1931 Prohibition Crisis in Germany

 

Readers saw in Prohibition and The Crash how U.S. Call Money rates skyrocketed when Congress decreed beer and wine felony drugs with the 02MAR1929 Five & Ten law.(link)
 

Once the League of Nations Opium Advisory Committee recommended, and the League itself adopted replacing markets with meddling on a global basis in its 1929-1930 sessions, the largest and most competent pharmaceutical companies in the world understood they had again been singled out for rough handling. I.G. Farben was--despite the prior restrictions that brought on WW1--the world's fourth-largest corporation of any kind in 1931. All through 1930, Committeemen from opiate-producing nations waved reports of drug seizures like bloody shirts as rhetorical openings for the heaping of scorn and opprobrium. What changed in 1931 was packing the committee with violently prohibitionist "victim" members to draw up regulations to forever ban laissez-faire markets from the face of the planet.

Fanatical prohibitionist Herbert Hover took office March 4, two days after beer became dope and 33 days after the League again declared war on German, Dutch, Swiss, Peruvian, Bolivian, Japanese and Netherlands East Indies drug producers. The call money market, like a leper's bell, announced the coming Crash and Great Depression.  

American government officials in 1931 were gunning down and jailing citizens, confiscating homes, factory plants, ocean liners, bank accounts. Official zealots bankrupted businesses and sued huge corporations such as Hershey's (of Hershey, PA), Corn Products Refining (next to Cicero, Illinois), American Maize (in Hammond, Indiana) and lately a long list of New York Banks (including Bank of America) involved in financing the Atlantic Highlands smuggling syndicate north of Atlantic City. That two-state operation involved radio stations, shipping docks, warehouses, an observatory and a cryptography system distinguishing bulky liquor from lightweight and expensive drugs which circulated much like currency throughout Dry America. Adolf Hitler's platform had since 1920 demanded revogation of the Versailles Treaty. That was the WW1 surrender treaty that incorporated all of the earlier drug bans that triggered WW1 and charged war reparations payments. Only by marketing drugs had Germany managed to keep afloat. But by the first week of July, 1931, collapse was certain to occur no later than July 15--the due date for the next reparations installment. The New York Times produced sparse, laconic coverage of the antidrug tale unfolding in Geneva. Other newspapers repeated Hoover propaganda and dodged the subject as best they could.

Trilby, a mind-control movie when the Harrison Act was news, was remade in 1927 as Svengali when the Manly Sullivan decision crashed European markets, then again in 1931.(link) Rasputin and The Empress was a related prohibition-era remake. 

 

Newspaper editors, like trained dogs understood they'd better not harp on the logical causation or probabilistic dependence between banning trade and crashing economies--or else! Indeed, so ingrained was the censorship that 16 years later Kurt Schumacher, in discussions of Marshall plan subsidies and trade rules noted that “It was economic crisis that brought Hitler to power, and the United States,” he then argued, was, “now indispensable in preventing another one.” The realization that the same sort of at-gunpoint prohibitionism that concurrently wrecked the U.S., Asian and European economies in the interwar period remained deeply submerged even after three opium wars, several drug Panics, Balkan Wars, WW1, the Crash and ancillary crumblings. Still, there is much to be gleaned from papers and government communiqués of the time--and from the gangster movies--arriving at the rate of one per week--advertised in the papers alongside Chesterfields, Luckies, Old Gold and soon...

Christian National Socialist STURM cigarettes!

On July 1, the Brüning cabinet had learnt that the losses of NORDWOLLE (of NY dope-in-woolens seizure fame) amounted to RM 200 million, not RM 54 million as had been officially reported in mid-June. The Schenectady Gazette heaped praise on Hoover's Moratorium on Brains, but noted bloody revolt in Peru and listed NY prohibition seizures for the preceding year: 14546 arrests, 730 cars seized, 7 boats, 915 stills, distilleries; 1,366,590 gallons beer, 289,988 gallons spirits, mash 2,382,941 gallons, wine 114,838 gal, and cider 238,535 gallons.(link) 

