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Decembec 1970
the Federal Reserve Board, William
McChesney Martín, listed sorne of the
important basic similarities:
"Then, as now, there had becn
vir–
tualty rmintermpted progress for seven
years
...
"Then, as now, prosperity had been
concentrated in thc fully developed
countries....
"Then, as now, there was a large
increase
in
private domestic debt."
Shockingly, consumer debt in both resi–
dential mortgages and
installment purchases
has
recenfiJ been climbing faster
!han
it
did in !he
111
enlies.
Former Chairman Martín
then listed sorne technical
comparisons, such as money
supply, turnover of checks,
international tradc, and the
parities of world currencies.
Continuing, he said:
"Then, as now, international
indebtedness (balance-of–
payments deficits] had risen
as fast as domestic debt.
The
PLAIN TRUTH
or surpassed srx ptrcent
only lhree times
this century - once just beforc the 1920
flash depression; ,¡gain in August 1929,
just bcfore the Grcat Crash, and a third
time in mid-1969, when the prime ratc
reached the all-t ime record of 8
Y
2
%.
Major corporation bond yields are
also an obvious comparison. Only
two times in the present century did
they pass eight percent - in the Bank
Crisis of 1931, and in 1969!
A look at nearly any graphic chart of
ll
ment leaders repeatedly spoke of the
approad1ing "abolition of poverty."
"The poorhouse is vanishing from us."
Such assertions "were comforting moral
justification
f
or the
materitlli!tic spirit
which pert•aded the nation ..
."
(Bin–
ing and Klein,
A History of the United
States,
Volume
II,
Scribners, 1951, p.
449).
There is the key! Materialistic con–
ceros were taking up people's time -
and also thci r money! As F. Scott
Fitzgerald, a well-known
writer of the time, rccorded,
the new generation had
"grown up to find all gods
dead, all wars fought, all
faiths in men shaken." It
was the age of speakeasies,
uncontrolled crime, dance
marathons, automania, and
Freud. It was an age of crass
materialism and declining
morality. Tragically, the
same mentality - but with
greater intensity - pervades
the thinking of Americans,
Britons, Canadians and Aus–
tralians today.
"Then, as now, thc pay–
ments position of the main
reserve center -
Britain
then and the United States
now - was uneasy, to say
the least; but again our
re\ent cumulative payments
deficits have far exceeded
Britain's deficits of the late
'20's....
Wido World Photo
The hero of the 1920's
was Charles Lindbergh. The
heroes of the Sixties and
Seventies are the
ttJirona111s.
Thcn the "earthly" heroes
werc movie stars, sports
heroes, and Hollywood's
reigning
"lt"
girl. Today,
our heroes remain sports
heroes, sex symbols, and
movie stars.
"Then, as now, thc most
important surpl us country,
France, had decided to con–
vert its official holdings of
foreign exchange into gold,
The United States is
in ...
"The worst financia ! crisis
we
1
ve
since 1931 ."
_
Wil/iom McChesney Mortin,
regardless of thc cffects of its actions
on international liquidity.
"Then, as now," he concluded, "many
government officials, scholars, and busi–
nessmen were
convinced that
a
new eco-
1/0mic era had opened,
an era in which
business fiuctuations have become a
thing of the past, in which poverty was
about to be abolished, and in which
pcrennial economic progress and expan –
sion were assured."
Mr. Martin, had he spoken four ycars
latcr in 1969, could have added a few
more startling financia) comparisons.
For instance, the
prime iuterest rafe
of
thc Federal Reserve Board has reach<!d
finandal matters shows striking sim–
ilarities between the 1920's aod 1960's.
However, al! these conditions, then as
now, are
mere/y
cffects.
Many controls to offset a depressioo
were instituted in the 1930's, 40's and
50's. But thesc deal only with the
Ef'I'IKTS.
Thc basic
CAUSES
of the
Depression are still with us. The worri–
some c¡ucstion is:
"HOTI7
will they
express themselves cconomically
?"
Society in the 1920's
Look at the Social Order of the
1920's. In it we will únd the
1111der·
lying calfse
of thc Great Crash. Govern-
had
1968
Stadium building abound-
ed, crowds of over 50,000
watched Red Grange or Babe Ruth,
fan (atic) s paid over a miliion dollars to
see each major Dempsey fight, the
World Series was the talk of millions.
One need only look at his television
screen to see the similarities.
Like the Sixties, the Twenties wit–
nessed an initial widespread migration
from the farms to the cities.
It
was an
age of fascination with new
gadgetry
(thc telephone, planes, appliances -
and especially the car). Henry Ford and
Walter Chrysler were the great success
stories in business.
The listo( comparisons is endless:
C,.ime:
In 1930, despite the curse of