Lords of Finance

Liaquat Ahamed

trusted · 239 citation(s)

Attached file

Source files are not served on the public archive. Metadata and citations remain available.

Cited by (239)

Montagu Norman's nervous breakdown revealed whole source
ON AUGUST 15, 1931, the following press statement was issued: “The Governor of the Bank of England has been indisposed as a result of the ex…
Hoover declares a one-year debt and reparations moratorium whole source
On June 20, President Herbert Hoover announced a one-year moratorium on all payments of debts and reparations stemming from the war.
Collapse of Austria's Creditanstalt whole source
In May 1931, the biggest bank in Austria, the Creditanstalt, owned by the Rothschilds no less, with $250 million in assets, closed its doors…
Rome's bank panic under Tiberius whole source
the first documented bank panic can, however, be dated to A.D. 33 when the Emperor Tiberius had to inject one million gold pieces of public…
Bryan's 'Cross of Gold' speech whole source
You shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.
Fifty-nine countries on the gold standard whole source
By 1914, fifty-nine countries had bound their currencies to gold.
Norman Angell's 'The Great Illusion' whole source
Angell’s pamphlet was issued in book form in 1910 under the title The Great Illusion.
Assassination of Archduke Franz Ferdinand whole source
The assassination in Sarajevo of the archduke Franz Ferdinand, heir presumptive to the Austrian Empire, and his wife Sophie by a comic-opera…
Austria declares war on Serbia whole source
That same afternoon it was reported that Austria had declared war on Serbia and was already bombarding Belgrade.
Carl Jung's misdiagnosis of Montagu Norman whole source
In April 1913, following a few days of tests, including blood and spinal fluid tests, the rising young psychiatrist informed Norman that he…
London Stock Exchange closes for the first time since 1773 whole source
At ten o’clock on Friday morning, a notice was posted on the door of the stock exchange announcing that it was to be closed until further no…
Bank of England raises Bank rate to 10 percent whole source
Its bullion reserves fell from over $130 million on Wednesday, July 29, to less than $50 million on Saturday, August 1, when the Bank, to at…
Germany mobilizes and declares war on Russia whole source
Germany countered the Russian mobilization with a general mobilization of its own on Friday, July 31, and dispatched an ultimatum demanding…
Bismarck annexes Schleswig and Holstein whole source
In 1866, following two short wars, Bismarck annexed Schleswig and Holstein, incorporating them into the Prussian empire.
North Schleswig returns to Denmark by plebiscite whole source
After the war, in 1920, the northern parts of Schleswig, including the region from which the Schacht family had come, reverted to Denmark as…
Germany declares war on France and invades Belgium whole source
On August 3, Germany declared war on France, and to reach France, invaded Belgium the next morning.
Britain enters the war over Belgian neutrality whole source
Britain, which had guaranteed Belgian neutrality since 1839, issued an ultimatum to Germany to withdraw.
Reichsbank suspends gold convertibility of the mark whole source
the Reichsbank entered August 1914 with large enough gold reserves on hand to feel confident about avoiding a replay of 1911 and was also qu…
New York Stock Exchange closes whole source
But the following morning, once the news hit New York that even the London exchange had been forced to suspend trading, the same bankers met…
Wall Street's worst day since the 1907 panic whole source
On Thursday, July 30, the United States woke to news of a Russian general mobilization, and stocks experienced their single largest down day…
Davison: 'the credit of all Europe has broken down' whole source
The credit of all Europe has broken down absolutely. Specie payments suspended and moratorium in force in France and practically in all coun…
The Panic of 1907 whole source
A few months later, in October 1907, the United States was rocked by a severe financial crisis.
The secret Jekyll Island meeting whole source
He therefore chose to hold the meeting in secret on a small private island off the coast of Georgia—in effect creating the very bankers’ cab…
Hamilton founds the First Bank of the United States whole source
In 1791, Alexander Hamilton, the secretary of the treasury, had created the country’s first central bank, the First Bank of the United State…
Federal Reserve Act signed into law whole source
came around and it was signed into law as the Federal Reserve Act by Woodrow Wilson on December 23, 1913.
