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Southern Historians Sapping and Mining the Northern Myth

Historian and author Frank L. Owsley dedicated his professional life to righting the revisionist history of postwar Northern textbooks and relating an honest appraisal of why the War was fought between North and South. He viewed the conflict of 1861 as a struggle between Southern agrarian culture versus Northern industrialism intent upon political and economic control of the entire country.

Bernhard Thuersam, www.Circa1865.com

 

Southerners Sapping and Mining the Northern Myth

“In describing the writings of one New Southerner, Frank Owsley wrote Allen Tate on February 29, 1932: “He is the typical “New Southerner,” the defeated [and] conquered . . . American. Dodd [William E. Dodd, Frank’s major professor at Chicago] remarked to me that it did not hurt him so much to be whipped! Or to see the South whipped! What broke his heart was to see the South conquered . . . he says it is the most completely defeated and conquered people of all history.”

Frank continued: “I believe that the spiritual and intellectual conquest of the South, which Dodd laments, is superficial. The leadership is in the hands of [these New Southerners] . . . and the history textbooks have been written by Yankees.

The purpose of my life will be to undermine by “careful” and “detached,” “well-documented,” “objective” writing the entire Northern myth from 1820-1876. My books will not interest the general reader. Only the historians will read them, but it is the historians who teach history classes and write textbooks and they will gradually, and without their own knowledge be forced into our position. There are numerous Southerners sapping and mining the Northern position by objective, detached books and Dodd is certainly one of the leaders.

By being critical first of the South itself, the Northern historian is disarmed, and then Dodd hits where it will do the most good . . . [Dodd told Davidson] that the younger Southern writers were making the Northern writers look unimportant.”

Frank’s essay in I’ll Take My Stand, “The Irrepressible Conflict,” concerned “the eternal struggle between the agrarian South and the commercial and industrial North to control the government, either in its own interest, or negatively, to prevent the other section from controlling it in its interests.”

At the time the Union was formed, the two sections were evenly balanced both in population and in number of States. The conflict worsened as the balance of power began to change. Slavery was an element of the agrarian society, but not an essential one. Even after the war, when there was no slavery, the South was an agrarian section. The irrepressible conflict was not a conflict between slavery and freedom, nor was it merely a protest against industrialism. It was equally a protest against the North’s brazen and contemptuous treatment of the South “as a colony and as a conquered province.”

(Frank Lawrence Owsley, Historian of the Old South, Harriet C. Owsley, Vanderbilt University Press, 1990, pp. 78-81)

Jul 31, 2016 - Antebellum Realities, Historical Accuracy, New England History, New England's Slave Trade, Slavery Worldwide    Comments Off on Arab Slavers of Zanzibar

Arab Slavers of Zanzibar

Nearly forgotten is the African slave trade conducted by African tribes who captured and sold their own people into slavery, and also that British power protected an African slave trade they publicly denounced. Like New England traders who had made fortunes trading Yankee notions and rum for slaves, Arab traders made fortunes in the ivory, clove and slave trade.

Bernhard Thuersam, www.Circa1865.com

 

Arab Slavers of Zanzibar

“During the eighteenth century, Kilwa had become East Africa’s principal port for the export of slaves, drawn initially from southeastern Tanganyika and then increasingly from the region of Lake Nyasa. The Omanis on the coast were based at Zanzibar and, after taking control of Kilwa in the mod-1870s, diverted to that island the bulk of the trade in slaves and ivory.

By 1834, exports of slaves drawn from the mainland had reached and annual figure of 6,500. By the 1840s, the annual numbers had risen to between thirteen thousand and fifteen thousand. Some of these slaves were destined for markets in the Middle East. Most, however, were designated for Zanzibar, where the labor-intensive cultivation of cloves had begun soon after 1810 and was expanding rapidly in response to the growing world demand for cloves.

By the 1850s, the island’s population might have included no fewer than sixty thousand slaves.

