Lords of Finance
Page 57
355 “susceptible of betterment”: “Financiers Ease Tension,” New York Times, October 25, 1929.
355 “There is no man or group”: Bell, “Crash: An Account of the Stock Market Crash of 1929.”
356 “undue speculation”: “Treasury Officials Blame Speculation,” New York Times, October 25, 1929.
356 “Bankers Halt Stock Debacle”: Wall Street Journal, October 27, 1929.
358 “friends and former millionaires”: Manchester, The Last Lion, 826.
358 “participating in the making of history”: “Closing Rally Vigorous” and “Crowds See Market History Made,” New York Times, October 30, 1929.
358 “No one who has gazed”: William Manchester, The Last Lion, 827.
359 “on fire,” “done and can’t be undone”: Josephson, The Money Lords, 82.
359 That evening: Josephson, The Money Lords, 82.
360 Though the crash of October 1929: Soule, Prosperity Decade, 309.
361 “underlying conditions,” “an excuse for going”: “What Smashed the Bull Market? ” The Literary Digest, November 9, 1929.
361 “No Iowa Farmer will tear up his mail order blank”: “Wall Street’s ‘Prosperity Panic,’” The Literary Digest, November 9, 1929.
361 “For six years, American business”: BusinessWeek, November 2, 1929.
361 Industrial production fell: Romer, “The Great Crash and the Onset of the Great Depression,” and Galbraith, The Great Crash, 142.
362 “Rich people who have not sold”: Hirst, Wall Street and Lombard Street, 59.
362 “constitutionally gloomy”: White, Autobiography, 515.
363 “back to normal,” “during the next sixty days,” “We have passed the worst”: Mangold, W. P. “The White House Magicians: Prosperity Invocations,” The Nation, October 21, 1931, and Allen, Washington Merry-Go-Round, 75-76. At several points along the way: Galbraith, The Great Crash, 76, 149-51.
363 “Gentlemen, you have come”: Schlesinger, The Crisis of the Old Order, 231.
363 He frequently claimed in press conferences: Mangold, W. P. “The White House Magicians: Playing with Statistics,” The Nation, October 28, 1931; “Victory in Maine predicted by Fess,” New York Times, August 27, 1930; “Labor Commissioner Stewart Quits Post,” New York Times, July 3, 1932.
364 “liquidate labor, liquidate stocks”: Hoover, Memoirs, 30.
364 For Mellon, it was a once-in-a-lifetime: Cannadine, Mellon, 414-27.
365 Between November 1929 and June 1930: Chandler, American Monetary Policy, 144.
365 “1927 experiment”: Federal Reserve Board letter from John Calkins, Governor of San Francisco Fed, to George Harrison, January 7, 1930.
366 “We have been putting out credit”: Federal Reserve Board, Minutes of the Open Market Policy Committee, September 25, 1930: quoted in Chandler, American Monetary Policy, 137.
366 “marathon dance”: Federal Reserve Board of Governors, letter from Talley, Governor of Dallas Fed to J. Herbert Case, Chairman of New York Federal Reserve Bank, March 13, 1930.
366 “back to life”: Harrison Papers, Letter from Talley to Harrison, July 15, 1930, quoted in Friedman and Schwartz, A Monetary History, 372.
367 In September 1930, Roy Young: Pusey, Eugene Meyer, 203.
368 “an ordinary tin-pot bucket shop operator,” “Judas Iscariot”: “Meyer, Eugene” in Current Biography, 1941, 575-78.
368 In January 1930, policy decisions: Chandler, American Monetary Policy, 133.
369 “panicky selling left London’s city”: “London Disturbed by Continued Fall,” New York Times, October 30, 1929.
369 “we in Great Britain”: Keynes, “A British View of the Wall Street Slump,” New York Evening Post, October 25, 1929, in Collected Writings, 20: 2-3.
369 like the bursting of an “abscess”: Sauvy, Histoire Economique, 115.
370 To a visiting Swiss banker: Somary, The Raven of Zurich, 157.
370 Convinced that it had been the rise: Sayers, The Bank of England, 229, n. 3.
370 During the last week of October: Bank of England, Notes on telephone calls between Harrison and Norman, October 25, October 31, and November 15, 1929.
372 Keynes: “Arising from”: HMSO. Report of Committee on Finance and Industry (Cmd. 3897), Minutes of Evidence, 1931, 27-31.
372 “Reasons, Mr. Chairman”: Boyle, Montagu Norman, 327.
373 “an artist, sitting with his cloak”: Woolf, Diary, 208.
373 “grows more and more temperamental”: Papers of Sir Charles Addis, May 7, 1930, quoted in Kynaston, The City of London, Illusions of Gold, 202.
18: MAGNETO TROUBLE
374 “To what extremes”: Virgil, The Aeneid, Book iii, l. 79-81.