Benjamin Strong becomes first governor of the New York Fed whole source
On October 5, 1914, the Federal Reserve Bank of New York formally announced that Benjamin Strong had been elected its first governor.
The Dreyfus affair whole source
In 1894 a young Jewish artillery officer, Captain Alfred Dreyfus, was wrongly convicted of treason when French intelligence officials conspi…
Bankruptcy of the Panama Canal Company whole source
In 1892, however, the Panama Canal Company went bankrupt and some 800,000 French investors lost $200 million.
The First Moroccan Crisis whole source
That March, the kaiser, who had an unfortunate habit of speaking out of turn, paid a visit to Tangiers, and in a challenge to French ascenda…
The Banque de France's gold arms race with Germany whole source
In 1897, its incoming governor, Georges Pallain, had gathered his staff to tell them that the Banque’s duty was to prepare for “every eventu…
Banque de France evacuates its gold reserves whole source
Few people—certainly not the Germans—were yet aware that on August 18, with the invaders still two hundred miles away in Brussels, the Banqu…
German army reaches the outskirts of Paris whole source
The German army swept through Belgium and across northern France in a great flanking movement around the French left wing, and by August 29…
Founding of the Bank of England whole source
Before the year was over the new bank opened its doors for business under the name The Governor and Company of the Bank of England.
The Glorious Revolution whole source
In 1688, James II, the last Catholic king of England and Scotland, was driven from his throne, having alienated much of his people by attemp…
Governor Cunliffe's rogue gold telegram whole source
In a fit of temper, without consulting any of his fellow directors, he dispatched a telegram to the Canadian government, then the North Amer…
Montagu Norman joins the Bank of England as adviser whole source
In 1915, the deputy governor, Brian Cockayne, invited Montagu Norman to become his adviser.
Founding of the Banque de France whole source
The Banque opened its doors on January 18, 1800, or according to the calendar of the Revolution then in force, on the 28th day of Nivose, th…
Bismarck founds the Reichsbank whole source
when the Reichsbank was being formed in 1871, his own private banker and confidant, Gershon Bleichröder, warned him that there would be occa…
Austerlitz saves the infant Banque de France whole source
In 1805, immediately following the naval disaster at Trafalgar and just as Napoléon was launching his latest campaign against the Austro-Rus…
Schacht's Belgian franc scandal whole source
Demand for the Belgian francs was extremely strong, and in February 1915 Schacht allowed the Dresdner Bank, his employer in civilian life, t…
Sinking of the Lusitania whole source
Since the Lusitania had been torpedoed and sunk off the coast of Ireland the year before, drowning almost 1,200 people, 124 of them American…
Strong's scouting trip and first meeting with Norman whole source
And so in February 1916, he decided to make a “scouting trip” to Europe.
The Armistice ends the Great War whole source
ON November 11, 1918, the Great War came to an end as it had begun, as a total surprise.
Proclamation of the German Republic whole source
A little while before, Philipp Scheidemann, a leader of the Social Democrats, had given history a push by coming out onto the balcony and pr…
The Paris Peace Conference opens whole source
At the Paris Peace Conference, which opened in January 1919, no other issue “caused more trouble, contention, hard feeling, and delay,” reca…
Versailles terms unveiled to Germany whole source
In May 1919, when the terms of the peace treaty were finally unveiled to Germany, the whole country exploded in shock and anger.
Keynes publishes 'The Economic Consequences of the Peace' whole source
In November 1919, John Maynard Keynes, the young Cambridge don, published The Economic Consequences of the Peace.
'Squeeze Germany until the pips squeak' whole source
during the December 1918 election campaign, the slogan that the Allies should “squeeze Germany until the pips squeak”
The London reparations schedule and 'fulfillment' whole source
In May 1921, the British proposal was accepted at a conference in London.
