The
Kingdom
Of Shylock
By
Frank Anstey M.P.
MELBOURNE;
LABOR CALL PRINT, PATRICK STREET
1917.
CONTENTS
Page.
Love of Country .. .. .. 1
The Clutching Hand .. .. .. 5
Lords of Lootery .. .. .. .. 8
Mammon the Overlord .. .. .. 13
The Mighty Swindle .. .. .. 17
Gorging the Vultures .. .. .. 22
The New Bondage .. .. .. 26
The Dawning Slavery .. .. .. 31
The Profiteers’ Programme .. .. 35
Australian Money Trust .. .. .. 40
The Unseen Grip .. .. .. .. 44
State Aid to Robbery .. .. .. 48
A Nation’s Credit .. .. .. .. 52
The Capitalist Arsenal .. .. .. 57
National Currency .. .. .. 61
National Redemption .. .. .. 66
National Instrumentalities .. .. .. 70
Historic Note Currencies .. .. .. 75
War Values .. .. .. .. 79
Standard of Value .. .. .. 79
Money Trust Armies .. .. .. 80
Foreign Exchange .. .. .. 81
Foreign Exchange and Gold .. .. 87
Foreign Exchange and Local Currency .. 88
Foreign Loans .. .. .. .. 89
Shifting Foundations .. .. .. 90
Currency—Notes and Cheques .. .. 90
American Banks .. .. .. .. 91
Australian Banks .. .. .. .. 92
Bank Capital .. .. .. .. 93
Bankers’ Agreement .. .. .. 94
War Profiteers .. .. .. .. 94
Things to Remember .. .. .. 95
Those Who Return
Found on the body of Sergeant Leslie Coulson—killed on the Somme (France October, 8, 1916 .
Who made the Law that Death should stalk the valleys?
Who spake the word to kill among the sheaves?
Who gave it forth that Death should lurk in the hedgerows?
Who flung the dead among the fallen leaves?
Who made the law?
Those who return shall till the ancient pastures,
Clean-hearted men shall guide the plough-horse reins,
Some shall grow apples and flowers in the village,
Some shall go courting in summer down the lanes –
Those who return
Those who return shall find that peace endures,
Find old things old, and know the things they knew,
Walk in the garden, slumber by the fireside,
Share the peace of dawn, and dream amid the dew –
Those who return
Who made the Law? At noon upon the hillside
His ears shall hear a moan, His cheek shall feel a breath,
And all along the valleys, past garden crofts and homesteads,
He who made the Law,
He who made the Law,
He who made the Law shall walk alone with Death
THE MONEY POWER
Plutocracy is more despotic then monarchy; more insolent than aristocracy; more selfish than bureaucracy. It accumulates by conscious fraud more money than it can use, and denounces as public enemies all who question its methods or throw a light upon its crimes.
(W. J. Bryan, New York Reception, 1906).
All undertakings in the field of industry are now dependent upon the consent of the banker.
The Stock Exchange activities of the banks are becoming more and more the controlling force in every department of economic life.
Modern capitalism is the child of money-lending
Money-lending contains the root idea of capitalism
In money there is no thought of production
In money-lending economic activity has no meaning
—Werner Sombart in “The Jews and Modern Capitalism.”
PRELIMINARY
“The triumphant nation of tomorrow will be that which defeats the others on the economic field, by reorganising the conditions of human toil, and by bringing more justice and happiness to mankind.”
—“Zola” in “Truth” Page 171.
In days of old the feudal baronage sallied forth with sword and spear to levy toll upon terrorised producers. They were masters of highways and waterways, and in the name of their overlordship exacted tribute from the toiling people. They were the self-evident personification of tyranny. To rise against them, destroy them, escape their vassalage, was to leave an open road along which the products of free men could pass untolled. Organised resentment and bloody victory were the sole essentials for the spontaneous development of industry in its primitive forms.
But the days of primitive industry and primitive Radicalism are passing. Under the freest political institutions exist financial oligarchies more rapacious than the old-time baronies. They bleed, not with sword nor spear, but by subtle processes that leave a people impoverished, they know not how or why. The mechanism of robbery is complex and impersonal. The operators are out of sight. The public only know them as benignant gentry distributing tracts or charity by the wayside.
In theory the Labor Movement is a protest against Capitalism. In practice it is its endorser and subsidiser. Legislation is enacted to make the baronage of Capitalism bearable and acceptable to democracy, but the baronage remains. Its exactions, if less outwardly brutal, are none the less extensive and complete. Not in the least do we touch its sacred edifice, impinge upon its prerogatives, or limit the unseen power which predatory wealth exercises upon the political machinery of the State, the lives of the people, and the economic future of the Nation.
We see States and Nation governed by the machinery of past centuries. We have seen a Labor Government in N.S.W. upholding the absurdity of an Upper Chamber to nullify its own proceedings. We have seen Governments of working men upholding as rigidly as the most rabid Tories all the procedures, formalities, mummeries and ceremonies of obsolete forms of government. In the midst of a flood tide of economic and scientific pro gression the legislative and administrative methods of Governments stand petrified in the chamber of dead ages.
The organisation of Labor upon the basis of craft is not less obsolete than all the other instrumentalities of past centuries. The members have need to think in terms of a wider brotherhood. True freedom consists in a state of mind as well as exterior surroundings. The mind must expand as well as the machinery of production. There is mental slavery as well as physical, and slavery is not abolished because men vote for their own enslavement, contented to be well fed. The Labor policy must be radical in fact as in name. It must go to the root of things or it goes nowhere.
This movement of ours talks of “The Means of Production, Distribution and Exchange.” Of the first two we read much, hear much—upon the last we are silent in speech and policy. Yet in the modern world the last is fundamental in industry, in statecraft, and in war.
It is in coping with the problems of Finance that the world has got to find its regeneration. All reorganisations of industry, all social projects, all efforts to climb out of the pit of misery into which the war propels the toilers are dependent upon the first. No skin-plaster legislation, no mere policy of alleviation, will meet the position. Revolution in action and method is the one saving instrumentality, the sole alternative to a long grind ing period of absolute slavery.
I make no apology for this statement. I do not stand alone, nor in poor company. I remind the men and women of Australia of the speech made last May (1917) by Lloyd George to a Labor delegation. He said:—
The whole of society is in a molten state. You can stamp upon it almost anything you like, provided you act firmly and determinedly. There is no time to lose. Unless the opportunity be seized it may pass. The post-war settlement will succeed in proportion to its audacity. Have audacity by new ways and methods, and you will get a really new world. If not, then God help the country.
This impulse, this essential action, cannot come from one man or a few Revolutions come from the miseries, the dissatisfactions, the passions of the masses. The duty of leaders is to be ready for it, and when it comes, guide it along the right channels.
It is in this spirit that I offer to the men who take an interest in the affairs of their country some facts for their consideration. It will be noticed that I do not offer them the exploded theories of the text books. I present the spectacle of the machine in operation in Europe, in America, in England, in Australia. I give them the sources of my information into which they can dive further if they wish. I present them with no academic dissertation, but with the admissions and affirmations of men who live on the game. The business is buttressed with a dead language. I endeavor to present it in a language all can understand.
Here is a summary of financial facts, of much reading through dreary records and evidences of many Commissions. Here is a record of financial buccaneering, financial legislation and capi talist methods of waging war at a profit. Here is a description of the only solid foundation upon which all policies of effective reformation and national progress must rest.
This booklet by its reference to documents and historic facts, has some thing more than passing value. It is a booklet, to which the holder in years to come, even if he does not agree with its conclusions, can turn to and ask, “Where is it?” To that extent, if for nothing else, it possesses some value to all students of economics, to all would-be leaders of men, and all those lovers of their country anxious to understand its problems and help in quiet ways.
It is not a question of a class or of class interests. The class struggle will disappear with the exterminated interests of the predatory cliques. It is a question of the capacity of the State to meet the rising tide of its responsibilities. It is a question of the economic reorganisation on lines that will furnish its people with an attractive existence and attract others from abroad. It is a question of how and by what means its territory shall beutilised, its resources developed, its wealth multiplied, so that by its wealth and its people—the abundance of the one and widespread owner ship by the other, the essentials of a self-sustained community will be secured.
Slavish acceptance of transmitted ideas, stolid attachments to old methods and old fetishes accomplish nothing. That was society stagnates, ossifies, and becomes the prey of the first besieger. Note the helplessness of Governments, their aimless drift on the stream of events, their lack of national objective, their poverty of policy. These things provoke disaster, and Australia is moving to the crisis.
Love of Country
“Romford, Essex,
“May 30, 1915.
“I look over this beautiful, delightful country, and I wonder if it is really true that there is so much bloodshed and horror in the world. Yet, last night by my window went the wounded westward, and this day, as for months past, go brave men eastward to the slaughter, and the Jews are making much money.”
Mother in England to her son in Australia.
Where is the Englishman who does not love the land of his nativity. Where is the one, who, in the hour of struggle, does not forget all that is bestial in her cities, and remember only, all that is beautiful in the things leftundefiled.
Hills and dales, rolling downs and valleys, woodlands and meadowland brooks and streams that yet flow untainted to the sea, daisies and primroses wild growing in the unfilled pastures, blackbirds and thrushes, finches and linnets warbling in the hedges, the lark up yonder in the sky—these pictures pass before the Men of England, “heirs of glory,” wherever in the wide world they be, even as visions unfold in the passing hours of slumber. I love a country, and love it very dearly, is not to be stone deaf to the **** trump of existing facts.
Through all the centuries long lines of unnumbered and now forgotten dead have marched forth from every village, along every road and byway, do battle for this little sea-girt isle.
And amongst those men were kings. Kings in reality, not figurehead kings, who were English—not Germans. Kings who beckoned “come”—not pointed “go.” Kings who said, “the place in front is mine”—not “the view from here” (a hundred miles behind) “is fine.” Kings whose sceptre was the battleaxe, not the golf-stick. Kings whose slogan of “Follow the King” meant follow him to the battlefield—not to the water-bottle.
