A Letter To Bankers From An American System Banker
June 15, 2011 • 4:06PM

The following letter was written by Mike Sperry, a retired chief credit officer at several banks over his career, addressed to American bankers everywhere, to correct the damage they have allowed to be imposed on the American banking system, to restore Glass Steagall and the American System of banking. It is being mailed to contacts in the banking community together with a fact sheet on the current status of sponsors and supporters of Glass-Steagall restoration.

Community Bankers Main Street Every City,
And State United States of America

Dear fellow bankers,

I retired in 2008, after a 35 year career in commercial banking. Ive watched in horror at whats happened to the industry since then, and I appeal to you now to join in the fight to save it.

Our banking system is in trouble. Easy money has unleashed a hyperinflationary spiral that is debasing our currency, and the global monetary system is teetering on the edge of collapse. For those of us who have not forgotten the nature of our role as bankers, the solution to this dilemma is, or should be, self-evident. But to marshal the level of necessary support for the obvious remedy, we must speak out. Bankers are supposed to understand how our banking system works, and the current exigency now compels us to bring our influence to bear.

Have we forgotten that money is only a tool for facilitating the realization of our nations goals? Has it escaped our collective memory that we are the ones who create money? Have we lost sight of the fact that our duty is to ensure that the money we create facilitates healthy commerce and advances the public weal?

By reason of our silenceour failure to speak out against those who pose as bankers but are, in reality, mere money-changersthe answer to these questions would appear to be yes. We seem to have lost our moorings, our grounding in those principles that once made banking a noble profession. It is time to reacquaint ourselves with the ideals bequeathed to us by the designers of our banking system. Those patriots created a new kind of banking system, a system consciously designed to be fitting and proper for this nation.

A nation whose purpose was to promote the general welfare of all of its citizens, and secure the blessings of liberty for future generations thereof, required a banking system unlike those of nations not likewise motivated. Our banking system differs from all others for the same reason, and to the same extent, that our economic system differs from those of other nations. Our banking and economic systems are intertwined. Indeed, the function of the formerthe very justification for its designis to advance the latter. So it is no coincidence that the corruption of our banking system was followed by the worst decline in our economy since the so-called great depression.

It follows that the first step on the road to economic recovery is to fix our banking system. It must be reoriented, back to the pursuit of the ends for which it was created. And to bring about this transformation we must re-enact the Glass-Steagall Act.

This 1933 legislation was an integral component of FDRs program to rebuild the economy. Separating commercial banks from other types of financial institutions re-established government control over the nations currency, the value of which it is constitutionally mandated to regulate. It is the loss of that control which has now brought our economy to its knees, once again. Bailing out the large investment banks, which are banks in name only, is an attempt to save the speculators at the expense of the general public. But, as is now obvious, that strategy is doomed to fail.

The oceans of money, manufactured by our government, have only served to temporarily sustain the illusion that the real value of paper assets spawned by those copious utterances even vaguely resembles their stated value. The value of derivatives, asset backed securities, options, and kindred instruments crafted by the pseudo-banks on Wall Street are, like the fabled emperors new clothes, real only in the eyes of those whofor lack of knowledge or fear of the alternativehave opted to delude themselves. We do not have to rescue these institutions from the consequences of their folly, in order to save the banking system. We only have to separate real banking from the casino-gambling, Ponzi-scheming, money-changing fiasco that is now fast approaching its inevitable and just end.

As commercial bankers who understand the difference between Wall Street banking and Main Street banking, it is our moral and patriotic duty to support the proposed legislation now in Congress that would re-enact the Glass-Steagall law. The bill, HR 1489, has bi-partisan sponsorship by fifteen Members of Congress thus far. I urge you to join me in supporting it.

Sincerely yours,

Michael W. Sperry Commercial Banker (Retired)