Assassination of Walther Rathenau whole source
On June 24, 1922, the architect of fulfillment, Foreign Minister Walter Rathenau, one of the most attractive political figures in Germany—cu…
French and Belgian troops occupy the Ruhr whole source
In early 1923, when Germany was late in meeting a reparations payment for that year—the precipitating incident was the failure to deliver on…
The German hyperinflation reaches its peak whole source
By August 1923, a dollar was worth 620,000 marks and by early November 1923, 630 billion.
German unemployment explodes as the currency dies whole source
Unemployment, which had hovered around 3 percent suddenly shot up to 20 percent in the fall of 1923.
Schacht recruits Goldschmidt, seeding the Danatbank whole source
In 1918, he recruited a thirty-six-year-old stockbroker, Jacob Goldschmidt, to join the Nationalbank.
The Norman-Strong compact between the central banks whole source
Over the next decade that compact between Britain and the United States—or rather between the Bank of England and the Federal Reserve—built…
Norman becomes governor of the Bank of England whole source
While Strong had been traveling, Norman had been elevated to the governorship of the Bank of England. It was the beginning of a true partner…
US Senate rejects the Treaty of Versailles whole source
On November 19 the Senate rejected the treaty by a vote of 55 to 39.
The Balfour Note links war debts to reparations whole source
Indeed, in the middle of 1922, the British government made the connection explicit in a note drafted by Arthur Balfour, then acting foreign…
Fall of Lloyd George and the Bonar Law government whole source
In October 1922, Lloyd George’s government precipitously fell and a new Conservative government under Andrew Bonar Law took office in Britai…
British delegation sails to settle war debts with America whole source
A British delegation, led by Baldwin himself and including as its principal adviser, the governor of the Bank of England, Montagu Norman, se…
France settles its war debts at 40 cents on the dollar whole source
It would eventually settle its war debts in 1926, when it reluctantly conceded to pay 40 cents on the dollar—even then the arrangement was n…
Genoa Economic Conference and Norman's idea of a central bankers' league whole source
After the Genoa Economic Conference of 1922, he floated the idea of a grand conclave of central bankers.
Run on the Bank of England forces Britain off gold whole source
In 1797, four years into the Revolutionary war with France, there was a run on the Bank of England, provoked by rumors that a French army ha…
The Bullion Committee of 1810 whole source
In 1810, a parliamentary inquiry known as the Bullion Committee was formed to examine the whole issue.
Britain returns to the gold standard in 1821 whole source
And though those years from 1815 to 1821 had been years of riots and agricultural distress, Britain went back on gold in 1821.
Bank of England chooses deflation in 1920 whole source
Inspired by this example—and in complete contrast to every other European country—in 1920, the Bank of England chose the path of deflation,…
Keynes begins speculating on currencies whole source
In the latter half of 1919, convinced that the inflationary consequences of the war would undermine the currencies of the main belligerents,…
Keynes publishes A Tract on Monetary Reform whole source
In December 1923, Keynes published a short monograph, A Tract on Monetary Reform, much of which had already appeared as a series of articles…
Strong invents the modern central banker whole source
It all sounds quite prosaically obvious now, but in 1922 it was a radical departure from more than two hundred years of central banking hist…
The Federal Reserve Act of 1913 whole source
The Federal Reserve Act of 1913 had been a political compromise.
Fight over control of Fed open market operations whole source
The purchase and sale of securities out of their portfolios had initially been left to the reserve banks; but in 1923, the Board, recognizin…
Schacht and Stresemann dine as Germany nears bankruptcy whole source
AT 10:00 p.m. on November 8, 1923, two men could have been seen arriving at the Hotel Continental in Berlin for an intimate dinner in one of…
Hyperinflation bread riots in Berlin whole source
On November 5, the price of a two-kilo loaf of bread had soared from 20 billion marks to 140 billion, sparking off nationwide riots.
