The Curse of the Corporation
Part XXII 1910 CE to 1932 CE
1910 CE - Portugal - A popular uprising forces the Portuguese king Manuel II to abdicate and Portugal becomes a republic.
1910 CE - Italy - Pope Pius X refused to receive ex-President Theodore Roosevelt because he had lectured in a Methodist church in Rome, which angered the American people. The pope forced all clergy to take an oath disavowing modernism, causing worldwide harassment of scholars which widened the breach between the church and the intelligentsia. People called this a form of thought control. Pius X believed that modernism had an objective to replace Jesus Christ in the family, the school, and the community in general. He prohibited the use of the veto in future papal elections.
Canon law 1325: No Catholic can debate matters of faith with non-Catholics.
Canon law 1386: No priest can publish a book, contribute to newspapers or magazines without Bishop approval.
1910 CE - United States - Eight financiers, including the host, met in absolute secrecy at the private hunting club of J. P. Morgan - the Jekyll Island Club off the coast of Georgia - "to shoot ducks". News of this meeting did not leak for six years, but from then on snippets of information were made public. For example, on 18 January 1920 CE, The New York Times made a most revealing statement about the Federal Reserve System, the basic plan for which those secretive bankers had proceeded to draft back in 1910 CE "The Federal Reserve is the fount of credit, not of capital." This meant that Reserve notes, instead of being backed by precious metal or other suitable commodity which would provide capital funds for the betterment of industry and commerce, are backed by paper loaned at interest.
J. P. Morgan and his "duck shooters" proceeded to draft the basic plan for the Federal Reserve System with five objectives
- Stop the growing competition from the nation's newer banks.
- Obtain a franchise to create money out of nothing, for the purpose of lending.
- Get control of the reserves of all the banks.
- Get the taxpayer to pick up the cartel's inevitable losses.
- Convince Congress that the purpose of the FRS was to protect the public.
It succeeded brilliantly. As Anthony Sutton remarks about one of the more blatant scams in history
"The Federal Reserve System is a legal private monopoly of the money supply operated for the benefit of the few under the guise of protecting and promoting the public interest."
"Constitutionally, the Federal Reserve is a pretty queer duck."
Wright Patman (1)
"It is necessarily part of the business of a banker to maintain appearances and to profess a conventional respectability which is more than human. Lifelong practices of this kind make them the most romantic and the least realistic of men."
John Maynard Keynes (2)
"There is a camaraderie about the Fed, a sense of a secret society working together in the bowels of the economy, keeping confidence with a tenacity quite extraordinary in America, manipulating mysteries the outside world (which includes bankers and monetary economists) does not begin to understand."
Martin Mayer (3)
"In the real world, banks extend credit, creating deposits in the process and look for the reserves later. The question then becomes one of whether and how the Federal Reserve will accommodate the demand for reserves. In the very short run, the Federal Reserve has little or no choice about accommodating the demand … "
Alan Holmes (4)
In response to taxpayer complaints, the Appropriations Act of 1910 tightened disclosure regulations for Taft's corporation excise tax. Henceforth, tax returns would be open to inspection "only upon the order of the President." It was a blow to progressives in both parties, who had hoped the tax would serve as a means to regulate private corporations by fostering the availability of accurate financial information.
Willis Van Devanter
Joseph Rucker Lamar
Nominated by Masonic President William Howard Taft, Willis Van Devanter, and Joseph Rucker Lamar became Associate Justices of the United States Supreme Court in 1910 CE. Both Devanter and Lamar were Freemasons. Devanter would serve as Justice for twenty-six years, four months and twenty-nine days, until he retired on June 2, 1937 CE. Lamar, serving six years on the Bench, had been Senior Warden of Webb Lodge #166 in Augusta, Georgia, in 1885 CE, but apparently never became Master of the Lodge. He died on January 2, 1916 CE, at the age of fifty-eight.
"Human society has its origin from God and is constituted of two classes of people, rich and poor, which respectively represents Capital and Labor."
The New World, the Official Organ of the Roman Catholic Church in the Archdiocese of Chicago, Ill, Comment on the Federation of Catholic Societies held at New Orleans, November, 1910.
1911 CE - Iran - Russia invades the northern provinces of Iran.
1911 CE - Portugal - Portugal declared a separation of church and state under protest from the Vatican. At the same time Pope Pius X supported the Catholic minorities in Poland and Ireland, angering the Russian and British Governments.
The Dodecanese Islands
1911 CE - Greece - Italy declared war on the Ottoman Empire (Turkey) eager to lay hands on Tripolitania. Her fleet conquered Rhodes and the Dodecanese Islands.
1912 CE - Libya - Italy takes Libya and the Dodecanese islands from the Ottoman Empire.
1912 CE - Europe - A Balkan League of Montenegro, Serbia, Bulgaria and Greece declares war, known as the "Balkan War," on the Ottoman Empire and drives the Ottomans almost entirely out of Europe.
1912 CE - England - Two thousand strikes this year in England reflect a deep-rooted dissatisfaction with conditions. Russia also had about 2,000 strikes this same year.
1912 - 1928 CE - Republic of China - The beginning of Republican China was a very flawed business. When a rebellion broke out on 10 October 1911 CE, Sun Yat-sen, who headed the "Revolutionary Alliance" [Tongmenghui] since 1905, returned from exile and was invited to become the Provisional President. However, the Army commander in Peking, Yüan Shih-k'ai [Yuan Shikai], who was made the Imperial Prime Minister in November 1911 CE, refused to depose the Emperor unless he was made President. Sun Yat-sen agreed to a compromise. The Emperor abdicated and Sun Yat-sen became the first official President of China on 1 January 1912 CE. Sun then resigned on 10 March, and Yüan Shih-k'ai became President. It then was not long before Yüan entertained plans of establishing himself as Emperor. He briefly declared himself Emperor between December 1915 CE and March 1916 CE. This was not popular; he retracted the declaration, and then soon died anyway. In July 1917 CE, a Warlord (Chang Hsün, Zhang Xun) tried to restore the Emperor Pu Yi (who was allowed to live in the Forbidden City until 1924 CE). The Republican Government was reestablished, but late in the same year Sun Yat-sen began forming rival governments in the South. Some semblance of a Constitutional order was maintained, but the Central Government quickly lost authority over most of the rest of the country; and Peking itself became this mainly meant Chang Tsolin [Zhang Zuolin], the "Old Marshal," Warlord of Manchuria. Foreign governments, however, continued to recognize the titular government in Peking, and the foreign run customs service remitted its revenues there.
Sun Yat-sen labored to set up a counter-government in the South. After a couple of false starts, he succeeded in 1923 CE. Although Sun Yat-sen died in 1925 CE, his movement had become established, and civil war was the result. Leading the Northern Expedition that occupied Nanking [Nanjing] in 1926 CE and eventually overthrew the Peking Government in 1928 CE, Chiang Kai-shek [Jiang Jieshi] emerged as the leader of the Kuomintang Party.
1912 CE - United States - A group of social reformers involved in the Hull House settlement in Chicago began calling for a federal agency to help protect children living in poverty. After several years of campaigning, the United States Children's Bureau was created in 1912 CE, [The Children's Bureau Act (37 Stat. 79, ch. 73) passed on April 9], the effort being spearheaded by Lillian D. Wald and Florence Kelley. Kelley, a Jewish socialist and graduate of Cornell University, became heavily influenced in socialism at the University of Zurich. She eventually translated Friedrich Engels' The Condition of the Working Class in England in 1844, which was published in New York in 1887 CE. In 1909 CE, Kelley became one of the founders of the National Association for the Advancement of Colored People (NAACP). President Taft appointed Julia Lathrop, a member of the Hull House settlement, as the chief of the bureau. Over the next nine years Lathrop directed research into child labour, infant mortality, mother mortality, juvenile delinquency, mothers' pensions and illegitimacy. The birth certificate was the necessary element to obtain the data for this socialist research. Sterling Edmunds would later say in his 1940 book The History Of The Most Successful Experiment Ever Made By Man To Govern Himself Without A Master that the Children's Bureau was the fastest growing government bureau ever in existence at the time.
The admission of New Mexico and Arizona marked the final two states on the North American continent to enter the Union in 1912 CE. The Union at that time consisted of 48 sub-corporations. In 1913 CE, the 17th Amendment was passed for electing senators directly by citizens of the United States. By people registering as "citizens of the United States" to vote for both senators and representatives, the authority each state government originally possessed is bypassed. Senators had previously been elected within the State legislatures and represented the corporate State governments, not the general population. As the State and Federal governments are operated by the consent of the governed, the constituents have transferred their power of attorney into the hands of those individuals who are elected. Thus, voters leave themselves at the mercy of their elected representatives in government.
The Master Key System, a 24-part study guide system that teaches the ultimate principles, causes, effects, and laws that underlie all attainment and success, was written by Charles Haanel.
1912 CE - Britain - France - Britain and France sign a naval treaty to fend off the threat of the German navy.
1913 CE - Germany - Germany began to mobilize by allotting huge sums of money to war materials. The Kaiser is determined to build a navy greater than England to dominate world trade like England had done.
1913 CE - Greece - The Ottoman protectorate of Crete is incorporated in Greece.
1913 - 1918 CE - Turkey - Germanus V becomes Patriarch of Constantinople. After Germanus V left office in 1918, the office would remain vacant until 1921.
1913 CE - United States - As part of his tax compromise (1909 CE), Taft had agreed to support a constitutional amendment authorizing federal income taxes. Not only would an amendment settle constitutional questions once and for all, it would also delay substantive action on the income tax, at least until ratification was complete. And since ratification was far from certain anyway, the amendment might defuse the income tax issue indefinitely, allowing it to simply fade away in the state legislatures.
West facade of the United States Supreme Court
In making his case for the amendment to wary Republican legislators, Taft stressed the importance of avoiding a confrontation with the Supreme Court. Such a fight, he warned, would diminish public confidence in the Court and threaten one of the pillars of American government. Congress agreed, and lawmakers soon approved the amendment and sent it to the states.
While opponents couldn't stop the 16th amendment, they argued long and hard against it. Richard E. Byrd, speaker of the Virginia House of Delegates made a particularly impassioned plea to reject the amendment, offering a potent rhetorical blend of state rights, limited government, and anti-tax convictions. Ratification, he warned, would open a new and dangerous chapter in American government
"A hand from Washington will be stretched out and placed upon every man's business; the eye of the Federal inspector will be in every man's counting house … The law will of necessity have inquisitorial features, it will provide penalties, it will create complicated machinery. Under it men will be hailed into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of Federal inspectors, spies and detectives will descend upon the state … Who of us who have had knowledge of the doings of the Federal officials in the Internal Revenue service can be blind to what will follow? I do not hesitate to say that the adoption of this amendment will be such a surrender to imperialism that has not been since the Northern states in their blindness forced the fourteenth and fifteenth amendments upon the entire sisterhood of the Commonwealth."
