Pensions - Homes - Schools - Jobs CONSTITUTIONAL MONEY ADVOCATE Volume I, Number 1 November 1, 1939 * * * * Price 10c

Ho n . Robert L. Owen (See Page Nine)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis UNROBING THE GHOSTS OF WALL STREET 1. Fifiy-Ceni Dollars 3. Inflation 5. Machine Age 2. Fiat Money 4. Periodic Cycles uninformed, trembling and frightened, echo the cry. Ghost Number One Let us unrobe the "Fiat Money Ghost." Webster s FIFTY-CENT DOLLARS Dictionary defines "fiat" as follows: A mystical value obscure to human observation, a value created We changed the size of the paper dollar in 1929 by law." and made it about one-half size, but you didn t notice All money is fiat money. It would not be legal- the change in its value or purchasing power, did you? tender money unless it were fiat. You tried it in 1933 when we reduced the gold All money is made by law. Gold is fiat money, content of the dollar 41 percent. You bought just the because its value was created by law. Remove the same amount of commodities as you did before. fiat from gold, or demonetize gold and its value You never noticed any difference in its value or would be so small that you would be ashamed to purchasing power, or debt-paying power, did you? wear a gold ring or to have the gold show in your Then why this continued talk of fifty-cent dollars? teeth. In 1933 we increased the price of gold from We all know better. $20.67 an ounce to $35—that is, we added another You cannot possibly change the value or pur­ $14 fiat to an ounce of gold, or we added to our gold chasing power of the dollar by changing the size holdings $2,700,000,000 fiat on top of all the other or material on which Uncle Sam's stamp appears. fiat we already had in the gold. It is the stamp of Uncle Sam which makes and Since all money is fiat money, then why all this determines the unit of exchange. continuous alarm in the press and on the platform, It is the abundance or scarcity of dollars which in Congress and out of Congress, about fiat money? determines the purchasing power or value. Whether it is a fifty-cent dollar or a dollar-and-fifty-cent dollar, can only be determined when measured by the Ghosl Number Three dollar's purchasing power of commodities. INFLATION There is no such thing as a "fifty-cent dollar," and Isn't it strange that you never hear of the terrors every thinking person knows there isn t any more of DEFLATION, even though it has robbed the labor­ than there is a two-foot yardstick or an eleven-inch ing man and the farmers no less than twenty-seven foot rule. The material from which a dollar or a yard­ times, and today we are still suffering from the last stick or a foot rule is made has no bearing on its three, with poverty in the midst of plenty? Why? measuring unit. When Uncle Sam prints on a coin Because the vultures of greed want money scarce "One Dollar," be it on gold, silver, copper, yellow so their interest-dollars will buy more labor and paper, or green paper, it is a dollar and will buy a dollar's worth of goods at their relative value or will products. Isn't it strange that you never see the word DE­ pay a dollar of debt. FLATION" blazoned across the front page of our big The purchasing power of a dollar is another matter newspapers? But with the slightest suggestion, the that is determined by the number of dollars in cir­ press, echoing Wall Street, waves the Inflation culation as compared with the amount of goods Ghost” in its most hideous robes? Why? Because traveling in the veins of trade and industry. For ex­ Wall Street owns the bonds of Industry and controls ample, in 1920 we had twice as much gold back of the advertising in big papers who don't dare to ven­ our dollar as today and still the dollar bought only ture a thought objectionable to these economic half as much in goods. dictators. So let us unrobe the Inflation Ghost and see the Ghost Number Two nothingness under the robe. You have never heard of a single bank failure in FIAT MONEY history caused by Inflation, have you? No, but you It was Nero, of Rome, who taught the international lived to see over 16,000 banks destroyed by Deflation. bankers the way. In building for himself fortification You never saw a Nation's homes destroyed by against any accusations, he created a poison called Inflation, did you? Of course you didn't, but you saw "prejudice" around the honorable name "Christian" over 100,000 homes destroyed annually by Deflation and when the name was thoroughly steeped in the in the last ten years. _ poison of gossip and prejudice, he pointed to it as You never heard of a single man losing his job something combined with everything horrible. An by Inflation, did you? There never was such a case, uninformed public aped him, as they always ape but you have heard of millions losing their jobs by those in power. Thus fortified, when accused he Deflation. pointed and whispered, "The Christians." And blind You never heard of bread lines and soup kitchens and prejudiced humanity burned them at the stake. created by Inflation. That's impossible. But you have And so today the international bankers point to the seen Deflation compel your neighbors and most pros­ Wall Street ghosts and whisper, "Horrible! Fiat perous citizens to fall in line, haven’t you? money! Look out or that ghostly bogey man will get You never heard of a Nation destroyed because of you!" And in Congress and out of Congress the (Continued on Page 19)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis Constitutional Money Advocate VOL. I No. 1 November 1, 1939 Why Should Congress Declare A Monetary Policy?

