Teaching critical thinking to high school students: Economics research/presentation (6.3 of 6)

The following are my teaching assignments on critical thinking for California 12th grade students in the semester-long courses, “US Government” and “Economics.” I offer them for non-profit use:

This is the final action: students explore their interests with research, writing, and presentation to the class. At this point of the course, the previous sections from this article and my sharing of current events have opened students’ minds that the world they thought existed in government and economics was a fairy tale believed by the ignorant. This conclusion is justified from the objective and independently verifiable facts, and young-adult confidence that they really do know some things more powerfully than adults (please recall this fact from when we were their ages).

This last project for student research, writing, and class presentation is divided into four parts:

6.1: Basis in academics and state teaching standards

6.2: Revealing economics history 1

6.3: Revealing economics history 2

6.4: Political economy, the assignment, supporting historical voices

This is 6.3:

7. President Andrew Jackson and leading inventor Peter Cooper

“‘Tis strange — but true; for truth is always strange; Stranger than fiction.”             – Don Juan, Canto XIV.

Andrew Jackson (1767-1845) is the last US President to pay-off the national debt. He did so only after ending the Federal Reserve of his day, the privately-owned Second Bank of the United States. As did Thomas Jefferson, Jackson understood the subversive act and perpetual national debt with banks creating money to lend to the government. He did not understand the positive policy response of the government creating money directly for the payment of public goods and services. Jackson critics would respond that he was proficient in killing, and indeed less than capable with constructive policy. In 1836 President Jackson issued an Executive Order called the Specie Circular that required payment to the government for land to be only in gold or silver. This increased demand and emptied the banks of the day of the fractional gold and silver backing their bank notes, causing bank runs. Jackson and Congress could have issued money directly, and then accepted this fiat currency for all payments:

“The bank, Mr. Van Buren, is trying to kill me, but I will kill it.” (referring to the Second Bank of the US)  – Said to Martin Van Buren (July 8, 1832), quoted in The Autobiography of Martin Van Buren, published in Annual Report of the American Historical Association for the Year 1918, vol. II (1920), ed. John Clement Fitzpatrick, ch. XLIII (p. 625)

“I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out and, by the Eternal, (bringing his fist down on the table) I will rout you out.”   – From the original minutes of the Philadelphia committee of citizens sent to meet with President Jackson, February 1834, according to Stan V. Henkels, Andrew Jackson and the Bank of the United States, 1928

The following two paragraphs are President Andrew Jackson in his veto message for the renewal of the privately-owned Bank of the United States, which would have continued their private monopoly of creating US money. July 10, 1832.

“It is maintained by some that the bank is a means of executing the constitutional power ‘to coin money and regulate the value thereof.’ Congress have established a mint to coin money and passed laws to regulate the value thereof. The money so coined, with its value so regulated, and such foreign coins as Congress may adopt are the only currency known to the Constitution. But if they have other power to regulate the currency, it was conferred to be exercised by themselves, and not to be transferred to a corporation. If the bank be established for that purpose, with a charter unalterable without its consent, Congress have parted with their power for a term of years, during which the Constitution is a dead letter. It is neither necessary nor proper to transfer its legislative power to such a bank, and therefore unconstitutional…

It is to be regretted that the rich and powerful too often bend the acts of government to their selfish purposes. Distinctions in society will always exist under every just government. Equality of talents, of education, or of wealth can not be produced by human institutions. In the full enjoyment of the gifts of Heaven and the fruits of superior industry, economy, and virtue, every man is equally entitled to protection by law; but when the laws undertake to add to these natural and just advantages artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society — the farmers, mechanics, and laborers — who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their government. There are no necessary evils in government. Its evils exist only in its abuses. If it would confine itself to equal protection, and, as Heaven does its rains, shower its favors alike on the high and the low, the rich and the poor, it would be an unqualified blessing.”

“I have no hesitation to say if they can re-charter the bank (2nd Bank of the US – a privately-owned central bank) with this hydra of corruption they will rule the nation and its charter will be perpetual and its corrupting influence destroy the liberty of our country. When I came into this administration…I had a majority of 75. Since then it is now believed it (the bank) has bought over by loans, discounts, etc until…there were 2/3 for re-chartering it.” – President Andrew Jackson, April 7, 1833 letter to R. H. M. Cryer referring to votes in Congress. Ralph Catterall, The 2nd Bank of the U.S., Univ. of Chicago Press, 1902.

“But you must remember, my fellow-citizens, that eternal vigilance by the people is the price of liberty, and that you must pay the price if you wish to secure the blessing.” – Farewell Address, March 4, 1837.

After President Jackson vetoed Congress’ re-charter the 2nd Bank of the US and paid-off the national debt, President Van Buren (elected 1836) and Jackson’s Vice President, was confident the goal of defending the US from a privately-owned central bank was won:

“The practice of funding the public debt…has long been discontinued…A National Bank has become a completely ‘obsolete idea’ among us, as thoroughly condemned in public opinion as a national debt.” – Catterall, p. 431.

