There can be no Liberty without Economic Freedom — America can have no Economic Freedom without an honest money system — one removed from the controls of the socially irresponsible private Money Creators. The problem facing us today is not the formation of a new political party. It is to inform the constituents of every Congressional District so that they may put such pressure upon our Congressmen and Senators as to leave them no alternative but to do the will of the people. The people must demand of them an honest money system. The illicit political machines and numerous rackets will pass into oblivion when an honest money system is set in operation. The controllers of our money system are the controllers of our illicit political machines.
Victims ! Do you want money made honest for you by the National Government; or kept “sound” for the Money Creators by mis-government ? Do you want U. S. dollars in sufficient number to keep the “wolves of depression” from your door; or do you want dollars in such overwhelming num bers as to deprive them of all value, as the Money Creators have done in other countries ? The reader will ask : “Why have not business leaders known that our money system is dishonest ? They are intelligent, aggressive people who seem equal to anything.
The answer is found in the fact that with few exceptions business men are honest, and, as honest men, believe that few men are dishonest. The situation resulting from this concept has set the stage for any confidence game, large or small. The Money Creators have truly operated a confidence game. Our home town and city bankers are, with few exceptions, honest men. Through intrigue and manipulations of gold and government debts they have become mere pawns in the world monetary confidence game.
They and their predecessors inherited a system which, because it is, they believe always was. If they would look into the origin of the system, and examine its nature, originated sub-rosa and only through centuries of legislative trickery congealed into Law, they would demand that the system be demystified, made non-collapsible, and honest in essence; for they would see that the near-by destiny of the system is ruin for them as well as for others. January 29, 1935.
To the American People : It gives me special pleasure to have the opportunity to explain the principles and purposes of this book, written by Miss Gertrude M. Coogan of Chicago. The facts that Miss Coogan was awarded a Master’s Degree in Economics and Finance by Northwestern University; was for eight years a Security Analyst for The Northern Trust Company of Chicago; that from the beginning she had a deep desire to understand the fancied enigma of money, have given her a great insight into monetary science. The basic principles of monetary science are simple.
It is a sound axiom of monetary science that the value of money depends upon the available supply of money in relation to the goods to be exchanged with it. Knowledge of the science has been made difficult by those who have converted these simple principles into an enigma. They have done so with ponderous volumes written on prices and on the processes of production, transportation, distribution and allied topics; weaving into the subject matter deceptive terms so that the public has been grossly misled by the use of words which contain accepted false premises. The intentional use of deceptive terms has made monetary science obscure.
For example; the so-called monetary experts and financial writers use the word Inflation to stigmatize justified expansion in the volume of money, when Inflation actually means unjustified expansion. They use Deflation, which means justified contraction of a previous unjust expansion; that is, contraction of previous inflation, as synonymous with unjustified contraction, in order to commend that unjust contraction. They use the word Money as meaning gold and currency alone, when the word Money really means, as Webster’s dictionary truly says : “anything having a conventional use as a medium of exchange and a measurement of value. That is, Money means bank checks and bank demand deposits principally.
It is through this deceptive use of the word Money that they say there is no relation between the volume of money and our domestic price levels. It is with this false use of the word Money that they deny the quantitative facts of money. They use the term Gold Standard deceptively because the weight of the gold exchangeable for a currency dollar has no standard measure of value, and cannot have. The value of a fixed number of grains of gold exchangeable for a dollar, fluctuates directly with the expansion or contraction of bank credit money.
It was easy to fix the currency price of gold, but the creators and controllers of bank credit money fixed the goods price of gold. The number of grains of gold exchangeable for a currency dollar is of very minor importance from a domestic standpoint. It is only in the purchase of foreign exchange, the currencies of other countries, that the number of grains of gold exchangeable for a dollar is of vital importance. When other countries change the grains of gold exchangeable for their currency units, it is necessary that the United States do likewise, if we wish to enter export markets.
In a really scientific money system, gold should not have a fixed price. The number of grains of gold exchangeable for a unit of currency, in reality, should fluctuate as the purchasing power of the dollars themselves change. Fixing the weight of gold exchangeable for a unit of currency has been the means by which the price levels of each country have been altered at the pleasure of foreign Bankers.
My own interest in this matter arose when I was a boy of 17 in the Panic of 1873. Then, the value of my father’s property was completely destroyed and my mother, from a life of abundance, was suddenly compelled to earn her living by teaching music. I determined to solve that question and have continued to give it consideration throughout my whole life. Opportunity favored me. In 1877, I was graduated in six languages; was awarded the Degree of Master of Arts; was Valedictorian of my class; received the Debater’s Medal; and later had conferred upon me the Degree of LL. D. nd was elected to Phi Beta Kappa.
During my entire life I have been a serious student. In 1890, I had the opportunity of establishing the first national bank chartered in Oklahoma; was its President ten years, and have been elected a Director for 45 successive years. I knew the causes of the Panic of 1893 and conducted that bank through that panic. I was a delegate to the National Democratic Convention in 1896 and made a resolute fight to commit the Democratic Party in its platform to a pledge to protect the people of the United States against panics and depressions.
An attempt was made to remonetize silver. Hon. William Jennings Bryan himself strenuously demanded the establishment of an honest money system—money whose purchasing power should remain the same. Bryan was defeated solely by a studied and expressive campaign of deception and ridicule, the threat of panic and the use of money. In 1898 I went to Europe and studied the methods by which Europe stabilized credit and the value of money.
After having studied at first hand the Bank of England through its Governors; the Bank of France through its Governor and expert advisers, and the Reichsbank through its Directors, I wrote many articles describing how the purchasing power of money could be stabilized in America. Many articles were written by me at that time to show what principles could be applied to an American system. In 1900 I devised a plan to protect this country against the evils of monetary panics by providing for the issuance of United States legal tender money when national production necessitated an increase in the supply of money.
In December 1907, I entered the United States Senate and served there for 18 years. Within ninety days after I entered the Senate, on the 25th day of February 1908, I analyzed completely the Panic of 1907; showed its causes, how it could be cured, and how depressions could be prevented in the future. My text was stability in the value of money. I was made Chairman of the Committee on Banking and Currency of the United States Senate on March 5, 1913, and immediately drafted a Bill called the Federal Reserve Bill.
In drafting this Bill I was greatly assisted by the results of four years work done by the National Monetary Commission. That Commission’s report consisted of 32 volumes, and an auxiliary library of 2500 volumes. It had been established on my request from the floor of the United States Senate. In July 1913, Hon. Carter Glass joined me in presenting to the Senate and to the House the so-called Federal Reserve Bill which had been prepared by me the previous March, but which had been expanded, and contained provisions with which I was not entirely content.
My Committee was immediately called together to take testimony on this Senate Bill, and after 3,000 pages of printed testimony had been taken, my colleagues in the Senate authorized me to write another Bill. I thereupon had the Senate strike out the Bill that had been prepared in the House and substitute the Bill which I had originally prepared. The Senate adopted the Bill written by me without a change of word. In the Bill introduced in July, in which the Hon.
