Income Tax, Manifesto Plank 2, 1913

incometax1913p13America’s third income tax arrived, armed and dangerous, in 1913. Here’s how it was received at the time.
Boston Evening Transcript April 15, 1913
INCOME TAX ABSURDITIES  [From the Baltimore Star Rep.]
No matter what may be the Individual attitude toward the income tax as a simple proposition, the section of the new tariff bill which embodies this employment of a war-time measure in the midst of peace is full of absurdities which, it is to be hoped, will be eliminated before the bill reaches the White House.

The requirement that employers shall withhold from employees the proportion of salaries required to be paid as income tax, and thus become responsible for their employees’ compliance with the law, is open to great objection. It infers (implies) that the employee is not himself sufficiently honest or responsible to take care of his own relation to the taxing power, and thus does serious injustice to a large class of salaried people. The man who is capable of earning as a salaried employee more than $4000 a year is usually a man of principle and responsibility, quite as capable of dealing fairly with the Government as the man who draws his income from stocks and bonds or a personal share in a business.

This human necessity of providing for the investigation of questionable returns shows how much of an invasion of private affairs this tax will allow. Its enforcement will be a source of scandal and annoyance and doubtless of much unfairness. It will encourage evasion and subterfuge and the withdrawal of funds from healthy enterprises to take advantage of the special classes of investment which are exempted. In its train will come many evils of a serious nature. It involves a more serious menace to the party assessing it than any other governmental measure in contemplation. ***

SO what was going on in the world as the US government fastened this vampire tax on citizens? 

China–desperate to rid the nation of foreign dumping of poppy sap chemicals–had completely dismantled and replaced its government in 1911, and repercussions fanned outward. Republican President Yuan called the poppy the “all-destroying weed!”  In January of 1912, an election year, Congress overrode President Taft’s veto to make it a federal felony to transport alcoholic beverages into ku-klux-dry territory (as most of the Southern states had enacted prohibition).  Corn Products Refining, flagship of The Glucose Trust–doing for America’s home distillation what the British East India Company did for opium addicts in China–was named in a criminal information in an Illinois district court. A ban on “foreign” alcohol provided protection from competition for corn sugar, the ethanol precursor chemical.

Persia, on signing the Hague Opium Convention, signed with reservations about helping to enforce Chinese opium prohibition. This growing Hague Convention was a direct threat to France, Great Britain, and to the Prussia-Austria-Germany axis refining morphine from opium produced in the Balkans. That entire region was already breaking out in scattered warfare–and a naval arms race between Germany and England gained momentum. Montenegro declared war on the opium-producing Ottoman Empire in the fall, so a global opium war became inevitable. In 1912 an assassin tried to shoot the King of Italy, and another shot and wounded former President Theodore Roosevelt. These things were almost routine.

George Orwell’s father, Richard Walmesley Blair retired to the safety of England after earning promotion to Sub-Deputy Opium Agent, first grade. England had given in to Pressure for the Hague Opium Convention, leaving Germany as the recalcitrant holdout. Germany also manufactured a stimulant, cocaine, which Americans–especially William Jennings Bryan–feared (and Europeans craved) as some sort of sex drug liable to drive down the price of coffee. German pharmaceutical companies were dismayed when–by British suggestion–cocaine was bundled into the Hague Convention as though it had anything in common with opium. Italy pressed for and got the inclusion of Indian hemp drugs. Hemp would only be effectively banned in These States after the legalization of heavily taxed beer and liquor failed to generate enough revenue to satiate the greed of politicians.

Such was the atmosphere as Woodrow Wilson–like T.R. a friend of prohibitionism, also opposed to “private and selfish purposes”–became President. Congress prepared to implement another income tax lifted straight out of the Communist Manifesto of 1848 in anticipation of a global opium war it then knew to be inevitable and imminent.

Get the details in Prohibition and The Crash, on Amazon Kindle.

