THE TRAGEDY OF DRASTIC DEFLATION
YOUR money masters, the Federal Reserve Board at Washington and the
twelve tentacular Federal Reserve Banks in their regional satrapies,
staged in 1920 the greatest financial debacle in human history.
They were, and they are, as much your money masters, as was ever a
slave-holder the master of his human chattel. Your labor and the
produce of your labor--in whatever capacity you worked--were, and are
today, as completely under their control as was ever the labor and
the production of the labor of slavery before Lincoln's Emancipation
Proclamation chiseled chains. So long as you exist in the U.S.A. and
the Federal Reserve System exists, the lash of these money masters will
writhe over your back and you must cringe under its sting. Make no
mistake about that. No sceptered king nor bedizened kaiser ever wielded
a tithe of the power which rests in the cunning brains and in the
ruthless edicts of these money masters.
Here are the facts. Read first these quotations from their own lips and
from their own pens which prove that these Federal Reserve oligarchs
deliberately staged the greatest financial debacle in all human
history. Nothing in human history approaches it for cold-blooded,
wanton, ruthless slaughter of values.
"Credit must be brought under effective control."
"The Board (meaning the Federal Reserve Board) will not hesitate to use
every statutory power to regulate currency and credits."
"Our present task therefore is to proceed with the deflation of credits
as rapidly and as systematically as possible."
If for "deflation" you read "destruction" you get the real intent and
the real meaning of these ichor-veined assassinators of real values.
Don't let these word jugglers and these money jugglers confuse you with
their lacquered language. When they say "inflation" what they really
mean is increase of values and when they say "deflation" what they
really mean is destruction of values.
The tragedy was staged in 1920--about fourteen months after the World
War was closed--but it didn't get going good and strong until the
summer and fall of 1920. After the summer had arrived, after grain and
cotton were in the ground, after cattle and sheep were on the ranges,
after merchants' stocks were on the shelves, after factories had
run at full capacity and after all producers and merchandisers were
hopelessly committed and couldn't retrace their footsteps, the lash
fell. Or to change the figure the trap wasn't sprung until every foot
was within its iron ring.
The first proof of a murder is the corpse and here are the corpses of
murdered values just as they were struck down by the Federal Reserve
bludgeon. Look at them.
New Orleans
1920 No. 3. Chicago Corn Middling Cotton
January 1.47 .40
May 1.98 .40
June 1.83 .40
July 1.53 .39
August 1.53 .33
September 1.29 .27
October .87 .20
November .80 .17
December .73 .14
1921
January .65 .14
February .63 .13
March .61 .11
April .55 .11
May .60 .11
June .60 .11
July .60 .11
August .55 .12
Here you get from January, 1920, to August, 1921, when these value
assassinations culminated, a corn debacle of 92 cents a bushel and a
cotton debacle of 28 cents a pound. If you had known that this value
assassination was en route and had "gone short" 1,000,000 bushels of
corn you could have robbed the corn growers of this land of $920,000,
couldn't you? And some "high financiers" did that very thing. If you
had known that cotton was going to shrink at least 28 cents a pound and
had "gone short" 10,000 bales (500 pounds to the bale) you could have
robbed the cotton growers of this land of $1,400,000, couldn't you? And
some high financiers did.
Take a look at some more value murders.
Wheat No. 2
Red Winter Wool
1920 Chicago Ohio Grades
January 2.63 1.23
May 2.97 1.16
June 2.89 1.00
July 2.80 .90
August 2.47 .87
September 2.40 .83
October 2.20 .72
November 2.05 .69
December 2.01 .54
1921
January 1.96 .54
February 1.91 .54
March 1.67 .52
April 1.38 .52
May 1.56 .50
June 1.43 .49
July 1.22 .49
August 1.23 .49
A destruction of $1.40 a bushel on wheat and of 74 cents a pound on
wool ought to satisfy the most murderous destructionist of values,
oughtn't it? You can make your own computations as to the millions
coteries of "bears" could make--and doubtless did make--out of these
value assassinations.
