After Mr. Edison worked about a year he presented a plan in December 1922, that I feel is up to date now. It received very little consideration then and has received but slight notice or attention since that time. I think this is the proper time to give it some attention. His plan was to let the Government build and operate licensed warehouses where all nonperishable farm products could be stored. I am from a cotton section. Taking cotton for instance, a farmer could take a bale of cotton to the nearest warehouse. This cotton would be graded, weighed, and classed, and placed in the warehouse. If cotton over a period of 25 years has been selling for 12 cents a pound on an average, the Government would advance to the farmer 6 cents a pound, which would be just one-half the price of cotton over a 25-year period. The Government would not be running any risk at all, because the price would be based on an average price over 25 years. The amount advanced would be 6 cents a pound or $30 a bale. Mr. Edison said the Government should loan the farmer this credit free of charge and that the Government should issue to him Federal Reserve notes or similar notes that the farmer would not pay one penny's interest on, thereby using free of charge a part of the credit of his Nation that he has helped build. To the extent of that small insignificant amount the farmer will be using the credit of the Nation free. In addition to this $30 the man would be given an equity certificate in the other half of the cotton. He could take the equity certificate to his private banker, merchant, or anyone else and use it as collateral for loans. The man would not be permitted to keep the cotton indefinitely, neither would he be permitted to keep coal which at that time was classed as one of the commodities, neither would he be allowed to keep wheat or anything else except for a period of 6 to 12 months, not long enough to allow him to use it purely for speculation. If this plan had been adopted, every farmer and many others in the country would have been allowed in a small way to have used the credit of his Nation free of charge up to a reasonable amount. The same plan could be used to help home owners. Why could there not be some limit placed on security-good security, the best on earth so that any person could use the credit of his Nation up to a certain amount free of charge just like the Federal Reserve banks now use the credit of the Nation? WHAT THOMAS A. EDISON PROPOSED Construction by the Government of warehouses where certain farm products can be stored. Immediate loan to the farmer of one half the value of the products stored, value for the purpose to be based on the average price of the products for a 25-year period. Issuance to the farmer of a certificate for his equity in the stored products, which certificate can be sold or used as bank collateral for an additional loan. Loans to be made with Federal Reserve notes, the notes to be canceled when the loans are canceled. No interest on the loan. If the price of the commodity goes up, the farmer will get the benefit. If it goes down, he will stand the loss, through increase or decrease in the value of his equity certificate. To prevent utilization of the plan for speculative purposes products stored must be withdrawn within 1 year. Unless withdrawn within 1 year, products will be sold at auction, the loan canceled, and the balance delivered to the owner in return for his equity certificate. Objects: To permit the farmer to sell his product as it is consumed instead of compelling him to glut the market by selling all at once; to permit the farmer immediate cash on his products as the gold miner does; to give the country a nonfluctuating currency. His plan is entitled "A Proposed Amendment to the Federal Reserve Banking System." From 1926 to 1929 we had on an average $200 per capita circulation of money and credit. To say that so many dollars per capita is in circulation does not mean a thing in the world. The only way to determine the circulating medium is by adding the demand deposits to the money outstanding. An average of $200 per capita during this period of time. In 1934 the per capita circulation was only $150, including both money and credit. We have had one-fourth of our circulating medium absolutely destroyed. The following table in regard to money and credit is self-explanatory: 1 Individual deposits subject to check in all reporting banks, as shown in the annual reports of the Comptroller of the Currency. 2 Figures in this column include only money in general circulation, exclusive of amounts held by reporting banks, Federal Reserve banks, and Treasury. Source: Annual reports of the Comptroller of the Cur rency. 3 In the Treasury, Federal Reserve banks, and reporting banks. Source: Annual reports of the Comptroller of the Currency. Continental United States. Estimates as of the middle of the year. Source: Statistical Abstract of the United States, 1934, p. 10. 5 The sum of the first and second columns divided by the population is given in the fourth column. • Not available. Demand deposits subject to check serve the same purpose as currency and are referred to as deposit currency. From 1926 to 1929, inclusive, these deposits amounted to $21,000,000,000. At the end of the fiscal year in 1934 they amounted to $14,000,000,000. Therefore, these banks destroyed $7,000,000,000 of our circulating medium, whereas the actual money outstanding, including paper money and coins, has remained practically the same-about $5,000,000,000-for 15 years. It seems to be all right for the banks to destroy $7,000,000,000 circulating medium, but if some of us attempt to restore $2,000,000,000 or $3,000,000,000 of that circulating medium, we are immediately branded as radicals and fiat-money advocates. These 15,000 money-manufacturing institutions engage principally in bookkeeping and pencil-mark transactions, but they have at their disposal the Bureau of Engraving and Printing at Washington, which is a standby for the purpose of furnishing the actual currency in greenback form when needed. BANKS AS WELL AS PEOPLE VICTIMS Let it be understood that I am not opposing individual banks or individual bankers. I am not criticizing them, but I am opposing a system that many of the banks, as well as the people are victims of. ISSUE DOLLAR BILL INSTEAD OF DOLLAR BOND We must have banks. We want safe banks for the people's deposits. Personally, I prefer a 100-percent reserve for all banks and let the Government make the money on the issuance of credit. We will have no more bank failures. These 15,000 banks, having no sort of proper control, have ceased to function as such and are now commercial bookkeepers for hire and holders of Government bonds These banks hold about $13,000,000,000 in United States Government; bonds, and they receive annually about $400,000,000 in interest on these bonds. This is a pure subsidy. The Government should not pay interest on its own credit, and as Thomas Edison said: If the Government can issue a dollar bond, providing for interest, that is good, it can issue a dollar bill that is good. The banks do not pay one penny tax on these bonds to either the local government or the Federal Government. If the 100-percent reserve requirement is enacted, we can pay off the national debt and save