The daily worker. [volume] (Chicago, Ill.) 1924-1958, 1932-03-10

ficit which at the present tine amounts to no
less than s4.OOO,OoOooo. In CIDER to cover UP
this deficit, the government began to issue
bonds. The value of these bonds be-an to drop
with each issue. The banks began TO fill UP
with government bonds, along with the other
stacks of paper that the banks had swallowed
up
In order to meet the increased demand for
paper money most of which was used for
hoarding) the Federal Reserve Bank required
greater gold stocks and greater amounts of what
is known as commercial paper Commercial
paper represents the production and circulation
of commodities; and with the cut in production
down to but so per cent of normal the amount
of commercial paper available for the issuance
of the money was materially cut down
With the world struggle for greater gold re-
sources, with European capitalists withdrawing
their gold from the United States the American
bankers were met with a very critical situation
The amount Of gold available for the issuance of
new money was very slim. Tall, about going off
the gold standard was real and remains real to
this day
Role of Federal Reserve
In this situation, the Federal Reserve System
controlled by the House of Morgan primarily
with Eugene Meyer an integral part OF the
House of Morgan as the head OF the Federal
Reserve SYSTEM began its manipu1ations which
led to the creation and adoption Of the Glass
Steagal Bill, and opened the way for vast
initiation
With this brief background, the development
of the processes behind the Glass steagau Bill
and its meaning should be clearer
The manner of passing the bill is extremely
significant for the workers The VI Congress of
the Communist International Pointed out to the
workers that the capitalist governments were
becoming more closely intertwined with the
financial magnates. In the United States this
was especially true. Andrew Mellon, leading
imperialist banker, was head of the treasury
Dwight W. Morrow, partner of the House of
Morgan, was a dominant figure in the Hoover
government. Every important cabinet office Is
today held by direct representative of leading
inperialist groups Hoover himself is the in
carnaton of the financial promoter in the i'm
perialist epoch But this process reached an ur-
precedented stage during the present crisis.
How the Glass-Steagal1 Bill Originated.
The formulation of the Glass Steagal1 BID
took place i'll the offices OF the leading bankera
in Wall Street. 1t was an extra parliamentary
matter, with very little discussion taking place
on it. despite its tremendous significance
secret conference of the leading democratic and
republican politicians was called by Hoover al
which Ogden Mills speaking for the bankers
laid down the dictates of the leading financiers
This shows in the present stage of the crisis in
the United States that the most important moves
OF the capitalist government do not even go
through the usual parliamentary procedure but
are put through directly by joint action of the
bankers and their government apparatus
The great secret of the rushing through of the
Glass-Steagall Bill is simply that the Congress
men and Senators who were called into confer
ence by President Hoover we're told that the
major objects Of the bill we're already achieved
and that any attempt to change then, would
precipitate financial panic of the severest tvpe
The capitalist papers reported that these Sen
ators and Congressman we're given "black pic
ture" OF financial conditions. but that the pie
ture was too black for publication
In short, the representatives of the leading
bankers merely instructed their republican and
democratic representatives that the whole fnan-
cial structure of American capitalism was In
dangerous state; that the Federal Reserve Rank
had already entered on period of initiation. and
that all they could do about it was formulate IL
INTO law, add few fnroe inflationrsy pro-
visos and pass IT. That is precisely what they
d
Where VIII II Lead?
Now the question arises: Precisely what Is the
situation which led to the Glass -Steagal Biu7
What is the bill itself and what are it's per-
spectives? What will it lead to? AS we pointed
out before, we must always keep in mind that
this is Just one OF the measures of American
further development of the econornie erisr
which IS reaching lower levels ur
,.xEM. rro m coNruNurnM wv