There were two significant components to the economic recovery of 1923. One was nullification of prohibition law enforcement, when dry killers learned it was better to accept bribes than take return fire. The increase in U.S. hop production is proof of increased demand for the precursor plant buds used in brewing Beelzebub’s brewski.
The other component was the exemption of stock dividends from the income tax Amendment “we” copied out of Karl Marx’s 1848 Manifesto. Page 255 of records of the 1st session of the 68th Congress Revenue Act of 1924, item (f) in Section 201, Distributions by Corporations, begins with “A stock dividend shall not be subject to tax,” modified by hairsplitting garble about special cases.(link) This was the most important line in the Andrew Mellon tax code. So successful was it–until Mabel Willebrandt got nine old men to quash the 4th Amendment then tax bootleg and black market drug profits–that the 1926 Revenue Act simply put a period after the word “…tax.”(link)
Stock dividends–pumped up in value by illegal profit investments–became America’s private retirement system. Private, that is, until the Hoover Administration used the tax code as a gatling gun against the economy in efforts to coercively wean the populace of its enjoyment of individual rights and beer. You can see a consequence of this in the increasing balances of Federal Reserve member banks–up until May of 1927. That was the month Willebrandt got those nine old men to authorize confiscating the black market dollars that served as seed capital for major U.S. industries. This development is also key to understanding the crucial importance of call money markets before Willebrandt’s serialized exposé on prohibition enforcement showed that resistance was futile. Today’s looter media spare no effort to keep mention of her syndicated serialized exposé elided out of the news and off of the internet.(link) (link) The Inside of Prohibition was, however, published in book form in 1930.(link)
Stocks bought on credit were paid for using their own dividends. Call loans made it possible to keep up payments or put up more margin as collateral whenever government raids froze assets and temporarily depressed stock values.(link) But by September of 1929, Willebrandt’s Supreme Court victory of 1927 had clearly become a mile-wide steamroller from which the economy could not possibly escape.(link) After Willebrandt’s serialized revelations during August of that year, it became clear to major investors that stock values could only recover after repeal of the Income Tax Amendment, the Prohibition Amendment, or both.
Find out the juicy details behind the mother of all economic collapses. Prohibition and The Crash–Cause and Effect in 1929 is available in two languages on Amazon Kindle, each at the cost of a pint of craft beer.