Lords of Finance: 1929, the Great Depression, and the Bankers Who Broke the World (86 page)

beginning of meetings of, 294–95

and blame for Great Depression, 501–3

and British departure from gold standard, 433–34

and Credit Anstalt problem, 406

and credit system, 11

distrust of, 168

foreign lending by, 370

functions/role of, 8, 15, 502

and funding for war, 76

goals of, 167, 171, 280

gold reserves of, 12, 15, 164, 370, 375, 434

and gold standard, 155, 171, 291, 292–93, 295, 302

government’s relationship with, 7

holding of pounds by, 302

impact of, 9

and interest rates, 11

Keynes’s views about, 167

and leadership, 502

Long Island meeting of, 296–98, 300, 308, 326

need for U.S. coordination with European, 91–92

power and prestige of, 7

and printing currency, 15, 155

private ownership of, 8

proposed league of, 149–50

public statements by, 5

reaction to Great Crash by, 370

reputation of, 156–57

response to panics by, 499

role during Great Depression of, 11–15

role in World War I of, 76

sisyphian nature of, 279–80

and stock market, 320

Strong as inventor of modern, 171

Central Europe

assassination of Archduke Ferdinand in, 24

banking system in, 419, 423, 424, 434, 443

and blame for Great Depression, 501

currency collapse in, 168

default on debts in, 497, 499

gold standard in, 443

impact of Great Crash on, 383

impact of stock market bubble on, 320

and Keynes’s personal finances, 165

pounds/sterling reserves of, 163

recession in, 341

Chamberlain, Austen, 131, 220

Chamberlain, Neville, 484

Chambers, Whittaker, 492, 495

Chase National Bank, 48, 355, 387, 388, 437, 440

Churchill, Winston

Baruch dinner for, 358

and Beaverbrook, 230–31, 231
n

blunders/mistakes of, 239, 432

as chancellor of exchequer, 221–23, 230–32, 239

Chaplin visit with, 432

and French war debt, 250

and gold standard, 230–36, 239, 431–32, 487

as “golden Chancellor,” 235

and Keynes, 237

lifestyle of, 224, 224
n

and Lloyd George, 222

and Norman, 6, 147–48, 223–24, 232, 235, 239

Norman profile by, 431

and The Other Club, 238–39

parliamentary speeches of, 235–36, 239, 431–32

political affiliations of, 222

reputation of, 224

Snowden as replacement for, 344

and U.S.-British relations, 135

Clemenceau, George, 106, 115

coal industry, 238

commercial/merchant banks

gold reserves of, 156

in Great Britain, 30, 31, 32, 77, 156

in U.S., 175, 448, 457

commodities, 341, 374, 378, 460–61, 469, 471, 490, 497

Communists, 3–4, 246, 282, 383, 400, 409, 493

Comptroller of the Currency, U.S., 173–74

confidence, public, 462–63, 466, 499

Congress, U.S.

