The World Since 1914
Final Lecture (7 May 1976)
[Ladies and Gentlemen. Your final exam will be]
the 19th, in the late afternoon. And I will not tell you where it is, but
you can gather it all XXXX I
won't tell you where it is XXXX.
I wouldn't want to say something that is wrong. XXXX
responsible for the whole semester, the lectures and the readings. There
probably will be two questions; and they will not necessarily be one on the
lectures and one on the readings, because I will expect you to use the total
information you have to answer these questions. Now, the course has
consisted of my efforts to increase your understanding of the world of the
20th Century, not only the world of the Third Bloc (the under-developed
areas, or whatever you want to call it), but also our own Western
Civilization and, for the last month, about our own United States, which, of
course, are part of Western Civilization.
my last day of teaching; and I have been teaching for 41 years on the
university level. If I were to go back a little. I'm 45 years older than
you, and for 41 of those I have been teaching in the university. If I were
to go back to my stage that you're in, let us say, sophomore year (Some of
you are sophomores, except for the juniors, you're sophomores. You're about
20 [years old]).
We were in a tremendous crisis in the United States in 1930.
To-day in 1975 we are in a much worse crisis. The crisis that we were in in
1930 was a crisis that took me many years of analysis.
studying at that time economics. And I found by early 1931, notably before
the final exam in the first semester of my economics course, that economics
was a enormous accumulation of myths that had very little relationship with
reality. For example, we were in an acute Depression, with thirty, thirteen
million, one quarter of the employees of the United States, un-employed. In
Germany it was even worse. Their situation. And I finally came up with
what seemed to me an explanation. I will put it on the board here. This is
the crisis of 1933, and it consists of something like this:
if there is demand, this creates confidence. If there is confidence, this
leads to investment. If there is investment, this means purchasing power.
If there is purchasing power, this creates demand. There was inadequate
purchasing power. The result is there was inadequate demand. The result
was there was little confidence and no investment. The result was that our
economy was filled with goods that could not be sold.
reason, the chief reason for this, of course, was there was an unequal
distribution of the national income, so that a small group of people was
getting a very large part, about 2% of the population were getting at least
a quarter of the national income. And about 60% of the population was
getting less than a quarter, I think it was 22%, of the national income.
The result was that consumer goods could not be sold because people didn't
have -- consumer goods -- didn't have the purchasing power to buy the things
that they needed. And they were hungry.
And, as a
result, there was enormous accumulation of wheat and cotton and unsold
automobiles and unsold everything. And we had idle men, idle factories and
idle money. And we couldn't bring those together. The only way to bring
them together is XXXX build
more factories. But nobody s going to build more factories when you cannot
sell what the existing faculties have available. The warehouses are loaded.
So why build more factories to produce more goods? The reason is that....
the American economy was a cancer economy. And a cancer economy is a system
which has intrinsic, built into it, unrestrained growth, and you cannot stop
it, even though it kills what it is in. So when your body when it is killed
by cancer, if it is, will be killed because half of your body's cells are
growing and growing and growing and growing. And they're not going to stop
growing. Now this is this system.
a tremendous controversy. The controversy was over, between those who said:
the only way to start this thing going is to increase confidence.
Those we called Republicans or conservatives And during the
campaign of 1932, Franklin [Delano] Roosevelt [1882 - 1945, the 44th governor of New York, 1929 -
1932, and the 32nd president of the United States, 1933 - 1945] was
one of these. He said we must balance the budget, reduce spending, restore
confidence, and so forth.
go over only briefly, but when when you've read it in the book, you should
understand it. They increase confidence by increasing the value of the
money, of the dollar. In order to keep the value of the dollar high, they
said you must keep on the Gold Standard. In order to make the
value of the dollar high, and you know this now, you must have low prices.
Because the lower prices go, the more you can buy with a dollar. And this
increases confidence in the dollar. So the people who are concerned with
the value of the dollar are the people who have savings; and they will not
invest those savings unless they see that the value, the prices are low.
