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revenues.

Judge Woolsey's remarks under section 5 are omitted.

6. “I hold, therefore, that the indictment states a crime and is sufficiently definite to meet the requirements of the criminal law."

Holding company artificial pool operations and subsidiary pool operator shell game artists, instead of using only 3 shells and 1 pea like oldtime Wall Street fakers, have operated dozens of shells to lose 1 pea in a maze of manipulations with no semblance of stability or honesty. They inflated and deflated much more than $20,000,000,000 in a single score or more holding company frame-ups. Like plumed knights of plunder, with fearful folly they planned to pluck the wealth, Îiberty, economic independence and commercial-industrial control of the American people beyond reach of recovery by Congress.

The stables of Augeus, left unclean for 30 years, were not as foul, as corrupted and contaminating as holding-company methods, whose contagion of crookedness jeopardized the welfare of an entire Nation of 126,000,000 people. A cleansing river torrent is needed to wash away the unfathomable muck of wide-spreading financial frauds that threaten our Republic and its democratic processes, just as the Augean stables were cleaned by a river, purposely changed in its course, as the fable relates.

Insatiable demons of greed, gorged and glutted with looted wealth, have at least rendered one useful service. By necessitating a reconstruction of our economic relations the thieves of finance have pointed the way for Government to raise as many billions of dollars as necessary to honestly, legitimately finance a wholesome economic structure. They have shown the possibility of large issues of honest Government money based on power revenues and other tax yielding

To begin to reverse our criminally inclined civilization so as to preserve our Republic from disintegration it is necessary to comply with the Constitution by taking actual control of commerce and money. It is also necessary to restore some of the looted wealth to the helpless victims of looted wealth.

As in the days of the kerosene lamp there has been ruthless, conscienceless exploitation of the public recently by the most corruptive influences conceivable, through the electric-light racketeers hiding behind holding companies.

For the full period of more than 70 years that private promoters, allied with monopoly bankers, have had unconstitutional privileges over the issuance of money and its regulation, and over commerce through holding companies and other corporate colatures, the American people, their resources and wealth have been the playthings of gangs of money-manipulating gangsters.

Calamities caused by wrong policies are evident in every direction. No greater crimes have been committed against any people at any time than the financial crimes comprehended in holding company electric power activities. Myriad bubbles of inflation became multiplied and magnified to siphon the Nation's sustenance until they became concentrated into a cloudburst of fraud.

On all sides incontestable proof exists of wanton corruption by utility power company vampires who feed on victims they bleed for bloodsuckers' greed.

Delve into the records of any one of the dozens of power companies exposed by the Federal Trade Commission studies, made in spite of fearful opposition, and every step of the way, in every phase of development, we find corruption, or financial pollution, or monumental maladministration of public trusts to gouge, pilfer, or steal ruthlessly.

Apologists who condone crime often are participants in the sordid, slimy, sodden mess of putrifying decay that spreads its evil precepts and influences to taint or corrupt every human agency that its infectious moral financial debaucheries can contaminate. And ramifies to encourage or impel others to compete and to help establish the present era of America's development as an age of loot. and crime.

Criminal holding company and allied banking practices produced the widespread criminal practices now rampant to an alarming extent in high and low society. Banking criminalities have almost wrecked society.

Disappearance of over 20 billions of negotiable circulating values in a limited list of holding-company securities and allied influences alone have plunged millions of families in disaster. Inflation and deflation of these more than 20 thousand million dollars have destroyed the general welfare of millions of American families through the fraudulent operations of a fraudulent system of finance, controlled by unconstitutionally operating private monopoly bankers.

To adapt a nursery rime we might say: "Electric kings of fraud marched up the hill with 20 billion men (dollars). Electric kings of fraud marched down again with 20 billion men (dollars.)” And the successful warfare and partial looting of more than 120,000,000 Americans by the inflation and deflation of over 20 billion dollars by power entrepreneurs and finance racketeers almost disrupted our civilization.

Mr. Chairman; we have been faced with a dissolution of our democracy because of this kind of fraud.

Congress must completely reverse policies that for decades permitted private promoters to divide and distribute among themselves our Nation's wealth. Congress, for long periods, conducted Government at cross purposes with constitutional rights and the intents of the founders of our democracy regarding the general welfare and the regulation of the financial money and commerce powers.

Holding companies may be called a modern unnatural and abortionate outgrowth of repressive monetary measures Congress has tolerated for decades. They are an arrested development of the failure of Congress to provide a uniform, adequate currency system for all 48 States—failure to provide an adequate regulation of an adequate money system.

