by Amity Shlaes
Dow Jones Industrial Average: 155 Data on the stock market in this book come from Dow Jones indexes. The numbers used are the beginning of the month or year in question. Readers can search for the DJIA themselves at djindexes.com. John Prestbo of that company has also authored a useful book on the history of the Dow, The Market’s Measure: An Illustrated History of America Told through the Dow Jones Industrial Average (New York: Dow Jones, 1999). Prestbo’s insight about the volatility of the Dow in the 1930s helps to explain the economic costs of political uncertainty.
Floods change the course of history Much of the flood material is covered in John Barry’s outstanding Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America (New York: Touchstone/ Simon & Schuster, 1997), which gives a useful, albeit hostile, portrait of Hoover. Time magazine and the New York Times also covered the flood action extensively. The more general biographical material comes from Hoover’s own abundant work, other sources, and the authoritative multivolume biography of Herbert Hoover by George Nash. Hoover’s own memoirs (New York: Macmillan, 1952) tell us about his fishing habits.
The idea of philosophical continuity from Coolidge to Hoover On Coolidge, the best resource is Robert Sobel’s outstanding biography of the thirtieth president, Coolidge: An American Enigma (Chicago: Regnery, 1998). Much of the detail on Coolidge is drawn from this book, including Coolidge’s nickname for Hoover, “Wonder Boy.” Coolidge also wrote an autobiography that sheds light on his views about presidential restraint. When it comes to Mellon, his own Taxation: The People’s Business (New York: Macmillan, 1924) is clear on Mellon economics, as are his son Paul’s memoirs, Reflections in a Silver Spoon (New York: William Morrow, 1992). Time magazine covered Mellon thoroughly in the 1920s.
By 1908, Hoover had outgrown Bewick Moreing Hoover’s attitude toward Russia comes out clearly in his memoirs and in George Nash; Lewis Feuer also details them in his article “American Travelers to the Soviet Union, 1917–1932,” American Quarterly 14, no. 2 (Summer 1962): 119–49. Robert Thomsen’s biography Bill W. (Center City, Minn.: Hazelden Press, 1975), provides detail on this stage of Wilson’s life.
The paramount symbol of such immigrant independence Details on the Bank of United States, including its status, can be found in Allan Meltzer’s History of the Federal Reserve, vol. 1 (Chicago: University of Chicago, 2002).
Blacks too were part of this story Father Divine’s story is delightfully and meticulously told by Robert Weisbrot in Father Divine: The Utopian Evangelist of the Depression Era Who Became an American Legend (Boston: Beacon Books, 1983).
2
The Junket
One late July day The passenger list of the President Roosevelt was published in the New York Times, as was the news of the Duilio. Material on the founding of the Consumers Union can be found in Richard Vangermeersch’s short biography of Chase, The Life and Writings of Stuart Chase (New York: Elsevier, 2005).
The story of this trip to Russia was told by a number of the travelers, both upon their return, to newspapers, and later in articles and books. Two reports were published by those on the trip—a short report by the American Trade Union Delegation, titled Russia After Ten Years, and a longer report by the technical advisers, the group that included Paul Douglas and Rex Tugwell. This second book, by Melinda Alexander et al., Soviet Russia in the Second Decade (New York: John Day, 1928), contains Tugwell’s long essay on agriculture and four essays by Paul Douglas. Douglas, Brophy, Maurer, Tugwell, and others would revisit the trip in their memoirs.
So the travelers carefully gave themselves a label In regard to Communist involvement in the planning of the trip, Sylvia R. Margulies reports in her Pilgrimage to Russia (Madison: University of Wisconsin, 1968) that the Comintern was involved from the beginning, asking the American Communist Party to create a delegation of labor leaders. Even at the time, the American Federation of Labor was suspicious; its executive council wrote that it seriously doubted “the good-faith of such a self-constituted commission.” There is no evidence that Paul Douglas, Rex Tugwell, or many of the other travelers were aware of the extent of Communist involvement. On the American fascination with Soviet Russia generally, David C. Engerman’s Modernization from the Other Shore (Cambridge, Mass.: Harvard University Press, 2003) is enlightening. In regard to trips and intellectual pilgrims, three books stand out: Peter G. Filene’s Americans and the Soviet Experiment (Cambridge, Mass.: Harvard University Press, 1967); Paul Hollander’s Political Pilgrims: Travels of Western Intellectuals to the Soviet Union, China and Cuba (New York: HarperCollins, 1983); and Margulies, Pilgrimage to Russia. Two articles proved crucial in the decision to place emphasis on the summer 1927 junket: Feuer, “American Travelers,” and Silas B. Axtell, “Russia and Her Foreign Relations,” Annals of the American Academy of Political and Social Science 138 (July 1928): 85–92. Feuer is especially good on Stuart Chase and on W. E. B. DuBois’s trip. Axtell became disillusioned during the 1927 trip and suspicious of the objectivity of some of his fellow junketeers. Of the descriptions of the Soviet Union, none speaks so much to us as Emma Goldman’s My Disillusionment in Russia (1925; repr., Gloucester, Mass.: Peter Smith, 1974).