Furthermore, they will not invest savings unless they see that costs are
if you drive prices down, it is, decreases wages, decreases rent, decreases
the cost of materials. Here it is: land, labor, materials, energy, legal
costs, management. If you are going to invest, you're going to spend money
for these things. We call that rent, wages, cost of materials, cost of
energy, fees for lawyers, salaries for management, and so forth and so
forth. And you are going to do that, then, if costs are low.
But what had happened here is: you're not going to do it, because you also
have to sell the goods you can produce. And that's a question of purchasing
the New Deal did, and the New Deal was not a success. It did not reform the
system. In fact, Franklin Roosevelt was an extreme conservative. And you
can, with what you've read in the book, show that. For example, he had the
right to issue fifty million, fifty million, was it?, [dollars] in
greenbacks, and he held that [right] for
more than twelve years, and never issued a dollar. XXXX he
could just print it, money, and given it to people, to increase purchasing
power. Instead he thought that, if he put purchasing power in here (and
this is the New Deal, this is [John Maynard] Keynes [1883 - 1946, 1st Baron Keynes of Tilton in the
County of Sussex, 1942 - 1946].
Keynesian economics), put purchasing power in there, the system will go.
The old method: Herbert [Clark] Hoover [1874
- 1964, the 3rd Secretary of Commerce of the United States, 1921 - 1928, and
the 31st president of the United States, 1929 - 1933], and
the bankers, and so forth, said: Increase confidence there. But
to them, increasing confidence means deflation. So this is a deflationary
have a totally different kind of a crisis, much worse. For one thing, it is
an inflationary crisis. You can see that. The reason is that banks have
changed totally their rôle. Back in that period banks had a
creditor status, i.e., money was owed to them. Creditors like low
prices. Inflation injures creditors, because it make the value of the money
owed to you greater [actually,
You have to understand these principles, either through economics or by
from what you've read in my book Because of the fact that
bankers were deflationary here, they held only credit and any organization
they controlled held only credit. For example, they controlled insurance
companies. Insurance companies invested their money often entirely in bonds
They controlled various other banks. These various other banks invested
their money only in bonds.
one man who dominated this whole economic system of 1930: J[ohn] P[ierpont] Morgan [Jr., 1867 - 1943]. And you've read about him in my book. J. P.
Morgan largely controlled, and certainly controlled the investments of
Harvard, Yale, Columbia, and a number of other places. But not Princeton.
Princeton was controlled by the Prudential Insurance Company through a man
named [Edward Dickinson] Duffield.
And when Duffield's president [John
Grier Hibben, 1861 - 1933],
who was [the 14th] president
of Princeton for 25 years [1912 - 1933, died]. I guess this is in the book; I don't really have
time to tell you. They presented him with a car; and he immediately went
out and killed himself and his wife by running into a tree. So Duffield
made himself [acting] president
of Princeton for one year. And then he met a man who was so stupid, so
insecure, that he knew he would obey him, so he made him president. His
name was Harold [Willis] Dodd [1889 - 1880, the 15th president of Princeton
University,1933 - 1957].
dean of Princeton said to me one time: "Good God, we can't stand this guy".
I lived with the dean of Princeton in his house, in part of his house, with
separate en[trance] and
separate bath, but I lived with him. His name was [Francis Richard Borroum] Godolphin [1903 - 1974, dean of Princeton College, 1945 -
He said: "We can't stand this guy". He said: "Jim [James Bryant] Conant [1893
- 1978, the 23rd president of Harvard University, 1933 - 1953] may
lead Harvard down a rat hole, but at least he'll lead them". So that's what
happened. Duffield put Dodd in, and he died -- leaving Dodd for years with
no one to tell him what to do. So he had breakdowns every two
years and they had to hide him away for a ye-, few months. And
yet he remained president of Princeton. I know these things because I knew
these people. I lived with them. On a daily basis, I knew what was
happening. Both at Harvard and at Princeton. My first job, 41 years ago,
was at Princeton. Later on, I was asked to teach at Harvard.
then is a totally different system. All the universities were, endowments
were in bonds, not in stock. Not in equity. They set up foundations.
