Sherman H. Skolnick
by Sherman H. Skolnick 7/25/02
THE GREAT CRASH 2002-2003 and Beyond
Did you ever talk to the elders of your family? About how they or others came to financial ruin in the bad old days of the Great Depression?
If you did, what could you have found out? Following the Crash of October, 1929, the stock market by April, 1930, recovered by fifty per cent, typical of horrendous bear markets. This was among talk that a fresh prosperity was just around the corner. And that now was the time to invest in American business for "the long haul".
BUT, who ever mentions there was an even worse, faster-developing Crash in 1937? Stock prices did not return to 1929 levels until 36 years later. Did all the victims of 1929 live that long?
The accepted pundits did not and do not bother to point out some key facts.
 The gap between the ultra rich and the common folks had become the greatest ever(like now). The income and assets of the aristocracy in the 1920s had gone UP AND UP. The wages of the ordinary people, however, had become stagnant if not declining (like now). Farm prices, if anything, had leveled off or had gone down in the 1920s
and into the 1930s (like now).  Ordinary workers and small business people were urged to own their own home. In good times, that would seem to be a great idea. In many city communities, there sprung up block after block of individual residences. As you looked down some streets, you could see row after row also of two-flats and three-flats, supposedly income producing buildings.
The properties had five-year, so-called Canadian-style mortgages, typical of the era. Who bothered to think about what would happen if the mortgage had to be rolled over or renewed in bad times? Who realized how would-be owners would be pressured to pay up the mortgage if the bank or mortgage company went under?
 There were plenty of newspapers supposedly competing with one another. But, they all relied for their existence on advertisers. The small amount paid by readers could not, by itself, keep the publications going. One subject was generally taboo. They did NOT publish pictures, if they had any, of the very wealthy, or if they did, were obligated to show them in a good light, smiling. And, they did NOT condemn the Establishment, the elite, for taking financial advantage of ordinary workers, small business folks, and yeoman farmers.
 There were plenty of community banks. And the big banks were "downtown". In some cities, you could see three different banks on the same street corners. The banks took deposits at the same time they sold corporate securities and mortgage bonds(after years of being prohibited, banks through their holdings firms or even directly, now sell such).. Chicago, for example, was a center to banks selling "Gold Bonds". That is, mortgage paper, the interest on which was payable in gold per month or per quarter. Some workers because they worked on several jobs were able to save up enough to buy such bonds and used the proceeds toward their rent on their flat.
 For investing in American business, some workers and small business folks found it convenient to buy shares in Investment Trusts. That was the name for the middle-men who, in turn, bought shares in stock. Few bothered to read the contracts which had a lot of technical legal details.
Here are some of the consequences and follow up details
===Some common folks put their family money into Wall Street as a result of the market "recovery" of the Spring of 1930. With a background as an engineer and developer for the super rich worldwide, President Herbert Hoover made statements he ought to have known were most likely mere puffing and false. He said words to the effect that, following the 1929 Crash, the American economy was on a sound and solid basis. Perhaps the present generation does not like to study history. Too many young folks think this Hoover was "the head of the FBI". This nonsense and lack of knowledge just causes the gap between the generations to be wider than usual.
===Those who re-invested in the "market recovery" of 1930, or failed to get the Hell out of Wall Street, as time went on, saw their stocks lose 90 per cent or more of their value or become entirely worthless. Unlike the direct purchase of stock, those who bought shares in Investment Trusts most often lost everything. The fine print of the contracts (if they were even shown or given a contract) stated there is a redemption clause. That meant, if too many investors tried to redeem their shares in the Investment Trust, the entity was frozen up. Thereafter, any investors left in the investment pool got zero; they could not transact in, out, or redeem. The Investment Trusts went into all manner of legal snarls for years and years, and receiverships, and some just plain disappeared.
If you listened carefully to the family elders, you heard them curse the "downtown banks". And even worse hollaring was against the "stinking Investment Trusts". When President Franklin Delano Roosevelt declared a Bank Holiday in 1933, he ended up ruining the community banks in favor of the "downtown banks" which survived. After World War Two, what sprung up as middlemen in stock purchasing were called MUTUAL FUNDS.. The term Investment Trust had become a dirty word.
By the 1990s, the Mutual Funds had multiplied like locusts, tens of thousands of them. Like the infamous Investment Trusts, their alter ego and ghosts arisen from the dead, Mutual Funds had the rotten redemption clause. Like in the 1920s and early 1930s, who bothered in the 1990s and thereafter, to read the contract about what could cause the Mutual Funds, formerly Investment Trusts, to be frozen up? Certainly the oil-soaked, spy-riddled monopoly press are not about to discuss this aspect of Mutual Funds, which are heavy advertisers and financially interwoven with the print and electronic media.
===Who in the press tells you about the supposed brokerage insurance, SIPC, not having sufficient reserves if a bunch of stockbrokers go bust in a bad downturn in business. And so you think the U.S. Treasury stands behind SIPC? Oh yeah?
