June 12–Efforts to revive the American System today are being led by the campaign to reinstate FDR’s Glass-Steagall law. The LaRouche Political Action Committee began to agitate for this measure in the fall of 2008, and by 2010 the drive had become an active issue in the U.S. Congress, at that time led by Senator Maria Cantwell (D-WA). In subsequent years, Cantwell was joined in the Senate by Elizabeth Warren (D-MA), John McCain (R-AZ), and Angus King (I-ME), and in the House by Rep. Marcy Kaptur (D-OH). In the last session of Congress, over 80 Congressmen and 10 Senators had signed onto legislation to reinstate Glass-Steagall.

At the same time, the call for reviving the separation of commercial from speculative banking has been taken up by state legislators around the country, who have introduced Memorials to Congress and the President urging immediate action. So far in 2017, there have been Memorials introduced in 17 states; in previous years, the numbers have gone as high as 25 states, and resolutions for Glass-Steagall were actually passed in several of them.

The prospects for the reinstatement of Glass-Steagall have been heightened by the fact that both the Democratic and Republican Party platforms for the 2016 Presidential elections endorsed its reinstatement, and President Donald Trump has several times indicated that he is looking seriously at the possibility of reinstating it.

For the current fight, I have assembled here the current legislation in Congress, and the resolutions and petitions which have been introduced, or are pending, during 2017.

First, here is FDR’s original Glass-Steagall bill, signed into law June 16, 1933: Glass-Steagall: “An Act to provide for the safer and more effective use of the assets of banks to regulate interbank control, to prevent the undue diversion of funds into speculative operations.”

House Resolution 790, introduced Feb. 1, 2017, by Rep. Marcy Kaptur. Text and sponsors can be found here.

House Resolution 2585, introduced May 22, 2017 by Rep. Michael Capuano (D-MA). Text and sponsors can be found here.

Senate bill S881,text and sponsors introduced April 6, 2017 by Sen. Elizabeth Warren.

Crucial Facts about Glass-Steagall

1. The bipartisan 37-page law signed June 16, 1933 by President Franklin Roosevelt, was actively promoted by some powerful Wall Street bankers, following the Crash of 1929 during the Great Depression. Throughout its 66 years as law, it prevented systemic banking collapse.

2. Glass-Steagall included the following provisions:

* It created the Federal Deposit Insurance Corporation, to insure citizens’ deposits.
* It prohibited commercial banks that take deposits and make loans, from speculating with depositors’ money.
* It mandated that investment banking (selling stocks, underwriting stocks and bonds, etc.) be separated into an entirely different bank from commercial banking, with no common boards of directors, shared deposits, etc.
* It permitted banks to purchase securities for their clients, but not for their account (i.e. proprietary trading, the subject of the Volcker Rule) reducing even the appearance of betting.
3. The timeline of the dismantlement:
* 1980s–the wall between investment and commercial banking began to be dismantled:
* In 1987, Fed Chairman Alan Greenspan allowed Bank Holding Company subsidiaries to deal in derivatives.
* In 1999 Glass Steagall was repealed. Too Big to Fail Banks (still too complex) were the result.
* In 2000, Congress passed the Commodities Futures Modernization Act, deregulating derivatives.

4. Following Glass-Steagall’s repeal, investment banks competed with TBTF banks, which financed their speculative dealings, by increasing leverage. Both collapsed in 2008; TBTF banks remain subsidized.

5. The system began to crash when Citigroup’s toxic financial paper tanked in the Fall of 2007. The myth is that the crash was caused by the implosion of investment banks which are not covered by Glass Steagall. THIS IS A LIE. Citigroup ultimately received $45 billion in taxpayer bailout, $340 billion in asset guarantees, and $2 trillion in near-zero percent Federal Reserve loans.

Federal Reserve Chair Bernanke testified in 2009 at the Financial Crisis Inquiry Commission that “by October 2008, 12 of the 13 most important banks were “at risk of immediate failure,” and were bailed out.

6. Today the U.S. banking system has $255 trillion in derivatives on the books of federally insured banks. A new bubble is the $14 trillion corporate debt, larger than the subprime mortgage bubble of 2007. Debt-to-Earnings ratios are at near record highs; corporate defaults are building to 2009 levels.

7. With Glass-Steagall restrictions removed, the banking system has heavily consolidated, eliminating hundreds of smaller banks, and “investment” has been increasingly restricted to speculation, including banks buying their own stock. The re-imposition of Glass-Steagall separation of commercial and investment banking, would again encourage commercial banks to invest in the real economy, as that would be the only way they could make their profits. Meanwhile, the investment banks would get no support from the government for their risky securities. Many would fail, as they would deserve to do.