Hitler's Beer Hall Putsch collapses whole source
Hitler’s attempt to seize power—the Beer Hall Putsch, as it was already being called—had collapsed within twenty-four hours, and the Stresem…
The Reichsbank Autonomy Law of 1922 whole source
But the Reichsbank Autonomy Law of July 1922—ironically enacted at the insistence of the British, who hoped, by making the Reichsbank indepe…
Introduction of the Rentenmark whole source
And so, when the new currency was introduced on November 15, 1923, Germany found itself in the curious position of having two official curre…
Schacht fixes the Rentenmark conversion rate whole source
Finally, on November 20, when the Reichsmark stood, if that is the word, at 4.2 trillion to the dollar, he fixed the conversion rate at 1 tr…
Death of Rudolf von Havenstein whole source
On November 20, the day that Schacht fixed the conversion value of the new currency, Von Havenstein after a late evening meeting with his bo…
Schacht appointed president of the Reichsbank whole source
On December 20, Schacht was appointed president of the Reichsbank.
Schacht meets Norman in London whole source
SCHACHT ARRIVED at Liverpool Street Station in London on the boat train from Berlin at 10:00 p.m. on New Year’s Eve, 1923.
Reparations Commission appoints committees of experts whole source
On November 30, 1923, the Reparations Commission announced the appointment of two international committees of experts—the first to consider…
First meeting of the Dawes Committee whole source
On January 14, the ten-man expert committee held its first meeting at the offices of the Reparations Commission, housed in the Hotel Astoria
The franc plunges as the Dawes Committee opens whole source
On January 14, the day the Dawes Committee, as it was now being called, began its deliberations, the exchange value of the franc plunged by…
J. P. Morgan lends France $100 million whole source
On March 13, the French government announced that J. P. Morgan & Co. had lent it $100 million on the security of its gold reserves.
The Dawes Plan is issued whole source
On April 9, the committee issued its plan.
London Conference to implement the Dawes Plan whole source
IN July 1924, the allies convened a conference in London on how to implement the Dawes Plan.
Barings finances the Louisiana Purchase whole source
In 1802, it had helped the U.S. government finance the purchase of the Louisiana Territory from a Napoléon desperate for cash.
Anarchist bomb outside J. P. Morgan & Co. whole source
Its status as one of the great powers to be reckoned with was confirmed in July 1920, when a group of anarchists, instead of targeting a hea…
First Franco-German heads of government meeting since 1870 whole source
The first plenary session took place on August 5—the first formal meeting between the respective heads of the German and French governments…
Germany accepts the Dawes Plan terms whole source
Finally, on August 14, the definitive terms were submitted to the German delegation, who were granted the night to accept or reject them.
Charles Dawes awarded the Nobel Peace Prize whole source
For having bought time for Europe and at least created the illusion that the Continent’s battles over money were finally over, he was awarde…
Conservative landslide returns Baldwin to power whole source
In January 1924, a minority Labor government under Ramsay MacDonald took over, but that November, a wave of anti-communist sentiment, fueled…
Churchill appointed chancellor of the exchequer whole source
To everyone’s surprise, Winston Churchill was appointed chancellor of the exchequer, the second most powerful position in government.
Beaverbrook lobbies Churchill against gold whole source
On January 28, 1925, Beaverbrook came to see Churchill and his advisers, only to have his arguments casually dismissed by the Treasury offic…
Norman travels to New York to consult Strong on gold whole source
He arrived in New York aboard the S.S. Carania on December 28, having managed to slip out of Britain “undetected, like a shadow in the dead…
American credits pledged to support Britain's return to gold whole source
To ensure that Britain had adequate reserves to draw upon, Strong promised $200 million from the New York Fed. From the partners of J. P. Mo…
Churchill's Downing Street dinner on the gold decision whole source
Finally, on March 17, Churchill decided to convene a sort of brain trust.
