As an illustration of corruption and manipulation, let’s focus on a catastrophe that happened almost a hundred years ago. To this day, it is thought of as a fluke, an unavoidable consequence of random numbers and events which collided in a merely unfortunate manner…
In 1933, Franklin Roosevelt took the office of President of the United States. The first three months of Roosevelt’s presidency are looked on fondly. They came to be known as the “Hundred Days.” During this period, his administration formed agencies like the Civilian Conservation Corps and the Works Progress Administration (WPA). The WPA was an agency created under Roosevelt’s “New Deal.”
The purpose of the New Deal was to put America back to work and drag the country out of the Great Depression. In doing so, the WPA gobbled up nearly five billion dollars, almost 7 percent of the country’s entire GDP (Gross Domestic Product) in 1935. The agency then hired close to 8.5 million Americans, and as part of the New Deal, built more than 650,000 miles of roads, 125,000 public buildings, 75,000 bridges, and 8,000 parks.¹
Image from the National Archives
Now, of course, the New Deal is still credited with jump-starting the economy after the Great Depression. And, undoubtedly, the New Deal is a large part of the reason the United States has the roads and infrastructure it does today. (You can tell because half of our roads still look like they’re from the 1930s.)
But what’s more curious than the New Deal is the event that made it necessary, the massive stock market crash that occurred on a day that has been labeled Black Tuesday, October 29, 1929. At the time of writing this, if you search for “What triggered the stock market crash of 1929,” you will be given a quote from a history.com article before anything else:
What Caused the 1929 Stock Market Crash? ... Among the other causes of the stock market crash of 1929 were low wages, the proliferation of debt, a struggling agricultural sector, and an excess of large bank loans that could not be liquidated.²
However, if you look for firsthand accounts of what happened on the NYSE (New York Stock Exchange) trading floor on Black Tuesday, you will discover a different story. Let’s go over one such account from a prominent trader and political figure of the time, who happened to write a book in which he described the day. In 1920, Curtis B. Dall (1896-1991) rose to become syndicate manager of Lehman Brothers and later was named a partner in the firm now known as Merrill Lynch, Pierce, Fenner & Smith, which I mention to demonstrate his prominence in the financial industry at the time. He also served in the Air Force during World War I and became national chairman of the Constitution Party. What’s more, Curtis B. Dall was President Franklin D. Roosevelt’s son-in-law.
In his book, FDR, My Exploited Father-in-Law, Dall muses over the cause of the stock market crash of 1929:
Of course, it would be most important for us to learn who called the “play” of October 24, 1929. Probably the actual date was accidental, though the month was evidently selected for the sudden withdrawal of the normal supply of credit. My guess is that “the signal” came from abroad. Obviously, much informed selling and short-selling of stocks came before the actual Crash itself, as well as after it, on rallies. The feeling around the Street, in succeeding months, was that there were, in particular, three large short sellers of stock, allegedly, Tom Bragg, Ben Smith, and Joe Kennedy…
…Tom Bragg and Joe Kennedy allegedly operated through various large wire houses, chosen as to their location, thus making the sell orders appear as though coming from all over the country. I saw Ben Smith, however, operate at the close range of five feet. Of the three mentioned well-known short sellers, Joe Kennedy was allegedly the most important, the most powerful and the most successful. This service, or operation, if such were the case, made him invaluable, but obviously controllable politically, to important – very important — world money people. Was Joe Kennedy carefully selected by world money leaders to sell short?
To understand where the signal Curtis B. Dall mentions came from, you need to understand what was happening with the apparent signal caller, the Vatican, at the time of the crash.
On June 7, 1929, just prior to America’s stock market crash, Italy signed a treaty with Pope Pius XI. This treaty, called the Lateran Treaty, freed Vatican City from Italian rule and officially established it as an independent state. On top of granting the Vatican independence, Italy paid 1.75 billion lira, roughly 350 million dollars at the time, more than 5 billion dollars today, to the Roman Catholic church in exchange for Papal land seized by Italy hundreds of years prior.³
In his book The Vatican Billions, historian Avro Manhattan (1914-1970) writes:
By 1929, the time of the Lateran Treaty, the Vatican’s State Treasure had become an official fund, so that when Mussolini in that same year turned over 1,750 million lira (the equivalent, in 1929, of 100 million dollars) to the Vatican as a final settlement of the Roman question, Pope Pius XI, no less a good businessman than Benedict, invested most of this vast sum in America immediately after the market collapse. The move was a profitable one for, following the Great Depression of the thirties, the Church reaped colossal profits when the U.S. economy recovered.
We also see somewhat strong anecdotal evidence that points to the fact the short sellers mentioned by Curtis B. Dall, specifically Joe Kennedy, had very strong financial ties to the Vatican.
In the December 13, 1943, edition of The Boston Globe Daily, Joseph Kennedy would be noted as a member of the Knights of Malta, a semi-secretive religious order loyal to the Pope which included the likes of Mussolini, leader of Italy at the time of the Great Depression.⁴ On top of that, Joseph Kennedy formed a well-known alliance with several other notable Irish-Catholic investors, including Charles E. Mitchell, Michael J. Meehan, and Bernard Smith.
By shorting the stock market at its peak and reinvesting afterward, a move mirroring the investments of the Vatican, Kennedy’s wealth reportedly jumped from $4 million to $180 million, the equivalent of several billion dollars today, in just five years. The move garnered skepticism about both the source of his funding and the potential for insider trading.
Famously, Kennedy claimed to have gotten his stock tip from a shoeshine boy.⁵ Legend has it that Kennedy decided, because the shoeshine boy was up to date on stock market information, the market must be oversaturated. So, he sold and got lucky.
There is no smoking gun to this story, only a series of unlikely coincidences. But we started here to illustrate that when we’re skeptical of coincidences, some greater truths tend to become evident. For example, it’s not always who you think, but where there’s money and obfuscation there’s corruption. And the more you dig into corruption like this, the more you’ll understand that Hanlon’s razor, “Never attribute to malice that which is adequately explained by stupidity,” is hogwash.
Stupidity is a convenient place for malice to hide.
This entire article was an excerpt from my book, God, Guns & Gardening. If you enjoyed this chapter, you'll enjoy the rest of the book.
References:
The Editors of Encyclopaedia Britannica, “Public Works Administration,” https://www.britannica.com/topic/Public-Works-Administration.
Julie Marks, “What Caused the Stock Market Crash of 1929?,” History.com, April 13, 2018, https://www.history.com/news/what-caused-the-stock-market-crash-of-1929.
Benedict Williamson, “Lateran Financial Convention (1929),” Concordat Watch, https://www.concordatwatch.eu/topic-39241.834.
Author Unknown, The Boston Globe Daily, December 13, 1946, https://bostonglobe.newspapers.com/image/434036936/.
Goodwin, Doris Kearns, The Fitzgeralds and the Kennedys. St. Martin's Press, 1987.
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