PATRIOTISM.
Beside the King rode the fighting barony of England, and behind them ye yeomanry from Kent and Devon and the hills of far Northumbria. There were men, as always, too old or fat to fight, and men, even then, whose thoughts on money bent gave them no stomach for ye battle. But none escaped the sacrifice. None were permitted to dodge their share of the common burden. Those who did not contribute their bodies contributed their money. One or the other they had to give. Wealth as well as human beings were offerings upon the altar of country. No Shylock could make a profit from war—he got no interest. No trader could “engross” or corner the necessities of life—he got the hangman’s knot. He was regarded as a traitor, and got a traitor’s doom. And this was the law of the land for long centuries.
Thus it was that England for over a thousand years waged war at home and abroad—wars of aggression and defence—wars by sea and land—wars on Spanish main and coasts of Tartary—wars against Armadas of old Madrid and fleets of the bold Van Tromp—wars in Normandy and Flanders—wars of Roses and of Roundheads—wars inside and outside, civil and foreign, some where, always—and yet she emerged from that thousand years of bloody strife free of debt, no harpies within her borders to gather interest from the blood of battle. Give your life or give your money. That was patriotism in the days when patriotism meant “love of country,” and not a blood-sucking, money-lender’s parody.
THE BLACK FLAG.
But times have changed. Dutch finance, a Germanised throne and capi talised industry are the marks of the transformation. Kings no longer go forth to battle, and Money no longer freely serves the Nation that protects it. Men may die, but Money makes no sacrifice. It looks upon bloody war as a rich gold mine yielding fat dividends for ever and ever without end. Human bloodsuckers, who risk neither life nor limb nor penny, wax fat on Armageddon. They constitute the “Money Power” that bestrides all coun tries, and makes all nations its slaves. It exercises political power under every form of government. It makes the world one wide dominion over which its black flag flies unchallenged.
The “Money Power” is something more than Capitalism. It is its pro duct; and yet its master. “Capitalism,” in its control of the great agencies of production, is observable and understandable. The other lurks in vaults and banking chambers, masquerading its operations in language that mysti fies or dazzles. Industrial Capitalism may roll itself up into great monopolies in production and distribution. It cannot exist for an hour apart from thepowers that hold the “Monopoly of the Instruments of Exchange.”
Modern Capitalism throws ever-increasing power into the hands of men who operate the monetary machine.
These men constitute “The Financial Oligarchy.” The key to power is combination and concentration. They control banks, trust companies and insurance. They control the savings of the people. They say to whom the savings shall be lent and from whom withheld. They finance industries in which they are interested, and withdraw facilities from would-be rivals.
Such is the Modern Money Power.
Profits are piled up in bank credits, reinvested, and reinvested until the field of industrial activity is exploited to its limit. Money, in the language of the market, becomes “plentiful” and “cheap.” In other words, the industrial outlets are diminishing, and the rate of interest, the “reward of capital,” is falling. Something must be done—it is done. International hatreds are stimulated. People prepare for peace by grinding the axe of bloody slaughter. Armaments are demanded, loans are raised and the right to levy perpetual tribute on the nation is given in return. Even this is insufficient to mop up profits as rapid as their accumulation.
THE PROFITEERS.
So war comes. Any pretext suffices. War must come. It is the pro duct of the predacious instinct in every age and clime. But there is a differ ence. Under every other economic system, war placed the yoke of slavery on the conquered foreigner. Under capitalism, war is made the instrument of the enslavement of men of kindred race and blood.
It was Count Von Moltke, himself a warrior, who, in the preface to his book on the Franco-Prussian war, said : —
“The great conflicts of modern times break out contrary to the will and wish of nominal rulers. The Stock Exchange has acquired an influence so great that it is able to call armed nations into the field to fight in its interests. Blood flows in order that the demands of High Finance may be liquidated.”
It was another writer of no mean repute who said : —
“The magnitude and appalling character of the influence on the welfare of the whole nation, exercised by the Stock Exchange, is entirely due to the fact that the securities dealt in on its floors represent in paper form the bulk of the business of the nation.”—Frank Hirst in “The Political Economy of War.”
So war comes. War borrows millions of the piled profits—interest rises. More millions of loans—higher and yet higher interest. Much rubbing of hands on the Stock Exchanges—3½ per cent, yesterday, 4½ to-day, and 5½ or 7 tomorrow. Men may rot on battlefields, but money gathers an ever-increasing harvest of rich ripe fruit.
Levy men? YES.
Levy money? NO! NO! NO! Gott in Himmel. That ish confishcation. We will lend it to you at much interest.
So the nation can levy men—but not Money.
Men may die.
Money lives.
Men come back armless, legless, maimed and shattered.
Money comes back fatter than it went, loaded with coupons, buttered with a perpetual lien on the toil of the fathers and mothers and sisters and brothers of the men who died, that the nation might live.
Where is the “love of country” to those vampires who batten and grow rich on the rotting carcases of the world’s humanity?
The Clutching Hand
“The ‘capitalisation’ of private industry is followed by the ‘capitalisation’ of the Nation. To be in pawn, to be mortgaged and bled, to be divided into stocks arm bonds and debentures, and sold in pieces is the fate of Nations.”
John A. Hobson, “Evolution of Capitalism.”
OLD JEWRY.
There was a time in the history of the British race when the jobber pursued his gambling in Change Alley or the Jews’ Walk, in the surreptitious manner of the accursed. He had one eye on the speculative customer and the other on the passing police. The Jew Medina came in the train of William the Dutchman. He gave Marlborough £6,000 a year for the first tips of victories in France or Flanders. All the tricks bound up in rising and falling prices, lying reports from the seat of war, the pretended arrival of couriers, the formation of financial cliques to work the market, cabals and connivings behind the scenes, the whole system of Mammon’s Wheels—Medina, the father, knew them well, and worked them to the full. His successors have amplified his methods.
After Medina came the Jew, Manessah Lopez. He amassed a fortune in the panic which followed the false news that Queen Anne was dead. He “bought on the slump and sold on the rise.” Then came Samson Gideon and the Goldsmids—Abraham and Benjamin. These were succeeded by the Rothschilds.
THE REIGN OF THE ROTHSCHILDS.
The Napoleonic wars made the fortunes of the Rothschilds. From 1797 to 1821 the British nation was on a paper currency. It was for the most part the paper currency of the private banks. They increased their note circulation from seven to 50 millions—that of the Government increased from nine to 27. The first depreciated—the last stood steadfast. With their Private notes they bought interest-bearing bonds. The notes flowed through channels commerce back to the banks, ready for the next loan. Loans were floated as low as £40 in the £100—the average £60. The nation was loaded with a bonded debt of 870 millions—dead men on the battlefields—profits for the cormorants.
The Rothschilds combined banking and brokerage. Behind the operator on the market stood the backer, the banker. He brought to the bulling and bearing and thimble rigging all the resources of deposits entrusted to his care. These were manipulated for fortune making. “Loan floating,” as distinct from lending, became a new occupation. Come into the good thing. Sub scribe to the loan. The loan is “floated.” Fortunes are skimmed off in brokerage and commissions. The “money market” is tightened, scares worked, prices depressed, the public sell, the riggers buy, confidence is re stored, prices rise, the public buy once more, perpetual game of depression and inflation, colossal fortunes made not by honest trade but by public decep tion, financial tricks and market fakes.
Here are all the instruments of the spieler and tick-tacks of the race-course, garbed in respectability, and sheltered and hossanahed by the Law and the Church.
PATRIOTS TO EVERY FLAG.
The Empire of High Finance has become intricate and extensive. Around the throne have gathered satraps and satellites, catching the sun shine. The dynasty of the Rothschilds is more powerful than ever—com patriots and puppets do its will and share the spoils. Its dominion is over nations. Its influence and its interests are as much in Berlin and Vienna as in London. Its titles and distinctions are gathered from every flag. Alfred Rothschild, ex-director of the Bank of England, partner in the firm of N. M. Rothschild and Sons, holds the Grand Cross of Austria, the first-class Order of the Crown of Germany, was, until the outbreak of war, Austrian Consul-General in London. Then he became an ardent Britisher—a welcome guest in every profit-mongering household, waxing fat on the blood of the dead soldiery of Britain.
His son, Albert Rothschild, born in Germany, educated in Germany, a member of the Imperial Yacht Club of Germany, an attache to the German Embassy in London, became an ardent Britisher as soon as war broke out. His patriotism went with his interests. The Majesties of the Kingdom of Finance are exempt from anti-German hostility. The nation may die—the perquisites of the parasites will be preserved. Any nation suits, so profits are undisturbed.
CAPITAL-ISM.
When a business is floated into a company of so many shares of £1 or £10, that business is “capitalised.”
Rich quick comes not from the processes of legitimate industry, but the market manipulation of negotiable shares. The actual business is a thing to monkey with; to boom or stiffen, to the spieler’s needs. Shares are let out and pulled in.
Every time they come in, they come loaded with the loot of a deluded public. Between the boom and the burst, the inflation or depression, the price at which the victims buy and the price at which they are squeezed out dry the riggers of the market draw to themselves the savings of the trustful.
THE MONEY POWER.
This group of speculators (financiers) properly designated and distinguished as “the “Money Power,” controls the whole mechanism of exchange, and all undertakings in the field of industry are subject to its will and machinations. It wields an unseen sceptre over thrones and populations, and bloody slaughter is as profitable to its pockets as the most peaceful peculation.
No nation can be really free where this financial oligarchy is permitted to hold dominion, and no “democracy” can be aught but a name that does not shake it from its throne.
Lords of Lootery
“This reckless and remorseless brutality comes from men who speak our language; who were born under the same skies and nurtured in the principles of a common faith. It comes from the cold, phleg matic heart of avarice—avarice that seeks to paralyse labor and increase the burden of the nation’s debt—avarice that refuses to be satisfied without the suf focation and strangulation of all the labor in the land.”
Senator James Mills, in the U. S. Senate.
