In the United States, the Great Depression began soon after the stock market crash of October 1929, which sent Wall Street into a panic and wiped out millions of investors. Over the next several years, consumer spending and investment dropped, causing steep declines in industrial output and rising levels of unemployment as failing companies laid off workers. By 1933, when the Great Depression reached its nadir, some 13 to 15 million Americans were unemployed and nearly half of the country’s banks had failed. The economy would not fully turn around until after 1939, when World War II kicked American industry into high gear. Writing in “The United States’ Unresolved Monetary and Political Problems”, William Bryan describes the carefully contrived market crash by the intentional failure of the Federal Reserve to aid the banks not owned by the oligarchy:
“When everything was ready, the New York financiers started calling 24 hour broker call loans. This meant that the stockbrokers and the customers had to dump their stock on the market in order to pay the loans. This naturally collapsed the stock market and brought a banking collapse all over the country because the banks not owned by the oligarchy were heavily involved in broker call claims at this time, and bank runs soon exhausted their coin and currency and they had to close. The Federal Reserve System would not come to their aid, although they were instructed under the law to maintain an elastic currency.”
The investing public, including most stock brokers and bankers, took a horrendous blow in the crash, but not the insiders. They were either out of the market or had sold “short” so that they made enormous profits as the Dow Jones plummeted. For those who knew the score, a comment by Paul Warburg had provided the warning to sell. That signal came on March 9, 1929, when the Financial Chronicle quoted Warburg as giving this sound advice:
“If orgies of unrestricted speculation are permitted to spread too far the ultimate collapse is certain … to bring about a general depression involving the whole country.”
Sharpies were later able to buy back these stocks at a ninety percent discount from their former highs. To think that the scientifically engineered Crash of 1929 was an accident or the result of stupidity defies all logic. The international bankers who promoted the inflationary policies and pushed the propaganda which pumped up the stock market represented too many generations of accumulated expertise to have blundered into “the great depression.”
Congressman Louis McFadden, Chairman of the House Banking and Currency Committee, commented:
“It [the depression] was not accidental. It was a carefully contrived occurrence… The international bankers sought to bring about a condition of despair here so that they might emerge as the rulers of us all.”
From Eustace Mullins ‘Secrets of the Federal Reserve’ (Ch.12):
The revelation of the Federal Reserve Board’s final decision to trigger the Crash of 1929 appears, amazingly enough, in The New York Times. On April 20, 1929, the Times headlined, “Federal Advisory Council Mystery Meeting in Washington. Resolutions were adopted by the council and transmitted to the board, but their purpose was closely guarded. An atmosphere of deep mystery was thrown about the proceedings both by the board and the council. Every effort was made to guard the proceedings of this extraordinary session. Evasive replies were given to newspaper correspondents.“
Only the innermost council of “The London Connection” knew that it had been decided at this “mystery meeting” to bring down the curtain on the greatest speculative boom in American history. Those in the know began to sell off all speculative stocks and put their money in government bonds. Those who were not privy to this secret information, and they included some of the wealthiest men in America, continued to hold their speculative stocks and lost everything they had.
In FDR, My Exploited Father-in-Law, Col. Curtis B. Dall, who was a broker on Wall Street at that time, writes of the Crash, “Actually it was the calculated ‘shearing’ of the public by the World Money-Powers, triggered by the planned sudden shortage of the supply of call money in the New York money market.” Overnight, the Federal Reserve System had raised the call rate to twenty percent. Unable to meet this rate, the speculators’ only alternative was to jump out of windows.
The New York Federal Reserve Bank rate, which dictated the national interest rate, went to six percent on November 1, 1929. After the investors had been bankrupted, it dropped to one and one-half percent on May 8, 1931. Congressman Wright Patman in “A Primer On Money”, says that the money supply decreased by eight billion dollars from 1929 to 1933, causing 11,630 banks of the total of 26,401 in the United States to go bankrupt and close their doors.
