All the Presidents' Bankers
Page 60
18. The White House, “Presidents: Warren G. Harding,” at www.whitehouse.gov/about/presidents/warrenharding.
19. Miller Center, “Harding: Foreign Affairs.”
20. Herbert Hoover, The Memoirs of Herbert Hoover: The Cabinet and the Presidency, 1920–1933 (New York, NY: Macmillan, 1952), 47.
21. Ibid., 185.
22. US State Department, Office of the Historian, “Milestones 1921–1936: The Dawes Plan,” at http://history.state.gov/milestones/1921–1936/Dawes.
23. Lamont, Ambassador, 186.
24. Ibid., 188.
25. “Germany Admits Default in Payment on Jan. 15,” Associated Press, January 6, 1923.
26. “Italy’s Progress Lauded by Lamont,” New York Times, April 15, 1925.
27. “Lamont and Kahn Defend Mussolini,” New York Times, January 24, 1926.
28. “Coolidge Takes Oath of Office,” New York Times, August 3, 1923.
29. David Greenberg, “Keeping It Cool with Silent Cal,” New York Sun, December 20, 2006.
30. Lundberg, America’s Sixty Families, 150.
31. “Coolidge Tries a New Method,” New York Times, September 16, 1923.
32. Lundberg, America’s Sixty Families, 139.
33. Harold Nicolson, Wall Street and the Security Markets (New York, NY: Harcourt, Brace, 1935), 125–128.
34. Calvin Coolidge, The Autobiography of Calvin Coolidge (New York, NY: Cosmopolitan Book Corporation, 1929), 174.
35. Ibid., 28.
36. Ibid., 181.
37. Lamont, Ambassador, 201–203.
38. “Bankers Blaze Way for a German Loan,” New York Times, July 28, 1924.
39. “Paris Cool to German Loan,” New York Times, September 5, 1924.
40. Lamont, Ambassador, 207.
41. Ibid.
42. B. J. C. McKercher, ed., Anglo-American Relations in the 1920s (University of Alberta Press, 1990), 156. Letter from J. P. Morgan & Company to J. P. Morgan, October 14, 1924, no. 24/2707.
43. Miller Center, “Harding: Foreign Affairs.”
44. Hoover, Memoirs, 89.
45. Andrew W. Mellon, Taxation: The People’s Business (New York, NY: Macmillan, 1924), 17.
46. “Coolidge Declares Press Must Foster America’s Idealism,” New York Times, January 18, 1925.
47. “Andrew W. Mellon’s Ignorance,” The Nation, May 28, 1924.
48. Donald Barlett, America: Who Really Pays the Taxes (New York, NY: Touchstone, 1994), 65.
49. Lundberg, America’s Sixty Families, 167.
50. David Cannadine, Mellon: An American Life (New York, NY: Random House, 2006), 318.
51. David Greenberg, Calvin Coolidge (New York, NY: Times Books, 2006), 78.
52. Earnest Elmo Calkins, Business, the Civilizer (Boston, MA: Little, Brown and Company, 1928), 13.
53. “Mitchell Expects Loan’s Success,” New York Times, September 12, 1924.
54. “The Week Reviewed,” Barron’s, September 28, 1925, 4.
55. Ibid.
56. Greenberg, Calvin Coolidge, 90.
57. “Mitchell Expresses Confidence in Cuba,” New York Times, January 27, 1922.
58. “Sees Remarkable Recovery in Cuba,” New York Times, January 31, 1922.
59. “1924 a Banner Year for New York Banks,” New York Times, January 31, 1925.
60. “Optimism in Trade Justified, He Says,” New York Times, July 24, 1925.
61. Donald L. Barlett and James B. Steele, America: Who Really Pays the Taxes? (New York, NY: Touchstone, 1994), 66.
62. President Calvin Coolidge, Fourth Annual Message, December 7, 1926, at www.presidency.ucsb.edu/ws/index.php?pid=29567.