If you get a grip of the pre-war scheme of the American Money Thugs, you will comprehend the operations of Mammon’s wheels in every land.
MONETISED SECURITIES.
In the American Republic the banks can deposit bonds in the National Treasury and draw currency notes on the basis of bonds deposited.
W. J. Bryan, in the U.S. House of Representatives, June 5, 1894, de scribed the system thus:—
“A bank invests 100,000 dol. in 2 per cent, bonds. It deposits the bonds in the Treasury and receives 90,000 dols. in bank notes. This is a return of so much of the capital expended for the purchase of bonds, so that the bank is only out 10,000 dol. On that sum the bank receives 2,000 dols. interest, less 1 per cent. tax on circulation. If a private citizen buys bond he can only draw interest. If a bank holds the bonds it can not only draw interest upon it, but draw 90 per cent, of its value in national notes.”
In 1900 the Yankee banking corporations lobbied through Congress an amendment of the National Note Act. They secured the abolition of the 1 per cent. tax, and got an increase of notes from 90 to 100 per cent, of deposited bonds.
In 1902 the banking corporations secured a further amendment of the National Note Act.
By this amendment the banks could secure national guaranteed notes not only on a deposit of Federal bonds, but upon deposits of municipal bonds of railway stocks, bonds of Steel, Beef, Standard Oil, and other securities of specified corporations.
THE MONEY TRUST.
Between 1902 and 1907 the banking corporations deposited such securi ties and drew notes to the extent of 250,000,000 dols.
Armed with these and other resources, the men controlling the great trusts and the principal banks of America organised a scheme of complete dominance over the industrial and financial life of the American Nation. They waged a war of extermination against every competitor.
Against this policy President Roosevelt set his face. He prosecuted and secured against Standard Oil verdicts that loaded the Trust with penalties to the extent of 29,000,000 dol.
At once the Standard Oil banks (under Rockefeller), the Steel Trust banks (under Morgan) and the Beef Trust banks (under Armour) entered into an offensive alliance. This Triple Alliance dominated the financial world of America. It had a majority on the Clearing House Association of all the big cities.
The New York Clearing House Association commenced proceedings. It commanded every independent bank to come to heel and take orders. Those who refused were expelled from the Clearing House (October 20, 1907), on the ground that such banks were no longer worthy of public confidence Such action destroyed confidence in the blackballed banks, and caused a run. Charles Barney, of the Knickerbocker Bank, and Howard Maxwell, of the Brooklyn, committed suicide; all others capitulated.
THE SYSTEM.
Within three days (from October 20 to 23, 1907), every bank in the United States had been brought to heel, taught obedience and mobilised for action. The representatives of banks expelled on the 20th, having duly made submis sion, were re-admitted to membership. Every bank received its orders, its ammunition and the hour of action.
Next day (Oct. 24, 1907), the strike of the Bank Trust against the nation commenced. Every bank, from the Atlantic to the Pacific, refused to pay out gold; refused to pay anything but a paper currency of its own creation—a currency with which every bank throughout the United States had been previously stocked—the incontestible proof of preparedness.
The paper notes of the American Money Trust were designated “Clear ing House Certificates.” They were of all denominations down to two dollars. Every bank at the preconcerted signal paid out in this currency. With it wages were paid and business conducted throughout the United States.
THE ULTIMATUM.
On October 25 (1907) Pierpont Morgan declared on behalf of the Banking Association of America that:—
“We will continue to trade in a paper currency, and pay no more gold, until we get from President Roosevelt the necessary guarantee against adverse legislation. The people can take paper money or leave it—they will get nothing else. The mills, mines and other industries controlled by ourselves or allied interests will slacken down or close until we get effective guarantees against anti-trust prosecutions.”
This was the ultimatum of the Money Trust to the subject nation.
STAND AND DELIVER.
The banks held the country by the throat. If any depositor moved process, the great magnates could carry him from court to court for years. If the Government enforced the law of cash redemption, the Banking Trust threatened to close its doors. Only a revolutionary, seizure, that Congress was not prepared to enforce, or the press to endorse, could defeat the con spiracy of the Financial Thuggery.
PAPER CURRENCY.
Throughout the United States the newspapers of the Trusts and bank officials set out to prove that paper money issued by private bankers was as good as gold, or better. The President of the Bank of California said:
“These ‘Clearing House Notes’ are based on a deposit of the highest class ‘A’ security. Currency that represents good security is good currency. The laboring man is working for a living. These notes are avail able for him, if married, in the payment of household bills, rent, etc.; and, if single, for such enjoyments as he may seek. He gets value for his labor—what more can he ask? He can get no more with gold money than he can with this paper.”
The banks refused to pay gold, but they enforced payment in gold. To refuse to find it was to have bank facilities withheld and be ruined. By this process every ounce of gold was bound to find its way to the bank vaults and stop there. Mercantile houses and producers were unable to meet their obligations. Immense quantities of goods were hurriedly shipped to Europe in order to secure gold.
When the banks went on strike it was not a period of falling trade or industrial depression.
“The Economist,” of December 21, 1907, said: “There never had been such prosperity in the history of America.”
The “Contemporary Review” (January, 1908), said: “It was a time of exceptional prosperity.”
Never were the gold reserves of the banks so large as when they refused to pay out.
“The Economist” said: “There was a criminal hoarding by the banks.”
Lord Welby, of the British Treasury “Contemporary,” January, said: “The stock of gold in the United States
In this last fact is the answer to those who assert that a paper currency will drive gold out of a country. “The Economist” (November 9, 1907) pointed out that, while the private banks in the United States inflated their note issues in ten years by ₤67,000,000, the stock of gold increased £175,000,000. The international balances had been favorable to the United States, and gold flowed in to settle those balances, irrespective of the internal currency.
The inflowing gold was cornered by the Money Trust, and its emission to the general community was barred.
The inability of the mercantile community to meet the gold claims of the Bank Trust, or to secure credit, brought about widespread collapse. More and more mines, mills and factories fell into the hands of the Trust at depreciated values. Hordes of men were out of work. The United States Attorney-General denounced the conspirators as—
“Pirates, whose operations are worse than those of the notorious Tweed gang-”
In these circumstances there went up from all sides, even from the Anti-Trust journals, demands and appeals, urging President Roosevelt to “come to terms.”
CONQUEROR MORGAN.
The London “Standard” (December 7, 1907), reported what followed. It said:—
“Mr. Pierpont Morgan is in virtual control. He has made it too ‘strenuous’ even for Mr. Roosevelt. Mr. Roosevelt sent an invitation to Mr. Morgan to come to White House and discuss the situation. Mr. Morgan consented to go only when Mr. Roosevelt sent him a personal letter promising a different attitude towards financial interests in the future.”
The President capitulated, forwarded his apology, and made the desired promises.
Morgan met Roosevelt on November 16, 1907.
The agreement was:—
1st. That Roosevelt drop his Anti-Trust campaign.
2nd. That no effort be made to collect the Standard Oil lines.
3rd. That no further action be taken against Trusts or Combines con trolled by Morgan, Rockefeller and Armour.
4th. That portion of the Sherman Anti-Trust Act be suspended.
5th. That gold previously paid into the Federal Treasury for bonds be left on deposit in the private banks.
THE TRUST MAGS.
The terms were accepted. The New York “Herald,” in its issue of November 25, 1907, said:
“Roosevelt has received his lesson. We shall hear no more of his at tacks on the Trusts.”
The London “Daily News” (December 6) said:—
“The Trust magnates hardly seem to have moved a finger, yet they have made their power felt throughout the civilised world. They have made no sacrifice, but, on the contrary, will emerge wealthier men than before. They have brought the most powerful Government in the world to its knees; they have forced it to suspend certain laws, and made it promise to interfere with them no more.”
In the Morgan-Roosevelt compact, Morgan agreed, on behalf of the banks to withdraw Clearing House Notes and resume “full and free payment of cash.”
[sentence missing]
the banks there (United States) have reverted to cash payments.” It ex pressed the hope that American financiers were about to abandon their “marauding tactics.”
On February 3, 1908, the cables announced that Roosevelt had issued against the Banking Trust “the most impassioned and stirring document ever issued from the White House.” The Morganites had refused to keep their part of the agreement.
THE REAL RULERS.
To this Morgan replied, denying any such promise. He said:—
“The banks will take their own time to resume specie payments, and will continue to use their own notes so long as it suits their convenience.”
His only promise, said Morgan, “was that the banks would not tie up commercial houses with a demand for gold.”
In its issue of February 13, 1908, the Melbourne “Argus” announced that the American banks were still “issuing their own paper currency in de fiance of the law.”
That same month Senator Aldrich, of Rhode Island, introduced and car ried through a Bill to legalise the hitherto illegal operations of the banks.
In addition (May, 1908), under the Emergency Currency Act, the Government was authorised to issue to the banks Government-guaranteed notes to the extent of 500,000,000 dols., upon a deposit of public or private bonds, “trade bills or other securities.”
So a capitalist Government, acting on the “advice” of bankers, can, and does, issue currency based, not upon gold, but upon bonds, bills and other securities.
A Labor Government worthy of the name could do ditto for the Nation.
Mammon the Overlord
“The Money Power preys upon the Nation in times of peace, and conspires against it in the hour of its calamity. Conscienceless and compassionless, it enervates its votaries, while it impoverishes its victims. It can only be overthrown by the awakened conscience of the Nation.”
W. J. Bryan, Madison Square Gardens, New York City, August 20, 1906.
THE REAL RULER.
The Yankee financiers, under Pierpont Morgan, have brought to their fullest bloom the germinations of Medina and the Rothschilds. A long chain of banks and insurances, the savings and premiums of the people, are their instruments.
THE MONEY MISH.
During the six years, 1910 to 1916 the Yankee banking corporations, under the triple mastery of Morgan, Armour and Rockefeller, organised and perfected an additional scheme of robbery and domination. It replaced the old Clearing House Certificate swindle, and rested securely on the legal sanc tion of the speaking-tubes of the Trust in politics.
