Economic Collapse, July 1930

Prohibition caused Depression

Chicago Tribune 17NOV1930

The stock market crash of 1929 marked the realization that prohibition laws would soon destroy the US economy and banking system. By mid-1930, financial collapse was so well underway that the old prohibition enforcement districts were redrawn to conform closely to existing Federal Reserve districts. This change took effect on July 1, 1930, the month Cook County Assessor Gene G. Oliver was convicted of tax evasion and sentenced to 18 months in prison and fined $12,500 by Judge Woodward in Chicago.

Here is a breakdown of the districts.

The transfer of the prohibition enforcement activity from the Treasury Department to the Department of Justice under the Williamson Act took place on July 1, 1930, under the Bureau of Industrial Alcohol in the Treasury Department, retained the duty of issuing permits for the manufacture and use of alcohol and other intoxicating liquor for non-beverage purposes, and of supervising the activities of the permitees.  The 27 prohibition districts hitherto existing were rearranged into 12 new districts, with boundaries corresponding in some measure with the 10 judicial circuits.  (Misdirection! The districts were a nearly perfect fit to the Federal Reserve Districts–tr)

1. Boston: Maine, N. Hampshire, Vermont, Massachusetts, R. Island, Connecticut
2. New York: New York State and Porto Rico
3. Philadelphia: New Jersey; Pennsylvania, Delaware
4. Richmond: Maryland, Virginia, West Virginia, N. Carolina, South Carolina, DC.
5. New Orleans: Alabama, Georgia, Florida, Louisiana, Mississippi, Texas.
6. Cincinnati: Michigan, Ohio, Kentucky, Tennessee
7. Chicago: Illinois, Indiana, Wisconsin.
8. St. Paul: Minnesota, N. Dakota, S. Dakota, Iowa, Nebraska.
9. Kansas City: Arkansas, Kansas, Missouri, Oklahoma.
10. Denver: Arizona, Colorado, N. Mexico, Utah, Wyoming.
11. San Francisco: California, Nevada, Hawaii.
12. Seattle: Idaho, Montana, Oregon, Washington, Alaska.
Source: NY World Almanac 1931 p 36

That same day, the Bank of Winter Park, Florida, closed its doors. As prohibition asset-forfeiture confiscations continued, many other banks would close. The Liberal Party, formed in 1930, published a plank in 1931 calling for the repeal of blue laws and the Prohibition Amendment. The Democratic Party copied this plank in the summer of 1932–in the middle of a major banking panic–and went on to win the election in November. That is s demonstration of the law-changing clout of libertarian party spoiler votes. By the time Franklin D. Roosevelt was sworn in as president in March of 1933, every bank in the nation had already closed its doors.

If you are disappointed not to have learned this in school, join the crowd. But be sure to choose a financial and accounting translator who won’t overlook things and cause added disappointment.

1931 Moratorium on Brains

Christian altruists

Herbert Hoover in 1938 meeting with results of 1931 Moratorium

In 1931 Republican President Herbert Hoover and drug czar Harry Anslinger were pressuring Germany into additional curbs on heroin exportation while semisocialist Germany’s victims were demanding reparations payments under the Treaty of Versailles (which the US did not ratify, but which still involved $10 trillion in gold).

Hoover’s error is relevant to ongoing efforts to extricate These States from the Vichy Paris carbon tax extortion the Obama Administration tried to smuggle past the Senate. Already there is a severe shortage of nuclear power plants in These States–which is the whole reason engineers are forced to rely on coal–which is less clean and less safe by comparison. The Paris Capitulation can only benefit Communist China at the expense of the relatively free world. 

As 1931 stupefacient drug prohibition negotiations proceeded, banks in Germany and Austria failed. Depositors were removing their money because they knew the influx of dope money would stop, but reparations claims were persistent. Hoover’s brilliant idea was to let France, Britain, Italy, Russia and others “temporarily” default on war loans payable to the USA. In exchange, they would let Christian altruist Germany default on reparations payments owed to the USA. That was the lose-lose theory of coercive prohibitionism. What happened under the Moratorium was that Germany kept exporting addictive poisons and using the money to build up the Steel Helmets, build submarines and battleships and entrench the National Socialist party. Immediately all of Europe began defaulting on war debts, and even commercial loans of private US capital.

socialism is socialism

Mystical collectivists elect Nazis, thanks to Hoover

Ayn Rand was a Hollywood writer and reader hanging out with pre-code movie stars like Barbara Stanwyck, watching Three on a Match (with husband Frank O’Connor), Scarface, Night Nurse (bootlegger hero), Dinner at Eight, The Secret Six and old Alma Rubens movies. At age 24, newlywed immigrant Ayn Rand was certainly aware of Russian and German anti-jewish fanaticism. All of America was painfully aware of Hoover’s solicitous concern for The Accursed Hun.

