“These are the rules of big business. They have superseded the teachings of our parents and are reducible to a simple maxim: Get a monopoly; let Society work for you; and remember that the best of all business is politics, for a legislative grant, franchise, subsidy, or tax exemption is worth more than a Kimberly or Comstock lode, since it does not require any labor, either mental or physical, for its exploitation.” Frederic C. Howe, The Confessions of a Monopolist (1906)
The previous post explained how your American birthright of liberty and self-government was traded for a mess of pottage, a cradle-to-grave nanny state under bureaucratic despotism. Of course, the process did not begin with the administration of Franklin Roosevelt and his “New Deal.” No, a century earlier, squads of sappers and miners began weakening the foundation of liberty, undermining the checks and balances, and separation of powers, in order to centralize authority in Washington under the command of an autocratic Executive branch.
The writings of the aging Thomas Jefferson, surveying the political landscape from his “little mountain,” are replete with warnings of usurpation of reserved powers of the States by the Federal executive. Penning his concerns to Charles Hammond in 1821, the elder statesman warned, “To this I am opposed; because whenever all government, domestic and foreign, in little as in great things, shall be drawn to Washington as the center of all power, it will render powerless the checks provided of one government on another, and will become as venal and oppressive as the government from which we separated.”[1]
Jefferson condenses a lifetime of experience in domestic politics and international affairs into this one powerful sentence. Via centripetal force, in matters great and small, Washington draws power away from the states, until they are bereft of the means to fulfill their constitutional duty to protect their citizens from a “venal and oppressive” federal executive.
Festina lente – Make Haste Slowly
A prophet seldom lives to see his admonitions fulfilled, and Jefferson’s trepidations remained suspended like a cloud on a distant horizon for another 70 years. The storm clouds rushed ashore in the 1890s, driven by the foul winds of European socialism, piloted with ruthless resolve by British Fabian Socialists. In Fabian Freeway (pdf available here), a meticulous exposé of the domestic Fabian Socialist movement, Rose Martin encapsulates the long-term revolutionary objective of the American converts, as “not merely to rewrite the Declaration of Independence…but to effect a series of basic changes in the Constitution itself that would make possible the introduction of State Socialism step by step in the United States” [emphasis in original].[2] Altering the American Constitution, by amendment or judicial construction, systematically removes the guardrails erected to protect the citizens from an uncontrollable, centralized government. The inaugural issue of the official journal, The American Fabian, February 1895, proudly announces the movement as the progeny of the British Fabian Society, while explaining the necessity of adopting differing measures pursuing the same object:
England’s [unwritten] Constitution readily admits of constant though gradual modification. Our American Constitution does not readily admit of such change. England can thus move into Socialism almost imperceptibly. Our Constitution being largely individualistic must be changed to admit of Socialism, and each change necessitates a political crisis. This means the raising of great new issues…
Through the Fabian method of penetration and permeation of existing institutions, a socialist “elite” vanguard formed to facilitate a “humane” transition to Socialism, although, for reasons of expediency, members and collaborators are encouraged to “even deny publicly that they [are] Socialists, if in doing so they could more effectively promote Socialistic policies” (235). The word Socialism, to early 20th century Americans, conjured images of “atheism, revolution and sexual novelties” (121), therefore the evangels of a new world order donned more palatable mantle of “Progressive,” “Moderate,” “Liberal,” “Social Democrat,” etc.
In quick succession, Congress and the courts seized the elastic “interstate commerce” and “general welfare” clauses of the constitution as the vehicle for a deluge of social legislation, enlarging federal police power through an army of unelected bureaucrats. Altering the constitution via judicial construction? Check. During the “Progressive Era” of the early 1900s, the States gave the Federal government the right to levy direct income taxes [16th amendment]; agreed that senators should be elected by popular votes [17th amendment]; and agreed to abolish legal sale of alcohol, giving Congress power to pass laws to suppress liquor traffic [18th amendment]. Neuter the States via amendment? Check. Constitutional changes “to admit of Socialism” were well underway, but what about necessitating “a political crisis”? Check.
Whose Depression?
Contrary to facts, standard history texts cite October 24, 1929, as the beginning of the “Great Depression.” Actually, October 24 marked the beginning of the long overdue bursting of the stock bubble, as stocks broke downward in freefall, bottoming out on November 13. That’s just shy of three weeks, beginning to end. Bear in mind, Herbert Hoover took the oath of office in March 1929. That the bubble burst in Hoover’s term was an accident of fate; failure to ease the air from the debt bubble was not.