Peter Cooper (1791-1883) was one of America’s leading inventors and businessmen. He designed and built the first US locomotive in 1830, the “Tom Thumb.” Cooper was the first to introduce anthracite coal into iron production in 1845, resulting in the US’ first wrought iron beams for construction. In 1854, Cooper was a founder in the telegraph company that created the first trans-Atlantic cable. Peter Cooper was the Greenback Party candidate for President in 1876. Cooper learned about monetary policy from Albert Gallatin, US Secretary of the Treasury from 1801-1814:

The following 14 paragraphs are the summation of his life-long experience of the benefits of monetary reform that he witnessed from Andrew Jackson ending the privately-owned 2nd Bank of the United States and promptly paying-off the national debt, the US government directly issuing Greenbacks to pay for the Civil War rather than borrow the money, and then the economic depression when that policy was rescinded in favor of the federal government again borrowing money, as we do today. This was his address at the Convention of the National Greenback Party in Boston on June 4, 1879. This third-party received 3.3% of the popular vote in the 1880 US presidential election.

“I think, that the neglect of our several administrations to make laws, that shall properly regulate the currency, both in volume and value, has been a greater cause of demoralization, want and misery among the mass of the people, than all other causes combined.

The American people have a right to demand of their Government a substantial reason for having taken from them their money, used by them for years as the currency of the country without cost to the Government. Our present Secretary of the Treasury declared in the Senate that ‘every citizen of the United States had conformed his business to the clause of the law regulating the currency of the country.’

I believe it will be impossible for our Government to show a good reason for having taken from the people their circulating notes, possessing (as the late Secretary McCulloch stated at the banquet, given by the New York Chamber of Commerce) ‘all the legal attributes of money.’  The Secretary at the same time said, that, ‘In the very year, in which the war was closed, the reduction of the debt was commenced, and the reduction has been steadily continued, to the amazement of foreign nations.’

This debt, so called, was also ‘the credit of a great nation, cut up into small pieces and circulated as money;’ as was well said by Secretary Chase.  What shall we think of the administration of a Government, expressly designed, ‘by the people and for the people,’ that should turn their circulating credit and their real money, into a debt which stops that circulation, vital as it is to the trade and prosperity of this people, and makes it a burden of bonds and taxes on their industry?

It will be equally impossible to show a good reason for having taken from the people their fractional currency, which was costing the Government nothing, and supplying its place with a more inconvenient currency, at the cost of thirty-two millions of dollars, added to the National debt.

The amount, already paid by the people as interest on the National debt, apart from any payments on account of the principal, is already one thousand, two hundred and twenty-four millions of dollars.

I have long been compelled to believe, that all that is now or ever has been required to secure permanently, is a safe deposit for all the unoccupied moneys of the country, and an ever strengthening bond of National union, as well as the best currency, that our country or the world ever saw, will be for the Government to do now, what should have been done at the close of the civil war,—and at the close of the war of Revolution against England—namely, to make the people’s money, found in circulation at the close of the war the sole money of the country, and the unfluctuating measure of all values, receivable for all forms of taxes, duties and debts, and interconvertible with the interest-bearing bonds of the Government, which should bear an equitable but low rate of interest.

…How can we, as a Republican and a free people, control the Financial Institutions and the policy of this Government in the interest and prosperity of the whole people?

It is evident, that some fatal errors have been committed, some where, by which want, ruin and distress have been introduced, where before was prosperity, abundance and full employment for the enterprise and industry of this nation.

Individuals may suffer from extravagance, over-trading or over-production; but how can a whole nation have its joy and prosperity turned into mourning, but by the fatal errors of its ruling classes, which make the laws, and can thus mete out injustice and dry up the resources of a nation by rapacity and greed of gain, instead of diffusing happiness, education and freedom among the people.

Misgovernment and the faults of the ruling class have always proved in history the trouble and sorrow of nations. All the responsibility of a nation’s happiness, which may depend on a people’s laws and administration, must rest upon those, who are, for the time, the law making and administrative class.

Though the influences, that are now working against the rights of labor and the true interests of a Republican Government, are insidious and concealed under plausible reasons, yet the danger to our free institutions, now, is no less than in the inception of the rebellion, that shook our Republic to its centre. It is only another oligarchy, another enslaving power, that is asserting itself against the interest of the whole people. There is fast forming in this country an aristocracy of wealth—the worst form of aristocracy, that can curse the prosperity of any country.  For such an aristocracy has no country—“absenteeism,” living abroad, while they draw their income from the country, is one of its common characteristics. Such an aristocracy is without soul and without patriotism.

Let us save our country from this, its most potent, and, as I hope, its last enemy.  I beseech you, fellow-citizens, to consider well what the crisis of the country demands of you, not losing sight of the fact, that there are great wrongs which must be righted in the administration of the finances of this country for the last twelve years. Old issues of North and South are, in a great measure, passing away, but there is no section of our common country, that needs so much the reviving influence of an abundant and a sound currency, as the South. The Southern people have the finest natural resources, that our country affords; every facility for manufacture—the material, labor and water-power indefinite.  They need only money, wisely distributed among its working and enterprising population, for their work and their enterprise, which may draw out the money, and put it to the best use.  It was well said, lately, by one of the Southern statesmen, that the ‘Government had impoverished, discomfited, and crushed the South more by its financial policy, since peace was declared, than by its arms during the whole war of Rebellion!’