Opposition from Byrd and like-minded conservatives couldn't stop the amendment. To the surprise of many, the states ratified the amendment in relatively short order, and in February 1913 CE it became the Sixteenth Amendment to the Constitution.
Portrait of Woodrow Wilson by F. Graham Cootes
Edward Mandell House
Woodrow Wilson, became 28th President of the United States as a Democrat. His loyalty to the U.S. Constitution is in question because of his mentor, "Colonel" Edward Mandell House, who was the major founder of the earlier American Institute of International Affairs, known today as the Council of Foreign Relations (C.F.R.). The C.F.R. is an outer layer of the Royal Institute of International Affairs (Great Britain), whose purpose was to retake the United States as a British colony, and then unite the world under British control, which is another outer layer of the Round Table Organization, which to is an outer layer of the main core of a secret establishment called the Circle of Initiates founded in 1891 CE by Cecil Rhodes. (A) Cecil Rhodes is a known Satanic cult member , who has helped pave the way for the New World Order. (5) Wilson's Vice-President was Thomas R. Marshall, from 1913 CE until 1921 CE. Edward Mandell House, an agent for the Rothschild / Warburg / Rockefeller cartel (avowed Illuminists), gained national prominence as chief advisor to President Woodrow Wilson. It was House who persuaded President Wilson to sign the Federal Reserve Act. President Wilson is quoted as saying "I have unwittingly ruined my country." (6) Woodrow Wilson almost destroyed this nation and the Constitution.
"[Very] soon, every American will be required to register their biological property in a National system designed to keep track of the people and that will operate under the ancient system of pledging. By such methodology, we can compel people to submit to our agenda, which will affect our security as a chargeback for our fiat paper currency. Every American will be forced to register or suffer not being able to work and earn a living. They will be our chattel, and we will hold the security interest over them forever, by operation of the law merchant under the scheme of secured transactions.
Americans, by unknowingly or unwittingly delivering the bills of lading to us will be rendered bankrupt and insolvent, forever to remain economic slaves through taxation, secured by their pledges. They will be stripped of their rights and given a commercial value designed to make us a profit and they will be none the wiser, for not one man in a million could ever figure our plans and, if by accident one or two would figure it out, we have in our arsenal plausible deniability. After all, this is the only logical way to fund government, by floating liens and debt to the registrants in the form of benefits and privileges. This will inevitably reap to us huge profits beyond our wildest expectations and leave every American a contributor to this fraud which we will call "Social Insurance." Without realizing it, every American will insure us for any loss we may incur and in this manner; every American will unknowingly be our servant, however begrudgingly. The people will become helpless and without any hope for their redemption and, we will employ the high office of the President of our dummy corporation to foment this plot against America."
Conversation between Edward Mandell House with President Woodrow Wilson in a private meeting. [c. 1913 CE]
House Ways and Means Chairman Oscar Underwood, D-Va. Photo courtesy of the Library of Congress.
President Woodrow Wilson. Photo courtesy of the Library of Congress
Newly elected President Woodrow Wilson, a marrano Jew, included a call for tariff reform in his inaugural address. On April 8, he reiterated the need for revenue reform, with a particular emphasis on lower import duties. Four days later, House Ways and Means Chairman Oscar W. Underwood (D-Va.) introduced a bill to lower tariff rates from and average of 40 percent to roughly 29 percent. Too compensate for lost revenue, the bill also included an income tax. The House passed the legislation on May 8, and the Senate followed suit four months later. When Wilson signed the bill in October, it included an income tax of 1 percent on individual income over $3,000 ($4,000 for married couples). It also featured a progressive surtax ranging from 1 percent to 6 percent, depending on income.
Returns for the new tax were to be kept secret, reflecting the unhappy fate of corporate publicity features in the 1909 CE revenue law. The new income tax also provided for collection at source, meaning that some kinds of income would be taxed before it reached the taxpayer, as with the modern system of tax withholding.
The Bureau of Internal Revenue established a Personal Income Tax Division to collect the new tax. It included a Correspondence Unit of thirty employees dedicated solely to answering questions about the new levy.
Woodrow Wilson's picture is on the $100,000 Federal Reserve Note. What is so special about this president that it warrants his picture appearing on one of, if not the largest, bill ever printed? It turns out that Woodrow Wilson's mentor was Colonel Edward Mandell House, an agent for the Rothschild / Warburg / Rockefeller cartel (avowed Illuminists), and was the founder of what is today known as the CFR (Council on Foreign Relations) with chairman Henry Kissinger currently in charge. Also, it was House who persuaded President Wilson to sign the Federal Reserve Act whereby President Wilson is quoted as saying "I have unwittingly ruined my country" and later when referring to the Illuminati to be quoted as saying, "there is a power so organized, so subtle, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it."
In 1914, President Woodrow Wilson deployed federal troops in Colorado to suppress a labor dispute. Olson-Wolls pointed out that Wilson ordered the U.S. Army to disarm American citizens including state and local officials, sheriffs, the police and the National Guard; to arrest American citizens; to monitor the state judicial process and re-arrest (and hold in military custody) persons released by the state courts; and to deny writs of habeas corpus issued by state courts.
Front of $100,000 Note
Back of $100,000 Note
Because of these activities, Wilson earned his picture as a leader in achieving Illiminati's goals with his face on the $100,000 note, which was never used in general circulation, but only between Federal Reserve Banks.
A great world war was impending, which fostered both patriotic and anti-patriot sentiment. England and the European bankers needed a method to finance the war. The Federal Reserve Act was a concoction by several of the international bankers to gain monetary control of the government of the United States which had eluded them for so long. They finally had a weak president in Woodrow Wilson, who oversaw the passage of the act on December 22, 1913 CE. The House passed the bill 298-60 on the evening of Dec. 22, 1913 CE. The Senate began debate the following day at 10 a.m., and passed it 43-25 at 2:30 p.m. The New York Times reported on the front page that President Wilson (A) signed the Currency Bill into law in an "enthusiastic" public ceremony on Dec. 23, 1913 CE.
To properly understand the manner in which the Federal Reserve Banking still operates today, please read Deconstructing Banking and Money Dynamics.
Arrest of Gavrilo Princip in Sarajevo on June 28th 1914, at 11 a.m.
Archduke Franz Ferdinand
Princess Sophie Von Hohenberg
1914 CE - Yugoslavia - Gavrilo Princip, 1895 - 1918 CE, assassinated Austrian Archduke Franz Ferdinand, 1863 - 1914 CE, and his Czech wife Sophie in Sarajevo, Yugoslavia, sparking the First World War. The Serbs considered Princip as a hero. Serbia refused to assist authorities in bringing the guilty parties to justice. Ferdinand was field marshal of the Austro-Hungarian army. Austria believed the new Greater Serbia and Yugoslav would eventually attack, so war is declared. Germany is an ally of Austria and is dragged into the war. General mobilization for war took place in the following order, Serbia, Russia, Austria, France and Germany. France aligned itself on the side of the Serbs and Russians. Germany mobilized nearly 14 million men over the next four years of war. Charles I, Francois, 1892 - 1989 CE, the last of the Habsburg's, is made Emperor of Austria and Hungary following the death of his uncle.
Sophie and Franz Ferdinand lie in state
Mustafa Kemal Ataturk with his wife
1914 CE - Europe - World War I breaks out in the Balkans, pitting Britain, France, Italy, Russia, Serbia, United States and Japan against Austria, Germany and Turkey (Ottoman Empire). Turkey entered WW I under on the side of the Central Powers. Britain decided that it was time to dismantle the Ottoman Empire. A British officer, T.E. Lawrence (Lawrence of Arabia) was aided a Muslim revolt by the Hashemite family, rulers of Mecca and the Hijaz. The British, Australians and French carried out a long and bloody battle in the Gallipoli peninsula, and finally were forced to withdraw, suffering about 250,000 casualties. However, General Allenby conquered Palestine and Syria, and the Turks retreated before the British and the rebellious Arabs, as well as the Russians pressing from the north.
Turkey was forced to sign an ignominious peace at Sevres in 1919 CE, but Mustafa Kemal Ataturk, who seized the government from the Young Turks, refused to honor it and negotiated better terms at Lausanne in 1922 CE after defeating the invading Greeks. Ataturk abolished the Caliphate formally in the same year and began the modernization of Turkey.
1914 CE - Egypt - Hussein Kamel was appointed sultan of Egypt after the deposition of Khedive Abbas by the British. He ruled Egypt from December 1914 CE until October 1917 CE. Egypt was declared a British protectorate in 1914 CE at the beginning of World War I. These moves brought to an end the nominal control of Egypt by the Ottomans. Sultan Hussein was the son of Khedive Ismail (who was ruler of Egypt from 1863 CE till 1879 CE). In 1917 CE, Hussein Kamel died and was succeeded by King Fuad, his brother, and also son of Ismail Pasha.
1914 - 1922 CE - Italy - Benedict XV, alias Giacomo Della Chiesa, is elected pope. He retained strict neutrality and abstained from condemning any participants in the First World War. Germany offered to give Rome back to the holy see after defeating Italy. The pope dreaded Orthodox Russian expansion in the event of an Allied victory. Pope Benedict XV lifted the church ban on modernism hoping it would recover some of the lost authority of the church. He also encouraged a native clergy and asked the missionaries to seek the welfare of the people and not the imperialist interests of their own country of origin. The missionaries however continued to serve the Imperialist interests of the Church rather than the interests of the people. In Canada, the belief of one God, one Church and one King is firmly entrenched in the French Church Dogma. In practice it is one King (French culture), one French Church and maybe some room for God.
1914 CE - United States - In 1914 CE, the Bureau of Internal Revenue (BIR) unveiled its form for the new income tax. Four pages long, it was dubbed Form 1040 as part of the agency's normal sequential numbering process. No money was collected during the first year. Instead, taxpayers returned just a completed form, which was then checked by field agents for accuracy.
The 1913 version of Form 1040.
In 1915 CE, several congressmen complained that income tax forms are too complicated. The House Sergeant at Arms offered lawmakers assistance in preparing their own returns. As one congressman explained the complexity: "I write a law. You drill a hole in it. I plug the whole. You drill a hole in my plug."
The United States Supreme Court case of Brushaber v. Union Pacific reiterates the non-liability of private individuals for the so-called Income Tax. It declared genuine "Income Tax" to be a direct tax not authorized by the 16th Amendment, and that the 16th Amendment is superfluous because Congress already had power to authorize the tax in question, namely an excise tax on corporate or juristic privileges measured by the amount of income produced by the exercise of the privilege.
1915 CE - Arabia - Britain recognizes the kingdom of the Saudis in south Arabia.
Christian Victims of Turkish Genocide
1915 CE - Armenia - Under the guise of the war, the Ottoman Turks wiped out a third of the Armenian (Hayastan) population. It is estimated that 1.5 million Armenians were massacred or died during forced marches, deportations and internments in the Syrian deserts. Turkey, a predominately Muslim country, to present times, denies that this genocide ever happened and brings economic pressure against countries that mention it. The United Nations would recognize this massacre in the future, as would twelve other countries, including Canada.