The Berkeley Daily Gazette feigned surprise with NATION WARNED OF COMMUNIST TREND--LOS ANGELES JULY 1. "The United States is facing the rising tide of communism," said Augustus O Thomas, who never mentions capitalism defined by Hoover Republicans as a Comstock-ordered protectionist enclave of mystical bigots who define most everything as "narcotic" then ban it as traffic. The U.S. Treasury showed a $903,000,000 deficit, about 5x the surplus of 6 months before. Bank of America, of smuggler-financing fame, lowered its dividends during the ongoing smuggling syndicate trial. German issues were the weakest in the European section, selling off in sympathy with the decline on the Berlin Bourse... while South American obligations weakened all along the line.(link) 

The July 2 Berkeley paper revealed in its p16 continuation that the German budget seemed to balance in April, (recall that 19th of April the Milwaukee docked at NY with a massive shipment of opiates packed in woolens). By June 6 the economy was crumbling so fast that Hindenburg slashed outlays another 300,000,000 marks and imposed 713,000,000 marks in new taxes.(link) That same day in Geneva, J.K. Caldwell of the American antidrug delegation obliquely informed the State Department that truculent efforts to disentangle control of drugs from Versailles Treaty Article 23 might be countered by reference to 18OCT1917 Hague proposals offering bureaucratic doubletalk as an alternative to war.(link) Unmentioned was that #2 National Socialist plank demanding ever more loudly the abrogation of the Versailles Treaty--whose article 23 incorporated all prewar Hague and Geneva drug prohibition policies. The possibility of the whole Moratorium distraction backfiring and a rearmed Germany lusting for revenge was a clear but future danger. The following day's papers called attention this prospect in unusually stark terms, as we shall see.  *-*-*

Good Reading: Still The Marshall Plan, which is an unusually lengthy blow-by-blow description of how "our Soviet allies" proceeded to again devour Finland, Czechoslovakia and dictate East Germany while vigorously putting stolen Los Alamos plans to use for the production of nuclear weapons. Unmentioned is the way our fearless leaders responded by reviving Harry Anslinger, who basically recycled National Socialist propaganda by replacing "Jew" with "narcotic" and again hobbling South American economic development. The blind spots and elisions that plague these sorts of blinkered documendacities are what got us into two World Wars... and our current predicament. 

Our current predicament includes the Republican version of The Reich Flight Tax (German: Reichsfluchtsteuer). Wikipedia explains it was is a German capital control law implemented in 1931 to stem capital flight from the German Reich. After seizing power, the Nazis used the law to prevent emigrants from moving money out of the Reich. Their descendants STILL use it for the same purpose--including a church tax! (link) Now that the Libertarian party has been compromised by nationalsocialist infiltration and robbed of its law-changing spoiler clout, American Citizens Abroad is acting to counter that form of asset-forfeiture looting. Like Brain Drains of earlier decades, efforts to stanch that plus the Dollar Drain are a reaction to the unexpected consequences of prohibitionist aspects of christian national socialism--as now modified for U.S. consumption.(link) Reporters are already parsing out the Administration's aping of previous errors.(link)

Get the big picture in Prohibition and The Crash on Amazon Kindle in two languages. After this you’ll be able to explain to economists exactly how fanaticism and loss of freedom wrecked the U.S. economy.

Prohibition and The Crash, on Amazon Kindle (link)

ASYLUM APPLICATION FORM i589 INSTRUCTIONS IN PORTUGUESE: INSTRUÇÕES PARA O FORMULÁRIO DE ASILO i589. What we did was make the Political Asylum instructions accessible to and understandable by people accustomed to thinking in Portuguese. This costs one dollar ($1) and you can read it on a cellphone with the Kindle app.(link)

Comment at LIBtranslator, my political economy blog at https://libertrans.blogspot.com/

Brazilian Sci-fi from 1926 featuring the adventures of a Rio de Janeiro man-about-town and the beautiful daughter of an elderly scientist–touting alcohol prohibition, eugenics and racial collectivism–in America’s Black President 2228 by Monteiro Lobato, translated by J Henry Phillips (link)

I also produce books and articles in Portuguese, using Brazilian historical sources at http://www.expatriotas.blogspot.com or www.amigra.us

My financial history blog, http://www.Libertrans.us, is LIBtranslator, readable at libertrans.blogspot.com

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