63. Hoover, Memoirs, 89.
64. “Predicts Prosperity Brought by New Ford,” New York Times, December 10, 1927.
65. Ibid.
66. Benjamin M. Anderson Jr., “Cheap Money, Gold, and Federal Reserve Bank Policy,” Chase Economic Bulletin, 4, no. 3 (August 4, 1924).
67. “Hungry Reporter Complains About Money Wizards Delaying Dinner,” Associated Press/United Press International, January 13, 1925.
68. C. W., “The National City Fiasco,” The Nation, January 1, 1930.
69. “Washington Sees 1928 Field Open; Some Talk of Drafting Coolidge,” New York Times, August 2, 1927.
70. Leo Grebler, David M. Blank, and Louis Winnick, Capital Formation in Residential Real Estate: Trends and Prospects (Princeton, NJ: NBER and Princeton University Press, 1956), 350. See also www.library.hbs.edu/hc/crises/forgotten.html#fn23.
71. The White House website, “Herbert Hoover 1929–1933,” at www.whitehouse.gov/about/presidents/herberthoover.
72. Laurence Todd, “Government by Millionaires,” The Nation, March 27, 1929.
73. Ibid.
74. Lamont, Ambassador, 248.
75. Anna J. Schwartz, “The Misuse of the Fed’s Discount Window,” Review, St. Louis Fed, September/October 1992, 58.
76. Federal Reserve Bulletin, vol. 15 (November 1929), at http://fraser.stlouisfed.org/docs/publications/FRB/1920s/frb_111929.pdf.
77. “Stocks on the Bargain Counter!” Forbes, November 15, 1929.
78. “Governor,” Time, March 31, 1930.
79. “Wiggin Now Head of Chase National,” New York Times, January 12, 1911.
80. “Nothing Resounding,” Time, August 2, 1931.
81. Ibid.
82. Ibid.
83. “Billion Dollar Bank Formed by Merger with Chase National,” New York Times, February 12, 1926.
84. “Banker Upholds Debt Reduction,” New York Times, January 10, 1927.
85. Ibid.
86. Advertisement for the National City Bank, The American Magazine, July–December 1921.
87. “Troubles of Mitchell,” Time, November 18, 1929.
88. Ibid.
89. Drexel Burnham Lambert’s Ivan Boesky and Michael Milken shared that late 1980s distinction of selling bonds for far more than they were really worth. They later went to jail, and landed Drexel the largest fine in banking history as of that date.
90. Stock Exchange Practices: Hearings Before a Subcommittee of the Committee on Banking and Currency, US Senate, Seventy-second Congress, Second Session, on S. Res. 84 and S. Res. 239, Resolutions to Thoroughly Investigate Practices of Stock Exchanges with Respect to the Buying and Selling and the Borrowing and Lending of Listed Securities, the Values of Such Securities and the Effects of Such Practices, February 21, 1933. (National City: Continuation of Richard Whitney Testimony). At http://fraser.stlouisfed.org/publications/sensep/issue/3912/download/64693/19330221_sensep_pt06.pdf.
91. Paul Gomme and Peter Rupert, “Per Capita Income Growth and Disparity in the United States, 1929–2003,” Economic Commentary: Federal Reserve Bank of Cleveland, August 15, 2004.
92. “Damnation of Mitchell,” Time, March 6, 1933.
93. “Bankers Break Money Squeeze,” United Press, March 28, 1929.
94. W. F. Wamsley, “The Ruler of the World’s Largest Bank,” New York Times, September 29, 1929.
95. “Norris Urges Mitchell to Quit Reserve Bank,” United Press, March 31, 1929.
96. No senator demanded a Fed–private banker resignation again until Vermont Independent Bernie Sanders did of JPMorgan Chase chairman Jamie Dimon, in June 2012. Mitchell remained through his term. Then, as now, no president demanded any such thing.
97. “Stock Slump Revives Talk of Investigation,” American Banker, October 28, 1929.
98. “Mitchell Warns of Undue Speculation,” Universal Press, March 29, 1929.