1915 CE - Germany - This year marked the first use of poison gas during warfare by Germany. The Allies agreed with Italy that the Vatican should have no role in any peace treaty. Pope Benedict XV considered this vengeful.
1915 CE - Italy - Wlodimir Ledochowski is elected Jesuit Superior General, succeeding Franz Xavier Wernz.
1916 CE - Arabia - Husayn (Hussein), sharif of Mecca (north Arabia) and founder of the modern Hashimite dynasty, leads a revolt against the Ottoman Empire, while Britain and France secretly agree to divide the Arab lands of the Ottoman empire.
1916 CE - United States - Once again, war brought a steep decline in international trade. In 1914 CE, President Woodrow Wilson had asked Congress for emergency revenue legislation, and lawmakers responded with the War Revenue Act of 1914. Featuring a slew of new excise taxes, the law tried to compensate for slumping customs revenue a byproduct of the damper that war put on international trade. While lucrative, these consumption taxes proved unable to close the fiscal gap. Wilson soon joined Democrats in Congress to support a steeper, more productive income tax.
Rep. Claude Kitchin, D-N.C. Picture courtesy of the House Ways and Means Committee.
Rep. Claude Kitchin (D-NC) led a group of congressional insurgents pushing for steeper income taxes. While barely two years old, the income tax had already proven itself a viable source of new revenue. Kitchin and his allies all comfortably to Wilson's left wanted to make better use of the tax, redistributing tax burdens up the income scale.
Congress approved a new income tax as part of the Revenue Act of 1916. The law set out to raise $205 million in new revenue, with more than half coming from the income tax. Lawmakers boosted the "normal" income tax rate from 1 percent to 2 percent on net incomes over $3, 000 ($4,000 for married couples). They also raised surtax rates, moving them from a maximum of 6 percent on incomes over half a million dollars to a maximum of 13 percent on incomes over $2 million. The changes made the income tax steeper, but left it's base quite narrow; the levy still applied only to the nation's richest taxpayers.
The 1916 CE law also raised the corporation income tax from 1 percent to 2 percent, and introduced a new federal estate tax with an exemption of $50,000 and rates ranging from 1 percent to 10 percent. The law included a novel munitions tax designed to appease opponents of American involvement in the war; levied on manufacturers of military equipment, it was designed to prevent war profiteering. Finally, the law featured a host of excise taxes, as well as a capital stock tax on corporations.
In response to administrative concerns, the 1916 revenue law repealed the "collection at source" provisions of the 1913 tax. Instead, the law now required simply that income souyrces provide information to the government on the amount of income paid out to receipients.
Mercury dime Lincoln Memorial
The fasces, which is an ancient Roman representation of military authority. This symbol of fascism appears on the reverse of the Mercury dime (1916 - 1945 CE), the armrests of the Lincoln Memorial, and behind the Speaker of the House of Representatives. A fasces is a bundle of elm or birch rods bound together by a red thong, and containing an ax with blade projecting from the side, which was borne by lictors as symbols of power before the kings, consuls, pretors, and emperors.
1917 CE - United States - In March, Congress introduced a major innovation to the federal tax system: a corporate excess profits tax. This levy taxed any profits above a "reasonable" rate of return. Initially, this rate was set at 8 percent; if owners made more than that, then they paid taxes according to a steep rate schedule.
Supporters defended the new tax on equity grounds, but it also turned out to be the biggest money maker among new wartime taxes. It attracted bitter opposition from business groups, who considered the tax a threat to managerial prerogatives. They were certainly justified in their suspicion, since both Wilson and his allies in Congress considered the levy a legitimate means of business regulation. Many supporters hoped to retain it after the war ended.
The excess profits tax applied to individual as well as businesses, taxing the former at 8 percent on incomes over $6,000. This last innovation prompted critics to label it a "tax on brains," since it generally only applied to professionals and other highly educated workers.
In addition to the new excess profits tax, 1917 CE brought hikes in the regular income tax as well. The War Revenue Act of 1917 imposed a 2 percent tax on incomes over $1,000 ($2,000 for married couples). It featured graduated surtaxes reaching as high as 63 percent. It also added an additional tax of 4 percent to the existing corporate income tax.
The Bureau of Internal Revenue struggled to cope with the massive tax changes. Federal revenues grew dramatically. The average collection for each year in the twelve years preceding 1915 CE was $281 million. For the twelve years between 1915 CE and 1926 CE, the average was $2.78 billion. As one congressional report later summarized the change: "[A]n organization which had collected slightly over a quarter of a billion dollars yearly suddenly was required to collect annually nearly ten times that amount."
The estate, munitions, and capital stock taxes all required new administrative machinery. The agency added staff in all these areas to interpret and administer the taxes. The real work, however, came from the expansion of the individual and corporate income taxes, as well as the introduction of the corporate excess profits tax. To cope, the bureau expanded dramatically. In 1917 CE, as the agency began to gear up for war taxation, it employed 524 headquarters staff and 4,529 field staff. By 1918 CE, total staff had grown to 9,600, and it rose further to roughly 14,000, 18,000, 20,000, and 21,000 in each of the subsequent years.
The task almost proved too much for the agency. The expanded income tax deluged the agency in paper. When returns for 1918 CE began to arrive, those from 1916 CE had not been audited, let alone ones from 1917 CE. The number of returns filed in 1918 was five times greater than the number from 1917 CE. Subsequent increases only added to the burden. All told, the number of returns increased more than 1,000 percent between 1916 CE and 1921 CE, giving the BIR an impossible problem. "The enormous increase in the revenue," one BIR commissioner complained, "the overwhelming increase in the number of returns filed and increase in the work to be performed as a consequence thereof went by leaps and bounds. No one did or could foresee it, or prepare for it."
The United States eventually became embroiled in World War I, and towards the end of the war, Congress passed the Trading with the Enemy Act of 1917 (A). This Act defined, regulated and punished trading with enemies, who were then required by that act to be licensed by the government to do business. It was designed to prevent the transfer of gold between enemy nations by President Woodrow Wilson in order that enemy governments would not wreak havoc with the currency of the United States by creating great fluctuations in the value of gold and silver.
1917 CE - Germany - Wettin [vet´in], was a German dynasty, which ruled in Saxony, Thuringia, Poland, Great Britain, Belgium, and Bulgaria. It takes its name from a castle on the Saale near Halle. The family gained prominence in the 10th cent. as leaders in the German drive to the east, which made Saxony and Lusatia German. It acquired (c. 1100 CE) the margravate of Meissen and soon expanded its domains to include most of Saxony and Thuringia. In 1423 CE, Frederick the Warlike of Meissen was granted Saxony and became (1425 CE) elector of Saxony as Frederick I. The Wettin holdings were repeatedly subdivided. The most important division (1485 CE) established the Ernestine line and the Albertine line, named for Frederick II's sons Ernest and Albert. The electoral title and most of Saxony passed in 1547 CE from the Ernestine to the Albertine line. The Ernestine line retained its possessions in Thuringia but split into several collateral branches. In 1918 CE, when the house of Wettin was deposed in Thuringia and Saxony, its Thuringian holdings consisted of Saxe-Weimar-Eisenach, a grand duchy, and of Saxe-Coburg-Gotha, Saxe-Meiningen, and Saxe-Altenburg, which were duchies. From the branch of Saxe-Coburg-Gotha the Belgian, the English, and the Bulgarian dynasties were descended through, respectively, Leopold I of the Belgians, Prince Albert (consort of Queen Victoria), and Czar Ferdinand of Bulgaria. The English house changed its name to Windsor to avoid anti-German sentiment following World War I; the Bulgarian branch was deposed in 1946 CE. A cousin of Prince Albert married Queen Maria II of Portugal and became king consort as Ferdinand II of Portugal. The Albertine line ruled in Saxony, obtaining hereditary royal rank in 1806 CE; it also ruled Poland from 1697 CE to 1763 CE.
The original maiden name of Queen Elizabeth II was determined to be Wettin, based on the royal lineage descending from Prince Albert.
1917 CE - England - The "Balfour Declaration" by the British government promises a Jewish homeland in Palestine. Arabs remained bitter that the British did not immediately fulfill their promise for an independent Arab empire that included Syria, and for the granting of Palestine as a homeland for the Jews. The Sykes-Picot Agreement of 1916 called for part of Palestine to be under British rule, part to be placed under a joint Allied government, and for Syria and Lebanon to be given to the France. However, Britain also offered to back Arab demands for postwar independence from the Ottomans in return for Arab support for the Allies and seems to have promised the same territories to the Arabs. In November 1917 CE, before it had conquered Jerusalem and the area to be known as Palestine, Britain issued the Balfour Declaration, stating Britain's support for the creation of a Jewish national home in Palestine, and leading to the League of Nations mandate for Palestine. The mandate, and subsequent creation of the State of Israel, led to the Arab Israel conflict, which has resulted in several wars.
Petrograd, 4 July 1917. Street demonstration on Nevsky Prospekt just after troops of the Provisional Government have opened fire with machine guns.
1917 CE - Russia - The Russian Revolution began, 1917 - 1920 CE, and evolved into a civil war that would have a most profound impact on the world.
Lev (Leon) Davidovich Bronstein (Trotsky), 1879 - 1940 CE, a Jewish Russian returned to Russia as a member of the Central Committee of the Bolshevik Party led by Vladimir IIich Ulyanov (Lenin), 1870 - 1924 CE. Bronstein (Trotsky) created the Red Army.
1918 CE - Europe - World War I ends with the defeat of Germany (which has to cede several regions to France and Poland, and all the African colonies) and Austria (which has to cede regions to Italy and grant independence to Yugoslavia).
1918 CE - Germany - The Bauhaus opens in Weimar. Universal female suffrage begins in Germany.
1918 CE - Iraq - Jordan - Britain takes control of Iraq and Transjordan after the defeat of the Ottoman Empire in World War I.
1918 CE - Yemen - Yemen becomes independent from the Ottomans under Yahya, the imam of the Zaydis.
1918 CE - Yugoslavia - Yugoslavia is created from the Kingdom of Serb, Croat and Slovene assembled on the Balkan ruins of the Ottoman and Hapsburg empires. Acrimony soon erupted between Catholic Croats and Orthodox Christian Serbo-Croats. Iceland becomes a nation as does Hungary and Czechoslovakia.
Coronation of Catholic Emperor Charles I
1918 CE - Austria - Hungary - Charles I, Francois, 1892 - 1989 CE, the last of the Habsburg's, Emperor of Austria and Hungary, declared a Austrian Federative State in an attempt to hold his empire together. A grandnephew of the emperor Francis Joseph I, Charles became heir presumptive to the Habsburg throne upon the assassination of his uncle Francis Ferdinand on June 28, 1914 CE, whose children were barred from succession because of his morganatic marriage.
