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"The events of the past year have seen the beginnings of a new 

technique, which, if maintained  and developed, may succeed in 

‘rationing the speculator without injuring the trader.’"

Governor Charles S. Hamlin quoted this statement at the Senate 

hearings in 1931 and said, in corroboration of it:

"That was the feeling of certain members of the Board, to remove 

Federal Reserve credit from the speculator without injuring the trader."

Governor Hamlin did not bother to point out that the "speculators" he 

was out to break were the school-teachers and small town merchants 

who had put their savings into the stock market, or that the "traders" he 

was trying to protect were the big Wall Street operators, Bernard 

Baruch and Paul Warburg.

When the Federal Reserve Bank of New York raised its rate to six 

percent on August 9, 1929, market conditions began which 

culminated in tremendous selling orders from October 24 into 

November, which wiped out a hundred and sixty billion dollars worth of 

security values. That was a hundred and sixty billions which the 

American citizens had one month and did not have the next. Some 

idea of the calamity may be had if we remember that our enormous 

outlay of money and goods in the Second World War amounted to not 

much more than two hundred billions of dollars, and a great deal of 

that remained as negotiable securities in the national debt. The stock 

market crash is the greatest misfortune which the United States has 

ever suffered.