressions that have wrecked our great Nation 26 times, lies in knowledge that is light and wisdom that is power. By the past we shall know the future. The past is the prologue. Know the cause of these disastrous depressions, and know that all depressions, all panics, are man made, just by a few men interested in keeping the control of money; inflating by bankers lending a credit money, fountain-pen money, figures on the book, lending dollars that do not exist, that have never been made; lending an Intangible thing, a vision, a dream of a dollar, and then asking payment in something else—a dollar that is tangible, it has never been made, it does not exist. Impossible my friends, impossible; inflating by the use of the debt of the United States—Government bonds and the debts of the people as the basis of our money—inflating and raising prices to an unreasonable level, and then all at once having a meeting, as they did in Washington, D. C., on the 18th ​day of May 1920, and taking away from the people this bankers-credit money, based on debt, contracting thereby our currency, and collapsing a great nation from the highest plane of prosperity to the lowest level of deprivation and starvation and misery and want.

Mr. Speaker, I know there are millions and millions of people of our great Nation that will welcome, and shout back "Amen", when I make the following announcement. A challenge has just been issued to predatory wealth, to Wall Street, and to international bankers. A bill has just been introduced that demands in no uncertain terms that this sacred right and privilege, this constitutional guarantee to the people, that Congress shall coin and regulate the value of their money, has been included in the bill that has just been introduced in this Congress. So the great battle is on.