Foundations were invested in bonds. If you are in bonds, then you want
deflation, because you are interested in the value of money. But if you
leave bonds, and cease being a creditor, and become an owner, then you have
everything that you want in, what you call, equity. And if you are in
equity, you want inflation. To-day all the banks, all of the endowments of
the old universities, and all of the holdings of the Rockefellers are in
I have a
very extensive list of the holdings of the Rockefellers. The Rockefeller
family to-day is much more dominant than J. P. Morgan was back here. But
it's an entirely different system. They own equity. These people had
claims to wealth, therefore they were deflationary. To-day we are in the
middle of an inflation, which is deliberate. Now, I cannot produce
telephone recordings which prove that these bankers, is deliberate.
But it is perfectly obvious to anyone who watches. For example, the
interest rate, the discount rate, by the chief banks in New York, controlled
by the Rockefellers and their associates, in the past year and a half have
lowered the interest rates from 12 percent to 7 percent. Nothing could be
more inflationary than that. Now I won't. Eventually,
to begin, I will explain why they're doing this. There's a very good reason
meantime, let's look at our economic system. If we look at a single
enterprise (micro-economics), you're expanding this.... Let me start with a
broad definition: Capitalism. Capitalism is an economic system motivated
by the pursuit of profit within a price structure. And it's been around for
a long time. It's been around since about 1200. You are seeking profits.
What are profits? Profits are selling for more than you spent [in
All right, here's the costs of production. Here is the selling price you
wish. This is profit. This is what you're after. Furthermore, in a
capitalist system you are supposed to maximize profit. This is what I call
insatiable greed. It's all a matter of vocabulary. Maximizing profits and
insatiable greed are exactly the same thing. It means that you are never
satisfied with your profit[s], whatever they are.
there's something very strange about this. If each factory is given into
the market.... And you know what the market is like. The market is the
place where people come with money. People come with goods. And they try
to exchange them. And if you increase the supply of goods, it is
deflationary. Increase the supply of money, it's inflationary. And so
forth. You know all about this. And what happens is suppliers of
goods compete with each other, to lower prices. Suppliers of money compete
with each other, to raise prices. And suppliers of goods and suppliers of
money haggle together, to arrive at a price. And it will be defensible if
they arrive at a price which clears the market of all the goods that came
into it and of all money that came into it. So all the money in the market
is exchanged for all the goods being offered in the market. All right, I'm
simply giving you the obvious things that you must know
Any single enterprise -- General Motors, anything, anyone you want -- has
put into the market only this.... But it is trying to sell to
this price. "Selling price" is greater than the "cost of production",
right? Suppose that there are ten enterprises. Ten enterprises
put, in time, selling price into the market and they are now trying to take
out, in time, XXXX the
same thing. They put into the market this much and they are trying to take
this much out. But each enterprise, and the total of the whole economic
activity, is trying to take out of the market more than it has put in.
Utterly impossible. How can you take out more than was put in? The answer
is simple. I have given you here only a moment of time. A
moment of time falsifies anything. These are flows. All right now, XXXX the
whole economic system. A flow of rent, a flow of wages, a flow of all of
these. And a flow of profits. And since the profits are now flowing
through the market too, you will have enough money, won't you?, presumably,
to buy the goods. Because, if the profits are flowing in, and making
purchasing power, this then is the total of purchasing power. But it is
also the income of the system. So the total income of the system is the
total selling price of all goods and services being produced, which is also,
presumably, the total purchasing power available. So it should work.
However, and I showed you before, It will not work, because that total
income is inequitably distributed. And much more so to-day than in 1933.