The preliminary to the new move was the organisation of the Monetary Commission, under the chairmanship of Senator Nelson Aldrich.
While this commission was sitting, Woodrow Wilson, then (1911) pro spective candidate for the Presidency, chanced to say in New York: —
“The greatest monopoly is the Money Monopoly. The financiers are more powerful than the nominal rulers.”
Next day the “New York Times” asked Wilson what he meant by “Money “Monopoly.” The following morning (June 17, 1911), the New York “World” came out and said: —
“The day the ‘Times’ asked Governor Wilson what he meant by the ‘money monopoly,’ the newspapers announced that Mr. Morgan’s Bankers’ Trust Company had bought from the Equitable Life Assurance society its holdings in the Mercantile Trust Company, and that by this transfer the aggregate assets of the banks dominated by J. P. Morgan and Co. exceeded 1,000,000,000 dollars. This 1,000,000,000 dollars is not Mr Morgan’s money, but it is in the hands of the Morgan interests, which can say whocan borrow it and who cannot borrow it.
When Mr Morgan took over the Equitable from Thos. F. Ryan, he paid more than 2,500,000 dollars for stock that can only earn 3514 dollars a year; but what he really bought was control over the Equitable’s 400,000,000 dollars of assets and 80,000,000 dollars of surplus.”
This control of banks and insurances by a few men constitutes the Money Trust. It is here in Australia as in America.
Morgan testified before the Pujo Committee that there was no such thing as a Money Trust; that he did not control anything; that he had no wish to control anything. Yet the committee reported that, by his control of banks, insurance and other companies, he controlled not less that 25,000 million dollars, could say where it should flow and from where it should be diverted.
PREPAREDNESS.
The Nelson Aldrich Monetary Commission presented its report. It was based upon an investigation of the banking and currency systems of all countries.
It epitomised the most recent innovations in banking, and the most ad vanced policy in currency.
It directed attention to the statement of the Japanese Minister of Finance, that “in point of the perfectness of organisation the National Bank of Belgium stands highest.” It directed attention to the special discount system; to the fact that notes were issued, not upon gold, but upon all classes of securities, and to the statement of the governor of the National Bank of Belgium
Upon the information contained in these reports, with additions born of their own experience and interests, the Money Kings proceeded to reorganise (in their own interests) the currency and banking system of the United States.
Maurice Patron, in his report to the Commission on the Bank of France, had said:—
“It is difficult to understand how, in certain countries, an undertaking of such universal interest should be left to private enterprise.”
But the Money Kings were determined that (he system should be in their hands, extending their security, power and profit. Increased facilities to trading public were merely incidental.
THE START.
Everything being ready, the new system was given a legal existence by the Federal Reserve Act of 1913.
The Act creates an overlordship of five Financial Magnates, with the Secretary of the Treasury and the Comptroller of the Currency as ex officio members.
The banks of the U.S. are grouped into 12 divisions.
In each division there is one great “Central Bank.” All gold reserves must be kept in the Central.
In each “Central” there is a “Federal Agent.”
Each “Central” through the “Federal Agent” or supervisor, is an issuer of paper currency to the member banks. This currency is guaranteed by the Nation.
The private banks are relieved of all responsibility to redeem their obligations in gold.
Currency is not issued against gold. It is issued upon securities of every description bonds and deeds, “drafts and bills arising out of commercial transactions”—securities previously deposited with the banks by the public as securities for loans.
The United States Treasury Report, of July, 1915, says (page 58):— “Elasticity in note issues is provided by a new form of currency based primarily upon the re-discount of commercial paper.”
This is the “Re Discount System,” the system that necessitates a “Central” bank to work it; the system that in varied forms exists through out Europe; the system that the Monetary Commission was instituted to populariseand localise in America.
Paul Warburg told the Commission that: —
“The European financial system is constructed upon discounts as its foundation; the American system is constructed upon bonds and stocks as its foundation.”
The American money kings seized the European system, engrafted it on their own, got a combination of both, and the advantage of both. The great “Central” is the reservoir which other banks can tap for currency on securities deposited by the public.
The immense gold stocks now held (1917) in America, have no more connection with the paper currency than wheat or cotton stocks. Gold is the bankers’ dice in the international gamble—not an internal currency.
R. H. Howe, in his book on banking (1916), states:—
“The coins in America
The Yankee Money Trusts Magnates have developed a paper currency by capitalists for capitalists, buttressed by the Capitalist State.
When war broke out in Europe, the American Government brought into operation the Emergency Currency Act of 1908, and on August 4, 1914, Congress passed through both Houses an amendment raising theauthorised Government Note Issue from 500 to 1,000 million dollars.
This was in addition to, and apart from the note issues of the Centrals, just as the British Government’s note issue of August, 1914, of ₤100,000,000 was apart from and in addition to the issues of the Bank of England.
In both countries they were issues to banks only.
In both countries the banks could take all the bonds, deeds, liens, receipts, bills, and other securities lodged by the public as cover for loans, and upon those pledges get legal tender currency, with which to trade and make further loans.
But in neither country were these facilities available to the average citizen—they were for bankers and brokers only.
In the United States these National legal tender notes were issued to the banks on the basis of 90 per cent, on bonds 75 per cent on commercial bills, and 66 per cent on deeds.
Thus in the United States there is the cheque currency of the individual bank, redeemable in the “Reserve Note” of the “Central,” redeemable in its turn on the legal tender note of the Government!
Thus a Government that functions in the interests of the great banking corporations, is an instrument of great monetary value to the capitalists who own and control that Government.
That which capitalists can do in the interests of capitalists, the democratic State can do in the interests of the Nation.
The Mighty Swindle
“With the first breath of national danger the fabric of financial fakery tottered to its base. It would have tottered to ruin unimaginable had not the Chancellor of the Exchequer backed the banks with the credit of the Nation.”
Oswald Stoll in “The People’s Credit.”
“The Great War will be long remembered for other things besides the destruction of life and the recon struction of the map of Europe. On the financial side the most notable event is the universal abandonment of the gold standard, not openly admitted, but de scribed in the kind of language familiar from the bulletins of defeated armies.”
“Quarterly Review,” April, 1915.
The moment war broke loose in Europe the much-extolled “British System of Finance” fell to pieces. The bottom fell out of the “Money Market.” The Stock Exchanges closed. The banks were unable to meet their obligations.
The “Daily Chronicle,” of August 5, 1914 , said:— “Credit based on gold has come to an end.” The “Statist” admitted a “Complete breakdown of the banking system.”
The British Government came to the rescue.
It called together the heads of the great banks and representatives of the Stock Exchange.
It asked them to devise a scheme, whereby they might be saved at the expense of the people.
This Finance Committee consisted of Lord St. Aldwyne, Lord Revelstoke, Sir John Bradbury, Sir Walter Cunliffe, Austen Chamberlain, each one a chief of a bank tottering to ruin.
This committee instituted a process of salvation based upon the guarantee of the British Nation.
The credit of the State, ever powerful where gold is a failure, saved the situation.
The guarantee of the British Government gave a security which privately controlled gold was incapable of giving.
STATE AID TO CAPITALISM.
The first step of the Government was to issue to the private banks millions of £1 and 10/- notes, to enable the private banks to meet obligations to depositors.
The banks were closed four days to give the Government time to print and issue the notes essential to the salvation of the banks.
When the banks reopened they paid their obligations in notes manu factured and guaranteed by the British Nation.
The total authorised issue was £100,000,000—afterwards increased. These notes had written across their face, “legal tender for any amount.” These notes were not “Bank of England” notes. They were issued from the Treasury. They did not carry any promise of redemption in gold.
Lloyd George, speaking in the Queen’s Hall, London, said: —
“Have you any of those little £1 notes?
“They are only scraps of paper.
“What are they made of?
“Rags!
“What are they worth?
“The whole credit of the British Empire.”
With these notes the banks met their obligations.
These notes took the place of gold, and by the end of December the notes in the hands of the public amounted to ₤103, 000,000. (“Times History of the War,” page 264, vol. 7.)
The Government further arranged that private banks might re-discount at the Bank of England all internal bills and securities upon which they (the private banks) had advanced, and that all settlement, whether between the Bank of England and the private banks, or the private banks and their debtors, should be postponed until twelve months after the war.
“The Investors’ Review” (August 22, 1914) reported that the country was operating on pure credit money with the mechanism of exchange excellent condition.
In other words, the country was working on a paper currency, guaranteed by all the resources of the British Nation.
It was a proof of the correctness of the statement made by Stoll in his book, “The People’s Credit,” that:–
“Banking credit is really national credit, because in every crisis it is the Government that is compelled to step in and provide notes and discount facilities to save the banks.”
THE GREAT CONSPIRACY
[sentence missing]
and acquiescence of the British Government they organized and perpetuated on the British race the most gigantic swindle of modern times.
The “Clarion” of August 7, had given warning, it said: –
“The democracy is uniformed, and without guidance, at a time when the greatest and most bare-faced piece of thimble-rigging is about to be perpetrated.”
The institutions controlled by the Money Kings held hundreds of millions of bills for goods for goods delivered to Continental houses, including Germany. These bills, as far as Germany was concerned, could not be met because of the war, and could not be met in the case of other Continental houses because the war had disastrously affected them.
On August 13, 1914, the British Government guaranteed all bankers, discount brokers and other holders of worthless commercial paper against loss.
It did more. It monetized those bills. It issued to the banks certificates to the extent of those bills. The certificates authorized the directors of the Bank of England to discount the useless bills and issue notes thereon.
The Bank of England, guaranteed and secured against loss by the Government, “did not,” so says the “Investor’s Review,” “even draw the line against the acceptance of German firms.” The Germans might never be able to pay, “but,” so says the same authority, “the Government acted to secure the British holder against loss.”
The Bank of England directors consisted of the Governor, Sir Walter Cuncliffe, and 24 “financiers,” who were directors of assisted institutions.