The smart Moratorium in Atlas Shrugged is Hank Rearden voluntarily offering rail on credit to Taggart Transcontinental. The dumb Moratorium in 1931 was Hoover helping Hitler’s backers arm and control Germany’s government. To this Ayn Rand drew too vague an analogy with the Moratorium on Brains in Atlas. Nor did she clarify the connection, possibly for fear of weakening Barry Goldwater’s GOP while the Soviet still existed. Dwight Eisenhower was, after all, the conquering Republican president of both These States and the Government of Occupation, and Richard Nixon was his vice-president and anticommunist Wingman when Atlas Shrugged was finally published. But the book was already in its tenth chapter in 1947, when Christian National Socialists were denying ever having so much as suspected that Henry Ford’s Fuehrer’s promise to “extirpate” jewish egoism in Mein Kampf was anything but a joke. That was the year Rand composed the Non-Aggression Pledge. That tersely-worded individual decision established a modern ethical position consistent with the era of mature nuclear physics.

I also produce articles in Portuguese, using Brazilian historical sources at http://www.faloingles.com or http://www.expatriotas.blogspot.com

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.

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.

Need a financial translation? Visit BrazilianTranslated.com

 

Dry Presidents

When Hoover was still president

Economic Results of Republican Prohibition Policies

Republican presidents Rutherford Hayes (1877-81), Benjamin Harrison (1889-93) and Herbert Hoover had three things in common: none drank alcohol, all were intensely and mystically religious, all presided major depressions–much like the one that began in 2007. Donald Trump never drinks or gets high either, but endorses all of the faith-based GOP policies that lead to economic collapse, market crashes, bankruptcies, recession and unemployment.

Rutherford Hayes, husband of Lemonade Lucy elected in a recession, returned control of the South to the prohibitionist Ku-Klux Klan, then signed a treaty drastically curtailing Chinese immigration. His wife banned all alcoholic beverages from ALL government functions.

Benjamin Harrison was, like George Bush Jr., the dynastic son of a US president. After defeating sitting president Grover Cleveland, Harrison signed the inflationary Silver Purchase Act that used the US mints to subsidize Western mining corporations. Harrison also signed the Antitrust Act, and abetted a coup to topple the Hawaiian government. The accelerating economic panic strengthened the looter People’s Party (pushing for a Communist Manifesto income tax) which received nearly 9% of the vote and 4 seats in the House. A high tariff on legal opium had created a smuggling industry by rail down from godless Canada. That avenue Harrison pinched off a month before the March 4 inauguration following Grover Cleveland’s  second election victory. This sudden regulatory change exacerbated the financial tumult of the times, and the People’s party pushed through an income tax neither entrenched party wanted. This deepened the depression until the Supreme Court, in desperation, struck down the parasitical monster.  Voters then struck down the parasitical William Jennings Bryan, who also despised beer and stumped for tee-totalitarianism.

Herbert Hoover’s Chinese interpreter had to surreptitiously drink all the liquor their hosts offered the mining engineer. This was back when the martial artist Boxer Rebellion sought to evict the foreign devils and their heroin from the Celestial Empire. Hoover promised in his inaugural speech was a “consecration under God…through the guidance of Almighty Providence”. “We are steadily building a new race,” promised the new president, nine years after Adolf Hitler endorsed “a Positive Christianity” and five years after Mein Kampf declared that positive Christianity the embodiment of ethical altruism. Hoover decried “disregard and disobedience of law” just 24 hours after mandatory minimum mystics in Congress made a 12-pack of light beer a federal felony with a five-year prison term and a fine equivalent to $110,000 in 1996 dollars. Asset forfeiture, instituted in 1932 and enforced by Hoover’s Executive Order using income tax inspection as a prohibition enforcement mechanism, completely shut down the entire national banking system BEFORE Franklin Roosevelt’s inauguration. Hoover’s election was the last Republican victory for 24 years, during which time God’s Own Prohibitionists struggled to erase all records linking their policies to the financial ruin of the nation while Christian National Socialists were speedily tried and hanged in Nuremberg. In fact, the first use of simultaneous interpreters was precisely to speed up the trials and execution of Nazi war criminals.

