America's Bank: The Epic Struggle to Create the Federal Reserve

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America's Bank: The Epic Struggle to Create the Federal Reserve Page 40

by Roger Lowenstein

Roosevelt and, 149–50

  submission to Congress of, 147–48

  Taft and, 133, 150, 158, 162

  Trenton draft of Glass and, 188–89

  Warburg and, 114, 121–22, 123, 138, 139, 188

  Willis’s criticisms of, 267–68

  Wilson and, 141–46, 148–49, 164, 170

  Aldrich-Vreeland Act (1908), 79, 82, 209

  American Academy of Political and Social Science, 120

  American Bankers Association (ABA), 38, 55, 269, 297–98

  Aldrich Plan and, 128–31, 134, 139–40

  currency committee of, 130, 216–17

  on Glass-Owen, 184, 216–17, 219, 228–29, 231, 235, 323

  American Economic Association, 89

  American Field Service, 264

  Andrew, A. Piatt, 94, 96, 99, 133, 134, 149, 264, 285

  on Aldrich’s European fact-finding mission, 82–83, 85–86

  Glass and, 310

  at Jekyl Island conference, 108, 110, 119, 122, 129, 294

  on National Monetary Commission, 80

  at 1912 Democratic convention, 163

  at 1912 Republican convention, 161–62

  on Panic of 1907, 67–68

  role in preparing Aldrich Plan, 147–48, 177

  Shaw criticized by, 53–54

  in Taft campaign, 158

  Treasury Department firing of, 161

  Wilson and, 144

  anti-federalists, 3

  anti-Semitism, 169, 172, 262–63, 314, 334

  antitrust, 72, 158, 167, 235, 288

  antitrust laws, 80

  banks and, see Money Trust

  Arkansas, 160, 231, 305

  Articles of Confederation, 253–54

  asset currency, 33, 38, 74, 78, 79n

  assets, 181

  financial, 226

  Atlanta, Ga., 68

  Federal Reserve Bank in, 260n

  Atlantic City, N.J., 129–30

  automobiles, 44, 198, 199

  Bachmann, Michele, 137

  Baer, George Frederick, 288

  Bagehot, Walter, 59, 84, 288, 293

  Baker, George F., 62–66, 80, 116, 135, 139, 192, 299

  Morgan’s collaboration with, 176

  Baltimore, Md.:

  banking reform meeting in, 20

  Democratic National Convention in, 159–61, 163, 164–66

  Baltimore platform, 327

  bank assets, 189, 221

  bank associations, 67

  bank checks, 67

  bank credits, 75, 261

  bankers, 6, 7, 8

  central banks supported by, 177, 179

  distrust of, 27, 72, 127, 138, 150

  Glass-Owen supported by, 247

  nineteenth-century, 16

  private, 115

  reform-minded, 128

  on silver, 16

  Wall Street, see Wall Street

  western, 85

  Wilson on, 143–44

  Bankers Trust, 64, 96

  bank holidays, 68

  Banking Act (1935), 266

  banking charter rights, 332

  banking reform, 5–8, 33, 45, 46, 60, 89, 93, 98, 150, 159, 175, 191, 201–22, 268–69, 325

  Democratic, 81, 157, 199

  federal control and, 216

  Main Street and, 131

  Taft and, 158

  Wall Street and, 70, 131, 175

  Wilson and, 73, 128, 143–44, 148–49, 167–68, 177, 195, 198, 201–2, 205–18, 221–22, 223, 227–28, 310

  banking system, unified, 122

  bank loans, currency and, 226–27

  bank notes, 49, 150

  Bank of Commerce, 299

  Bank of England, 2, 83–84, 85–86, 335

  American economy and, 56–57

  currency supply and, 86–87

  interest rates of, 5–6

  loans in time of scarcity by, 70, 83, 288

  money issued by, 117

  notes issued by, 83, 84, 86

  as private, 83–84

  and Wall Street recessions, 5–6

  Bank of France, 4, 84, 85, 214

  cash reserves of, 87

  Bank of the United States, first, 2–3, 84, 142, 246

  Bank of the United States, Second, 3–5, 20, 84, 101, 115, 142, 187, 198, 246

  Bank of the United States, Third (potential), 3

  bank paper, 122, 246, 258

  bank runs, 2, 63, 81, 200, 204, 245, 249

  banks:

  asset currency and loans by, 33

  big, 4, 45, 136

  bills of trade and, 39

  branch offices of, 55

  business and, 199

  central reserve city, 14–15, 26–27, 39n, 182, 248n, 311

  chartering of, 41

  commercial, 47, 85

  country, see country banks

  deposits rising in, 199, 316

  failures of, 13, 15, 19, 204

  Fed and member, 322

  federalism and, 183

  for-profit, 181

  in Gilded Age, 6

  government power over, 207

  growth of, 199

  heartland, 46

  hoarding by, 69, 259

  interlocking directorates for, 222, 225, 228

  international, 118

  lending by, 33, 248

  limited guarantee for, 313

  middle-tier, see middle-tier banks

  national, see national banks

  under National Banking Acts, 14–15

  New York, see New York, banks and bankers in

  northern, 17

  number of, 31, 135, 193, 278–79, 314

  private, 3, 7–8, 48n, 63, 121–22, 185, 195, 228n

  progressives on, 71

  public control of, 115, 128

  public oversight of, 148

  regional, 149

  Reserve Banks and, 181

  reserve network, 101, 311

  reserves of, 39, 70, 321, 325

  self-regulation for, 119

  shortfall by, 225

  state, see state banks

  Treasury loans to, 27, 41

  Barney, Charles T., 62–63, 283

  barter, 67

  Baruch, Bernard, 308

  baseball, 156

  Bear Stearns, 62

  Belmont, August, Jr., 165n

  Berlin, 49, 57, 86, 88, 140

  Bermuda, 171

  Bernanke, Ben, 25, 188, 258, 296

  Big Business, progressive skepticism toward, 45

  bills of lading, 226

  bills of trade, 32, 39

  discounting of, 87, 226

  bimetallic system, 16, 19–20, 230, 277

  Blankfein, Lloyd, 122, 257

  Board of Trade, British, 96

  see also National Board of Trade

  bonds, 24, 188

  government, 14, 24, 75, 78, 114, 212, 217, 220, 225, 258, 277, 321

  railroad, 15, 41, 78

  Boston, Mass., 53, 156, 159

  banks in, 12, 68

  Federal Reserve Bank in, 260n

  Boston Daily Globe, 332

  Brandeis, Louis, 169, 190, 193, 211–12, 313–14

  Brandt, T. R., 97

  Brazil, 93

  “Breaking the Money Trust” (Brandeis), 193

  Bristow, Joseph L., 103, 237

  Brown, William Garrett, 144, 145

  Broz, J. Lawrence, 281, 289

  Bryan, Nathan, 211

  Bryan, William Jennings, 81, 88, 187, 201, 221–22, 225, 235, 236, 321

  Aldrich Plan oppose
d by, 137, 148, 161, 164–65, 174

  on banking bill, 205–7, 210, 212, 217, 218, 219, 227–28, 230

  “cross of gold” speech of, 23, 142

  in election of 1896, 22–24, 142, 204, 301

  on government-issued money, 128, 185, 200, 204, 213–14, 252, 323

  on Money Trust hearings, 151

  at 1912 Democratic National Convention, 164–66, 307

  populism of, 44, 143, 199, 206

  as secretary of state, 189–90

  in Wilson administration, 170

  Wilson’s requests for support by, 145–46, 148–49, 157, 301

  Bulkley, Robert, 212

  Burns, Arthur, 257

  Business Men’s Monetary Reform League, 123

  see also National Citizens’ League

  Butler, Nicholas Murray, 55, 90

  Butt, Archie, 159

  California, 68, 157

  women’s voting in, 156

  call loans, 65

  call money, 58

  campaign contributions, 22, 23–24

  Canada, gold rush in, 26

  Cannon, Joe, 38

  capital, 237

  banking, 70

  flows of, 264

  international, 57

  capitalism, 53, 73, 199

  capitalization, 137

  Carlisle, John, 24–25

  car loans, 1

  Carnegie, Andrew, 169

  cash reserves, 69

  cash substitutes, 67–68

  central bank(s), 3–4, 17, 19, 50–51, 117–18, 183, 199, 228n, 231, 236, 237, 252, 261