The ruler of Oman, Sayyid Said ibn Sultan, transferred his court to Zanzibar in 1840. The island had become, as a result of his policies, the most rewarding part of his realm: the paramount port on the western side of the Indian Ocean, the source of virtually the entire world supply of cloves as well as the main sales outlet for ivory, and the largest slave markets.

Bagamoyo, in particular, flourished. Its rich agricultural hinterland, its open beaches suitable for the arrival of dhows, and its proximity to Zanzibar made it the predominant mainland outlet for the slave trade. Most of these [slave caravans to the coast] ventures were financed by local Asians from India, a majority of them Muslims, who had settled in the coastal town but mainly in Zanzibar and who provided trade goods on credit at high rates of return.

Those conducting the trade included Arabs; it was to the so-called norther Arabs, or Omanis, that the more ferocious aspects of slaving in the region came to be ascribed. In fact, perhaps most of the leading slavers were Afro-Arabs, or the progeny of inter-ethnic unions, and the trade itself became increasingly Zanzibari rather than an Omani one. Certainly, many of the main slavers, along with many of the regional slave dealers, were as black as their victims.

In the last resort, Said relied on British power to protect him against Arab contenders for his rich realm, (indeed, it was British power which had forced the retreat of Egyptian armies in 1839) and the threat that other European imperial powers, principally the French, might seek to devour it. He was not inclined, however, to surrender the enormous tax revenues accruing to him from the slave trade. The British government too, despite its commitment against the [slave] trade, was reluctant to antagonize an ally or so imperil that ally’s position that it found itself having to deal with someone worse.”

(Islam’s Black Slaves, the Other Black Diaspora, Ronald Segal, Farrar, Straus and Giroux, 2001, pp. 146-147)

 

An Inhuman and Barbarous Act

Fully aware of the sufferings of Northern prisoners in the South due to the blockade, President Jefferson Davis in the summer of 1864 sent commissioners to Washington to bring US surgeons to the Southern camps to dispense medicine. No reply was ever received and Lincoln refused to meet the commissioners, leading Davis to wonder if Federal were prisoners left to suffer, and afterward photographed “to aid in firing the popular heart of the North?”

Bernhard Thuersam, www.Circa1865.com

 

An Inhuman and Barbarous Act

“The South had been dependent upon the outside world for medicine of all kinds, except “home remedies” used by many of its people. Of all imported, none was so necessary in the South as quinine, since malaria was prevalent over most of the region.

As if striking at the most vulnerable spot in the Confederacy, the United States, immediately upon the outbreak of war, placed medicine on the contraband list. Few war measures caused feeling to run so high in both the North and the South, for many felt this to be an inhuman, barbarous act.

When the American Medical Association met in New York in 1864, some doctors decided that they would try to get the restrictions regarding medicine going into the Confederacy lifted in the name of humanity, but their motion to that effect was tabled “indefinitely.” And the restrictions were not removed for the duration of the war. A poem urging the continuance of the contraband principle was widely circulated in the Northern newspapers as follows:

“No more quinine – let ‘em shake; No more Spaldings pills – let their heads aches; No morphine – let ‘em lie awake: No mercury for the rebels take though fever all their vitals bake;

No nitre drops, their heat to slake; No splinters though their necks they break, And, above all, no Southern rake, Shall have his ‘wine for stomacks sake,’ Till full apology make.”

From the adoption of Federal restrictions, there was never sufficient medicine to relieve the sickness and suffering in the Confederacy.

Medicines and surgical equipment were captured from time to time, but this became increasingly rare as the course of the war turned against the Confederates. And when such supplies were captured, they were diverted to military channels and had no effect on the supply of medicines for civilians.

The second source of supply, through running the blockade, proved far more successful. Small in bulk and high in price, medicine became part of the cargo of nearly every blockade runner. Land blockade-running was more interesting than running of the water blockade. Drugs were sent down the [Mississippi] river originally from Paducah, Kentucky, or Cairo, Illinois, by Northern speculators or traders and were sent ashore into the Confederacy at night.

