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Some nine million soldiers and ten million civilians were left dead in the wake of World War I. France and Germany had sustained the most damage; both nations had sent upwards of eighty percent of their male populations to the front.
While the servicemen of mainland Europe had returned home to dig their countries out of the rubble, the American servicemen returned home to a season of economic prosperity which must have seemed surreal when played against the backdrop of their war experience. The Roaring 20’s might have represented a great Irish wake honoring the passage of the old economic and social order of the world, but by 1929 the party was over.
On the 24th of October, 1929, a day remembered as Black Thursday, the opening bell of the New York Stock Exchange rung on an 11% devaluation of the entire stock market. On Black Monday, another 11% devaluation took place. On Black Tuesday, yet another 12% devaluation took place. What was happening was an ever-widening spiral of panic; with each successive devaluation, more share-holders would liquidate their assets and withdraw all of their money from the bank, to the effect that many investors and banks were ruined in the process. This was before banks were federally insured; if a bank went under, it took your money with it. The spiral of consequence began to work under its own momentum so that between April 17, 1930 and July 8, 1932, the market lost 82% of its value.
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The Stock Market is something that a bunch of rich dudes made up. It goes back to the 1400’s, when Antwerp, Belgium became the center of international trade. In 1611 The Dutch East India Company became the first (and for a long time, the only) publicly traded company. Where ever these East India bastards show up, you know that there is some shady business afoot. I don’t fully understand how it worked back then, and I don’t fully understand how it works now, but my barbarian intuitions tell me that the stock market is a form of black magic foisted upon the rest of us by a shadowy and unaccountable aristocracy working without name or shape from within the unassailable bastion of High Finance, the capstone at the top of the pyramid scheme that is the modern merchant class. I have substantial proof to back up this wild assertion, and it comes in the form of The Great Depression (1929-1939).
Investment pooling fraud is the black center of mass at the heart of the Great Depression, and it encompasses almost the whole of its circumference as well. ‘Investment pooling’ is also called an ‘investment club’. In George Carlin’s words, ‘it’s a club and you aren’t invited’. An investment club acts just like a mutual fund: a group of people pool their investment capital and then distribute a large amount of money across a wide variety of assets. This is a diversification strategy which minimizes personal risk. Sounds innocent enough, right?
By the turn of the century, elite investment clubs had transformed themselves into sinister cabals devoted to the crass art of market manipulation. Here’s how it would have worked:
First, the pool manager begins quietly accumulating a large percentage of shares in a particular stock, hoping that no one will notice.
The manager then consults the exchange specialist of the target stock, who holds information about buy and sell orders from other investors for that stock. Based on this information, these sharks can then gauge how much to manipulate the stock.
Stock market commentators who are in on the gambit would then increase buyer confidence in the stock by reporting on its outstanding performance.
Members of the investment club would trade the stock amongst themselves in order to drive up its price.
People not privy to the machinations of the investment club would purchase shares of this pumped-up stock, believing they were making a good investment.
The investment club then sells off all its shares of a worthless stock to a beguiled public for windfall profits.
I want to be clear: this is the very definition of a ‘conspiracy’. Here’s what Makenna Cooper at wiseinvestor.com has to say about it:
“Investment pools manipulated the stock market to such a high degree that they played a significant part in the stock market crash. Perhaps the most prominent example of investment pools manipulating stocks was in 1929 when RCA stock rose 61 points in only four days, just to plummet soon after and devastate investors. Speculation became an extremely popular activity, but in the end, only the investment pools and other market manipulators seemed to profit from the craze. Innocent people entrusted their money to these schemes and lost confidence in the market when they were cheated. Often, speculators would invest using borrowed money from banks. When stocks plummeted from investment pool manipulation, these speculators lost their money and were unable to pay back loans to banks. This huge loss in funds to the bank also meant that people who kept their savings in those banks lost their money as well. Fraudulent behavior in the stock market not only affected investors, but it affected anyone who deposited money in a bank that lent to investors.”
The Federal Reserve seems to place the blame for all this squarely at the feet of those maverick banks who had balked at the federal reserve system, making no mention of the rampant insider trading which we had previously identified as a root cause. All of the major banking interests had been folded into the federal reserve system early on, and none of those major banks went under during the Great Depression. Proceeding from all this is the conspiracy theory that the economy had been crashed on purpose; that this was an act of war perpetrated by actors with ties to the federal reserve system intended to drive out non-member entities and accumulate their assets on the cheap. Big if true.
By the end of the Great Depression in 1939, every major currency had left the gold standard. When it was reinstated as an international monetary standard again in 1944 under the Bretton-Woods agreement, central banks could convert their dollars into gold, but individuals and private institutions could not. Why does this sound like another sophisticated form of plunder?
In ‘After the Stock Market Crash of 1929‘ (1930), Henry Howard Harper states that the rampant asset liquidation on that fateful day in 1929 had begun as far away as Paris and London. Just how deep is the banking conspiracy?
Paranoid speculation aside, insider trading (active market manipulation) have been accepted as among the leading causes of this dramatic incident wherein the entire stock market tanked on both sides of the ocean. The financial wizardry of bad actors on the stock exchange had the power to negatively impact the livelihoods of millions of people around the world for years to come. Wizardry is the only thing I can call it; sure, the dust bowl was kicked off around 1935, and there were a few other things going on, but the scarcity and desperation which followed in the wake of the banking run of 1930 were largely artificial. These material conditions were maintained for almost a decade by a social concensus to follow a set of rules proscribed by the same set of interests which had created the Depression in the first place, either by design or by accident. How is this not sorcery?
