Getting to Know You

A Quick Review of the Times and a Few of the Players

In 1921 per capita income in the USA was only $522, by 1928 it had grown to $628.
With as little as $100 an individual could purchase $1000 worth of stock on margin! For the relatively small number of people in the general population who understood the mechanics of this chicanery they were rewarded handsomely…up until September 1929.

Federal Reserve Chief Benjamin Strong

The catalyst for speculation took many shapes. In order for their scheme to work, easy money had to be in abundance. New York Federal Reserve chief Benjamin Strong, Winstor Churchill, Montague Norman of the Bank of England and U.S. Secretary of the Treasury Andrew Mellon operated together to ensure easy money for speculation on Wall Street was readily available.

Winston Churchill, Chancellor of the Exchequor, on his way to deliver his budget speech.

In 1925 Churchill was eager for England to return to the role of world leadership, he pegged the British pound to $4.86. Afterwards fewer companies and people around the globe were able to afford British goods and commodities!
Over the next two years, hundreds of millions of dollars of gold flowed to the USA from all over Europe. Some of it was used to gamble in the Wall Street casinos known as brokerage firms. Other moneys were put toward a wide range of Wall Street mirages, promises, and opportunities. If that situation had continued all of Europe would have been forced off the gold standard before very long.

Hjalmar Schacht of the Reichsbank (left) and Montagu Norman of the Bank of England (right)

In 1927, a meeting was convened by Montague Norman of the Bank of England, Charles Rist of the Bank of France, Hjalmer Schacht of the Reichsbank, and Federal Reserve Benjamin Strong and Secretary of the Treasury Andrew Mellon of the USA.
An agreement was made to lower USA interest rates. In 1927 the Federal Reserve lowered its discount rate from 4 to 3.5 %.
With cheap money in abundance the formula had all the ingredients to concoct a bull market witch’s brew to poison the masses — after they had drunk from the cauldron of speculation. In the process most of those sucked into the market experienced a living world nightmare worse than any hallucinogen even today’s most experienced chemist could cook up.
Selling the market short was a task the plungers and manipulators thrived on.
In 1929 there were less than 1.6 million active stock market brokerage accounts reported by Wall Street firms. There were 600,000 “margin” accounts while the entire USA population in 1930 was 123.2 million.



In 1930 12.6 million lived in New York and 9.6 million lived in Pennsylvania — together these sister states held 18% of the entire population. By 1990 the percentage had plunged only 12%.

More than a few of the speculators held dozens of accounts simultaneously. They listed themselves, their children, spouses, and even set up joint accounts for friends and associates for reasons of secrecy; making the actual number of speculators probably less than 300,000. Many of those were employed by the stock exchanges and brokerage firms around the USA. Some even worked as agents responsible for their overseas customer’s accounts and transactions.
There is no way the crash can be attributed to individual small investors failing to meet their “margin” calls; not enough of them existed. In addition, when the crash occurred it was with enormous “blocks” of stocks traded. 10,000, 20,000, 30,000, 40,000, 50,000 and 100,000 block shares were traded with such rapidity that the tape on the market ran behind for hours!
Although the common man on the street was blamed for the market freefall he had little role to play other than a bit part as a “patsy” for the diabolical forces behind the scenes.
In the June issue of American magazine Bernard Baruch urged the public to continue to participate in their buying binge.
He stated, “The economic condition of the world seems on the verge of a great forward movement.”
While he talked up the market for his own advantage, Baruch had been very busy positioning his, as well as his collaborators, interests in a way that the public would have never believed — if discovered. Baruch had planted another one of the many lies that were sown, up to and during the Crash. In October he and his cabal reaped their evil harvest.

For his part Baruch had been purchasing large quantities of gold. He and his co-conspirators continued to bait the giant trap on Wall Street that later slaughtered the innocents, by continuously “talking up” the stock market. He also supervised his conspiracy with the help of friends and business partners in our government and in Europe to guarantee everything went as he and Churchill planned.
Baruch was not alone in his scheme to tell all of America how great the USA stock market was as an investment.
John J. Raskob, another friend of Bernard Baruch, also got into the act. While luring people into the market, Raskob had quietly liquidated his enormous stake in the stock market and was instead busy selling the market short.
Raskob successfully infiltrated another dynamic segment of the American economy after his “Everyone Should Be Rich” article appeared in the August 1929 Ladies Home JournaL The story sent housewives, nationwide, scurrying about to participate in the get-rich-quick scheme which Raskob proposed in his interview, conducted by Samuel Crowther.
Raskob described how a person would have $80,000 after only twenty years if they invested just $15 a month ($3600) in the stock market following his “free” advice. With the average per capita annual income of only $628, this hustler’s suggested “investment” amounted to a substantial portion of a person’s disposable income.
His sales pitch was irresistible to many of the readers – women and men alike. Raskob described how a person who had invested $10,000 in General Motors stock ten years earlier was now worth over $1 million!
He also said that a man with a million dollars used to be considered rich, but there were so many new millionaires (in 1929) that a million just was not worthy of comment. Was this guy the salesman of the century or what?
Again, the average per capita income in 1928 was $628, or
just .000628% of the fortune Raskob claimed so many people
had discovered.
Clearly the future Democratic National Committee Chairman was out of touch with mainstream America, just as much as the current Democratic leadership remains today!
Of the thousands of women (and men) he duped into believing his scheme, none of them stood a chance against it. Raskob knew exactly what he was doing. As an inside player of the game he and his cronies needed new “patsies” to fuel the raging bonfire of overheated speculation he played a major role in creating. John J. Raskob later received the title of chairman of the Democratic National Party.
It is further evidence of just how pervasive the complete lack of ethics and morals had become throughout the network of government and corporate America. After 60 years, has anything changed? Can it really be possible the situation has actually worsened?
It reminds this author of the old question who is guiltier, the man who steals the chicken off the land or the man who steals the land from beneath the chicken? After the Crash and Great Depression of the 1930’s not only the chickens, but a great deal of land had been swiped from generations of honest hardworking Americans. Untold millions of lives and dreams were devastated.

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