Much more so.
words,.... I don't have the exact figures now, but the 4 or 5 percent
to-day control much larger incomes, much, much larger, than they did in
1930. The income of a single family, the Rockefellers to-day, is so
fantastic that they themselves could never tell you how much it is. Just as
they XXXX tell
you exactly what they control and what they don't control. But I can assure
you that all of the figures given by Nelson [Aldrich] Rockefeller [1908 - 1979, the 49th governor of New York, 1959 -
1973, and the 41st Vice President of the United States] under
oath in his confirmation hearings were false. And he admitted that, because
he changed them three times. XXXX In
one case he XXXX The thing is he hasn't been.... He could easily say "My
income is zero". That is all family controlled. In fact, the, that system
broke down because it derives XXXX For instance XXXX,
du Ponts divided up among the individual members of the family. And the
result is du Pont XXXX through
the courts to-day XXXX relatively
speaking Oh, they control Delaware. They have very significant,
very significant political power in Florida, because of Alfred P. [actually, I.] du Pont's estate, which is being administrated by
a man [Edward Gresham Ball,
1888 - 1981] who
must be 90 now. Alfred P. [actually,
I.] XXXX Alfred
P. [actually, I.] du Pont [Alfred
Irénée du Pont de Nemours. 1864 - 1935] died, my guess would be, twenty, twenty-five years
ago [actually, forty years ago].
But the estate is still XXXX in
Florida. But in any case, it has nothing to do has nothing to do the
Christiana - du Pont [Securities
in Delaware. XXXX on
their own. But, in the course XXXX,
The Rockefeller system, it is five major corporations and they are run by
one man. And that became XXXX Rockefeller.
He gave testimony at the confirmation hearings and he evaded answers to
all questions. But he's the man who runs pretty much the whole system.
But in any
case, it is a totally different kind of system Now, notice what
we have here. The flows are adequate if they're all spent. But they are
not all spent. XXXX. Because very rich people cannot possibly spend all
their income. And even poor people, like me, do not spend all of our income
We save. And we may put it in the bank. We may put it into anything.
But notice, we put it into medical insurance, life insurance. We put it
into retirement pensions. And so forth and so forth and so forth. All of
this is spending. Furthermore, all such spending by middle class people,
including your parents and me, is middle class. And it makes the middle
classes the only significant creditor group in our society to-day.
People who have claims on money. For retirement, insurance, of all kinds. XXXX money.
XXXX (The Rockefellers don't have any of this. They own property and have
incomes from property.) All right. Notice. This then is the amount of
purchasing power. It is the same as the amount of selling prices. So that
what should.... XXXX Let
me analyze XXXX.
is a considerable amount taken in the form of taxes by the government. And
there is a considerable amount saved. These two things make the purchasing
power inadequate. Now what I should have done here XXXX All
right, you have the government here and the corporations here.
The chief saving in the United States to-day is by corporations, because
they have the chief income. Most of the income in the United
States does not go to living people. It goes to corporations.
And they then invest it, or do anything they want with it. You
saw that a hundred million [dollars] a year was being spent illegally, by the Library
of Congress study issued two weeks ago, by 24 corporations. All right, that
is part of their savings. So bribes, expenditures of all kinds,
political contribution, everything, is... Now, that goes in savings. It
may go into savings banks. That's "SB". It may go into
investment banks. That's what J. P. Morgan was. By investment banks, I
mean: you buy securities, or bonds. Or it may go into
commercial banks. And they presumably will put it out into the system, as
investments. All right, so we'll say here's savings coming in and here's
investments going out.
there is a third thing. Credit. Commercial banks can make money. Whenever
they please, they can increase or decease the supply of money. And this was
well-established. And I give you quotes in my book from innumerable
authorities, that beginning with [William Ewart] Gladstone [1809 - 1898, Prime Minister of the United Kingdom
of Great Britain and Ireland, 1868 - 1874, 1880 - 1885, 1886 and 1892 -
1852, when things had hardly got started. And ending up with The Wall
Street Journal of 195-, in 1931 with a quotation that I have in my book.
And I have a number of other quotations from people. Reginald McKenna [1863 - 1943, the Principal Secretary of State for
the Home Department, 1911 - 1915, and the Second Lord of the Treasury and
Chancellor of the Exchequer, 1915 - 1916] would be the chief one. Reginald McKenna's quotation. And he was
Chancellor of the Exchequer in England and was the chairman of the board of
the largest banking system in England. It was in those days, called the
Inland, the Midland Bank.
they make money for his credit, which is a money making thing. This means
that they can put into the system here more than came out here, if they
wish. At the same time, of course, the government is taking money in taxes.