Mr. Chairman, there is room for only one holding company for electric power developments in the United States. That one consolidated holding company must belong collectively to 126,000,000 stockholders. Our citizens must not forever be exploited as sucker victims of "hold the bag" holding companies, and ravaged by predacious private promoters.

This bill comprehends much more than merely regulating holding company electric power racketeers. This legislation must be expanded to provides program for private or public operation of electric power service under the National control of Government as the sole authority in providing power at minimum cost to every community that needs economic assistance of the Government in the form of allocated national funds. There must be only one uniform rate-making authority to regulate values for all 48 States which surrendered the regulation of money and commerce to the National Government. These rate and regulation policies are unavoidably a constitutional mandate and duty.

To substantially relieve our national distress our civilization must quickly adopt constitutional controls and principles through measures that make Congress directly responsible for all controls of commerce and the money power, nationally.

Democracy cannot survive subservient to the autocracy of financial racketeers.

Government subserviency to private privileged interests belies the principles of our Declaration of Independence and the mandates of the Constitution.

Government has been in danger of being wholly abdicated. Legislative, executive, and judicial functions of government had all been usurped for decades, in varying degrees, to comply with the demands and program of a supergovernment of financial pirates.

These racketeers long, long ago took command of the purse and domination of the sword. For their benefit activities of the Treasury Department and all money-issuing privileges were commandeered periodically. Four million men were enlisted in a commercial war for their aggrandizement. Tens of billions of dollars in Government-guaranteed debts (Liberty bonds) were issued for their

An army, navy, the police, and all our courts have been used and maintained to protect the thieves of finance.

Because of the almost complete failure of democracy, on account of the controls of all wealth by a few masters of unlimited finance privileges, our American civilization, begun only 328 years ago, has actually been threatened. Rome's civilization crashed after a thousand years because the multitudes of men were impoverished by imperial masters of wealth and power. And because of a vanished commerce, due to lack of circulation of money tokens or mediums of exchange which failure made trade intercourse, and progress impossible.

We must be spared the fate of Rome, Mr. Chairman.

Financial concentration that was subjugating the United States to become an autocracy under an oligarchic control of government cannot live in domination with democratic institutions. Both cannot lead.

Private business, socialism, and communism and their influences, as practiced by the community of interest gold-fraud bankers from the time they were enthroned in 1861, 1862, and 1863, and later by their holding-company allies, must be entirely dissolved.

Holding company pirates and small gangs of banker allies with their deliberate. unashamed development of private communistic, Russianized financial control of government, who divide our country into regional commercial satrapsies, must yield to a Constitutional, democratic, national, complete control of commerce by Congress.

use.

Inhuman cruelties of holding companies and allied Wall Street money magicians, pitiless as sharks, have driven to and forced "80 percent of our citizens on the border line of poverty”, says Senator Borah. This age-long tendency and condition must be entirely reversed.

Brutal, criminal acquisition of wealth by unrestrained greed and fraud that sandbags human hopes; that wrecks careers, wrecks millions of homes by foreclosures, drives tens of millions to poverty or despair, and many to suicide; that economically disinherits, dispossesses, disfranchises and disillusions the vast masses of mankind through Nation wide economic havoc, is personified and exposed in the slimy trails of nearly every holding company the Federal Trade Commission has examined and reported upon the past 7 years. There seem to be no exceptions.

Delve into any holding company record. Methods and results are all the same, symptomatic of the whole history of Wall Street operations.

The human mangling machinery that strips human souls of their money substance, that bleeds men of their sustenance on treadmills of plunder, while justice nods and sleeps before the blinking footlights of its temples, is completely centered in the citadels of fraud pictured in a spider-web diagram printed elsewhere and used by Senator Norris in his disclosures on the Senate floor 2 years ago.

While there is no degree of depravity to which the racketeer operations of Wall Street's masters, who disdain getting their cuffs bloody, has not sunk, claims are made that some manipulations and pyramided stock-inflated operations are less unclean than others.

The North American Co.. which controls utilities in the Nation's capital city, Detroit, Cleveland, Milwaukee, and St. Louis, with scores of subsidiaries and affiliates, is referred to as a model, “clean” operation. Unlike Caesar's wife, it is not above suspicion nor free frone taints. Nevertheless it is looked upon as a beacon light of purity among many prostituted financial frame-ups. Not a paragon of perfection but an outstanding example of superior integrity and unassailable sanctity, financially, it is claimed.

Having examined closely the virtues inhering in and faults appertaining to the North American, a brief and unbiased record of its career is here essayed.