The Federal Reserve Board had already warned the stockholders of the Federal Reserve Banks to get out of the Market, on February 6, 1929, but it had not bothered to say anything to the rest of the people. Nobody knew what was going on except the Wall Street bankers who were running the show. Gold movements were completely unreliable. The Quarterly Journal of Economics noted that:
The question has been raised, not only in this country, but in several European countries, as to whether customs statistics record with accuracy the movements of precious metals, and, when investigation has been made, confidence in such figures has been weakened rather than strengthened. Any movement between France and England, for instance, should be recorded in each country, but such comparison shows an average yearly discrepancy of fifty million francs for France and eighty-five million francs for England. These enormous discrepancies are not accounted for.“
The Right Honorable Reginald McKenna stated that:
Study of the relations between changes in gold stock and movement in price levels shows what should be very obvious, but is by no means recognized, that the gold standard is in no sense automatic in operation. The gold standard can be, and is, usefully managed and controlled for the benefit of a small group of international traders.“*
In August 1929, the Federal Reserve Board raised the rate to six percent. The Bank of England in the next month raised its rate from five and one-half percent to six and one-half percent. Dr. Friday in the September, 1929, issue of Review of Reviews, could find no reason for the Board’s action:
“The Federal Reserve statement for August 7, 1929, shows that signs of inadequacy for autumn requirements do not exist. Gold resources are considerably more than the previous year, and gold continues to move in, to the financial embarrassment of Germany and England. The reasons for the Board’s action must be sought elsewhere. The public has been given only the hint that ‘This problem has presented difficulties because of certain peculiar conditions’. Every reason which Governor Young advanced for lowering the bank rate last year exists now. Increasing the rate means that not only is there danger of drawing gold from abroad, but imports of the yellow metal have been in progress for the last four months. To do anything to accentuate this is to take the responsibility for bringing on a world-wide credit deflation.“
Thus we find that not only was the Federal Reserve System responsible for the First World War, which it made possible by enabling the United States to finance the Allies, but its policies brought on the world-wide depression of 1929-31. Governor Adolph C. Miller stated at the Senate Investigation of the Federal Reserve Board in 1931 that:
“If we had had no Federal Reserve System, I do not think we would have had as bad a speculative situation as we had, to begin with.“
Carter Glass replied, “You have made it clear that the Federal Reserve Board provided a terrific credit expansion by these open market transactions.”
Emmanuel Goldenweiser said, “In 1928-29 the Federal Board was engaged in an attempt to restrain the rapid increase in security loans and in stock market speculation. The continuity of this policy of restraint, however, was interrupted by reduction in bill rates in the autumn of 1928 and the summer of 1929.”
Both J.P. Morgan and Kuhn, Loeb Co. had “preferred lists” of men to whom they sent advance announcements of profitable stocks. The men on these preferred lists were allowed to purchase these stocks at cost, that is, anywhere from 2 to 15 points a share less than they were sold to the public. The men on these lists were fellow bankers, prominent industrialists, powerful city politicians, national Committeemen of the Republican and Democratic Parties, and rulers of foreign countries. The men on these lists were notified of the coming crash, and sold all but so-called gilt-edged stocks, General Motors, Dupont, etc. The prices on these stocks also sank to record lows, but they came up soon afterwards. How the big bankers operated in 1929 is revealed by a Newsweek story on May 30, 1936, when a Roosevelt appointee, Ralph W. Morrison, resigned from the Federal Reserve Board:
The consensus of opinion is that the Federal Reserve Board has lost an able man. He sold his Texas utilities stock to Insull for ten million dollars, and in 1929 called a meeting and ordered his banks to close out all security loans by September 1. As a result, they rode through the depression with flying colors.“
Predictably enough, all of the big bankers rode through the depression “with flying colors.” The people who suffered were the workers and farmers who had invested their money in get-rich stocks, after the President of the United States, Calvin Coolidge, and the Secretary of the Treasury, Andrew Mellon, had persuaded them to do it.