To address unemployment in 1930, an election year, the administration handed subsidies for debt-financed, make-work projects to states and municipalities, rapidly expanding the debt bubble. With the other hand, the GOP Congress raised tariffs (already too high) again, supplying Europe the pin to explode it in 1931. Economist Benjamin Anderson regards the Hawley-Smoot Tariff Act of June 1930 as “the crowning financial folly”[3] of the Hoover administration. Nevertheless, the first phase of the depression - domestic and international - was arrested by the summer of 1932.[4] By October 1932, bank failures had almost ceased, bank re-openings exceeded suspensions, and gold began to flow back into the country. The New York Times, July 4, 1933, quoting Edmund Platt, former vice-governor of the Federal Reserve, declared, “If 1932 had not happened to be a presidential year, the recovery begun then might have continued without any serious interruption.” The record is clear: the “Great Depression” began in 1933, immediately after the election of Franklin Roosevelt as the 32nd President of the United States.
Hoover-baiting
The campaign to oust Hoover from the White House began within days of his election in November 1928, in what Hoover biographer Eugene Lyons dubs “The Big Smear.”[5] A tar-and-feathers factory headed by newspaperman Charles Michelson, operating under the auspices of the Democratic National Committee, occupied an entire floor of the National Press Building. Michelson was joined by Jouett Shouse, executive secretary of the DNC. Donations from Wall Street heavyweights, such as the Du Ponts, John J. Raskob (vice present of Du Pont and GM), Thomas F. Ryan (Guaranty Trust and Bankers Mortgage Co.), Herbert Lehman (Lehman Brothers and Studebaker), Vincent Astor (Great Northern Railway and US Trust), and many more, covered the salaries of these high-priced mudslingers.
No sitting President is exempt from vilification, but in Hoover’s case “the practice was put on an organized, systematic, lushly financed, and almost scientific basis. It was geared for mass production and mass distribution…every anti-Hoover lie, and innuendo was endlessly multiplied, as in repeating mirrors, through press syndication, canned speeches, quickie books, bushels of cartoons, hours of radio broadcasts,” (232). Of course, the advent of “social” media provides new nadirs for political mudslinging.
These character-assassins specifically targeted President Hoover, not the Republican Party. In truth, most of the GOP despised Hoover as much as the Democrats because he was not a professional politician, and stubbornly adhered to principles, faith, and morality – the bane of the “Progressive” wing of the GOP. Many of the “party faithful” gleefully cheered the open, vitriolic attacks on the titular party chief. Some things never change.
Meanwhile…Confessions of a Monopolist
The quote at the top of this post is from The Confessions of a Monopolist by Frederic C. Howe, a Wall Street speculator, politician, and campaign financier. Howe’s chronicle is a “story of something for nothing – of making the other fellow pay.”[6] Howe was neck-deep in bankrolling the Bolshevik revolution, also serving in the Wilson administration and New Deal bureaucracy. Historian Antony Sutton describes Howe’s Confessions as “the most lucid and frank description of corporate socialism and its mores and objectives.”[7]
Politics and religion may make strange bedfellows, but politics and big business share the same blanket. Big business despises competition, the “level playing field.” Big business wants monopoly control of industry, but monopoly requires monopoly law, thus monopoly capitalists must control Congress and the regulatory agencies. Corporate legal monopoly is corporate socialism.
Here Comes the Boom
Read that sentence again: corporate legal monopoly is corporate socialism. Corporate socialism? Surely that is an oxymoron. Not at all. For example, consider the economic benefit of a ban on gasoline to a manufacturer of electric vehicles, or a vaccine mandate to a pharmaceutical company. Imagine the ability to legislate your competition out of business.
Forget the intellectual straightjacket of capitalists vs. socialists – that is pure fiction. From this point forward, keep two key concepts in mind: 1) monopoly capitalists are the bitter enemies of free enterprise and entrepreneurs; 2) the autocratic socialist planned economy creates the perfect captive market for monopoly capitalists. As Sutton demonstrates with overwhelming evidence, there exists “a partnership between international monopoly capitalist and international revolutionary socialism for their mutual benefit,”[8] but not yours. BOOM!
1932 Campaign Begins
Given the preceding, it should come as no surprise that the high-rollers behind the Michelson anti-Hoover blitzkrieg also bankrolled the gubernatorial and presidential campaigns of Franklin Roosevelt, adding heavy-hitters Barnard Baruch, Paul Warburg, and Joseph P. Kennedy. After all, FDR was a member of their elite fraternity, actively promoting European investments until sworn in as governor in 1930 (252).
Those who invested in FDR knew him best and surrounded him with a bevy of ghostwriters and advisors. The Roosevelt that Secretary of Labor Frances Perkins knew was neither scholar nor book-reader,[9] while chief ghostwriter Raymond Moley admits Roosevelt’s mind “was neither exact nor orderly.”[10] Moley fretted over placing words into the mouth of a man who was not always intellectually discriminating. To be sure, FDR was not the last man of limited intellectual ability to be elected President of the United States.