ProhicrashAmazon

Prohibition and The Crash, on Amazon Kindle

If you favor legalization of safer enjoyable drugs as harm-reducing competition to weaken the black market in addictive narcotics, consider volunteering or making a donation to your friendly neighborhood Libertarian Party.  The LP is as old today as JFK was when gunned down, and our votes change bad laws.

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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)

Prohibition and the Crash–guest appearance

Rand Paul voted to confirm Jeff Sessions

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

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.

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The Valentine’s Day Massacre

Chapter 40

The Valentine’s Day Massacre

The electoral college had barely confirmed the election of the Hoover-Curtis dry fanaticism slate voted in 1928. There were still over two weeks to go until inauguration day which, back then, was on March 4th.

valentinemassacrect29

            Radio newscasters shocked the nation with the story of the Chicago Saint Valentine’s Day massacre in which five gangsters an optician and a mechanic were machine-gunned against a brick wall. The drys fell upon this with whoops of joy and redoubled their lobbying efforts for passage of a draconian enforcement bill introduced a year before by Congressman Gale Hamilton Stalker and Senator Wesley Livsey Jones.[1] What disturbed Chicagoans was the economic reaction; corn dropped 1 & 1/8 cents, and bank stocks likewise fell. All 7,000 saloons, speakeasies and beer flats in the city were immediately shut down, which effectively dried up a major source of income for that convention city. The dry autocracy sprang into action and Congress was besieged with heated demands that something be done immediately to enforce prohibition. Senator Glass, as always, resumed his railing against stock market gambling.[2]

Ferrari’s City Trust depositors, by now sick and tired of obfuscation, organized to demand what New York State feared most: answers.

Investigation of narcotics trial Judge Winslow now went to a House committee, and ailing Hollywood star Alma Rubens was humiliatingly exposed as a morphine addict. As icing on the cake, one John Sergi was arrested for the 14th time and charged with running a mail-order business in heroin.[3] All these stories broke Thursday, February 17, but none were as important as the other white powder connection.

 

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

[2] (CT 2/17/29 1, III-8; 15) (WSJ 2/16/29 1) (NYT 2/17/29 1)

[3] (NYT 2/17/29 24; 2; 23)

 

 

Ayn Rand balks British

arevoltadeatlas

Atlas & the Fountainhead in Portuguese

Most Brits simply cannot Grok Ayn Rand. This is hardly surprising when you consider that Atlas Shrugged freezes the thinking of most Americans conditioned by government schools and teevee…  

Just as a host makes parasite survival possible, so a large political party can artificially extend the life of a parasitical cult or ideology. History is full of such things. The Whigs with their Tariff of Abominations permanently alienated the Colonial South, represented by The Slaveholding Democracy.

High-tariff politicians were thenceforth centered in open iron gunsights by Democratic partisans of the day. Abolitionists deserted the Whigs as ineffective wimps. Karl Marx’ altruistic communist party in Germany seized upon “graduated income tax” as a source of someone else’s substance in the midst of a depression wrought by disruption of the opium trade in China and related Indian mutinies. Because this verifiable explanation of the Great Depression of the USA in what the Disraeli called the  “hungry forties” is avoided in government schools or detoured by exaggeration of the Irish potato famine, a digression is in order.

Britain had become a colonial parasite on primitive China and India both. Defeated by the US in the wars of Independence and 1812, Cornwallis was transferred to India and the loose agglomeration of Hindu and Moslem tribes whipped into agricultural production of opium and indigo, much like the American South had been transformed by the lash into colonial cotton plantations under British rule. After China in 1837 expelled the opium traders, capital was withdrawn from US municipal bonds and other securities and poured into the opium wars. That and a bad winter, possibly exacerbated by fallout from an Icelandic volcano, made Europe fertile soil for a looter kleptocracy. Communism and socialism sounded better than looter kleptocracy and so those party denominations were ingrained by repetition.

