Chapter 3: The Dangers of the Yellow Brick Road
1. Gerald Ford was born, and lived for a few weeks, in Omaha, Nebraska, but he was never elected president.
2. Richard Franklin Bensel constructed a useful state-by-state chart in his fascinating book Passion and Preferences: William Jennings Bryan and the 1896 Democratic National Convention (New York: Cambridge University Press, 2008), 29–30. This chapter draws on his work, as well as R. Hal Williams, Realigning America: McKinley, Bryan and the Remarkable Election of 1896 (Lawrence: University Press of Kansas, 2010); Michael Kazin, A Godly Hero: The Life of William Jennings Bryan (New York: Alfred A. Knopf, 2006); and Karl Rove, The Triumph of William McKinley: Why the Election of 1896 Still Matters (New York: Simon and Schuster, 2015).
3. “Ohio Democrats: The State Convention Declares for Free Coinage,” Philadelphia Inquirer, June 25, 1896.
4. The issue of anti-Semitism among Bryan’s followers has been hotly contested for decades. Oscar Handlin drew explicit connections between anti-Rothschild and anti-Shylock material distributed by Populists in the 1890s and the Christian symbolism in Bryan’s convention speech in “American Views of the Jew at the Opening of the Twentieth Century,” Publications of the American Jewish Historical Society 40, no. 4 (June 1951): 323–344. Richard Hofstadter focused on some of the darker aspects of Progressivism and populism in The Age of Reform (New York: Vintage Books, 1955). In The Tarnished Dream (Westport, CT: Greenwood Press, 1979), Michael Dobkowski gives a detailed discussion (pp. 170–208) of how Populist imagery incorporated existing stereotypes about Jews as moneylenders. Norman Pollock marshaled a defense of Bryan and others in “The Myth of Popular Anti-Semitism,” The American Historical Review 68, no. 1 (October 1962): 76–80.
5. Hill quoted in “The Presidential Campaign,” Public Opinion 21 (July 16, 1896), 70.
6. Hofstadter, Age of Reform, 5–6.
7. “Republican Comment on the Chicago Convention,” Public Opinion 21 (July 16, 1896), 77.
8. Memoirs of William Jennings Bryan (Philadelphia: J. C. Winston, 1925), 115.
9. “The Convention and Candidate,” Minneapolis Tribune, July 11, 1896, 6. The sentence about suicide does not appear in the edition of the paper digitized by the Minnesota Historical Society. However, it is quoted in the news digest magazine Public Opinion 21 (July 16, 1896): 77. It is possible that it appeared in some but not all of the paper’s four daily editions.
10. A. Scott Berg, Wilson (New York: G. P. Putnam’s Sons, 2013), 129.
11. James Livingston details the politics and meaning of the “sound money” campaign in Origins of the Federal Reserve System: Money, Class and Corporate Capitalism 1890–1913 (Ithaca, NY: Cornell University Press, 1989), 88ff.
12. Ken Coates, from the introduction to the reprinted edition of E. Tappan Adney, The Klondike Stampede (New York: Harper, 1899), xvi–xvii.
13. Gold stock figures come from Friedman and Schwartz, A Monetary History of the United States, 141.
14. Roberts’s speech was reproduced in part in “Financial Law’s Results,” New York Times, May 18, 1900.
15. Henry M. Littlefield, “The Wizard of Oz: Parable on Populism,” American Quarterly 16, no. 1 (Spring 1964): 50.
16. See, for example, Hugh Rockoff, “The ‘Wizard of Oz’ as a Monetary Allegory,” The Journal of Political Economy 98, no. 4 (August 1990): 739–760.
17. Robert F. Bruner and Sean D. Carr, The Panic of 1907: Lessons Learned from the Market’s Perfect Storm (Hoboken, NJ: John Wiley & Sons, 2007), 14.
18. “Biggest Gold Cargo Landed From Liner,” New York Times, November 9, 1907.
19. James Parthemos, “The Federal Reserve Act of 1913 in the Stream of U.S. Monetary History,” Federal Reserve Bank of Richmond, Economic Review, July/August 1988, 25.
20. Carter Glass, quoted in Gerald T. Dunne, A Christmas Present for the President (St. Louis: Federal Reserve Bank, 1984), 7.
21. Speech of Hon. Elihu Root, The Banking and Currency Bill, December 13, 1913, 24.
22. Fifth Annual Report of the Federal Reserve Board (Washington, DC: Government Printing Office, 1919), 35.
23. Barry Eichengreen and Peter Temin, “The Gold Standard and the Great Depression,” Contemporary European History 9, no. 2 (July 2000): 184–185.