THE ROBBER’S INDEMNITY
By the 2nd September, 1914, the Bank of England had discounted waterlogged bills to the extent of ₤95,000,000.
The London “Economist” (August 29), defending the banks against a charge of harsh treatment of the public, used these words:–
“IT IS TRUE THE GOVERNMENT HAS GUARANTEED THE BANKS AGAINST LOSS ON BILLS, WHICH LOSS MAY WORK OUT AT ANYTHING FROM ₤50,000,000 TO ₤150,000,000, WHICH WILL, OF COURSE, BE ADDED TO THE NATIONAL DEBT.”
“Of course” – “added to the National Debt” – “of course.”
The “Economist,” in its issue of September 12, after saying that under “the 13th August arrangements” all bank losses will be added to the National Debt, said :–
But from where, it may be asked, did the British Government get the hundred odd millions to compensate the Lords of the Money Market for the losses on useless trade bills?
It could not get it from men and institutions whose credit the war had destroyed. The only credit and the only currency in Great Britain was that created, secured, and guaranteed by the nation.
SOMETHING FOR NOTHING.
The Government issued to the private banks and discount houses of England legal tender currency notes in place of unredeemable trade bills. With these notes the bankers met their obligations and renewed their trade.
When the war is over the Government will call in the non-interest-bearing notes, and issue to the Money Kings interest-bearing bonds. This they will get for nothing in return. This will be designated “compensation for losses.” The compensation for the losses sustained by the men who fought the battle of their country will be—Nothing. The soldiers returning; from the war will be taxed to pay interest to the robbers who stayed at home, and drew “compensation for losses” while the nation was struggling for its life.
Thus British capitalists, manipulating a Government that functioned in the interests of capitalists, loaded upon the British people for nothing in return—a load of debt almost equal to the indemnity which the Germans imposed upon the French nation at the end of the Franco-Prussian War.
And these millions of loot were only part of the plunder.
Gorging the Vultures
“These are the men who, without virtue, labor or hazard, are growing rich as their country is impoverished; they rejoice when obstinacy or ambition adds another year to the slaughter and devastation; and laugh from their desks while they are adding figure to figure and cipher to cipher.”
Frank Hirst. Editor of the “Economist,” in his book, “The Political Economy of War.”
The gigantic scoop of August 13 was not sufficient. That scheme gave the banks compensation on all “pre-war” debts. By what are known as the “4th September arrangements,” a new and larger scheme of plunder was devised. Stripped of all verbiage, gloss, glamor and mystification, it amounted to this:—
All had debts contracted by banks between the 4th August, 1914, and a year after the end of the war, will be made good by the British Government, and added to the National Debt.
This dose was hard to swallow. The “Economist,” in its issue of September 12, said:
“There is much to be said for compensating banks, discount and accepting houses for their losses, but in equity one person who has been ruined through no fault of his own has just as much right to be relieved at the taxpayer’s expense as another person.”
PILED PLUNDER.
When the 4th September plunder scheme became known, Robert Blatchford’s paper, “The Clarion,” (Sept. 11) came out with this statement:—
“Other auxiliaries to the Gold trust will shortly come bobbing up and asking for the National Credit to help them on their felonious way, and these credits and guarantees will continue to be freely bestowed. That notorious highwayman, Dick Turpin, and the Heathen Chinee, were not in it with these thieves of to-day. Why, the game of ‘Under which thimble the pea’ becomes a standard of high and honorable con duct compared with the chicanery going on under the very eyes of the fleeced ones. The people of England have been robbed, are being robbed, and are about to be further robbed on a larger scale than any recorded in history.”
The “Clarion” spoke true. Not the robber scheme of August 13 nor that of September 4 could satisfy the felonious hunger of those who stayed at home to rob while others went abroad to die. Not enough that they had loaded the living with debt and fashioned new chains of servitude for the unborn. The tigers had tasted blood. All the retainers and hangers-on of the Kingdom of Finance must come into the feast.
In the same issue of the “Clarion” Richard Temple said:—
“Having backed the shareholders in the banks, the Government is preparing, in obedience to the financial Press, to back the members of the Stock Exchange.”
And it was so.
THE STOCK JOBBERS.
The “Economist” of October 3, 1914 , said:— “They are waterlogged with unsaleable securities.”
Under this new scheme the Stock Exchange operators (who gave such a jubilant reception to William Morris Hughes) could deposit their water logged securities in the Bank of England, and draw credit to the extent of 60 per cent, of the value of such securities as at the time of the closing of the Stock Exchange.
The credit thus secured was actually more than the money they could get if compelled to sell.
Against these credits they could draw by cheque. If till money was required, they could draw a portion of the ₤100,000,000 of notes issued by the British Government.
With these “credits” and Government notes, obtained by a deposit of their unsaleable securities, they were able, to resume business and patriotically lend to the Government at interest the currency that the Government had created.
THE GREATEST ROBBERY IN HISTORY
The editor of the London “Investors’ Review” (September 19) stated
“Credit is being created against unexisting assets in amounts of unprecedented magnitude at a time when the ordinary uses for it are unusually restricted.”
“These things are done,” said the “Investors’ Review,” “to support the money market.” It added:—
“These credits are called into being either in the form of notes or in the shape of advances by the Bank of England under Government guarantee.”
Thus the British Government advanced credit to men whose credit was dead upon securities that were valueless. Then, because the ordinary channels for the investment of money were “unusually restricted,” the Government for the found a field of profit for the profit-mongers by borrowing “the credit called into existence by the Government” from the very men to whom the Government had given credit upon “unexisting assets.”
IN ALL THE WORLD THERE NEVER WAS SUCH A ROBBERY—THE ROBBERY OF A NATION STRUGGLING FOR ITS LIFE.
The nation needed food, clothing, guns and ammunition to carry on the war.
If a legal tender currency note was good when issued to bankers for com pensation or to stockjobbers as a circulating representative of unsaleable securities, it was equally good if issued to the industrial community as a circulating representative of the nation’s obligation to those who supplied the requisites of war.
But the British Government that issued legal tender notes for the salva tion, use and profit of the private banks would not issue legal tender notes for the salvation, use and profit of the nation.
The Government issued interest-bearing bonds and debentures, and called upon the financiers to subscribe to the war loans.
VAMPIRE PATRIOTS.
But the “financiers” had no credit outside of that guaranteed by the Government. They had no currency outside of that furnished by the Govern ment. How could they subscribe to the loans?
They did it by lending to the British Government the legal tender currency notes that the Government had previously given to the banks and financiers as compensation for commercially rotten bills and waterlogged securities.
As a result, there went into the vaults of the private banks debentures and bonds armed with the privilege to suck for ever millions per annum from a people struggling on the battlefields of Europe to maintain the national life. And while they were struggling, the bonds of slavery for the survivors were carefully stored for suckage in the vaults of the vampires.
There might have been some justification for saving the banks and great financiers from ruin, on the ground that their ruin would have involved all in a common disaster.
But what justification was there in furnishing insolvent institutions with a currency to enable them to loan that currency to the Government that gave it, and to make a profit from the war? It was pitiless robbery.
On December 22, 1915, Lloyd George, in reply to a question in the House of Commons, admitted that the State aid to financial institutions reached up to nigh £200,000,000.
Nobody ever heard of a Government that guaranteed the workers against loss. But the Kings of Finance must not only be saved, their power of robbery must be extended, their riches augmented, and the toiling multitude ground in the mill of financial servitude.
The New Bondage
This war will make bondsmen of us all, and the economic rule of the bondlords—the greatest oligarchy the world has witnessed—will become absolute.
Henry Slobodin, in the “International Socialist.”
The most important lesson of modern warfare is the fact that a knot of men, financiers, politicians and profiteers, can capture the mind of a nation, arouse its passion, and in the name of patriotism impose a policy of slavery.
John A. Hobson, “Evolution of Capitalism.”
NATIONAL CREDIT.
The London “Observer” of September 26, 1914, said:–
“The Government is proved to be the ultimate supporting influence of credit.”
In its issue of October 3, 1914 , the “Economist” pointed out how utterly futile gold “The Reserve is useless as the basis of credit. The proved basis is the credit of the Government—i.e., of the country.”
Yet that Government paid interest for a credit that was not only inferior to its own, but incapable of existence without the vitalising power of national sustenance.
EGYPTIAN BONDS.
On October 7, 1914, the London press announced that, as it was not possible for the banks to follow usual practice and ship gold to Egypt to finance the cotton crop, the British Government had come to the rescue. It hadauthorised the Egyptian Government to accept from the banks deposits of Egyptian bonds, and issue to them a note currency based on bonds. With this currency the cotton growers were paid.
Yet this, that a Capitalist Government could do for capitalist banks, this issue of notes on the security of national bonds, a Labor Government and Labor party in Australia (in 1915) rejected as absurd, as impossible of application for the benefit of a nation.
PAPER MONEY FOR LOANS.
The “Economist,” of October 10, 1914, said:—
“Funds wherewith to subscribe to the War Loan can be obtained by pledging” investments for paper money”
This privilege was for the great financial houses only. The Bank of England is a bank for banks, and not for the general public. The average citizen could not lake his securities’ to the Bank of England, draw notes, and with these notes subscribe to a new loan.
The “Investors’ Review,” of October 24, 1914, said:—
“Out of this great mass of credit, created under Government guarantee, the means comes with which to subscribe to national loans.”
The “Round Table,” of November, 1914, said:—
“The British Government has given the private banks most generous aid. It has liquidated their bills and securities by giving them credit on the Bank of England. Upon these credits they tan draw, and with these credits contribute to the War Loan.”
The “Round Table” went on to say:—
“One can observe, therefore, the curious process by which the Govern ment lends its credit.”
And it might have added:—
“Yes! and the curious process by which it borrows it back, with a per petual blister of interest upon the struggling masses.”
MORE PLUNDER.
But another plunder scheme was in process of hatchment. Through all the early months of the war the great banks and loan agencies were putting the screw on the public, refusing banking facilities to men with undoubted securi ties, and compelling the general public, in urgent need of currency, to sell their holdings on a falling market.