But notice, taxes come almost entirely from natural persons. Now, I'm
going to put it back out of here. And then there are what are called in
Latin, and, in the old law, "persona dicta" And I will
put in down that way, "fictitious persons". They're corporations. If you
look at the taxes paid by large corporations, they're infinitesimal. I pay
between a quarter and a third of my income in taxes. And if I include local
taxes, then it's a third of my income. So 33%. Very few corporations, and
none of the big ones, pay more than 5%. And they do that, make
that appear, by very tricky book-keeping. If it were a solid analysis of
what they were paying, it would be less than 5%. So, what goes out in taxes
here is largely from natural persons, not from corporations. And the
government may spend those taxes; in fact, it does. So this comes out as
government spending. Thus the amount of purchasing power in the community
is what's in here. And what is in here (I don't know why I'm looking
at now) what is here, that's purchasing power, back in 1933 was totally
inadequate to provide the goods that were pouring out into the market,
because, you see, that in addition to..., This is money, I'm talking about
here. But this factory's, or the economic system, is also pouring out goods
and services. And those goods and services will be used up only if there is
adequate purchasing power here. XXXX good
at things. Goods and services, and that "goods and services" includes the
services of professors of history or administrators or many others. All
kinds. Military service. Anything you want.
is XXXX what
is it that determines the amount of the purchasing power. It is determined
by government spending, or whatever is flowing out of here. And what's
flowing out of here is largely a result of the credit policies of banks.
When banks shifted over from being determined to keep prices low, determined
to stay on the Gold Standard in order to keep prices low, and determined to
invest everything they had in claims, in money, money claims, to make them
creditors in a monetary way. When they abandoned that, and went into
concern with equity, real estate, own property, Gulf Oil bought the Holiday
Inn. Gulf Oil bought the Ringling Brothers Circus. So forth and so forth.
This is called increasing the output of fossil fuels. And we're cheering
them on. All right, now, when they made that change, they became
inflationary. And the proof that they became inflationary is that they
expanded credit to the maximum that they possibly could, and they persuaded
every individual, and every corporation, including Georgetown University and
every university in the country, to go into debt way over their head. For
example, fifteen years ago to approximately eight years ago, every couple of
months I received in the mail a credit card from some credit thing. My son [Thomas
Fox Quigley, 1941 - 1995] received so many that he couldn't carry them all.
And they now, they then had wallets that were this long, with
[He is] thirty-four
now. Every. Never sees any money or touches any money. When he gets paid
at the end of the month, he sits down and he writes out checks for all these
bills that came in. He has credit cards for everything on God's Earth, and
every bank that you can think of, and, you know, all these....
Notice, on the front of stores now; We Accept: Central Charge, and
American, Bank of America, AmeriCard, all of these. This is a new thing.
In 1930 they did, banks did not finance consumption. Consumer goods. They
only financed investments. And you could not borrow. That's why, if you
wanted to buy an automobile in 1930, '40, '50, you had to go to a finance
company, not a bank. And Ford Finance [actually, Motors] had
their own finance company; General Motors, had their own finance company.
And they concealed what they were charging you. They were charging you 18
to 20 percent interest. And this is why the government passed this
honesty-in-lending thing. That they have to tell you now precisely, of each
monthly payment, what goes for interest, what goes for reducing the amount
of the debt, and what the rate of interest is XXXX to-day on an annual
basis. But notice, financing consumption was a totally new thing.
Furthermore, they threw up these things at you and to-day almost every
person is over their head in debt, particularly the lower classes. It is
not true of the middle classes. The middle classes have certain restraints.
The lower classes do not. They are deeply involved in debt. And the
credit card, they buy, all the cars, everything, are on credit, and they're XXXX buy
all kinds of cars that were recovered, because somebody couldn't keep up the
payments. They don't bother investing. They don't care about your credit,
really. They sell it to you and then will re-capture it, if you don't make
the payments more than a couple of months. And they can still sell it and
they have XXXX a
couple of months payments from you and a couple of months from somebody
else, and a couple months payments from him, and so forth. That's the
way things go. Now, what we have to-day then is tremendous amount of credit
coming into here; but notice, it is privately controlled.