374 “the shadow of one of the greatest”: Keynes, “The Great Slump of 1930,” Nation and Athenaeum, December 20 and 27, 1930, in Collected Writing: Essays in Persuasion, 9: 126-34.
376-77 “the war . . . fear of Germany”: Adamthwaite, Grandeur and Misery, 132.
377 “harmonious economic structure”: L’Echo de Paris, December 7, 1930, cited in Mouré, Managing the Franc Poincaré, p. 27.
377 “glittering new embodiment”: Brendon, The Dark Valley, 132.
378 “the French gold hoarding policy”: Einzig, Behind the Scenes, vii.
378 “the Banque de France”: Howe, World Diary, 65.
379 In fact, it was clear that during 1930: Mouré, Managing the Franc Poincaré, 143. and Johnson. Gold, France and The Great Depression, pp. 152-57.
379 Bullion was so heavy: “Gold: 150 Tons,” Time, December 26, 1932.
379 “This depression is the stupidest”: “D’Abernon on Gold,” Time, January 5, 1931.
380 “lean on England”: General Réquin to General Weygand, February 2, 1931, quoted in Adamthwaite, Grandeur and Misery, 138.
381 “sumptuous trimmings: “Tightwad Up and Out,” Time, January 14, 1935.
381 He was succeeded by his deputy: “Tightwad Up and Out,” Time, January 14, 1935.
381 Moret thought of himself: Netter, Histoire de la Banque de France, 341.
381 “ask favors from the French”: Boyce, British Capitalism, 296.
382 From his departure aboard the Berengaria: “Along The Highways of Finance,” New York Times, April 12, 1931.
382 “an orchestra leader”: “Norman Arrives on Banking Mission,” New York Times, March 28, 1931.
382 When they begged him: “Norman Goes Home Silent on His Plans,” New York Times, April 15, 1931.
383 “artificial” agency: Clarke, Central Bank Cooperation, 180.
383 “visionary and inflationary”: Clarke, Central Bank Cooperation, 180.
383 “very gloomy situation”: Morison, Turmoil and Tradition, 345.
383 “Russia was the very greatest”: Stimson Diary, April 8, 1931, quoted in Schmitz, Henry Stimson, 85.
383 “U.S. was blind”: Lamont Diaries, May 8, 1931, quoted in Kunz, The Battle for Britain’s Gold Standard, 46.
385 Rumors of the trouble: “False Rumors Lead to Trouble at Bank,” New York Times, December 11, 1930.
385 The bank had been founded: Werner, Little Napoleons and Dummy Directors, 1-12.
385 When, for instance, Bernard went to Europe: Ellis, A Nation in Torment, 109.
386 The Bank lent some $16 million: Lucia, “The Failure of the Bank of United States” and Trescott, “The Failure of the Bank of United States, 1930.”
386 two big projects on Central Park West: Werner, Little Napoleons and Dummy Directors, 125-27.
387 “lend freely, boldly”: Bagehot, Collected Works, Volume 9: Lombard Street, 79.
387 “A panic . . . is a species”: Bagehot, Collected Works, Volume 9: Lombard Street, 73.
388 “foreigners and Jews”: Letters from Thomas S. Lamont to Edward C. Grenfell, December 13 and 30, 1930, quoted in Chernow, The House of Morgan, 326.
388 “with a large clientele”: Letter from Russell Leffingwell to Benjamin Joy, January 23, 1931, quoted in Chernow, T
he House of Morgan, 326-27.
388 “I told them”: Werner, Little Napoleons and Dummy Directors, 206-07.
388 “I warned them”: Friedman and Schwartz, A Monetary History of the United States, 309n.
389 shaken by such: Friedman and Schwartz, A Monetary History, Appendix A.
390 By the middle of 1931: Federal Reserve System, Banking and Monetary Statistics, Washington, D.C., 1943, 18. See Bernanke, “Nonmonetary Effects of The Financial Crisis,” in Essays on the Great Depression, 41-69. in May 1931, the bank runs resumed: “More Bank Trouble,” Time, August 24, 1931.
391 The real issue for the governors: Gary Richardson, “Bank Distress During the Great Depression: The Illiquidity-Insolvency Debate Revisited” (December 2006), NBER Working Paper.
392 “the capitalist system”: “Ein’ Feste Burg,” Time, July 27, 1931, and Howe, World Diary, 111.
19: A LOOSE CANNON ON THE DECK OF THE WORLD
395 “three generations,” “Jewish machination,” “a product of the Jewish spirit”: Chernow, The Warburgs , 323.
396 On December 5, he dropped his bombshell on Berlin: “Schacht Protests Demands on Reich,” New York Times, December 6, 1929.
