From the September AD 2009
Our Lady of the Rosary
ON THIS PAGE:
The Great Depression
[ Q&A ARCHIVES ]
From what, exactly, are Catholics expected to abstain on Fridays and other
days of abstinence? Does the use of chicken broth violate the rules of
abstinence? Are there causes that might excuse from abstinence?
Here is how the eminent moral theologian Henry Davis, S.J. explains it
in his Moral and Pastoral Theology, (London: Sheed & Ward, 1935) Vol. II,
law of abstinence forbids the eating of flesh meat and meat soup, but not of
eggs, milk foods, and condiments from animal fats (c.1250). By
condiment is meant that which is taken—whether liquid or solid—in a
small quantity with food to make it more palatable. Butter made from
animal fats, and margarine from palm kernel are allowed. Jellies also
which are made from fish or animal bones are not meat. Lard, the
rendered fat of hog, and dripping, the grease that has dripped from roasted
meat, may be taken as condiments. But suet, the fatty tissue about the
kidneys and omentum of ox and sheep, being an integral part of the animal,
is flesh meat, and is forbidden. Suet pudding, made of flour and
shredded suet, is forbidden if the suet is more than a condiment, that is,
more than a small fraction of the whole.
precisely is an animal, within the meaning of the law, cannot be completely
determined. We need not take scientific definitions, but may have
recourse to the common usage of the term. In case of doubt, the rule
laid down by Saint Thomas may well be taken, namely, that by the term are
meant animals that are born on land and breathe (Summa II-II, q.147
a.8). Saint Thomas meant, we believe, animals that are born, live, and
mature on land. In the case of amphibians, their similarity to land
animals must decide. In case of doubt the law does not bind.
fish are included frogs, snails, oysters, lobsters, otters, beavers, crabs.
To decide the issue of cooking with chicken broth we
inquired as to how it is prepared, and found that:
broth is easy to make at home and can be used in place of water in many
dishes. It’s a favorite ingredient in many wok recipes. Chicken
broth is technically a reduction of liquid from the various meaty parts of a
chicken that are simmered in water. Vegetables are often added to increase
flavor. The breasts and/or legs and thighs are removed after approximately
three hours of cooking and used in other dishes. Broth tends to be
more liquid and lower in fat, especially when allowed to cool and the top
layer is skimmed. At this stage, a thin broth can be strained, seasoned, and
consumed as soup. (The Big Oven Food Dictionary, s.v. “Chicken
If anything, this description of chicken broth sounds
less like meat than the “lard” or “dripping” permitted as a condiment in
Father Davis’ instruction quoted above—particularly when the broth is
skimmed and strained as indicated in the recipe. Of course Davis’
stipulation that the material is to be used only as a condiment would apply to
the chicken broth as well, so that it would not be appropriate to take it as a
soup on its own. Using it to flavor rice or an egg-drop soup would seem to
be within the spirit of the law.
Those are excused who are under seven years of age or who have never come to
the use of reason; those who cannot get abstinence fare, or who cannot keep
the law without considerable difficulty, whether of health, occasion,
time, or expense, for example the sick, the convalescent, and the very poor,
those who require meat for health’s sake …those who undertake
considerable manual labor … who journey and cannot obtain abstinence fare
without considerable difficulty … vagrants who live by what they can beg
… soldiers and sailors who are fed, during service, by the State.
an invited Catholic guest finds meat fare and nothing else … if by
accident meat had been prepared … particularly with poor families (Davis).
Scandal ought to be avoided, but the restaurant meal
that would be paid for and probably thrown away would generally qualify as
The Great Depression
[Continued from last month]
there moral aspects to the Great Depression?
A lot of people suffered for well over a decade. Shouldn’t someone be
held responsible? Can we prevent such a thing from happening again?
as Money ●
Over the centuries, when societies evolved from
barter to money economies, a common choice has been to use a weight of gold or
some other precious metal as the money. Gold is rare enough to be not
found laying around, abundant enough to be available for trade, not subject to
tarnish, and in demand for artistic and practical purposes. Having a more
or less universal appeal, gold makes a good medium of exchange, unit of account,
and store of value—the three essential characteristics of money.
Coining money in standard weights and recognizable
shapes makes it more useful in trade than carrying it around in bars.
