The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-01-04
WHERE DID THE SAVINGS co?

An important point usually overlooked in &C
counting for the depth and duration of the depres-
sion is what became of the money the masses had
accumulated by the time the depression broke upon
us. This issue is conprehensively analysed by Da-
vid H. Jackson an eminent Chicago lawyer and for
merly head of the Illinois securities department.
His contribution is contained in a chapter on
what Are Financial Rackets?" in the slashing new
book edited by Ernest D. NIacDougaI on Crime for
Profit" (Stratford), the most complete and author
itative volume yet devoted to the increasingly i'm
portant problem of mercenary crime.
Mr. Jackson punctures the common illusion that
it has been mainly the rich who have lost as a re-
suit of the Wall Street crash, the shrnkage of Sc
curity values, the slump in real estate foreclosures
receiverships. closed banks and the like.
The rich lost, but most of their losings was done
with other peoples money" to use Justice Brandes
classic phrase
Granting that the bulk of Americans did not get
their Just share of the national income before 1929
yet if they had been able to use what money they
had saved when the crisis came upon us purchasing
power could have been kept up.
The depression could have been mitigated and
fattened out. But they did not have all their saw
ings even in 1929 and their losses have rolled up
since in the very years when need was greatest.
Where did the money go? Jackson answers this
in his clear summary of the development of financial
rackets in the last decade
The speculative mania made countless honest
but innocent and women victims of downright
SwindlerS, who sold them bogus stock of no value
whatsoever. Bucket shops swiped by devious meth
DDS the money left by customers for stock pur-
chases or switched their clients from good to worth
less enthusiastically by telephone conversations
which could not be used as evidence in prosecutions
Their total toll about $2OOCOOOOOO yearly
enough to float great public works enterprise
Others eager to swell their fortunes entered
Wall Street and played the hopeless game against
the loaded dice of insiders with their price pegging
pools short selling, and other manipulatons These
securities have shrunk the tune of S7OOO0O 900
since 1929.
More conservative persons sought mortgage
houses, which once upon a time boosted that they
had lost dollar for their clients" But these
mortgage houses had changed their methods and
ideals In the old days, they bought good mortgage
bonds on conservative real estate developments
which were needed for residences, Offices and fac
tories.
In the later days, some of them instigated and
engineered absurdly unnecessary building so as to
float great bond issues to sell for pecuniary profit
to the trusting lambs. The lambs held the bag when
foreclosures, receiyershps and evaporated bond
values came along More billions were dropped
here
The most conservative people simply put their
money in banks. Formerly the bank of deposit
used its surplus money for investments primarily
purchased for itself. The profits of the bank came
from the surplus of interest on the investments
and loans Of the bank over the low costs of opera
ton"
But in the golden days before 1929 "the banker
was just merchant broker, selling securities
on which he making a large profit" Along
came the crash Depositors already hadglost some