Thus, amongst others, vast millions of British Consols, in which the thrifty had invested their savings, fell into the hands of the market riggers.
The schemers knew that, because of the thousands of millions of inevitable war debt, low priced Consols would not be redeemed in their time and generation. They did not buy to hold for redemption. They bought to make Consols earn from the bleeding nation a higher rate of interest.
FIRST WAR LOAN (1914).
The Financial Houses, having inside knowledge of the conditions under which the £350,000,000 loan was to be floated, got their corner on 2½ per cent. Consols. They were forced below £60. At that price they were bought by the riggers. Then they jumped to £65. At that price they were con verted into 3½ per cent, war loan, worth £66/13/4, with the right of conver sion into higher-priced loans at a later date. The clear profit on this deal was measured in millions.
A writer in the “Nation” said:—
“For a country that had no hope of redeeming its loans for long years, it was a barefaced confidence trick, and the Government was a fraudulent trustee of the public interests.”
SECOND WAR LOAN (1915).
Then came the big float of ₤600,000,000 patriotic loan, at 4½ per cent. The first loan performance was repeated.
There was the same withholding of bank credits to the public, the same organised depreciation of Consols, the same organised purchase, the same inflation after possession, the same conversion after possession into high-priced securities. The process of public robbery was repeated on even a more gigantic scale than on the first loan.
The general public, who had not already been gouged out of their Consols, could not convert unless they possessed means to subscribe to the loan floats. They could not pledge Consols for credit at the Bank of England. This could only be got after they had sold to the spielers in the ring. Bank of England facilities were for bankers and brokers only—not for the general public.
The “Fortnightly Review,” August, 1915, said:—
“Advantage has been taken of the opportunity for nimble stock ex change dealing by a class of men who do not think it unpatriotic to utilise a great patriotic occasion for their own sordid ends.”
Dealing with this second loan float, the “Economist” (June 26, 1915) pointed out that the patriotic robbers had added another 20 per cent, to the interest rate on Consols, and that “holders of the 3½ per cent, loan will now receive interest at the rate of £5/4/9 per cent.”
And for this crowd of harpies men were rotting on battlefields.
In this case the previous loan bonds were deposited in the Bank of Eng land, and upon these deposited securities credit was given to the extent of 95 per cent, of par value.
It was a paper cheque currency based on bonds, and with this cheque currency the subscriptions were made to the loan.
The “Financial News” reported that:—
“The Bank of England lent 95 per cent, of face value against deposit of bonds.”
The “Quarterly Review” said:—
“The war loan bonds are made the basis of the most easy borrowing from the Bank of England.”
With currency based on previous war bonds the financiers contributed to the 600 million loan.
Oswald Stoll, in his book, “The People’s Credit,” said:—
“Three banks and two insurance companies answered for ₤100,000,000. They were able to invest such an amount because the Government had backed them by the credit of the whole people. Saved from bankruptcy, they were permitted to place a tax of millions per annum upon the nation that had saved them.”
“The ‘Times’ History of the War” (page 251, vol. 7), says that the joint stock banks (saved from ruin a few months previously by the paper currency of the nation) subscribed over ₤200,000,000 to this June loan.
And upon this currency, issued by the nation, they draw interest in per petuity.
And, as the war went on and the rate of interest rose, so were all previous loans raised to the higher price, as a premium and a bonus to the Loan Float ing Profiteers.
FINANC1NG 1916.
After the exhaustion of the proceeds of the second loan, the war was financed by the banking houses to the extent of nearly 1000 millions, on short dated loans—Treasury Bills and Exchequer Bonds. For these the Government paid interest up to six per cent.
The “English Review” (March, 1917), in an article entitled, “Lesson of the War Loan,” said:—
“Mr. McKenna was merely a puppet of the Bankers. He did what ever he was told.”
THIRD WAR LOAN (1917).
Then came the “Equality of Sacrifice” Government, under Lloyd George.
From this “Equality of Sacrifice” Government came the “Great Victory Loan” of 1917—₤1,000,000,000.
Under this all previous financial swindles were outclassed and eclipsed. All previous 2½, 3½, 4½ per cent. loans were converted into 5 per cents.
The holders were under no obligation to subscribe to the new loan. They simply gave notice of their intention to convert at 5 per cent.
For every £100 of second loan they got £105/5/3on the third loan, so the actual interest was 5¼ per cent.
Conversion (apart from new money) covered the first and second loans, and reached close up, to 1000 millions.
“Stead’s Review” said: “That means the Government will have to pay stockholders £10,000,000 more a year additional blood money—upon old loans.”
BACK TO SLAVERY.
Thus the schemes of the plunderers grew. Every day some new device. Take useless German bills to the Bank of England, get credit, draw notes, invest the notes in British bonds, deposit the bonds in the Bank of England, draw 95 per cent currency, make this the basis upon which to issue fresh supplies of credit, and grant additional loans to the Government. Transfer loans at 2½, 3½, 4½, 5½, into 6 and 7 per cent, as the war goes on. Get richer and richer. Pile up the burden of the people’s bondage.
That’s High Finance.
Never had the Lords of High Finance gathered such a harvest. Their loot surpassed in its immensity the greatest scheme ever evolved from the cutest group of Yankee grafters. Never in the wildest dreams of avarice did they imagine that they could get a British Government to function so heartily, extensively and exclusively in their interests. With them, as with the German Junkers, the toast was “To the Day,” and their day, the day of speculative opportunity, was while the nation bled on battlefields.
The Dawning Slavery
“A tremendously powerful financial oligarchy is de veloping in the shadow of the war, the like of which has never been known in the world before—possess ing more wealth, more power, more control over the destinies of the human race than any class or caste ever possessed. Beside this oligarchy, the old Roman Senate and the Venetian Council of Ten fade into in significance. After the war the attitude of this oligarchy towards the workers will be ruthless and terrible.”
T. Quelch, in “London Justice,” March, 16, 1916 .
The great financiers are running every Government—irrespective of party labels. In every country they devise “ways and means”; they “advise,” and Governments are their executors. In every land, under every party, the shackles of the most degrading slavery are being rapidly forged. In every land the leechery of the bondholders becomes an increasing drain on the vitality of the people. “What use,” said Chaumette, “is a constitution to a nation of skeletons?” And what, use is democratic power, when its only re sult is the elevation of men who complacently walk in the footsteps of their predecessors, aping the manners, using the language, and pursuing the methods of the men they have derided, denounced, supplanted, and slavishly imitated? Thus we are faced with the fact that the ruling political party in every land is a mere instrument of the Money Bag, devising for Money Bag interests a national currency to be lent back at usury to the nation that created and sustained it. Such are the Morals of Robbery and the ethics of the poli tical jugglers.
Great Britain is now (1917) spending ₤3,000,000,000 per annum on the war. Yet the more the banks lend the stronger grow their resources. They can lend ten, fifty, a hundred times the amount of gold in their vaults, and yet the gold remains—the only limit on “loans” is the capacity of the people to carry the load of interest.
The currency created by the nation for the salvation of the banks is loaned back to the nation at perpetual and ever duplicated interest.
The “Round Table,” in its article on “How Wars Are Financed” (June, 1915), said:—
Thus in 1917 all previous 2½, 3½, 4½ Per cent, blood loans were convertible into 5 per cents, to all subscribers to the “Great Victory” Loan Float—ever rising patriotism of the Parasites.
AFTER THE WAR.
The war over, and the people under the burden of millions of interest, profits flow once more into the channels of industry at the higher rates of interest created by the war.
Out of the war will come for ever annual dividends in the shape of interest upon the money invested in blood. For this the people must toil.
Out of the war will emerge two classes—Bondholders and slaves to the Bondholders.
Lord Inchcape, President of the National Provincial Bank of Great Britain and London director of the Australian Sugar Shipping and Banking Combine, known as the Burns, Philp Company, said: —
England must recover herself in the markets appropriated by neutral nations, by nations upon whose industries sit no war burden. Whatever goes to the bondholders, must come out of the flesh and blood of the workpeople. So
“The standard of life must be reduced,”
The arms of Britain, France and Russia may be as triumphant as those of Rome in the days of its greatest glory—yet the workmen of all the com batant nations will emerge from the war steeped in such awful poverty, such abject slaves of Mammon, that they will wish they were dead.
All who come out of the war alive must be bled dry that interest mongering vampires within the nation may extract from the products of toil hundreds of millions per annum.
Lloyd George, speaking in the House of Commons (May 12, 1915) said: —
“Distress, Misery, and Wretchedness always follow a great war.”
The English financial journal, “The Economist,” commenting on the Lloyd George speech, said:—
“The standard of life must be reduced.”
In Australia interest and other charges, arising out of the war will increase the burden of taxation fourfold.
Productive and distributive costs will be augmented, prices will rise to the level of the increased costs, purchasing power will be correspondingly diminished. The returned soldiery, thrown suddenly upon a depressed and dislocated labor market, will engender amongst the wage-earners an agonising struggle for existence.
“Distress, misery, and wretchedness always follow a great war.”
Awful is the price the workers must pay, so that Shylock may get his bloody “shentage.” He will draw blood from sweating brows and hungry mothers all the days that God gives them life. This war weakens the workers and strengthens the Money Bags. This war means misery for the toiler, and “much monish” for the bondholder.
This war makes the living worker a slave, and fills the treasury of Shylock to overflowing.
Workingmen! You shall eat less—have poorer food—shabbier clothes—scantier furniture—fewer pleasures—and know more hardships than ever you knew in all your days and generation.
You want to know “Why?”
Is it not plain? If every year Shylock is to draw hundreds of millions more in interest from his investments on wasted lives and bloody slaughter, you who remain alive must slave for it and pay for it? All your days shall be “made bitter with hard bondage.” That is your future, workingmen. That is what they mean when they say “the standard of life must be reduced.”
The workers come back from the war doomed to toil and pay annual tribute, not to a foreign conqueror, but to a small exclusive moneyed clique within the nation—the Kings of the Kingdom of Shylock.