Churchill announces Britain's return to the gold standard whole source
On April 28, he rose before the Commons at 4:00 p.m. to great applause.
British general strike of 1926 whole source
By 1926, attempts to cut costs led to a long and bitter strike in the coal industry, and in May 1926, boiled over into a countrywide ten-day…
Churchill concludes the return to gold was a misjudgment whole source
Though Churchill remained chancellor until 1929, by 1927 he had come to realize that the return to gold at the old prewar exchange rate had…
The Banque de France 'faux bilans' scandal whole source
Earlier that month, the French public had learned that for the past year, senior officials at the French central bank had conspired with the…
France caps the Banque de France note circulation whole source
In April 1919, the National Assembly fixed a limit on the its advances to the state and in September 1920, imposed a ceiling of 41 billion f…
Caillaux returns as French finance minister whole source
Paul Painlevé29 formed a new left-wing coalition government and named as his finance minister a man whose four previous tours in the office…
Caillaux and Churchill restructure the French war debt whole source
In July, he went to London and struck a bargain with Winston Churchill to restructure the French war debt to the British at 40 cents on the…
France and the United States settle war debts whole source
In April 1926, France and the United States finally negotiated a war-debt settlement at 40 cents on the dollar.
Caillaux returns for a fifth term and installs Moreau whole source
On June 15, the “Ballet of Ministries” came around full circle, and Joseph Caillaux returned as minister of finance, his fifth time in that…
Émile Moreau becomes governor of the Banque de France whole source
On June 24, Moreau, fifty-eight years old, vindicated at last, assumed the governorship.
French war-mutilated veterans protest American war debts whole source
On July 11, in a dramatic protest, twenty thousand mutilés—maimed war veterans—the legless in wheelchairs, the blind led by nurses, marched…
Poincaré forms a national unity government whole source
ON July 21, Raymond Poincaré was asked to form a ministry.
Norman's first meeting with Moreau whole source
On the morning of July 29, it was Norman’s turn to meet with the Banque’s new leadership.
Banque de France begins pegging the franc whole source
On December 21, the Banque began to purchase foreign exchange and sell its own currency to prevent the franc from rising above 25 to the dol…
Moreau prevails and rebuilds French reserves whole source
By the middle of 1927, it was clear that Moreau had won.
General Motors founded by William Durant whole source
It had been founded in 1908 by William Crapo Durant, grandson of H. H. Crapo, the Civil War governor of Michigan.
The Coolidge bull market whole source
By 1925, after the reelection of Calvin Coolidge as president, this last upward ride even acquired its own moniker: the Coolidge bull market…
The Florida real estate bubble bursts whole source
The Florida real estate bubble burst of its own weightlessness, helped by a devastating hurricane in 1926
General Motors overtakes U.S. Steel whole source
Between 1925 and 1927 the profits of General Motors went up almost two and a half times. With earnings of almost $250 million a year, it ove…
Nazi storm troopers rampage in Berlin whole source
On March 21, 1927, a band of six hundred Nazi brownshirt storm troopers of the Sturmabteilung , the SA, beat up a group of Communists in eas…
Schacht triggers Germany's 'Black Friday' whole source
On Thursday, May 12, 1927, he made his move. The Reichsbank instructed every bank in Germany to cut its loans for stock trading by 25 percen…
Central banks assemble a loan to stabilize the Polish zloty whole source
In late 1926, a consortium of central banks, including the Federal Reserve, the Bank of England, the Reichsbank, and now the Banque de Franc…
France orders its sterling balances converted to gold whole source
The next month, without even consulting the British, the Banque issued instructions that $100 million of its sterling balances be converted…
Strong invites the central bankers to America whole source
In the summer of 1927, still weak from his recent illness, Strong decided that rather than go to Europe as he usually did, he would invite N…
The four great central banks convene at the New York Fed whole source
It was on the twelfth floor of this faux Italian palace that the four great banking powers of the world first convened.
