except when ordered to do so by a court of competent jurisdiction or by direction of the Congress of the United States, or of either House thereof, or any committee of Congress of either House duly authorized. Any person violating any provision of this paragraph shall be punished by a fine of not exceeding $5,000 or by imprisonment not exceeding one year, or both.

Any person connected in any capacity with any national farm-loan association, Federal land bank, or joint-stock land bank, who embezzles, abstracts, or willfully misapplies any moneys, funds, or credits, or who without authority from the directors, draws any order, assigns any note, bond, draft, mortgage, judgment, or decree, or who makes any false entry in any book, report, or statement of such association or land bank with intent in either case to defraud such institution or any other company, body politic or corporate, or any individual person, or to deceive any officer of a national farm-loan association or land bank or any agent appointed to examine into the affairs of any such association or bank, and every person who with like intent aids or abets any officer, clerk, or agent in any violation of this section, shall be punished by a fine of not exceeding $5,000 or by imprisonment not exceeding five years, or both.

ORGANIZATION EXPENSES.

SEC. 29. That the sum of $100,000, or so much thereof as may be necessary, is hereby appropriated, out of any money in the Treasury not otherwise appropriated, to be expended under the direction of the Federal Farm Loan Board, for the purpose of carrying into effect the provisions of this act.

LIMITATION OF COURT DECISIONS.

SEC. 30. That if any clause, sentence, paragraph, or part of this act shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this act, but shall be confined in its operation to the clause, sentence, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered.

REPEALING CLAUSE.

SEC. 31. That all acts or parts of acts inconsistent with this act are hereby repealed, and this act shall take effect upon its passage. The right to amend, alter, or repeal this act is hereby expressly reserved.

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PART

RURAL CREDITS.

MAY 5, 1916.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed.

Mr. LINDBERGH, from the Committee on Banking and Currency, submitted the following

MINORITY VIEWS.

[To accompany H. R. 15004.]

In one way all people would become prosperous; that is to have equal opportunities, and no special privilege. When special privileges are granted to any, all others require special privilege to overcome the advantages created against them.

Special privileges have already been granted to the big national banks and to certain other interests. If we can not get rid of the existing special privileges, special privileges must be granted to all legitimate industries. The practice, however, of granting special privilege at all is much more expensive than it would be to have none. Some farmers want a special privilege from the Government in the nature of rural credits. Under existing circumstances they are entitled to it. Unfortunately for them, as well as for all unprivileged people, the big banks framed the Federal reserve act, a specialprivilege law created exclusively for the banks. It appropriated all existing financial advantages. The rural credit proposed by the majority of the committee avoids taking anything that the banks want. Since they want all that is of value, the farmers would get nothing of value in this bill. In fact it is sop to the farmer, and if it becomes law it will postpone any substantial rural credit.

Let us keep in mind the fact that the farmer feeds the world, while the big bank owners simply scalp profits from the exchanges between the producers and consumers, exploiting them both. Let us compare a few of the special privileges the Federal reserve act gives to the national banks with the failure of the majority of the committee to give any substantial relief to the farmer. I will follow that comparison with a plan which would give an equitable and substantial credit system to all the people.

SPECIAL PRIVILEGE NO. 1, TO BANKS.

Bank corporations hold over twenty billions of the people's credits, paying an average of less than 2 per cent. They loan those deposits and collect about $1,000,000,000 interest. That is not all, for certain speculators to whom a part of the loans are made collect enormous profits scalping on the market. In the double process, the one by the banks and the other by the speculators who borrow the depositors' money from the banks, the people are forced to pay not only what the banks pay the depositors but in addition enormous profits, besides the billions of dollars the speculators make.

SPECIAL-PRIVILEGE REFUSAL NO. 1, TO THE FARMER.

The farm corporations will not be allowed to receive deposits, not even from their brother farmers themselves. At first there was a sort of pretense for saving deposits in the bill; but if that had been left in the bill it might be the beginning of what would lead to a system favorable to the people, and it was taken out. Therefore the farmers could not, even though they have the best security in the world, secure money direct from the depositors. The banks retain that exclusive monopoly.

SPECIAL PRIVILEGE NO. 2, TO THE BANKS.

The Government established a Postal Savings Bank System for the benefit of the bank corporations. It gathers in the funds of those who prefer to have the Government guarantee their deposits, pays them 2 per cent, and turns these deposits over to the banks for 21 per cent to speculate with. The Government is put in the capacity of a 66 copper" for the banks in gathering in postal savings deposits. The banks and speculators, who produce nothing, make more net profits for the use of the people's deposits than all the toilers in field, shop, and elsewhere combined make, and yet these toilers patiently submit to the wrong.

SPECIAL-PRIVILEGE REFUSAL NO. 2, TO FARMERS.

The Government refuses the use of the postal savings bank deposits to farmers and other toilers. What would happen to the value of the farm in the way of improvements if the Government turned over postal savings bank deposits to farm borrowers at 2 per cent? It would be an economic saving to toilers everywhere and decrease the cost of living.

