364 GENERAL FARM PROGRAM 



We were enjoying the best economical experience of our history. Nobody was 

 being hurt except the international banker^ who had loaned their money to 

 England, France, Holland and Italy. 



If we had followed the same course, we could have marked off those war debts 

 and kept our own natio?ial economy on a high scale and have told the international 

 bankers to go jump in the ocean. 



Instead of doing this, we lowered the tariff bars and we started importing goods, 

 merchandise and commodities to collect the war debts. From 1919 to 1929, over 

 a period of 11 vears, according to Government figures, we imported goods to a 

 total of more tlian $43,000,000,000. By the time Mr. Coolidge was going out of 

 office, it was apparent to all students of national and international economy that 

 the -American economic set-up had been wrecked by these wild imjwrts. Mr. 

 Coolidge, being as astute student of national and international economy, stepped 

 out from under with the memorable phrase, "I do not choose to run." 



Mr. Hoover came into office and inherited a condition which was bound to 

 blow up in his face. 



Mr. Hoover thought that somehow he could avoid the iznmutable law of 

 economics just as the administration today foolishly thinks it can escape the 

 immutable law of pay day. Mr. Hoover got nowhere, neither can Mr. Truman, 

 The die was cast for Mr. Hoover when he took office and likewise the die was cast 

 for Mr. Truman when he came to the White House. 



From 1919 to 1929, $43,000,000,000 worth of goods, merchandise and com- 

 modities of all kinds came into United States ports. 



Naturally, $43,000,000,000 worth of foreign imports closed down, or put on 

 part-time, our manufacturing industry and c/eated an army of unemployed which 

 we said was 12,000,000 strong. Nobody knows how many. Imports of agri- 

 cultural products took away the American market from the American farmer and 

 he was faced with crops which he could not sell. 



The administration called the American Farmers' crops surj)lus and sought to 

 deal with them as surplus. Actually, the surplus consisted of imports which 

 replaced the American market, and actually, the American farmer, in the over-all 

 picture, did not have a surplus. 



The proof of these statements can be easily found in the statistical report of the 

 Government which shows the excess of agricultural imports over agricultural 

 exports. 



Mr. Hoover took office on the 4th day of March 1929. Mr. Hoover took a most 

 proper action in passing an Executive order declaring a moratorium on the 

 collection of war debts. 



In the meantime, out of the sale of $43,000,000,000 worth of imports, the 

 international bankers received their money. The international bankers were the 

 "us" that was going to l^e paid all the time, but the innocent taxpayer who had 

 already paid $1.5,000,000,000 in loans to Europe, instead of being the "us" to 

 receive payment, was called upon to pay out an additional S15, 000, 000, 000 so that 

 international bankers could get their money. 



One thing Mr. Hoover overlooked was that England, France. Holland, and 

 Italy had credits in American l^anks in the amount roughly of $3,500,000,000. 

 Mr. Hoover should have provided in his order for the conversion of the $3,500,- 

 000,000 into the United States Treasury as payment on their war debt. Instead, 

 he overlooked this most vital matter and when his Executive order went into effect 

 the $3,500,000,000 credit was left subject to draft. 



As soon as the moratorium went into effect and this $3,500,000,000 became 

 subject to draft those countries began to draw this out in gold as they had a right 

 to do under international agreement. 



At that time, under Federal law, if my memory serves me right, banks were 

 required to maintain a gold reserve of 68 percent against deposits and some other 

 liabilities. 



At that time, we could not spare $3,500,000,000 worth of gold and still maintain 

 the legal gold reserve. 



When the gold -supply was depleted $3,500,000,000 it became necessary for 

 United States banks to reduce their deposits. 



But the banks could not reduce their deposits without first making collections 

 from their customers to whom the depositors' money had been loaned, therefore, 

 the banks were under the necessity of enforcing collection. When they went out 

 to collect they found their customers could not raise the funds with which to pay. 

 The banks were compelled to unload stocks and bonds which they held as 

 security against loans and the natural result was the great stock market crash in 

 New York in October 1929. What followed in 1930, 1931, and 1932 was but the 

 natural result of what had gone before. 