Jimmy Carter banned most alcoholic beverages from the White House and kept all recreational drugs illegal. Good luck getting the Dems to nominate another faith-addled mystic. Which brings us to the current Republican nominee, the one, the Dilbert cartoonist assures us, “reportedly never had a drink, an illegal drug, or a cigarette.” George Waffen Bush invited faith-based organizations to wax fat and fanatical on federal funding through the White House Office of Faith-Based and Community Initiatives. These transfer payments from taxpayers to unproductive hands were preserved and expanded to include Mohammedan faith-based organizations by Democratic President Barak Obama. Obama also firmly enforces the criminalization of victimless enjoyment of cannabis, including asset-forfeiture confiscation of homes, property and bank accounts. Obama’s likely successor (favored by bookies at 3 to 1 odds to win in the Electoral College) Mrs. Clinton also promises to bleed tax dollars for asset forfeiture and toward the coffers of collectivised lobbyists who want men with guns sent out to arrest doctors or kill young people over vegetable matter and pregnancy prophylaxis pills. That is the situation today in a prohibitionist global depression that began in 2007.

Please consider making a donation to a Libertarian Party Candidate near you. Every libertarian spoiler vote is worth 6 to 36 votes wasted on tax-and-spend looter prohibitionists.

 

Then and now, asset forfeiture crashes

1987DJIAAccording to Ronald Reagan, on Thursday, September 11, 1986, lunch with VP George H.W. Bush was followed by a lengthy cabinet meeting over proposed prohibitionist legislation.

Those were the heady days of “Just Say No,” when the Soviet Union was going broke and the Reagan administration was looking for ways to cut off all sources of income for the communist empire. The 9/11 drug bill in question contained items like using the military to invade other countries to enforce prohibition, an extra hundred million dollars to hire a drug army, Federal funds for state prisons, and “introduction of illegally obtained evidence at criminal trials in cases where a police officer acting in good faith makes an error in a warrantless search situation” … “forfeiture of substitute assets“,  “drug tests for all U.S. government employees in “sensitive” positions” and so on.  Reagan signed the resulting bill and called it a “National Crusade.” The way these laws are written, they only take effect a year after they are signed. You wouldn’t want cause and effect close enough together to draw attention to the financial charts.

1932banksuspensionsThe same sort of thing had been happening 55 years earlier, Herbert Hoover was president, beer was a major felony, several large banks in New York City had been involved in financing illegal alcohol and drugs, and Ronald Reagan had just turned 20.

Pres. Wilson’s son-in-law, William McAdoo, suggested that Congress pass a law confiscating all money owned by drug and alcohol operators. Pres. Hoover had already more than doubled the number of convicts in prison for victimless crimes. Money the government didn’t have was being appropriated for building new prisons and hiring hordes of agents an prosecutors.

In June 1932 the Senate passed the revenue act containing the asset forfeiture provisions, along with major tax hikes. Hoover lost the election in November, but would still be president until March 4, 1933. In the meantime banks for closing right and left because citizens, fearful of asset forfeiture confiscations, we’re removing all of their deposits, thereby contracting the amount of available credit. Tax revenue fell by nearly half before anyone had ever heard of the Laffer curve. Stockbrokers were only making money by selling short. Huge bootlegging and narcotics trials of wealthy and important defendants from arrests made back in 1928-1932 were running out of delaying tactics.

GOPNSDAPFinally, on December 13, 1932, President Hoover signed executive order 5970 –Inspection of Income Tax Returns–which allowed States to look at Federal income tax forms filed by corporations within their borders.

This was done quietly, with no fanfare in the newspapers. Few even realized what had happened until Hoover’s press conference of January 20 subtly spilling the beans. This realization dawned ten days before Hitler was named Chancellor of the same German Reich Hoover had nurtured and protected by his moratorium on war debt collections (the Moratorium on Brains). The House promptly cut off all funding for wiretaps and entrapment buying. Corporations began withdrawing money from banks, and over the course of the following month every single bank in the United States shut down even before Franklin D Roosevelt was sworn in to become President for Life and declare a “holiday,” complete with fines, imprisonment and forfeiture language. Religious conservatives have since that time pronounced the word “liberal” (in favor of repealing prohibition) the way their German counterparts pronounced the words “liberal” and “Jewish” (meaning laissez-faire).  In the rest of the English-speaking world, liberal still means the same thing that it meant–-even to religious conservatives–-in America before 1932.

Stay tuned for how these events relate to the Crash of 2007-8 and the ensuing Depression.