Secret central bankers' conclave on Long Island whole source
The four men remained in seclusion for five days, No official record of the discussions was kept.
The Fed cuts rates, the 'petit coup de whisky' whole source
A few days after the European central bankers left, the New York Fed and eight of the other reserve banks voted to cut interest rates by 0.5…
The Fed reverses course and raises rates whole source
Over the next three months, the Fed raised its rates from 3.5 percent to 5 percent.
Benjamin Strong sails for Europe to resign whole source
In May 1928, Strong sailed for Europe. He had already decided to submit his resignation.
Death of Benjamin Strong whole source
After Strong returned to New York, on October 15, he underwent an operation to stem intestinal bleeding. The next day, he died in the hospit…
Wall Street bubble breaks free of economic reality whole source
It was in the early summer of 1928, with the Dow at around 200, that the market truly seemed to break free of its anchor to economic reality…
Paul Warburg warns of coming collapse whole source
issuing his most powerful jeremiad on March 8, 1929: “History, which has a painful way of repeating itself, has taught us that speculative o…
Raskob's “Everyone Ought to Be Rich” published whole source
Indeed, the seminal manifesto of the time, “Everyone Ought to Be Rich” originally appeared in the August 1929 Ladies’ Home Journal.
Fed raises rates to check speculation whole source
Recognizing that the easing of credit policy in the middle of 1927 had been a mistake, it raised rates from 3.5 percent in February 1928 to…
Coolidge calls stocks “cheap” whole source
In February 1929, as he prepared to leave the White House, he declared that stocks were “cheap at current prices” and conditions absolutely…
Norman urges the Fed to break the market whole source
He arrived in New York on January 27 armed with his new proposal. Meeting with Harrison at the New York Fed, Norman now surprised everyone b…
Federal Reserve Board's “direct action” directive whole source
On February 2, it issued a directive to all its member banks that they should not borrow from the Fed “for the purpose of making speculative…
Charlie Mitchell defies the Fed whole source
Charlie Mitchell of National City Bank, himself a director of the New York Fed, defied the Board by calling a press conference and announcin…
Germany slips into recession whole source
It was the combination of the drying up of foreign credit due to high interest rates induced by the U.S. stock bubble and the residual lack…
Gilbert calls for a final reparations settlement whole source
In his 1927 report released in December, Gilbert declared that the time had come for Germany to take control over her own economic destiny “…
Allies agree to a new reparations conference whole source
By late 1928, however, Gilbert had been successful in persuading the Allies to convene a conference in Paris in February 1929 to do just tha…
The Young Conference opens in Paris whole source
On February 11, the Young Conference—as it would come to be called but was for the moment referred to as the Second Dawes Conference—opened…
Schacht opens with a low reparations offer whole source
On the second day, seated around the horseshoe table, Schacht made his opening offer—$250 million a year for the next thirty-seven years.
Marthe Hanau arrested in Paris financial scandal whole source
In December 1928, she was arrested and forced into bankruptcy, owing $25 million dollars.
Young Plan creates the Bank for International Settlements whole source
A new bank, the Bank of International Settlements (BIS), jointly owned by all the major central banks, would be set up to administer and whe…
Run on German gold forces Reichsbank rate hike whole source
In any case, Germany suddenly began to lose gold at an accelerating pace—$100 million over the next ten days, forcing the Reichsbank to rais…
Keynes predicts the Young Plan will fail whole source
Keynes responded to the new plan by proclaiming, “My prophecy would be that the Young Plan will not prove practicable for even a short perio…
Bank of England raises rates as gold drains whole source
In February 1929, the Bank of England raised its rates a full percentage point to 5.5 percent, despite unemployment above 1.5 million.
Fed raises discount rate to 6 percent whole source
On August 8, after the market had closed, the New York Fed announced that it was raising its discount rate from 5 percent to 6 percent. The…
The Dow tops out whole source
Indeed, on September 3, 1929, the day the Dow topped out, only 19 of the 826 stocks on the New York Exchange attained all-time highs.