Although free enterprise mints have existed, governments tend to usurp this
function for their own as an extension of their power over those governed, and
to be able to finance wars and other spending not made possible by direct
taxation. The free enterprise mint must produce full valued coins (and
sometimes a bit more) to preserve the recognition of its coins by the
market—the government merely uses its coercive powers (legal tender laws) to
demand recognition of its coins. Unscrupulous governments have been known
to debase their coins by minting them with less precious metal content than the
monetary standard, producing extra coins for themselves with the “surplus.”
States Constitution was ratified by the States on June 21, 1788, with Article I
delegating certain monetary powers to the Congress:
Section 8. …. To borrow money on the
credit of the United States … To coin money, regulate the value thereof,
and of foreign coin, and fix the standard of weights and measures …To
provide for the punishment of counterfeiting the securities and current coin
of the United States….
The federal government thus assumed the
responsibility of setting the standards for units of measure like the foot, the
gallon, the pound, and the dollar—clearly things that need to remain constant
once set, apart, perhaps, from specifying them more precisely in the future.
Among the first laws passed by the new Congress was the Mint
Act of 1789, which set the nation’s monetary standards and commissioned a
mint to strike the coins. The Mint Act did not outlaw the private
production of metallic coins, and free enterprise coinage continued until
outlawed by the Lincoln regime in 1864.
Gold was valued at roughly $20 dollars per ounce, and silver at
one-fifteenth that of gold, or about $1.34 per ounce. Under the Mint Act
the penalty for debasing the money of the United States—a species of treason
mixed with theft—is death!
Constitution, the sovereign States also agreed to some monetary restrictions on
10. No state shall … coin money; emit bills of credit; make anything but
gold and silver coin a tender in payment of debts … pass any … law
impairing the obligation of contracts….
Section 10 is
significant for, as we will see, the “Gold Robbery of 1933” would make gold
coin unavailable for paying debts (silver coin would become unavailable in 1970),
and impair the obligation of contracts specifying payment in gold.
Prior to 1933
the federal government issued paper money that was backed by gold or silver.
The bearer was entitled to exchange his certificate at the Treasury for the
specified amount of metallic coin.
At the same
time, there also circulated Federal Reserve Notes that were backed by U.S.
Securities. Forty percent of the currency in circulation was supposed to
be backed by gold. This, of course, does not include the deposits created
by fractional reserve banking—easily a ten-fold expansion of the “money”
supply, connoting a four percent backing in gold.
Great Gold Robbery of 1933” ●
administration was desperate to raise prices by inflating the money supply.
Prices had declined due to technological development and consequent increased
productivity—more things were available, in greater variety, at lower
prices—but Roosevelt mistakenly viewed this prosperity as a cause of the
economic depression, as though lower prices led to unemployment.
On the day
after his inauguration, 5 March 1933, Roosevelt summoned Congress into session,
and on the 6th invoked the wartime “Trading With the Enemy Act” to keep the
banks closed until at least the 13th. While this was clearly illegal,
Congress passed the “Emergency Banking Relief Act of 1933” in the evening of
This amended the “Trading With the Enemy Act” to include emergencies
“During time of war or during any other period of national emergency declared
by the President” to criminalize the “export, hoarding, melting, or
earmarking of gold or silver coin or bullion or currency, by any person within
the United States.” Americans became the “enemy” and could
“be fined not more than $10,000, or, if a natural person, may be imprisoned
for not more than ten years, or both.” If they were commanded to
surrender “any or all gold coin, gold bullion, and gold certificates” but
failed to do so, thy would “be subject to a penalty equal to twice the value
of the gold or gold certificates in respect of which such failure occurred.”
In other words when the “enemy”—the American citizen—failed to
turn in all his money, he was supposed to turn in all his money twice over.
of the “Banking Relief Act” enabled the government to seize and reorganize
banks as it saw fit.
allowed the Fed to issue money (“receivable at par in all parts of the United
States for the same purposes as are national bank notes, and shall be redeemable
in lawful money of the United States on presentation at the United States
Treasury”) based not on gold or silver, but on securities (“Upon the
deposit with the Treasurer of the United States, (a) of any direct
obligations of the United States or (b) of any notes, drafts, bills of
exchange, or bankers' acceptances acquired under the provisions of this Act.”)
inauguration in March of 1933 and January 31st of the following year, Roosevelt
went off the gold standard, tried to confiscate all privately owned gold bars
and coins, nullified all contract clauses requiring payment in gold, and debased
the dollar roughly forty percent by raising the theoretical price of gold from
$20 to $35 per ounce.