  ABA support for, 228, 229n

  Aldrich Plan’s differences from, 113, 122–23, 140

  America wary of, 41, 132, 241

  bankers’ lobbying for, 311

  Bryan’s opposition to, 164–65

  customers of, 185

  European, 1–2, 30, 39, 54, 56, 74, 83, 86, 111, 114, 185, 204, 269

  federal structure of, 112–13

  founders and, 141

  and frontier traditions, 101–2

  Gage’s call for, 28

  government-owned, 206

  industrialized nations and, 1, 2, 19, 264

  in legislative proposals, 177

  “modified,” 74, 101

  opposition to, 2–8, 18, 19, 20, 32–33, 140

  privately managed, 71, 119

  as progressive idea, 104

  Reserve Association and, 122–23

  Reserve System and, 217–18

  Vanderlip’s support for, 220–21, 238–43

  Warburg’s call for, 6–7, 31–33, 47, 56, 71, 75–76, 77, 88–89, 99, 109, 120, 128, 184, 185, 217–18, 242, 253, 262, 269–70, 295

  Wilson on, 7, 141–44, 149, 157, 170, 174n, 183–84, 312

  see also South, central bank opposed in; United States, centralization feared by

  central bank notes, 112

  central bank of issue, 49

  central government, opposition to, 1–4, 8

  central reserve city banks, 14–15, 26–27, 39n, 182, 248n, 311

  Chamber of Commerce, New York, 46–51, 121n, 123, 281

  Chamber of Commerce, U.S., 229, 248

  Glass-Owen endorsed by, 235

  Charlotte Daily Observer, 229

  Chase, Salmon P., 13–14

  Chase Manhattan, 258, 265

  Chase National Bank, 37, 184

  check clearing, 39–40, 41, 114

  checks, personal, 49

  Chernow, Ron, 30

  Chicago, Ill., 21, 85, 88, 95, 97, 123, 131, 140, 219, 321

  bankers in, 53, 54–55, 121, 129, 173, 184, 186, 216, 229

  central bank accepted by, 184

  Federal Reserve Bank in, 260n

  Republican convention in, 159, 161–63

  as reserve city, 14, 39n, 69, 218–19, 241

  Chicago, University of, 25, 121, 131

  Chicago Tribune, 13

  child labor, 104

  China, 49

  Churchill, Winston, 96, 117

  city banks, central reserve, see central reserve city banks

  Civil War, U.S., 6, 7, 17, 32, 34, 44, 68, 92, 180, 201, 219, 246, 251, 304, 330

  banking chaos during, 12–13, 16

  banking structure from, 20, 47

  Democratic Party since, 156

  tariffs in wake of, 36

  Clark, Champ, 148, 157, 165–66, 215

  Clayton Antitrust Act (1914), 229n

  clearinghouses, 41, 67, 68, 74, 113, 186, 284, 310

  Cleveland, Grover, 18–21, 24, 277

  as “gold Democrat,” 16

  Cleveland, Ohio, Federal Reserve Bank in, 260n

  Coin’s Financial School (Harvey), 21

  Columbia University, 55, 90, 94, 155

  banking lectures at, 73, 286

  Coming Battle, The (Walbert), 27

  commercial banks, 122

  Commercial Club of St. Louis, 98

  commercial loans, discount of, 237

  commercial paper, 39, 79n, 112, 225, 226, 258, 262

  discounting of, 226, 262

  comptroller of the currency, 212, 220, 241, 250

  Conant, Charles A., 310, 330

  Congress, U.S., 22, 55, 73, 74, 194

  Aldrich Plan and, 141

  bank credit and, 222

  bank reform in, 46, 310

  continuing debates over Federal Reserve in, 257

  currency bill in, 58

  failure of Bank of the United States rechartering by, 3

  Glass bill debated in, 193

  gold standard and, 16

  hearings in, 128

  monetary reform shifted to, 127–28

  National Banking Acts in, 13

  progressives in, 116

  response to Panic of 1907 in, 77–79

  Second Bank of the United States chartered by, 3

  sectionalism in, 307

  silver dollars and, 16

  silver-purchase act and, 19, 20

  special session of, 234–35