Labour wins power; Snowden replaces Churchill whole source
In June 1929, Britain went to the polls. After four years of high unemployment under Conservative rule, the Tories were voted out of office…
Snowden clashes with France at The Hague whole source
At a conference at The Hague in August 1929 to wrap up some of the details of the Young Plan, he entered into a particularly heated exchange…
Dow closes at record high of 381 whole source
On September 3, 1929, the Dow traded up a single point to close at a record high of 381.
Roger Babson forecasts a crash whole source
At two o’clock on the afternoon of September 5, the newswires reported that the Massachusetts economist and statistician Roger Babson had an…
Collapse of Clarence Hatry's empire whole source
On Friday, September 19, the empire of the British financier Clarence Hatry suddenly collapsed, leaving investors with close to $70 million…
Irving Fisher's “permanently high plateau” whole source
On Tuesday, October 15, economist and market pundit Irving Fisher, in a speech that would go down in history for its spectacularly bad timin…
Black Thursday and Lamont's “little distress selling” whole source
Looking “grave” and “gesturing idly with his pince-nez as he spoke,” he began by announcing, “There has been a little distress selling on th…
Black Monday whole source
By the end of the day, 9 million shares had changed hands and the Dow was down 40 points, roughly 14 percent, the largest percentage fall in…
Black Tuesday whole source
That day, which came somewhat unoriginally to be christened Black Tuesday, saw no letup in selling.
Harrison insists the exchange stay open whole source
“The Stock Exchange should stay open at all costs,” he told the gathering.
First major crash without a bank failure whole source
Though the crash of October 1929 was by one count the eleventh panic to grip the stock market since the Black Friday of 1869 and was by almo…
Mellon's “liquidate” doctrine whole source
In the meantime, he argued that the best policy was to “liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.
Fed eases sharply after the crash whole source
Between November 1929 and June 1930 the Fed eased monetary policy dramatically. It injected close to $500 million in cash into the banking s…
Eugene Meyer appointed to head the Fed whole source
IN SEPTEMBER 1930, Roy Young resigned as chairman of the Federal Reserve Board to become the head of the Boston Fed, a position that not onl…
Macmillan Committee established whole source
In November 1929, a few weeks after the crash, the new British Labor government responded to criticisms about the endemically poor performan…
Norman's “I have instincts” testimony whole source
When pressed, he replied, “Reasons, Mr. Chairman? I don’t have reasons. I have instincts.”
Central banks cut rates in unison whole source
By June 1930, with U.S. rates at their postwar low of 2.5 percent, the Bank of England was down to 3.5 percent, the Reichsbank to 4.5 percen…
Keynes publishes “The Great Slump of 1930” whole source
IN December 1930, Maynard Keynes published an article titled “The Great Slump of 1930,” in which he described the world as living in “the sh…
Smoot-Hawley tariff imposed whole source
With American capital bottled up at home and U.S. demand for European goods shrinking—a result of the weak U.S. economy and of higher import…
France's gold mountain whole source
By the end of 1930, the Banque de France, in addition to the $1 billion it held in sterling and dollar deposits, had accumulated a gold rese…
Moreau resigns from the Banque de France whole source
In September 1930, it was suddenly announced that Moreau was resigning.
Norman floats an international bank plan whole source
Norman rolled it out at the February 1931 monthly meeting in Basel of the BIS, which had become a sort of club for central bankers.
