Bankers play far too great a part in the conduct of industry. Most business men will privately admit that fact. They will seldom publicly admit it because they are afraid of their bankers. It required less skill to make a fortune dealing in money than dealing in production. The average successful banker is by no means so intelligent and resourceful a man as is the average successful business man. Yet the banker through his control of credit practically controls the average business man.
There has been a great reaching out by bankers in the last fifteen or twenty years—and especially since the war—and the Federal Reserve System for a time put into their hands an almost limitless supply of credit. The banker is, as I have noted, by training and because of his position, totally unsuited to the conduct of industry. If, therefore, the controllers of credit have lately acquired this very large power, is it not to be taken as a sign that there is something wrong with the financial system that gives to finance instead of to service the predominant power in industry? It was not the industrial acumen of the bankers that brought them into the management of industry. Everyone will admit that. They were pushed there, willy-nilly, by the system itself. Therefore, I personally want to discover whether we are operating under the best financial system.
Now, let me say at once that my objection to bankers has nothing to do with personalities. I am not against bankers as such. We stand very much in need of thoughtful men, skilled in finance. The world cannot go on without banking facilities. We have to have money. We have to have credit. Otherwise the fruits of production could not be exchanged. We have to have capital. Without it there could be no production. But whether we have based our banking and our credit on the right foundation is quite another matter.
It is no part of my thought to attack our financial system. I am not in the position of one who has been beaten by the system and wants revenge. It does not make the least difference to me personally what bankers do because we have been able to manage our affairs without outside financial aid. My inquiry is prompted by no personal motive whatsoever. I only want to know whether the greatest good is being rendered to the greatest number.
No financial system is good which favors one class of producers over another. We want to discover whether it is not possible to take away power which is not based on wealth creation. Any sort of class legislation is pernicious. I think that the country's production has become so changed in its methods that gold is not the best medium with which it may be measured, and that the gold standard as a control of credit gives, as it is now (and I believe inevitably) administered, class advantage. The ultimate check on credit is the amount of gold in the country, regardless of the amount of wealth in the country.
I am not prepared to dogmatize on the subject of money or credit. As far as money and credit are concerned, no one as yet knows enough about them to dogmatize. The whole question will have to be settled as all other questions of real importance have to be settled, and that is by cautious, well-founded experiment. And I am not inclined to go beyond cautious experiments. We have to proceed step by step and very carefully. The question is not political, it is economic, and I am perfectly certain that helping the people to think on the question is wholly advantageous. They will not act without adequate knowledge, and thus cause disaster, if a sincere effort is made to provide them with knowledge. The money question has first place in multitudes of minds of all degrees or power. But a glance at most of the cure-all systems shows how contradictory they are. The majority of them make the assumption of honesty among mankind, to begin with, and that, of course, is a prime defect. Even our present system would work splendidly if all men were honest. As a matter of fact, the whole money question is 95 per cent. human nature; and your successful system must check human nature, not depend upon it.
The people are thinking about the money question; and if the money masters have any information which they think the people ought to have to prevent them going astray, now is the time to give it. The days are fast slipping away when the fear of credit curtailment will avail, or when wordy slogans will affright. The people are naturally conservative. They are more conservative than the financiers. Those who believe that the people are so easily led that they would permit printing presses to run off money like milk tickets do not understand them. It is the innate conservation of the people that has kept our money good in spite of the fantastic tricks which the financiers play—and which they cover up with high technical terms.
The people are on the side of sound money. They are so unalterably on the side of sound money that it is a serious question how they would regard the system under which they live, if they once knew what the initiated can do with it.
The present money system is not going to be changed by speech-making or political sensationalism or economic experiment. It is going to change under the pressure of conditions—conditions that we cannot control and pressure that we cannot control. These conditions are now with us; that pressure is now upon us.
The people must be helped to think naturally about money. They must be told what it is, and what makes it money, and what are the possible tricks of the present system which put nations and peoples under control of the few.