During the late winter and early spring of 1862, a story was widely circulated that some of the quinine sent into Tennessee and Arkansas in this manner was poisoned; heated editorials and warnings followed. The quinine was believed to contain strychnine, and the people were cautioned against its use.”

(Ersatz in the Confederacy, Shortages and Substitutes on the Southern Homefront, Mary Elizabeth Massey, University of South Carolina Press, 1952, excerpts, pp. 115-117)

The Union League of the Republican Party

In the midst of the mostly inflammatory influence of the Republican’s Union League upon the freedmen, the Ku Klux Klan emerged in the immediate postwar. To underscore the Union League’s destructiveness, an 1870 Congressional Committee report provided this indictment of Republican rule over the conquered South: “[The] hatred of the white race was instilled [by the League] into the minds of these ignorant people by every art and vile that bad men could devise; when the Negroes were formed into military organizations and the white people of these States were denied the use of arms; when arson, rape, robbery and murder were things of daily occurrence, . . . and that what little they had saved from the ravages of war was being confiscated by taxation . . . many of them took the law into their own hands and did deeds of violence which we neither justify or excuse. But all history shows that bad government will make bad citizens.”

Bernhard Thuersam, www.Circa1865.com

 

The Union League of the Republican Party

“The nocturnal secrecy of the gatherings, the weird initiation ceremonies, the emblems of virtue and religion, the songs, the appeal to such patriotic shibboleths as the Declaration of Independence, the Constitution, the Flag, and the Union, the glittering platitudes in the interest of social uplift — all these characteristics of the League had an irresistible appeal to a ceremony-loving, singing, moralistic and loyal race. That the purposes of the order, when reduced to the practical, meant that the Negro had become the emotional and intellectual slaves of the white Radical did not dull the Negro’s enthusiasm, he was accustomed to be a slave to the white man” [South Carolina During Reconstruction, Simkins & Woody, page 7].

The Union League gave the freedmen their first experience in parliamentary law and debating . . . the members were active in the meetings, joining in the debate and prone to heckle the speakers with questions and points of order. Observers frequently reported the presence of rifles at political rallies, usually stacked in a clump of bushes behind the speaker’s platform, sometimes the womenfolk left to guard them.

In the autumn of 1867, a League chapter made up mostly of blacks, but with a white president named Bryce, was holding a meeting with its usual armed sentries on the perimeter. When a poor white named Smith tried to enter the meeting, shots were fired; there followed a general alarm and, subsequently, a melee with a white debating club nearby. The Negroes rushed out; Smith fled, hotly pursued to the schoolhouse; the members of the debating club broke up in a panic and endeavored to escape; a second pistol was fired and a boy of fourteen named Hunnicutt, the son of a respectable [white] citizen, fell dead.

[Carpetbagger John W. De Forest wrote]: “The Negroes, unaware apparently that they had done anything wrong, believing, on the contrary, that they were re-establishing public order and enforcing justice, commenced patrolling the neighborhood, entering every house and arresting numbers of citizens. They marched in double file, pistol in belt and gun at the shoulder, keeping step to the “hup, hup!” of a fellow called Lame Sam, who acted as drill sergeant and commander. By noon of the next day they had the country for miles around in their power, and the majority of the male whites under their guard.”

(Black Over White, Negro Political Leadership in South Carolina During Reconstruction, Thomas Holt, University of Illinois Press, 1977, pp. 29-32)

 

That the Union Not be Abandoned to its Enemies

Many Southerners like Georgia’s Benjamin H. Hill wanted to hold out against secession after Lincoln’s election, and labeled the purely sectional Republican Party as disunionist and an enemy of the Constitution. He reasoned that if Andrew Jackson could coerce South Carolina for nullification thirty years prior, why not coerce the guilty Northern States who nullified the federal fugitive slave law?