2017 State Legislative Memorials for Glass-Steagall

Note: 10 of these 17 resolutions—as of June 1—include Glass-Steagall as the first step in a four-step recovery plan. Some of them have died in committee, but the text and record of the sponsors is of interest to those active in the fight. URLs are not available for all the bills. The states are listed in alphabetical order:

Alabama: HR60, Industrial Recovery Act. Be it Resolved by the House of Representatives of the Legislature of Alabama, That we hereby urge the United States Congress to immediately adopt an “American Recovery” program as follows: 1. Restore the provisions of the Glass-Steagall Act; 2. Return to a national banking and a federal credit system; 3. Use the federal credit system to build a modern network of high speed rail, power generating systems, including nuclear power, water projects, such as those urgently needed in the Southwest and other critical transportation, energy and infrastructure programs, and 4. Launch an immediate rebuild of our space program to explore the solar system and inspire future generations, and a program to develop nuclear fusion, to finally solve the energy needs of the nation and the planet.
Delaware: House Concurrent Resolution No. 8. Urging the President and the Congress of the United States to enact legislation reinstating the separation of commercial and investment banking.
Illinois: SR 55 (2016), Industrial Recovery Act. Resolved, by the Senate of the One-Hundredth General Assembly of the State of Illinois, that we urge the United States Congress to immediately adopt the “American Recovery” program by doing the following: 1) Restore the provisions of the Glass-Steagall Act, … 2) Return to a national banking and a federal credit system, modeled on the principles of Alexander Hamilton’s First Bank of the United States, … 3) Use the federal credit system to build a Modern network of high speed rail, power generating systems, water projects, such as those urgently needed… 4) Launch a program to rebuild our space program to put a permanent manned colony on the Moon…
Iowa: Senate Resolution No. 1. A Resolution urging the United States Congress and the president of the United States to enact legislation that would reinstate the separation of commercial and investment banking functions previously in effect under the federal Glass-Steagall Act.
Maryland: HJ0004. Reinstatement of the Separation of Commercial and Investment Banking Functions
Michigan: S49, Industrial Recovery Act. A resolution to urge the President and Congress of the United States to pursue a long-term, durable infrastructure- and industrial-driven economic recovery plan.
Minnesota: HF 1075;(Senate Bill) SF934.  Be It Resolved by the Legislature of the State of Minnesota that it urges the Congress to immediately adopt the “American Recovery” program by doing the following: 1) Restore the provisions of the Glass-Steagall Act…, 2) Return to national banking and a federal credit system…, 3) Use the federal credit system to build a Modern network of high speed rail…, and 4) Launch a program to rebuild our space program…
Mississippi: House Resolution 17. A resolution urging Congress to immediately enact the “American Economic Recovery” Program.
New Mexico: Senate Memorial 25. Requesting the New Mexico Congressional delegation in Washington, D.C. support the adoption of an American Economic Recovery policy to support efforts to restore the provisions of the Glass-Steagall Act…
New York State: K00369. A resolution to urge the entire new York State Congressional delegation to support and enact in Congress the legislation that would reinstate Glass-Steagall… 
North Carolina: House Joint Resolution 391. A Joint Resolution urging Congress to enact without delay an “American Economic Recovery Program” with suggested parameters and specifics in order to provide mechanisms to restore the economic health and well-being of America and its citizens.
Ohio: HCR No. 7 To urge the United States Congress and the President of the United States to enact legislation that would reinstate the separation of commercial and investment banking function that was in effect under the Glass-Steagall Act.
SCR No. 7 – matching bill in the Senate
Pennsylvania: HR 268. A Resolution urging the Congress of the United States to support efforts to reinstate the separation of commercial and investment banking functions previously in effect under the Glass-Steagall Act and support efforts to return to national banking policies to repair our nation’s infrastructure.
Rhode Island: SR263. House Resolution 5558. Both call for Congress to adopt “an American Economic Recovery” program…
South Carolina: H3344. To memorialize the Congress of the United States to enact without delay an “American Economic Recovery Program” with suggested parameters and specifics to in order to provide mechanisms to restore the economic health and well-being of America and its citizens.
Virginia: HJR642. Memorializing the Congress of the United States to enact legislation to reinstate the separation of commercial and investment banking functions that was in effect under the Glass-Steagall Act.
Washington State: Senate Joint Memorial 8002. Your Memorialists respectfully pray that Congress enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall Act…
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