Once in Golconda by John Brooks

Author:John Brooks
Language: eng
Format: epub
ISBN: 9781497679078
Publisher: Open Road Media

III

In April there were rumblings from the West, and resounding echoes of them in Washington. The nation’s farmers were in a state approaching open revolt. Prices paid for their output had fallen piteously low–the index of wholesale farm commodities stood at about 40 percent of its 1926 level–and as a result, they were caught in a seemingly hopeless bind. Even though they sold every crop they grew, the prices were insufficient to meet their mortgage payments, and they were being dispossessed by the tens of thousands. There began to be incidents of violence; one day late that month, in Le Mars, Iowa, a mob of masked farmers dragged a judge from his bench to a crossroads and nearly lynched him in an effort to force him to promise to stop signing mortgage foreclosures. But criminal assaults on legal authority could serve no purpose; what the farmers chiefly needed was the classic remedial measure for debtors in hard times–a deliberate governmental inflation of the currency such as Bryan had preached so long and so eloquently, that would raise prices and enable the farmers to pay off in cheap money the debts they had contracted in dear money. Inflation talk raged in Congress, and came to a climax in an amendment to the Agricultural Adjustment Act offered by Senator Elmer Thomas of Oklahoma, authorizing the President at his discretion to issue greenbacks or resort to practically any other known inflationary measure.

To hard-money men in and out of Wall Street the Thomas Amendment meant financial anarchy. Its adoption would mean that the country had definitively abandoned its monetary religion since 1879, the gold standard. But there seemed to be no indication that Roosevelt wanted the Thomas Amendment or that any similarly drastic move was in the wind; on the contrary, during the first half of April government licenses to ship gold abroad in spite of the embargo were issued to several banks, apparently indicating a gradual return to the old gold standard. Then on the evening of the eighteenth, Roosevelt held a White House meeting ostensibly to discuss the forthcoming International Monetary and Economic Conference, plans for which had been inherited from the Hoover Administration, inviting to the meeting, among others, Secretary of State Cordell Hull, Secretary of the Treasury Woodin, Moley the Almighty, and the monetary men Douglas, Warburg, and Feis. It developed that the President had other things than the conference on his mind when he unexpectedly instructed Moley to prepare the Thomas Amendment for Congressional passage and his signature. Then, turning to the rest of the group, Roosevelt blithely informed them that the country had just “gone off gold” and asked them to congratulate him.

They didn’t; instead, according to Moley, “hell broke loose,” with the trio of monetary experts, in despair at the casualness with which the momentous step seemed to have been taken, frantically lecturing Roosevelt on the pitfalls and horrors of inflation for two solid hours, and even finally invoking the ghastly example of Germany in 1923, when

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