and bank rescue package, 454

banking system study by, 54

causes of Great Crash hearings in, 440–41

and creation/reform of Federal Reserve Board, 56, 475

and credit, 300

and early years of Depression, 439

and French- U.S. relations, 257

and gold standard, 443–44, 462

Harrison’s views about, 473

and monetary policy, 278

and moratorium on reparations and war debt, 410

and prices, 462

reaction to Great Crash by, 362

and RFC, 439

and Roosevelt administration, 454, 456–57

stock market concerns in, 316–18, 324

and war debts, 140, 142, 143, 257

Converse, Edmund, 45, 51, 59, 92

Coolidge, Calvin, 142, 209, 216, 257, 272, 299, 314, 324

Cox, James M., 467, 469

credit

and characteristics of Great Depression, 497, 499

collapse of, 75

congressional hearings about, 300

and gold standard, 156, 167, 170, 171

and impact of Great Crash, 365, 366, 375, 391, 392

and role of central bankers, 11

and stock market bubble, 318, 323

Strong’s views about, 170, 171

Credit Anstalt, failure of, 4, 404–6

Crissinger, Daniel, 173–74, 298, 299, 319

Cunliffe, Walter, Lord, 29, 81–82, 83, 105–6, 107, 114, 148, 159–60

Cunliffe Committee (1918), 220

currency

amount of, 13

attempts to stabilize, 469–70

collapse of European, 5, 168

contraction of, 156

and covering of U.S. debt, 48

devaluation of, 76, 156–57

and funding for war, 76

and gold standard, 11–12, 13–14, 20, 155, 167

and interest rates, 12

in post-World War I years, 151, 156–57

and role of central bank, 11–15, 171

Curzon, George Nathaniel, 116, 117

customs union, 406, 416

Danatbank, 4, 128–29, 179, 183, 183
n
, 185, 281, 414, 415, 418

Davillier, Maurice, 244, 245, 246

Davison, Henry

and central bank plan, 54–55

death of, 212

and Jekyll Island meeting, 55

Lamont’s relationship with, 211–12

lifestyle of, 152

and meeting at J.P. Morgan & Co., 48, 49

and Panic of 1907, 53

personal background of, 49, 50

personality of, 59

reputation of, 51

and Strong as governor of New York Fed, 58, 59–60

Strong relationship with, 51, 54, 60

as trustee of Bankers Trust, 47

Dawes, Charles Gates, 198, 199, 200, 202, 206, 207, 216, 315, 453

Dawes, Rufus, 200

Dawes Committee, 105, 107, 108, 118–19, 198–208

Dawes Plan, 207–16, 221, 226, 227, 243, 261, 280, 283–85, 325, 327–28, 334, 401, 453.
See also specific nation

de Gaulle, Charles, 241

deflation

and blame for Great Depression, 502

and gold standard, 156, 157, 297

and initiatives to revive economy, 438

Keynes’s views about, 339

Norman’s concern about, 301

Deutsche Orientbank, 423

Deutsche Bank, 423

Deutsche Demokratische Partei (DDP), 103

devaluation

views about, 156–57

Dillon Read, 213, 253, 397

Douglas, Lewis W., 458, 461, 462

Dresdner Bank, 36, 40, 41, 89–90

Dreyfus, Alfred, 64, 266

Du Pont family, 273

Dufour-Feronce, Albert, 193

Dulles, John Foster, 106

Durant, William Crapo “Billy,” 272–73, 279, 312, 342–43

Eastern Europe, 287, 301, 329, 383, 422, 482, 497

The Economic Consequences of Mr. Churchill
(Keynes), 237, 238

The Economic Consequences of the Peace
(Keynes), 19, 99, 109–10, 114–16, 164, 166, 167, 168, 169–70, 337

Economy Act (U.S., 1933), 456

Edge, Walter, 411, 412

Einzig, Paul, 378, 417

elections of 1932, U.S., 441–42

Emergency Banking Act (U.S., 1933), 454

Emergency Relief Act (U.S., 1933), 456

emerging markets, 499

The End of Reparations
(Schacht), 417–18

Esher, Lord (Reginald Brett), 21–22

Europe

American tourists in, 57–58

anti-Americanism in, 135

and comparison of Great Depression and modern events, 499

exchange rates in, 501

gold reserves of, 164, 172, 297

gold standard in, 171–72, 501

impact of Great Crash on, 369–73

impact of U.S. stock market bubble on, 325

Keynes’s plan for financial reconstruction of, 131–32

loans to U.S. from, 48

reconstruction of, 135

U.S. foreign investment in, 375

Europe’s Optical Illusion
(Angell), 20–21

“The Family,” 133–34, 133
n
, 202

Federal Reserve Act (1913), 57, 172

Federal Reserve Bank of Chicago, 446

Federal Reserve Bank of Cleveland, 390–91

Federal Reserve Bank of New York

British loans from, 4, 424, 426, 428, 434

and BUS rescue, 387–89

central bankers meeting at, 294, 295–96

and divisiveness within Federal System, 91, 298–99, 321, 322–24, 356, 357–60, 365

and France, 253, 259, 300

and funding for war, 94

and German economy, 417

gold reserves of, 163, 379, 444–47

Harrison named head of, 318

headquarters of, 225, 295

and impact of Great Crash, 356, 357–60, 365

and interest rates, 298–99, 322–23, 343, 356, 365

and international bank proposal, 383

and Jewish-owned banks, 386–87

and Liberty bonds, 94

Norman meeting with, 382

power of, 357

and reform of Federal System, 475

Reichsbank gold at, 379
n

run on, 444–47

size of, 58
n

and stock market, 343, 357–60

Strong named governor of, 58–60

Federal Reserve Board/System

appointments to, 91

and Bank of England, 132, 434

and banking crisis, 391, 444–47, 454, 455, 455
n
, 499

and blame for Great Depression, 501, 502, 503

Board of Governors of, 475

and British economy, 227–28, 237, 240, 296–98, 300

British views about, 378

as central bank of industrial world, 295

charter/rules of, 12, 278

closing of, 447

comparison of modern and 1930s, 499

congressional hearings about, 300

creation of, 54–57, 173, 312, 317, 390, 436

credibility of, 95, 323

and credit, 157, 171, 227, 300, 318

criticisms of, 322

and devaluation of dollar, 465, 489

dissension/divisiveness within, 173, 175, 176, 291, 294, 298–99, 319–24, 344, 356–60, 365–66, 368, 369, 446