Hungary and Czechoslovakia however declared their independence. On November 11, Charles I, Francois, was forced to abdicate and was exiled to Switzerland. The Habsburg Austro-Hungarian dynasty that believed in the divine right of kings, effectively ended with the banishment of Emperor Karl (Charles I) Habsburg the following year.
1918 - 1921 CE - Turkey - The Patriarch of Constantinople is vacant.
1918 CE - United States - The Revenue Act of 1918, actually passed in early 1919 CE, made relatively few major changes in the tax structure, but it did raise rates on individual and corporate income, corporate excess profits, and estates. The law provided for normal and surtax rates that rose the dizzying level of 77 percent on the biggest incomes. Corporations were given an exemption of $2,000, but rates were raised to 12 percent on net taxable income. The law also rectified numerous mistakes in earlier revenue laws, most of which had been enacted in great haste.
The income tax now occupied a central place in the federal revenue system. In 1916 CE, income taxes had been providing 16 percent of federal revenue. From 1917 CE to 1920 CE, that percentage ranged as high as 58 percent. The tax was now a pillar of federal finance. Still, however, it remained a narrow levy. In 1920 CE, only 5.5. million returns showed any tax due.
William G. McAdoo, Wilson's Secretary of the Treasury. Photo courtesy of National Archives.
On May 27, Wilson makes his famous "politics is adjourned" speech to urge higher taxes, including levies on income, estates, and excess profits.
Meanwhile, the BIR began a massive recruitment campaign to help redress its chronic personnel shortage. More than 1,000 auditors were hired in the first six months of 1919 CE. The agency still struggled to keep up, however; delays in the printing of tax forms and instructions prompted an extension of the filing deadline from March 1 to April 1.
On October 27, the Volstead Act, providing for enforcement of the new Prohibition Amendment, passed over Wilson's veto. BIR commissioner was charged with enforcing the act. A new Prohibition Unit was created on December 22, allowed a budget of 2 million under the Volstead Act.
Winston Churchill, Clementine Churchill and Bernard Baruch
1919 CE - France - The American President, Woodrow Wilson, was "advised" at the Versailles Peace Conference near Paris by Colonel House and Bernard Baruch, both Jewish Rothschild clones and leaders of the Round Table in the United States; when the elite of the Round Table from Britain and the United States, people like Alfred Milner, Edward Mandel House, and Bernard Baruch, were appointed to represent their countries at the meetings which decided how the world would be changed as a result of the war these same people had created. The British Prime Minister, Lloyd George, was "advised" by Alfred Milner, Rothschild employee and Round Table leader, and Sir Phillip Sassoon, a direct descendent of Mayer Amschel Rothschild, the founder of the dynasty; The French leader, Georges Clemenceau, was "advised" by his Minister for the Interior, Georges Mandel, whose real name was Jeroboam Rothschild. (7)
1919 CE - Europe - European socialists split into "Communists" and "Social Democrats."
1919 CE - Afghanistan - Afghanistan gains independence from Britain.
1920 CE - Palestine - Palestine becomes a British protectorate.
1920 CE - Russia - The Russian Revolution had begun without violence, but by 1920 CE the victims of execution, famine and epidemics numbered almost 7 million.
1920 CE - Germany - The Nazi Party is formed this year in Germany called the National Socialist German Worker Party.
In Germany, psychiatrist Karl Binding and magistrate Alfred Hoche argue for the killing of those who are "Ballastexistenzen," i.e. whose lives are seen merely as ballast, or dead weight, within humanity; this includes Gypsy (Roma). The concept of Lebensunwertesleben, or "lives unworthy (or undeserving) of life," becomes central to Nazi race policy in 1933 CE, when a law incorporating this same phrase is issued by Adolf Hitler on July 14th that year. This policy is based upon the theory of "eugenics," which originated in England in 1883 CE.
Adolf Hitler, 1889 - 1945 CE, a Catholic Austrian, lists his position: revoke the Versailles Treaty, confiscate war profits, expropriate land without compensation, revoke civil rights for Jews and expel all Jews who emigrated into Germany after the war began.
1920 CE - Ireland - Ireland was partitioned by two enactments of the British government which (1) made the six counties of Northern Ireland part of the United Kingdom in 1920 CE and (2) gave dominion status to the Irish Free State in 1922 CE. The Irish Free State became an independent republic in 1949 CE.
Left to right: Sec. of the Interior John Barton Payne, Moreven(?) Thompson of Washington, D.C., Sec. of the Treasury David F. Houston, ex-Senator Willard Saulsbury, photographed at the Chevy Chase Club. Photo from Library of Congress (LC-USZ62-101983)
1920 CE - United States - A broad consensus held that steep wartime tax rates were unsustainable. Two of Woodrow Wilson's Treasury secretaries, Carter Glass and David Houston, suggested cuts. Even Wilson himself the architect of the progressive wartime tax system seemed to agree. In his 1919 State of the Union Address, he had suggested the possibility of reducing taxes.
Still, many Democrats and progressive Republicans were unwilling to roll back wartime tax reforms. Pleased with the newly progressive cast of federal revenue policy, they sought to retain some of its more progressive elements, including the excess profits tax.
Supporters believed that the profits tax - which imposed a graduated levy on business profits above a pre-determined "normal" rate of return on capital - to be a blow for egalitarian ideals. Rep. Claude Kitchin led the campaign to retain the tax. As chairman of the House Ways and Means Committee in the years leading up to World War I, he had helped craft the highly progressive wartime tax system. Now in the minority, he insisted that the tax should be made permanent, arguing that it would shift the fiscal burden to the individuals and corporations whose wealth posed a threat to American society.
Kitchin and his allies were not destined to succeed. Republican lawmakers joined with a series of GOP presidents to engineer tax cuts in 1921 CE, 1924 CE, 1926 CE, and 1928 CE. Andrew Mellon who moved into his Treasury office in 1921 CE and stayed their until 1932 CE was the principal architect of these reforms. As one wag remarked, "three presidents served under Mellon," and when it came to taxes, he was certainly correct.
The Independent Treasury Act of May 29, transferred the office of the Secretary of the Treasury over to a private corporation the Federal Reserve and their agents. The bulk of the ownership of the Federal Reserve System (8), a very well kept secret from the American people, is held by the following banking interests
- Rothschild Bank of London
- Rothschild Bank of Berlin
- Warburg Bank of Hamburg
- Warburg Bank of Amsterdam
- Lazard Brothers of Paris
- Israel Moses Seif Banks of Italy
- Chase Manhattan Bank of New York
- Goldman, Sachs of New York
- Lehman Brothers of New York
- Kuhn Loeb Bank of New York
The Federal Reserve Bank was neither Federal, nor does it have any reserves. The monetary policy was to create an "elastic" currency that was to be based on the labor of the American public using their property as collateral. The major banks of Europe were the sole shareholders in the stock of the Federal Reserve, which makes this particular banking monopoly a foreign corporation contractually bound with the United States government to supply currency which is created out of thin air and tracked simply as bookkeeping entries of debits and credits. Equity proceedings still maintain use of charge and discharge regarding the "account" of each "person."
The sole rise of Jews in the financial systems of America caused Henry Ford to make the following comment in the Dearborn (Mich) Independent regarding international banking
"How does the Jew so habitually and so resistlessly gravitate to the highest places? What puts him there? Why is he put there? What does he do there? What does the fact of his being there mean to the world? That is the Jewish Question in its origin. Fifty years ago, international banking, which was mostly in control of Jews as the money brokers of the world, was on top of business. It exercised the super-control of governments and finance everywhere. The significance of this is that the type does not grow anywhere else than on a Jewish stem. There is no other racial or national type which puts forth this kind of person. It is not merely that there are a few Jews among international financial controllers; it is that these world controllers are exclusively Jews. Since world-control is an ambition which has only been achieved by Jews, and not by any of the methods usually adopted by would-be world conquerors, it becomes inevitable that the question should center in that remarkable race."
The International Jew, Henry Ford Sr., p. 191, 1921.
A few years later Mr. Ford said "It is well enough that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." In his book "The International Jew," Henry Ford Sr. wrote the following
"When the powerful Jew is at last traced and his hand revealed, then comes the ready cry of persecution and it echoes through the world press. The real cause of the persecution (which is the oppression of the people by the financial practices of the Jews) is never given publicity."
The International Jew, Henry Ford Sr., p. 229, 1921.
Wary of the unpopularity of "German-sounding" names after World War I, August Beuck begins using the name Buick rather than Beuck as he christens the new post office in his Colorado hometown. The new name of the GM marquee seemed assuredly all-American in a time when anti-German feelings dominated the nation. The wave of intolerance had begun with the United States entrance into World War I, resulting in many a Schmidt becoming a Smith. Throughout the country, hundreds of German newspapers and publications were forced to shut down, and German language instruction came to an end in most states.
1921 CE - Jordan - The British install Abdullah, fourth son of Sharif Hussein of the Hashemite dynasty, as king of Transjordan.
1921 CE - Persia (Iran) - General Reza Khan seizes power with a coup.
1921 - 1923 CE - Turkey - Meletius IV Metaxakis becomes Patriarch of Constantinople.
Warren G. Harding
1921 CE - United States - Warren G. Harding becomes the 29th President of the United States as a Republican. Brother Harding became a Freemason when he was initiated on June 28, 1901 CE in Marion Lodge No. 70 in Marion, Ohio. Because of some personal antagonism, Brother Harding's advancement was hindered until 1920 CE, by which time he had been nominated for President. Friends persuaded the opposition to withdraw the objection, and on August 27, 1920 CE, nineteen years after his Initiation, Brother Harding achieved the Sublime Degree of Master Mason, in Marion Lodge. At his request, Brother Harding took the Oath of Office of President of the United States upon the same Bible as was used by Brother George Washington for the same purpose on April 30, 1789 the Altar Bible of St. John's Lodge No. 1, New York City. (9) Harding remarked privately to his wife while on a cross country trip "I have no trouble with my enemies … but my … friends … keep me walking the floor nights!"
William H. Taft, a Freemason, was nominated by Masonic President Warren G. Harding as Chief Justice of the United States Supreme Court. Taft held this position from 1921 CE until 1930 CE, after previously serving as 27th president of the United States from 1901 CE until 1913 CE.
The series of Mellon tax cuts began in 1921 CE, as legislators from both parties set about revising the wartime tax system. On April 30, Mellon asked Congress for a variety of tax changes, including elimination of the excess profits tax, a modest increase in the corporate income tax, a reduction in personal income tax rates, and the retention of most wartime excise levies.
Repeal of the excess profits tax was almost a foregone conclusion, enjoying broad, bipartisan support. In 1919 CE, President Wilson had told Congress in 1919 CE that the levy "should be made the basis of a permanent tax system which will reach undue profits without discouraging the enterprise and activity of our business men." But fiscal experts had since begun to question the tax.