Bernhard Thuersam, www.Circa1865.com

 

That The Union Not Be Abandoned To Its Enemies

“On the fifteenth of November [1860], following [Howell] Cobb, [Robert] Toombs and [Alexander] Stephens, Hill appeared before the Assembly and made an eloquent argument against immediate secession or any precipitate action. The speech is primarily a closely reasoned appeal for moderation and a plea that passion and prejudices be discarded in the face of the imminent crisis.

“What are our grievances?” asks Hill; and then he proceeds to enumerate them, outlining the discriminatory policies and propaganda of the Republican party and laying special emphasis on the nugatory action of various free-State legislatures, affecting the fugitive slave laws. Hill represents the Republican Party as the real disunionist party, and quotes from various abolitionists who damn the Union and Constitution because they permit slavery. The grievances, then, are plain, and agreed of all Southern men.

Moreover, Hill believes the redress of grievances is not so hopeless a prospect in the immediate future. But suppose, for the sake of argument, redress of grievances within the Union is impossible, surely it is worth the effort; and all are agreed . . . that if such redress fails, then secession must come. But what are the remedies then, which are proposed within the Union.

First, the demand must be made by all the Southern States that the laws protecting slavery and requiring the rendering up of fugitive slaves must be enforced. The demand can be made as an ultimatum if need be. If necessary, let the federal government enact a force bill against any recalcitrant Northern State refusing obedience, as was done against South Carolina in 1833. Let the wrangling about slavery cease, and the entire machinery of government, if necessary, be put behind the enforcement of existing laws.

And Lincoln must come to this view. His only strength is in the law; he is bound by oath to carry out the law. A Southern president had once coerced a Southern State; now let a Northern president coerce a Northern State, if it comes to that. Hill insists that such a resolute attitude has never been taken by the Southern States, and he pleads that the Union not be abandoned to its enemies without making this effort to save it . . . He asks: “Is this Union good? If so, why should we surrender its blessings because Massachusetts violates the laws of that Union? Drive Massachusetts to the duties of the Constitution or from its benefits . . . Let us defend the Union against its enemies — not abandon it to them.

On December 6, Cobb, in an address to the people of Georgia announcing his resignation from [President James] Buchanan’s cabinet, averred that : “the Union formed by our fathers, which was one of equality, justice and fraternity would be supplanted on the 4th of March by a Union of sectionalism and hatred — the one worthy of the support and devotion of free men, the other only possible at the cost of Southern honor, safety and independence.”

This was followed up on December 23 by Toombs telegram to the Savannah Morning News, after the failure of the Crittenden Compromise: “I will tell you upon the faith of a true man that all further looking to the North for your constitutional rights in the Union ought to be abandoned. It is fraught with nothing but ruin to yourself and posterity.”

(Secession and Reconstruction, Haywood J. Pearce, Jr., University of Chicago Press, 1928, pp. 43-45)

 

A Union of Willing States, Not Conquered Provinces

Far from being united against Southern independence, the North endured military rule as Lincoln saw fit to silence criticism of his war policy against Americans by arresting newspaper editors and dissenters, including the grandson of Francis Scott Key. Even the Supreme Court feared arrest from a president who clothed himself in powers not granted by the Constitution.

Bernhard Thuersam, www.Circa1865.com

 

A Union of Willing States, Not Conquered Provinces

“Many [antebellum Northerners] . . . saw the Union in more conditional terms, as an agreed-upon relationship, not one resting upon coercion or compulsion. Millions of Northern Democrats, for example, denied the validity or value of a Union held together by force. Many felt so strongly about the invalidity of a coercive Union that they resisted and defied the Lincoln government during the Civil War in order to proclaim their views.