If the people can look for no relief from the present Congress and Administration—if those, who now sway the financial interests of the country cannot see their great opportunity—then new men must be chosen by the people, whom they can trust to make laws, and execute measures, that ‘shall secure the blessings of liberty to themselves and their posterity.’

I will close my remarks by a quotation from a speech of Daniel Webster.  He declared that ‘The producing cause of all prosperity is labor, labor, labor.  The Government was made to protect this industry, and to give it both encouragement and security.  To this very end, with this precise object in view, power was given to Congress over the currency and over the money of the country.’”

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“The bankers will favor a course of special legislation to increase their power…They will never cease to ask for more, …so long as there is more that can be wrung from the toiling masses of the American People…The struggle with this money power has been going on from the beginning of the history of this country.” – Peter Cooper, in his letter to President Hayes, June 1, 1877

8. New York City Mayor John Hylan and two Chairs of Congress’ Banking Committee

John F. Hylan (1868-1936) was Mayor of New York City from 1918 to 1925. New York has long been the US banking and financial headquarters, with the mayor’s office about a half-mile from the New York Stock Exchange:

Hylan has two revealing communications in strong argument for monetary reform. The first is four paragraphs from a speech he made in Chicago on March 26, 1922 and reported in the New York Times the following day in the article titled, “HYLAN TAKES STAND ON NATIONAL ISSUES” (and here with immaterial other commentary). The next are 12 extensive paragraphs reported by the New York Times on Dec. 10, 1922 in the article titled, “HYLAN ADDS PINCHOT TO PRESIDENCY LIST; FORESEES A REVOLT.”

March 26, 1922:

“The warning of Theodore Roosevelt has much timeliness today, for the real menace of our republic is this invisible government which like a giant octopus sprawls its slimy length over city, state and nation. Like the octopus of real life, it operates under cover of a self-created screen. It seizes in its long and powerful tentacles our executive officers, our legislative bodies, our schools, our courts, our newspapers, and EVERY agency created for the public protection. It squirms in the jaws of darkness and thus is the better able to clutch the reins of government, secure enactment of the legislation favorable to corrupt business, violate the law with impunity, smother the press and reach into the courts.

To depart from mere generalizations, let me say that AT THE HEAD of this octopus are the Rockefeller-Standard Oil interests and a small group of powerful banking houses generally referred to as the INTERNATIONAL bankers. The little coterie of powerful international bankers virtually run the United States government for their own selfish purposes.

They practically control BOTH parties, write political platforms, make cats paws of party leaders, use the leading men of private organizations, and resort to every device to place in nomination for high public office only such candidates as will be amenable to the dictates of corrupt big business. They connive at CENTRALIZATION of government on the theory that a small group of hand-picked, privately controlled individuals in power can be more easily handled than a larger group among whom there will most likely be men sincerely interested in public welfare.

These international bankers and Rockefeller-Standard Oil interests control the majority of newspapers and magazines in this country. They use the columns of these papers to club into submission or drive out of office public officials who refuse to do the bidding of the powerful corrupt cliques which compose the invisible government. It operates under cover of a self-created screen [and] seizes our executive officers, legislative bodies, schools, courts, newspapers and every agency created for the public protection.”

Dec. 10, 1922:

“What each party wants is a man whose sympathies are with the people and not with gold, a candidate with a proven progressive record. If the international bankers and the food profiteers control both parties, there undoubtedly will be a third party, but it strikes me that they won’t be able to.

One of the most astounding facts about our American life is that the wealth and property of the country and the control of the machinery of government are in the hands of less than 2 per cent of the inhabitants. That is to say, a small group of excessively wealthy individuals, members of the Republican and Democratic Parties alike, have, through the exercise of powerful, sinister and, too often, unlawful influence, usurped the government and seized public property on such a wholesale scale that they have become the virtual dictators of the destinies of more than 110,000,000 people (the US population at the time). That is a situation which, to my mind, constitutes the greatest menace to the safety of our republic.

A small group of international bankers and money lenders, public utility exploiters and tariff beneficiaries have actually dictated nominations for offices up to the Presidency. They have placed the slickest, cleverest, and most cunning manipulators in official positions, even in the minor posts, where they could be of service when called upon by the invisible power which, utterly devoid of all humanity, seeks but to wallow in riches.

This invisible power, whose black and menacing form hovers over every fireside in the land, stealthily and secretly reaches out and seizes in its filthy paws our vaunted institutions of free government with the same ruthlessness and relentlessness as the grim specter of death pursues its numberless victims.

So absolute is the power of America’s secret dynastic rulers that they have, without hindrance, written the very platforms and pledges of political parties, and because of substantial contributions to campaign chests they have arrogated to themselves the right to dictate the governmental policies of the administration elected to office regardless of party.

Woe to the public officials who dare to resent their dictatorship! If there be such public officials who will not submit to their imperious dictation, then the flood-gates of lying press propaganda are released, sweeping the unhappy public servant to an earthly as well as political grave, or compelling him to compromise with his conscience and become their subservient tool to the end of his term.