Four years ago the Federal Trade Commission printed a volumn of 1,699 pages of testimony and exhibits concerning North American, abbreviated N. A. below.

For 30 years N. A. dragged along. It was organized in 1890 to trade its stock for identical fictitious stock of the Oregon & Transcontinental Co., with 40 million capital and imaginary assets of $52,152,709, (p. 62 Fed. Tr. Com. Nos. 33, 34). All N. A. references are made to the same report.

By cleaning out impossible stocks of cats-and-dogs "securities” the N. A. balance sheet for 1901 claims 274 millions in Cincinnati, 574 millions in Milwaukee, three-fifths of a million in St. Louis common stocks totaling $8,361,429 (p. 813). In 3 years time by juggling, horse-trading deals, etc., N. A. claims nearly 10 million in Milwaukee, an increase of 165 percent in St. Louis, 5%2 million in Laclede Gaslight and Cleveland Electric Illuminating, over one-fourth million in Detroit, less than one-half million in Cincinnati, and a total of almost 18 million (p. 813).

In 1910 N. A. claimed 22 million “investments' and $26,628,490 in 1920, all except a few percent of this total being in common stocks (pp. 809, 811).

A Wall Street slaughterhouse conspiracy to loot the United States was initiated in May 1920. Within a few weeks the Jolly Roger ships of Wall Street pirates, including North American, were being outfitted with fresh sails and new crossbone and skull black flags nailed to their mastheads, emblazoned with the dollar insignia of two bars and the snaky ess ($).

Former Senator Robert L. Owen explains in part in his news stand Money publication, March 1933:

“There is not the slightest doubt about the cause of the panic of 1921. We very greatly expanded credit and money to carry on the World War floated 40 billions of bonds. We expanded the currency at the same time; and because of the urgent demand for commodities for war purposes and for destructive purposes, commodity values rose to the very high point of an index of 167.2 in May 1920, the dollar index falling to 60, followed by a drastic contraction of money and credit in 1920–21, which within a year drove commodity prices to the low point of 93.4 in June 1921. (Index 1926=100.)”

Explaining just how the panic of 1920–21 was brought about, Senator Owen wrote:

“By the great financial powers of the country, through their control over the political powers of the Nation and over the Federal Reserve Board, the Federal Reserve banks and its member banks.

we

“Those who had acquired large holdings of Government bonds at a time the dollar was at its lowest in purchasing power (0.60) conceived the idea that it would be to their advantage to increase the purchasing power of the dollar in which their funds were invested. They, therefore, demanded that 'the high cost of living' should be reduced—that is to say, that the high cost of commodities should be reduced or, that the products of labor should decrease in dollars and that the dollar should increase in purchasing power in terms of commodities and labor.

“The country was flooded with arguments that we were suffering from the high cost of living' and 'inflation. These arguments were so subtle and deceitful that the people accepted them as true, to their own great injury.

“At that time, we were enjoying the results of expansion of credit and abundant money. Bank failures had been reduced to zero, employment was at its maximum, and the country was in a highly prosperous condition.

"A campaign was then put on in 1910 and 1920 to contract credit and currency. A United States Senate resolution of inquiry, introduced by the Honorable Medill McCormick, Senator from Illinois, demanded of the Federal Reserve Board what steps they were taking to cause the member banks to correct the inflation of credit and currency.

“This resolution passed the Senate during my absence from the Chamber, apparently without being sufficiently understood, on May 17, 1920.

"On May 18, 1920, I vigorously protested against it on the floor of the Senate and warned the country that that policy would produce a depression and unemployment. On the same day (May 18, 1920) the Federal Reserve Board, the Federal Reserve Advisory Council, and 36 class A directors had a secret meeting and declared in favor of the policy of contraction. It was not until 2 years later, however, that this secret proceeding was disclosed as the result of a resolution adopted by the Senate (s. Doc. 310. 67th Cong., 4th sess.).

“On June 10, 1920, the Republican National Convention adopted a plank in favor of lowering “the high cost of living". That meant lowering the value of commodities by contracting credit and currency. It was called “deflation". It demanded “the courageous and intelligent deflation of credit and currency"but it meant contraction!

In July 1920, President Harding, in his speech of acceptance, declared in favor of the "courageous and intelligent deflation of credit and currency". It meant contraction. He was overwhelmingly elected in November 1920; and immediately after his election the policy of contraction went into vigorous effect. Bank loans were contracted about 6 billion dollars and currency was contracted about 1% billion dollars, with the result that many commodities fell to one-third their value almost immediately. Farm products fell to one-third their value, petroleum fell to one-third, imported olive oil fell to one-third, and so on through the list. This meant that the dollar was changing its value.