Roosevelt had taken History 10-B The material on Roosevelt’s undergraduate curriculum comes from his collected letters as edited by Elliott Roosevelt. On the evolving American policy toward utilities, Preston J. Hubbard’s Origins of the TVA (New York: Norton Library, 1961) is especially useful. his feeling for Harvard Law School Frankfurter’s statement about the quasi-religious feel of Harvard comes from Harlan B. Phillips, Felix Frankfurter Reminisces (New York: Reynal, 1960).
There was another element to Frankfurter’s personality Feuer, “American Travelers,” analyzes this stage in Frankfurter’s work.
Frankfurter had a virtual monopoly The detail about the clerk who did not come from Frankfurter comes out of Dennis J. Hutchison and David J. Garrow, eds., The Forgotten Memoir of John Knox (Chicago: University of Chicago Press, 2002).
“You learn no law in Public U” Joseph Lash cites the poem in From the Diaries of Felix Frankfurter.
“victims of ‘American capitalism’” Both Peggy Lamson and Robert C. Cotrell, Roger Nash Baldwin and the American Civil Liberties Union (New York: Columbia University Press, 2000) provide material on Roger Baldwin’s Soviet stay. The story of the posting of the news of Sacco and Vanzetti in Russia comes from Lamson, Roger Baldwin (Boston: Houghton Mifflin, 1976).
“the ‘Three Musketeers’ in Moscow in 1927” The letter is at Hyde Park in the presidential archives.
“there is a bit more to eat” Tugwell’s analysis of Soviet agriculture can be found in Alexander et al., Soviet Russia in the Second Decade.
“We had been good the day before” Tugwell recalls this and other details in To the Lesser Heights of Morningside: A Memoir (Philadelphia: University of Pennsylvania Press, 1982).
3
The Accident
“Closing Rally Vigorous” The literature on the 1929 crash is vast. John Kenneth Galbraith’s clear and short The Great Crash: 1929 (Boston: Houghton Mifflin, 1988) argues that the market crashed because of a speculative bubble and was rescued by government action. Frederick Lewis Allen, Only Yesterday (New York: Harper, 1931), gives a good feel for the mood at the time. Economists have long differed on the causes of the crash and downturn. Milton Friedman and Anna Schwartz argued famously in the early 1960s that deflation caused the Great Depression; Allan Meltzer has more recently, in his History of the Federal Reserve, supported that thesis with newer sources. A less technical version of the deflation argument can be found in Lester V. Chandler’s underappreciated America’s Greatest Depression, 1929–1941 (New York: Harper and Row, 1970). Chandler’s book includes some astounding charts on unemployment, including the fact that by January 1934, six in ten of all unemployed Massachusetts males had been unemployed for more than a year. In 1940, 15 percent of unemployed males had been out of a job two years. All these authors are to some extent building on Irv
ing Fisher, who helped develop modern monetarism.
Gene Smiley’s Rethinking the Great Depression (Chicago: Ivan R. Dee, 2002) is also highly useful. Barry Eichengreen’s Golden Fetters (New York: Oxford University Press, 1995) assigns blame to the gold standard. Thomas E. Hall and J. David Ferguson’s The Great Depression (Ann Arbor: University of Michigan Press, 1998) is admirably clear. In the camp arguing that inflation was the problem, the best-known book is Murray Rothbard, America’s Great Depression (Auburn, Ala.: Mises Institute, 1962). Benjamin Anderson’s Economics and the Public Welfare (New York: D. Van Nostrand, 1949) also stands out, especially for its analysis of the tax problem. As early as 1949, the year this book was first published, Anderson provocatively titled chapter 31 “The New Deal in 1929–1930.” Anderson’s blow-by-blow account of the 1937–38 recession is especially important. (The difference between the downturn of 1921 and 1929 is noted in Don Lescohier’s article in David Shannon’s anthology, The Great Depression.)