There had been some warnings of the approaching crash in England, which American newspapers never saw. The London Statist on May 25, 1929 said:
“The banking authorities in the United States apparently want a business panic to curb speculation.“
The London Economist on May 11, 1929, said:
The events of the past year have seen the beginnings of a new technique, which, if maintained and developed, may succeed in ‘rationing the speculator without injuring the trader.’”
Governor Charles S. Hamlin quoted this statement at the Senate hearings in 1931 and said, in corroboration of it:
That was the feeling of certain members of the Board, to remove Federal Reserve credit from the speculator without injuring the trader.”
Governor Hamlin did not bother to point out that the “speculators” he was out to break were the school-teachers and small town merchants who had put their savings into the stock market, or that the “traders” he was trying to protect were the big Wall Street operators, Bernard Baruch and Paul Warburg.
When the Federal Reserve Bank of New York raised its rate to six percent on August 9, 1929, market conditions began which culminated in tremendous selling orders from October 24 into November, which wiped out a hundred and sixty billion dollars worth of security values. That was a hundred and sixty billions which the American citizens had one month and did not have the next. Some idea of the calamity may be had if we remember that our enormous outlay of money and goods in the Second World War amounted to not much more than two hundred billions of dollars, and a great deal of that remained as negotiable securities in the national debt. The stock market crash is the greatest misfortune which the United States has ever suffered.
The Academy of Political Science of Columbia University in its annual meeting in January, 1930, held a post-mortem on the Crash of 1929. Vice-President Paul Warburg was to have presided, and Director Ogden Mills was to have played an important part in the discussion. However, these two gentlemen did not show up. Professor Oliver M.W. Sprague of Harvard University remarked of the crash:
We have here a beautiful laboratory case of the stock market’s dropping apparently from its own weight.“
It was pointed out that there was no exhaustion of credit, as in 1893, nor any currency famine, as in the Panic of 1907, when clearing-house certificates were resorted to, nor a collapse of commodity prices, as in 1920. What then, had caused the crash? The people had purchased stocks at high prices and expected the prices to continue to rise. The prices had to come down, and they did. It was obvious to the economists and bankers gathered over their brandy and cigars at the Hotel Astor that the people were at fault. Certainly the people had made a mistake in buying over-priced securities, but they had been talked into it by every leading citizen from the President of the United States on down. Every magazine of national circulation, every big newspaper, and every prominent banker, economist, and politician, had joined in the big confidence game of urging people to buy those over-priced securities. When the Federal Reserve Bank of New York raised its rate to six percent, in August 1929, people began to get out of the market, and it turned into a panic which drove the prices of securities down far below their natural levels. As in previous panics, this enabled both Wall Street and foreign operators in the know to pick up “blue-chip” and gilt-edged” securities for a fraction of their real value.
The Crash of 1929 also saw the formation of giant holding companies which picked up these cheap bonds and securities, such as the Marine Midland Corporation, the Lehman Corporation, and the Equity Corporation. In 1929 J.P. Morgan Company organized the giant food trust, Standard Brands. There was an unequaled opportunity for trust operators to enlarge and consolidate their holdings.
Emmanuel Goldenweiser, director of research for the Federal Reserve System, said, in 1947:
It is clear in retrospect that the Board should have ignored the speculative expansion and allowed it to collapse of its own weight.“
This admission of error eighteen years after the event was small comfort to the people who lost their savings in the Crash.