Even nationalists of an antislavery point of view could have doubts about a Union maintained by force. In 1801 when John Quincy Adams feared that Aaron Burr might break up the recently-created union he was not sure that it ought to held together by force. “If they break us up – in God’s name, let the Union go,” he wrote. “I love the Union as I love my wife. But if my wife should ask and insist upon a separation, she should have it though it broke my heart.”

Sixty years later another son of Massachusetts and an abolitionist, Wendell Phillips, used the wifely metaphor again – this time in confronting an actual breakup of the Union. Phillips spoke after secession had taken place. “A Union is made up of willing States, not of conquered provinces,” he said. “There are some rights, quite perfect, yet wholly incapable of being enforced. A husband or wife who can only keep the other partner within the bond by locking the doors and standing armed before the door had better submit to peaceable separation.”

(The Other South, Southern Dissenters in the Nineteenth Century, Carl N. Degler, Harper & Row, 1974, page 121)

Union Saved for Republican Party Hegemony

With the South out of Congress since 1861 and no Southern leadership to provide a conservative and responsible voice in US government, the predictable occurred. As a soldier Grant was a butcher who sent wave after wave of new recruits to wear down the thin Southern brigades; as a politician, Orville H. Browning of Illinois described Grant as “weak, vain, ignorant, mercenary, selfish and malignant”; that he was surrounded by corrupt and unprincipled men and that his reelection would be a great calamity to the country.” Grant’s election in 1868 was achieved with a few hundred thousand freedmen votes, they herded to the polls by the Republican’s terrorist Union League.

Bernhard Thuersam, www.Circa1865.com

 

Union Saved for Corrupt Republican Party Hegemony

“The eight years of Grant’s administration rocked with one scandal after another. Citizens defrauded the government in the acquisition of land and in claims for [Northern veteran] pensions; contractors supplying the army and navy were often venal; and unscrupulous lawyers levied toll on ignorant and defenseless Indians.

Members of Congress were bribed and disgraced. Cabinet officers were investigated and impeached. Subordinate officials and employees were revealed in outright betrayal of public trust. Never had the Republic sunk to so low an estate of official morality.

During the 1870s there was both incompetence and dishonesty in the large customhouses; discipline and integrity among the navy-yard labor forces were at a low ebb; the Indian service had been roundly condemned by [James] Garfield; land agents connived at irregularities, and surveyors made fraudulent claims for work not performed.

The tone of the eight years of Grant’s administration was . . . set by a small number of weak and unreliable persons holding seats in Congress and in high executive office. It was during these years that the most resounding scandals occurred, not only in Washington but in many States and cities. When the mighty wandered far from the paths of rectitude, it was not surprising that some of the lesser ranks followed their example.

To a few of the scandals we turn . . . The Credit Mobilier . . . originally organized to finance railroad construction, [it] fell into the control of a group of adventurers, including a member of Congress, Oakes Ames. The corporation was awarded a lucrative but fraudulent contract for the . . . [Union Pacific Railroad and disgraced Grant’s] Vice Presidents Colfax and Wilson.

Laxness or corruption in the award of Indian trading posts had been suspected for some time under General [William] Belknap’s administration of the War Department. [Secretary of the Navy George M. Robeson levied] percentages on . . . contractors’ engagements with the navy, [and] Robeson grew rich. [Secretary of the Treasury John D. Sanborn, a protégé of Benjamin Butler, siphoned money destined for the Internal Revenue Service].

The most dramatic and perhaps the most damaging evidence of corruption during the Grant administration involved the evasion of internal revenue taxes on distilleries. Fraud had long been suspected [and persons involved] included General John A. McDonald, collector of internal revenue in St. Louis . . . other collectors, the chief clerk of the internal revenue division of the Treasury Department in Washington [and] General Orville Babcock, President Grant’s private secretary, who was subsequently indicted but who escaped conviction.”