Thomas S. Adams was arguably the most important tax policy expert of his day, a trusted adviser to both Democratic and Republican administrations. He was also one of the original champions of excess profits taxation. In 1920 CE, however, he dealt the levy a heavy blow, calling for its repeal. Having once defended the tax as a means to "allay hostility to big business," Adams now derided it as burdensome, complicated, and inequitable. Business leaders, he warned, understandably resented its "intricacy and capricious inequalities." Government officials, moreover, had found the levy hard to administer.
Columbia University economist Edwin Seligman was another vocal critic. More conservative than Adams, Seligman was a leading light of the economics profession and a pioneer in the study of taxation. With strong support from the business community, he argued that the excess profits tax posed a threat to corporate autonomy and economic efficiency. While supporting progressive taxation generally, Seligman argued that the excess profits tax was unwise. Instead, he favored broader use of the federal income tax.
Economist Edwin Seligman. Photo courtesy the History of Economic Thought Website.
Sen. Reed Smoot. Photo courtesy of the Library of Congress.
Not every economist, however, was a critic of the excess profits tax. Robert M. Haig, a Seligman protégé and colleague at Columbia, offered a compelling case for retention. The excess profits tax, he insisted, was both just and practical - or at least it might be, if Congress would enact several key reforms to simplify its administration. Compared with its alternatives, including higher income taxes or a national sales tax, the profits tax was far superior. Policymakers should "continue the policy of skimming the richer crocks of milk," he counseled, rather than opting for less progressive alternatives.
Expert debate notwithstanding, the forces arrayed against the excess profits tax proved irresistible. Even Democrats joined the campaign for repeal. Wilson's Treasury Secretary Carter Glass insisted that the tax "encourages wasteful expenditure, puts a premium on overcapitalization and a penalty on brains, energy, and enterprise, discourages new ventures, and confirms old ventures and their monopolies." Business leaders, meanwhile, agitated aggressively against the levy.
When Congress began consideration of the 1921 revenue bill, the sales tax proved to be a sticking point. Mellon's proposals, including excess profits repeal, sailed through the House of Representatives, arriving in the Senate almost intact. In the upper house, however, the bill ran into trouble. Sen. Reed Smoot, R-Utah, proposed a national retail sales tax, and he had considerable support among Senate leaders. Sen. George Higgins Moses, R-N.H., offered a colorful, if intemperate, appeal, insisting that a sales tax would "strike down the vicious principle of graduated taxation which appears in the pending [House] tax bill, and which is but a modern legislative adaptation of the Communistic doctrine of Karl Marx."
Moses failed to persuade his colleagues, especially after Mellon sided with opponents of the sales tax. Meanwhile, a strong coalition of Democrats and progressive Republicans challenged the bill on the Senate floor, opposing the sales tax and insisting on higher income tax rates. This "agricultural block" - derided as the "wild asses of the desert" by their enemies - also pushed for steeper estate tax rates, as well as higher corporate income taxes.
Nearing the end of the session, harried lawmakers agreed to a relatively moderate package of reforms. They eliminated the excess profits tax, but replaced some of the lost revenue with a hike in corporate income tax rates. They also lowered the top marginal income tax rate on individuals to 50 percent - a dramatic reduction from wartime highs but far less than Mellon had requested. Legislators increased the exemption for heads of families and for dependents, making the tax base somewhat narrower and lightening the burden for many middle income taxpayers. And they introduced preferential treatment for capital gains income.
As passed, the 1921 revenue act pleased almost no one. Critics complained that it was a pastiche of unrelated, politically driven compromises. Republicans were disappointed in its modest rate reductions; as Sen. Smoot observed, "When the bill becomes law it will be the present revenue baby merely dressed in pink instead of red." But at least one contemporary observer thought the country had dodged a bullet. "The leaders of each of the contesting parties," observed economist Roy Blakey, "as well as the nation at large had cause to be thankful that the law was no worse than it was."
Generally speaking, Mellon argued that tax burdens were too high. Steep rates, he insisted, served only to stifle incentive and foster tax evasion. "Any man of energy and initiative in this country can get what he wants out of life," he wrote. "But when initiative is crippled by legislation or by a tax system which denies him the right to receive a reasonable share of his earnings, then he will no longer exert himself and the country will be deprived of the energy on which its continued greatness depends."
President Calvin Coolidge, Secretary of the Treasury Andrew Mellon, and Secretary of Commerce Herbert Hoover. Photo courtesty of the Library of Congress.
Worse yet, Mellon argued, high rates didn't even raise money. By encouraging both legal tax avoidance and illegal tax evasion, they eroded the tax base and reduced overall revenue. Lower rates, he said, would actually raise money by spurring economic growth and reducing the incentive for tax avoidance. "It seems difficult for some to understand," he complained, "that high rates of taxation do not necessarily mean large revenue to the government, and that more revenue may actually be obtained by lower rates." In particular, Mellon insisted that high rates distorted investment decisions, boosting the popularity of tax-free state and local government bonds. Indeed, Mellon made these tax-free bonds a regular target of his reform attempts, but Congress resisted his plans to eliminate them.
In general, Mellon offered a consistent and politically compelling case for tax reduction, impressing even his opponents with his passion for sweeping cuts. "There was a mystical righteousness about tax reduction," observed Randolph Paul, a leading tax expert who would figure prominently in Roosevelt-era tax policymaking. That sense of righteousness even extended to specialized tax breaks for specific industries. Mellon and his supporters believed that tax reductions - almost any tax reduction - would help spur growth. A convenient side-effect of such narrow tax incentives, of course, was the power they conferred on policymakers, who used them to reward friends and political allies.
But for all his tax cutting zeal, Mellon was not quite singleminded in his pursuit of lower taxes. He split with some of his GOP colleagues to support the retention of both corporate and individual income taxes. When some Republicans tried in 1921 to advance a plan for a national sales tax, Mellon resisted the idea. And even while promoting repeal of the excess profits tax, he supported an increase in corporate income tax rates to compensate for the lost revenue. Perhaps most important, he advocated rate cuts for individuals but endorsed retention of the income tax. "The income tax," he assured lawmakers, "is firmly embedded in our system of taxation and the objections made are not to the principle of the tax but only to the excessively high rates." The comment reflected Mellon's assessment of political and economic realities. The income tax, he had concluded, was here to stay.
Mellon had a few distinctly progressive ideas. Of particular note, he suggested taxing "earned" income from wages and salaries more lightly that "unearned" income from investments. As he argued
"The fairness of taxing more lightly income from wages, salaries or from investments is beyond question. In the first case, the income is uncertain and limited in duration; sickness or death destroys it and old age diminishes it; in the other, the source of income continues; the income may be disposed of during a man's life and it descends to his heirs."
Surely we can afford to make a distinction between the people whose only capital is their metal and physical energy and the people whose income is derived from investments. Such a distinction would mean much to millions of American workers and would be an added inspiration to the man who must provide a competence during his few productive years to care for himself and his family when his earnings capacity is at an end.
It was a striking argument, especially coming from a friend of wealth and capital. But it was not out of character. Mellon believed that some degree of progressivity was necessary to forestall more radical attacks on capital. Such an argument did not sit well with many of his Republican colleagues, who longed to eliminate income taxes. Mellon remained committed, however, to taming the income tax, saving it from the excesses of its more ardent supporters, as well as its most bitter critics
On 25 July 1921 CE, Senator Owen stated in the New York Times
"The Federal Reserve Board is the most gigantic financial power in the world. Instead of using this great power as the Federal Reserve Act intended that it should, the board … delegated this power to the banks, … "
The Children's Bureau was eventually made responsible for administering financial aid to the States to help them improve conditions for children. In 1921 CE, the Congress passed the Maternity and Infancy Act, popularly known as the Sheppard-Towner Act [Pub. L. No. 97-67, 42 Stat. 224], which was "for the promotion, the welfare and hygiene of maternity and infancy and for other purposes," It passed in the senate with a vote of 63 to 7, by the house with a vote of 279 to 39, was finally signed by the president and became law on Nov. 23, 1921 CE. The act authorized $1,200,000 to be given each year to the States to help them improve their health services for infants and for mothers during childbearing. The bill was a direct outgrowth of a nine year study made by the Federal Children's Bureau, with the Bureau being administrator of these history-making grants-in-aid. This act and the acceptance of its benefits by the States created the "United States birth registration areas." (10)
The constitutionality of conditional federal grants came before the U.S. Supreme Court in the form of a challenge to the Sheppard-Towner Act, which established an innovative federal program authorizing annual grants to states that met certain conditions for the improvement of maternal and infant health. The Act was characterized as "a usurpation of power not granted to Congress by the Constitution an attempted exercise of the power of local self-government reserved to the states by the 10th Amendment." It was said to deploy federal spending power "for purposes not national, but local to the States," and to be unconstitutional because it was "an effective means of inducing the States to yield a portion of their sovereign rights." In Massachusetts v. Mellon, [262 U.S. 447 (1923 CE)] however, the Court repulsed this attack on the Act. The Court crafted standing and political question doctrines that to this day have essentially precluded judicial oversight of the federalism implications of the national spending power.
Challenges to the legality of such grants were rejected by the court on the grounds that participation in the programs was voluntary on the part of the states and thus did not violate separation of powers.
Grace Abbott, another member of the Hull House settlement, replaced Julia Lathrop when she resigned in 1921 CE. The Sheppard-Towner Act expired in 1929 CE, but
… it established the national policy that the people of the United States, through their Federal Government, share with State and local governments responsibility for helping to provide the health and welfare services children need for a good start in life. It also provided the blueprint for Title V of the Social Security Act, passed in 1935 and in operation continuously since then, which authorizes financial aid to the States to help them extend and improve their maternal and child health, crippled children's, and child welfare services. By delegation, the Children's Bureau administers these grants.
The Federal Children's Bureau was transferred to Department of Labor in 1913 CE. The Children's Bureau continued to be part of the Department of Labor until 1946 CE. As part of the same reorganization that created the Social Security Administration, the Children's Bureau was transferred to SSA, effective July 1946 CE. This was done, according to President Truman's executive order, because
"The transfer of the Children's Bureau … will strengthen the child-care programs by bringing them in closer association with the health, welfare, and educational activities with which they are inextricably bound up."
In 1968 CE the Children's Bureau became part of the Social and Rehabilitation Service; in 1970 CE it was submerged in a new Office of Child Development; later in the 1970s it became part of the Public Health Service; it is currently part of the Department of Health & Human Services' Administration for Children and Families.
The Federal Children's Bureau was concocted, campaigned for, implemented and maintained by socialists. Congressional speeches denounced the origins of the Federal Children's Bureau and the socialists who control and operate it. It was forerunner of the current government agencies that are responsible for the guardianship of all children by the State and Federal governments, constituting the basis of modern-day socialism through Social Security.
The rights of the individual are not derived from governmental agencies, either municipal, state or federal, or even from the Constitution. They exist inherently in every man, by endowment of the Creator, and are merely reaffirmed in the Constitution, and restricted only to the extent that they have been voluntarily surrendered by the citizenship to the agencies of government. The people's rights are not derived from the government, but the government's authority comes from the people.