Britain’s chief concern in the Gilded Era was the expansion of chemical slavery by exportation of morphine–an ambition lustily shared by France, Prussia, Germany and Austro-Hungary (and to a lesser extent Switzerland and Holland). But the dumping of addictive narcotics in China again broke down after the revolution of 1911 made it possible for the Chinese republic to again ban poppy drugs. In this China was abetted by the guilt-ridden Roosevelt, Taft and Wilson Administrations, through Pure Food and Drug laws and the Hague Opium Agreements detrimental to the traffic. German and Austrian morphine came from Balkan opium. As prices collapsed in the wake of interruption of the China dumping, war broke out in the region and escalated into WWI.

Britain’s most pressing concern after the Great War was how to squirm out of repaying the loans taken from American banks to throttle the Accursed Hun. The entire interwar period was one of renewed imperial parasitism on primitive colonies–and on the foolish creditors of those same morphine exporters who went to war in 1914 to evade the Hague Opium accord. This was the era in which Ayna Rosenbaum was educated in Russia, fled communism to These States in 1926, and witnessed the Crash and Depression wrought by a combination of American alcohol prohibition, prosecution of sugar and yeast companies under tax and conspiracy laws, and the squirming of European Pharmacy metropolises to evade controls on addictive poppy drugs and skip out on loan repayment and reparations collections.

To the Americans, WWI became inconvenient when Germany exported communism to Russia and that ideology toppled the Russian Empire. To save their loans, American bankers and industrialists had the Congress conscript youngsters to turn the fortunes of war in favor of the drug-peddling debtors whose notes they held.

President Warren Gamaliel Harding, a hard-drinking, drug-taking philanderer was the women voters’ choice in 1920. His exploits, retold by his love-child’s mom Nan Britton, coupled with the adventures of “missing” Los Angeles evangelist Aimee Semple McPherson, are revived in unobtrusive background splendor in the pages of Atlas Shrugged. The novel was written by that same Russian immigrant writing under her Ayn Rand pseudonym. Herbert Hoover, HL Mencken and other colorful characters are mirrored in the cast.

The history of the British Empire of that day is by contrast a sordid set of setbacks in colonial parasitism of Egypt, India, Iran, Burma… awash in cheap opium. Celebrity appearances are provided by Mahatma Gandhi (preaching non-initiation of force) and Miss Brenda Dean, debutante of London drug party scandals. George Orwell’s writings record Burmese misery and the dreary preoccupation of looter populists exploiting the baffled hunger of illiterate proletarians to curry favor with British Fascists or communist-infiltrated Labour cliques.

So OF COURSE the familiar media story chords exploited by Ayn Rand differ completely from the social milieu prevailing in the British Isles during the interwar period that framed the backdrop to Atlas Shrugged–except, perhaps, in the town of Starnesville. British intellectuals are oblivious of or baffled by the struggles of 1930 American Liberal Party liberals (not looters) against totalitarian prohibitionists. And prohibitionists are the very creatures the pub-drinking British themselves struggled against–to keep pubs open and the better to compete in narcotics export markets with France, Switzerland and Germany.

Small wonder they never brag about these things, but it goes a long way toward explaining the bovine incomprehension of Britishers confronted with American libertarian values. Like our Liberal Party forbears of 1930, American Libertarians apply the power of spoiler votes as a lever to pry parasitical hangers-on from the major parties. The Republican party is threatened by potential bleeding off of spoiler votes by declining remnants of three religious fanatic parties concerned with prohibiting sex and drugs. The Democratic party–ever the party of slavery–relies on the declining remnants of communism. The Green Party and CPUSA are reliable purveyors of “global warming” hobgoblins as justification for government suppression of industrial production in Western mixed economies. Their spoiler votes are still a dying bindweed coiling about the ankles of the Democratic Party. Do not despair… Libertarian spoiler votes increased 328% in the 2015 election, and these votes pack law-changing clout.

The threat to civilization today is religious fanaticism as pushed by the Republicans, Islamic berserker-states, communist collectivists, papal states and ku-klux entities committed to the coercion of females against their will. The libertarian party alone is for the time being relatively free of those parasites. Its platform therefore contains no promises to have the police gun down children, confiscate innocent assets, throttle industrial access to energy and purchase votes with transfer payments from producers to non-producers.

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