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I am going to be honest. After looking at pictures of Hoovervilles across the country during the Great Depression, the urban landscape of America in 2024 looks somehow worse. At least these guys were allowed to have shacks. We just let our elders crawl in their own piss and shit, smoking scavenged cigarette butts in a soiled blanket next to a pile of broken glass. ‘Hoovervilles’ were the 1931 equivalent of a tent city, named for then-incumbent president Herbert Hoover as a crass joke. This would have been 1931’s answer to ‘Thanks, Obama’. It’s important to keep a sense of humor, especially when the market has lost 82% of its value.
“Hoover blankets” were old newspapers used as blanketing, a “Hoover flag” was an empty pocket turned inside out, “Hoover leather” was cardboard used to line a shoe when the sole wore through, and a “Hoover wagon” was an automobile with horses hitched to it (often with the engine removed).
Over fifty-thousand people in New York City were homeless by 1932. That’s about the same as the number of unsheltered people in the Los Angeles metropolitan area in 2023, which clocks at 46,260. New York City in 1932 had almost the same population as Los Angeles Metro in 2022; 13,001,000 and 12,488,000, respectively. While this breaks down to an unhoused rate of only .38%, it begs the question:
Are We In A Depression? Today, we don’t see the soup lines. We do see the modern Hoovervilles, though.
As in England’s Industrial Revolution, impoverished mothers during the Great Depression would sometimes sell off their children. Everyone was broke, including the affluent. Bank foreclosures had wiped out the savings of entire townships. Even Henry Ford was having financial problems. He was forced to lower wages and lay off workers, which lead to the Ford Hunger March of 1932 in Dearborn, Michigan. In the 1920’s, Ford had been voted by Americans the ‘greatest man to have ever lived after Napoleon Bonaparte and Jesus’. When his private security forces killed five members of the Young Communists League during the counter-protests and he published an editorial wherein he stated that giving basic necessities away would do more harm than good, some people started to look askance at him. ‘Is this man a socio-path?’, they wondered. For others, this would only reaffirm his status as the best thing since Jesus. Floating suspended in an amniotic fluid of cold, hard cash and unshakable industrial prowess, Ford himself probably didn’t think too much about it.
As consumer spending evaporated, so did entire businesses. This lead to fewer jobs. This lead to even less spending. Which lead to more closures and foreclosures. Which lead to fewer jobs. Which lead to less spending. Down and down, on and on.
The decadent consumer culture which had thrived in the tropical economic climate of the previous decade was brought to a screeching halt, and the people lucky enough to actually have jobs skipped the movies to worry about their house and car payments. Hand-me-downs and and fixing broken things became fashionable, as did hoarding that which could not be fixed. Many families split apart and migrated to seek out bare subsistence, and people took whatever job they could get, no matter how unpleasant. Generational farm-steads were ruined, and hunger and malnutrition became the daily lived experience of millions of Americans. This sustained scarcity lead to a situation where, when recruiting drives began for the Second World War in the 1940’s, many young Americans were turned away for being underweight. So many, in fact, that the government began to see malnutrition as a national security risk. The first state-funded nutritional research and accompanying nutritional programs came out of efforts to reverse the physiological harm done to the generation that had grown up during the Great Depression.
I’m not sure how to communicate the gravity of prolonged hunger and homelessness. Alejandro Solzhenitsyn once asked, “can a warm man understand one who is freezing?”. We can talk about the cascade of effects moderate to severe malnutrition will produce in the human body if carried on long enough. Malnutrition effects the function of every organ system; tooth loss, vision problems, osteoporosis, general weakness and fatigue, mood swings, depression, increased risk of infection, delayed wound healing, loss of muscle mass, reduction in cardiac muscle mass, impaired renal function, hypertension, stroke, and this is just scratching the surface. There are particular diseases which accompany particular deficiencies; scurvy, anemia, diabetes, rickets, pellagra, hypocalcemia, beriberi. We are talking about full spectrum negative impact, especially on early childhood development.
With the wealthy disdainful toward the deserving poor and no help on the way, people survived by learning to be poor. Children would roam the shipping docks, looking for rotten produce to bring home. Crime flourished; the 1930’s gave us such famous outlaws and gangsters as John Dillinger, Bonnie and Clyde, Baby Face Nelson, Pretty Boy Floyd, and Machine Gun Kelly. Sometimes you would stay in bed so that you didn’t have to burn any metabolic fuel. After all, you can only autocanabalize so much muscle tissue. Sometimes you would skip a meal so that someone else could eat. Sometimes you wouldn’t survive at all. At least a few people starved. People are still starving; CNN says that at least 21,000 people died of malnutrition in America in 2022.
Even as late as 1939, 82% of farm families were classified as ‘impoverished’. Fortunately, they were farm families; they could raise chickens and goats and grow things. I cannot imagine the nightmare conditions which would prevail if a similar disaster played out in America today. Hoovervilles often encroached on private property, but were permitted out of raw necessity. Do you think they will let us have little shacks during the next total market collapse?