==="Gold Bonds" became a great scandal of the 1930s. Who corruptly covered it all up? Why, Joseph P. Kennedy, first boss of the newly-then-formed U.S. Securities and Exchange Commission and "Founding Father" of the Kennedy clan. Gold Bonds were based on mortgages. Real estate, being the only free market in America, went down in price when the bubble burst. Nowadays there are shares on the Big Board of Fannie Mae, a huge mortgage pool (sort of like "Gold Bonds" though not paying in the precious metral). Some have the false impression that Fannie Mae is a Federal Government agency and supposedly in a mortgage foreclosure crisis, would be bailed out by the U.S. Treasury. Not so.
===In the 1930s, when real estate prices collapsed, the market price of many properties was lower than the mortgage. So, some would-be owners of individual residences, or apartment buildings, left a note inside their abandoned property for the mortgage company. "Goodbye, mortgage company, nice knowing you. Here is the key." The would-be owner could most often at the time purchase a similar property nearby, for cash, if they still had any, at much less than the mortgage on their then current item. The press whores now cannot discuss such things. After all, the Sunday edition of most newspapers have a large real estate section. Telling the truth about real estate, then as now, is bad for business.
===In recent years, a swarm of mortgage companies have shown up from No Where. They urge owners to suck all the equity out of their property through re-doing the mortgage or adding another pile of bricks on their head through a second mortgage. The liars and whores of the press advertising these mortgage peddlers, do not bother to inquire who they are. Some of them (certainly not all of them) are purveyors of criminal offshore loot, proceeds of gangster enterprises too often jointly with corrupt tax collectors, plain old-fashioned mobsters some in bed (as we have shown in other situations) with judges and other public office holders. The dirty money is being laundered as "mortgage lending".
===In the 1930s, the enterprising tenant could live in an apartment for a time without paying. So many apartment buildings were partly vacant, that the landlords offered three-month concessions. That meant, you could live there for the first three months for free. There were plenty unemployed to move you elsewhere, in the dark of night, when the rent freebie expired. (Is more of that coming back, such as with the overbuilding of condominium buildings?).
===When banks collapsed in the 1930s, some of the bank presidents opened the Safe Deposit Box vault and looted the contents of some of the deposit boxes. After all, the Deposit Box Companies were then, and are now, completely separate entities housed within the bank building. Few, if any, know this. The vault companies generally carry no theft insurance. And what box holders wants to report to the police or the FBI that some jewels, some gold coins, and other valuables are missing from their deposit box? And can you PROVE what was in the box? Do husbands really want their estranged or legally separated or divorced wives or ex-wives to know what was kept in that deposit box? Do corrupt politicians want tax collectors to know what the public office holder has siphoned off some public agency's funds? Hey, do you think highly corrupt IRS officials want to divulge what is in THEIR safe deposit box?
Two examples. A top Illinois state official was criminally prosecuted when his estranged wife blew the whistle on fifty thousand dollars kept in his safe deposit box apparently embezzled from his state office. A Mayor of Chicago took bribes in the hundreds of thousands of dollars in the form of diamonds. This loot somehow disappeared from his deposit box when he croaked. Who could prove what?
===Gotten rich during the Great Depression era from the looted deposit boxes, some banker's families after World War Two used these funds to establish a form of competitors to banks, called Savings and Loan Associations, appealing to home ownership and such.
Good references "The Rich and The Super Rich" by Ferdinand Lundberg, Lyle Stuart Publishers, 1968, reprinted in paperback in later years. "The Great Crash- 1929" by Kenneth Galbraith.
Can America's secretive PRIVATE central bank, the Federal Reserve, keep pumping up the stock market? Are they actually now reversing position, and selling short against the unsuspecting American common people? That is, having made the market go up, secretly profitting from making it go down? Is the Federal Reserve technically bankrupt? What is the treasonous history of J.P. Morgan & Company? Study also Part One of this series.
More coming. Stay tuned.
Since 1958, Mr.Skolnick has been a court reformer. Since 1963,
founder/chairman, Citizen's Committee to Clean Up the Courts, disclosing
certain instances of judicial and other bribery and political murders.
Since 1991 a regular panelist, and since 1995, moderator/producer, of
one-hour,weekly public access Cable TV Show, "Broadsides", Cablecast on
Channel 21, 9 p.m. each Monday in Chicago. For a heavy packet of printed
stories, send $5.00 [U.S. funds] and a stamped, self-addressed business
sized envelope [4-1/4 x 9-1/2 #10 size] WITH THREE STAMPS ON IT, to
Citizen's Committee to Clean Up the Courts, Sherman H. Skolnick,
Chairman, 9800 South Oglesby Ave., Chicago IL 60617-4870. Office, 7
days, 8 a.m. to midnight, (773) 375-5741 [PLEASE, no "just routine
calls]. Before sending FAX,