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market, in 1927. There had been uneasiness about the inflated 

condition of the market, and the bankers showed their power by 

getting the President of the United States, the Secretary of the Treasury, 

and the Chairman of the Board of Governors of the Federal Reserve 

System to issue statements that brokers’ loans were not too high, and 

that the condition of the stock market was sound.

Irving Fisher warned us in 1927 that the burden of stabilizing prices all 

over the world would soon fall on the United States. One of the results 

of the Second World War was the establishment of an International 

Monetary Fund to do just that. Professor Gustav Cassel remarked in the 

same year that:

"The downward movement of prices has not been a spontaneous 

result of forces beyond our 

 

control. It is the result of a policy 

deliberately framed to bring down prices and give a higher value to 

the monetary unit."

The Democratic Party, after passing the Federal Reserve Act and 

leading us into the First World War, assumed the role of an opposition 

party during the 1920s. They were on the outside of the political fence, 

and were supported during those lean years by liberal handouts from 

Bernard Baruch, according to his biography. How far outside of it they 

were and how little chance they had in 1928, is shown by a plank in 

the official Democratic Party platform adopted at Houston on June 28, 

1928:

"The administration of the Federal Reserve System for the advantage of 

the stock-market 

 

speculators should cease. It must be administered for 

the benefit of farmers, wage-earners, merchants, manufacturers, and 

others engaged in constructive business."