Although the women of the United States are confined within the narrow circle of domestic life, and their situation is, in some respects, one of extreme dependence, I have nowhere seen woman occupying a loftier position; and if I were asked... in which I have spoken of so many important things done by Americans, to what the singular prosperity and growing strength of that people ought mainly to be attributed, I should reply, To the superiority of their women.

--Alexis de Tocqueville, Democracy in America

Tuesday, January 31, 2012

Wall Street and FDR: Chapter 7

Roosevelt, Hoover, and the Trade Councils

People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public, or on some contrivance to raise prices.
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (London: George Routledge, 1942), p. 102.
Getting society to work for the Elite is an idea as old as civilization itself. Ask the enslaved Israelites or the peasants living in medieval feudalism.

Our host, Dr. Antony Sutton gives us an old-timey example of the New Deal and the power of cartels buying laws that benefit themselves while posturing this collusion as good business for everyone:

In 1291 the tanners of Norwich, England were brought before the local court charged with organizing and coding their tanning activities to the detriment of local citizens. Two years later in 1293, the cobblers and saddle makers of Norwich were faced with similar charges. By "greasing" the legislators, the political power structure of medieval Norwich was brought around to the view that perhaps the tanners needed protection, after all. This protection came to incorporate the same basic principles of economic planning that almost 700 years later were put forward in the Roosevelt New Deal. So in 1307 the tanning industry of Norwich was legally coded and wages and conditions of work prescribed, all done under the guise of protecting the consumer, but in practice granting a legal monopoly to the tanners.
As we learned in a previous chapter, FDR spent his career on Wall Street setting up this same arrangement for those in bond industry, which has been completely ignored by historians.Some  exceptions include Daniel Fusfield who acknowledged that Roosevelt:
"took an active part in the trade association movement that was to develop into the N.R.A. of the early New Deal;
Historians like Fusfield then like to soft-pedal the close ties of men like Roosevelt had between business and public service. They tend to portray these men as "public minded" and doing what is right for business. But when sees that these cartels are formed and make merchandise of the whole political process, one can see that buying up laws and using the police power of the state goes hand in hand with profit maximization. 


This group was founded in 1922 and originally proposed by Secretary of Commerce Herbert Hoover.  (This is a department that Ron Paul wants to cut.) This council was headed up by none other than our subject, FDR, who had just left his job as Assistant Secretary of the Navy. 

Officially, the objectives of the ACC were to establish a "code of ethics", which really meant reducing output and creating a pretext for raising prices and fixing them. According to the New York Times:
The official purpose of the ACC was the following:
. . .to place the construction industry on a high plane of integrity and efficiency and to correlate the efforts toward betterment made by existing agencies through an association dedicated to the improvement of the service within the construction industry. . . ."
 This was similar to the War Industry Board we discussed in the previous chapter. This means that now the armament industry and construction industries could be regulated by these boards and councils. Like a disease, this line of thought was sure to spread to every other sector of the economy. Oh, and it's all for the good of the consumer, as always. The specific pretext for needed an American Construction Council was the matter of the Lockwood Commission which was an investigation into the building industry in New York:.

However, as that scandal dealt in great part with exclusive dealing and similar coercive conditions forced upon contractors and erectors by the United States Steel Corporation and Bethlehem Steel, the announced public good makes little sense. These industry giants were controlled by the Morgan interests on Wall Street who were, as we shall see, also at the root of the A.C.C. proposal.
So here we have the banksters creating trouble and then creating their own solution which benefits them. The old Hegelian Dialectic at play once again.

Elliott Brown, a friend of FDR, called these trade organizations socialistic and that government will always assert it's interests one way or another. How right he was. 

In Herbert Hoover's memoirs, he decried government involvement in free enterprise and claimed that the left wing answer for all business was national planning. In case you missed it, Herbert Hoover's views on World War II are also counter to what you've been taught and Patrick Buchanan has a great synopsis. 

The correspondence between Hoover and FDR, paints another picture however. 

June 12, 1923  
Franklin D. Roosevelt, Vice Pres.
Fidelity and Deposit Company of Maryland
120 Broadway--you know about this address..
New York City
My Dear Roosevelt:
I am in somewhat of a quandary about your telegram of June 7th. I had hoped that the Construction Council would be solely originated from the industries without pressure from the Administration. Otherwise it will soon take on the same opposition that all Governmental touches to this problem immediately accrue.
The vast sentiment of the business community against Government interference tends to destroy even a voluntary effort if it is thought to be carried on at Government inspiration.
Yours faithfully
Herbert Hoover
In any event, the American Construction Council was a cooperative association of business, labor, and government
formed at Washington on June 19 at the suggestion and under the guidance of Secretary Hoover of the Department of Commerce (who) has taken the first steps toward putting into operation a program of construction effort which, it is hoped, will eliminate many of the evils which have developed in the industry during the past decade.
Thus, it was free enterpriser Herbert Hoover who became the sponsor of the first of the trade associations, the American Construction Council, which was designed to include
architects, engineers, construction labor, general contractors, sub-contractors, materials and equipment manufacturers, material and equipment dealers, bond, insurance and real estate interests and the construction departments of Federal, State and municipal governments.
The organization meeting of the American Construction Council was held at FDR's house in New York and attended by about 20 persons. This group discussed the concept of the council and particularly whether it
should be a clearing house for the different national associations, a clerical clearing house, or whether it should be an active, aggressive (sic) militant organization in this service of the public good of the construction industry.
Along with our friends the banksters, it was decided that this council would be an agressive organization that would be centrally planning the construction industry. FDR proposed sending construction workers down South to work on projects instead of sitting idle throughout the New York winter. In short, he took a communist view of spreading labor around from a central point.

Not everything went so smoothly for FDR's ACC. Frustrated that the central planning wasn't happening the way he wanted, saying the following in 1923:

The American Construction Council was organized, but frankly, it has not done one darned thing from that time to this except collect dues from some 115 different organizations, I think."
To add to it, the people who were supposed to be collecting a salary from this council weren't being paid and were a little put out on it. The VP of the council of D. Boyd said that they might as well dissolve if they didn't get with it to nationalize the building industry:

If the Council should go out of existence it would, in my opinion, be a country-wide calamity—as I doubt whether after this second effort to nationalize the great building industry on human lines, enough people with the enthusiasm, faith and patience could be found to make a third attempt.
And we know that the plans of these bankster is to nationalize every industry in the United States. Health care was the last frontier for them in a long slog through the American economy.

Wall Street and FDR is available at Reformation Theology.


  1. Thanks for the history lesson!

  2. Time is always on the side of truth. One day children will be taught the truth about FDR, and not the statist fairytale we were taught.

    1. That's a comfort. One day, I hope to see these Establishment textbooks on display as examples of state-induced propaganda.

  3. Thanks for the History. It repeats itself over and over again, if only we could learn.

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