The Wall Street Crash of 1929 was the beginning of a world-wide credit deflation which lasted through 1932, and from which the Western democracies did not recover until they began to rearm for the Second World War. During this depression, the trust operators achieved further control by their backing of three international swindlers, The Van Sweringen brothers, Samuel Insull, and Ivar Kreuger. These men pyramided billions of dollars worth of securities to fantastic heights. The bankers who promoted them and floated their stock issue could have stopped them at any time, by calling loans of less than a million dollars, but they let these men go on until they had incorporated many industrial and financial properties into holding companies, which the banks then took over for nothing. Insull piled up public utility holdings throughout the Middle West, which the banks got for a fraction of their worth. Ivar Kreuger was backed by Lee Higginson Company, supposedly one of the nation’s most reputable banking houses. The Saturday Evening Post called him “more than a financial titan”, and the English review Fortnightly said, in an article written December 1931, under the title, “A Chapter in Constructive Finance”: “It is as a financial irrigator that Kreuger has become of such vital importance to Europe.”
“Financial irrigator” we may remember, was the title bestowed upon Jacob Schiff by Newsweek Magazine, when it described how Schiff had bought up American railroads with Rothschild’s money.
The New Republic remarked on January 25th, 1933, when it commented on the fact that Lee Higginson Company had handled Kreuger and Toll Securities on the American market:
Three-quarters of a billion dollars was made away with. Who was able to dictate to the French police to keep secret the news of this extremely important suicide for some hours, during which somebody sold Kreuger securities in large amounts, thus getting out of the market before the debacle?”
The Federal Reserve Board could have checked the enormous credit expansion of Insull and Kreuger by investigating the security on which their loans were being made, but the Governors never made any examination of the activities of these men.
The modern bank with the credit facilities it affords, gives an opportunity which had not previously existed for such operators as Kreuger to make an appearance of abundant capital by the aid of borrowed capital. This enables the speculator to buy securities with securities. The only limit to the amount he can corner is the amount to which the banks will back him, and, if a speculator is being promoted by a reputable banking house, as Kreuger was promoted by Lee Higginson Company, the only way he could be stopped would be by an investigation of his actual financial resources, which in Kreuger’s case would have proved to be nil.
The leader of the American people during the Crash of 1929 and the subsequent depression was Herbert Hoover. After the first break of the market (the five billion dollars in security values which disappeared on October 24, 1929) President Hoover said: “The fundamental business of the country, that is, production and distribution of commodities, is on a sound and prosperous basis.”
His Secretary of the Treasury, Andrew Mellon, stated on December 25, 1929, that:
The Government’s business is in sound condition.”
His own business, the Aluminum Company of America, apparently was not doing so well, for he had reduced the wages of all employees by ten percent.
The New York Times reported on April 7, 1931, “Montagu Norman, Governor of the Bank of England, conferred with the Federal Reserve Board here today. Mellon, Meyer, and George L. Harrison, Governor of the Federal Reserve Bank of New York, were present.”
The London Connection had sent Norman over this time to ensure that the Great Depression was proceeding according to schedule. Congressman Louis McFadden had complained, as reported in The New York Times, July 4, 1930, “Commodity prices are being reduced to 1913 levels. Wages are being reduced by the labor surplus of four million unemployed. The Morgan control of the Federal Reserve System is exercised through control of the Federal Reserve Bank of New York, the mediocre representation and acquiescence of the Federal Reserve Board in Washington.” As the depression deepened, the trust’s lock on the American economy strengthened, but no finger was pointed at the parties who were controlling the system.
The Coinage Act of 1792 established a dollar consisting of 371.25 grains of pure silver, but was later replaced with a gold dollar consisting of 25.8 grains of gold. In 1873, the Coinage Act was passed, prohibiting the use of Silver as a form of currency, because the quantity being discovered was driving the value down. In 1875, after temporarily suspending gold convertibility during the Civil War greenback period, the U.S. was put more firmly on the gold standard by the Gold Standard Act of 1900. From 1900 to 1933, gold was coined by the U.S. Mint, and our paper currency was tied into the amount of gold held in the U.S. Treasury reserves.
In July, 1927, the directors of the Bank of England, the New York Federal Reserve Bank, and the German Reichsbank, met to plan a way to get the gold moved out of the United States, and it was this movement of gold which helped trigger the depression. By 1928, nearly $500 million in gold was transferred to Europe.
