NATIONALIZATION OF LEGAL-TENDER MONEY

HOUSE OF REPRESENTATIVES,

COMMITTEE ON BANKING AND CURRENCY,

Tuesday, April 10, 1928.

The committee met at 10.30 o'clock a. m., Hon. Edward J. King presiding.

Present: Messrs. King, Strong, Campbell, Hooper, Allen, Goodwin, Wingo, Steagall, Brand, Stevenson, and Canfield.

Mr. KING. The committee will be in order.

We have with us General Coxey, who will make a statement to the committee, and he requests that he be not interrupted until he gets through with his general statement, and then he will answer all questions that he is able to answer.

STATEMENT OF JACOB SECHLER COXEY, SR.

Mr. COXEY. Mr. Chairman and members of the Banking and Currency Committee of the House of Representatives, first I want to thank and compliment Mr. Campbell of Pennsylvania for introducing H. R. 12288, and for his assistance in obtaining this hearing in 20 days; quite a contrast with the first hearing on it. The bill was first introduced after the common weal army of 5,000, representing 3,000,000 of the unemployed, arrived at the Capitol May 1, 1894, appealing to Congress to enact this bill into law, and it was introduced June 15, 1894, and hearing granted by W. J. Bryan, chairman of the subcommittee of Ways and Means, January 8, 1895. Another march was made on it in 1914, appealing to Congress to enact it into law.

I have staved off another march this year, stating to the unemployed that I would go to Washington first, have the bill introduced, obtain a hearing if possible, present the conditions of 5,000,000 unemployed, and then put it up to Congress whether they would give favorable consideration to this bill, or whether a referendum vote will be needed among the unemployed for another march to Washington. I can assure this committee, as I have told the unemployed, that I do not desire to lead another march. To me it looks like an age of reason, and not of prejudice based upon ignorance. I am here at my own expense, giving the best that there is in me, and appealing to your intelligence, stating facts and figures so that you may be informed and may come to a correct conclusion on this bill so as to avoid a referendum by the unemployed. The last time this bill was introduced was April 20, 1921, and a hearing was granted and held April 20, 1922. There were several hearings held between 1895 and 1922 on this same bill.

1

By the aid of gasoline and improvement of our highways and the introduction of automobiles and flying machines we are now moving more rapidly. It is pleasing to find that this committee in this instance is keeping up with the times.

I also want to thank all of the members that I have seen-18 in number of the 21-for their cooperation in agreeing to this hearing at an early date, as well as for the courteous treatment accorded me. I am also pleased to find quite a change in the attitude and interest displayed by the members of this committee toward the principles contained in this bill.

I have never been discouraged in campaigning during these 34 years for this bill for the reason that I realize that a terrible catastrophe must always happen before any great change can take place. Some of you members helped to enact the Federal reserve banking law. You thought it would solve the money question, but you failed to realize that you were delegating away a part of the greatest right, the coinage and issuance of money, that had been delegated to Congress by the States and that Congress now alone possesses.

You, by and through that act, have delegated to privately owned and operated banks the right to issue all money and control all credits, simply retaining the right of coinage-printing.

Under it you can not use what you make money-without paying interest for the use of it.

There is a bill pending in Congress for flood relief for the Mississippi River and its tributaries. This is a public necessity and it should be passed unanimously, as it was in the Senate, but I hope some patriotic member of this committee will amend it so as to make available the sum of $1,000,000,000 of full legal tender Treasury notes to pay for it. This will cost the Government 88 cents per $1,000, instead of $40 per thousand dollars, providing that the Government issues bonds bearing 4 per cent interest, and it will not interfere with the tax cut.

This will stimulate and revive the drooping and sad hearts of the flood sufferers. Either the paid or uninformed press will make the cry that this is inflation. It is important to make a comparison between the Government coining and printing $1,000,000,000 of full legal tender Treasury notes which will pay all debts at the cost of printing $878,500 to be paid for out of the money when printed, and printing a like amount of Federal reserve notes which are receivable and not legal tender and will not pay all debts at cost of printing $878,500 the cost of printing to be paid for out of profits received from interest on rediscounted loans made by 12 regional Federal reserve banks, such notes being based upon 40 per cent of gold and 100 per cent of commercial notes-eligible paper.

The Government legal tender money is paid out as follows: First, $878,500 for printing, the balance to be paid out of the $1,000,000,000 for material, supplies, and labor as and when needed as the work progresses.

The legal tender money can not be used for inflation purposes until it has been paid out for material and labor, and then deposited in the member banks of the Federal reserve system. Then such banks will attend to inflating bank credits as follows: $100,000 of such legal tender money having been deposited, subject to check in a member bank, such bank would send 8 per cent, or $8,000, of it to its regional