The Great Depression
When we were reading over this document, we noticed some parallels,
between the rhetoric used by Rep. McFadden, in 1932, and Ross Perot, in 1992, with NAFTA.
Perot, generally, talks about companies moving overseas, putting
Americans out of work, for "cheap labor, lower environmental
McFadden is talking about "cheap, exported credit,
loaned by the Federal Reserve Banks, enabling foreign companies to use
cheap labor to make products more cheaply than they can be made here,"
putting American businesses out of business, and, thereby, Americans
losing their jobs. The mechanism is different, but the same scorn for
"cheap, foreign labor, and the companies that are taking advantage of
it" is there. Congressional Record of June 10, 1932
We think some things need to be clarified in order to get a full
understanding of his argument.
Louis T. McFadden was Chairman of the House Banking Committee. in the early 1930's. The
same as Henry Gonzalez was in the late `80's and early `90's.
From the Congressional Record of June 10, 1932:
McFadden talks about so many Federal Reserve
Notes being held by foreigners, and that the wealth of Americans is
being exported to these foreigners in order to redeem these FRNs.
Back then, in the '30's, regular money, used to buy things, was gold and silver coins.
One could turn in their coins for Federal Reserve Notes, or get gold
or silver certificates. These slips of paper were redeemable by the
holder for money: gold and silver coins. So, if a foreign holder
wanted to redeem an FRN, the Federal Reserve would have to send the
holder the amount of money (gold or silver coins) that is called for, on each note of currency..
Also, he says that an independent treasury needs to be reestablished.
According to what we've heard recently, the U.S. Government does not
have its own Treasury, as it used to,
and most people think it still
The Treasury Dept. is in fact a part of the Federal Reserve System, a privately owned corporation!!!
When the IRS collects its taxes, those taxes go to the
Treasury Dept., and the government gets access to that money anytime
it wants to.
As far as we know, this pool of money is not loaned to
the government, as is the case with the paper currency, when it is
newly created. It is just held there until the government wants it, we
"Mr. Chairman, last December, I introduced a resolution here asking
for an examination and audit of the Federal Reserve Board and the
Federal Reserve Banks and all related matters. If the House sees fit
to make such an investigation, the people of the United States will
obtain information of great value. This is a government of the
people, by the people, for the people, consequently nothing should be
concealed from the people. The man who deceives the people is a
traitor to the United States. The man who knows or suspects that a
crime has been committed and who conceals or covers up that crime is
an accessory to it. Mr. Speaker, it is a monstrous thing for this
great Nation of people to have its destiny, presided over by a
traitorous government board, acting in secret concert with
international usurers. Every effort has been made by the Federal
Reserve Board to conceal its power but the truth is the Federal
Reserve Board has usurped the Government of the United States. It
controls everything here and it controls all our foreign relations.
It makes and breaks governments at will. No man and no body of men is
more entrenched in power than the arrogant credit monopoly which
operates the Federal Reserve Board and the Federal Reserve Banks.
These evil-doers have robbed this country of more than enough money to
pay the national debt.
What the national Government has permitted the
Federal Reserve Board to steal, from the people, should now be restored
to the people.
The people have a valid claim against the Federal
Reserve Board and the Federal Reserve Banks.
If that claim is
enforced, Americans will not need to stand in breadlines or to suffer
and die of starvation in the streets. Homes will be saved, families
will be kept together, and American children will not be dispersed and
abandoned. The Federal Reserve Board and the Federal Reserve Banks
owe the United States Government an immense sum of money.
We ought to
find out the exact amount of the people's claim. We should know the
amount of the indebtedness of the Federal Reserve Board and the
Federal Reserve Banks to the people and we should collect that amount
immediately. We certainly should investigate this treacherous and
disloyal conduct of the Federal Reserve Board and the Federal Reserve
Here is a Federal Reserve Note.
Immense numbers of these notes
are now held abroad. I am told they amount to upward of a billion
dollars. They constitute a claim against our government and likewise
a claim against the money our people have deposited in the member
banks of the Federal Reserve System. Our people's money to the extent
of $1,300,000,000 has, within the last few months, been shipped abroad,
to redeem Federal Reserve Notes and to pay other gambling debts of the
traitorous, Federal Reserve Board and the Federal Reserve Banks. The
greater part of our monetary stock has been shipped to foreigners.
Why should we promise to pay the debts of foreigners to foreigners?