It is immaterial to the people of the United States what the cause is of a shortage of money supply, or whether it be a shortage of volume or a shortage of volume and velocity. The hoarding of money, whether in demand bank deposits or in currency is immediately reflected in a rise in the purchasing power of money and in the sacrifices of property and serv­ ices needed to get money. In 1932, when people hoarded currency, the Department of Commerce had reports from over 1,000 cities where people estab­ lished barter exchanges or issued scrip and locally manufactured money to es­ By Honorable Robert L. Owen cape the intolerable conditions then ex­ isting. ANSWER: Because Congress has exclusive power Demand bank deposits hoarded or held in reserve and duty to regulate the value of money; because by individuals or corporations, deny the country regulation of value requires regulation of volume; the volume of money necessary to supply the me­ because regulation of volume requires an executive dium of exchange of the products and services of instrument directed by law to expand or contract the the people with each other. The reason why such volume with an objective defined by law. demand bank deposits are hoarded is immaterial. The present powers given the reserve board, The proof that it is hoarded appears in the August enormous as they are, have no declared objective bulletin of 1935, but the figures there estimated are by law, not even "to regulate the value" of money; not as important evidence as the failure of national nor to furnish an adequate volume to increase em­ production by volume to register a minimum index ployment and production to maximum. of 126 instead of 105 as above set forth. For over two years the reserve banks, the open Unemployment as Proof market committee, and the Federal Reserve Board Obviously without working capital with which to have failed to expand demand bank deposits through pay wages, employment is impracticable. Even in the expansion of credit by the reserve banks. 1929, there were 1.8 million people unemployed The reserve board emphasizes the dangers of in­ which increased up to 13.7 in 1933. And in 1936 there flation and doubles the reserve requirements of mem­ were still 10.5 millions unemployed,—one-third of the ber banks to prevent inflation when the country is people on relief, underprivileged, illfed, illclothed, afflicted with unemployment through so-called defla­ under-housed, subject to exposure, disease and tion (really by indefensible contraction of credit and crime. When the contraction of the money supply demand bank deposit by some 16 thousand privately took place, unemployment rose to a maximum. Un­ owned banks). employment diminished again as the money supply The index of physical production for 1929 was increased. 119, (1926, 100) and for 1936 was 105; when it Consuming power depends on wages and on em­ should have been 126, because the population had ployment—employment on power to sell the products increased approximately 7 millions from 121.5 in of employment. When producers cannot sell, produc­ 1929 to 128.5 in 1936. Here is a shortage of 21 points tion and employment diminish accordingly, both as from what production should be by increase of pop­ a matter of reason and as a matter of fact. ulation. The unemployment of one-sixth of the Loeb's "Chart of Plenty" based on the findings of people explains the lack of production by volume. 60 experts found that the people of the United States Unemployment is accounted for by the contraction had an annual potential production of 135 billions of our money supply which took place in check in 1929 if its labor and factories and resources were money, which in 1929 had a turnover of 1230 billions employed at a maximum. As the population has falling to 470 in 1934, and was 530 in 1935 and 600 now increased over 7 millions, the potential produc- in 1936. (Continued on Page 4)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 4 CONSTITUTIONAL MONEY ADVOCATE Constitutional Money Advocate money, deposits, currency, and if that process of deflation gets under way, it is more or less A Monthly Publication self-generating and it is very difficult to stop it. . . . " Charles G. Binderup______Editor In commenting on the crash of 1929, Governor Published By Eccles further said: The Constitutional Money League of America "Banks . . . brought pressure upon all loans Washington, D. C. which came due during the period, and were A non-partisan, non-profit organization forced to refuse new credit. They were bringing Printed and distributed from the Central Office at pressure to collect loans that became due, and Minden, Nebraska to sell securities that they had, whenever they could do so without taking too large a loss. . . . Subscription Rate______50 cents per year Therefore, in an effort and under pressure to get liquidity, they froze themselves so completely Published for the purpose of disseminating mone­ that they finally closed the entire banking tary facts. Truth is the basis of all knowledge and structure." science and education are the foundation of Democ- The above frank and true statements are from racy. Mr. Marriner S. Eccles, Governor of the Federal Reserve Board of the Federal Reserve Banking System. Who Creates the What an admission of the incompetency of our banking system! Nation's Money? What an indictment of our monetary policy, and what a crime that we should allow it to continue In support of our contention that private banks, for even another day! insofar as they expand their own credit and thus create bank deposits, are virtually individual private mints, issuing money in contravention of the Con­ Why Should Congress Declare A stitution, I quote below from the testimony of Gov­ ernor Eccles of the Federal Reserve Board, before Monetary Policy? the Banking and Currency Committee of the House (Continued from Page 3) during the hearings on the Banking Act of 1935: tion should be about 145 billions without considering Governor Eccles: . . . "In purchasing offerings improved processes since 1929 figures. Our present of Government bonds, the banking system as production is estimated at 60 billions and an effec­ a whole creates new money, or bank deposits. tive money supply of about 20 billions of demand When the banks buy a billion dollars of Govern­ bank deposits. ment bonds as they are offered—and you have In the testimony of Robert H. Hemphill (hearing of to consider the banking system as a whole, as 1935) a table was submitted showing that the ratio a unit—the banks credit the deposit account of between the demand bank deposits and national the Treasury with a billion dollars. They debit income was equal to one-third of the production their Government bond account a billion dollars, as estimated in the Department of Commerce. or they actually create, by a bookkeeping entry, His figures were as follows: a billion dollars." D e m a n d N a t i o n a l Mr. Goldsborough: "By a sort of magic." D e p o s i t s I n c o m e Ra t i o 1929 24.3 81 3.3 In like manner as the banks increase their deposits 1930 24 75.4 3.1 or create new money through the purchase of Gov­ 1931 21.3 63.3 3.3 ernment bonds, the banks also create new money— 1932 16.4 48.9 3.0 increase their deposits—by buying notes and other 1933 15.2 46.8 3.0 commercial paper from their customers. 1934 17.6 52.8 3.0 1935 18.3 52.9 3.0 Thus as our money supply is increased by the 1936 20.0 net 60.0 banking system creating new money—increasing Some of the tables of national production give their deposits—by purchasing Government bonds or larger amounts to the calculations involving addition­ notes or other obligations of their customers, so also al forms of productions not employed in the Hemphill is our money supply decreased by the banking sys­ tables. This makes no difference in the principle tem demanding payment of these notes or obligations established that the national production has a fixed and refusing to make new loans to take their place. relation to the actual money in actual circulation. In this connection I again quote Governor Eccles It follows that to attain maximum employment (and in the same testimony as quoted from above: production) you must increase the money supply Governor Eccles: "When the community begins until all available employables are engaged in pri­ to pay its debt to the banks, it extinguishes vate industry.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 5 CIVILIZATION'S MASTER — By Robert H. Hemphill — Former Credit Manager of The Federal Reserve Bank of Atlanta, Georgia * Holding the Purse Strings of Society, of exchange—that imaginary money—Bank Credit. Rendering the Whole Community De­ The checking accounts of the individuals, partner­ ships and corporations of the nation have been pendent upon Them, the Money Chang­ decimated by the commercial bankers of the nation ers Proscribe Every Man Who Dares some two billions of dollars more—probably nearer To Expose Their Unlawful Practices three billions, since January 1st, 1937, and we are having an orthodox, common, or garden variety of All over the front pages and through the financial depression, nothing mysterious or unusual about it sections of the newspapers is strewn the constantly crt aU—fust the same kind of depression we have had repeated statement that because of the capital gains periodically since Congress, under the manipulation tax, or the undistributed profits tax, or because of of these shrewd chiselers, abdicated and turned over New Deal antagonism to business generally, Capi­ to them its most vital function, the creation of money, tal has lost confidence, become frightened, and is the only mechanism we have for passing our goods not flowing into the channels of commerce and and services from one to another. industry," and because of this we have a constantly There is, however, a great reservoir of imaginary deepening depression. money in the potential credit which resides in the If it were not tragic, it would be amusing to sit capacity of commercial banks to lend credit to com­ on the side lines and watch the skilled propagandists merce and industry. All of this talk and propaganda of the Money Changers advance an idea, designed about reassuring Capital is, in the final analysis, to cover up the manipulations of their cunning nothing more nor less than a statement that: If we masters, and by constant repetition finally embed are to have prosperity we must adjust our lives and it firmly in the minds of the unsuspecting public. actions to a standard which will be satisfactory to For months such a campaign has successfully im­ the commercial bankers of the nation, and after that planted in official and unofficial minds alike the is done, they may loosen up and grudgingly allow idea that there exists, in some unspecified cache, a commerce and industry to function again by loaning vast fund of idle capital which, under more favorable them an imaginary but usable medium of exchange circumstances would be circulating in the constant —bank deposits created by loans. exchange of goods and services to the end that every­ BUT commerce and industry will have to pay them one would be busy at a remunerative job and living a share in the profits for every dollar of this synthetic off the fat of the land. money. We cannot transact business, we cannot There is just one expressive answer to that state­ produce, we cannot employ labor, unless the com­ ment—vicious boloney! mercial bankers permit us to do so. Understand, I am not for either the capital gains If this is a new and startling thought to you who or the undistributed profits tax. I believe that both read this, you may well ask, who owns the United are vicious in the extreme. The capital gains tax, States, anyway? I have always believed, was germinated in com­ The answer is very simple—the commercial banks. munistic pique and revenge directed at successful In the language of a legislative commission of the speculators by persons in the Administration who New York Legislature—which should be burned into very likely never earned or had more than a modest the consciousness of every man and woman in this weekly salary. The undistributed profits tax was, magnificent country: in my opinion, designed specifically to "get" Henry "In the opinion of your committee, no system was Ford—to destroy his enterprise or force it into the ever better devised so perfectly to enslave a com­ control of some of the many "Dillingers" of Wall munity as that of the present mode of conducting Street. - banking establishments. Like the siren of the fable These measures, together with other ill-advised they entice to destroy. They hold the purse strings proposals of the so-called New Deal, whose general of society . . . thus rendering the whole community philosophy dates back to Diocletian, the gentleman dependent upon them; proscribing every man who who put the disintegrating Roman Empire on the dares to expose their unlawful practices.” skids, unquestionably deter many possible new The reason, and the only reason we have un­ ventures which are the essence of progress. employment, hunger and distress in this grand The idea that a vast fund of inactive money exists country, is that the commercial bankers who control somewhere, and that this situation is responsible the only mechanism for creating a usable substitute for the present severe and rapidly deepening de­ for money, refuse this essential medium of exchange pression, is just a red herring drawn across the trail and for this reason, and for this one reason only, this of the Money Changers, who have for more than a nation, endowed with resources almost beyond year constantly cancelled and taken out of circu­ imagination, is idle, hungry, ragged and in distress. lation substantial fractions of our principal medium (Continued on Page 9)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 6 CONSTITUTIONAL MONEY ADVOCATE There was a growing public opin­ ion against allowing some man to hit her over the head with a club, drag her off to his cave, and set up housekeeping with her, thus cheating the father out of some return for the services he had ren­ dered in keeping her alive. One bright young man solved the problem by offering the father of his loved one a cow in ex­ change for the girl. Now a cow was something real, she could be used as a beast of burden, she gave milk, her flesh was good to eat, her hide made good loin cloths or offered shelter at the entrance of the cave or as a tent covering. Even her horns, attached to the head of a male member of the family, had the double, value of an ornament and a charm against evil spirits; so the bargain was made and both sides were satisfied. What the daughter thought is not on record, but she was prob­ ably greatly flattered and pretty snooty to the other girls who had been married by the old club and drag method. At any rate, 'tis said that the price of a wife was a cow for a considerable length of time. Various kinds of money our ancestors used from 1050 B.C. to date. Of course "the economic royal­ ists" of that day who owned two Money, we all want it. In spite It is of value only in exchange for or more cows could have their pick of the fact that the Bible says— necessities, comforts, or luxuries. of the brides but there were still "the love of money is the root of According to tradition, cows were plenty of girls and any man who all evil," we find good men as the first medium of exchange. It owned a cow or could, by any well as bad striving to get as much happened this way. hook or crook, get hold of one, of that foul root as is humanly The right of a father to his could be assured of a more or less possible. daughter became established by happy home. To many, money means wealth. popular opinion. The father had Having purchased his wife, he This is true among civilized people sheltered her, defended her, need not fear that the father or only and to a limited degree only. hunted and fished that she might some male relative would lay in Primitive man did not use money. not starve, and society decreed wait for him and take her away He produced for himself practi­ that he had a right to her labor from him by force. cally everything he needed to and her companionship, if any. Whether cows became more satisfy his primitive wants. The savage of today uses and needs little or no money. You can't eat money. Of itself, it will neither give you shelter from the weather nor clothe you. Only where money may be used'as a medium of ex­ change,'where the desire for arti- _ cles that neither you nor your im-' mediate neighbor are capable of producing, is there any need for a medium of exchange. A' million dollars" on a desert island would be worth less than a pint a f water. Thus we draw our first conclusion —money of itself is riot wealth.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 7 plentiful and the price rose, or the Noble or Land Owner a certain of personal adornment. Traders brides became more plentiful and amount of goods before he could who traffic with savage and primi­ the price fell, is not recorded. Un­ gain his freedom or even leave the tive people use bright beads and doubtedly there were fluctuations estate of his master. gaily colored fabrics as their me­ just as there are fluctuations in the With the coming of money, or a dium of exchange. Primitive peo­ buying power of money, our medium of exchange, the slave ple will part with almost anything medium of exchange today. could sell his products where there they own in exchange for articles However the cow is still the unit was the most demand for them and they consider ornamental. of value in some sections of the Caucasus today. Other merchan­ dise is referred to in value as one cow, two cows, or even one-tenth of a cow. Generally speaking, ten sheep are equal in value to one cow. And here we come to a second fact about money. When the sup­ ply of goods is greater than the demand, prices will be low. When the demand for goods is greater than the supply, prices will be high. Bartering meat tor a blanket. In spite of anything that may be turn the money over to his master Our love of jewels is probably said against money, the use of a in exchange for his freedom. Thus common medium of exchange has a survival of the primitive within he could employ his time in those us. Some authorities say that contributed more to the welfare of occupations to which he was best the human race than almost any clothes were first worn, not so fitted and so gain his freedom more much for the protection they af­ other one factor. quickly. For instance, one man and his forded or from any sense of modes­ The master was also better off ty, but as an ornament and a place family might be particularly skill­ because he could go into the open ful in hunting or the raising of on which to hang ornaments. market and buy where his money Therefore, nothing is more natur­ crops. Another family might be would purchase most. skillful weavers. On the basis of al than that ornaments of various Metal working, cloth spinning, barter, or exchange, the skillful kinds should have been used as tanning, and other trades devel­ weavers would have to go hungry money. Such ornaments had value oped. It was found that these unless the hunters and agricultur­ because there was a demand for trades could be followed more ad­ ists wanted cloth and the hunters them. True they were not useful vantageously by men living to­ and agriculturists would have to as was the cow, but they were gether in a settlement. Permission light, easily carried and could be wear skins unless the weavers was given them to do this and co­ happened to need food. made in small units and thus used operation in industry was born. as a measure of value for many In olden times, nearly every This of course made a medium of man was bom a slave—not free. different commodities. exchange an absolute necessity. It was necessary for him to give The American Indians used this Many of the cities of Central kind of money which was called Europe were founded by groups of "wampum." It consisted of beads workmen who banded together for —white ones made from the shell mutual benefit. These groups were of the periwinkle and black ones called guilds. Hamburg and Bre­ from the black part of clam shells. men are among the most important These became fairly standardized of the cities founded by guilds. as to size and were made into ORNAMENTS BECOME MONEY belts, necklaces and other orna­ mental objects. Even the white No characteristic of the human man recognized them as money race is more marked than the love and in 1643 the Massachusetts Legislature made them legal ten­ der for the payment of debts up to forty shillings. They established a fixed value of eight for a penny for the white beads and four for a penny for the black ones. Other colonies as far south as Virginia passed similar laws al­ SBbt e .v'-rsdfcJLs*** c . though the value of the beads was not exactly the same. For thirty Slaves bartering their crop to the Nobleman for their freedom. years or more wampum was legal