  Third Bank legislated, 3

  Congressional Government: A Study in American Politics (Wilson), 142n

  conservation, 158

  Constitution, U.S., 73

  Sixteenth Amendment to, 191

  Seventeenth Amendment to, 156, 201

  Continental National Bank of Chicago, 85

  Cooke, Jay, 12, 15

  Cooper, John Milton, 194

  copper mining, 61

  corporate mergers, 33

  corporate underwriting, 175

  corporations, 44, 50

  banking and, 41

  capital and, 18

  debt of, 1

  greed of, 73

  regulation of, 90, 100, 138

  Cortelyou, George, 58, 59–60, 63, 66, 69

  Cosmopolitan, 43–44, 89

  Council Bluffs, Iowa, 68

  country banks, 14, 26, 39n, 40, 49, 52, 55, 140, 218, 220, 229, 245

  central reserve and, 101, 232

  hoarding by, 69

  reserves for, 231–32, 248n

  Coxey, Jacob, 21

  Creature from Jekyll Island, The (Griffin), 117

  credit, 27, 28, 68, 227, 245

  access to, 167–68, 244

  bank, 175

  concentration of, 196

  disbursal of, 175

  evaporation of, 30, 84

  fragility of, 65

  government and, 238

  local conditions for, 186

  notes and, 200

  overextension of, 56–57

  role of banks and,
118

  stimulation of, 244

  supply of, 258

  credit markets, 30, 209

  in Europe, 39

  liquidity in, 56

  Crozier, Alfred Owen, 72, 150–51

  Cuba, 93

  Cummins, Albert B., 95

  currency, 181, 200, 252

  Aldrich Plan and, 122

  ceiling on, 246

  circulation of, 246

  elastic, 112, 113, 185–86, 215, 227, 258, 259, 308

  emergency, 209

  gold-backed, 181

  government, 150, 204

  government bonds and, 114, 115

  illiquid assets and, 181

  legislation on, 194, 210

  private loans and, 115

  source of, 199–200

  Treasury-issued, 207

  volume of, 114

  see also money

  currency associations, local, 79

  currency reform, 5–8, 19, 73, 75, 95, 160, 165, 183, 314

  Dallas, Tex., Federal Reserve Bank in, 260n

  Davison, Henry P., 99, 130, 133, 139, 294

  Aldrich Plan and, 122

  in Aldrich’s European fact-finding mission, 82, 85–87

  on Glass-Owen, 219

  on Jekyl Island, 107–10, 112

  Morgan run by, 175, 264

  on National Monetary Commission, 80, 96

  outreach to bankers by, 128–29

  in Panic of 1907, 63–64, 66

  Vanderlip’s alternative bill and, 238–40

  Debs, Eugene V., 168, 171

  “Defects and Needs of Our Banking System” (Warburg), 56

  deflation, 18, 246

  Democratic National Convention:

  of 1896, 21–23, 153, 204

  of 1912, 159, 160–61, 215

  Democratic Party, 128, 155, 170, 191, 231, 239

  agrarians in, 221–22

  Aldrich disliked in, 90, 310

  Aldrich Plan and, 150, 154–55, 160–61, 164–65

  annual Jackson dinner of, 146, 149

  bankers’ distrust of, 199

  banking reforms supported by, 81, 144, 240–41

  Bryan’s status in, 137, 174, 199

  central bank and, 7, 218, 238–39

  in Congress, 105, 171, 200, 208, 230

  conservatives in, 151

  federalism in, 213

  Federal Reserve Act and, 268

  Glass-Owen and, 219n, 235, 248

  gold standard and, 16, 23

  governance by, 251–52

  government money supported by, 210

  Jackson’s influence on, 153, 157, 210, 225, 236, 240, 252

  Jeffersonians in, 166, 167, 204, 307

  laissez-faire in, 21, 93

  Morgan bailout and, 20

  as party in transition, 156, 165

  platform of, 173, 187

  populists in, 199

  power struggle within, 240–41

  progressives in, 99, 132, 133, 148, 156–57, 165, 191, 204

  shift to left by, 168

 

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