(The Republican Era, 1869-1901, A Study in Administrative History, Leonard D. White, Macmillan Company, 1958, excerpts pp. 366-373)

Occupied Richmond, July 4th 1865

Richmond citizens quietly observed Independence Day, 1865 with enemy troops occupying their city — celebrating their triumph in vanquishing the American defenders of that city.

Bernhard Thuersam, www.Circa1865.com

 

Occupied Richmond, July 4th 1865

“The 4th of July may be said to have been celebrated in Richmond this year. Cannon were fired at morning, noon and night. A few Chinese crackers were fired off by vagabond boys, white and black, at the corners of the streets in the early morning and in the evening, their pyrotechnic resources, I take it, being too scanty not to make it advisable to husband them to closely.

In the morning, a flag was hoisted on the Spottswood Hotel, and a short speech made from the roof of the building by [occupation forces commander] General Osgood. Somewhat later in the day a small crowd, made up mainly of Negroes and Union soldiers, with a sprinkling of citizens and children, congregated in the Capital Square. A lady was introduced to the assembly and read the Declaration of Independence, but in so low a tone and amid such noise of talking and walking about as made it quite impossible for anyone to hear her. The conclusion of her reading was marked by music from a military band which was in attendance.

Speeches were then made by a surgeon and two chaplains, and after a benediction the company dispersed. No applause was elicited by any of the speakers. The soldiers evidently were in the character of onlookers; the Negroes were doubtful if they were expected to applaud or would be allowed to do so (they were carefully removed by the soldiers detailed as police from the crowded steps near the speakers’ stand); and as for the citizens — to ask any men, Unionist or secessionist, to hear such speeches and applaud them would be asking too much.

All places of business were closed throughout the day, but the city wore no holiday aspect. That part of the rebel population which appeared in the streets were seemingly indifferent spectators of what went on around them. The boys and the Negroes, and the Union soldiers in a graver way, alone seemed to enjoy the occasion.”

(The South As It Is, 1865-1866, John Richard Dennett, Viking Press, 1967, pp. 9-10)

“They Have Made a Nation”

Lincoln appointed no men to his cabinet who were familiar with Southern sentiment or sensitivities – an act which might have avoided a collision and perhaps have truly “saved the Union.” The Republican Party won the contest and would not be denied the fruits of victory no matter the cost. Charles Francis Adams was appointed minister at London by Lincoln, somewhat appropriate as Adam’s grandfather himself viewed the presidency as monarchical. More important, Adams was a Republican politician with little regard for the American South and put party above the welfare of the country.

Bernhard Thuersam, www.Circa1865.com

 

“They Have Made a Nation”

“For the post at London Lincoln had made one of his best appointments. As a boy [Charles Francis Adams] had witnessed stirring events in Europe; in the company of his mother he had taken the long and arduous winter journey by carriage from St. Petersburg to Paris to join his father John Quincy Adams. Passing through the Allied lines, he reached Paris after Napoleon’s return from Elba.

By 1861 he had served as legislator in Massachusetts, had become prominent as a leader of the “conscience” Whigs and the Free-Soilers, and had achieved the position of an influential leader of the national House of Representatives where his main contribution was as a moderate Republican earnestly engaged in the work of avoiding war.

Though depressed at the nomination of Lincoln, whom he never fully admired, he accepted appointment as minister to England and gave of his best as a loyal servant of the Lincoln administration.

Through all the diplomatic maneuvers there ran the central question of recognition of the Confederacy and the related questions of mediation, intervention and the demand for an armistice. Had the South won on any of these points, victory would have been well-nigh assured. By September of 1862 [Lord] Palmerston and Russell’s deliberations had reached the point where, in view of the failures of McClellan and Pope and the prospects of Lee’s offensive, Palmerston suggested “an arrangement upon the basis of separation” (i.e., Southern victory); while Russell, the foreign minister, wrote in answer that his opinion the time had come “for offering mediation . . . with a view to the recognition of the independence of the Confederates.”

