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500 THE CREATURE FROM JEKYLL ISLAND
There is no evidence that the Crash was planned for the
purpose of profit taking. In fact, there is much to show that the
monetary scientists tried mightily to avert it, and might have done
so had not their higher-priority agendas gotten in the way. Yet,
once they realized the inevitability of a collapse in the market, they
were not bashful about using their privileged position to take full
advantage of it.
In that sense, FDR's son-in-law, Curtis Dall, was
right when he wrote: 'It was the calculated 'shearing' of the public
by the World Money Powers."
NATURAL LAW NO. 5
Here is another of those "natural laws" of economics that needs
to be added to our list:
LESSON: It is human nature for man to place persona]
priorities ahead of all others. Even the best of men cannot long
resist the temptation to benefit at the expense of their neighbors
if the occasion is placed squarely before them. This is especially
true when the means by which they benefit is obscure and not
likely to be perceived as such. There may be exceptional men
from time to time who can resist that temptation, but their
numbers are small. The general rule will prevail in the long run.
A managed economy presents men with precisely that kind
of opportunity. The power to create and extinguish the nation's
money supply provides unlimited potential for personal gain.
Throughout history the granting of that power has been
justified as being necessary to protect the public, but the results
have always been the opposite. It
has been used against the
public and for the personal gain of those who control. Therefore,
LAW: When men are entrusted with the power to control
the money supply, they will eventually use that power to
confiscate the wealth of their neighbors.
There is no better illustration of that law than the Crash of 1929
and the lingering depression that followed.
1. Curtis B. Dall, FDR: My Exploited Father-In-Laiv (Tulsa, Oklahoma: Christian
Crusade Publications, 1967), p. 49.
THE GREAT DUCK DINNER 501
FROM CRASH TO DEPRESSION
The lingering depression is an important part of the story. The
speculators had been ruined, but what they lost was money
acquired without effort. There were some unfortunate souls who
also lost their life
savings on call
savings, but only because they gambled those
loans. Those who bought stock with money they
actually possessed did not have to sell,
and they did quite well in
the long run. For the most part, something-for-nothing had merely
been converted back into nothing. The price of stocks had plummeted,
but the companies behind them were still producing
products, still employing people, and still paying dividends. No
jDne lost his job just because the market fell. The tulips were gone,
but the wheat crop remained.
So, where was the problem? In truth, there was none—at least
not yet. The crash, as devastating as it was to the speculators, had
little effect on the average American. Unemployment didn't
become rampant until the depression years which came later and
were caused by continued government restraint of the free market.
The drop of prices in the stock market was really a long-overdue
knd healthy adjustment to the economy. The stage was now set for
recovery and sound economic growth, as always had happened in
the past.
It did not happen this time. The monetary and political
scientists who had created the problem now were in full charge of
the rescue. They saw the crash as a golden opportunity to justify
even more controls than before. Herbert Hoover launched a
multitude of government programs to bolster wage rates, prevent
prices from dropping, prop up failing firms, stimulate construction,
guarantee home loans, protect the depositors, rescue the banks,
subsidize the farmers, and provide public works. FDR was swept
into office by promising even more of the same under the slogan of
a New Deal, And the Federal Reserve launched a series of "banking
reforms," all
over the money supply.
of which were measures to further extend its power
In 1931, fresh money was pumped into the economy to restart
the cycle, but this time the rocket would not lift off. The dead
Weight of new bureaucracies and government regulations and
subsidies and taxes and welfare benefits and deficit spending and
tinkering with prices had kept it on the launching pad.