99. Wamsley, “The Ruler.”
100. John Kenneth Galbraith, The Great Crash, 1929 (New York, NY: Houghton Mifflin Harcourt, 2009), 151–154.
101. Chernow, House of Morgan.
102. “Mitchell Regards Our Business Is Sound,” New York Times, October 9, 1929.
103. Letter from Thomas W. Lamont to President Herbert Hoover, National Archives and Records Administration, PPF 1072, October 19, 1929.
Chapter 5. 1929:
The Room at 23 Wall, Crash, and Big-Six Take
1. “Radicals: A Jaunty Young Man,” Time, May 19, 1923.
2. “Frequently Asked Questions,” Herbert Hoover Presidential Library and Museum, at http://hoover.archives.gov/info/faq.html#chicken.
3. “Financiers Ease Tension: Five Wall Street Bankers Hold Two Meetings at Morgan Office,” New York Times, October 25, 1929.
4. John Kenneth Galbraith, The Great Crash, 1929 (New York, NY: Houghton Mifflin Harcourt, 2009), 74.
5. B. C. Forbes, “Stocks on the Bargain Counter!,” Forbes, November 15, 1929.
6. “Bankers Halt Stock Debacle,” Wall Street Journal, October 25, 1929.
7. “Business Is Sound, Bankers Declare,” Daily Boston Globe, October 25, 1929.
8. “Banks Restore Stability to Raging Stocks,” Chicago Tribune, October 26, 1929.
9. “Financiers Ease Tension.”
10. “Banking Buoys Up Stricken Stocks,” New York Times, October 27, 1929.
11. “Financiers Ease Tension.”
12. Richard Hiltzik, The New Deal: A Modern History (New York, NY: Free Press, 2011), 178.
13. “Richard Whitney, 86, Dies; Headed Stock Exchange,” New York Times, December 6, 1974.
14. Evan W. Thomas, “The Clubs: Pale but Still Breathing,” Harvard Crimson, September 20, 1971, at www.thecrimson.com/article/1971/9/20/the-clubs-pale-but-still-breathing/.
15. “End of a World,” Time, November 7, 1949.
16. Ibid.
17. “Financiers Ease Tension.”
18. “Shortage of Bankers Bills Expected to Lift Bond Prices,” New York Times, October 26, 1929.
19. Forbes, “Stocks on the Bargain Counter!”
20. “Record Christmas Bonuses Are Expected as Rewards in Brokerage Houses This Year,” New York Times, November 3, 1929.
21. Eighty years later, headlines would be similar. In early January 2010, a year after the biggest bank bailout in US history began, the New York Times reported, “Bank Bonuses, Bigger than Ever.”
22. “Stock Slump Revives Talk of Investigation,” American Banker, October 28, 1929.
23. “Federal Reserve Bulletin,” Board of Governors of the Federal Reserve System, November 1929, 703.
24. Ibid.
25. “TW Lamont Sees Market as Normal, Morgan Partner Speaks for Banking Group After an Informal Meeting,” New York Times, November 16, 1929.
26. “Bankers to Cooperate, Four of American Association Chosen for Capital Conference,” New York Times, November 27, 1929.
27. Galbraith, The Great Crash, 139.
28. The Pecora Investigation: Stock Exchange Practices and the Causes of the 1929 Wall Street Crash (New York, NY: Cosimo, 2010), 325.
29. Ibid., 325.
30. Ibid.
31. Charles D. Ellis and James R. Vertin, Wall Street People: True Stories of the Great Barons of Finance (Hoboken, NJ: Wiley, 2003), 188.
32. Jerry Markham, A Financial History of the United States: Volume II (Armonk, NY: M. E. Sharpe, 2002), 146.
33. “History,” The Roosevelt Hotel, at www.theroosevelthotel.com/defaultaspx?pg=history.
