America 1919

Chapter 1606 - 589: Power Lies in the Support of the Majority (Part 2)

This shows Franklin Roosevelt’s insistence on the New Deal!"

The much-debated "Silver Purchase Act" was finally officially passed after entering 1934.

The content of the act is very complex, but it can be summarized into one point!

The U.S. Government would step in to purchase silver from the Silver Group at a high price.

Before the twentieth century, silver was the main international currency.

But after entering the twentieth century, silver was replaced by gold, and now only the East still uses silver as currency.

The signing of this act is actually a devastating blow to the economy of the East!

Donnie also lamented that the changes in events far exceeded his imagination, for instance, in the original timeline, Franklin Roosevelt was supposed to sign the "Silver Purchase Act" in June of this year, but now it’s been signed in February.

"Did you know about this in advance, is that why you had Dwight buy a lot of silver in Nevada?"

Cameron Block asked Donnie.

Donnie waved his hand: "I didn’t inquire about this with Franklin Roosevelt, but based on Franklin Roosevelt’s personality, it’s predictable that he would eventually compromise with the Silver Group, otherwise he wouldn’t be able to continue implementing his New Deal."

Cameron Block said: "When I move into the White House in the future, I must find a way to suppress those people in Congress!"

Only when facing Donnie does Cameron Block reveal his thoughts without reservation.

Upon hearing Cameron Block speak like this, Jessica Dole stood up: "You guys continue chatting, I’ll go check on how lunch preparations are going in the kitchen!"

Jessica Dole then left.

Donnie glanced at Cameron Block and said: "Don’t think just because you’ve got the City of Los Angeles under control that you’ll be able to manage Congress.

When you move into the White House, if you can accomplish half of what Franklin Roosevelt has, I’ll be very impressed!"

Cameron Block, feeling indignant, replied: "You think I’m not as good as Franklin Roosevelt?"

Donnie nodded, indifferent to Cameron Block’s attitude, and said: "Right now, you indeed can’t compare to him. If you’re not convinced, let me ask you. If you were Franklin Roosevelt, with those bankers on Wall Street obstructing your New Deal in front, and the members of Congress behind you extending their hands, saying they won’t pass your legislation unless their demands are met, what would you do?

Bear in mind that in these matters, Venus Bank will not be helping you!"

Cameron Block was seriously pondering what Donnie had said, imagining himself in Franklin Roosevelt’s position and how to face such a situation.

But soon, Cameron Block realized that such circumstances are indeed difficult to handle!

"Politics is the art of compromise; those in Congress each have their own vested interests. Your goal should not be to suppress everyone but to garner support from most while suppressing a small portion."

The structure of Congress itself already determines that it’s impossible for the organization to be united.

The members are all appointed from various states, so they represent the interests of their respective states.

But the interests between states are different.

Just as before, during Herbert Hoover’s tenure, in order to gain the support of agricultural states, the "Smoot-Hawley Tariff Act" was signed.

But for other non-agricultural states in the United States, this bill was considered insignificant, at least they thought so at the time.

So why should I support a bill that is irrelevant to me?

Thus, for the interests of their own states, other members demanded adding their state’s products to the bill.

Ultimately, the bill turned into a joke.

Cameron Block asked: "What if the majority’s interests conflict with ours?"

Donnie chuckled: "Any organization is composed of individuals.

In such cases, everyone has their own personal interests.

For example, the Los Angeles city councilors Harold Parsons and Eunice Tapia have always advanced and retreated together.

But in reality, they are backed by different interest groups, with Harold Parsons supported by the Teacher’s Union of Los Angeles, and Eunice Tapia supported by the Actor’s Union of Los Angeles.

It seems their interests don’t conflict, so they have been able to cooperate.

But in reality, as I know, recently the Teacher’s Association backing Harold Parsons has been urging him to protest to Hollywood, believing the current Hollywood movies are overly violent and could corrupt children.

On the other hand, the Actor’s Union believes that movies are fictitious art, and if children are corrupted by movie plots, it is not the fault of the movies but rather the irresponsibility of parents and teachers.

This matter has strained relations between the Teacher’s Union and the Actor’s Union in Los Angeles.

And the relationship between Harold Parsons and Eunice Tapia has also become strained because of this!"

Cameron Block pondered for a moment and then said: "So what you mean is, if our interests conflict with those of the majority, we need to drive a wedge and gain the support of the majority!"

Donnie nodded and said: "Exactly, to me, politics is always about the correctness of the majority; truth may rest in the hands of a few, but power always lies with the support of the majority!"

Cameron Block nodded, agreeing with Donnie’s statement.

"Currently, the only place globally still using silver as currency is the East, and now with the signing of the ’Silver Purchase Act,’ it’s sure to directly impact the Eastern economic environment."

Cameron Block, in reality, doesn’t care about the Eastern economic environment.

So he continued: "If at this time, one buys a large amount of silver in the East and transports it to Europe or the United States, there’s surely a profit to be made!"

The East does not actually produce silver; since the Ming Dynasty, Eastern goods such as tea and silk have been flowing continuously abroad, earning foreign silver.

And with the self-sufficient smallholder economy as the mainstay in the East, there has been little interest in imported goods, resulting in the accumulation of large amounts of silver by the government at the time.

Therefore, since the Ming Dynasty, the East began implementing the "silver standard," which continued till now.

Under the "Silver Purchase Act" signed by Franklin Roosevelt, before the act, the US price of silver was $0.44 per ounce. After the act, US mints purchased newly mined domestic silver at $1.29 per ounce.

If it stopped at this point, it would affect only the domestic US silver price, having some but not significant impact on global silver prices.

But human desires are infinite, as is the case with the Silver Group, so they demanded the U.S. Government purchase silver on a global scale!

This directly affected global silver prices.

Take London as an example: in 1933, the price of pure silver on the London market was only 18.2 pence per ounce. By May 1935, it had surged to 33.8 pence, almost doubling.

In such a situation, if the East cannot balance the domestic and foreign price disparity, it will lead to a severe outflow of silver currency, triggering deflation and a collapse in domestic pricing levels.

And indeed it was so; with the signing of the "Silver Purchase Act," the East’s silver was rapidly flowing abroad.

Just within 1934, recorded by customs, 268 million units of silver were lost.

This figure doesn’t even account for smuggling or illicit transport.

Unfortunately, at this time, the so-called government in the East was unable to stop these occurrences, with some authorities even directly participating.

So by the following year, the East abandoned the silver standard and switched to issuing Fiat Currency.

Everyone knows how severely Fiat Currency inflated afterward.

Tang Fei waved his hand: "Feng Zhangping is responsible for matters over there; I don’t concern myself with it. I’m more interested in the situation of the Silver Group!"