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 8 CONSTITUTIONAL MONEY ADVOCATE book money, etc., comprises 97% of our medium of exchange today. Probably the first paper money was used in China about 100 B.C. Our "bills" are of several kinds, the most common of which are U.S. Notes (greenbacks), Silver Certifi­ cates, and Federal Reserve Notes. Up to a few years ago, National Banks issued bank notes, secured by deposits of the bonds with the U.S. Government. The bonds so deposited were called consols and Buying ivory with ornaments. paid 2% interest. The U.S. Gov­ tender in this country. The white In Asia Minor, coins were used ernment has been destroying Na­ man became so expert in making in 700 B.C. These coins were made tional Bank Notes as received, for these beads and it was such an from gold, silver, and from a mix­ several years and issuing new cur­ easy matter to dye the white ones ture of gold and silver called "elec- rency for the notes so destroyed. black and thus increase their value trum." Bronze coins came into use No more consols are issued and that wampum was finally out­ about 600 B.C. the National Banks no longer issue lawed as a medium of exchange. Only a small part of the busi­ their own currency. The entire is­ Nearly two centuries later shell ness of today is conducted by the suance of United States paper money was used in California. exchange of commodities. Paper money is now in the hands of the Traders in the northwestern part money has replaced gold because Federal Reserve Banking System, of the United States used blankets of the fact that paper money is a system of private banks. for money. The blankets had points more easily conveyed. Heavy Approximately $6,500,000,000 in woven into their edges, the best coins are becoming outdated just money is in existence today in the being four points and the poorest, as were cows and other less con­ United States, out of which about one point. The unit of trade ac­ venient mediums of exchange. $1,000,000,000 of this money circu­ ceptable to all was a point The tendency to specialize in the lates. This is what we call pocket- blanket. Beaver skins and tobacco production of goods grew. Man­ book money or small change. The were also used as money in the kind needed more and more the balance, $5,500,000,000, is depos­ early history of the United States. things he could not produce for ited in the banks in time or de­ Porpoise teeth, boar tusks, salt himself and something of less mand deposits as part of the $52,- bars, nails, fish hooks, feathers, weight and bulk than coin became 000,000,000. The balance is banker- have all been used as money. In necessary. You have probably created money or check-book fact, some of them are still used been annoyed when you have had money. by primitive races. to take all silver in change even FOREIGN MONEY GOLD AND SILVER AS MONEY from a $5.00 bill. Trade between countries de­ Since gold and silver were first Gold is no longer minted which pends to a great extent on a com­ mined, they have been valued as makes our silver dollar the largest paratively steady ratio between ornaments. Rings for the fingers, denomination in which we issue the values of their currencies. toes, ears, and nose, bracelets, coins. When the money of any country anklets, and a great variety of We have mentioned the fact that has a high comparative value, its other ornaments have been made from these two metals. Mixed with a small quantity of harder metal, they retain their shape, wear well, do not tarnish easily, and are easily restored to their original polish. In about 1850 B.C. there was a great famine in Canaan and the Bible says that the sons of Jacob took money into Egypt to buy com. Historians are of the opinion that Sons of Jacob trading money (ornaments) for com. this money was in the shape of coins are too bulky and too heavy exports naturally decrease be­ rings, probably of silver. Metal to transact the immense volume cause it takes more of the curren­ discs or coins are of a later date. of trade today. Generally speak­ cies of other countries to buy its The ancient Romans made these ing, paper currency is used for the products. When the comparative coins and the Emperors are said to small local transactions; and value is low, exports increase be­ have cheated not only on weight, checks for the larger, and for the cause it takes less of the currency but by mixing base metals with transmission of funds to distant of the purchasing country to buy their gold and silver. points. In fact, this form of check­ the desired goods.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 9 to enslave a community . . . They hold the purse Robert L. Owen strings of society . . . they proscribe every man who dares to expose their unlawful practices." (See Front Cover) This is what is wrong with civilized society. This is the reason we have booms and depressions. This May it first be known that the executive manage­ is the reason governments are impotent to advance ment of the Constitutional Money League of Amer­ the welfare of their respective countries. This is the ica solicited the Honorable Robert L. Owen as reason behind the growing discontent with present Councilor-in-Chief of this national organization, first social organizations. because of the great national crisis, when the great­ There is nothing wrong with representative consti­ est men must take leadership, and second because tutional governments except that the bankers will in his many years of public service, his record in not permit them to function. behalf of his country and the cause of humanity There is nothing wrong with the capitalistic system, has builded for him a monument of righteousness in except that the bankers prevent it from functioning. the hearts of his fellowmen. Because of this excep­ They have perfected their system of piracy so that tional fitness his counsel is sought in the Nation's practically no man, preacher, teacher, editor, or Capital by Republicans and Democrats alike. writer "dares to expose their unlawful practices." Mr. Owen organized the First National Bank in Entrenched in this seemingly impregnable position, Indian Territory, now Oklahoma; was its President they are no longer satisfied with interest on their for ten years and has been its Director for 42 years. imaginary money which they produce at no cost He was 18 years in the Senate of the United States, to themselves, and they now demand a lion's share and voluntarily retired. He is well-educated, having in the profits. the degree of Master of Arts and of Doctor of Laws Every dollar you have in your pocket or in the and has for many years been a member of the bar credit balance in your bank account was borrowed of the Supreme Court of the United States. Above all, by someone from a commercial bank. If they fore­ he has concentrated upon the questions of panic, closed their short and long term loans, beginning depression, and credit and currency, and is an out­ tomorrow, at the end of this liquidation, there would standing international authority upon these matters. not be a dollar of either cash or bank deposits in Immediately upon entering the Senate of the United circulation. The deposits would all have been can­ States, he made a notable address on February 25, celled and the cash would all be in the banks. 1908. He then presented every principle of impor­ If the commercial bankers are optimistic and tance which five years later he wrote into the create a sufficient fund of this imaginary money by Federal Reserve Act when it was a people's bill. As their loans to commerce and industry, we are pros­ Chairman of the Committee on Banking and Cur­ perous and the standard of living is constantly rency in the U. S. Senate, he framed the Senate Bill elevated. which, upon acceptance by the House of Representa­ If they are pessimistic and begin foreclosure of tives, became the Federal Reserve Act. Before fram­ their loans, business declines; unemployment, bank­ ing the Act, as Chairman, he took over 1,000 printed ruptcies and distress increase just as the volume pages of testimony from the leading farmers, busi­ of the imaginary money which they created shrinks. nessmen, economists, bankers, and representatives Our great inventive genius, our outstanding ca­ of labor in the country. He foretold and protested pacity for organization, our willingness and ability against the processes causing the panics of 1921 and to labor and create wealth, our great and highly 1929-32. developed transportation systems, our splendid pro­ ductive and commercial systems are all impotent in the face of the fact that the bankers "hold the Civilization's Master purse strings of society" and that we cannot ex­ change our products and services without money or (Continued from Page 5) some usable substitute, and they completely control Why do not the newspapers, the champions of the issue of money and its only usable substitute— that bulwark of democracy, free speech, expose this bank credit. absurd situation and demand of Congress that it recover its constitutional prerogative to issue the money of the nation and to regulate its value (which We must have 100,000 subscribers and with the can only be done by regulating its volume)? assistance of our present subscribers we will They have been intimidated by the commercial soon reach this number. bankers who "proscribe every man who dares to expose their unlawful practices." There is not a merchant in the United States who would dare incur - SPECIAL OFFER - the displeasure of his local banker. There is not a 50% Discount will be given to all subscribers for merchant who would dare refuse to withdraw his orders of this issue of the "Constitutional Money advertising, without which no newspaper can exist, from any newspaper which incurred the local Advocate" in quantities of ten or more copies, banker's displeasure and antagonism. making the price 5c a copy. This offer expires "No system was ever better devised sq perfectly December First.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 10 CONSTITUTIONAL MONEY ADVOCATE THE MONEY QUESTION SIMPLIFIED Written and explained in simple language so that even a child could understand it