24. Although it is little recalled today, the Federal Reserve actually did engage in a large, unprecedented campaign to improve conditions through market operations. The Glass-Steagall legislation passed in February 1932 (not to be confused with the identically titled legislation, passed two years later, that broke up big banks) gave the Fed the authority to buy government securities with gold, thereby freeing up the metal for commercial purposes. In mid-April, for example, the Fed bought over $100 million of securities in this manner. But after a few months, the Fed simply gave up, for reasons that economists have debated for decades.
25. Stabilization of Commodity Prices: Hearings Before the Subcommittee of the Committee on Banking and Currency, House of Representatives, 72nd Congress, 1st session, on H.R. 10517 for Increasing and Stabilizing the Price Level of Commodities, and for Other Purposes, Parts 1–2, p. 492.
26. Theodore G. Joslin, Hoover Off the Record (Garden City, NY: Doubleday, Doran & Company, 1935), 170ff. “Hours” is almost certainly an exaggeration.
Chapter 4: FDR Bids Good-bye to Gold
1. Theodore G. Joslin, Hoover Off the Record (Garden City, NY: Doubleday, Doran & Company, 1935), 171.
2. George Warren’s diaries can be found in his collected papers at the Cornell University Library. I am indebted to Eric Rauchway’s The Money Makers: How Roosevelt and Keynes Ended the Depression, Defeated Fascism, and Secured a Prosperous Peace (New York: Basic Books, 2015), chapter 2, for its clear account of FDR’s first weekend, based in part on Warren’s Washington visit. Not all historians agree on the decisiveness of Warren’s influence. Thomas Ferguson, for example, points to the influence of a business interest group—representing Standard Oil and Sears Roebuck, among others—called the Committee for the Nation, that supported FDR’s 1932 campaign and urged moving off gold. See Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems (Chicago: University of Chicago Press, 1995), 149–150. Ferguson also points to the influence of Rene Léon, a securities and exchange expert who corresponded with FDR. Elliot A. Rosen, in his book Roosevelt, The Great Depression and the Economics of Recovery (Charlottesville: University of Virginia Press, 2005) says that Léon had, as early as January 1933, pointed both Raymond Moley and FDR to the possibility of using the Trading With the Enemy Act to take the country off the gold standard. See 246n5.
3. Ben S. Bernanke, “The Macroeconomics of the Great Depression: A Comparative Approach,” Journal of Money, Credit and Banking 27, no. 1 (February 1995): 4.
4. A detailed account of Hoover and his advisers’ discussions of using the Trading With the Enemy Act for peacetime banking purposes can be found in Raymond Moley, The First New Deal (New York: Harcourt, Brace & World, 1966), 157–160. Some of that account relies on Francis Gloyd Awalt, “Recollections of the Banking Crisis of 1933,” The Business History Review 43, no. 3 (Autumn 1969): 347–371.
5. FDR press conference #13, April 19, 1933. FDR press conferences are archived at the FRDL and online at http://www.fdrlibrary.marist.edu/archives/collections/franklin/?p=collections/findingaid&id=508.
6. The draft legislation is reproduced as document 6 in Documentary History of the FDR Presidency, ed. George McJimsey (Bethesda, MD: University Publications of America, 2001), 3:33ff.
7. This account comes from a letter dated March 16, 1966, from former Fed staffer Walter Wyatt to Raymond Moley, and is quoted extensively in Moley’s The First New Deal, 176.
8. Walter Wyatt, oral history, Rare Book and Manuscript Library, Columbia University Library, 86.
9. George Harrison to Arthur Ballantine, March 24, 1933; George Harrison to William Woodin, April 17, 1933. George Leslie Harrison Papers on the Federal R
eserve System, Box 24, Rare Book and Manuscript Library, Columbia University Library, New York, New York.
10. Moley, The First New Deal, 154.
11. Congressional Record, 73rd Congress, 1st session, 76.
12. Moley, After Seven Years (New York: Harper & Brothers, 1939), 152.
13. Hoover used the figure $1.4 billion in hoarded money during a news conference on February 5, 1932. It is unclear how that amount was calculated. Official statistics from the Federal Reserve for January 1932 show $120 million in gold coin and $850 million in gold certificates in circulation (Banking and Monetary Statistics, 1914–1941, part 1, p. 412). The remainder could have reflected the $399 million in silver coins and certificates in circulation, or perhaps an estimate for nonmonetary gold in the form of gold bars and bullion, or the fact that the Federal Reserve retroactively changed the way it computed the value of gold.
14. Central bank gold reserve figures can be found in the Federal Reserve Bulletin, October 1932, 647.
15. Herbert Hoover, “White House Statement About the Conference on the Hoarding of Currency,” February 6, 1932, online at Gerhard Peters and John T. Woolley, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=23366.
