Germany's Gathering Storm, 1931

 

American papers and politicians made the Moratorium an anchor to draw attention away from the cocaine, marijuana, hashish, coca leaves and newfangled opiates limitation convention. Few suspected the USA produced more cocaine than its commercial rival Germany  

Newspaper headlines for 03JULY1931 painted a grim picture of Germany.(link) One-third of the workforce was jobless, clashes among police, communist and nationalsocialist agitators were breaking out everywhere. (link). France was making trouble, large banks were failing and German officials were again begging for a moratorium on loan and reparations payments, just as they had in March of 1922. Back then it was the looming Jones-Miller Act to ban all importation of heroin into the US. Government agencies and VA hospitals had already stopped buying the painkiller of which Germany was the leading producer.  The following year hyperinflation completely wrecked Germany's economy.(link) But the 1931 situation looked even worse. 

July headlines told of the Atlantic Highlands smuggling syndicate prosecutions, trials of Russian-born failed Bank of United States/BUS officials, Al Capone trials for income tax evasion--thanks to the 1927 U.S. v. Sullivan decision making smugglers liable for taxes on illegal profits--and War Department Military planes shifting from parades over major cities to Gulf Coast patrols. Hoover Administration narcotics agents as of May 1931 became smugly confident Germany would sign any drug limitation "agreement" slid in front of them. The newspaper articles were interlinked. The BUS failed after agents grabbed half a ton of morphine off the S.S. Alesia, and the Atlantic Highlands trial involved smuggled drugs in addition to liquor. All of these proceedings involved tax liability. Agents could now invoke huge fines and forfeitures for narcotics smuggling thanks to the 1930 Tariff Act. Also as of 1930, Germans could be extradited to the United States for violating drug laws. None of these events or new laws are mentioned in books or articles purporting to "explain" ubiquitous Banking Panics, Crashes and Recession events. Yet every one of these prosecutorial liabilities now encircled the large load of drugs and woolens seized aboard the Hamburg-American liner Milwaukee the third week of April. Hoover and Anslinger fancied they had the Germans right where they wanted them.

Herbert Hoover had three billion dollars on the table, said the papers.(link) Backers warned France would suffer if the Hoover Moratorium failed; skeptics warned that Germany would never pay another pfennig on reparations or loans if it did pass.(link) By July 3, the Reichsbank had used up the entire $100,800,000 credit just gotten. Small wonder. The Nordwolle bankruptcy was costing DM 200 million, nearly 4x the earlier estimate, and the largest German state bank--the Landesbank der Rheinprovinz--was, like the Austrian Danat Bank, turning up insolvent.(link) Violence was breaking out all over Europe, dry America and Latin America,(link); not even cops were safe in Germany (link) with 1/3 of industrial workers jobless.(link)

Germany began making noises about defaulting on loans and reparations if the Moratorium did not give them some relief. Italy had already done much the same back in June. On Saturday, July 4, Reichsbank president Luther warned the German Chancellor that at this rate, there would not be money enough to pay the reparations installment due July 15. U.S. politicians and papers cut out all mention of drug prohibitionism and sweated to make the Moratorium on Brains look as though that was the panacea for restoring confidence. It was not the best of times, and worsening daily. 

RCA switched to non-replaceable cheap NiCAD batteries on its mp3 players. I used a short USB extension to hook the player to a cellphone recharging battery pack. Once the charging settles down, you can turn the player on and use it for many hours. 

Good reading and listening: The Autobiography of Calvin Coolidge.(link)  I read the book years ago and was delighted when a fellow blogger steered us to this elegant Librivox recording. The book is short and Cal's writing style was clear and simple. His training was in banking, so Coolidge had an unusually clear perspective on the way prohibition laws were damaging the U.S. and global economies, steering us toward Panics, Crashes and War. The high-quality mp3 version is divided into chapter files, easy to listen to on any cheap mp3 player. 

The picture shows RCA players capable of playing audiobook files several hours long, connected to recharging battery packs made for cellphones. The player's cheap batteries are not replaceable but the work-around adds battery capacity so the player can run for many hours without pause, then start back up the next day right where you left off. Philips and RCA both made really nice players that let you swap rechargeable batteries in the middle of a book without losing your place. None of the many Chinese models I've tested offer this useful feature, and nobody seems to be making players that don't lose their place AND let you replace the battery. The hack is clunky and ugly, but effective. 

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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