The Underground Economy

callrate03_1929

In the absence of economic freedom, the visible economy rests upon the foundations of an underground economy.

Chapter 44

Call Money Rates

            It was against this background that call money rates jumped to 12% during the first week of March. This happened after Dr. Kenneth Phillips signed an affidavit stating that his patient Al Capone was too ill to answer a March 6 grand jury summons for questioning on January’s Chicago Heights raids. That same day, Arnold Rothstein’s old bodyguard, Thomas “Fatty” Walsh was killed at the Miami Biltmore.[1] Rothstein’s stockbroker friend George Graham Rice, already on trial since January for stock fraud was indicted March 8 for income tax evasion—for which his attorney, former judge Rockwood, was already headed for prison.[2]

President Hoover unexpectedly announced that his planned Commission on Law Enforcement would look at all laws, not just prohibition of narcotics and alcohol.[3] President Hoover enjoyed lunch with Texas’ driest Senator, Morris Sheppard. Also invited was New York Representative Hamilton Fish Jr.—perhaps the most active pusher for Draconian narcotics legislation.

Call rates remained stable at 6% as Hoover announced March 12 that no further oil leases on government land would be forthcoming in the aftermath of the Teapot Dome scandal. This was the day Al Capone had been rescheduled to appear before the grand jury and didn’t.[4] Then a former Ohio State Treasurer was convicted March 13 of conspiracy to bribe a federal officer. Investigation into the murder of Rothstein associate Thomas “Fatty” Walsh, continued, and Rothstein’s good buddy Sidney Stajer was finally true-billed on a narcotics violation. The Stajer arrest had been kept out of the newspapers for eight months, and even now newspapers resorted to misspelling his name. Brewer John J. Dunn, and four others were indicted for income tax evasion, and call rates resumed their steady climb through March 19.[5]

After a meeting with Attorney General William Mitchell, Hoover assured the press he did not plan any dramatic prohibition raids, but did intend to work inexorably “week by week, year by year, as rapidly as possible, to build up the enforcement of the laws of the United States, whether they relate to prohibition or narcotics or any other subject.” Newsmen who had heard the President solemnly assure farm representatives back in January that the special session would be called for the benefit of agriculture, were puzzled when Mr. Hoover added that it was “for this purpose in large degree that I called the extra session of Congress.” Prohibition and narcotics laws were enforced by US Treasury agents, and “any other subject” simply had to include the income tax law.[6]

By now there was a dawning suspicion that by “certain agricultural commodities” Hoover really meant sugar and possibly opium. As Secretary of Commerce Hoover was paid to monitor the recent increases in the domestic corn and beet sugar markets. Of course the former Food Czar of wartime prohibition could certainly guess the purpose of all that yeast. Hoover’s strategy appears to have been twofold: one side of the pincer movement was to enact as prohibitive a tariff on sugar as possible. With supplies from abroad thus curtailed, the job of cracking down on domestic sugar and yeast producers—throttling off moonshine liquor at the source—would be easier. All of this depended on Congress promptly and obediently passing the tariff revisions to Hoover’s specifications. Hoover repeated his intentions in his April 16 message to Congress, again with no hint that he was concerned with the sugar rates and little else.[7]

Hoover had another meeting March 19—this one with Commissioner Doran and Levi G. Nutt of the narcotics section. Article 22 of the League’s Geneva Opium Convention of 1925 required treaty nations to turn in statistics on narcotic and drug production, manufactures, consumption and stocks before the end of March each year. It is a safe bet this information was studied by major participants in narcotics production, traffic and enforcement.

The following day brought the filing of opinions in the Illinois Alcohol case, along with the issuance of 33 subpoenas. That same day Al Capone finally appeared before the federal grand jury at Chicago eight days late. The Federal Reserve Board—by now caught between hostile Congressmen and increasing brokers’ loans—was also in a meeting nervously fretted over by brokers and bankers. Just as nervously fretted over were the additional 17 subpoenas issued March 21 and 22 in connection with the Illinois Alcohol case, bringing the total to 51 in three days.[8] But other meetings on the high seas and in an Aurora, Illinois home carried more explosive portent.

[1] (Bergreen 1994 325) (CT 3/22/30 2)

[2] (NYT 3/3/29 19; 3/8/29 14:4; 3/26/29 33)

[3] (Hoover 1930 1976 639)

[4] (Myers & Newton 1936, 375-376) (Schoenberg 1992 223)

[5] (NYT 3/12/29 31; 3/15/29 12)

[6] (Hoover 1929 1974 732, 36, 5, 77)

[7] (WSJ 1/21/29) (Hoover 1929 1974 75, 77)

[8] (Docket 11070 4)

Word Count Professional–BUYER BEWARE!