City of Dallas v. Mitchell, 245 S.W. 944 (Tex.Civ. App. Dallas 1922).
1922 CE - England - Britain receives a mandate from the League of Nations to create a homeland for the Jews in Palestine, which starts large-scale Jewish immigration from Europe.
Winston Churchill - Time Magazine Cover 1923
King Fuad I
Winston Churchill, Prime Minister of England, a Freemason and Druid, stated to the London Press in 1922 CE
"From the days of Sparticus Weishaupt, Karl Marx, Trotsky, Belacoon, Rosa Luxenburg, and Ema Goldman, this world conspiracy has been steadily growing. This conspiracy played a recognizable role in the tragedy of the French Revolution. It has been the mainspring of every subversive movement during the 19th century. And now at last this band of extraordinary personalities from the underworld of the great cities of Europe and America have gripped the Russian people by the hair of their head and have become the undisputed masters of that enormous empire."
1922 CE - Egypt - Egypt declares its independence under Fuad I and a secular constitution is proclaimed to create a parliamentary monarchy.
1922 - 1939 CE - Italy - Pius XI, alias Ambrogio Damiano Achille Ratti, is elected pope. His motto is: Christ's peace in Christ's kingdom, meaning that the Church and Christianity should be active in, and not insulated from, society. Using the term kingdom, however, is already against the social trend toward democracy, placing the church at odds with Christian principles. His actions of introducing Catholic Action groups, however, inadvertently introduced the beginning of democracy into the church. He established the Vatican City as an independent neutral state with Benito Mussolini, Il Duce, the Italian Prime Minister. The Vatican had to recognize Italy as a kingdom with Rome as its capital, and Mussolini had to accept Catholicism as the official religion.
Benito Mussolini, Il Duce
1922 CE - Italy - Benito Mussolini, Il Duce, (1883 - 1945 CE) a socialist, gains power in Italy. He promises to have the trains run on time. He achieves this objective by shooting someone if it doesn't run on time. The news was full of his brutality but all countries choose to look the other way.
1922 CE - Iraq - The British install Faisal, third son of Sharif Hussein, brother of Abdullah of Transjordan, as king of the newly created state of Iraq.
1922 CE - Germany - The cost of a newspaper in Germany rises from 0.30 marks (1921 CE) to 70 million marks (1922 CE).
1922 CE - Russia - Russia is renamed as the Union of Soviet Socialists Republic.
1922 CE - Syria - Lebanon - Syria and Lebanon become French protectorates.
1922 CE - United States - The culmination of the codification of the Revised Statutes and the laws of the United States was adopted as the United States Code. The code combined all the laws into fifty categories, which task had originally been authorized under the Grant administration in 1871 CE. The Law Revision Counsel lists the Titles of the United States which have been enacted into positive law, and those which are not positive law. Of the 50 titles, only 23 have been enacted into positive (statutory) law. When a title of the Code was enacted into positive law, the text of the title became legal evidence of the law. Titles that have not been enacted into positive law are only prima facie evidence of the law. In that case, the Statutes at Large still govern. Title 26 Internal Revenue Code has never been enacted into positive law. See Title 44, Section 1505 as to documents required to be published in the Federal Register.
The applicable citation rule is that U.S.C. positive laws must cite to the U.S.C.; however, a different rule applies to non-positive enactments. Non-positive law may (permissively) be cited to the U.S.C. provided no "material" variance exists from the Public Law (published in the Statutes at Large); however, given such variance, the official law being the Public Law, citation must, in that event, be to the Statutes at Large. This issue is discussed in somewhat more detail in "Statutes at Large = Official U.S.C. = Presumptively Official."
Miguel Primo de Rivera
1923 CE - Turkey - Mustafa Kemal (Ataturk) abolishes the Ottoman empire and declares Turkey a republic.
1923 CE - Spain - Miguel Primo de Rivera installs a dictatorship in Spain. After a rapid and brilliant military career in Cuba, the Philippines, and Morocco, he became governor of Cádiz (1915 CE), then in turn captain general of Valencia, Madrid, and Catalonia. From Catalonia he staged a coup in Sept. 1923 CE, dissolving the Cortes and then establishing, with the full approval of King Alfonso XIII, a military directory. The constitution of 1876 as well as civil liberties were suspended. The military dictatorship was replaced by a civil one (1925 CE); both ruled quite moderately, without the brutalities and extreme repression that characterized later dictatorships. Primo de Rivera ended the war in Morocco (1926 CE), introduced many measures aimed at economic modernization and administrative reform, and launched an ambitious program of public works, but his rule aroused the opposition of anarcho-syndicalists, Catalan regionalists, and all liberals. An uprising in 1929 CE by the liberals did not succeed, but various political and economic failures of the regime soon led to his resignation in January 1930 CE. He died in exile in Paris.
1923 CE - Germany - Hyper-inflation is rampant in Germany, where the mark goes down from 2000 DM for $1 to 4.2 trillion DM to $1.
French and Belgian troops marched into Germany to settle a reparations dispute. This further humiliated the German people thereby generating more support for the Nazi movement.
On November 8, 1923 CE, Adolph Hitler led his Nazi followers in an abortive attempt to seize power in Munich in what became known as the "Beer Hall Putsch". Although the plan failed, and Hitler was imprisoned, the notoriety the Nazi leader gained laid the groundwork for the rise of the Nazi party. While in prison, Hitler wrote Mein Kampf, the book that described his political philosophy and planned conquest of Europe.
1923 - 1924 CE - Turkey - Gregory VII becomes Patriarch of Constantinople.
Warren G. Harding
1923 CE - United States - President Harding visited Alaska and receives a "long ciphered message" which visibly upset him, causing him to ask what a president could do when friends betrayed him; he died soon after among conflicting rumors about the cause of his death. He developed pneumonia and died suddenly on August 2, 1923 CE. Within minutes of Warren G. Harding's death at either 7:10, 7:20, or 7:30 p.m. on August 2, 1923 CE, rumors began to circulate. No one present at his demise could give the correct time of death. No one seemed to be sure who was on hand in the San Francisco hotel room when he breathed his last. Most of all, the four physicians who had been caring for Harding for the previous week could not agree on the cause of death. It had something to do with his heart. On the other hand, perhaps it was a stroke. Alternatively, it could have been both, exacerbated by the ptomaine poisoning that he may or may not have experienced a few days earlier in Vancouver. Despite the confusion over the time of death, surely an autopsy would resolve the uncertainty about what killed Warren G. Harding.
Except there was no autopsy. Mrs. Harding the "Duchess," as her husband called her would not permit it. Within an hour of his death, he was embalmed, rouged, powdered, dressed, and in his casket. By morning, he was on a train, headed back to Washington, D.C.
Calvin Coolidge became the 30th President of the United States as a Republican following the untimely death of Harding. His Vice-President was Charles G. Dawes from 1925 CE until 1929 CE. The status of both men as Freemasons is unknown. Coolidge was related to the following Presidents: William Henry Harrison, Benjamin Harrison, Thomas Jefferson, Andrew Jackson, Harry Truman, and Lyndon Johnson. (11)
1924 - 1925 CE - Turkey - Constantine VI becomes Patriarch of Constantinople.
1924 CE - United States - Mellon took another run at tax reduction in 1924 CE. He urged lawmakers to further cut income tax rates, arguing as he had in 1921 CE that lower rates would actually raise revenue. Existing taxes were simply too high, he told the chairman of the House Ways and Means Committee. "Ways will always be found to avoid taxes so destructive in their nature, and the only way to save the situation is to put the taxes on a reasonable basis that will permit business to go on and industry to develop," he wrote. "The alternative is a gradual breakdown in the system and a perversion of industry that stifles our progress as a nation."
The secretary proposed a top rate of 25 percent, insisting that lower rates would stem tax avoidance. He also proposed his special tax break for earned income, amounting to a 25 percent reduction for wage and salary income. Finally, he supported reductions in estate taxes, which Mellon considered a "levy upon capital," since it allowed lawmakers to extract capital from accumulated fortunes and use it for current operating expenses.
An unusual photo series of John Nance Garner from his time as vice president. Photos by Theodor Horydczak, courtesy of the Library of Congress.
Mellon met stiff resistance on Capitol Hill. With a smaller congressional majority than they had enjoyed in 1921 CE, Republicans had less room to maneuver. Rep. John Nance Garner (D-Tex) seized the opportunity to launch a Democratic attack, contending that the Mellon plan cut rates too much. "This is the time to determine the policy of who is going to pay the taxes," he told one observer. "The crux of the fight is the surtax. The Mellon 25 percent maximum is at least 10 or 15 per cent too low."
Republican stalwarts attacked Garner's substitute bill as a mishmash of bad economics. "You have heard of great musicians sitting down at a piano and improvising a tune," declared Rep. Ogden Mills (R-N.Y.) "Mr. Garner sits down at a table in this chamber and improvises a tax bill." But Garner was gaining ground, securing the votes of virtually all Democrats and even some progressive Republicans. Within three weeks, Republican leaders were ready to capitulate. Speaker Nicholas Longworth (R-Ohio) agreed to accept higher income tax rates, and even swallowed a hike in estate tax rates.
In the Senate, Republican leaders knew they had a weak hand, and they offered only limited resistance to the Democratic onslaught. President Calvin Coolidge reluctantly signed the 1924 act, complaining that Congress had ignored his recommendations. The law granted an immediate 25 percent rebate on taxes paid for 1923 income. It also reduced the top marginal income tax rate to 40 percent - a substantial cut but, again, much less than Mellon had sought. The secretary got his 25 percent earned income credit, but he also had to swallow a hike in estate tax rates from 25 percent to 40 percent.
1925 CE - Iran - Reza Khan, 1925 - 1941 CE, appoints himself as Shah of Persia, the Qajar dynasty ends and the Pahlavi dynasty begins. He began his career as an army officer and gained a reputation for great valor and leadership. He headed a coup in 1921 CE and became prime minister of the new regime in 1923 CE. He negotiated the evacuation (1921 CE) of the Russian troops and (1924 CE) of the British forces stationed in Iran since World War I.
Virtually a dictator, Reza Khan deposed Ahmad Mirza in 1925 CE, the last shah of the Qajar dynasty, and was proclaimed shah of Iran. He changed his name to Reza Shah Pahlevi, thus founding the Pahlevi dynasty, and in 1935 CE officially changed the name of Persia to Iran. Reza Shah introduced many reforms, reorganizing the army, government administration, and finances. He abolished all special rights granted to foreigners, thus gaining real independence for Iran. Under his rule the Trans-Iranian RR was built, the Univ. of Tehran was established, and industrialization was stepped-up. In World War II his rapprochement with the Germans was protested by the Allies, and in 1941 CE, British and Russian forces invaded and occupied Iran. Forced to abdicate in favor of his son, Muhammad Reza Shah Pahlevi, he died in exile in South Africa.