I say to you in all candor that either alternative might have been my lot, and that I might not now be Mayor of the City of New York if one of the greatest, most useful of citizens and, through his publications, the most powerful individual in the United States, William Randolph Hearst, had not enabled me, through the columns of his newspapers in greater New York to present my side of the city administration’s case to the people and thus offset the deluge of mendacious misstatements in the opposition press.

It has also become increasingly obvious that these wealth lords are able, in many instances, to place their own hand-picked Judges upon the Bench, thus insuring decisions in favor of organized corporate greed at the price of human life; while the instances of promotion of such Judges in recent years has been an open secret to us all. This is said with all due respect to the courts and with a genuine appreciation of the exemplary conduct and superior attainments of our judiciary as a body.

…The wealth lords of America are already busily engaged in attempts to insure their control of the nominees of the Republican and Democratic Parties in 1924. They will endeavor at that time to place in nomination at both conventions candidates whom they can control. If this can be accomplished, the election will be of small interest to them, for the people will have to elect one or the other of their candidates.

It would seem the part of wisdom for the people in every State in the Union to watch carefully the maneuvers of corrupt big business and to organize themselves thoroughly to ensure the nomination of men in both the major parties of fighting personalities and progressive tendencies. Both the Republican and Democratic Parties must adopt progressive platforms attuned to the needs of the times and select men who will carry out such platforms if they expect to receive the support of the people generally. Only in this way may we ever hope to be liberated from the economic serfdom and human slavery to which we have been so long subjugated.

I cannot escape the feeling that the most recent movement inspired by the worst kind of bigotry is another attempt engineered by the ruling minority or money lenders of America to create dissension among the different creeds and races of our people, thus diverting attention from their own sinister machinations.

The regrettable feature of this unwholesome situation is that there are some among us who are unwittingly mislead into fellowship with such pernicious organizations. Even a few clergymen who are supposed to extol before the world the virtues of charity and forgiveness and to stand out as living exemplars of these humane doctrines have been found susceptible to the clink of dirty gold which such membership places upon their palms.”

These revealing comments come from two Chairpersons of the House Banking Committee, totaling 24 years of service in that position of comprehensive insight into American banking:

Louis McFadden (1876-1936) was Chair from 1919-1931, and Wright Patman (1893-1976) was Chair from 1963-1975. McFadden was the president of the Pennsylvania Bankers’ Association (1914-15) and president of the First National Bank of Canton, Pennsylvania (1916-25). He had been Chairman of the House Banking and Currency Committee for 12 years when he made a speech on the House floor of the summation of his analysis of the Federal Reserve System. Two paragraphs from his speech are excerpted below.

Wright Patman was a Representative in the U.S. Congress from 1929 to his death on March 7, 1976, and on the House Committee on Banking and Currency for 40 years. For 20 of those years, he introduced legislation to repeal the Federal Reserve Banking Act of 1913. A paragraph excerpt of a House floor speech from Mr. Patman follows Mr. McFadden’s observations.

“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. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.

Some people think the Federal Reserve banks are United States Government institutions. They are not 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; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man’s throat to get a dollar out of his pocket; there are those who send money into States to buy votes to control our legislation; and there are those who maintain international propaganda for the purpose of deceiving us and of wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.” – Rep. Louis McFadden, June 10, 1932. Source: Congressional Record, June 1932, pg 12595-12603.

“When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money… The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now, under our system, we will sell bonds to commercial banks and obtain credit from those banks. I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue. I make that statement after years of study.” – Wright Patman: excerpts from September 29, 1941, as reported in the Congressional Record of the House of Representatives (pages 7582-7583).

9. Benjamin Franklin and William Jennings Bryan

What then is, generally speaking, the truth of history? A fable agreed upon.” – Napoleon Bonaparte (1)

Benjamin Franklin (1706-1790) was a Founding Father of the United States and one of the most accomplished inventors and brilliant minds in human history. Among his achievements was contributing to the discovery of how to fund a government without taxes and its successful implementation in the colony of Pennsylvania.

“There is no Science, the Study of which is more useful and commendable than the Knowledge of the true Interest of one’s Country; and perhaps there is no Kind of Learning more abstruse and intricate, more difficult to acquire in any Degree of Perfection than This, and therefore none more generally neglected. Hence it is, that we every Day find Men in Conversation contending warmly on some Point in Politicks, which, altho’ it may nearly concern them both, neither of them understand any more than they do each other.

Thus much by way of Apology for this present Enquiry into the Nature and Necessity of a Paper Currency. And if any Thing I shall say, may be a Means of fixing a Subject that is now the chief Concern of my Countrymen, in a clearer Light, I shall have the Satisfaction of thinking my Time and Pains well employed.” – Benjamin Franklin, A Modest Enquiry into the Nature and Necessity of Paper Currency, 1729.

Although Aristotle clearly wrote that money is a function of law (2) and not of commodity value, many people were confused how to manage the creation of money. The American colonies had almost no gold or silver, so were driven to fiat currency by necessity. The colony of Pennsylvania would lend money to land owners at 5% interest. The money would provide the essential government service to facilitate trade. Because only the principal was leant, the government could create and spend the interest on public goods and services without taxing their citizens. For an encyclopedic summary: here and here.