Furthermore, it is almost impossible to find out what's going on. Ah, [John William] Wright Patman [1893 - 1876, member of the United States House of
Representatives from Texas, 1929 - 1976],
who is, hates banks, just like Henry Ford [1853
- 1947] hated
banks, is the head of the House [of
on banking. Has been for years. They've tried it, but they could't get rid
of him. They can't get rid of him. He had an investigation about, oh,
should be 6 years ago, on commercial banks, like Morgan Guaranty, National
City (First National, it is now). See they, what they do is they absorb
others. The Morgan Guaran--, of course, went out of business. Morgan
Partnership went out of existence in 1940 when it incorporated. And then it
went out, out of existence as a significant bank. But it was merged with
one of its, commercial bank. Guaranty Bank. And so forth. All of these
banks are pouring in credit XXXX,
but they are all holding equity. Now, the Wright Patman committee produced
a two-volume study of the whole issue of commercial banks. And every effort
was made to suppress that. If you do not think things can be suppressed, I
assure you books, government reports, all kinds of things can be suppressed.
I tried to get a copy of this two-volume report on the credit XXXX in
the United States and I've been told by the Speaker's office that the
Speaker [John William McCormick, 1891 - 1980, the 53rd
Speaker of the United States House of Representatives, 1962 - 1971] himself
did not get a copy. That the copies were locked up in a back room and the
employees themselves are searched every time they left the room to make sure
they haven't taken them out. I'd be foolish if I didn't tell you that
I do have that report. [Laughter] Let
me give you one, another example about what's going on. Someone might break
into my house, you know. I know many other reports that have been
suppressed, of this kind. I could give you a list of them. The
history of them. There's books of them. I told you about the book that was
suppressed. The one on the China involving in [American] politics. It was suppressed. My own
books were repressed. Both of them by Macmillan. And there are various
other books, books that are reported as repressed.
instance, Harley [Martin] Kilgore[1893 - 1956, United States Senator from West
Virginia, 1941 - 1956].
Senator Kilgore of West Virginia, for years, sent me all the reports of his
committee on monopoly and similar things, and some of these were repressed.
One in particular was repressed. So it's a repression of
information. The reason they want to repress information is this, this is
the chief reason: that we now have mutual funds. In the old days, if you
wanted to buy shares, XXXX you
bought a hundred shares of General Motors. And this means you would share
in their profit, if any. This is what's called a dividend. To-day,
however, they have corporations which buy shares and collect the dividends,
so the dividends.... They own shares, of all kinds. All kinds of
corporations. The dividends come in and go through. They take what they
want themselves. And then they pay out to the people who bought shares in
that investment. It's called an investment fund. It's called a mutual
fund. Now anyone who invests in a mutual fund is really pretty much XXXX nominal.
Because they take out such a share, that you'd do much better if you just
take your money and put it in a food processing corporation. Food
processing corporations, for thirty, forty, fifty years, at least -- And I
fol--, used to follow on a monthly basis, very carefully, in New York --
were earning 12% or more, even through the Depression. And if the
conditions improved slightly, they would maybe 18%. So if you wanted to put
money in something like this, you know, it'd be much better.
I'm concerned with, however, is not the fact that middle class people bought
mutual funds and get [just] part
of the returns from the shares that the corporation bought using the money
to pay for this. What I'm concerned with is: who votes those shares? Who
Because that is what you gave up. How conveniently XXXX they
voted XXXX knock
out. They voted for them, no matter what they're doing. But these same
banks vote the shares. This means that if you are a very, very big shot
banker, you will not control just the corporations that you have invested
in. You control those corporations that you can vote the shares that are
being held by the trustee. Now, who is the trustee? The trustee is the
trust company that was given control of the shares by this corporation and
who guarantee the payments will be made. And these are the biggest four or
five commercial banks in this country, including Morgan Guaranty, First
National City, Chase Manhattan, it's the three of them, and a couple of
others. So they can control every significant corporation in the United
States. Thousands of people. Now, now savings are part of.... Oh,
suppose the government has not balanced the budget? This means that the
government is putting into savings, in spending here more than it's taking
from people in taxes there. They have to get that from the banks. When I
drew the diagram here, I put the banks up here, but it became too
complicated. In other words, if the government needs money it has to come
down to these bankers and borrow from the banks.