Economists and historians likewise differ on the costs of the Smoot-Hawley tariff. Some argue that the Fordney-McCumber tariff of the early 1920s did not weigh down the U.S. economy and believe others exaggerate the damage of Smoot-Hawley. I agree with economist Charles Kindleberger on this, who argues that the Smoot-Hawley Act was damaging per se but also because it made clear that, when it came to the world economy, “no one was in charge.” Overall the best economic guide to the crash and early Depression years is Michael A. Bordo et al., The Defining Moment (Chicago: University of Chicago Press, 1998), a volume of papers presented at a National Bureau of Economic Research conference in 1996. On the effect of public spending after the crash and later, Herbert Stein’s Fiscal Revolution in America (Washington, D.C.: AEI Press, 1990) and his Presidential Economics (New York: Simon & Schuster, 1984) are the classics.
Alfred Loomis More on Loomis’s philosophy and movements in the market can be found in Jennet Conant’s insightful biography, Tuxedo Park.
Irving Fisher…argued that stock prices were too low Fisher’s relationship with Sumner was a strong one. As Fisher’s son Irving Norton later noted in My Father, Irving Fisher (New York: Comet Press, 1956), Fisher dedicated his book The Nature of Capital and Income to Sumner, writing, “To William Graham Sumner, who first inspired me with a love for Economic Science.” Nobel Prize winner Edward C. Prescott outlined the increasingly accepted argument that stocks were not outrageously high in 1929 in a 2003 paper coauthored with Ellen McGrattan, “The 1929 Stock Market: Irving Fisher was Right,” Research Department Staff Report 294, Federal Reserve Bank of Minneapolis. the actual money supply available dropped The figures are from Hall and Ferguson, Great Depression.
“Mr. Hoover’s Economic Policy” Tugwell’s article is discussed in Bernard Sternsher, Rexford Tugwell and the New Deal (New Brunswick, N.J.: Rutgers University Press, 1964).
“much-needed construction work” The Roosevelt letter is quoted in The Hoover Administration: A Documented Narrative. The construction data are from “Public Construction Highest in Five Years,” New York Times, April 21, 1930.
Meanwhile, the horizon darkened further The unemployment estimate comes from Vedder and Gallaway, Out of Work. As Time magazine reported, states were crucial in unemployment data collection in those days, but only ten states compiled numbers.
Smoot-Hawley raised the average tariff Douglas Irwin points out that Smoot-Hawley returned tariffs to turn-of-the-century levels in National Bureau of Economic Working Paper 5895, “From Smoot-Hawley to Reciprocal Trade Agreements,” 1997. The 40 percent drop in trade is mentioned there.
Bankers Athletic League “Bank of U.S. Five Wins League Title.” New York Times, February 25, 1930, reports the basketball match. On December 12, 1930, the paper reported the story in “Bank of U.S. Closes Doors.” More of this material can be found in Milton Friedman and Anna Schwartz, A Monetary History of the United States, 1867–1960 (Princeton, N.J.: Princeton University Press, 1971), and Meltzer’s History of the Federal Reserve.
“Let it fail” The New York Times of Dec. 21, 1930, describes the demonstration at Freeman Street. The remark is recorded in Meltzer, History of the Federal Reserve. See “Throngs at Bank,” New York Times, December 23, 1930.
4
The Hour of the Vallar
One late summer day Marriner Eccles’s own memoirs, Beckoning Frontiers (New York: Alfred A. Knopf, 1951), and the descriptions of his biographer, Sidney Hyman, helped here. Descriptions of the “money drought” come out of contemporary papers; a good summary of the scrip network appeared in Time magazine’s January 9, 1933, issue, in an article titled “For Money.” Also useful is Wayne Parrish and Wayne Weishaar, Men without Money: The Challenge of Barter and Scrip (New York: G. P. Putnam’s Sons, 1933). Paul Douglas mentions the Hyde Park Co-op’s founding in his memoirs, but the story is also detailed on the Co-op’s website, http://www.coopmarkets.com/ history.htm.