approximately a billion dollars a year in interest charges. I want to call attention to what Benjamin Franklin said in his Autobiography, as it is very timely today: About this time (about the year 1729) there was a cry among the people for more paper money, only 15 thousand pounds being extant in the province, and that soon to be sunk. The wealthy inhabitants oppos'd any addition, being against all paper currency, from an apprehension that it would depreciate, as it had done in New England, to the prejudice of all creditors. We had discuss'd this point in our Junto where I was on the side of an addition, being persuaded that the first small sum struck in 1723 had done much good by increasing the trade, employment, and number of inhabitants in the province, since I now saw all the old houses inhabited, and many new ones building; whereas I remembered well, that when I first walk'd about the streets of Philadelphia, eating my roll, I saw most of the houses in Walnut-street, between Second and Front Streets, with bills on their doors, "To be let "; and many likewise in Chestnut-street and other streets, which made me then think the inhabitants of the city were deserting it one after another. Our debates possess'd me so fully of the subject, that I wrote and printed an anonymous pamphlet on it, entitled "The Nature and Necessity of a Paper Currency." It was well receiv'd by the common people in general; but the rich men dislik'd it, for it increas'd and strengthen'd the clamor for more money, and they happening to have no writers among them that were able to answer it, their opposition slacken'd, and the point was carried by a majority in the House. My friends there who conceiv'd I had been of some service, thought fit to reward me by employing me in printing the money; a very profitable job, and a great help to me. This was another advantage gain'd by my being able to write. The utility of this currency became by time and experience so evident as never afterwards to be much disputed; so that it grew soon to fifty-five thousand pounds, and in 1739 to eighty thousand pounds, since which it arose during the war to upwards of three hundred and fifty thousand pounds, trade, building, and inhabitants all the while increasing, tho' I now think there are limits beyond which the quantity may be hurtful. SUPPLY AND DEMAND OF MONEY Do not be misled into believing that supply and demand of a commodity is the sole controlling factor in determining the price of the commodity. Just as much depends on the supply and demand of money and credit. If our cotton and wheat farmers produce only one-fourth of a normal crop this year and money and credit are made scarce, high, and dear, cotton and wheat will be cheap. Since the supply and demand of money which includes credit controls, the price of all labor, services, and commodities, our Government should be careful about who controls this great privilege. The people are entitled to have someone in charge of that great lever that expands or contracts money and credit at will who has their general welfare at heart; no one should have charge of this lever who can manipulate it in a way to make profit for themselves to the detriment of the general welfare. What chance has a producer or wage earner of this Nation to earn a decent livelihood for himself and family if the value of his products or labor is fixed by someone who has in mind making a profit for himself? CONSTITUTIONAL MANDATE The framers of the United States Constitution in article 1, section 8, very wisely said: "Congress shall have the power to coin money and regulate the value thereof." This provision of the Constitution is mandatory. All Members of Congress are sworn to uphold the Constitution. Why has this provision never been carried out? The answer is simple. In the early days of our national existence the people were deceived into believing that the subject of money was so mysterious and intricate that only a few of the financiers understood the subject, and therefore the great privilege of issuing and distributing money should be farmed out to them. This was done and it has never been changed, except to give them more power and authority. The strange part of it all is that the ones who are the beneficiaries of this great privilege are not even charged with the duty of furnishing the people a sufficient circulating medium. FIAT-MONEY PARROTS ་ 66 Do not blame the bankers for this. They are not to blame; they are doing what Congress has permitted them to do; Congress should be held responsible. However, when Congress seriously considers printing sufficient money to carry out this constitutional mandate the holders of this great privilege and their satellites repeat like parrots such phrases as printing-press money" "rag money ""fiat money " "baloney money", and "greenbacks." They do not tell you that it is the same kind of money that is printed for them and that it will be backed by the same security which is the credit of this Nation. Let me make a prediction. The people are getting wise to such false, selfish, and greedy propaganda, and will, before very long, compel their Congress to change our idiotic monetary system by complying with the Constitution. I'll admit, it takes a long time to sell the people of this Nation a good proposal. WILL WAGE EARNER BE INJURED? It is contended that if more money is issued the dollar will become cheaper, which will be harmful to the farmers and those who live on fixed incomes. We can get on a currency basis, instead of a credit basis, without changing the purchasing power of the dollar, but most of us who advocate issuing more money really desire the return of what may be termed a "cheaper dollar." As the dollar becomes cheaper, real estate, common stocks, cotton, wheat, raw materials, labor, and all goods and services upon which there is no fixed price increase in value. This will enable the ones in these groups to have additional purchasing power. Let us see how much it will affect the wage earner who receives one of these so-called "cheaper" dollars. He can use it to pay 100 cents on his debts, taxes, insurance, rent, electricity, gas, water, telephone, railroad freight, and passenger rates, and all other bills, goods, and services upon which there is a fixed and inflexible price. Any adjustment will be in favor of additional purchasing power which will be in the direction of additional consumption of goods. The factory employee will probably pay a little more for eggs which will enable the farmer to buy more of what his factory produces. It will be better for the wage earner to receive a dollar that will not purchase so much in certain commodities than not to have a job which will enable him to earn a dollar. I much prefer to bring purchasing power up to the point where our surplus may be consumed rather than force production down to a very limited buying power. In conclusion, I hope you will consider the following statements: 1. The Federal Reserve banks should be taken over by the Government and operated in the interest of all the people, banks, industry, agriculture, and commerce. 2. No private corporation, or corporation owned by private corporations should have the right to issue money. 3. The Government should issue currency when in need of money instead of tax-exempt interest-bearing bonds. |