President Franklin D. Roosevelt accepted the advice of England’s leading economist, John Maynard Keynes (1883-1946), who said that deficit spending would be a shot in the arm to the economy. Most of the New Deal spending programs to fight economic depression, were based on Keynes theories on deficit spending, and financed by borrowing against future taxes. In 1910, Lenin said: “The surest way to overthrow an established social order is to debauch its currency.” Nine years later, Keynes wrote: “Lenin was certainly right, there is no more positive, or subtler, no surer means of overturning the existing basis of society than to debauch the currency … The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million is able to diagnose.”
A Presidential Executive Order by Roosevelt on April 5, 1933, required all the people to exchange their gold coins, gold bullion, and gold-backed currency, for money that was not redeemable in precious metals. The Gold Reserve Act of 1934, known as the Thomas Amendment, which amended the Act of May 12, 1933, made it illegal to possess any gold currency (which was rescinded December 31, 1974). Gold coinage was withdrawn from circulation, and kept in the form of bullion. Just as the public was to return all their gold to the U.S. Government, so was the Federal Reserve. However, while the people received $20.67 an ounce in paper money issued by the Federal Reserve, the Reserve was paid in Gold Certificates. Now the Federal Reserve, and the Illuminati, had control of all the gold in the country.
According to testimony allegedly given by Christian Rakovsky, known as ‘Red Symphony’, during an interrogation by the Stalinist police on 26 January 1938, Rakovsky stated that he and Leon Trotsky were representatives of an invincible power known as the Capitalist-Communist Financial International. This power, Rakovsky insisted, was being exercised by the House of Rothschild, which facilitated, financed and controlled the work of Karl Marx and the revolutionary communist movement from the outset, proof of which can be determined by examining how the bankers, who control the flow of capital via the monopolization of the money supply, were never identified by Marx as being part of the ruling establishment, let alone the unaccountable power behind the moneyed aristocracy. Rakovsky claimed that the organization created the Communist state as a “machine of total power” to establish a global dictatorship of the super-rich.
Remember the morning of the 24th October 1929. The time will come when this day will be for the history of the revolution more important than October, 1917. On the day of the 24th October there took place the crash of the New York Stock Exchange, the beginning of the so-called “depression,” a real revolution. The four years of the Government of Hoover— are years of revolutionary progress: 12 and 15 millions on strike. In February, 1933 there takes place the last stroke of the crisis with the closing of the banks. It is difficult to do more than capital did in order to break the “classical American,” who was still on his industrial bases and in the economic respect enslaved by Wall Street. It is well known that any impoverishment in economics, be it in relation to societies or animals, gives a flourishing of parasitism, and capital is a large parasite. But this American revolution pursued not only the one aim of increasing the power of money for those who had the right to use it, it pretended to even more. Although the power of money is political power, but before that it had only been used indirectly, but now the power of money was to be transformed into direct power. The man through whom they made use of such power was Franklin Roosevelt. Have you understood? Take note of the following: In that year 1929, the first year of the American revolution. in February Trotsky leaves Russia; the crash takes place in October… The financing of Hitler is agreed in July, 1929. You think that all this was by chance? The four years of the rule of Hoover were used for the preparation of the seizure of power in the United States and the USSR; there by means of a financial revolution. and here with the help of war and the defeat which was to follow. Could some good novel with great imagination be more obvious to you? You can understand that the execution of the plan on such a scale requires a special man, who can direct the executive power in the United States, who has been predetermined to be the organizing and deciding force. That man was Franklin and Eleanor Roosevelt. And permit me to say that this two-sexed being is not simply irony. He had to avoid any possible Delilah… I do not know if he is one of “Them,” or is only subject to “Them.” What more do you want? I think that he was conscious of his mission, but cannot assert whether he obeyed under duress of blackmail or he was one of those who rule; it is true that he carried out his mission, realized all the actions which had been assigned to him accurately. Do not ask me more, as I do not know any more.”