Have some more views of values on the toboggan.
Penn.
1920 Steers at Chicago Crude Oil
January 15.93 5.06
May 12.60 6.10
June 15.03 6.10
July 15.38 6.10
August 15.35 6.10
September 15.25 6.10
October 14.68 6.10
November 14.57 6.10
December 12.09 6.10
1921
January 9.84 5.79
February 9.31 4.18
March 9.56 3.00
April 8.71 3.18
May 8.42 3.35
June 8.09 2.65
July 8.40 2.25
August 8.77 2.25
When you grease the toboggan with $2.81 a barrel on oil and $7.16 a
hundred on steers you can slide a good many millions of dollars into
the maws of foresighted "short sellers," can't you?
This panorama of value murders could be continued for pages of tables.
They all tell the same story. Granulated sugar dropped in the same time
from .15 cents a pound to .05 cents a pound; copper ingots from .19
cents a pound to .11 cents a pound; cotton yarn from 72 cents a pound
to 25 cents a pound; pig iron from $37.75 per ton to $18.20 per ton;
hides from 40 cents a pound to 14 cents a pound and so on down the line.
These are the corpses strewn all along America's highways of
production. What was the bludgeon which hit all these commodities on
the head and drove them into the pit of loss? It was the persistent,
wanton, ruthless and cold-blooded calling of loans and refusal of bank
credits and contraction of currency by Federal Reserve oligarchy. They
said they'd do it and they did it--aplenty. Here is the bludgeon, look
at it.
Their total of all loans and discounts including "bought paper" in
all of the twelve Federal Reserve Shylockeries stood around from
$2,700,000,000 to $3,000,000,000 from January to October, 1920, when
the bludgeon pounded hard. Here is the bludgeon. Look at it in action.
1920
October $3,099,672,000
November 2,983,103,000
December 2,974,836,000
1921
January 2,622,174,000
February 2,500,013,000
March 2,356,160,000
April 2,180,178,000
May 1,995,051,000
June 1,782,951,000
July 1,661,036,000
August 1,527,255,000
And from May 28, 1920, to January 25, 1922--when the slaughtered
were piled the highest--the twelve Federal Reserve Shylockeries
hammered and battered down their bank credits in the leviathan sum
of $2,005,149,000, or from $2,938,031,000 to $932,000,000! And
incidentally the circulation of Federal Reserve notes contracted in the
same period by the stupendous sum of $923,020,000! So that from May 28,
1920, to January 25, 1922, the Federal Reserve oligarchy--at their will
or at their whim or for hidden purposes--contracted bank credits and
currency by the titanic total of $2,928,169,000, almost $3,000,000,000,
almost 3,000 million dollars. That was the pile driver battering your
values down into the mire of loss.
Take now a look at the financial corpses so slaughtered. Here they are.
Look 'em over and don't overlook the hands that killed them.
In 1921 there were 19,625 business failures as compared with 6,451
in 1919, or an increase of 13,174--more than three for one. And the
liabilities reached the stupendous total of $627,401,000, an increase
of $514,000,000 over 1919, more than five for one. In the so-called
panic year of 1907, the high tide of business failures, liabilities
were only $197,000,000, as against $627,000,000 in 1921. Why, if 1907
was a "panic year," 1921 was a pandemic year!
And here is another destruction meter, absolutely infallible--the
suicides. In the first six months of 1921 there were 4,527 men
suicides, as against 1,810 for the same period in 1920; 1,982 women as
against 961; 214 boys as against 88 and 293 girls as against 137--7,016
suicides for the first six months of 1921 as against 2,996 for the
same period of 1920. The enormous increase in men suicides--over two
and one-half for one--tells its own story. They came from all classes,
bankers, merchants, farmers, laborers and professional men. None know
how many of this enormous increase, the largest since statistics have
been kept, were driven to desperation and to death from hunger, from
unemployment, from the loss of life's toil or from the failure of
enterprises in which they had spent their lives. No statistics can
summarize human emotions, but they can tell and they do tell of the
greatest holocaust of suicides ever ravaging this land--undoubtedly
due to industrial tragedies staged by the cold blooded butchery of
production. This much is certain. Never before in a given time in this
land has there been such a holocaust of failures, of suicides and of
unemployment. Never before in this land were such sacrifices laid on
the twin altars of Moloch and of Mammon. And they precisely correspond
in time with the Tragedy of Drastic Deflation!