These are the “conquerors”—these “Lords of Finance.” Beneath their yoke must men of all the nations tread.
“The hapless producer of wealth goes forth into a night illuminated by no star—he travels in a desert where the ever retreating mirage makes his disappointment a thousandfold more keen.
The Profiteers’ Programme
“The banking system as it now stands is a dis grace to civilised communities. It places in the hands of a small committee, the Bankers’ Association, a power greater than that of Government—without its responsibility to the country.”
Gilmour Brown, Victorian State Commission on Banking, 1895.
TORYISM.
In 1893, during the Australian banks’ smash, the Governments of the various States rushed eagerly to the assistance of the afflicted corporations.
In Queensland
In Victoria the Government guaranteed the private note issues.
The “Argus” urged the Government to go further. It said (May 16, 1893) that the Government should issue notes upon the security, of deposit receipts. In its issue of June 9 it stated that banks should be allowed Government notes to meet liabilities. It buttressed its arguments with the statement that the Bank of England issued ₤16,000,000 in notes outside any gold basis.
When the Federal Labor party came into power in 1910, the Govern ment, under Mr. Fisher, introduced the Australian Notes Bill, This was an application to all Australia Queensland
But the adoption of the Queensland Tory expedient of ‘93—the expedient whereby legal tender currency, is given to private banks for the temporary use of gold that flows through the channels of trade back to the banks—that was no part of the Labor programme. It could not be, it cannot be, else between Tory policy and Labor policy there is no difference.
The only justification was that of emergency—the emergency existed The Labor Party of 1910 was confronted with an empty Treasury and it half a million deficit. It needed to raise money quickly. Instead of interest it paid the price to the banks in a Government guaranteed note, legal tender for all their obligations.
LABORISM.
The emergency measure was good, provided it was a measure to give the Labor party time to put its declared banking and currency principles into operation.
But those principles were put in the dustbin.
The note issue scheme, as devised by the Queensland Tories in ‘93 was put into force as the accepted permanent policy of the Australian Labor Party.
I said (June 23, 1910) :—
The Labor movement let its principles go by the board, and to-day is paying the penalty.
The clearly understood basic principles of the Labor movement are those of public ownership.
Those principles applied to banking, imply a system of public ownership superseding all private traffic in the instruments of exchange.
The programme distinctly declares that the Commonwealth Bank, amongst other functions, shall exercise the functions of issue and reserve.
Without those powers it is an emasculated institution. It is not the reservoir of the national gold supplies. It is not the tap from which flows legal currency available to all upon conditions common to all. It is not the Bank of the Nation, endowed with supreme powers. It possesses no more power than any ordinary trading bank.
It is a mere addition to the list of banks enrolled beneath the peculent banner of the Associated Banks. It is as much a part of the Capitalist System of Exchange as any private institution in the land.
STATE CAPITALISM.
I stated in 1910, and I re-state the fact now, that the banking corporations in every country are favorable to a national note issue. In every country where they exercise influence they get the Government to issue notes, not upon gold, but upon bonds, bills and other securities.
The banks thus shift the onus of redemption from themselves to the Government, secure for themselves a legal tender currency, and the mass of gold previously non-productive in their vaults is made available for export and profit. For a gold-producing country exportation is always profitable.
The transformation in the methods and mechanism of exchange, like the transformation in the methods and mechanism of production, constitutes an economic revolution. The development of the cheque system has made the old “non-legal” lender notes of the individual banks obsolete. They are no longer a speculative utility.
The banking world seeks a new base, and it gets it in Government guaranteed notes—instruments of redemption for all their obligations.
Under this new system—seen in Japan, Germany, France, and America—gold ceases for internal currency. It is held for international traffic only. This economic progression should be a Nation’s Benefit, not a Burglar’s Kit.
In every country where financial capitalism wields political power, and where its dynastic dominion is apparently assured, it has established for this end a “Central” Bank, designated in many countries a “National” Bank, operated, in some cases, by the Government; functioning, in every case as an instrument of State Aid to private banks; re-discounting the bills of private banks for their gain and their salvation.
BANKING COMMISSION.
In 1895 we had the Victorian State Commission on Banking. There was a Bankers’ Conference to consider proposals to be put before the Commission. There were preliminary suggestions, but the eighth clause stated that if notes issued by the Government to the banks under the preliminaries were not sufficient, then the banks were to get notes upon a deposit of 20 per cent, gold and 80 per cent. Government securities. Their ninth clause stated that, when gold and Government securities were exhausted, the Government should be empowered to issue to the banks Government guaranteed legal tender notes upon the security of ordinary trade bills.
Mr. Gyles Turner, on behalf of the Bankers’ Conference, told the Com mission that:—
“Paper money issued by the community on good security is as sound as the Bank of England.”
Mr. Turner did not mean that the Government should issue currency to every citizen who had good security. He meant issued to the banks—the banks would do the lending.
Amongst those who appeared before the Commission was Mr. Gilmour Brown. He had been a bank manager for 22½ years Apart from the statement that appears as a text to this article, he told the Commission that:—
“A small irresponsible body reigns over the whole community, pays its own debts how and when it likes, while it makes all its debtors’ obli gations payable at call.
“They (the Bankers’ Association) levy direct taxes on the enterprise, industry and production of the community greater by far than that levied by the Government. They control our reserves, our rate of interest, our credit, and possess a more absolute jurisdiction over out livelihood, our savings, our monetary future, than the Government.”
Hon. N. Levi: “It is a trades union.”
Gilmour Brown: “It is a currency monopoly—a corner in credit.” Gilmour Brown, amongst other things, told the Commission that the Bankers’ Association was a close corporation bound together by the cohesive power of plunder.
Things have changed since then. Later on we had it on the authority of Labor Treasurers that the banking corporations were patriotic institutions deserving the undying thanks of the community. These glowing testimonials were got without influence, solicitation or reward.
RUSSELL FRENCH.
Ten years after the Commission of 1895 Russell French, general manager of the Bank of New South Wales, put forward in the “Insurance and banking Record” proposals for a Federal Bank of Issue (April, 1905).
This “Central” was to issue legal tender notes to other banks.
There was to be no deposited security. Without security the banks were to get notes equivalent to 40 per cent, of their capital
If a bank failed, the Government was to have first lien on the assets.
If a bank wanted notes in excess of 40 per cent., then, and then only, was security to be deposited.
These securities were to be such as the Commissioners might approve—bonds, bills, deeds, etc.
Not an ounce of gold was to be supplied by the banks to the issuing institution. Banks were to pay out notes—estimated profits 3½ per cent. Of these profits the banks were to allocate 2 per cent to meet expenses of the Federal bank of Issue.
For these privileges the banks would consent to the Federal Bank issuing to the Government a volume of notes equal to that drawn by the private corporations, but the Government was to provide a gold cover of 40 per cent.
Against the total mass of issues to banks and Government there was to be a gold base of 20 per cent. If the Government did not avail itself of the privilege to draw notes, then against the notes issued to the private banks there would be not one ounce of gold.
PRIVILEGED MONOPOLY.
Thus, with the bankers in Australia, as with those in America, England and elsewhere, gold is a non-essential, and legal tender notes of the nation are excellent and desirable, so long as issued under terms and conditions that treat the banking corporations as a privileged class. Even a National Bank of Issue is a favored institute of the corporations, provided it be made a fortress for the defence of the great monopolies.
Once again we see that the value of an institution is to be measured, not by its name, but by getting to see in whose interest it functions. State Aid to Capitalism is too often imposed upon us in the name of Labor and the Common Good.
The Australian Money Trust
“Control of banks, trust companies and insurances by a small group of Financiers means their ability to lend a large part of those funds to industries in which they are interested. They appropriate an ever-increasing proportion of the products of industry. They dominate the economic situation, and become more powerful than the nominal rulers.”
Louis Brandeir, “The People’s Money.”
Australia is a country in bondage, nor merely to the foreign bondholder, but to a small local group financially powerful, and every day becoming richer and richer and more powerful.
These men control the great industries. They are behind every pool, scheme, ring, compact and combine. They control the banking system of the continent, and all the depository agencies of the people.
They control the insurances and investments of the people.
They control the market upon which are bought and sold the securities in which a large part of savings banks’ deposits are invested.
The savings banks are collecting agencies for the peculative “Money Power.”
All liquid savings of the people flow in rivulets to the reservoirs of the private banks.
The States of Victoria, South Australia, and Tasmania constitute an economic unity. The economic centre is Melbourne.
The Metal Gang constitute the Economic Junta ruling these three States. Their names are:—W. L. Baillieu, H. C. Darling, Harvey Patterson, F. C. Hughes, James Harvey, M. C. E. Muecke, Ed, Miller, Frank Snow,Kelso King, R. G. Casey, W. M. Jamieson, Edward Fanning, J. L. Wharton, Bowes Kelly, H. H. Schlapp (of Knox, Schlapp and Co.), and D. E. McBryde.
These men control the lead, tin, silver and copper output of the mines at Broken Hill, Mount Lyell, Cobar, Cloncurry, Chillagoe, Moonta Wallaroo and Mount Morgan; control Tasmanian copper, Pioneer tin and all smelting and refinery works in connection with the metallic products of this continent.
These men, either directly or through their associates and business dependents control every bank that has its headquarters in Melbourne, and nine tenths of the Life, Fire, Loan and Trustee agencies of the three Southern states. They dominate, in conjunction with the Sydney section, every loan deposited in Australia, and every institution that operates a loan.
These men, through their interlocking system of directorates, are the Brewery Combine, Timber Combine, Dunlops, Amalgamated Zinc, Dalgety’s, Goldsbrough Mort’s, Emu Rails, Electrolytic Smelting, Elder Shenton, Elder’s Metal and scores of others.
The control by this group over the banking, insurance and mercantile loan agencies of the Southern States is every day drawing nearer to un limited and unrestricted monarchy.