Why should our government be put into the position of supplying money
Why should American farmers and wage earners add
millions of foreigners to the number of their dependents?
the Federal Reserve Board and the Federal Reserve Banks be permitted
to finance our competitors in all parts of the world?
Do you know why
the tariff was raised?
It was raised to shut out the flood of Federal
Reserve goods pouring in here, from every quarter of the globe--cheap
goods produced by cheaply paid foreign labor-- on unlimited supplies of
money and credit, sent out of this country, by the dishonest, and
unscrupulous, Federal Reserve Board and the Federal Reserve Banks. Go
out in Washington to buy an electric light bulb and you will probably
be offered one that was made in Japan, on American money.
Go out to buy
a pair of fabric gloves and, inconspicuously written on the inside of
the gloves that will be offered to you, will be found the words 'made
in Germany' and that means 'made on the public credit of the United
States Government paid to German firms in American gold taken from the
confiscated bank deposits of the American people.'
The Federal Reserve Board and the Federal Reserve Banks are
spending $100,000,000 a week buying government securities, in the open
market, and are, thus, making a great bid for foreign business.
trying to make rates so attractive that the human-hair merchants and
distillers and other business entities, in foreign lands, will come here
and hire more of the public credit of the United States Government, and
pay the Federal Reserve outfit, for getting it for them.
Mr. Chairman, when the Federal Reserve Act was passed, the people
of the United States did not perceive that a world system was being
set up here, which would make the savings of an American school-teacher
available to a narcotic-drug vendor in Cacao.
They did not perceive
that the United States was to be lowered to a position of a coolie
country, which has nothing, but raw materials and heavy goods for
export; that Russia was destined to supply manpower, and that this
country was to supply financial power, to an international
superstate--a superstate controlled by international bankers and
international industrialists, acting together, to enslave the world, for
their own pleasure.
The people of the United States are being greatly wronged. If
they are not, then I do not know what `wronging the people' means.
They have been driven from their employments. They have been
dispossessed of their homes. They have been evicted from their rented
quarters. They have lost their children. They have been left to
suffer and to die for the lack of shelter, food, clothing, and medicine.
The wealth of the United States, and the working capital of the
United States, has been taken away from them and has, either, been locked
in the vaults of certain banks and great corporations, or exported to
foreign countries, for the benefit of the foreign customers of those
banks and corporations.
So far as the people of the United States are
concerned, the cupboard is bare.
It is true that the warehouses and
coalyards and grain elevators are full, but the warehouses and
coalyards and grain elevators are padlocked and the great banks and
corporations hold the keys.
The sacking of the United States by the
Federal Reserve Board and the Federal Reserve Banks and their
confederates is the greatest crime in history.
Mr. Chairman, a serious situation confronts the House of
We are the trustees of the people and the
rights of the people are being taken away from them.
Federal Reserve Board and the Federal Reserve Banks, the people are
losing the rights guaranteed to them by the Constitution.
property has been taken from them without due process of law. Mr.
Chairman, common decency requires us, to examine the public accounts of
the government, to see what crimes, against the public welfare, have been,
and are being, committed.
What is needed, here, is a return to the Constitution of the United
We need to have a complete divorce of Bank and State.
old struggle that was fought out, here, in Jackson's day, must be fought
The independent United States Treasury should be
re-established and the government should keep its own money under lock
and key in the building, the people provided for that purpose. Asset
currency, the device of the swindler, should be done away with. The
government should buy gold and issue United States currency on it.
The business of the independent bankers should be restored to them.
The State banking systems should be freed from coercion.
Reserve districts should be abolished and State boundaries should be
respected. Bank reserves should be kept within the borders of the
States, whose people own them, and this reserve money, of the people,
should be protected, so that international bankers and acceptance
bankers and discount dealers cannot draw it away from them. The
exchanges should be closed while we are putting our financial affairs
in order. The Federal Reserve Act should be repealed and the Federal
Reserve Banks, having violated their charters, should be liquidated
immediately. Faithless government officers who have violated their
oaths of office should be impeached and brought to trial. Unless this
is done by us, I predict that the American people, outraged, robbed,
pillaged, insulted, will rise in their wrath and send a President, here,
who will sweep the money changers out of the temple."
Speech before Congress, 1935, by Louis T. McFadden, Chairman of the House Banking Committee, Congressional Record of June 10, 1932
McFadden was eliminated from the debate by his "untimely death, in 1935."
Return to History List.-Please use your Browsers "BACK" Button.