All Reform Must Wait Explained in this book are the prin­ ciples of Government monetary On Money Reform issue and control as approved by the leading economists of America as well as of five nations of Europe. Price $1.00

Propounding the teachings and amplifying the warnings of BENJAMIN FRANKLIN, THOMAS JEFFERSON, ANDREW JACKSON, ABRAHAM LINCOLN, W. J. BRYAN, and SENATOR BRONSON CUTTING

It contains the plan and the bill introduced in the House of Representatives in the First and Second Available Publications Sessions of the Seventy-Fourth and Seventy-Fifth Con­ "Uncle Sam's Hospital Chart"______$1.00 gresses by former Congressman Charles G. Binderup By Charles G. Binderup of Nebraska and in the First Session of the Seventy- Binder containing Congressional Break­ Sixth Congress by Honorable H. ferry Voorhis of fast Talks (See Page 16)______1.00 California, Honorable John F. Hunter of Ohio, and "Where Does the Money Come From?" .10 (A clear, concise explanation of our Honorable Knute Hill of Washington; and introduced money system) in the Senate in the First Session of the Seventy- Books by Professor Irving Fisher: Sixth Congress by Honorable M. M. Logan of Ken­ "Stable Money"______3.50 tucky. "Booms and Depressions" 2.50 A Few Testimonials From Readers Of "Uncle "100% Money" _____ 2.50 Sam's Hospital Chart" "Stamp Scrip" ______1.50 "Your 'Uncle Sam's Hospital Chart' makes it easy "After Reflation" ___ 1.50 to understand the money question." "Money Illusion" ___ 2.00 "I use your 'Uncle Sam's Hospital Chart' in teach­ ing my class in Economics." "Honest Money Year Book and Directory" 2.00 "In my class in Financial History I find your 'Uncle "More Dollars and More Sense" Free Sam's Hospital Chart' very helpful." By Hon. Jerry Voorhis "I use 'Uncle Sam's Hospital Chart' in teaching Public Speaking. It proves very effective." First Congressional Breakfast Talk Free "W e study 'Uncle Sam's Hospital Chart' in our (Discussion by Hon. Jerry Voorhis and Townsend meetings." - Charles G. Binderup) "I sell the 'Chart' by just letting a prospective j Second Congressional Breakfast Talk Free buyer read page 33." I (Discussion by Hon. George W. Norris "After reading this book it is not difficult to under­ ( and Professor Irving Fisher) stand why we are starving in the midst of plenty."

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 11 The Constitutional Money League of America The Constitutional Money League of America, a gressional Breakfast Talk Binder, and the Text non-partisan, non-profit, non-political organization, Book belong to the League and all profits there­ was formed with a definite purpose in mind—that of from go to further the program. Also available are education on the monetary question, a subject here­ the books of Professor Irving Fisher, Professor tofore much neglected although it is so important Emeritus of Economics of Yale University and in­ that it has a direct bearing on the lives of every ternationally recognized monetary authority. Our man, woman, and child of the Nation. list of available publications will include the works For years, in fact for the lifetime of our Nation, the of Sir Arthur Kitson and Professor Soddy of Eng­ merits of the old Rothschild theory of banking and land as well as Senator Robert L. Owen, Robert finance, as brought to our country by Alexander H. Hemphill, and many others. Hamilton, have been taught to our people. Any 3. "The Constitutioncd Money Advocate," a monthly dissenting theory or information was quickly and publication, will play an important part in the effectively "nipped in the bud" through the powerful program. mediums of press, propaganda, and lately radio, all 4. Radio. Perhaps the most effective means of modem of which are controlled, with little exception, by communication is the radio. Besides having con­ Wall Street. ducted a series of Congressional Breakfast Talks Fear of any new theory has been instilled in the over Station WOL, Washington, D.C., participated people's minds. These ungrounded fears must be in by Members of Congress and monetary author­ dispelled and the unbiased truth brought directly ities, we expect to use this instrumentality for to the people; and the Constitutional Money League national broadcasts on educational programs as of America has the effective program for such an well as for rebroadcasting by electrical transcrip­ educational campaign. tion the Congressional Breakfast Talks, which Following are the instrumentalities which will be proved to be exceptionally interesting as well as used by the League in bringing information to the informative. people: 5. Study Clubs. The monetary question will be 1. Text Book, "Basic Principles of Constitutional studied and discussed in study clubs and other Money," for Schools and General Public. This organizations over the Nation. Literature and in­ book gives the fundamental elements necessary formation as well as interesting and nationally- for a thorough understanding of monetary eco­ known public speakers will be sent to these groups nomics. It is primarily for high schools but every by the Constitutional Money League headquarters. American citizen would do well to read this book This phase of the program will be developed just which gives a complete explanation of the money as soon as a strong foundation has been built question in simple, factual form with bits of history upon which to form study clubs and organizations. having to do with the monetary problem and 6. Cinaudio and Electrical Transcription Records. questions and definitions at the end of each chapter Study clubs can use the miniature, portable, broad­ to further clarify the subject. casting machine to reproduce electrical transcrip­ 2. Books and Publications on the Money Question. tions of discussions and talks by outstanding mone­ The books, "Uncle Sam's Hospital Chart," the Con­ tary authorities of the United States and Europe.

Whai Do We Have As A Background And How Powerful Is That Force? The National Grange with its 800,000 members tain the dollar with a constant purchasing power, declares in its Legislative Program for 1939, "The preserving the equity of contracts by the debtor and Grange stands for an honest dollar, a dollar that creditor and avoid dangers and results that are will be fair to debtor and creditor alike. Congress inevitable involved in excessive and uncontrolled should give a mandate to the Board of Governors inflation or deflation. Be it further resolved that of the Federal Reserve System to manage the cur­ there be established a monetary authority and that rency in such a way as to restore the average price this monetary authority be as largely as possible level obtained between 1921 and 1929, and then non-partisan and non-political." stabilize the purchasing power of the dollar at that The National Farmers' Guild with approximately point"; also "that Congress shall exercise its Con­ 65,000 members has the following for its Legislative stitutional right to coin money and regulate the Program for 1939: "I. Restoration to Congress of the value thereof." power to coin and regulate the value of money. The National Farmers' Co-operative Council with II. Refinancing of farmers' indebtedness at a low its 1,700,000 members declared in their Legislative rate of interest on amortized repayment plan, funds Program for 1939, "Be it resolved that the desire and provided by Government issue of currency. III. Tax­ objective of the National Co-operative Council is that ation based on ability to pay. IV. Abolishing the our monetary system be so revised and currency practice of issuing tax-exempt bonds." and credit so managed as to establish and main­ The National Farmers' Union with its 250,000 mem­