16. Joslin, Hoover Off the Record, 170ff.
17. Herbert Hoover, “Address at the Lincoln Day Dinner in New York City,” February 13, 1933, online at Gerhard Peters and John T. Woolley, The American Presidency Project, http://www.presidency.ucsb.edu/ws/?pid=23427.
18. File memorandum of White House letter to Gloria Bedrosian, April 7, 1933, Franklin D. Roosevelt Papers as President, Gold Hoarding file, FDRL.
19. Memorandum for the Attorney General, “Gold Hoarding Prosecutions,” December 5, 1933. Franklin D. Roosevelt Papers as President, Henry Morgenthau Jr. Collection, Box 110, Gold file, FDRL. A detailed discussion of the case against Campbell, including the judge’s mixed rulings, can be found in Henry Mark Holzer, “How Americans Lost Their Right to Own Gold and Became Criminals in the Process,” monograph no. 35, Committee for Monetary Research and Education, Inc., December 1981, 12–15.
20. “Small Gold Hoard Will Be Ignored,” New York Times, May 5, 1933. The senator was Charles Thomas, a Democrat from Colorado. His daughter Edith was later investigated for hoarding a larger amount of gold.
21. “President’s Order Will Be Quick Means to Reach Hoarders, Declares Cummings,” New York Times, August 30, 1933.
22. Selected Papers of Homer Cummings, Attorney General of the United States 1933–1939, ed. Carl Brent Swisher (New York: Charles Scribner’s Sons, 1939), 101–105.
23. See chart, “Kinds of Money In Circulation,” Federal Reserve Bulletin, August 1934, 517.
24. Banking and Monetary Statistics, 1914–1941, part 1, p. 522; Annual Report of the Board of Governors of the Federal Reserve System, 1934, 67n2.
25. Friedman and Schwartz, A Monetary History of the United States, 464n45.
26. Moley, The First New Deal, 302. The quotation has been attributed both to FDR’s Wall Street ally James Warburg and to budget director Lewis Douglas.
27. Congressional Record, May 23, 1933.
28. Elmus Wicker, “Roosevelt’s 1933 Monetary Experiment,” The Journal of American History 57, no. 4 (March 1971): 864.
29. James Chace, Acheson (New York: Simon & Schuster, 1998), 65.
30. “See No Move to Cut Dollar,” New York Times, August 30, 1933.
31. Diaries of Henry Morgenthau, vol. 00 (Farm Credit Diary), November 4, 1933, 96, http://www.fdrlibrary.marist.edu/archives/collections/franklin/?p=collections/findingaid&id=535&q=&rootcontentid=188897#id188897.
32. Minutes of meeting, executive committee of New York Fed, November 2, 1933, George Harrison papers, Box 23, Columbia University, New York, New York.
33. Salant oral history in The Making of the New Deal: The Insiders Speak, ed. Katie Louchheim (Cambridge, MA: Harvard University Press, 1983), 271.
34. Kenneth D. Garbade, Birth of a Market: The U.S. Treasury Securities Market from the Great War to the Great Depression (Cambridge, MA: MIT Press, 2012), 237–242.
35. Arthur M. Schlesinger Jr., The Coming of the New Deal: 1933–1935 (vol. 2 of The Age of Roosevelt), reprint ed. (New York: Houghton Mifflin Harcourt, 2003), 240.
36. Diaries of Henry Morgenthau, October 29, 1933, 88.
37. Letter to E. M. House, November 21, 1933. F.D.R.: His Personal Letters, ed. Elliott Roosevelt (New York: Duell, Sloan and Pearce, 1950), 373.
38. Will Rogers, “Complete Heads or Tails of the Gold Problem,” 1934, reprinted in Will Rogers’ Weekly Article, vol. 6, The Roosevelt Years, ed. Steven K. Gragert (Stillwater: University of Oklahoma Press, 1982), 78–80.
39. For concision purposes I have omitted discussion of the Silver Purchase Act of 1934, which paralleled the government purchase of gold. An account of the politics behind its passage can be found in Allan Seymour Everest, Morgenthau, The New Deal and Silver: A Story of Pressure Politics (New York: King’s Crown Press, 1950).
40. See, in particular, Charles W. Miller, The Automobile Gold Rushes and Depression Era Mining (Moscow: University of Idaho Press, 1998).
41. Robinson Newcomb, Charles White Merrill, and O. E. Kiessling, Employment and Income from Gold Placering by Hand Methods, 1935–37 (Philadelphia: U.S. Bureau of Mines and U.S. Works Projects Administration, June 1940).
42. An account of Hoover’s and Warburg’s efforts can be found in Rosen, Roosevelt, The Great Depression and the Economics of Recovery, ch. 4.
43. The most complete account of True and his activities is by Donald Strong, Organized Anti-Semitism in America: The Rise of Group Prejudice During the Decade 1930–40 (Westport, CT: Greenwood Press, 1979), 124–128. This is a reprint of a pamphlet published in 1941 by the American Council on Public Affairs.