Eccles named head of, 475

and economic recovery in U.S., 463

functions/goals of, 171, 175, 271, 277, 293–94, 351, 357, 475

and funding for war, 94

gold reserves of, 12, 95, 163, 172, 375, 379, 391, 435–36, 439, 444, 447, 474, 503

and gold standard, 170, 338, 444

governors of, 173

and Hoover-Roosevelt negotiations, 446–47

importance of, 7, 173, 299, 391

impotency of, 324

and inflation, 271

and initiatives to revive economy, 437

and interest rates, 157, 161, 293, 300, 318, 320–23, 365, 366, 370, 436, 475

Keynes’s views about, 338–39

and Long Island meeting, 298

and Mellon impeachment hearings, 440

members of, 172, 173–74

Meyer named chairman of, 367, 439

Meyer resignation from, 458, 465

New York Fed relations with, 298–99, 321, 322–24, 356, 357–60

Norman’s views about, 322, 339–40

open market operations of, 175, 368–69, 436, 439, 458, 475

operations and character of, 172

and Polish loan, 287

reaction to Great Crash by, 365–66, 368, 369, 370, 391

reform of, 91–95, 475

and Reichsbank, 434

and Roosevelt administration, 454, 455, 455
n
, 465, 475

and stock market, 270–79, 298–99, 300, 314, 317–18, 320–24, 343, 348, 356–60, 501

Strong as leader of, 175–76

and Strong’s death, 319–20, 321

Strong’s relations with, 175–76

during war years, 91–95

Young (Roy) as chairman of, 319–20

Young (Roy) resignation from, 367

financial crises, characteristics of, 14–15

financial media, 313–14, 347–48, 350, 354–55, 356–57, 358–59

First Bank of the United States, 52

“First Name Club,” 55

First National Bank, 48, 355

Fisher, Irving, 349–50, 353, 503

Fisher, Warren, 429–30

Florida, real estate boom in, 273–74, 275, 278

Ford, Henry, 142, 442–43

Ford Motor Company, 293

Fort Knox, 163
n

France

anti-Americanism in, 144, 256–58, 259

banking system in, 378–79

and blame for Great Depression, 500

Britain compared with, 219

British relations with, 4, 67, 76, 77, 136, 144, 250, 259–61, 263, 287, 289, 292, 293, 301–3, 344–45, 380, 411, 428, 433, 435, 501

collapse of government in, 256

corruption/scandals in, 61–66

and cost of World War I, 203

and Credit Anstalt problem, 406

credit in, 289, 477

currency in, 69, 84–85, 157, 158–59, 203–4, 251, 254, 255, 261–65, 267–69, 286, 379

and customs union, 406, 416

and Dawes Committee/Plan, 200, 202–3, 204–5, 213–14, 243, 249

and devaluation of the dollar, 466

economy in, 100, 286–88

and exchange rates, 204, 251, 263, 264, 267, 268–69, 289
n
, 293, 376

failure of economic policies in, 151

financial problems of, 202–3, 238, 241–69

and foreign exchange, 286

foreign loans for, 84, 203, 205, 253, 287

funding for World War I in, 86–87

GDP of, 243

and German economy, 415–16

German loans from, 325, 335, 401

German relations with, 66–67, 204–5, 328, 330–37, 416–17

German war against, 42, 71

Germany compared with, 251

gold reserves of, 69, 162, 163, 205, 252, 253, 288, 341, 375–81, 407, 411, 415–16

gold standard in, 75
n
, 85, 159, 378, 466, 468, 477

impact of Great Crash on, 370, 376–77, 378–80, 381

impact of Great Depression on, 3

impact of World War I on, 7, 219

industrial production in, 479

inflation in, 159, 168

interest rates in, 288–89

and international bank proposal, 382

and London Economic Conference, 467, 468–69, 470

Mellon negotiations with, 412–14

mobilization in, 31, 70, 71

money supply in, 100, 251

and moratorium on reparations and war debt, 410, 411–14

Morgan loans to, 205, 214