The result was stable prices and economic prosperity without direct taxation.

Contemporary economist, Adam Smith, in The Wealth of Nations:

“The government of Pennsylvania, without amassing any [gold or silver], invented a method of lending, not money indeed, but what is equivalent to money to its subjects. [It advanced] to private people at interest, upon [land as collateral], paper bills of credit…made transferable from hand to hand like bank notes, and declared by act of assembly to be legal tender in all payments…[the system] went a considerable way toward defraying the annual expense…of that…government [low taxes]. [Pennsylvania’s] paper currency…is said never to have sunk below the value of gold and silver which was current in the colony before the…issue of paper money.”

In agreement are famed Princeton economist Richard Lester in his book, Monetary Experiments: Early American and Recent Scandinavianand Stanford’s Hoover Institute’s Senior Fellow Alvin Rabushka in his paper, Representation without taxationThis prosperity continued until the British government ended the colonies’ power to issue its own currency through the Currency Act of 1764. Peter Cooper, born one year after Franklin’s death and colleague of Jefferson’s Secretary of the Treasury Albert Gallatin, wrote:

“After Franklin had explained…to the British Government as the real cause of prosperity, they immediately passed laws, forbidding the payment of taxes in that money. This produced such great inconvenience and misery to the people, that it was the principal cause of the Revolution. A far greater reason for a general uprising, than the Tea and Stamp Act, was the taking away of the paper money.”

From Franklin’s memoirs:  “The difficulties for want of cash were accordingly very great, the chief part of the trade being carried on by the extremely inconvenient method of barter; when in 1723 paper-money was first made there, which gave new life to business, promoted greatly the settlement of new lands (by lending small sums to beginners at easy interest, to be repaid on installments) whereby the province has so greatly increased in inhabitants, that the export from hence thither is now more than tenfold what it then was; and by their trade with foreign colonies, they have been able to obtain great quantities of gold and silver to remit hither in return for the manufactures of this country. New York and New Jersey have also increased greatly during the same period, with the use of paper-money; so that it does not appear to be of the ruinous nature ascribed to it.”

“Experience, more prevalent than all the logic in the world, has fully convinced us all, that it (paper money issued directly by government) has been, and is now of the greatest advantages to the country.” – Benjamin Franklin, The American Weekly Mercury, March 27, 1729.

“The utility of this currency became by time and experience so evident as never afterwards to be much disputed.” – Benjamin Franklin, The Autobiography of Benjamin Franklin, page 65.

William Jennings Bryan (1860-1925) was an attorney, one of the nation’s most popular public speakers, and the Democratic Party’s choice for President in three elections: 1896, 1900, and 1908. He served as Secretary of State in the Wilson administration; he resigned in protest to Wilson’s support of the Allies in WW I which he saw as leading to US involvement in a war where national security was not threatened:

Bryan’s political populism centered on American monetary policy. He supported an expansion of the money supply in response to a national depression in the 1890’s by rejecting the gold standard, a limitation on currency based on a fractional reserve of gold holdings. We discussed Peter Cooper’s presidential ambition with the Greenback Party, who campaigned for “greenbacks” to be created directly by the federal government for public projects and jobs. This policy compromised into the “free silver” movement to include silver with gold as a legal fractional backing for money. His powerful stand for monetary reform is clearly expressed in his “Cross of Gold” speech in accepting the Democratic Party nomination for President in 1896, quoted below (click here to listen to Bryan’s reading of the speech 25 years later).

The Wizard of Oz (oz. for ounces of silver), was a political allegory of this history, with Bryan portrayed as the lion with a loud roar but no power (3). Author Frank Baum, hopeful for the wisdom of monetary reform becoming the nation’s monetary policy, wrote that the lion eventually beheaded the great spider, representing the overreaching financial monopolies of Wall Street. Ellen Brown’s Web of Debt walks readers through the details of the history and Oz allegories, in one of the most-read books on monetary reform (I highly recommend it to understand this trillion dollar issue). Bill Still’s The Secret of Oz is an excellent documentary.

Bryan’s brilliant and concise statement for monetary reform:

“We say in our platform that we believe that the right to coin and issue money is a function of government. We believe it. We believe that it is a part of sovereignty, and can no more with safety be delegated to private individuals than we could afford to delegate to private individuals the power to make penal statutes or levy taxes…Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank, and that the government ought to go out of the banking business. I stand with Jefferson rather than with them, and tell them, as he did, that the issue of money is a function of government, and that the banks ought to go out of the governing business… When we have restored the money of the Constitution, all other reform will be possible, but until this is done there is no other reform that can be accomplished.” – William Jennings Bryan, Cross of Gold Speech, 1896.

10. Charles Lindbergh, Senior and US top economists during Great Depression

Charles Lindbergh Sr. (1859-1924) was a member of the House of Representatives from 1907-1917 (R-MN). Lindbergh became disgusted with the leadership of both Republicans and Democrats, and ran as an unsuccessful third-party candidate for the Senate, Congress, and Governor from 1916 until his death. Lindbergh was among the leading spokespersons against the Federal Reserve and against US involvement in World War 1. He was the father of famous aviator, Charles Lindbergh, Junior.

