Post-Truth economic reform: educational insight from two House Banking Committee Chairs

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The financial crisis in America today could be over almost instantaneously through monetary reform. Monetary reform is a fundamental shift in how America creates money. The shift is from a Robber Baron-era design of banks creating credit to lend to us at interest and ever-increasing debt, to our community (government) creating it for the direct payment of public goods and services. The benefits of monetary reform are conservatively $1 TRILLION every year, the end of the national debt, and full employment.

Please review the links above to fully understand this idea.

The power of monetary reform is evident in history. Napoleonic France quickly became the world’s leading economy and Paris its most beautiful city after ten years of violent revolution that killed or drove-off their economic leadership. Nazi Germany overcame tragic-comic hyperinflation to become the model economy during the Great Depression. These nations were in worse economic conditions than America today (economic power needs to be invested in the public good, not for empire).

This top 10 list of Americans who understood monetary reform deserve your attention. Given our economic condition, you literally have nothing more valuable for your attention. Each of the ten gives unique and added perspective for your learning of this multi-trillion dollar topic.

The following revealing comments come from two Chairpersons of the House Banking Committee, totaling 24 years of service in that position of comprehensive insight into American banking. Louis McFadden (1876-1936) was Chair from 1919-1931, and Wright Patman (1893-1976) was Chair from 1963-1975. After the two gentlemen’s remarks is a new 10-minute video from “The Secrets of Oz,” the sequel of the acclaimed “Money Masters” documentary.

McFadden was the president of the Pennsylvania Bankers' Association (1914-15) and president of the First National Bank of Canton, Pennsylvania (1916-25). He had been Chairman of the House Banking and Currency Committee for 12 years when he made a speech on the House floor of the summation of his analysis of the Federal Reserve System. Two paragraphs from his speech are excerpted below.

Wright Patman was a Representative in the U.S. Congress from 1929 to his death on March 7, 1976, and on the House Committee on Banking and Currency for 40 years. For 20 of those years, he introduced legislation to repeal the Federal Reserve Banking Act of 1913. A paragraph excerpt of a House floor speech from Mr. Patman follows Mr. McFadden’s observations.

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“Mr. Chairman, we have in this country one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board and the Federal Reserve Banks. The Federal Reserve Board, a Government board, has cheated the Government of the United States and the people of the United States out of enough money to pay the national debt. The depredations and iniquities of the Federal Reserve Board has cost this country enough money to pay the national debt several times over. This evil institution has impoverished and ruined the people of the United States, has bankrupted itself, and has practically bankrupted our Government. It has done this through the defects of the law under which it operates, through the maladministration of that law by the Federal Reserve Board, and through the corrupt practices of the moneyed vultures who control it.

Some people think the Federal Reserve banks are United States Government institutions. They are not Government institutions. They are private credit monopolies which prey upon the people of the United States for the benefit of themselves and their foreign customers; foreign and domestic speculators and swindlers; and rich and predatory money lenders. In that dark crew of financial pirates there are those who would cut a man's throat to get a dollar out of his pocket; there are those who send money into States to buy votes to control our legislation; and there are those who maintain international propaganda for the purpose of deceiving us and of wheedling us into the granting of new concessions which will permit them to cover up their past misdeeds and set again in motion their gigantic train of crime.” – Rep. Louis McFadden, June 10, 1932. Source: Congressional Record, June 1932, pg 12595-12603.

“When our Federal Government, that has the exclusive power to create money, creates that money and then goes into the open market and borrows it and pays interest for the use of its own money, it occurs to me that that is going too far. I have never yet had anyone who could, through the use of logic and reason, justify the Federal Government borrowing the use of its own money... The Constitution of the United States does not give the banks the power to create money. The Constitution says that Congress shall have the power to create money, but now, under our system, we will sell bonds to commercial banks and obtain credit from those banks. I believe the time will come when people will demand that this be changed. I believe the time will come in this country when they will actually blame you and me and everyone else connected with this Congress for sitting idly by and permitting such an idiotic system to continue. I make that statement after years of study.” - Wright Patman: excerpts from September 29, 1941, as reported in the Congressional Record of the House of Representatives (pages 7582-7583).


The U.S. government does not have the power to create money. It has the power to coin money and regulate the value thereof, and of foreign coin. The money was created millions of years ago by natural processes. Gold and silver were the medium of exchange, and the Constitution directs the government to facilitate trade by "coining money", or putting it in a convenient form. Regulating the value thereof simply means establishing how much gold is the unit of account. "and of foreign coin" simply means to establish the exchange rate between foreign coin and US coin. I thus maintain that the US government has no constitutional mandate to create money whatsoever, only to coin money. And that is as it should be.

Since the states were restricted from making anything a tender in payment of debts but gold and silver coin, it would stand to reason that the Federal government was obligated to supply this coin. Now perhaps an argument could be made that with the advent of the federal income tax, if indeed the amendment mandating it was properly ratified by the states, took federal taxation away from the states, and thus the federal government could demand the medium in which payments were to be made. It could thus circumvent the constitutional safeguard regarding gold and silver coin. In other words, since the states were taken out of the loop, taxes being collected directly by the federal government, the restrictions on the state of making only gold or silver coin a tender in payment of debts, would not apply.

let's think about that...

The founders created the nation on fiat currency (then flooded with British counterfeits), and Ben Franklin discovered its efficiency to issue money and not have to tax the public in Pennsylvannia. Current law gives the power to create credit (psuedo money) to the banks. Connecting money and gold serves no purpose other than to attempt to limit its supply. With transparency, we can limit the supply without the risky variable of a commodity. Put the major benefit is government creating currency to pay directly for goods and services. If the value of what's created exceeds the costs to create public goods, then prices go down and government serves as the employer of last resort. The debt gets paid, no unemployment, and ever-improving infrastructure. With gold, how do you pay the debt? How do you guard against fluctuation of gold prices/money prices?

We hold these truths to be self-evident...