Chapter 5: The Arsenal of Gold
1. Robert Jackson, That Man: An Insider’s Portrait of Franklin D. Roosevelt (New York: Oxford University Press, 2003), 59. There is one significant discrepancy in Jackson’s account of the January 10 discussion. He says that he told the president that evening about Sidney Ratner’s article “Was the Supreme Court Packed by President Grant?” Political Science Quarterly 35, no. 3 (September 1935): 343–358. However, given the publication date of that article and the fact that in its first paragraph it makes reference to several events that took place after January, two possibilities suggest themselves: Jackson had seen an early draft of Ratner’s article or, more probably, Jackson conflated his chronology and thought the article came out before the conversation. It seems unlikely, however, that Jackson would have made up the incident entirely, especially because Harold Ickes’s diary also notes that Roosevelt discussed court packing with him as well on January 10.
2. The Secret Diary of Harold L. Ickes (New York: Simon and Schuster, 1953), 273–274.See also William Leuchtenburg’s account in “The Origins of Franklin D. Roosevelt’s ‘Court-Packing’ Plan,” The Supreme Court Review (1966): 347–400. Leuchtenberg omits the role of Jackson and Ratner, but his article was published decades before Jackson’s lost memoir, for which Leuchtenberg wrote a preface.
3. Bronson v. Rodes 74 U.S. 229 (1868).
4. Marian McKenna, Franklin Roosevelt and the Great Constitutional War: The Court-Packing Crisis of 1937 (New York: Fordham University Press, 2002), 49.
5. Roy L. Garis, “The Gold Clause,” Annals of the American Academy of Political and Social Science (January 1933): 221.
6. James Truslow Adams, “The Gold Clause Would Probably Be Upheld by the Supreme Court,” Barron’s, August 22, 1932.
7. H.R. 14604, 72nd Congress, 2nd session, introduced by Rep. Ed Campbell.
8. “Fourth Section of Analysis of Proposal for Devaluation of the Dollar (draft),” February 8, 1933. Papers of Alexander Sachs, Container 98, Gold Clause file, FDRL.
9. Senate report no. 99, 73rd Cong., 1st sess., reprinted in Federal Reserve Bulletin, vol. 6 (June 1933).
10. “Senate Repeals the Gold Clause,” New York T
imes, June 4, 1933.
11. Excerpts from Cummings’s oral argument can be found in Selected Papers of Homer Cummings, Attorney General of the United States 1933–1939, ed. Carl Brent Swisher (New York: Charles Scribner’s Sons, 1939), 112–120.
12. “Hughes Assails Repudiation of Gold Payment,” Chicago Daily Tribune, January 11, 1935.
13. “Justices Quiz Lawyers on Gold Clause,” Chicago Daily Tribune, January 10, 1935.
14. Melvin I. Urofsky, “The Brandeis-Frankfurter Conversations,” The Supreme Court Review, vol. 1985 (1985): 337.
15. “Capital Debates Gold Issue; Justices Confer for 5 Hours,” New York Times, January 13, 1935.
16. “Talk of Packing the High Court if Gold Case Loses,” Chicago Tribune, January 13, 1935.
17. Diaries of Henry Morgenthau, January 14, 1935, 3:98.
18. Memorandum prepared by Parker Gilbert, January 17, 1935, reproduced in Diaries of Henry Morgenthau, 3:146–151.
19. Diaries of Henry Morgenthau, January 21, 1935, 3:190.
20. For example, the New York Times wrote: “In the financial circles in New York yesterday it was understood that while the SEC has not formally considered a closing of the stock exchanges in the event of an adverse decision on the gold clause by the Supreme Court, it was prepared to do so.” “SEC, With Power to Close Stock Exchanges, Is Ready to Do So on Adverse Gold Decision,” February 2, 1935.
21. Alexander Sachs to Marvin H. McIntyre, January 31, 1935, Alexander Sachs collection, Box 98, Gold Clause file, FDRL.
22. Franklin Roosevelt, “Proposed Statement: Gold Clauses,” February 18, 1935, Speech file microfilm, FDRL.
23. Perry v. United States, 294 U.S. 330 (1935).
24. Walter Lippman, “Today and Tomorrow,” Los Angeles Times, February 20, 1935. See also David Glick, “Conditional Strategic Retreat: The Court’s Concession in the 1935 Gold Clause Cases,” The Journal of Politics 71, no. 3 (July 2009): 800–816. An excellent account of the administration’s struggles with the gold-clause cases can be found in Jeff Shesol, Supreme Power (New York: W. W. Norton, 2010), ch. 6.
One Nation Under Gold Page 37