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 12 CONSTITUTIONAL MONEY ADVOCATE bers declares in its Legislative Program for 1939 as other hand—a currency which will permit full utili­ follows: "I. Restoration to Congress of the power to zation of the Country's resources." coin and regulate the value of money. II. Refinancing The Republican Party had in their platform of 1932, of farmers' indebtedness at a low rate of interest "We pledge a sound currency at all hazards. We on amortized repayment plan, funds provided by will restore to the Congress the authority lodged Government issue of currency. III. Taxation based with it by the Constitution to coin all m on ^y and on ability to pay. IV. Abolishing the practice of regulate the value thereof.” Again in their platform issuing tax-exempt bonds.” of 1936 they pledged, "We advocate a sound cur­ The American Farm Bureau Federation with its rency .... We will restore to Congress the approximate 900,000 members had its views on the authority lodged with it according to the Constitu­ monetary question expressed in a statement by the tion to coin all money and regulate the value thereof.” president of the organization in his annual address before 20th Annual Convention of the Bureau at New WHY? Orleans, Louisiana, when he said, "I am convinced WHY—when 90% of the people want to restore further that we must have a commodity dollar and this Constitutional right to the people, WHY do we a managed currency in order to maintain our do­ not succeed in passing this most important legis­ mestic price level on a stable basis.” lation? Labor Organizations with their thousands of mem­ BECAUSE, while 90% of the people agree on the bers are generally in favor of a Constitutional money desired objective, it is only natural that from a multi­ system which would provide an adequate money tude that has been kept in utter darkness there should supply to enable them to exchange the products of issue forth numerous ways and means by which to their hands and brains for the necessities to which accomplish that objective—the unreal and the vision­ they are entitled. ary plans mingling with the sound and practical President Roosevelt said when first elected, "We plan—thus dividing the ranks and confusing the must drive the money changers out of the temple,” minds. and "W e are only interested in a dollar with the BECAUSE the International Bankers own and con­ same purchasing and debt-paying power now and trol the public press and fill it with false propaganda, a generation hence." and have succeeded in teaching even in the schools "Social Justice" with its 3,600,000 subscribers and their false doctrine that money should be based advocates, declares, "Restore to Congress its sole on the people's debts, controlled by the banks, in right to coin and regulate the value of money!” place of on the Nation's resources, controlled by the The Progressive Party had as one of the planks in people. their platform for 1938, "The ownership and control of BECAUSE, while we know education is the founda­ money and credit, without qualifications or reser­ tion of Democracy, yet we allow ourselves to remain vations, must be under public and not private con­ uninformed on this most important question. trol." BECAUSE the small minority, the International Farmer-Labor Party declared in their platform for Bankers, are organized and united against the 1934, "Congress shall exercise its Constitutional people's interests. They reap their profits in billions power to coin all money and regulate the value by controlling the people's money, which the people thereof.” themselves should control according to the Constitu­ The Democratic Party stated in their platform of tion. The people's loss is their gain. 1924, ”We denounce the recent cruel and unjust con­ BECAUSE we have always lacked the power of traction of legitimate and necessary credit currency, union by co-ordinating our groups together in one which was directly due to the so-called deflation great army for the people. policy started on May 18, 1920. . . . We demand THEREFORE was organized The Constitutional that the Federal Reserve Banking System be so Money League of America to hold aloft the Torch administered as to give stability to industry, com­ of Leadership. merce, and finance, as was intended by the Demo­ If the people are given light, they will find the way. cratic Party which gave the Federal Reserve Bank­ Having agreed on the objective, we must now ing System to the Nation." Again in 1932 the Demo­ unite to bring power to our efforts. cratic Platform carried the following plank: ”We maintain the depressions of 1920 and 1929 were due In its educational work The Constitutional Money to the indefensible contraction of credit for private League of America endorses and intends to promote gain at public expense (that is, by the banks calling the "Program for Monetary Reform” (including the old loans and refusing to make new ones) and we principles of Government monetary issue and con­ pledge the Democratic Party to preserve a sound trol and 100% reserves back of demand deposits) currency at all hazards. We promise to restore sponsored by a group of the Nation's 250 academic property values and to endeavor to establish a dollar economists under the leadership of— of uniform permanent debt-paying and purchasing Professor Paul H. Douglas, University of Chicago power. : . .. We approve the objective of a per­ Professor Irving Fisher, Yale University manent sound currency established so as to prevent Professor Frank D. -Graham, Princeton University the former wide fluctuations in value, injuring in Professor Earl J. Hamilton, Duke University turn wage earner- ond creditor on the one hand, and Professor Wilford I.-King, New York University the producers, debtors, and property owners on the ' Professor Charles R. Whittelsey, Princeton Uni.

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 13 A. We must not redeem our money. To redeem YOUR QUESTIONS our money means to destroy it, and our money must not be destroyed, but must remain in circulation. The very thing that has caused our depressions is the ANSWERED destruction of our money or the failure of the E d it o r ’s N o t e : This column is set aside for banks who control our money volume, to keep answering the questions most often asked by enough in circulation to keep up with a growing Nation. our readers. Send in your question, requesting Q. So far as silver purchase is concerned, we are that it be answered in the Constitutional Money Simple Simons among the nations. If anyone has Advocate, and we will endeavor to answer it or a ever discovered a single reason why we should con­ very similar question. tinue to buy silver at a fantastically high price, I Q. What seems strange to me is that in all your would like to know it. —J. W. Q., Editor writing and talking about our money system, you A. In the first place, Mr. J. W. Q., we don't buy never mention about how the Democrats have been silver, we simply give a receipt in the form of a putting the Nation in debt. Why not condemn the silver certificate in exchange for the silver. All sil­ enormous debt which is being piled up on us?—J.C.B. ver costs us is the paper upon which the certificate A. First I will have to explain what money really or receipt is printed. is. Money is created in this manner: You go into I hold in my hand a five dollar bill, a silver cer­ the bank and borrow $1,000. Now th© banker does tificate. It costs the Government just 30 cents for not have this money. It has never been stamped or $5,000, or in other words, just the cost of the paper printed. You are merely borrowing the banker's on which the certificate is printed. credit or his promise to pay. No money changes Notice the silver certificate and you will see that hands. You give a note as evidence of indebted­ it reads, "This is to certify that there has been de­ ness and he hands you a check book. posited one silver dollar in the Treasury of the "Oh," you might say, "I could get the money if I United States," which simply means that some wanted it." Yes, a few could get the money, merely miner brought to the United States mint a certain because the others don't want it. But there is only amount of silver and received a receipt - that cir­ $6,500,000,000 actual money in existence, and the culates as money. And this is real money. It is banks have loaned out approximately $52,000,000,- a receipt for services or labor rendered. That is 000, and the balance is created out of thin air by the way all our money should be issued, whether the bankers based on their promise to pay; and it be paper, gold or silver. It makes no difference your banker definitely relies on your not asking him on what Uncle Sam puts his stamp. It could be on to pay in actual money. white paper or yellow paper, or gold, or silver, or Exactly the same is true when Uncle Sam borrows copper. It is the stamp that makes it money. money. He also gets a check book and checks on A silver dollar contains only 33c worth of silver. the International Bankers' credit. We don't get a A gold dollar has only 35c of gold in it, and paper cent of real money for our United States bonds. money has nothing in it but practically worthless In this way is created 97% of our circulating me­ paper; yet we are perfectly willing to accept the dium of exchange. paper money. Why? Because it bears Uncle Sam's But, if all at once, the bankers say, "Come in and stamp, and is therefore legal tender for all purposes. pay your debts," we gather up enough money and Yes, silver costs us nothing, while all our other pay the note, and by this very act of paying our debts money issued by the bankers costs us a billion we take that much money out of circulation again! dollars a year in interest, except Abraham Lincoln's So, if we all paid our debts, 97% of our money old greenbacks, the greatest money of all. This would disappear like the dew before the morning sun. money, like silver, is a receipt for services rendered Only the old Abraham Lincoln Greenbacks ($346,- by the soldiers of the Civil War, or someone who 681,016) and silver money would remain, and this performed a service for humanity. amount would soon become hoarded because of the Q. I have always been much interested in the enormous purchasing power it would have, due money question, but have not been able to under­ to its scarcity. You would be able to buy land stand your philosophy of the "commodity dollar." for a nickel an acre and a penny a day would be Why not just issue so much money per person or per a good wage for labor. capita, and as the population of the Nation increases, Under our present corrupt banking and monetary just estimate the growth each year, and balance it system of today, you must thank God for our debts. every ten years when the census is taken? —N. E. B. Q. In reading your book, "Uncle Sam's Hospital A. Even after a circulating medium of exchange Chart," I have wondered where is the plan for re­ was first invented or used very little money per deeming all this money you suggest putting out for capita was necessary. Old Age Pensions, and the Rehabilitation of the Less than a hundred years ago, if a man needed Farmer back on his farm, and the $250,000,000 you a suit of clothes, he would go out and catch a sheep, propose to put out for education of children whose shear it, and in the evenings the family would wash parents cannot afford the desired education, etc. it and filter the wool, spin it into yarn, weave it into —A. F. N. (Continued on Page 14)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 14 CONSTITUTIONAL MONEY ADVOCATE Basic Principles of Constiiuiional Heretofore little, if any, effort has been made to give high school students a simple, clear under­ Money standing of the operation of our monetary system. By Mrs. Etta M. Russell This has resulted in a widespread lack of under­ A Textbook for High Schools and the General Public standing of one of the greatest factors in our scheme of distribution. Until the masses of our people under­ stand our present system, they cannot assist in solv­ ing the problem of distribution and the periodic booms and depressions which afflict our Nation.

This book was written to supply this information in a style and manner which high school students can understand. Its twenty chapters can be covered in a period of four weeks in our schools.