1925 CE - Italy - Benito Mussolini Il Duce, a socialist, becomes dictator of Italy and is slowly turning into a Fascist.
1925 - 1929 CE - Turkey - Basil III becomes Patriarch of Constantinople.
1926 CE - USSR - Iosif Vissarionovich aka Joseph Stalin (1879 - 1953 CE) takes power in the USSR, he was a ruthless man responsible for millions of deaths.
1926 CE - Switzerland - The Swiss Pro Juventute Foundation begins, "in keeping with the theories of eugenics and progress," to take children away from Gypsy (Roma) without their consent, to change their names, and to put them into foster homes. This program continues until 1973 CE, and is not brought to light until the 1980s. Switzerland has apologized to the Gypsy (Roma), but adamantly refuses to allow them access to the records which will help them locate the children taken from them.
1926 CE - England - Knights of St. Columba instigate the 'Roman Catholic Relief Act' abolishing many of the anti-catholic clauses of the Penal Laws. The Roman Catholic Relief Act repealed virtually all legal disabilities of Catholics in England.
1926 CE - United States - All in all, the 1924 tax act amounted to half a loaf - or less - for Mellon. By 1926 CE, he was ready for another try. Energized by GOP victories in the presidential and congressional elections, he offered a new plan, including immediate elimination of the gift tax, gradual elimination of the estate tax, and a broad reduction in individual income tax rates, bringing the top marginal rate to just 20 percent.
A major lobbying effort sprung up in support of Mellon's proposals, featuring Capitol Hill appearances by a number of "tax clubs." The clubs claimed to be grassroots organizations, giving prominent voice to popular opinion. Critics, however, considered them ill-informed, partisan mouthpieces for the rich.
As it happened, Congress needed little convincing; lawmakers of both parties rushed to sweeten the Mellon proposals. With the progressive wing of the Republican party in disarray, and many Democrats throwing in their lot with GOP tax cutters, the success of the Mellon proposals was never in much doubt.
Democrats managed to stave off elimination of the estate tax, but only after agreeing to a 50 percent rate cut, as well as a credit for state inheritance taxes. Rep. John Nance Garner successfully resurrected his plan to raise income tax exemptions. The law raised exemptions across the board, eliminating roughly a third of the nation's 7.3 million income taxpayers; higher exemptions moved many taxpayers off the rolls entirely.
President Calvin Coolidge signs the 1926 revenue act. Treasury Secretary Andrew Mellon is on the far left. Photo courtesy of the Library of Congress.
The exemption hikes were not part of Mellon's plan. Indeed, he opposed the idea, insisting that the tax base was already too small. "To narrow it further," he told one Republican senator, "would make the whole tax structure unstable and its continued usefulness as a source of revenue uncertain." In Mellon's view, the higher exemptions also created a political hazard. "As a matter of policy," he said, "it is advisable to have every citizen with a stake in his country. Nothing brings home to a man the feeling that he personally has an interest in seeing that government revenues are not squandered, but intelligently expended, as the fact that he contributes individually a direct tax, no matter how small, to his government."
Progressives in both parties bridled at Mellon's suggestion that poor Americans had no fiscal stake in their government. "Surely the Secretary of the Treasury can not intend, with a stroke of his mighty pen, to expatriate 96 per cent of us," noted the Omaha World-Herald, "We pay taxes on our coats, on our shoes and socks, on our hats, on our shorts and underwear, on the food on the breakfast-table, on the materials of which are homes are constructed, on the furniture in them, on the vehicles we ride in, on the amusements wherein we seek surcease-on practically everything, indeed, that we have and do. Do not these payments entitle us to feel equally with Mr. Mellon, that we have a stake in our country?"
Poor Americans did, indeed, pay a host of taxes, most of them on consumption. Many excise taxes enacted during World War I remained on the books, imposing their regressive burden on a host of consumer goods and services. But as a few lonely liberals pointed out, the consumption tax burden was really an argument against higher exemptions, not for them.
Nonetheless, 1926 CE was a year for tax cuts, and Garner's exemption hike became part of the package. Mellon accepted the higher exemptions as the price of his marginal rate cuts. In a few years, he would have cause to regret that decision, but for the time being, it seemed a reasonable expedient.
1926 CE - Saudi Arabia - In 1902 CE, Abdul al-Aziz Ibn Saud captured Riyadh, the Al-Saud dynasty's ancestral capital, from the rival Al-Rashid family. Continuing his conquests, Abdul Aziz subdued Al-Hasa, the rest of Nejd, and the Hijaz between 1913 CE and 1926 CE. Abdul al-Aziz conquered north Arabia from the Hashemites. On January 8, 1926 CE, Abdul-Aziz ibn Saud became the King of Hejaz and renamed it Saudi Arabia. The Treaty of Jedda was signed on May 20, 1927 CE, making Saudi Arabia independent of the United Kingdom. In 1932 CE, these regions were unified as the Kingdom of Saudi Arabia. The discovery of oil on March 3, 1938 CE, transformed the country.
1927 CE - Iraq - Oil fields are discovered near Karkuk in Iraq and king Faisal grants oil rights to the British.
1927 CE - Germany - Hitler publishes "Mein Kampf."
1927 CE - USSR - Lev (Leon) Davidovich Bronstein (Trotsky) a Jewish Russian is expelled from the USSR by Iosif Vissarionovich aka Joseph Stalin (1879 - 1953 CE), a Socialist.
1928 CE - Egypt - Hassan Al-Banna creates "Al-Ikhwan Al-Moslemoon," the "Muslim Brotherhood," in Egypt, a quasi-monastic movement that advocates for the entire Arab world a fundamentalist Islamic society like the one created by the Wahabites in Saudi Arabia and therefore advocates rebellion against the westernized Egyptian government.
1928 CE - Indonesia - Achmad Sukarno founds the Nationalist Party with the mission to gain independence for Indonesia from Holland.
1928 CE - Italy - Pius XI had originally encouraged discussion between Roman Catholics and Anglicans but this year stated the Roman Church could never be a federation of independent bodies holding differing doctrines and forbid Roman Catholics to take part in conferences with non-Romans.
1928 CE - Turkey - Mustafa Kemal Ataturk introduced religious freedom in Turkey and Islam ceased to be the state religion.
1928 CE - United States - The tax cut parade was not quite over. In 1928 CE, Mellon took another run at reduction, again suggesting estate tax repeal, as well cuts in the corporate income tax. Lawmakers agreed with the latter but not the former. It was the last time for a long while that legislators would have a free hand in cutting taxes.
As Mellon surveyed his seven years in office, he must have been pleased. The income tax had grown more central to the federal revenue system; Prohibition had dried up alcohol excise revenue, making the income tax even more important than it had been at the end of World War I. But rates had declined dramatically since 1921 CE. And while Mellon never succeeded in his quest to eliminate the estate tax, he did manage to keep its rates relatively modest. All in all, taxes were less burdensome for many Americans, particularly those in the upper strata of society. These were happy years for tax policymakers of both parties. They had the pleasant task of choosing among various tax cuts, their deliberations buoyed by a fat and happy Treasury. As Franklin Roosevelt later pointed out, "it was all very merry while it lasted." But in 1929 CE, the party came to a crashing end.
1929 CE - Palestine - Hundreds of people die in clashes between Arabs and Jews in Palestine.
Generalissimo and Madame Chiang Kai-Shek
1929 CE - China - Chiang Kai Shek becomes president of China. In the early 1920s, he became chief of staff to Sun Yat-Sen, founder of the Chinese Kuomintang, or Nationalist party; after Dr. Sun's death in 1925 CE, Chiang took over Kuomintang, subdued feudal warlords, and became ruler of mainland China from 1928 CE to 1949 CE, when the Chinese Communists won the civil war. Chiang, together with the remaining Nationalist forces, moved to the island of Taiwan (Formosa), where he set up a government-in-exile.
1929 - 1935 CE - Turkey - Photius II becomes Patriarch of Constantinople.
1929 CE - United States - Herbert Hoover becomes the 31st President of the United States as a Republican. Hoover's Vice-President was Charles Curtis from 1929 CE until 1933 CE. The Masonic status of both men are unknown. Hoover refused to implement the Emergency Banking and Relief Act in early 1933 CE prior to Roosevelt being inaugurated. Hoover was a member of the all-male ultra-exclusive Bohemian Club to which every Republican President since Herbert Hoover has belonged.
The Federal Reserve Bank raised the reserve rates in October which called for the payment of all accounts made on margin. As a high percentage of stock-ownership was on margin accounts, the investors did not have the money to pay the margin calls and the market crashed. The amount of money in circulation was available to run the country, but people refused to put their money into the banks, thereby diminishing the reserves the banks needed for fractionalization. If the banks had lower financial holdings, they could not make as many loans or establish credit for the people.
The secret machinations and malfeasance, including the Crash of 1929 and the Great Depression, was organised by Montague Norman, Governor of the Bank of England from 1916 CE to 1944 CE, and Benjamin Strong, with a little help from their friends. Nor is there room to examine the wider implications of the actions of these Robber Barons and their support for Germany in the First World War (Nurse Edith Cavell was shot by the Germans upon the insistence of the British authorities for her "inconvenient" exposure that "Belgian Relief" supplies were being shipped to Germany to feed its army), and for Hitler's subsequent rise to power.
Prior to assuming real power, Montague Norman had had a nervous breakdown in 1912 CE and, as was fashionable, had gone to Switzerland to be treated by Jung.
"When people of this class are stricken by guilt feelings while plotting world wars and economic depressions which will bring misery, suffering and death to millions of the world's inhabitants; they sometimes have qualms. These qualms are jeered at by their peers as "a failure of nerve." After a bout with their psychiatrists, they return to their work with renewed gusto, with no further digression of pity for "the little people" who are to be their victims."
On Thursday, October 24, 1929 CE, - a day that will live in infamy as "Black Thursday," 12.9 million shares changed hands (a new record - 4 million shares was considered a busy day back then). Most of the panic took place in the morning hours. The ticker tape machine fell behind by an hour and a half leaving investors madly scrambling to sell their investments without even knowing the current prices. Panic set in. People gathered outside the exchanges and brokerages, police were dispatched to insure peace. Rumors were flying. By 12:30 pm, the Chicago and Buffalo Exchanges closed down, eleven well-known speculators had already killed themselves and the NYSE closed the visitor's gallery on the wild scenes below. Reporters learned that an important meeting was taking place at the office of J.P. Morgan and Company, involving many of the most important men in banking. After the meeting broke, Thomas Lamont, senior partner at Morgan - a company founded by a man who had help stop a panic in 1907, made the following statement to newspaper reporters: "There has been a little distress selling on the Stock Exchange … due to a technical condition of the market" and that things were "susceptible to betterment."
Combine the worst features of Black Thursday with the worst features of Black Monday (October 28) and you get Black Tuesday (October 29). On Thursday, a record 12.9 million shares traded and the ticker tape fell behind one and a half hours. On Black Tuesday, a new record of 16.4 million shares were traded and the ticker tape fell behind by two and a half hours! On Monday, the stock market suffered a record one-day loss of around 13 percent. On Black Tuesday, the market suffered a loss of about 12 percent. The resultant losses precipitated the beginning of "The Great Depression."