During all this time and particularly beginning with the late summer
and early fall of 1920, individuals, associations, committees
and organizations representing farmers, planters, cattlemen,
manufacturers, bankers and merchants--in short, representatives of
all industries--were entreating and beseeching Governor Harding of
the Federal Reserve Board and his associates to be more mild and more
lenient and more reasonable in their drastic tragedy of destruction.
They might as well have besought a cyclone or entreated a tornado or
prayed to an earthquake. Cold-bloodedly, relentlessly and wantonly
loans were called, extensions were refused, renewals were tabooed and
bank credit put on the chopping block. The very people whose toil and
whose labor and whose real wealth were building the magnificent palaces
wherein these Shylockeries were housed and were paying the exorbitant
salaries of these money despots were being ruined by their servants!
The Federal Reserve System at that very time had a loaning ability
of over $2,000,000,000 more than it then used and not only wouldn't
use it, but contracted its loans by $2,005,149,000 and currency by
over $932,000,000. Instead of aiding production, it throttled it. And
instead of aiding the producers of commodities to carry them it forced
producers to market them at most ruinous losses! Instead of dropping
the curtain on this Tragedy of Drastic Destruction, it ran it to its
close! It staged the greatest debacle of blasted credit, number of
failures, magnitude of liabilities, suicides and unemployment ever
witnessed in this land. It did it deliberately, ruthlessly and as per
program too.
Go back over these figures, all taken from official records--all
undenied and undeniable--and ask yourself if ever before in human
history the industries and credit of a successful nation and
successful in the greatest War ever waged, too, were so butchered?
These figures indict and convict the Federal Reserve System, as it
has been maladministered, as the arch betrayer of a people's trust.
It indicts and convicts them as juggling with the symbols of value
to the destruction of real values. No sane man can read this record,
frozen into Government statistics, and defend the oligarchs who made
it. It never was "deflation." That is just a sonorous euphemism to
disguise sandbaggery. It was destruction to scores of thousands and to
hundreds of thousands of the real producers of real wealth. Billions
of dollars of real values were annihilated, not by the trend of the
markets, but by artificial "bear" markets artificially created by the
throttling of credit. You can't withdraw literally billions of credit
and currency--almost three billions of them--the very life-blood of
commerce from industry and have it thrive any more than you can tap a
man's jugular vein and have him live! That's what really happened in
this Tragedy of Drastic Destruction.
And upon whom did this Tragedy bear the hardest? Upon those least able
to endure its fearful pressure--the farmers. Bear in mind that farming
is not only the largest industry in the U.S.A., but it is the only
absolutely basic industry--the keystone upon which rests the entire
industrial superstructure.
Here is what this Tragedy of Drastic Deflation did to the farmer as
measured for the years of 1919, 1920 and 1921.
Value in 1919 $13,500,000,000
Value in 1920 9,000,000,000
Value in 1921 5,675,000,000
In each of these years there was practically the same acreage under
cultivation, 350,000,000 acres. In 1919, farm products were worth
$39 per acre, in 1920, $26 per acre and in 1921, $16 per acre. Here
is where the Federal Reserve credit crusher pulpified the finest--at
the very foundation of all industry! The production of these basic
farm products--the real foundation of all this Federal Reserve
splendor--was practically the same in volume for these three years,
but the Federal Reserve credit crusher crushed it from $39 to $26 to
$16 per acre measured by its purchasing value! That's the Tragedy of
Drastic Deflation in its final analysis battering down the money value
of America's basic industry almost two-thirds! But the profits of the
Federal Reserve System--and its exorbitant expense account and its
lavish salary rolls--kept off the toboggan down which slid all the
others!