When our youth have acquired these facts, they will not only be better prepared to cope with eco­ nomic conditions confronting them as individuals, but will be better fitted to become intelligent Legis­ lators and Executives in a Country capable of offer­ ing an opportunity for ALL. Well-informed, helpful individuals make up an efficient and progressive citizenry. —The Author

The sound philosophy and principles taught in The Stable Foundation of any Democracy rests this book have been approved by the outstanding upon the enlightenment of its people. The youth and leading monetary authorities of the Nation. The of today is the Legislator and Executive of tomorrow. book will be printed and bound as soon as the text­ As water can never rise above its source, neither book fund for publishing it is large enough. $5,000 can a form of government be better than those who will be necessary to print and place the book in the formulate and execute its laws. High Schools of the Nation. All contributions to the textbook fund will be Under present economic conditions the very exist­ thankfully received. —The Editor ence of our Public Schools is threatened with finan­ cial failure. Because so many high school graduates are financially unable to secure a higher education, Your Questions Answered the masses of our citizens are dependent solely upon (Continued from Page 13) the high schools for their training for future citizen­ cloth, and finally cut it and sew the garments. In ship. the whole transaction no money was necessary. But as we more and more commercialize all busi­ No individual can successfully cope with economic ness, additional medium of exchange is necessary conditions or aid in correcting inequalities inconsist­ to carry on all the different steps or transactions ent with Democratic ideals, who is not informed and through which material now goes before it is turned familiar with the workings of ALL the important into a suit of clothing. factors of PRODUCTION, DISTRIBUTION, and CON­ Suppose today, since the making of clothes has SUMPTION. become commercialized, a sheep owner would want to get a suit of clothes. First he hires a sheep herder Of all the important factors in our present economy to take care of the sheep, then he hires a man to and of all our great public utilities, MONEY, by shear the sheep. He sells the wool to a local dealer general admission, is the least understood. No doubt and the local dealer hires the railroad to take it this accounts for the fact that, while every other phase to the market where it is sold to a wholesale dealer of our economic life has changed, we are still using in wool, who, in turn, sends it to the textile mills. a monetary system used a century and a half ago, Here it is woven into cloth. The cloth is sold to a designed to facilitate PRODUCTION, the great eco­ tailoring establishment or factory where the garment nomic problem of that time. is made. From there the garments are sold to a Present facts and conditions make it obvious that wholesaler, then to a jobber, then to a retailer, and the problem of today is one of DISTRIBUTION. It is then to the customer, the man who owned the sheep. not logical to assume that a system designed solely And thus twelve transactions are necessary, each for furthering production can successfully provide one involving perhaps on an average the use of an adequate system for solving the problem of dis­ ten dollars, or in all, $120, (This amount, of course, tribution in a highly mechanized age when the use is not the cost of the suit. It is merely the amount of of power and machinery has provided abundant money that must change hands in the process of production. (Continued on Page 17)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 15 NEUTRALITY Radio Address by Charles G. Binderup, October 8, 1939 Good-morning, Everybody! York to Washington, as President also an intimate personal friend of I have just recently returned from Roosevelt proposed. Morgan’s. Hancock? Yes, we in Con­ Washington, where I have been since Who are all these New York “big gress, learned to know Hancock very last January. I want to tell you shots” who come to Washington so well. It was he who led Wall Street’s something about Neutrality from often? Well, there is Barney Baruch, fight against us when we passed the headquarters. I want to tell you about the multi-millionaire of New York, Securities Exchange Act that held in how the winds of false propaganda former President Hoover’s economic check stock gambling and racketeering and hatred and revenge have extin­ adviser, the representative of the on the New York Stock Exchange. guished the torch of reason in a pre­ International Bankers of New York. And who else is on the War Industries meditated plan to destroy our Neu­ They say of him in Washington that Board? George Harrison of New York, trality. he is the only man who can walk in President of the Federal Reserve Bank It is a strange fact that descendants to see the President without an ap­ of New York City, with his own com­ of any nationality retain for genera­ pointment. Then there is Morgenthau, mittee to advise on war financial tions, an inherent, perhaps uncon­ Sr., from New York, the father of problems, (just as though we had a scious, love for the land of their Henry Morgenthau, Secretary of the war). Who is his committee? Henry fathers and the religious creed of Treasury, the multi-millionaire stock­ Morgan of New York, son of J. Pier­ their ancestors; and so it is only holder of Kuhn-Loeb and Company pont Morgan; William Potter of New natural that the Jews should love which is one of the largest Inter­ York, of the Guarantee Trust Bank, a their own and resent the persecutions national Bankers’ Associations in the Morgan bank of New York, with over of their people and their race by the world. The Senior Morgenthau is a two billion dollars deposits; and Fred­ German Dictator. And be it Jew or house guest of the President quite erick H. Ecker, New York, of the Gentile, there is not a fair-minded frequently. Isadore Lubin, also from Metropolitan Life Insurance Company, citizen but who will condemn Hitler New York, is at the head of the very another billion dollar corporation, for persecuting his own citizens, for important Statistical Department. To whose policies are controlled body, the Jews are as much citizens of Ger­ name some more there is Henry Mor­ soul, and breeches by Morgan of New many as is any Gentile. These same genthau, Jr., from New York, the York. people of the Jewish faith fought in President’s Secretary of the Treasury; But that wasn’t all. In order to give the muddy trenches for Germany, as Goldenwieser from New York, chief the International Bankers more com­ much as did any Gentile, in the World adviser to the Board of Governors of plete control to dictate policies best War; and let me predict, the very fact the Federal Reserve Board of the Fed­ for the banks, Morgenthau of the that Hitler has created a race hatred eral Reserve Banks; and Cohen and Treasury selected a committee to ad­ among his own citizens will mean the Cochren, the President’s chief advis­ vise with him, not for the welfare of downfall of his dictatorship. ers; and many other frequent visitors the people, but for the welfare of the It was Abraham Lincoln who spoke at the White House from New York. International Bankers. If he had those words so true “A Nation (mean­ Perhaps it is the result of all the visits wanted to protect the welfare of the ing a people) divided against itself by these men from New York that people, he would have selected a com­ cannot stand.” there was appointed a War Industries mittee from the people or he would It is a recognized fact that the Board in Washington of the same have taken this committee from Mem­ banking business of the world is owned class. bers of Congress, from the people’s and controlled by the Jews, led by the Yes, it seems everything is perfectly representatives. But let us take a Rothschilds. It is also a recognized in order. All we need now is just the further inventory of just who Morgen­ fact that there are huge profits in war war, and then we can go right ahead. thau selected. First, there is W. R. Burgess, vice-president of the Nation­ for International Bankers. Did not Let us take a further inventory. al City Bank of New York, the largest Hitler sin against the financial doc­ Just who are the men who have been bank in the world (Burgess was for­ trine of the International Bankers appointed on this extremely important merly vice-president of the Federal when he put a Rothschild in jail and War Industries Board? Every one of Reserve Bank of New York, the head confiscated his property? Why friends, them are close personal friends and of the money octopus, the Franken­ that alone would be enough to provoke business associates of J. Pierpont stein of the money pow er); second, a war. And when Hitler banished from Morgan of New York, one of Amer­ Tom K. Smith, of the Boatsman’s Germany the ancient rights of the ica’s billionaires, the United States National Bank of St. Louis which bank International Bankers they had held Representative of the Rothschild’s ranks among the Nation’s largest; since 1815, or since Napoleon lost the Bank of England, a foreign billionaire and third, Earl Bailie, chairman of battle of Waterloo, did he not sin once corporation. There is Edward R. Stet- the Tri-Continental Corporation In­ more against the beneficiaries of this tinius of the United Steel Corporation, vestment Company, whose assets of privilege? Thus are the winds of a J. Pierpont Morgan billionaire cor­ stockholders run into the billions. Mr. hatred and revenge, wafted onward poration; Walter Gifford of the Amer­ Bailie is also a member of the Board by the love .for their race and kin and ican Telephone and Telegraph Com­ of the banking company known as the desire for financial gain,, all tearing pany, closely allied with Morgan, and J. and W. Siegleman Company, a away at our neutrality which is stand­ another billionaire corporation; John banking concern combined and inter­ ing in the way. L. Pratt, director of General Motors, locked with other banking concerns, Let us reason well, unbiased and again a billionaire corporation, with stockholdings, and directorates. With unprejudiced. Let us view the situ­ both Morgan and DuPont stockhold­ fhis atmosphere in'and around Wash­ ation from the atmosphere of Wash­ ers; and John Hancock of the Lehman ington, you surely are not surprised, ington, and then, my friends, I believe Brothers Banking Firm of New York my friends, are you, that the special you will understand our Government City, the fourth largest International has not yet been moved from New Banking Corporation of the . World, ___ CContinued. on Page 17) J