Below is Lindbergh’s powerful Congressional speech from his 1917 book Why is Your Country at War?, page 156, that alleges the Money Trust created the privately-owned Federal Reserve banking system to maximize their own profits. This speech is as strong and accurate a message that can be communicated. It is fully worth your investment of under 5 minutes’ attention.

“…I shall now quote the main important parts of my speech of July 5, 1916—in the Congressional Record of that date:

“No matter what individual professions and party claims may be to the contrary, it is apparent to anyone who has been a Member of Congress, and to anyone else who examines, that the will of the people in regard to legislation is seldom consulted. The price of leadership here is exactly the opposite of carrying out, in good faith, the will of those we are elected to serve.

Wholesale deception of the voters has been, and is now, the means used most successfully to secure office and remain in public life.

…Every one here knows that these things are true. But the public gets no information from the press about it, but anyone who dares to uncover the system and expose the schemes for deceiving the public finds that a certain part of the press will attack him and call him a radical and obstructionist, and excoriate him in every way possible. If to tell the truth about things makes one a radical, then radicals ought to be at a premium. But they have not been so far politically.

There is a sinister influence at work in our country, which, if it is not checked, intends to completely undermine the original purpose of the formation of our Government—change it from the purposes of a democracy, and instead make it of a monarchical and plutocratic system, and to bring all the world into one control and one system, which for purposes of deception of the plain people, they would call a “world’s democracy,” but which in fact it is their plan to make the rule of the wealth grabbers, maintained by simple organization of themselves and disorganization of the masses pitting the masses against each other. It would be the privilege of a few to rule in splendor, and the fate of the many to spend their lives in unrequited toil and that hopeless condition of servitude which millions came here to escape from. The few now desire to cut off every possible avenue of escape from industrial slavery for the masses.

…The plain truth is that neither of these great parties, as at present led and manipulated by an ‘invisible government’ is fit to manage the destinies of a great people. Their rules of regulation must be changed before they will be, and it is doubtful if their rules will be materially changed. If they shall be, it will be because the voters themselves force it.

Early in my service here I observed that there was some power outside the Government itself which was insidiously, but none the less effectively dictating the course of legislation in reference to finance, currency and the creation and control of credit throughout the country; that it was in a position to dictate and did dictate to an extent almost unlimited, to whom credit should be extended and from whom it should be withheld, and that it largely controlled the political action and influence of most of the banking and other corporations of the country. I saw that such a power of control existed here in Congress.

I introduced a resolution setting forth the facts, naming this insidious and well nigh invincible power, the Money Trust, source of all the trusts and calling for an investigation of its activities. The “big business” press, ridiculed the resolution and especially the idea that the Money Trust had an existence. (The facts about this appears elsewhere in this volume. See Index: Money Trust.) In this case the Committee reported out my resolution under a different name, and in order to prevent me from serving on the committee to be appointed, the resolution was referred to the Banking and Currency Committee which was composed almost entirely of bankers and lawyers for some of the banks. By keeping me off the committee I could not cross examine the witnesses.

The committee, nevertheless, had to report that there was a Money Trust and that its activities were as I had stated, and that its existence and the power it yielded were a menace to the institutions of the country, but took no action to deprive it of its power.

Woodrow Wilson, however, took notice of the proceedings and of the existence of the Money Trust.

This was before he became president. He promised to exercise his influence if elected, to curb its power and influence. But I have no hesitation in saying that this promise has not been kept, but on the contrary the principal result of financial legislation during this administration has been to legalize and more firmly entrench the Money Trust in its control of business, credit and politics of this vast country than ever before, and in order to conceal that fact the Money Trust has bought the services of many prominent financial writers for the purpose of running articles in the press praising the Federal Reserve system which in less than six years the people will rise in rebellion against because of its intolerable and unjust burden (Editor’s note: Lindbergh was off by seven years. It took 13 years from this speech for the Money Trust to simultaneously call-in loans in October 1929, crash the Stock Market, and begin the Great Depression).

Profiting from my observation of the Money Trust inquiry by a committee nearly all the members of which were interested in limiting its activities as much as possible, I introduced a resolution declaring it should be the policy of the House Membership that no banker or any one who was financially interested in a bank should be a member of the banking and currency committee.

I also introduced a resolution calling on Members to declare the extent of their affiliations with banks, if they had any.

Neither of these resolutions came out of the Committee on Rules to which they were referred, so we must take it for granted that a majority of the Rules Committee believe that it is right for bankers to frame legislation for Congress to pass for the bankers personal benefit, as all financial legislation shows has been done. Personally I do not believe that a banker should be on that Committee, any more than that if some one sued a judge that he, the sued judge, should sit as the presiding judge to decide his own lawsuit.