34. Herbert Hoover, “Remarks to a Chamber of Commerce Conference on the Mobilization of Business and Industry for Economic Stabilization,” December 5, 1929, posted by Gerhard Peters and John T. Woolley, American Presidency Project, at www.presidency.ucsb.edu/ws/?pid=22023. The president spoke at 10:15 A.M. in the assembly room of the Chamber of Commerce in Washington, DC. The address was also broadcast over a chain of National Broadcasting Company stations.
Chapter 6. The Early 1930s: Tenuous Times, Tax-Evading Titans
1. “National City Head Sees Bright Future,” Atlanta Constitution, January 16, 1930.
2. “Dow Jones Industrial Average Index Chart,” Yahoo Finance, at http://finance.yahoo.com/echarts?s=^dji+interactive.
3. Herbert Hoover, “Address to the Chamber of Commerce of the United States,” American Presidency Project, at www.presidency.ucsb.edu/ws/?pid=22185.
4. “Federal Reserve Bulletin,” Federal Reserve Board 16 (Washington, DC: Government Printing Office, October 1930), 613.
5. Ibid., 615.
6. Paul B. Trescott, “The Failure of the Bank of United States, 1930,” Journal of Money, Credit and Banking 24 (August 1992): 384.
7. Liaquat Ahamed, Lords of Finance: The Bankers Who Broke the World (New York, NY: Penguin Group, 2009), 388.
8. “Bank’s Depositors Get Loan Aid Today,” New York Times, December 16, 1930.
9. Jonathan Alter, The Defining Moment: FDR’s Hundred Days and the Triumph of Hope (New York, NY: Simon & Schuster Paperbacks, 2007), 77.
10. “Constituent Charter of the Bank for International Settlements,” BIS Basic Texts, Bank for International Settlements, January 20, 1930.
11. “Business: Bankers’ Outlook,” Time, January 19, 1931.
12. Donald R. Wells, The Federal Reserve System: A History (Jefferson, NC: McFarland & Company, 2004), 45.
13. Federal Reserve Archive, “The Discount Rate Controversy Between the Federal Reserve Board and the Federal Reserve Bank of New York,” Document X-6737, November 1930, at http://fraser.stlouisfed.org/docs/meltzer/bogsub110130.pdf.
14. “National Affairs: Reserve Review,” Time, February 16, 1931.
15. “International: Nothing Resounding,” Time, August 24, 1931.
16. Ibid.
17. For more on dollar-to-marks currency conversion, see www.history.ucsb.edu/faculty/marcuse/projects/currency.htm. See also Gianni Toniolo, Central Bank Cooperation at the Bank for International Settlements, 1930–1973 (Cambridge, UK: Cambridge University Press, 2005), 100.
18. Ibid.
19. Aurel Schubert, The Credit-Anstalt Crisis of 1931 (Cambridge, England: Cambridge University Press, 1991), 99.
20. Drew Pearson, “The Washington Merry-Go-Round,” Spokane Daily Chronicle, May 2, 1941.
21. “Bankers Sending Dulles to Berlin,” New York Times, May 19, 1931.
22. Drew Pearson, “Dulles’ Early Defense of Germany Laid to Clients’ Investments,” United Feature Syndicate, September 28, 1944, at http://tinyurl.com/c498bvu.
23. “International: Nothing Resounding,” Time.
24. “100 Largest Banks Show Deposit Gain,” New York Times, January 20, 1931. See also Thomas Ferguson and Peter Temin, Made in Germany: The German Currency Crisis of 1931 (Cambridge, MA: Massachusetts Institute of Technology, 2001), 51–52.
25. Jerry W. Markham, A Financial History of the United States (New York, NY: M. E. Sharpe, 2002), 71–72.
26. Herbert Hoover, “The President’s News Conference,” June 20, 1931, posted online by Gerhard Peters and John T. Woolley, American Presidency Project, at www.presidency.ucsb.edu/ws/?pid=22719#axzz2gP1iPE3o.
27. Ibid.
28. “Mr. Hoover, Call Congress!” The Nation, August 12, 1931.