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 16 CONSTITUTIONAL MONEY ADVOCATE Congressional Breakfast Talks Over Station WOL, Washington, D. C. February 28, 1939 Binder for Congressional Breakfast Talks "Constitutional Money and Government This attractive binder Monetary Control." is a neat way to retain between the printed Congres­ sional Breakfast Talks Congressman H. JERRY VOORHIS of California. in a permanent volume. Former Congressman CHARLES G. BINDERUP of As additional Talks Nebraska. are made by leading monetary authorities of Introduced in the Congressional Record by the United States and Congressman KNUTE HILL of Washington. Europe, they will be printed and punched for insertion in the Binder March 7, 1939 and sold for 10c each. "The Plan Whereby Fifty Million People Can Go to The different angles the Bank at the Same Time and Get All and advantages of Gov­ Their Money." ernment monetary issue and control and the plan between for Constitutional mon­ Senator GEORGE W. NORRIS of Nebraska. ey will be discussed in these Talks. This will be an especi­ ally valuable volume for public speakers and others. Professor IRVING FISHER of New Haven, Connecticut. Order your Binder and the first ten Talks TODAY. Price $1.00 Introduced in the Congressional Record by Congressman H. JERRY VOORHIS of California. April 11, 1939 "Incompetency and Inefficiency of the Board of March 14, 1939 Governors of the Federal Reserve Banks Accord­ "Shall the People Take Over the Twelve Federal ing to their Own Statement." Reserve Banks Which of Right Belong to Them?" between between Senator ERNEST LUNDEEN of Minnesota. Honorable ROBERT L. OWEN of Oklahoma. Congressman ABE MURDOCK of Utah. Senator M. M. LOGAN of Kentucky. Introduced in the Congressional Record by Congressman JOHN F. HUNTER of Ohio. March 21, 1939 "Are Political Platforms Mere Scraps of Paper?" April 18, 1939 between "Raising the Price Level Gives Greater Profits Congressman KNUTE HILL of Washington. To Labor and the Farmer." Congressman JAMES C. OLIVER of Maine. between Introduced in the Congressional Record by Senator JAMES E. MURRAY of Montana. Congressman ED V. IZAC of California. Congressman KNUTE HILL of Washington. Introduced in the Congressional Record by March 28, 1939 Congressman WALTER M. PIERCE of Oregon. "Price of Commodities Is Determined by the Amount April 25, 1939 of Goods Offered for Sale as Compared with the Amount of Money Available Where­ "Profits and Advantages in the Plan for Government with to Buy." Monetary Control to the Small Commercial Banks." between between Senator GUY M. GILLETTE of Iowa. Senator LYNN J. FRAZIER of North Dakota. Congressman JOHN F. HUNTER of Ohio. Congressman HOMER D. ANGELL of Oregon. Introduced in the Congressional Record by Introduced in the Congressional Record by Congressman WILBURN CARTWRIGHT, Oklahoma. Congressman USHER L. BURDICK of North Dakota. May 2, 1939 April 4, 1939 "Necessary Additional Money Supply in Order to "That an Increase of the Quantity of Money Raises Keep Pace with our Growing Nation Must Be Put Prices and a Decrease Lowers Them, Is the Most Into Circulation among the Lower Income Group Elementary Proposition in the Theory of Money." To Create a Consuming and Purchasing Power." between between Senator EDWIN C. JOHNSON of Colorado. Senator SHERMAN MINTON of Indiana. Congressman USHER L. BURDICK of North Dakota. Congressman ROBERT G. ALLEN of Pennsylvania. Introduced in the Congressional Record by Introduced in the Congressional Record by Congressman KENT E. KELLER of Illinois. Congressman BERNARD J. GEHRMANN, Wisconsin,

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis CONSTITUTIONAL MONEY ADVOCATE 17 May 9, 1939 Your Questions Answered "Paying the Government Debt with a Fountain Pen in the Hands of the People, in the Same Manner (Continued from Page 14) the Debt Was Created, with the Pen in the Hands making a suit.) for the transactions that are necessary of the International Banker." to turn out a suit of clothes that formerly required no between money at all. (In this we have omitted, for lack of Congressman BERNARD J.GEHRMANN of Wisconsin. space, the twelve times transportation is used in Congressman SAM MASSINGALE of Oklahoma. getting the goods from one place to the next). Introduced in the Congressional Record by There are approximately 30 million men in the Congressman JOHN R. MURDOCK of Arizona. Nation. Suppose each man bought only one suit one May 16, 1939 of clothes each year. If we had only dollar in circulation for that purpose and each suit required, "Paying the Government Debt with a Fountain Pen." as above explained, the circulation of that one dollar between 120 times, this would mean that one dollar would Congressman VINCENT HARRINGTON of Iowa. have to circulate no less than 3,600,000,000 times to Congressman WALTER M. PIERCE of Oregon. complete the suits in their various stages for the Introduced in the Congressional Record by 30 million men. Congressman R. T. BUCKLER of Minnesota. A dollar circulates on an average 50 times in a May 23, 1939 year, and this would mean that it would require the "The People Have Decided There Shall Be No More entire use of no less than $72,000,000 to make one Banker-Created Money Panics. Twenty-Seven suit of clothes for each man, where a hundred years Is Enough!" ago it required no money at all and as we go along, commercializing the manufacture of goods more and between more, it requires billions of more dollars each year Congressman ED V. IZAC of California. added to our money supply. Congressman KENT E. KELLER of Illinois. These figures are, of course, very conservative, Introduced in the Congressional Record by but it gives a vision just how and why we must add Congressman JED JOHNSON of Oklahoma. to our money supply. June 3, 1939 There are nations in the Old World that have not "Discussion of the Need of a Text Book on the increased in population for a hundred years, but they Monetary Subject in the Schools." have rapidly commercialized industry so that mil­ between lions of dollars are necessary where a hundred years MRS. ETTA M. RUSSELL of Decatur, Illinois. ago not a cent was necessary. CHARLES G. BINDERUP former Congressman from Therefore, we must add to our money volume Nebraska. according to the demand or use for money as shown by our statistical bureaus and with the year 1926 15-Minute Speeches by as the base equaling 100. Congressman WRIGHT PATMAN of Texas. Briefly, to answer your question, population is Congressman JOHN E. RANKIN of Mississippi. not an accurate indicator of the actual growth of our Senator GERALD P. NYE of North Dakota. Nation. Governing by a price level contemplates WILLIAM JENNINGS BRYAN of Nebraska. and provides for all these different factors that enter (His famous "Cross of Gold" speech) into the growth of our Nation.

NEUTRALITY in our Nation where they can make a and carry” plan and the repeal of living, by finding the way to return (Continued from Page 15) Neutrality, as advocated by Big Busi­ to the farmers their farms and homes ness, would assure safer, and bet­ session of Congress was called to which have been taken away from ter neutrality. On the contrary, the repeal the Neutrality A ct? them because our Government failed repeal of the Neutrality Act would But let not the spirit of partisanship, to protect the worthy weak against increase the dangers of involving envy, or race prejudice enter into this. the greedy strong. Make the World America in war. I have only told you the truth as it is Safe for Democracy by making our Has a single nation in the entire in Washington. You cannot blame the Nation an example to all Nations.” world ever complained about our Neu­ Jewish people for seeking revenge on But the question is, shall we repeal trality Act, which was passed about Germany. You and I would feel exactly the Neutrality Act and risk the danger four years ago (in February 1936) as the same way about it if our people, of being involved in war in order to being unfair or unjust? Not a single race, or creed had been persecuted in avenge Germany’s persecutions? To one, until after the war started, and a like manner. us, as a nation, Germany has not certain nations saw they could profit In the last World War the battle committed one overt act, and we be­ by the repeal of the embargo and cry was, “ Make the World Safe for lieve in Roosevelt’s “good neighbor thereby get an advantage over their Democracy.” This time we could al­ policy.” Then why the repeal of enemies. Has there been a protest most use the same slogan, slightly Neutrality ? from our own citizens about this neu­ changed by past experience, and say, Those opposing the present Neu­ trality since the Act was passed? Not “ Make the United States Safe for trality Bill in Congress have not pro­ a single word, until the war started Democracy, by finding the way to duced one argument of the slightest and Big Business, individuals and Cor- give eleven million unemployed a place significance to prove that their “cash ( Continued on Page 18)