How do you report a mislabelled product and obtain a refund from iTunes?

 That is the crux of my question. The App Store offered a mislabeled app, which I deleted and reported immediately, along with a notice that I expect a refund.

Instead I got a notice of bunko artistry, mislabelled “receipt” for a product labelled “Word Count Professional” by one “domenico castellana”

The product does not count the words in a group of documents–which is what real word count apps do. Instead, it offers to count words in some highlighted segment–something every word processor already does. How much money would you pay for an app that changes a font color? That is another thing every word processor already does, and nobody would pay a penny for such nonsense unless duped by misleading advertising.

True, the blurb “describing” the app is full of grammatical errors, but that hardly qualifies as a fair warning that the thing is useless for the intended purpose of any thing labeled “word count” software. Nor does Apple or iTunes offer to make good. Instead they provide a link to a website all in Italian–except for the product labels. There the offending product is listed right below “Tattoo & Piercing Manager.”
http://www.softwaresolution.eu/software-development-for-mac-windowsweb-application-vbaweb-design.html

I am prepared to exclude all iTunes products from my Paypal payment authorizations if that’s what it takes to neutralize what impresses me as a fraud delivery vehicle. A refund, however, woudl be more apropos. Let’s see how many other victim complaints are needed before the mislabeled piece of junk is no longer listed to the detriment of Apple’s reputation. The perps are already feeling the heat inasmuch as they now urge potential victims to download a demo before tossing money down a rathole.

Send a note if you have had a similar experience.

If you liked this post you might want to join the Braziliantranslators maillist…

White Powder, USA, 1929

The new Republican President never touched liquor before his March, 1929 swearing-in ceremony. Indeed, nearly three decades earlier he palmed off all hospitality cordials on his Chinese interpreter, who sometimes had trouble navigating after Hoover’s visits to hosts.

Peter Lorre movie poster

Chapter 43

White Powder

In New York there was something of a stir when, Superintendent of Banks Warder suddenly resigned his post and was replaced by Joseph A. Broderick. Awkward questions were being raised before a grand jury in connection with the handsome sums Mr. Warder had been receiving quite apart from his salary as a public official. So awkward were the questions and vexing the official secrecy surrounding Mr. Warder’s beneficiary, the failed City Trust bank, that Manufacturers Trust cancelled its planned takeover of the institution. City Trust’s depositors had no such easy way out.[1]

Two federal agents paid a discreet visit to the Hubinger corn sugar plant in Keokuk, Iowa, on February 23, but left with the impression that the plant owners had not grasped the seriousness of the situation. The presence of federal agents at the Hubinger corn sugar factory was not reported, but the sentencing of the former mayor of Herrin to two years at Leavenworth for alcohol was widely covered. On Capitol Hill, the Jones Five and Ten bill passed the House February 28 and became law March 3. Herbert Hoover was inaugurated the following day promising vigorous enforcement of every such law.[2]

The U.S. Embassy in London continued to assemble newspaper clippings on the Naarden narcotics conspiracy and send them to the State Department, while the London Times praised the U.S. government for helping to stamp out opium traffic even as the League of Nations rushed in to claim it’s share of the credit.[3] The grand jury probe ground on and the House voted to investigate federal judge Winslow—with the Senate first horning in on the act, then blocking the investigation entirely.

On the Teapot Dome front, Edward Lawrence Doheney Jr.—the oilman’s son who had allegedly delivered $100,000 to Interior Secretary Albert Fall—was murdered by his personal secretary who immediately shot himself February 16.[4] On the income tax front, beleaguered Staten Island brewer J.J. Dunne was indicted for income tax evasion and former judge Nash Rockwood pled guilty to the same charge.[5] Back of all this lurked the latest round of WWI reparations talks. Germany now sought to blackmail American investors by holding private loans hostage to a reduction in reparations payments awarded to the European Allies.[6]

Excerpted by permission from Prohibition and the Crash by J Henry Phillips

[1] (NY World Almanac 1930 98, 99) (NYT 3/2/29 7)

[2] (Lawrence 1929 97; 119) (Docket 11070 4) (NY World Almanac 1930 100; 1931 358) (Hoover 1929 1974 2-10)

[3] (Taylor 1969 231f) (NYT 2/19/29 2:1; 2/21/29 12)

[4] (NY World Almanac 1930 99)

[5] (NYT 2/21/29 2; 3/3/29 9; 2/27/29 48, 25:2; 3/26/29 33)

[6] (NYT 2/13/29 1, 6; 2/22/29 1)

The Five and Ten Law, March, 1929

Light beer (and even sauerkraut) became a major federal felony 24 hours before Herbert Hoover, a lifelong teetotaler, placed his hand upon a religious tome and became President. 

