One of my Internet sources sent me the "Father Coughlin" post below with the comment:
"This is a tremendous list of question regarding modern banking. It summarises in bold and succinct prose many of the technical criticisms and complaints about those nefarious bankers that I have read in other sources. Those who are tempted to dismiss Father Coughlin's critique on the grounds that his objections are simply religious are advised to read carefully the non-religious portions. If a priest tells you that twice two equals four, do you dismiss the answer because it comes from a man of the cloth?"
Here is Father Coughlin on "Modern banking", written in February 1936:
1. What are modern banks?
We have clothes shops, candy shops, bake shops, food shops. Why not call present day banks what they really are -- debt shops?
2. What is modern banking?
The Cashier of one of the largest mid western banks, when asked this question, answered: "It is a series of motions which we go through without knowing what it is all about." Real banking is more evident by its absence than by its presence.
3. What is the nominal definition of the word "bank"?
The word is derived from the word "banca" which means bench. On the bench, the money changers were accustomed to operate. It was such benches that Christ turned over when he drove the money changers from the Temple.
4. What is the real and philosophic definition of the word "bank"?
Philosophically, a bank is a financial institution which accepts depositors' money for safe keeping and contracts with the depositors to lend this money at interest to individuals who are in need of its use and who can give ample security that the loans will be paid. From the profits made from lending money at interest the banker agrees to pay the legitimate depositors a fixed sum of interest besides safeguarding the deposits.
5. Is this philosophic definition of a bank applicable to modern banks?
No. The practice of modern banks is not in harmony with the philosophic concept of reaI banks.
6. What, then, is the definition and practice of modern banks?
While modern banks presumably accept depositors' money for safe keeping, it should be understood by each depositor that the contract which he is making with the bank does not guarantee that his deposit will be returned to him on demand or any other time. The depositor really becomes a creditor of the bank, and not a preferred creditor, at that. Moreover, while the bank does lend some of the depositors' real money, the said bank is gambling on human nature. First, it arranges to create ten, twenty or thirty times the amount of money really deposited with it and then proceeds to lend this to manufacturers, merchants, builders, tradesmen and citizens. The banker goes so far as to make loan deposits that are ten to thirty times, the real deposits. When one analyzes the complete operation, he finds the amount of money the real depositors placed as safe keeping in the bank is money manufactured by some banker in some preceding transaction.
Today (February 1936), the total deposits of real money placed in the banks for safe keeping by all classes of citizens amount to approximately $700 millions. The bankers report to the public, however, that the deposits in the Federal Reserve banks and in the member banks total many billions of dollars. Truthfully, they should report that these many billions of dollars are loan deposits that they have created.
7. Are banks limited to the above activities only?
No. Bankers manufacture money, rediscount notes, regulate the value of foreign coins, dominate industry by placing bankers on the Boards of Directors of Corporations, dictate to the press, execute foreign loans for war purposes even against the laws of neutrality, manipulate political parties, and in reality, operate the Government and the nation for their own selfish ends. More than that, they flood the nation with their created credit and then, at the opportune moment, call this credit and cause depressions and make it possible for the banks themselves to confiscate real wealth, farms, homes and industry.
8. Is there any judicial evidence to prove that when you have a deposit in the bank you do not have real money in the bank?
Yes. In 1923, the Missouri Appellate Court rendered the following decision. This decision was upheld by many State Supreme Courts.
"When a deposit is made in a bank the funds deposited become the funds of the bank, the deposit becoming an ordinary indebtedness and not a trust fund for its depositor." (From "Digest of Decisions Relating to National Banks", Vol. II, page 69).
9. If banks, then, are debt shops where money is manufactured for the purpose of creating debts, is money issued primarily for usurious purposes?
Yes. Money comes into existence from the banks only as "interest bearing loans" which interest must be paid by every person who uses money.
10. What is usury?
Usury is a breach against the commandment "Thou shalt not steal", and is related to three specific immoral actions listed under the following:
(a) Charging an unreasonable and abnormal rate of interest.
(b) Charging interest on any recognized non-productive or destructive loan.
(c) Charging interest on a loan of fictitious money which the lender created, thereby demanding from the borrower an unjust return. In the latter case, the lender reaps where he did not sow.
11. Is usury opposed to morality?
Yes, and it is also opposed to Christian teaching.
12. Is it permissible to charge interest at any time?
When real money is loaned for productive purposes at a reasonable rate, interest is permissible because money, in modern society, is regarded as the means of transferring claims or titles to wealth. To lend a bushel of seed corn to a neighbor farmer and to expect that he return to you a bushel plus a fair portion of the new corn which he raised is legitimate. His possession of the new corn was only made possible by the lender abstaining from using the original corn himself.
13. Who are the principal opponents to necessary banking reform and to the establishment of an honest money system?
The beneficiaries of this ingeniously devised institution for securing a percentage on transactions and getting legal title to property without the victims understanding what is happening.
"The chief factors that oppose reform and progress and strive to keep things as they are, are by no means inertia and ignorance, but thoroughly well-informed individual self-interest."
(From WEALTH, VIRTUAL WEALTH AND DEBT, by Frederick Soddy.)