“households, farmers, unincorporated businesses, and small corporations” Ben Bernanke, especially, studied the damage when banks could or did not lend; the quote is from his Essays on the Great Depression (Princeton, N.J.: Princeton University Press, 2004).
“There will be this situation” U.S. Senate hearings before a subcommittee of the Senate Banking and Currency Committee on S. 2959, 72nd Cong., 1st sess., January 1932. Much of this material can also be found in Chandler, America’s Greatest Depression.
Other components of the downturn Douglas Irwin in The Defining Moment.
National unemployment…was something like 16 percent and rising The data on unemployment are from the U.S. Department of Commerce annual figures, cited in Chandler, America’s Greatest Depression. interest in the Soviet effort was mainstream Peter Filene does a valuable job of evaluating and quantifying U.S. interest in Soviet Russia in his Americans and the Soviet Experiment.
The energized professors wanted to fashion for Roosevelt a dramatic message In regard to Franklin Roosevelt’s brain trust, there is a rich body of material to draw from. Tugwell wrote multiple memoirs, including one of his rural childhood, The Light of Other Days (New York: Doubleday, 1962). Adolf Berle’s role comes clear in Navigating the Rapids (New York: Harcourt Brace Jovano-vich, 1973). Scholars Jordan Schwarz and Bernard Sternsher beautifully capture this period in their books. Michael Namorato and Sternsher cover Tugwell. Of all the members of the brain trust, Ray Moley feels the most modern. Much of his story comes out in After Seven Years (New York: Harper and Brothers, 1939), the book he wrote upon breaking with Roosevelt. Stuart Chase’s New York Times obituary gives him the credit for the phrase “New Deal,” but it was in the air at the time.
“I turned the tables” “Roosevelt Confers on Russia Policy,” New York Times, July 26, 1932.
“backbone of the nation” Some of the text of the address was reprinted in “Mills’ Address Closing Republican Campaign,” New York Times, September 11, 1932; more of the text elsewhere. puff piece in the New York Times “Capper and Wallace Disagree on Effect of Hoover’s Speech,” New York Times, October 6, 1932.
Over lunch, Eccles asked Eccles describes the lunch meeting in Beckoning Frontiers. news that Stalin was moving farther forward with the collectivization of agriculture “50,000 Soviet Reds Will Direct Drive to Socialize Farms,” New York Times, January 30, 1933.
5
The Experimenter
They met in his bedroom This scene comes from Henry Morgenthau’s diaries, which were pulled together by the historian John Morton Blum as From the Morgenthau Diaries (Boston: Houghton Mifflin, 1959–67). I first read the story of President Roosevelt’s gold experiment in John Brooks’s outstanding Once in Golconda: A True Drama of Wall Street (New York: Harper and Row, 1969). Ickes, Tugwell, and others also commented on the experiment in their writings about the period.
Some of the projects were mere extensions of Hoover’s efforts Moley describes the cooperation in Twenty-seven Masters of Politics (New York: Ticknor and Fields, 1991). signing a bill that included deposit insuran
ce Paul Mellon describes the deposit insurance discussion. As Irving Norton Fisher notes in My Father, Irving Fisher, 1956), Roosevelt went back and forth on the insurance more than once. “I think it is true that FDR is ready to change his mind easily. I believe in this for myself, but is very worrisome to have a President do it. He seems now to be wobbly about Bank Deposit Guarantee, because New York bankers via [Treasury Secretary] Woodin have questioned it again.”
Columbia’s president…had been flatteringly reluctant Tugwell describes the interaction with Columbia in The Diary of Rexford G. Tugwell, 1932–1944 (New York: Greenwood Press, 1992).
“no president ever took over a nastier…mess” Warburg’s reaction is described in his own Hell Bent for Election (Garden City, N.Y.: Doubleday Doran, 1935) and also in Brooks, Once in Golconda. Fisher’s notes about his meeting with Roosevelt are in Robert Loring Allen, Irving Fisher: A Biography (Cambridge, England: Blackwell, 1993) and his son’s memoir, My Father, Irving Fisher.
“culmination of my life work” Fisher’s son reprints Fisher’s letter to his wife in My Father, Irving Fisher.
“Congratulate me” John Brooks relays this incident, but so does Warburg; for an economic description of events, Peter Temin’s Lessons from the Great Depression (Cambridge: Massachusetts Institute of Technology, 1989) is especially clear.