29. “Federal Reserve Bulletin,” Federal Reserve Board 16 (March 1930), 100.
30. Irving Bernstein, The Lean Years (Chicago, IL: Haymarket Books, 2010), 313.
31. Hoover, Memoirs, vi.
32. “The Administration: The Sky Room’s the Limit,” Time, July 7, 1950.
33. “Increase in Federal Reserve Bank Credit; More Money in Circulation, Report Shows,” New York Times, May 6, 1932.
34. S. Palmer Harman, “Finance: The Bond-Purchase Plan,” The Nation, May 4, 1932.
35. Patman Address to the House of Representatives regarding Mellon’s impeachment: Congressional Record—House of Representatives, January 6, 1932, 1399–1401.
36. “Patman Cites High Crime by Head of Treasury,” The Milwaukee Sentinel, January 7, 1932.
37. Leslie Geary Haggin, “Tax Troubles of the Rich and Famous,” CNN Money, February 20, 2003.
38. “Mellon Drafted Envoy to London,” The Spokesman-Review, February 4, 1932.
39. “Taxation: U.S. v. Mellon, Lamont et al.,” Time, March 19, 1934.
40. Noah Feldman, Scorpions: The Battles and Triumphs of FDR’s G
reat Supreme Court Justices (New York, NY: Hachette Book Group, 2010).
41. Ibid.
42. “Revised Glass Bill Curbs Speculation, Helps Failed Banks,” New York Times, March 18, 1932.
43. Federal Reserve Archive, Text of Glass-Steagall Act of 1932, Federal Reserve Bank of St. Louis, at http://fraser.stlouisfed.org/docs/historical/brookings/17620_04_0006.pdf.
44. 5443 Folder: Weinberg, Sidney J., FDR Library.
45. Charles D. Ellis, The Partnership: The Making of Goldman Sachs (New York, NY: Penguin Press, 2008).
46. Ibid.
47. Joseph Persico, “First Chapter: Roosevelt’s Secret War,” New York Times, October 21, 2001. See also “Story of Man Beside Roosevelt,” New York Times, February 16, 1933.
48. “Newest Morgan Partner Won Fame in War Loans,” New York Times, July 8, 1923.
49. PPF 866 Folder: Leffingwell, Russell C., 1935–1944 and cross-references, FDR Library.
50. Program transcript, American Experience: FDR (PBS), at www.pbs.org/wgbh/americanexperience/features/transcript/fdr-transcript/.
51. ASN Files, Box 52, Folder: Lamont, Thomas W., FDR Library.
52. Letter from Lamont, February 27, 1933, PPF File 70, Folder: Lamont, Thomas W., FDR Library.
53. Ibid.
54. “Morgan’s Proffer of Stock to Woodin,” New York Times, May 25, 1933.
55. William Silber, “Why Did FDR’s Bank Holiday Succeed?,” Federal Reserve Bank of New York, Economic Policy Review, July 2009.
56. United States Senate Committee on Banking and Currency, Stock Exchange Practices: Report of the Committee on Banking and Currency (Washington, DC: Government Printing Office, 1934), 102.
57. Ibid., 62.
58. Letter to James Perkins, March 9, 1933, PPF 54, Perkins, James H., FDR Library.
59. “J.D. Rockefeller, Jr., Weds Miss Aldrich,” New York Times, October 10, 1901.
60. “Largest Bank in the World Formed in New York Merger,” Associated Press, March 19, 1930.
61. “Wiggin Retires as Chase Executive,” Associated Press, January 11, 1933.
62. A. Tabarrok, “The Separation of Commercial and Investment Banking: Morgans vs. Rockefellers,” Quarterly Journal of Austrian Economics 1, no. 1 (1998): 1–18.
63. Research Correspondence I: Box 8, Aldrich Archives.
64. Thomas Ferguson, “From Normalcy to the New Deal: Industrial Structure, Party Competition, and American Public Policy in the Great Depression,” International Organization 38, no. 1 (Winter 1984): 41–94.