America's Money Machine

Where Two Tides Meet 211
creating a new Board as the direct monetary agent of Congress to regulate
the value of money and to control the volume of bank deposits. 6 A
feature of the bill was that it would require a 100 per cent reserve by
banks to be held in lawful money or government securities. The bill
authorized the government to finance old-age pensions, public works,
and loans to industry through the Federal Reserve banks, without increase
of the public debt, until the price level was restored to the 1926
level and full employment had been obtained.
When Binderup was defeated for re-election he organized the Constitutional
Money League, and his bill was re-introduced by Congressman
Jerry Voorhis of California the following year. 7
Other monetary bills of similar tenor were introduced by Senator M.
M. Logan of Kentucky, who also wanted the Federal Reserve System to
be wholly under Congressional control, and monetary policy geared to
restoration and maintenance of the price level;8 by Representative
Wright Patman of Texas, and by Representative Usher L. Burdick of
North Dakota.
Among the non-political figures in the arena was the Reverend Charles
E.Coughlin, a parish priest of Royal Oak, Michigan, who found a nation
listening to his radio program when he turned from the salvation ofsouls
to saving the country from the bankers.
What probably saved the country from more radical monetary legislation
was the continuing abundance of money, and an enormous receipt
of gold from abroad, fleeing from a Europe in fear of Hitler. During the
six calendar years, 1934-1939, inclusive, the country gained $10 1/2
billion of gold in addition to $3/4 billion of silver.
Meantime, the policy of spend and spend undoubtedly made many of
the electorate happy with the Democratic Administration, and by August,
1939, the face of the world had changed with the German invasion of
Poland, and the Federal Reserve System faced a new set ofconditions and
policies.