397 “he was about to be crucified”: Letter from de Sanchez to Lamont, April 28, 1934, quoted in James, The German Slump, 59.
397 Schacht had gone “crazy”: Kopper, Hjalmar Schacht, 171.
398 “on the highest moral grounds”: “Success at The Hague,” Time, January 27, 1930.
398 “flamboyant political moves”: The Times, January 14, 1930, quoted in Simpson, Hjalmar Schacht in Perspective, 52.
398 “immoral agreement”: “Schacht to a Piggery,” Time, March 17, 1930.
399 “What is the actual reason”: Quoted in Mühlen, Schacht: Hitler’s Magician, 28.
401 Historians have debated: Balderston, Economics and Politics, 92.
401 unintended consequences of the Young Plan: Ritschl. “Reparations transfers, the Borchardt hypothesis and the Great Depression.”
402 “You must not think”: “Schacht Blames Reparations for World Slump: Holds Moratorium for Germany Inevitable,” New York Times, November 22, 1930.
402 “If the German people are going to starve”: “Schacht, Here, Sees Warning in Fascism,” New York Times, October 3, 1930.
402 “I would stop making payments”: Schacht, My First Seventy-six Years, 277.
403 “not above using the swastika”: Fromm, Blood and Banquets, 29.
403 “economic situation,” “pleasant, urbane” man: Schacht, My First Seventy-six Years, 279.
403 On January 5, Göring invited Schacht: Schacht, My First Seventy-six Years, 279-280, and Schacht, Account Settled, 29-30.
405 It had grown over the last decade: Schubert, The Credit Anstalt Crisis, 31-44.
405 to compensate Credit Anstalt: Aguado, “The Creditanstalt Crisis of 1931.”
406 The French government: Aguado, “The Creditanstalt Crisis of 1931,” and Lewis, Economic Survey, 63.
407 “more than likely throw out of the window”: Lamont Memorandum to Leffingwell,” Debt Suspension Matters,” June 5, 1931, quoted in Lamont, The Ambassador from Wall Street, 295-96.
408 “gentlemen do not read each other’s mail”: Stimson and Bundy, On Active Service, 188.
409 “conducting a post-mortem”: Leith Ross, Money Talks, 135.
410 “came crying down . . .”: Interview with Herbert Feis, November 4, 1955, quoted in Morrison, Turmoil and Tradition, 349.
410 “a sickly, overworked and overwhelmed man”: Wells, Experiment in Autobiography, 679, quoted in Schlesinger Jr. The Crisis of the Old Order, 244.
410 “like sitting in a bath of ink”: Stimson diary, June 18, 1931, quoted in Schlesinger, The Crisis of the Old Order, 243.
411 “we [the Americans] and the British”: Edge, Jerseyman’s Journal, 156.
411 “the killing of the fatted calf”: Edge, Jerseyman’s Journal, 192.
412 “the more one reflects”: Howe, World Diary, 105.
412 Norman got hold of young Mellon: Anon, High Low Washington, 99.
412 “Are you glad to be in Paris”: “Secretary Acts Quickly,” New York Times, June 26, 1931. Hoover vented against the French: Ferrell, American Diplomacy, 114.
413 Berlin was being “bled to death”: Federal Reserve Bank of New York, Memorandum on telephone call between Harrison and Norman, July 1, 1931.
413 “France has been playing”: Macdonald Diary, July 5, 1931, quoted in Boyce, British Capitalism, 336.
414 “Now, Monsieur Mellon”: Cannadine, Mellon, 438.
415 “round face deep lined”: “Beggar No Chooser,” Time, July 20, 1931.
416 “Not since those days of July 1914”: “Beggar No Chooser,” Time, July 20, 1931.
417 “they had come to a decisive point”: Bennett, Germany and the Diplomacy of the Financial Crisis, 236.
417 “On the ruins of the wealth”: Einzig, Behind the Scenes of International Finance, vii.
417 “Never has the incapacity of the economic leaders”: “Schacht Arraigns Capitalist Greed,” New York Times, July 11, 1931.
418 the Danatbank had failed to open: “German Banks Curb Runs by Depositors,” New York Times, July 14, 1931.
419 “resigned passivity”: Guido Enderis, “Berliners Calm in Money Crisis,” New York Times, July 17, 1931.
419 “much struck by the emptiness,” “In such circumstances”: E. L. Woodward and R. Butler, eds., Documents on British Foreign Policy, 2: 225-26.
420 “the program to be executed”: “Hitler Unites Ranks of the Old Germany to War on Brüning,” New York Times, October 12, 1931.
20: GOLD FETTERS
422 “Lo! thy dread empire Chaos!”: Alexander Pope quote from Bartlett’s Familiar Quotations, 313.