the way we sold the war bonds in World War II. We had seven big war bond
drives in World War II. I never bought one. Because they were a lie. And
they had Bob Hope [1903 - 2003, born Leslie Townes Hope] and
everybody that you had ever heard of. In those days they really had some
people. Some senior actresses in Hollywood. I saw figures that came
out yesterday. There's only one female actress to-day, significant in
Hollywood to-day. And I do not go for Barb[a]ra [Joan] Steisand [1942 - 2---]. She's not my type. XXXX Anyway.
Now, they sold these bonds to the public. Series E. XXXX The
drive went on for sixty days, or ninety days, or whatever they said. And
they gave occasionally a score. They were going to raise seven billion [dollars]. And they said, at the end of -- a sixty day
drive, let us say -- at the end of the fiftieth day, they had sold almost
one billion. All right, on the sixty-first day, you read in the newspaper:
"The big 7th [war
bond drive] went
over then top". The Victory Drive. Every one of them went over the top.
It's a lie. What they did is, just before midnight on the last day, they
gave the rest of them to the banks. And the bankers XXXX paid [for] them in credit. Now, the difference here you read
in my book: there's all the difference in the world between financing a war
with selling bonds to people. That is deflationary. But selling bonds to a
bank, that is inflationary. Because they can make the money to buy the
bonds and add, therefore, to the supply of money. But if you, as a person,
went and bought from the Treasury a Series E bond, then you give them your
money and you take your money out of the system. Now, even when they [governments] spend
it, they're only going to put back the money that you gave them, and they do
not increase the supply of money.
is that the whole system to-day is inflationary. It's inflationary because
that is what the small group of people who really dominate the system want.
And they want it because they are in equity. Now, the real reason they
want that is not just because they value their equity so much, every piece
of land they own, every security they own and control, including XXXX.
It's that, is that having pushed credit to the absolute limit in everything
they control, including everything in the United States, to-day every
significant entity in the United States, and that includes corporations, is
technically bankrupt. By "technically bankrupt" I mean that their assets
are less than their debts. Now, you know a lot of these. And they'll
always tell you it's crookedness. Well, sure, it's crookedness. Even the
ones that didn't go bankrupt are run crookedly. But you know Boeing, Penn
Central, New York City, Lockheed, Pan American (I said that, didn't i?), in
England, Rolls Royce, Chrysler of England, which is now pulling out of
England. All these are bankrupt. They are all bankrupt because they
borrowed more money than they possible could ever pay [back]. All right, what you do is exactly what the
Germans did in 1923. That is, you deliberately inflate. If you can double
prices, you cut the burden of your XXXX debt in half. Because if you double
prices, you can sell, if you're making Quaker Oats,.... If you
double the prices,.... And they certainly did double it. Now it's 110.
That's $1.10 for two pounds of Quaker Oats to-day. Even though you can buy
it in health stores for 29 cents a pound. But they got some nice XXXX, you
see. And so forth. It has gone up from 59 cents to $1.10 in little
over a year, they doubled it. So this means, they sell, if they sell the
same amount of [Quaker] Oats,
they take in twice as much money. And it means that the burden of their
debt has been cut in half.
notice what happened in Germany. By the end of 1923 in Germany
the inflation had gone to the point that money was worthless. Worthless.
And all debts had been wiped away. No one would even take the trouble to
collect a debt. To be specific: In 1903 a German takes out a twenty year
endowment insurance policy. He pays no money a year; and, at the end of the
twenty years, he collects a hundred thousand marks. In 1923, when that
twenty year endowment policy becomes mature, and he can collect that hundred
thousand marks, he will not collect it. He will not write a letter saying
"Send me the check", because a postage stamp costs four billion marks.