"The dollar increased in value, as a necessary result, from an index of 60 in value in June 1920, to 107 by June 1921, an increase of 68 percent in its purchasing power. And it is now (in February 1933) at an index of 166, a gain of 276 percent in purchasing power.”

New York's master bankers conspired to deflate many thousands of millions of Liberty bonds so they could cleanly scuttle the market in every direction and grab the Liberties at huge discounts of nearly 20 percent. Under the direction of the Federal Reserve, through Eugene Meyer and an Assistant Secretary of the Treasury, since become one of the Morgan gang's 20 partners, the Treasury Department took part in the manipulative melee precipated by bear raids that deflated Liberties. Senator Huey Long, 2 years ago, read the record on how Eugene Meyer, serving as a Government official, used his own Wall Street brokerage office to privately spend Government money buying bonds millions of dollars above market prices from his friends and losing millions of Government dollars selling United States bonds below market prices to his friends.

This witness tried to borrow $1,500 on $2,000 in Liberty bonds from every large bank in Washington without success. My best offer was a loan of only 65 cents on the dollar for the safest investment in the world, bonds of the United States Government. This was in April 1920 when no honest bankers could tell. what the plans of New York's master-pirate bankers were. They then completely controlled Constitutional money privileges, regardless of Congress.

NATIONAL ASSOCIATION OF RAILROAD AND UTILITIES COMMISSIONERS,

Washington, D. C., May 4, 1935. Hon. BURTON K. WHEELER, Chairman Committee on Interstate Commerce,

United States Senate, Washington, D. C. DEAR Sır: Availing myself of the privilege extended by you at the conclusion of the hearing on S. 1725, I desire to file certain excerpts from my statement before the House committee on H. R. 5423, and to request that the same be printed as supplementary to my statement before your committee on S. 1725. The same are attached hereto. Yours very truly,

John E. BENTON,

General Solicitor.

EXCERPTS FROM THE STATEMENT OF JOHN E. BENTON BEFORE THE HOUSE

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE ON H. R. 5423, FILED AS SUPPLEMENTAL TO MR. BENTON'S STATEMENT ON S. 1725

Section 202 (a), beginning on page 104, we ask to have amended as follows and I may state that this change is not in the copy which is before the members of the committee but is contained in the corrected copy which I gave to the reporter. Section 202 (a), as amended, would read as follows:

"Sec. 202. (a) It shall be the duty of every public utility subject to the jurisdiction of the Commission to furnish energy to any person, at wholesale, in interstate commerce, upon reasonable request therefor; and to furnish and maintain such services and facilities as shall be in all respects adequate, efficient, and reasonable: Provided, however, That a public utility, the major part of the business of which, measured by gross revenues, is not subject to the jursidiction of the Commission, shall not by order of the Commission be required to furnish energy to any person."

As I stated this morning, that cuts out the common-carrier feature, and also limits the jurisdiction of the Federal Commission, so far as requiring service to be rendered to those companies, is concerned, which are mainly interstate in character.

It is thought of the State commissions that there are many electric utilities in every part of the country which sell some part of their surplus power in interstate commerce at wholesale to other companies but which are primarily local companies, doing the major part of their business in sales to consumers and deriving their principal revenue therefrom.

The State commissions do not think that these companies ought to be required to extend their plants and facilities to sell power to utilities outside the State, or that they ought to be subject to Federal order requiring them to transmit their electric energy which may be needed at home. It is the belief of the State commissions that every utility which has any power to sell will be glad to sell all its surplus power, but that they should not be disabled in supplying local business for the benefit of utilities elsewhere.

On page 5 of the list of amendments I have given you, subsection (c), we insert the word “undue". The section as originally drawn, we think, would not be practicable. In different classes of service different rates prevail. A difference in rates is a discrimination, but it may be proper. You have the question of whether it is a proper or an "undue” preference. That the Commission can determine. The word “undue" should be put in to give the same discretion to the Federal Commission which every State commission has.

I come now to the part of the bill which would provide for the setting up of regional districts for control over the production of electrical energy and over interconnecting facilities and the determination of the use to be made of the facilities, and the suggestion in the bill that such control, “as far as practicable" be by the companies themselves.

The view of the State commissioners is that it is not necessary for the development of the electrical business, or the gas business, to use the compulsive power of Government; that these companies will expand their capacity to the fullest extent possible where there is a prospective profitable market, and that it is not desirable to subject companies which have established their business, to compulsive measures requiring them to enlarge their operations against the judgment of their managers.

We have, therefore, suggested the entire elimination of that section.

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