This group, in conjunction with the Sydney
They control savings, insurances, investments and industrial capital in the States of Victoria, South Australia and Tasmania to the extent of some ₤200,000,000.
They are the economic masters of those three States.
The States of New South Wales and Queensland constitute an economic unity.
The economic centre is Sydney.
Sugar and Gas Monopolists constitute the Economic Junta ruling those two States.
Their names are : James Burns, Robert Philp, Adam and James Forsyth, J. T. Walker, J. R. Fairfax of the Burns, Philp Combination; Levy, Cohen, Moses and Myles, of the Sydney Gaslight Monopoly; W. C. Watt, Knox, Kater, Mackellar, Binnie, Buckland, Cowley, Black and Onslow Thompson of the Sugar Squeeze.
These men control the 250 branches of the Bank of New South Wales, the 200 branches pf the Commercial Banking Company of Sydney, the A.B.C. Bank, the Bank of North Queensland, the A.M.P., and nine-tenths of the Life, Fire, Trustees and Loan Agencies that operate in the two States of New South Wales and Queensland.
These men, by their control of a long chain of banks, insurance and mercantile loan agencies, are masters of the whole economic life of the people. They control savings, insurances, investments and industrial capital of over ₤200,000,000 in those two States,
The Sugar and Gas Gang of the two Northern States, and the Metal gang in Melbourne, stand in the same relation to the democracy of Australia as Standard Oil, the Beef Trust and the Steel Trust stand to the people of America.
No nation can be really free where such a financial oligarchy controls the savings and investments of the people.
Yet it was to these mining magnates and market-riggers, to these, mani pulators of banks and insurances, to these dear friends of Beer, Sondheimer and Aaron Hirsch, that a Government of Labor in 1915 went to for “advice.”
It was to these men that the Labor Government of 1915 went for ideas on how to save the nation.
Salvation through the pawnshop.
And when you have mortgaged your soul, and assigned your offspring to bondage, you are asked to console yourself with the reflection that you have stimulated in the pawnbroker “the most lofty sentiments of patriotism.”
At £4/14/4 per cent.—patriotism.
Plus a remission of taxation equal to another ten shillings per cent., making £5/4/4 per cent.
That’s patriotism.—mit interest.
It was a Labor policy so “patriotic,” so “national,” that the “Argus” in its issue of July 16, 1915, gave it its sweetest blessing. It said:—
“The fact that the Federal Treasurer (Mr. Fisher) has conferred with the leading bankers, and others versed in financial operations, is a guarantee of sound finance.”
That’s “sound finance”—because it was born of the “advice” of the bitterest enemies of Labor and of everything for which the Labor movement stands.
Why not go to land monopolists for advice on a land policy? Why not go to the slum landlord for advice on housing?
Why not consult sweaters on sweating, pickpockets on honesty, pros titutes on purity—and establish codes of virtue, honesty and decent standards of life, according to their ideas and their “advice”.
THE MARKET RIGGERS.
Yet to men who traffic in money, as sweaters in sweat, and monopolists in monopoly, the Labor Government of 1915 went for advice on how to finance a continent; on their “advice” the Labor Party acted.
You could understand these things being done by a gang of Tories.
But, what the Labor Government did financially was exactly what W. L. Baillieu, Bowes Kelly, John Grice, Harvey Patterson, Ed. Miller, Jim Harvey and the rest would have done if they were in power.
They had no need to be in power. The Labor government of 1915 acted on their advice.
The Unseen Grip
“They are a financial absolutism. They levy direct taxes on the enterprise, Industry and production of the community. They control our reserves, our rate of Interest, our credit, and possess more absolute jurisdiction over our livelihood, our savings, our monetary future, than the Government.”
Gilmour Brown, Victorian Banking Commission, 1895.
FINANCING A WAR.
When a Government—no matter where placed or how labelled—is per meated by capitalist conceptions of finance, the first thing it does is to call into its councils the representatives of the Stock Exchanges and the Banks. The second tiling it does is to act in the manner directed by those whose advice it seeks.
A political party is to be gauged not by its name, but by getting to know in whose interests it functions.
In Great Britain, when the war cloud burst, the administrators of the capitalist State hastily called into its councils the representatives of the great, banks and Stock Exchanges.
In Australia the Government did ditto.
The representatives of the Australian banks and the presidents of the Stock Exchanges of Sydney, Melbourne, and Adelaide were called together to draw up a financial policy for the people.
The bankers and brokers were constituted a behind-the-curtain govern ment.
From that date, the financial conduct of the Commonwealth has been in accordance with the advice, directions and interests of the Stock Exchange presidents and bank controllers of Australia.
And for those services “the people of Australia,” in the words of Andrew Fisher, “are under an undying debt of gratitude.”—(London, March 2, 1916.)
The Labor Manifesto of 1910 had referred to private controlled banking as one of the frauds by which Capitalism bleeds the people.
Yet, in 1914, it was to these bleeders—not to Labor principles—that a Labor Government turned for light and guidance.
And the doped organisations made no protest.
The new Government—the real Government—the Government of Brokers and Bankers—laid down the law.
It acted in anticipation of a loss of public confidence, of a run on the banks, on the collapse of the banking system similar to Great Britain. It assumed the liability to borrow either abroad or at home. It did not foresee the almost immediate collapse of German sea power, but it did anticipate a difficulty in getting away our surplus produce. It assumed, as a consequence, “a serious outflow of gold,” in addition to the internal drainage arising from a loss of public confidence.
Upon these anticipations and assumptions the Brokers and Bankers drew up the scheme.
SELF-PRESERVATION.
The scheme provided for the Banks, States and Commonwealth. It be came an endorsed document, an agreement between the banks, the brokers and the Commonwealth.
It was as under:—
1st. The Banks.
Banks were to get a supply of notes to meet their own obliga tions, on the basis of three notes to one of gold. Where they had only one million of gold to meet calls they were to be provided with three millions of national guaranteed notes, legal tender settlement for all their debts and obligations.
The “Economist,” commenting on the position in Australia, said (Oct. 10, 1914):—
“There is to be a sufficiency of paper money to advance to the private-banks such paper money as they may require. The banks welcome the scheme as one calculated to relieve any pressure on their resources. It makes it easier for the stronger banks, as it relieves them of the respon sibility of coming to the support of their weaker brethren.”
Thus the sustaining power of the banking corporations in Australia, as desired by their own representatives, was to be not gold, but the credit, the guarantee, of the Australian Nation through its Government.
Finally, all Commonwealth Notes held by the Banks were to be re deemed in gold at the end of the war. On the other hand, any indebtedness of the Banks to the Government was not to be paid until twelve months after the war. In this case no mention of gold payment.
For these concessions to the Banks, the Bankers and Brokers made gracious concessions to the States and Commonwealth.
2nd. Commonwealth to issue notes to States on the basis of four notes to one of deposited gold. As the States could only get gold from the Banks, one-fourth of such notes to go to Banks for gold deposited in theTreasury, and the other three-fourths as credit to the States.
3rd. Commonwealth to be permitted to issue legal tender notes to meet military expenditure. For expenditure in England, where Commonwealth Notes were not currency, Commonwealth to borrow on the London. The intimation that the Credit of the Nation stood behind the Banks that legal tender currency of the Nation would be, if necessary, issued in liquidation of the called-up obligations of the banking corporations, was suffi cient for the public. There was no lack of confidence, no run, no collapse and the Commonwealth Notes, drawn by some of the Banks in accordance with the scheme, in anticipation of a run, were not needed.
THE RESERVE.
The notes issued by the Government for industrial wages and soldiers’ pay filtered through the channels of trade to the reservoirs of the Banks. The cheques paid by the Government to contractors and suppliers went to the Banks, who presented for collection at the Commonwealth Bank, and drew more notes. Thus the “legal tender reserves” of the Banks began to grow.
THE RATIO.
In proportion as the stocks of legal tender currency accumulated in the bank vaults, so did the old-time necessity of maintaining a ratio of gold to liabilities diminish. Commonwealth Notes performed the function. They were legal tender. They met all obligations. They acted for the Banks as if they were “gold in reserve,” and upon this basis—upon the paper notes of the Nation—the Banks erected an additional superstructure of credit for loans and profiteering.
Thus it came about that the original scheme—the scheme whereby the credit of the Government, and the Nation behind it, was pledged to uphold the credit of the private corporations—was no longer needed. The Bankers no longer feared runs and collapses. They no longer needed protection and preservation. The national instruments, “the instruments by which credit could be sustained,” had become their property—a vast accumulation in the vaults of the financiers. Henceforth they wanted interest-bearing loans floatable on the notes previously issued by the Government.
Thus, on the “advice” of the Bankers and Brokers, the “men whose services we should, never forget,” the original scheme—the agreement between Bankers, Brokers and Government—was, bit by bit, nullified, modified, and varied, until nothing of the original remained.
THE RING.
Thus, under the Money Ring in Australia, as under Pierpont Morgan in America, and the Rothschilds in England, the currency no longer rested on gold, but on the guaranteed notes of the Nation. These were to the bankers as “gold in reserve.” As such they were used. Upon these as a basis they piled their credits and financed loans to the people at ever-rising interest-
The Labor party Manifesto of September, 1914—the manifesto William M. Hughes claimed to-have drawn up, contained these words:—
“The Labor party, THROUGH ITS NOTE ISSUE, had created the very instruments by which credit could be sustained and the wheels of industry kept moving.”
That being so, what need was there for the Commonwealth to borrow from, and pay interest to, institutions and persons whose credit was not only inferior to the Commonwealth, but whose credit was so sustained by the instruments which the Labor Party had created?
That question was put to Andrew Fisher in the National Parliament. It was not answered. It never has been answered.
The entire production and exchange of wealth is controlled by a few men who control the banks and money of this continent. They are the Metal Gang and Sugar Trust Gang rolled into one.
Their exclusive dominion over the trade and savings of the people is inimical to the national interests. It is the Black Hand on all the productive agencies of the land; its power should be broken.
No comments:
Post a Comment