bono? Who would profit? ●
Roosevelt pursue the highly inflationary policy of getting off the gold
lobby, first of all, wanted to see inflation for two reasons—to raise the
dollar price of their products, and to pay off the ubiquitous farm loans with
cheaper dollars than they had borrowed. American farmers continued to
produce at World War I levels, but without the large European demand
for their product, thereby lowering farm prices. Roosevelt feared the farm
lobby. Instead of encouraging them to enter new fields of endeavor or to
diversify into more profitable crops, the government determined to inflate the
currency (as well as paying subsidies to not grow, and destroying crops and
livestock). In 1937 they even criminalized the growing of the very
versatile hemp plant on the grounds that smoking it might cause addiction
(translation: it was a threat to the well connected synthetic fiber producers).
Inflation and subsidies might benefit the farm lobby.
Many but not
all of the bankers lobbied against the gold standard as it represented a
measuring rod against which the woefully under-backed money supply could be
gauged. Roosevelt alluded to this in his May 7th “Fireside Chat”
If the holders of these promises to pay started in to
demand gold the first comers would get gold for a few days and they would amount
to about one twenty-fifth of the holders of the securities and the currency. The
other twenty-four people out of twenty-five, who did not happen to be at the top
of the line, would be told politely that there was no more gold left. We have
decided to treat all twenty-five in the same way in the interest of justice and
the exercise of the constitutional powers of this government.
One out of
twenty-five is precisely the four percent I predicted earlier—not the forty
percent mandated by law and not the hundred percent demanded by justice.
Roosevelt did not act in “the interest of justice,” and far exceeded his
“constitutional powers,” which in no way include grand theft or the
nullification of contracts.
The right of
the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not be violated….
businessmen lobbied for devaluation of the dollar as a means of increasing
exports. A few foreign currency speculators chimed in, as well as those
who had already gotten gold out of the country.
By far, the
greatest proponent of going off gold was the federal government itself.
When people turned in their gold in early 1933 they received $20 an ounce—when
the price rose to $35, the government turned an instant forty percent profit.
among history’s biggest hoarders with an estimated 190 million ounces of gold
worth $7 billion after the dollar devaluation. FDR undoubtedly hoarded
gold for the same reason that the mercantilist kings of the sixteenth,
seventeenth, and eighteenth centuries hoarded it: Gold was the
ultimate money, and for a ruler money meant power.
importantly, abandonment of the gold standard meant that the government could
inflate the currency at will, robbing from everyone who held dollars, and
saddling the taxpayers and their descendants with interest payments forever.
● To What
we know that a good end never justifies achieving that end through evil means.
Nonetheless, it will be instructive to ask whether or not the “Great Gold
Robbery” achieved its ends.
After confiscating American’s gold, the government
did not inflate the currency very rapidly. Price levels did not rise to
1929 levels until 1942 or 1943; M2 took until 1938 or 1939.
Unemployment remained in double digits until 1941 when the government prepared
for the attack on Pearl Harbor and entry into World War II. The war itself
brought unemployment down to a percent or so, but at a terrible price—apart
from the war years, 1929 employment levels were not reached again until the
1950s. By 1937, the Gross Domestic Product (GDP) was back to 1929 levels,
but government spending became an ever increasing component. (GDP can be a
misleading figure as it counts government consumption as though it were
Farm prices did not rise as the farmers had hoped.
Bizarre farm programs would come into being, often counter productive, leaving
people without food to eat, and farmers with continued low prices.
The bankers seem in general to have enjoyed the loss
of discipline involved in the gold standard. Of course those who had taken
gold out of the country before 1933 profited. The eventual war would be
profitable, as usual, for those in the appropriate industries.
The real beneficiary of the Gold Robbery was the
federal government. Not only had it acquired a huge stock of gold, but it
had gained the means to keep that stock within the country without regard to the
condition of the US economy. Other “New Deal” programs would be
challenged in court—some successfully—but the Gold Robbery clearly
emboldened the robbers to find other immoral and illegal ways to tinker with the
losers were those with an interest in the American economy. Prosperity
depends on private sector investment, which in turn requires confidence that the
rules will remain constant. Going off gold and nullifying gold contracts
sent the terrible message that the rules might change at any time, for the US
was no longer a nation under the rule of law.
[To be continued]