And nobody is going to spend four billion marks to mail a letter saying
"Send me a check for a hundred thousand", It was all wiped away.
Now, what the Dawes Plan tried to do, therefore, was re-establish such a
debt on German industry, the German railroad system, in order to use the new
debt income to pay reparations payments. That was the Dawes Plan,1924.
But, of course, then they wiped that away. Then. J.P. Morgan did all of
this. As you know from reading my book. The Young Plan, January '30, and
so forth, were all handled by him. [Charles Gates] Dawes [1865
- 1951, the 30th Vice President of the United States, 1925 - 1929] was
one of his stooges, from Ohio. XXXX he
was Vice President of the United States, and so forth. He was a banker from
Ohio. And Owen D [no
middle name; just the letter D] Young [1874
- 1962, the chairman of the board of General Electric Company, 1922 - 1945] of
the Young Plan, was the head of the Schenectady General Electric, which was
entirely a Morgan firm. He was XXXX
Insatiable greed, well, let me say this, can be satisfied only by total
control of our economic life through corporations' reducing all individuals
to a subsistence level. In other words, these must all be reduced to just
the level of subsistence. And all wealth is owned by this. Now, for
thousands of years the rich people exploited the poor. To-day there is no
point in exploiting the poor any more. They have gone down to the
subsistence level. They haven't got enough of value to take it
away. And they're getting very unruly. Notice, New York [City] has
become bankrupt, but nobody is suggesting they cut welfare payments. They
don't dare. So they're going to cut all government services:
garbage, police, fire, everything. Because they don't care what happens to
the middle class. They ought to XXXX get
themselves killed in New York in order to do that. Now, these, you must get
the money now from the middle class. The middle class is a creditor class.
And you take away from them the value of their credit. I have insurance
policies. I suppose they, maybe a hundred thousand dollars, I don't know
what it is. I never even paid any attention. I just know that for years
they have taken out of my [pay] about,
well, hundreds of dollars a month, they've taken out of it, for retirement,
and these various things. Now, all of this will become valueless as the
ask: why is this? Notice, I told you the liberals want to destro, destroy
communities, and create isolated individuals. Like that judge [Wendell Arthur Garrity,
Jr., 1920 - 1999, a Judge on the United States District Court for the
District of Massachusetts, 1966 - 1985] in Boston who took, just, over Boston high school[s]. He is just going to run them himself. XXXX The
conservatives want to reduce government expenditures. Remember the system I
put up here. Government, corporations -- the field of action --
communities, individuals. And they all act in the field of action, which
is public decision-making. Corporations
and corporation people want to destroy government. You see Jerry [Gerald Rudolph] Ford [1913
- 2006, the 40th vice president of the United States, 1973 - 1974, and the
38th president of the United States, 1974 - 1977, born Leslie xxx xxx] constantly
saying we must reduce the rôle of government. His [1974 - 1977] Secretary of the Treasury [William Edward Simon, 1927 - 2000] is
committed to reducing the rôle of government to nothing, if possible,
because he is a devoted disciple of Ayn Rand [1905
- 1982, born Alisa Zinov'yevna Rosenbaum].
Devoted. They're close personal friends. They're going to reduce
almost nothing. And that is what the cor--, conservatives are doing. The
liberals want to destroy communities. XXXX If
you destroy both government and communities, what you really get is
corporations and atomized individuals.
And that's what they're working for. It won't
work. For this reason: you cannot retain law and order with atomized
individuals. As soon as they finish this Metro subway system, very few
people will ever go on it, It's not safe You can only control
human behavior by internalized controls, not by externalized controls. And
you only can get internalized controls in community. So what we have is:
the conservatives and the liberals are both working for the same goals: to
reduce our society to atomized individuals. And they will then be subject
to corporations at a subsistence level. But they'll never get that far.
Because you can always opt out. Opt out if you want. You can always start
eating organic foods. And doing things that are important. Time is up.
Thank you very much.