My Democratic friends, you have the vain hope that special privilege, having obtained enormous benefits at your hands, is going to be grateful for the past favors that you have showered upon it and assist you in retaining control of the Government. They will furnish you campaign funds, as they do to both the dominant parties, but it makes little difference to them which of you have the power as long as it remains with either under present conditions. You are to learn, having done all you could for it, that you are no longer necessary to its business, except that now that you have passed the most important laws that it wanted, you are forced to follow it up, and are stopped from complaining through your portion of the press and on the stump or from entering any protest whatever when the time comes that your eyes will be open to the oppression the plain people are surely destined to suffer because of your falsely so-called ‘beneficial legislation.’

You have missed the opportunity of your lifetime; one not likely to ever come to you again. The time will come when no Democrat who boasts of the achievements of this administration will be considered worthy to hold any public office. You have gone “cross-roads” with some of the most vital principles laid down by the great Thomas Jefferson. You may boast of him as a great Democrat, but none of you who have been active in fastening some of the hardships of this administration upon the people can boast of yourselves.”

The Great Depression in the US (1929-1941) motivated professional economists (4) to comprehensively and creatively address its causes. Upon consideration of previous US economic depressions in 1837, 1873, and 1893, prominent economists led by Henry Simons at the University of Chicago proposed monetary reform as the nation’s most effective and practical policy response, known as the Chicago Plan (5) (and here [6]). Monetary reform is government creating debt-free money for the direct payment of public goods and services. This power can stimulate the economy to whatever extent desired with infrastructure investment, such as Thomas Edison and Henry Ford proposed for hydroelectric dams.

The Chicago Plan proposal was endorsed by Simons’ colleague, Paul Douglas, Frank Graham and Charles Whittlesley of Princeton, Irving Fisher of Yale, Earl Hamilton of Duke, Willford King of NYU, and sent to a thousand academic economists for their input. Three hundred twenty responded to the mailed proposal and survey (an impressively high number for a cold-call proposal and survey) from 157 universities, with 73% in full agreement with the proposal, 12.5% in approval with various considerations in its implementation, and only 14% in disagreement.

Despite the professional expert opinion in support of monetary reform, President Roosevelt and Congress supported a minor public works program that was paid by government debt. The US depression continued only until the government embraced full employment for WW 2, but paid with further debt. The depression could have ended anytime and with enormous domestic benefit if the full employment had been for infrastructure.

The following brief quotes from President Roosevelt and his son-in-law, and some of our most prominent economists, will help put the proposal in context. Remember that this follows damning House floor testimony of the criminality of the Federal Reserve by House Banking Committee Chair, Louis McFadden, in 1932.

“The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson — and I am not wholly excepting the Administration of W.W. (Woodrow Wilson). The country is going through a repetition of Jackson’s fight with the Bank of the United States — only on a far bigger and broader basis.” – Franklin Roosevelt, letter to Col. Edward Mandell House (21 November 1933); as quoted in F.D.R.: His Personal Letters, 1928-1945, edited by Elliott Roosevelt (New York: Duell, Sloan and Pearce, 1950), pg. 373.

“The depression was the calculated ‘shearing’ of the public by the World Money powers, triggered by the planned sudden shortage of supply of call money in the New York money market….The One World Government leaders and their ever close bankers have now acquired full control of the money and credit machinery of the U.S. via the creation of the privately owned Federal Reserve Bank.”

– Curtis Dall (FDR’s son-in-law), My Exploited Father-in-Law, 1967. pages 34-43:  . Dall was a graduate of Princeton, manager at Lehman Brothers, Partner at Merrill Lynch, and Vice Presidential nominee for the Constitution Party in 1960.

“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. 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.” – Robert H. Hemphill, Credit Manager of the Federal Reserve Bank of Atlanta, 1934 foreword to 100% Money, by Irving Fisher. Fisher was a Yale economist whose proposal for monetary reform lost to Keynes’ deficit spending plan during the Great Depression.

“I have come to believe that that plan is incomparably the best proposal ever offered for speedily and permanently solving the problem of depressions; for it would remove the chief cause of both booms and depressions.” – Irving Fisher, Yale University, March 1935 Preface to the First Edition, 100% Money

“As you know, I am entirely sympathetic with the objectives of your Monetary Reform Act…You deserve a great deal of credit for carrying through so thoroughly on your own conception…I am impressed by your persistence and attention to detail.” – Milton Friedman, Nobel Prize Laureate in Economics and Senior Fellow at the Hoover Institute in his letter to the producer of The Money Masters, 1996, which he helped edit (7).

The mistake…lies in fearing money and trusting debt. Money itself is highly amenable to democratic, legislative control, for no community wants a markedly appreciating or depreciating currency…but money is not easily manageable alongside a mass of private debt and private near-moneys…or alongside a mountain of public debt.” – Henry Simons, Economic Policy for a Free Society

This proposal will of course be opposed by the bankers from whom it takes the lucrative privilege of creating purchasing power. It would however insure the safety of deposits, give large revenues to the government, provide complete social control over monetary matters and prevent abnormal fluctuations in the capital market. At the same time it would permit the allocation of productive resources…to remain primarily in private hands. All in all it seems the most promising program for the reform of our monetary and credit system…” – Paul Douglas in the Chicago Plan booklet.