The record proves the public voted against Hoover and for FDR, but did the electorate vote for the New Deal? According to Lyons, “Neither the 1932 Democratic platform nor the oratory of its standard-bearers offered a forthright statement of the New Deal pertinent to its future shape. The phrase was bandied about but none of its lineaments were exposed. The most emphatic pronouncements of the Democratic candidates, in point of fact, sound like a preview of the anti-New Deal polemics in years to come.”[11] The Democratic Party platform of 1932 is so conservative,
Unlike the GOP’s long-winded exposition, the DNC offered the public a two page “covenant with the people to be faithfully kept by the party when entrusted with power.” The party promised:
1. To cut the cost of the Federal Government by 25% (encouraging the States to do the same), and to “abolish useless commissions and offices.”
2. Maintain the national credit through a balanced budget
3. Maintain a sound currency (meaning remaining on the gold standard)
4. Reduce tariffs
5. Reign in the executive agencies by ending their defiance of Congressional oversight, and revoke the regulatory agencies’ “improvident subsidies granted to favored interest”
Today’s GOP would reject such a platform out of hand as too “right-wing.”
What of Roosevelt’s speeches? The motley crew of ghostwriters and academic mentors, the self-styled brain trust, doctrinaire believers in a “new social order,” filled the candidate’s orations with promises of the “new deal” unencumbered by specific facts, couched in catchphrases of “economic planning,” “production for use,” “mobilization of business,” “cooperation” and “partnership in planning.”
For his part, President Hoover, in his first and last campaign speeches warned, “This campaign is more than a contest between two men. It is more than a contest between two parties. It is a contest between two philosophies of government.”[12] Though the New Deal was not being defined, deliberately, the sitting President knew it originated on Wall Street and was offered to Hoover in 1931.
Called the Swope Plan, after its promoter Gerard Swope, president of General Electric, it was based upon a similar plan for Germany after World War I, the Rathenau Plan, created by Walter Rathenau of German General Electric. What a small world! The Swope plan proposed to stabilize prices and distribution through industry agreements under government supervision, after suspending the Sherman and Clayton anti-trust laws. Those pesky anti-trust laws prevented monopolies, and corporate socialists LOVE monopoly. Of course, this short paragraph was followed by pages of proposed social do-goodisms, as a sop to the socialist powerbrokers.
The President thought it dangerous and unconstitutional (eerily similar to Mussolini’s “corporate state”) and referred the plan to his Attorney General. On the covering memo, Hoover declared it “the creation of a series of complete monopolies over the American people,” leading to “the decay of American industry…the most gigantic proposal for monopoly ever made in our history.”[13]
In the interim, several similar economic stabilization plans were prepared by industry groups, the U.S. Chamber of Commerce, academics, and labor unions. All effectively proposed the same system of economic control of society. A case of intellectuals without intelligence plotting to save the world.
The head of the Chamber of Commerce, Henry I. Harriman, having pitched his plan to the President as well, returned to the White House eight months later. With the campaign now in full swing, Harriman demanded assurance that, if reelected, the President would implement the plan, noting that Roosevelt was fully on board. He was equally clear that unless Hoover adopted the plan, all campaign cash and endorsements from the business community would go to Roosevelt. Hoover remained obdurate, and, as Sutton proves, Roosevelt did reap tremendous business backing.[14]
Roosevelt Takes Control
So ends the “bait” side of the story. This post is already much longer than intended, so the next post, scheduled for tomorrow, will finish the tale of the “switch.”
[1] Thomas Jefferson to Charles Hammond, August 18, 1821, Founders Online, National Archives, https://founders.archives.gov/documents/Jefferson/03-17-02-0379.
[2] Rose Martin, Fabian Freeway: High Road to Socialism in the U.S.A., 1884-1966 (Belmont, MA: Western Islands, 1966), 136.
[3] Benjamin M. Anderson, Economics and the Public Welfare: A Financial and Economic History of the United States, 1914-46 (1949: repr., Indianapolis: Liberty Press, 1979), 229.
[4] Ibid., 277-84. See also Murray N. Rothbard, America's Great Depression (New York: Van Nostrand, 1963), and William Starr Myers, and Walter H. Newton, The Hoover Administration, a Documented Narrative (London: Scribner's, 1936).
[5] Eugene Lyons, Herbert Hoover: A Biography (Garden City, NY: Doubleday & Co., 1964), 231-43. All quotes in this section are from Lyons unless otherwise indicated.
[6] Frederic Clemson Howe, The Confessions of a Monopolist (Chicago: Public Publishing Co., 1906), v.
[7] Antony Sutton, "Wall Street and FDR," in The Wall Street Trilogy: A History (Global Alliance Publications, 2018), 271-72.
[8] Sutton, "Wall Street and the Bolshevik Revolution," 27-28.
[9] Frances Perkins, The Roosevelt I Knew (New York: Viking Press, 1946), 43.
[10] Raymond V. Moley, After Seven Years (New York: Harper & Bros., 1939).
[11] Lyons, 304.
[12] Herbert Hoover Campaign Speech in Madison Square Garden, October 21, 1932, Miller Center, https://millercenter.org/the-presidency/presidential-speeches/october-21-1932-campaign-speech-madison-square-garden.
[13] Lyons, 293-94.
[14] Sutton, "Wall Street and FDR," 324-32.