Chapter XIV

FROM DEPRESSION TO WAR BOOM

For all this torturing out of shape of our whole constitutional system, there is supposed to be one all-sufficient excuse—a raging, booming prosperity. It is essential, therefore, that the American citizen understand with clarity that this country has not enjoyed anything remotely resembling a sober and healthful recovery.

When the American business world sank down, in 1929, into a depression of unexampled severity, that depression could have been of brief duration and of no great depth. I do not say the depression could have been avoided. I have pointed out that our economic system itself is a human mechanism. It is composed of free men, and free men make mistakes and commit sins which can result in economic depressions. The severity of the depression which started in 1929 was due to the abuses that had grown up in our banking system and in our corporate system. The collapse was inevitable and many men who watched the rising orgy of speculation foresaw it. When it came, it was enormously expanded by the failure of our banking system—the abuses of which, in a measure, were later controlled by the passage of an act sponsored by the late Senator Glass of Virginia—an act which Mr. Roosevelt refused to support.

Mr. Roosevelt was elected as a result of this disaster. It was his duty under our constitutional system to do what was necessary to return the American economic system to health. But he did not. What we must understand is that, following the banking crash of 1933, we have never recovered. Here are the American Federation of Labor’s figures on unemployment for Mr. Roosevelt’s first two terms:

 

January,1933

13,100,000

1934

13,282,000

 1935

12,058,000

 1936

12,646,000

 1937

10,002,000

 1938

10,926,000

 1939

 11,369,000

 1940

10,656,000

The slight decrease in unemployment, such as it was, was due to government spending of borrowed money for various improvised adventures. The relief figures are even more startling. In 1932 there were 4,155,000 households on relief with 16,620,000 people. In 1940 there were still 4,227,000 households on relief with 16,908,000 people.

Mr. Roosevelt had denounced President Hoover for his extravagance in spending on all the expenses of government 14 billion dollars during his four-year term. But President Roosevelt himself spent 25½ billion dollars during his first term and 33 billion during his second term. He had denounced Hoover for a deficit of 3½ billion dollars. Roosevelt’s deficit at the end of his second term was 24 billion dollars. The government’s receipts were only 34 billion of the 58½ billion Roosevelt spent in his first two terms. In other words, over 40 percent of the sums spent by President Roosevelt were borrowed. When he took office in 1933, the national debt, after 144 years of the Republic, was 22½ billion dollars. By 1940 it was nearly 43 billion—almost twice as much as the debt in 1933 after 144 years.

It was not until the war was launched by Hitler and Stalin in Europe in 1939 and we, under Mr. Roosevelt’s leadership, became the “arsenal of democracy” that any sort of “recovery” appeared. In short, it must be recognized that Mr. Roosevelt and his successor, Mr. Truman, did nothing to return the American economic system to health. What they did was to maneuver the United States into the European and Asiatic wars. By this means, millions of men were employed in the military and naval forces of the country, far more millions were employed in the munitions plants, and most of the cost of this new and dangerous industry was paid for with borrowed funds—a process which continues to the day I write.

Thus, two very grave changes in the nature of the American Republic have occurred: (1) It has for 14 years lived on an unnatural boom created wholly by war and spending on war. (2) It has in that time been subjected to a revolutionary movement the purpose of which is to transform this great nation (a) into a unitary central system of government and (b) into a socialist economic system.

Each of these objectives is evil in its own way. The socialist society is not possible save in a unitary government—a central government asserting vast powers over every phase of social, political and economic life. To accomplish this, our great federal Republic erected on these shores 166 years ago must be liquidated and transformed into a unitary government possessing powers sufficient to establish and manage a socialist society. In the process of establishing these powers, the Republic—the federal Republic composed of sovereign states—must be dismantled. Socialism cannot be operated in a federal republic such as our Constitution blueprints. The federal Republic and the Constitution which sets out its nature, its powers and the powers of the states and limits the powers of the federal government make this impossible.

In order to create a socialist society, our politicians have been perfectly willing to wreck a republic built to insure freedom. This, as we have seen, has been effected by a Supreme Court composed of lawless judges who were named for the specific purpose of giving new meanings to words in the Constitution—meanings never seen in those words in 148 years of the Court’s existence.

The raging prosperity which excuses all that preceded it—the distortion of our Republic and our economic system—is a spurious prosperity built entirely on war and war spending and debt. There is no doubt that the nation has “enjoyed” a wide and, in a sense, a lawless prosperity, though there might be some question as to the intensity of the enjoyment. Some 16 million young Americans were taken from their homes, their schools, their professions and jobs. Some 407,828 died; 670,000 were wounded in World War II, plus 34,000 dead and 103,000 wounded in the Korean War.

While American boys were paying in blood all over Europe and Asia, the people at home were in clover. In 1937 the federal government spent 8 billion dollars. In 1941, as we moved into the war, it spent nearly 13 billion. After that the sky was the limit. Government expenditures rose by leaps and bounds until in 1945 the government spent 100 billion dollars. After that it spent in the neighborhood of 40 billion a year until 1952, when Mr. Eisenhower took office. Since then expenses have been running between 64 and 75 billion dollars a year, with no war anywhere.

But the government, despite these burdensome taxes, does not collect enough to cover its staggering outlays. Here is the record:

A national debt of 22½ billion dollars when Mr. Roosevelt took office after 144 years of the Republic.

A national debt of 278 billion dollars after Messrs. Roosevelt, Truman and Eisenhower! Under President Eisenhower the debt, in a period of peace, has actually increased by 12 billion dollars.

The essential meaning of all this must be obvious to any rational person. The government keeps a diseased prosperity alive by borrowing and taxing, spending most of the money to supply army units all over the world with weapons and material manufactured in American plants employing millions, paying subsidies to farmers, supporting with federal grants all sorts of business and political activities.

Here, then, is a spurious prosperity built on war scares and wars, vast taxes and fantastic borrowing. In the absence of a fighting war this will inevitably come to an end. But, in the meantime, these sums—so vast as to defy understanding—are spent to buy the votes of various minority groups—territorial groups, economic groups, cultural groups, industries depending on war contracts for the armed services and for our giveaway programs all over the world.

While we waste our substance around the globe and expose ourselves to endless conflict, we are confronted with a crisis in the very fundamentals of our own national life. The gravity of this social disease is hidden for the moment from our eyes by the apparent prosperity—a prosperity in which we are trapped, which is devouring our institutions, our philosophy of the free life, and the basis of our well-being, and which has now brought us to the verge of an economic and social crisis whose dimensions can hardly be measured.

In the meantime we have built up, to almost unbelievable proportions, the one great outside threat to ourselves and the world. When World War II began, Russian communism held dominance over 8½ million square miles of territory and 180 million people. Today it holds dominance over 13 million square miles of territory and 800 million people—almost all of it won with the help and connivance of the American government. And while we spend our substance and our strength to fight the enemy which we ourselves installed in Europe and the Orient, a strange phenomenon appears amongst us. It is all right—in fact, it is highly commendable—to fight an ideology like communism with guns and tanks and planes and soldiers and dollars in Europe, Asia and Africa. But let a patriotic American who believes in and wishes to protect our American Republic raise his voice against the false prophets of this same ideology inside the United States and inside our government, and all the forces of vituperation, slander, smear and calumny come down on his head not only from a large section of the press, but from the government itself.