In discussing our current monetary system, John Kenneth Galbraith wrote in Money: Whence it came, where it went (1975) the following two poignant observations. Galbraith wrote five best-selling books on economics (best-selling to the public), was President of the American Economic Association, economics professor at Harvard, and advisor to four US Presidents.

“The process by which banks create money is so simple that the mind is repelled.” (p. 29; that is, the banking system creates credit out of nothing)

“Much discussion of money involves a heavy overlay of priestly incantation. Some of this is deliberate. Those who talk of money and teach about it and make their living by it gain prestige, esteem and pecuniary return, as does a doctor or a witch doctor, from cultivating the belief that they are in a privileged association with the occult — that they have insights that are not available to the ordinary person. Though professionally rewarding and on occasion personally profitable, this too is a well established form of fraud. There is nothing about money that cannot be understood by the person of reasonable curiosity, diligence and intelligence…. The study of money, above all other fields in economics, is the one in which complexity is used to disguise the truth, not to reveal it. Most things in life — automobiles, mistresses, cancer — are important principally to those who have them. Money, in contrast, is equally important to those who have it and to those who don’t. Both, accordingly, have a concern for understanding it. Both should proceed in the full confidence that they can.” – John Kenneth Galbraith, Money: Whence it came, where it went – 1975, p15.

Note: If we were discussing how the population of some other nation could employ critical thinking skills to understand current events from anytime in history, we would certainly understand the importance to anticipate disinformation from government, danger of controlled media, and assassination as a political weapon.

Failure to do so would appropriately elicit the label attributed to the first dictator of the Soviet Union, Vladimir Lenin. Such people who believe what their government tells them when the history and present have overwhelming objective evidence to explain, document, and prove that the government is typical of so many other historical self-serving oligarchies are:

“Useful idiots.”

To the extent the United States today is any different from all other nations and all other times is up to your exercise of critical thinking skills.

Your choice of a current event to research and consider will provide you with helpful evidence to answer that question for yourself.

Endnotes:

1 Conversation with Emmanuel, comte de Las Cases (20 November 1816), Mémorial de Sainte Hélène, v. 4, p. 251.

2 Zarlenga, S. Stephen Zarlenga’s speech at the U.S. Treasury. Dec. 4, 2003. American Monetary Institute.

3 Turn me on, dead man. The Wizard of Oz. Symbolism of the Cowardly Lion.

4 Herman, C. Top 10 Americans for monetary reform: #10: 86% of Economics professors during Great Depression. Examiner.com. Oct. 5, 2009

5 American Monetary Institute. The 1930’s Chicago Plan vs. the American Monetary Act. Zarlenga, S. AMI Monetary Reform Conference. Oct. 2005

6 Asia Times. Askari, N. & Krichene, N. Dust off the Chicago Plan. Sept. 17, 2008

7 The Money Masters. Milton Friedman: End the Fed.

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  • Big Bear

    Glad to see attention drawn to Charles Lindbergh, Sr., a great congressman and patriot who has been erased from official history for “official” reasons. Besides Why Is Your Country At War, his other two books, Banking and Currency and the Money Trust, and The Economic Pinch, are also absolutely pertinent to America’s present-day problems. Lindbergh confronted the pirates of Wall Street with the facts of their predatory frauds and tried to inform Americans. That’s why you never heard of him.

  • Big Bear

    Congressman Charles Lindbergh, Sr. writes (on page 148 of Why Is Your
    Country At War: “Fifty years ago [1867] 98% of the people owned more than
    95% of the wealth of our nation, and the other 2%, who individually were the
    most wealthy, then owned less than 5% of the wealth, and now [1917] 2% of
    the people own more than 60% of the wealth, and the 98% own less than 40%.”
    Morever, then as now, the poorer 50% of Americans owned virtually nothing.
    Congressman Lindbergh was in a position to say this because 20 years earlier
    South Dakota’s first Senator, Richard Pettigrew, inserted a clause in a bill
    funding the Census instructing the Bureau to determine the distribution of
    wealth in the United States.

    America’s ruling financial elite saw to it that this never happened again
    and that this subject vanished from public discussion, and it was only with
    the Occupy movement that — for the first time since the 30s — some
    Americans began to learn even sketchy facts about extreme inequity of the
    distribution of wealth in our country. Today, as in 1917, the controlling
    interest in America is held not by “the 1%” but “the 0.01%” — one person in
    ten thousand, 16 thousand families among the 300 million of us.

    For an understanding of how this transformation occured three classic works of American
    economic history are excellent reading:

    Gustavus Myers, History of the Great American Fortunes (Chicago, C.H. Kerr &
    Company, 1910; Modern Library, 1936).

    Lewis Corey, The House Of Morgan (NY, 1930; rpr. AMS 1969):

    Louis Brandeis, Other People’s Money And How The Bankers Use It (NY, Stokes,
    1914).

    In 1915 the Congressional Commission On Industrial Relations found (with the aid of Congressional subpoena power) that about 50 men at the apex of the financial system controlled the American economy. This situation, too, has not changed substantially. Its final report observes: “The figures also show that with a reasonably equitable division
    of wealth, the entire population should occupy the position of comfort and security which we characterize as middle class.” This is of course still more the case today, thanks to the vast advances in techniques of industrial production over the last century.