Congressman Louis T. McFadden, Chairman House Banking Currency
"The United States has been ransacked and pillaged. Our structures have been
gutted and only the walls are left standing. While being perpetrated, everything the world
would rake up to sell us was brought in here at our expense by the Fed until our markets
were swamped with unneeded and unwanted imported goods priced far above their value and
make to equal the dollar volume of our honest exports, and to kill or reduce our favorite
balance of trade. As Agents of the foreign central banks the Fed try by every means in
their power to reduce our favorable balance of trade. They act for their foreign principal
and they accept fees from foreigners for acting against the best interests of these United
States. Naturally there has been great competition among among foreigners for the favors
of the Fed.
"What we need to do is to send the reserves of our National Banks home to the
people who earned and produced them and who still own them and to the banks which were
compelled to surrender them to predatory interests.
"Mr. Chairman, there is nothing like the Fed pool of confiscated bank deposits in
the world. It is a public trough of American wealth in which the foreigners claim rights,
equal to or greater than Americans. The Fed are the agents of the foreign central banks.
They use our bank depositors' money for the benefit of their foreign principals. They
barter the public credit of the United States Government and hire it our to foreigners at
a profit to themselves.
"All this is done at the expense of the United States Government, and at a
sickening loss to the American people. Only our great wealth enabled us to stand the drain
of it as long as we did.
"We need to destroy the Fed wherein our national reserves are impounded for the
benefit of the foreigners. "We need to save America for Americans.
"Mr. Chairman, when you hold a $10.00 Fed Note in your hand, you are holding
apiece of paper which sooner or later is going to cost the United States Government $10.00
in gold (unless the Government is obliged to go off the gold standard). It is based on
limburger cheese (reported to be in foreign warehouses) or in cans purported to contain
peas (but may contain salt water instead), or horse meat, illicit drugs, bootleggers
fancies, rags and bones from Soviet Russia (of which these United States imported over a
million dollars worth last year), on wines whiskey, natural gas, goat and dog fur, garlic
on the string, and Bombay ducks.
"If you like to have paper money- which is secured by such commodities- you have
it in Fed Note. If you desire to obtain the thing of value upon which this paper currency
is based, that is, the limburger cheese, the whiskey, the illicit drugs, or any of the
other staples- you will have a very hard time finding them.
"Many of these worshipful commodities are in foreign Countries. Are you going to
Germany to inspect her warehouses to see if the specified things of value are there? I
think more, I do not think that you would find them there if you did go.
"On April 27, 1932, the Fed outfit sent $750,000 belonging to American bank
depositors in gold to Germany. A week later another $300,000 in gold was shipped to
Germany. About the middle of May $12,000,000 in gold was shipped to Germany by the Fed.
Almost every week there is a shipment of gold to Germany. These shipments are not made for
profit on the exchange since the German marks are blow parity with the dollar.
"Mr. Chairman, I believe that the National Bank depositors of these United States
have a right to know what the Fed are doing with their money. There are millions of
National Bank depositors in the Country who do not know that a percentage of every dollar
they deposit in a Member Bank of the Fed goes automatically to American Agents of the
foreign banks and that all their deposits can be paid away to foreigners without their
knowledge or consent by the crooked machinery of the Fed and the questionable practices of
[Ed. Note- Problem with next paragraph in original] "Mr. Chairman, the American
people should be told the truth by their servants in office. In 1930, we had over a half
billion dollars outstanding daily to finance foreign goods stored in or shipped between
several billion dollars. What goods are these on which the Fed yearly pledge several
billions of dollars. In its yearly total, this item amounts to several billions of dollars
of the public credit of these United States?
"What goods are those which are hidden in European and Asiatic stores have not
been seen by any officer of our Government but which are being financed on the public
credit of the United States Government? What goods are those upon which the 17 United
States Government is being obligated by the Fed to issue Fed Notes to the extent of
several billions of dollars a year?
The Bankers' Acceptance Racket
"The Fed have been International Banks from the beginning, with these United
States as their enforced banker and supplier of currency. But it is none the less
extraordinary to see these these twelve private credit monopolies, buying the debts of
foreigners against foreigners, in all parts of the world and asking the Government of
these United States for new issues of Fed notes in exchange for them. "The magnitude
of the acceptance racket as it has been developed by the Fed, their foreign
correspondents, and the predatory European born bankers, who set up the Fed here and
taught your own, by and of pirates, how to loot the people: I say the magnitude of this
racket is estimated to be in the neighborhood of 9,000,000,000 per year. In the past ten
years it is said to have amounted to $90,000,000,000.00. In my opinion it has amounted to
several times that much. coupled to this you have to the extent of billions of dollars,
the gambling in the United States securities, which takes place in the same open discount
market- a gambling on which the Fed is now spending $100,000,000.00 per week.
"Fed Notes are taken from the U.S. Government in unlimited quantities. Is is
strange that the burden of supplying these immense sums of money to the gambling
fraternity has at last proved too heavy for the American people to endure? Would it not be
a national [calamity to] again bind down this burden on the backs of the American people
and by means of a long rawhide whip of the credit masters, compel them to enter
another seventeen years of slavery?
"They are trying to do that now. They are trying to take $100,000,000.00 of the
public credit of the United States every week, in addition to all their other seizures and
they are sending that money to the nefarious open market in a desperate gamble to
reestablish their graft as a going concern.
"They are putting the United States Government in debt to the extent of
$100,000,000 a week, and with the money they are buying our Government securities for
themselves and their foreign principals. Our people are disgusted with the experiences of
the Fed. The Fed is not producing a loaf of bread, a yard of cloth, a bushel of corn, or a
pile of cordwood by its check-kiting operations in the money market.
"Mr. Speaker, on the 13th of January of this year I addressed the House on the
subject of the Reconstruction Finance Corporation. In the course of my remarks I made the
following statement: In 1928 the member banks of the Fed borrowed $60,598,690,000. from
the Fed on their fifteen-day promissory notes. Think of it. Sixty billion dollars payable
on demand in gold in the course of one single year. The actual amount of such obligations
called for six times as much monetary gold as there is in the world. Such transactions
represent a grant in the course of one single years of about $7,000,000 to every member of
"Is it any wonder that American labor which ultimately pays the cost of all
banking operations of this Country has at last proved unequal to the task of supplying
this huge total of cash and credit for the benefit of the stock market manipulators and
foreign swindlers? "In 1933 the Fed presented the staggering amount of
$60,598,690,000 to its member banks at the expense of the wage earners and tax payers of
these United States. In 1929, the year of the stock market crash, the Fed advanced
$58,000,000,000 to member banks.
"In 1930 while the speculating banks were getting out of the stock market at the
expense of the general public, the Fed advanced them $13,022,782,000. This shows that when
the banks were gambling on the public credit of these United States as represented by the
Fed currency they were subsidized to any amount they required by the Fed. When the swindle
began to fall, the bankers knew it in advance and withdrew from the market. They got out
with whole skins- and left the people of these United States to pay the piper. "My
friend from Kansas, Mr. McGugin, has stated that he thought the Fed lent money on
rediscounting. So they do, but they lend comparatively little that way. The real
discounting that they do has been called a mere penny in the slot business. It is too slow
for genuine high flyers. They discourage it. They prefer to subsidize their favorite banks
by making them $60,000,000,000 advances and they prefer to acquire assistance in the
notorious open discount market in New York, where they can use it to control the price of
stocks and bonds on the exchanges.
"For every dollar they advanced on discounts in 1928, they lent $33.00 to their
favorite banks for whom they do a business of several billion dollars income tax on their
profits to these United States.
The John Law