SPECIAL PRIVILEGE NO. 3, TO THE BANKS.

The bank corporations were given the exclusive privilege to secure emergency currency from "Uncle Sam" when the world war began, and the United States Treasury printed, became responsible for, and delivered to the big banks $387,000,000, and charged 3 per cent interest, while the banks used it to speculate in war credits and made enormous profits.

SPECIAL-PRIVILEGE REFUSAL NO. 3, TO THE FARMER.

As stated, when the war began the Government furnished the big banks $387,000,000 currency to speculate with. At that time and as a consequence of the war the farmers of 12 States were in dire distress because they could not market their farm products. They could not pay their creditors or buy the necessaries of life, and they were refused emergency currency or Government aid and suffered enormous loss. Many of them will never be able to recover. Contrast that with what the Government did for the Wall Street banks.

SPECIAL PRIVILEGE NO. 4, TO THE BANKS.

The taxes collected for the United States Treasury were turned over to the bank corporations for 2 per cent interest when the war broke out. Rather than disturb the banks in their speculation with these tax funds the Government instead of making the banks pay what the people had already paid in taxes forced the people to pay special war taxes. The big banks, and especially their owners, have made enormous profits on war stocks and war-trade speculations. It is a war tax for their benefit.

SPECIAL-PRIVILEGE REFUSAL NO. 4, TO THE FARMER.

A fake and ineffective provision, section 7, is inserted in the bill by which the Government could deposit money with farm corporations; but that is mere sop, for the other provisions of the bill make it absolutely impractical. The folly of believing that the Treasurer would ever use current taxes to float 36-year mortgages is too apparent and ridiculous to need comment.

SPECIAL PRIVILEGE NO. 5, TO BANKS.

Bank corporations loan their depositors money and also use it to buy bills, acceptances, etc., and take the notes and other paper in their own names and are given the monopoly of securing from "Uncle Sam" money upon the pledge of this paper. They are secured by the paper they have taken for their depositors' money. They not only owe their depositors but they also owe the Government, which has a lien upon this paper ahead of the depositors. In that way the Government permits the banks to inflate the money. Note the following language in the Federal reserve act:

SEC. 16. Federal reserve notes, to be issued at the discretion of the Federal Reserve Board for the purpose of making advances to Federal reserve banks through the Federal reserve agents. The said notes shall be obligations of the United States and shall be receivable by all national banks and member banks and Federal reserve banks and for all taxes, customs, and other public dues.

There was, on February 18, 1916, outstanding of these notes, $206,978,000. It may be increased to billions. The direct profit to the banks is not so great as the advantages it gives to the big stockholders and speculators who operate with them. It serves as an insurance to them in their game of fleecing the people, for in the event

of their being caught in financial distress, their banks will pledge paper to get "Uncle Sam " to print money for the banks. Then the banks will not be forced to collect from the speculators. The speculators have scalped huge fortunes aggregating more than a billion dollars since the world war began. The people will hereafter be forced to pay dividends on those fortunes-vested rights" we understand.

SPECIAL-PRIVILEGE REFUSAL NO. 5, TO FARMERS.

The farm corporations to be, are refused the privilege to take notes, paper, or security of any kind to the Government, even though they have the best, to get a single dollar issue of money from "Uncle Sam." The bank corporations may do that, but the proposed farm corporations are refused a like privilege.

OTHER SPECIAL PRIVILEGES.

It is unnecessary to list all the special favors the banks enjoy. They have a complete monopoly of financial affairs. It is not so much their wrong as it is the wrong of Congress in having granted the privilege to the banks.

Every considerable supply of money must, under existing conditions, come through the banks. This rural-credit bill deprives the banks of nothing; not even the exclusive monopoly they enjoy. The system proposed by the committee bill would be dependent upon the supply of money which the banks control, and consequently would be dependent upon the banks. The Government has no credit except that supported by the earning capacity of the people, and whatever draft is made upon it the people must pay. That is why the Federal reserve act is a crime. It supports the banks with the Government credit. The Government simply places in the control of the banks an agency by which they rob the people of their actual earnings. My purpose in calling attention to these facts is merely to show what sop" it is now that is offered to the farmer in the hopes that the farmer will press further for his right.

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BORROWER BORROWING FROM HIMSELF.

By a strange jugglery of proposed law, before any money can be had from the farm departments sought to be created by the bill it is expected that the farm borrower shall begin by supplying funds for himself, "lift himself by his own bootstraps," so to speak. Before he can borrow he must become a stockholder in a corporation where none but borrowers can. That corporation would issue stock to him, upon which he himself will collect from himself to pay for the stock and a dividend and send it to a head office, where they will take out the expenses of the corporation and credit the balance, if any, to him. If there should not be enough to pay expenses he will be called upon for an additional remittance. Whatever money the farmer is to get on his loan that he does not lend to himself will have to be gotten in the open market by bids, and it must come principally from funds in the banks.