[Just] at this juncture there came a bombshell in the speech of the chancellor of the exchequer, W.E. Gladstone, at Newcastle (October 7) in which he said:

“Jefferson Davis and other leaders of the South have made an army; they are making, it appears, a navy; and they have made what is more important than either, — they have made a nation . . . We may anticipate with certainty the success of the Southern States so far as regards their separation from the North.”

(The Civil War and Reconstruction, James G. Randall, D.C. Heath & Company, 1937, pp. 461-462; 468-469)

The Anticipated Profits of Next Year’s Pay Checks

Lincoln instituted a national banking system which “developed into something that was neither national nor a banking system” and more represented a loose organization of currency factories “designed to . . . [serve] commercial communities and confined . . . almost entirely to the New England and Middle Atlantic States.” This system was more concentrated in New York and fraught with abuses, and superseded by the even more abusive Federal Reserve Act of 1913.

Bernhard Thuersam, www.Circa1865.com

 

The Anticipated Profits of Next Year’s Pay Checks

“July 3, 1930

Mr. McFadden: “Mr. Speaker and gentlemen, time and events have arrived at a point where we should no longer deceive ourselves concerning the business situation. Continued statements of unfounded optimism will have only an unhappy effect upon the minds of millions of our citizens who are now unemployed and who, in the circumstances, must continue to be unemployed for many months to come. The economic condition in which we find ourselves is too sustained and deeply seated to be met by pronouncements that it does not exist.

Let us face the truth – that we and the world are undergoing a major economic and business adjustment which is and will be both drastic and painful. These consequences will be particularly severe in the United States, because they will force many people to recede from the standards of living and expenditure attained during the past 14 years.

Some part of this condition is the natural consequence of the operation of basic economic laws which function with little regard for human legislation. A large part is due to mismanagement of our national affairs. A still larger part is due to a deliberately contrived and executed program which has as its object the impoverishment of the people of the United States.

The end of the World War found us with a greatly expanded industrial and credit structure, to large, by far for the requirements of our national needs as the latter existed before the beginning of the war period of abnormal consumption. It was clearly a time to halt and to analyze fundamental economic facts. We did not do this.

Rather we chose to proceed with our abnormal production and to stretch the limits of credit still further. War production and its profits had made Americans drunk with power, and ambition for more power. Luxuries developed in the disorganization of war became necessities with the reestablishment of peace.

The American peop0le entered upon a decade in which the whole structure of their lives was to be passed upon the principle of discounting the future. A vast system of installment credit sprang into life almost overnight, aided by the optimism of the Federal Reserve system. The automobile industry expanded more rapidly and to greater size than any industry had expanded in history.

The public was encouraged by advertising and propaganda to buy beyond its immediate means. Further industrial expansion was financed by the same expansion of credit which made installment buying possible. Consumption was expanded and financed upon the consumer’s promise to pay and production was expanded upon by capitalizing the producer’s hope that the consumer would keep that promise.

In the period between 1920 and the present time we experienced the full use and purpose of the credit machinery built up with the Federal Reserve system. It was but a logical development that anticipated profits should be capitalized as anticipated production and consumption had been capitalized – and that the Federal Reserve system should in turn finance tis capitalization of anticipated profits.

The entry of millions of Americans of moderate means into stock-market speculation [was] a natural consequence of the policy of expansion to which we had committed ourselves. It was also a logical development that the Federal Reserve should expand broker’s loans to make possible a huge inflation of the business of speculating in securities on margins.

All this brought the country to a point where the individual was living beyond his personal means, buying more than he could afford on his hope that he could afford to pay for it in the future and then speculating in the hope that he could make enough profit to pay his debts when they came due. In brief, the greater part of the American business structure was built upon the anticipated profits of next year’s pay checks.”

(Basis of Control of Economic Conditions, the Collective Speeches of Congressman Louis T. McFadden, Omni Press, 1970 pp. 64-66)