424 Macmillan Report: Williams, “London and the 1931 Financial Crisis.”
425 “nervous dyspepsia”: Addiss Papers, August 5, 1931, quoted in Kynaston, The City of London: Illusions of Gold, 234.
425 “Can’t he be persuaded”: Letter from Leffingwell to Jack Morgan, July 28. 1931, quoted in Kunz, The Battle for Britain’s Gold Standard, 107.
425 “Feeling queer”: Bank of England, Norman Diary, July 29, 1931.
425 “prejudice, ignorance, and panic”: Taylor, English History, 288.
427 “It certainly is a tragically comical situation”: Webb, Diary, 253. 10 Downing Street: Harold Callender, “A Picture of Britain in the Time of Crisis,” New York Times, August 30, 1931.
427 “pandemonium had broken loose”: Boyle, Montagu Norman, 272-73.
428 “What the City did”: Howe, World Diary, 115.
429 “It is now clearly certain”: Keynes, “Letter to Ramsay MacDonald,” August 5, 1931, in Collected Writings, 20: 591-93.
429 “the most wrong and foolish things”: Keynes, “Speech to Members of Parliament,” September 16, 1931, in Collected Writings, 20: 607-11.
429 “admit quite frankly that the way out”: Moggridge, Maynard Keynes, 525.
430 “rose to his feet, his eyes flashing”: Williams, Nothing So Strange, 105.
431 “Going off the gold standard”: Jones, Diary, 32-33, quoted in Brendon, The Dark Valley, 164.
431 “Nothing more heartening has happened”: “Run,” Time, September 28, 1931.
432 gold “is dug up out of a hole in Africa”: Manchester, The Last Lion, 862.
432 Charlie Chaplin, as a guest at Chartwell: Boothby, Recollections of a Rebel, 51.
432 “chuckling like a boy”: Rolph, Kingsley, 164, quoted in Skidelsky, John Maynard Keynes: The Economist as Saviour, 397.
432 “There are few Englishmen who do not rejoice”: Keynes, “The End of the Gold Standard,” in the Sunday Express, September 27, 1931, in Collected Writings: Essays in Persuasion, 9:245-49.
432 “tragic act of abdication”: Bonn, Wandering Scholar, 318-19.
433 “A pound is still a pound”: “Pound, Dollar and Franc,” Time, October 5, 1931.
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br /> 433 “France will be heavily punished”: Boyle, Montagu Norman, 276.
435 “solidarity and politeness”: Letter from Moret to Harrison, October 7, 1931, quoted in Kindelberger, The World in Depression, 168.
435 “holes in the ground, privies”: Congressional Record, 72 Congress, 1 Session, December 9, 1931, 75: 233-6, quoted in Warren, Herbert Hoover, 164.
437 “more depressed than ever”: Hoover, Memoirs, 86.
438 “If there is one moment”: J. Bradford DeLong, “The Economic Foundations of Peace” http://econ161.berkeley.edu/Econ_Articles/lal.html
439 “Yes. It was called the Dark Ages”: Edwin Lefèvre, “When Is It Safe to Invest?” Saturday Evening Post, August 6, 1932.
439 A similar measure in late 1930: Bordo et al., “Was Expansionary Monetary Policy Feasible?”
441 “If you steal $25”: The Nation, March 8, 1933, quoted in Kennedy, The Banking Crisis of 1933, 126.
441 “the so-called depression”: “Radio address delivered on February 26, 1933, in Coughlin, Driving Out the Money Changers.
442 “It’s just as if I put my car”: “Close to Bottom,” Time, March 6, 1933.
443 “If the fall in the price of commodities”: Schlesinger Jr., The Crisis of the Old Order, 453. “England has played us”: “Roosevelt’s Ten,” Time, March 6, 1933.
443 At least six bills were circulating: “Inflation—Curse or Cure?” The Literary Digest, February 11, 1933.
444 Hoover composed a ten-page handwritten letter: Schlesinger Jr., The Crisis of the Old Order, 477.
445 he “did not want his last official act”: Josephson, The Money Lords, 120.
445 the New York Fed lost: Wigmore, “Was the Bank Holiday of 1933 Caused by a Run on the Dollar?” Tape 1, 745.
446 “Like hell, I will!”: Dorothy Roe Lewis, “What FDR told Hoover, March 3, 1933,” New York Times, March 13, 1981.
446 “Urban populations cannot do without”: “Letter from Lamont to Franklin D. Roosevelt,” February 27, 1933, quoted in Lamont, The Ambassador from Wall Street, 330.
447 At 9.15 p.m. on March 3: Pusey, Eugene Meyer, 235-36.
448 “a beleaguered capital”: Arthur, Krock. “100,000 at Inauguration,” New York Times, March 5, 1933.
21. GOLD STANDARD ON THE BOOZE
451 “In order to arrive”: Eliot, Collected Poems, 187.