The Great Depression wrought havoc on the federal budget; as one observer recalled, "The sun was sinking in a cloudy western sky." By 1930 CE, Andrew Mellon was warning Congress that declining revenues would produce a deficit of $200 million. His projection proved optimistic, and lawmakers watched fiscal gap soar to more $900 million that year. Despite the prospect of even larger deficits to come, Mellon and President Herbert Hoover continued to resist tax increases. But with national income falling from $87.8 billion to $42.5 billion between 1929 CE and 1932 CE and tax revenues falling at an even faster rate, thanks to the progressive rate structure of the individual income tax such intransigence could not last.
1929 CE - Germany - Unemployment in Germany is 1 million.
1929 CE - Italy - The so-called Roman Question was only resolved in 1929 CE by the Lateran Treaty, which, among other things, established the Vatican City.
However the new Italian control of Rome did not wither, nor did the Catholic world come to the Pope's aid, as Pius XI expected. In the 1920s, the papacy abandoned its demand for a return of the Papal States and signed the Lateran Treaty (or Concordat with Rome) of 1929 CE, which created the State of the Vatican City, forming the secular territory of the Holy See.
1930 CE - Peru - Beginning in the 1930s, the father of Dr. Javier Cabrera, Cultural Anthropologist for Ica, Peru, discovered many hundreds of ceremonial burial stones in the tombs of the ancient Incas. Dr. Cabrera, carrying on his father's work, has collected more than 1,100 of these andesite stones, which are estimated to be between 500 and 1,500 years old and have become known collectively as the Ica Stones. The stones bear etchings, many of which are sexually graphic (which was common to the culture), some picture idols and others depict such practices as open-heart surgery and brain transplants. The most astonishing etchings, however, clearly represent dinosaurs - brontosaurs, triceratops (see photo), stegosaurus and pterosaurs. While skeptics consider the Ica Stones a hoax, their authenticity has neither been proved or disproved. [about]
1930 CE - Costa Rica - Workmen hacking and burning their way through the dense jungle of Costa Rica to clear an area for banana plantations in the 1930s stumbled upon some incredible objects: dozens of stone balls, many of which were perfectly spherical. They varied in size from as small as a tennis ball to an astonishing 8 feet in diameter and weighing 16 tons! Although the great stone balls are clearly man-made, it is unknown who made them, for what purpose and, most puzzling, how they achieved such spherical precision. [about]
Ho Chi Minh shortly before his death in 1969.
Ho Chi Minh Mausoleum in Hanoi, Viet Nam
1930 CE - Viet Nam - Vietnamese intellectual Ho Chi Minh founds the Indochinese Communist Party and organizes anti-French riots in Vietnam.
1930 CE - Germany - Unemployment in Germany is 3 million.
1930 CE - Italy - Pius XI defined Christian marriage and condemned contraception.
1931 CE - Spain - Miguel Primo de Rivera resigns and Alfonso XIII abdicates which allowed Leftists to proclaim Spain a republic and proceed to disestablish the Church, confiscate church property, deny salaries to the clergy, expel the Jesuits and ban teaching of the Catholic faith. These actions were preludes to the civil war of 1936 - 1939 CE.
1931 CE - Italy - Pius XI attitude toward Italian fascism is shaken when Benito Mussolini, Il Duce, a socialist, dissolved the Catholic youth movements. The Church failed to speak out about his atrocities so they should not be surprised.
1931 CE - United States - On May 3, when commenting on the death of one of J. P. Morgan's closest associates, The New York Times remarked "One-sixth of the total wealth of the world was represented by members of the Jekyll Island Club." This reference was to just those men who were part of Morgan's group and members of his Club. It excluded the Rockefeller group and the European financiers. Among those "duck shooters" present back in November 1910 CE were Benjamin Strong, head of J. P. Morgan's Bankers Trust Company, and from 1914 CE till his death in 1928 CE, Governor of the Federal Reserve Bank; and Paul Warburg, who not knowing one end of a gun from the other, had carried a borrowed shotgun onto the train that night at Hoboken, New Jersey. Warburg, who had exceptionally powerful banking connections in New York, England, France, Germany and the Netherlands, was the real power behind the Federal Reserve throne. His brother Max was head of the German Secret Service during World War I.
1932 CE - Portugal - Salazar becomes prime minister of Portugal and turns Portugal into a dictatorship.
1932 CE - Iraq - Iraq becomes independent under the rule of King Faisal.
1932 CE - Saudi Arabia - Saudi Arabia becomes independent under the rule of King Abdul al-Aziz.
1932 CE - Germany - Unemployment in Germany is 6 million. The Nazist party wins 37% of the votes and becomes the largest party in Germany.
Treasury Secretary Andrew Mellon (left) and his deputy, Ogden Mills. Photo courtesy of the Library of Congress.
1932 CE - United States - Early in the year, Mellon appeared before the House Ways and Means Committee to ask for a tax hike. It was a painful request for this inveterate tax cutter, but one dictated by fiscal orthodoxy. In a sign of things to come, Mellon asked Undersecretary of the Treasury Ogden Mills to read his statement; within a month, Mellon would be eased out of the Treasury building, dispatched to London as an ambassador. This towering figure of the 1920s was being put out to pasture.
Ogden Mills took the reins at Treasury, offering the Hoover Administration both his financial expertise and his political acumen. An upper-class New York Republican of generally orthodox fiscal inclinations, he had served on the Ways and Means Committee during the early 1920s. "Little Oggie," as he was known in the liberal press, enjoyed a reputation as a tax expert.
In presenting the administration's proposals, Mills warned that the deficit was soaring above $2 billion. Excessive expenditures, coupled with falling tax revenues, had opened a huge hole in the budget. The decline in revenue was particularly dramatic. Corporate income taxes, which had yielded $1.1 billion in fiscal 1930, were likely to raise only $550 million in 1932 CE. Individual income tax rates were plummeting even more dramatically, from just over $1 billion in 1930 CE to $370 million in 1932 CE. The only relatively bright spot was excise revenue, which Mills expected to decline from $628 million to $544 million over the same period; the moderate decline, he pointed out, was due largely to the stable revenues of the federal tobacco tax.
Altogether, the revenue shortfalls were nothing short of cataclysmic. The problem, Mills declared, was inherent in the revenue structure. "The truth of the matter is that our revenue system rests on a comparatively narrow base," he explained, "and that our tax receipts are susceptible to the widest variations in accordance with variations in business conditions. This is particularly true of current individual income-tax collections." The progressive nature of the income tax made the problem worse, he said. Large incomes were the first to rise in good times and the first to fall in bad times. The graduated rate structure ensured that revenues would rise faster than overall income when the economy was doing well. But it also guaranteed that when depression struck, revenues would fall faster than incomes.
Given this reality, Mills counseled against steep increases in the rate structure, predicting that they would not raise adequate revenue. While acknowledging that rates must necessarily rise, especially on the richest Americans, he emphasized the need for an increase in the number of people paying income taxes in the first place. Congress must recognize, he said, that "the weakness in our revenue system is, as I have already stated, the narrowness of the base on which it rests." Broadening that base was crucial to securing adequate, and dependable, revenue. It was also, he said, manifestly fair. "Many not now taxed are very definitely in a position to make some contribution to the support of Government," he declared. "The should be asked to do so, taking into consideration ability to pay."
To close the budget gap, Mills suggested a package of tax hikes that would together raise about $920 million. First and foremost, he asked legislators to restore income tax rates to their 1924 CE levels. Surtax rates, he said, should increase across the board, topping out at 40 percent - twice their existing level. Even more important, Congress should reduce exemptions to $1,000 for individuals and $2,500 for married couples. These reductions would broaden the tax base, bringing 1.7 million new taxpayers into the system. The tax, Mills emphasized, would still be confined to a narrow slice of American society. "There would be only some 3,600,000 Federal taxpayers in a Nation of 120,000,000 people, and of this number less than 300,000 would contribute 90 percent of the tax." Indeed, Mill's plan would still have left the tax much narrower than it had been before the 1926 CE exemption hike.
Ultimately, leaders of the new democratic Congress refused to adopt the lower exemptions that Mills suggested. Instead, they chose to embrcae a new federal sales tax. This was a striking departure, given the party's traditional opposition to sales taxes.
A rebellion among rank and file Democrats forced party leaders to backtrack. Abandoning the sales tax, they resorted to a slew of narrow excise taxes, as well as higher rates on incomes and estates.
As ultimately passed by Congress, the Revenue Act of 1932 was predicted to raise $1.1 billion in new revenue. A substantial chunk of this revenue - some $178 million-was expected to come from a combination of steeper rates and lower exemptions in the personal income tax. But fully $457 million was expected from new or increased excise taxes. The list of consumption levies was long, including taxes on lubricating oil, malt syrup, brewer's wort, tires, toilet articles, furs, jewelry, automobiles, trucks, radio and phonograph equipment, refrigerators, sporting goods, cameras, firearms, matches, candy, chewing gum, soft drinks, and electricity.
Taxed goods were disparate, their selection dependent on a variety of factors, including the political influence - or lack thereof - associated with an industry. Most important, however, was a preference for articles of wide consumption, with a secondary concern for their relative necessity. Lawmakers preferred to tax items that people had some choice about consuming, rather than, say, table salt or flour. Some levies, however, were selected because they clearly seemed to indicate a capacity to pay - hence the luxury tax on jewelry, for instance. But others, like the car tax, were selected at least as much for the revenue they promised. Long the target of progressive tax reformers, the car tax survived the legislative battle because it promised to raise money.
Franklin Delano Roosevelt
Indeed, revenue was the name of the game in 1932 CE. All other concerns were secondary. The pitched battle over the sales reflected not so much an argument about whether to increase taxes - that was never in doubt - but exactly how. The rank and file Democrats who shaped the debate made clear their preference for isolated excise taxes, strongly preferring them to more general sales levies. In large part, this preference reflected a conviction that people could choose whether to consume taxed goods. Under a general sales tax, no such choice was possible.
Of course, the excise taxes were highly regressive. But regressivity was only one measure of fairness, and in the face of a gaping deficit, it was not the most important one. Democrats made consumer choice a central aspect in their definition of fair taxation.
During the Democratic National Convention in Chicago, Illinois, June 27 - July 2, 1932 CE, Frankling Roosevelt had flown to Chicago from Albany to deliver his nomination acceptance speech in person (the first time this was ever done) in which he declared, "I pledge you, I pledge myself, a new deal for the American people."
Just five months after the 1932 revenue act was signed into law, Franklin Roosevelt won his campaign for the presidency.
1932 CE - Italy - Pope Pius XI as well as condemning contraception, ordered German Catholics to drop their hostility towards Hitler. He also backed Mussolini's invasion of Abyssinia.
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