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis 18 CONSTITUTIONAL MONEY ADVOCATE bombing planes, poison gas and dyna­ and weigh these words after compar­ NEUTRALITY mite.” That’s what our present Neu­ ison with more recent developments, (Continued from Page 17) trality Act means. the past rises before me like a dream. porations, International Bankers, and Isn’t is unreasonable to say, “We I see, I understand now the twinkle war mongers saw it was obstructing will lend you money or sell you muni­ in his eye and the expression of their potential ill-gotten war profits, tions on ninety days’ time so you can satisfaction on his face, as though he and so started their false propaganda. kill more men, women, and children, had just discovered a plan whereby and although you skinned us out of prosperity could be brought back and The repeal of the Neutrality Act all the money we loaned you in the a depression of twenty years’ endur­ after a war has started is a different last war, we will now lend you more, ance, which had refused to be solved matter. This is in itself an act of and again ask the taxpayers of A- by the many other experiments, could being un-neutral and plainly shows merica to pay for your war.” be solved by following the pattern of that we are taking sides in the war the war mongers of Europe. and are legislating accordingly. Have we forgotten that the last war was fought in Europe to collect pay­ Yes, I also heard Senator Burke In President Roosevelt’s recent mes­ ment of the allied bonds to the Inter­ from my own state say over the radio sage to Congress and to the people national Bankers ? Have we forgotten on Saturday night, September 23, that by radio, in his efforts to justify the that this cost us the precious lives of to repeal the embargo would have a repeal of the embargo, he said, “ The over 125,000 young men who rest in beneficial effect on business, that it enactment of the embargo provisions Flanders Field, and $45,000,000,000 in would have a favorable effect on un­ had the effect of putting land power cash that the American taxpayer must employment, meaning we could make on the same footing as naval power, pay? Have we forgotten that in the money by assisting in the murderous so far as sea-borne commerce was last war we extended credit to Eng­ warfare of Europe. concerned.” (And I want to add land and France and other European President Roosevelt said, when he right here; why not, President Roose­ powers to the extent of $22,000,0(30,000, signed the Neutrality Act, that it was velt? Why not give land power which obligations they have repudiated a step in the right direction, meaning equal rights with naval powers ? and refused to pay, thus forcing the it was an improvement over the an­ This matter does not concern us.) American taxpayers to pay for their cient international law. But he added The President continued, “ A land war? that he didn’t think our neutrality power could thus be assured in ad­ I can understand how a munition went far enough. But the ancient vance that a sea power would be maker, an International Banker, or international laws, which merely sug­ weakened through the denial of its some one whose kin or friends in gested how to carry on wars, and made ancient rights of buying anything any­ Germany are being persecuted, can no attempt to prevent conflicts be­ where.” But President Roosevelt, to vote or work for repeal of the em­ tween nations, certainly is not going repeal the Neutrality Act would give bargo, but how in the world a farmer further in the right direction! I to sea power an advantage over land or anyone not included in this cate­ agreed with President Roosevelt. I, power. This legislation in times of gory, caring for agriculture, can favor too, did not think we were going far peace is neutral but to thus legislate repeal, is impossible to understand. enough. I -wanted a neutrality act during war is un-neutral. And what The present Neutrality Bill is a that provided for Government owner­ business is it of ours, as a neutral farmer’s bill, Vhich works for the ship of munition factories. I was on nation, whether a sea power is weak­ advantage of the farmer. the committee in Congress sponsoring ened or a land power is weakened. If the Legion Bill which provided for the The repeal of the Neutrality Act we are to be neutral we must take no conscription of capital in case of war, would tell the warring nations to part on either side of the contest. and I wanted union wages for every come over and buy from Pthe steel Now let us reason further: Is it soldier boy, for if there is anyone corporations and munition manufac­ safer, is it better neutrality, is it who is entitled to union wages, it is turers all they want with which to fairer, to say to the belligerent the boys in the trenches. I wanted to murder each other. powers at war in Europe, “We will take the profits out of war, and believe sell both sides all the munitions and The present Neutrality Act says, me if that bill were in effect today, implements of war with which you “Come over and buy farm products there would be no war. Friends, if want to murder each other and bomb­ and the necessities of life for your you conscript capital, you can’t have ing planes, machine guns, and poison men, women, and children, but we are a war! gas, so you can kill the women and a Christian people who still believe in We must have a neutrality bill that children as well as men.” That’s the Ten Commandments. If you are says to Morgan, the symbol of self­ what repeal of our Neutrality means. bound to murder, get your war ma­ ish greed, “ If you think this country, Or is it better to say, “ We will sell terial from nations less civilized. De­ where you have made your money, is neither side any war munitions nor mocracy was founded on brotherly not good enough to invest it here, implements of war.” That’s what our love and not strife and war.” look to the nation where you invest present Neutrality Act says. It was in Washington, in the month for your protection. But don’t try to Is it better neutrality, is it safer for of January, I was visiting in the elab­ make a collector out of Uncle Sam our Nation and people; is it fairer to orate office of one of the Nation’s and gun fodder out of our young men say to nations at war, “ Come over here most influential men in our Govern­ in order to collect your otherwise and buy all you want on the so-called ment. In discussing with him the worthless bonds.” I was on the steer­ ‘cash and carry’ plan. We will help European situation, I was deploring ing committee of the Ludlow Bill that you in your murderous warfare, and the sad plight of the European nations, provided no man dressed in a soldier’s thereby invite the war with sub­ with their continuous wars or prepara­ uniform could cross the boundary line marines and battleships to our very tions for war, when to my surprise of the Nation without a referendum shores.” That is what repeal means. he replied, “ But after all, Mr. Binder­ vote of the people. And some day, my Or is it better to say to them and give up, you must have noticed, and must friends, we will have this kind of a the same notice to the world, “ Just admit, that the only nations that neutrality law. If the Democrats and don’t come over here at all. Do your have prosperity are those in war or Republicans won’t give it to us, why fighting over there; for we will not preparing for war.” not get a Progressive Party or a sell you shot and shell, cannons and When I now think of that incident Farmer Labor Party that will!

Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis UNROBING THE GHOSTS OF WALL STREET 1. Fifty-Cenl Dollars 3. Inflation 5. Machine Age 2. Fiat Money 4. Periodic Cycles (Continued from Page 2) Ghosi Number Five Inflation, but history is crowded with the chronicles of Nations that died of Deflation. The French Assig­ TECHNOCRACY or the MACHINE AGE nats, the German Marks, the American Continentals Without a doubt, the Wall Street Ghost thct has and depreciated Greenbacks were all instrumen­ most adherents to the belief of its genuineness is the talities in the hands of the International Bankers, "Technocracy" or "Machine Age" Ghost. created by themselves in their ruthless plan to rule That machinery does away with much labor or ruin. sounds reasonable when we see the tractor and Then why this ridiculous exaggeration and magni­ combine on the farm replacing thousands of farm fying of the word INFLATION, when our nation is laborers, the type-setting machines and automatic chronically afflicted with DEFLATION? printing presses doing the work of hundreds of men, the 100-car freight train run by three men, etc. We Ghost Number Four imagine that all the labor which has been replaced by machinery is now in the idle class. Where else PERIODIC CYCLES have all these men gone? Yes, the big bankers will tell you, and argue, to But have you taken notice of the several hundred support their contention that these depressions, mon­ thousand men who are employed in radio manu­ ey panics, and recessions are cycles; that it is just facturing and broadcasting, the thousands in the too bad, but it can't be helped; it is destiny going refrigeration, airplane, automobile, motion picture, onward in its ruthless way. and other new industries; hundreds of thousands in In other words, they blame God Almighty. They ladies' beauty parlors, cosmetics industry, and mak­ say it is He who periodically visits these scourges, ing machinery for these new businesses; thousands catastrophes, and years of misery and want on his in the business of telephone and telegraph, good people. Alibis have always been the subterfuge of roads and public improvements, and in the manu­ tyrants and criminals. facture and distribution of thousands of luxuries and In the minutes of that nefarious, secret meeting of amusements we have never enjoyed before and the big bankers which has gone down in history as which we have a right to enjoy as civilization pro­ the Crime of May 18, 1920, on page seven, the Presi­ gresses. Have you ever wondered where all these dent of the Federal Reserve Banking System, W. P. laborers came from? LABOR STATISTICS AC­ I. Harding, spoke as follows: "W e all know if the TUALLY SHOW DEMAND FOR LABOR INCREASES bankers in any community, large or small, were to WITH THE INVENTION OF NEW MACHINERY. clamp the screws on tight, they can bring disaster to But let us just judge from our own knov/ledge and any community which might spread to other com­ use the past as our guide. In 1774 Benjamin Frank­ munities." So these bankers did understand. They lin, in his Autobiography tells how the previous did know that they could so easily create one of the prosperity of the Colonies had turned into poverty, "cycles" for which they were blaming God Almighty, with the streets of the villages filled with unemployed. although several small bankers present objected We had no machinery then., They wove and spun strenuously and warned against this procedure. Of their garments in the homes with hand-made spin­ course they knew, for was not this meeting called ning wheels and hand-made looms. But Franklin for the very purpose of creating a cycle of money also shows that this unemployment was caused by contraction? Rothschilds of England who took from the Colonies And everyone knows just how the depression or their money called "Colonial Scrip." And this was "business cycle" starting August, 1929 was brought followed by the money panics of 1789, 1798, 1803, about, and also the recession of 1937. Why, the 1809, 1814, 1818, and 1825. chairman of the Board of Governors of the Federal Skipping the other depressions, let us turn to the Reserve Banks openly admits they caused the Cycle year 1869, the worst depression, although it lasted or Depression of 1937, and so everyone knows there only three years. History records the one day as never was a depression or "cycle" that was not Black Friday, when the Nation stood still and all caused by the money manipulators, or rather by our business was suspended. We had very little machin­ childish, ignorant, dishonest, incompetent money and ery then. People harvested with a scythe and the banking system, so contrary to the Constitution of women raked the fields by hand. Horses or oxen the United States. were the main motive power. Yet we had the great­ AND SO, WHEN EVERYONE KNOWS THAT THIS est depression recorded in history up to that date. Be not deceived! Machinery is a blessing and IS A FALSEHOOD, WHY THIS FOOLISH TALK an asset to our Nation, regardless of what it may ABOUT "CYCLES"? WHY THIS SACRELIGIOUS appear to be on the surface or what you have been SUBTERFUGE OF BLAMING GOD ALMIGHTY? led to believe! All of these matters are discussed in the book, "Uncle Sam's Hospital Chart," and will be discussed from time to time in the "Constitutional Money Advocate,"

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There is no greater moral duty that confronts you today than r The , ...... to become an active, informed citizen, and member and contributor Constitutional Money League in this great national plan for education on the money question. Of America Incorporated ‘ j-' There is nothing new about the plan for government monetary issue and control. It is the old philosophy of Benjamin Franklin, A Nonprofit. "Educational Organization Thomas Jefferson, Andrew Jackson, Abraham Lincoln, W. J. Bryan, Senator Bronson Cutting, and every recognized financial authority.

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