Chapter 42

The Five and Ten

 Senator Wesley Livsey Jones of Washington—possibly the most fanatical prohibitionist in the upper Chamber—again pressed for his year-old “increased penalties” plan on February 19.[1] “Be it enacted,” he proposed in his bill, “That wherever a penalty or penalties are prescribed in criminal prosecution by the National Prohibition Act, as amended and supplemented, for the illegal manufacture, sale, transportation, importation or exportation of intoxicating liquor, as defined by Section 1, Title II of the National Prohibition Act, the penalty imposed for each such offense shall be a fine not to exceed $10,000 or imprisonment not to exceed five years, or both.”[2] The national media dubbed it the Five & Ten, but the Chicago Tribune preferred to call it the Jones Law.

The gauntlet was thrown. Drys, championed by Senator William A. Borah of Idaho, hailed it as essential to maintaining a constitutional form of government. Wets, led by Senator James A. Reed of Missouri, classed it as improper, unjust and cruel, and on raged the debate. The Tribune compared it to the Fugitive Slave Law, but the Senate passed it anyway, albeit with the added proviso that “it is the intent of Congress that the court, in imposing sentence hereunder, should discriminate between casual or slight violations and habitual sales of intoxicating liquor, or attempts to commercialize violations of the law.”[3]

The House passed it as it stood, and President Calvin Coolidge signed it into law just twenty-four hours before an optimistic Herbert Hoover was to blithely take an oath to enforce it. But Hoover wouldn’t let it go at that. To this lynch mob atmosphere of hysteria he added: “Of the undoubted abuses which have grown up under the 18th amendment, part are due to (…) the failure of some States to accept their share of the responsibility for concurrent enforcement and to the failure of many State and local officials to accept the obligation under their oath of office zealously to enforce the laws. With the failures from these many causes has come a dangerous expansion in the criminal elements who have found enlarged opportunities for dealing in illegal liquor. (…) I have been selected by you to execute and enforce the laws of the country. (…) To those of criminal mind there can be no appeal but vigorous enforcement of the law. Fortunately they are but a small percentage of our people. Their activities must be stopped.”[4]

A delegation from the Women’s Christian Temperance Union was photographed on the White House lawn. Herbert Hoover had lunch with Assistant Attorney General Mabel Walker Willebrandt, then met with Senator Morris Sheppard of corn-producing Texas, author of the 18th Amendment. Time called Hoover the “Dry Hope,” and those first few days in office seemed to confirm exactly that. Bootleggers took no comfort whatsoever, and some of them began to wonder whether they’d overstayed the market.

An excerpt from Prohibition and the Crash, by JHenryPhillips.com

[1] (NYT 3/24/29 27)

[2] (Time Capsule 3/4/29 66)

[3] (CT 2/19/29 1, 3, 2/21/29 12)

[4] (Hoover 1929 1974 2-10)

Useless Drones Claim to Represent Science Beehive–as reported by Ron

This week the AMS (American Meteorological Society) sent a letter chastising Scott Pruitt for keeping an open mind on the question of man-made global warming/climate change. The letter (here) referred to the AMS institutional statement on the matter, and summarized their position in this paragraph: In reality, the world’s seven billion people are causing climate […]

via The Weathermen vs. EPA’s Scott Pruitt — Science Matters

Avoiding Mac Sierra OS

Remember when Microsoft released Vista? When was the last time you saw them brag about that?

Apple’s Sierra is as miserable a turkey as Vista or Windows 8 or 10. But there is a way to avoid the pitfall.
Regular Mac users can upgrade from the cat family OSes (Mountain Lion, Snow Leopard, etc) to Yosemite by going to Purchased items in the Apple Store. I discovered this only after Sierra ruined my system, and am studying methods for rolling back the install and starting fresh with Yosemite.  (Yosemite includes functional multi-language speech-to-text dictation features).

Expect to see about as many people looking to roll back to El Capitan or Yosemite as there were trying to remove Vista and install Windows XP.  These are the sorts of releases that make people appreciate Linux…

Prohibition and the Crash–guest appearance

The following post The Drug Problems Jeff Sessions Complains About Are Caused By Prohibition appeared first on A Libertarian Future at A Libertarian Future – Spreading a Libertarian message across the internet.. Many libertarians were upset with Rand Paul for voting to confirm Jeff Sessions because the Attorney General has an enormous amount of leeway…

via The Drug Problems Jeff Sessions Complains About Are Caused By Prohibition — A Libertarian Future