Norman's “secret mission” to America whole source
From his departure aboard the Berengaria on March 21, he was followed everywhere on his “secret mission”
Run on the Bank of United States begins whole source
On the morning of December 10, 1930, a small merchant from the Morrisania section of the Bronx went to his local branch of the Bank of Unite…
Collapse of Caldwell and Company whole source
That October, two months before the BUS crisis, the terrible drought across the Midwest and South led to the collapse of the Tennessee inves…
Bank runs resume in Chicago whole source
After a lull during the spring, in May 1931, the bank runs resumed. A real estate bubble in the Chicago suburbs collapsed, and thirty Chicag…
Norman predicts the wreck of capitalism whole source
It was during the spring of 1931 after Norman had returned from the United States that he wrote his infamous letter to Moret, foreseeing the…
Death of Gustav Stresemann whole source
In October 1929, three weeks before the Wall Street crash, Stresemann died suddenly of a stroke at only fifty-one, a victim of stress and ov…
Schacht's public attack on the government whole source
On December 5, he dropped his bombshell on Berlin. Without warning he issued a public statement in which he accused the government in inflam…
Schacht resigns from the Reichsbank whole source
Back in Berlin, on March 7, he announced his resignation. “I will now become a country squire and raise pigs,” he declared at a turbulent pr…
Nazis surge in the 1930 Reichstag elections whole source
The Nazis won 6.4 million votes, and vaulted into second place in the Reichstag with 107 seats.
Schacht meets Hitler whole source
On January 5, Göring invited Schacht, along with Fritz Thyssen, chairman of the giant United Steel Works, to meet Hitler at his modest apart…
Failure of the Credit Anstalt whole source
On Friday, May 8, the Credit Anstalt, based in Vienna and founded in 1855 by the Rothschilds, with total assets of $250 million and 50 perce…
Germany and Austria announce a customs union whole source
In March 1930, Germany and Austria had announced that they would form a customs union.
Lamont proposes a debt moratorium to Hoover whole source
Saying that he was about to make a suggestion that the president would “more than likely throw out of the window,” Lamont proposed that Hoov…
Bruning's provocative austerity manifesto whole source
On June 5, he unveiled a new package of austerity moves that included a further lowering of civil servants’ salaries, a cut in unemployment…
Hoover announces the debt moratorium whole source
On Saturday, June 20, Hoover’s plan was publicly announced. The United States would forgo one year’s principal and interest of $245 million…
Nordwolle wool combine collapses whole source
On June 17, the Norddeutsche Wolkkammerei—“Der Nordwolle,” a large German wool combine—declared bankruptcy, revealing losses amounting to $5…
Danatbank cannot meet its liabilities whole source
Two days later, the head of the Danatbank, Jacob Goldschmidt, Schacht’s old colleague and nemesis, informed the Reichsbank that his bank cou…
France's political conditions for a German loan whole source
The French government informed him that it might be prepared to lend as much as $300 million, provided that Germany abandon the customs unio…
German banks fail to open; bank holiday declared whole source
On the morning of Monday, July 13, as Luther was setting off for Basel, the Danatbank had failed to open. On the locked doors of all its bra…
The Bad Harzburg rally of the right whole source
In October 1931, the parties of the right collectively staged a rally in the little mountain spa of Bad Harzburg, one of the few places wher…
Macmillan Report exposes London's debts whole source
The Macmillan Report now revealed that the City’s short-term liabilities to foreigners came close to $2 billion. This was viewed as a shocki…
Bank of England loses half its gold whole source
In the last two weeks of July, the Bank of England lost $250 million—almost half its gold reserves. It reacted by raising interest rates mod…
May Committee report deepens the crisis whole source
Maynard Keynes called the May report “the most foolish document I have ever had the misfortune to read.”
Morgan blessing and fall of the Labour government whole source
On Saturday, August 22, the Morgan partners assembled at the house of F. D. Bartow in Glen Cove, Long Island, and after a long weekend of de…
The Invergordon mutiny whole source
On September 14, a group of sailors of the Atlantic Fleet at Invergordon refused to muster and put to sea.
Britain decides to leave the gold standard whole source
That weekend, the prime minister, after meeting with the officials of the Bank of England, took the decision to suspend gold payments.
The pound falls off gold whole source
Within a few days the pound had fallen by almost 25 percent in the foreign exchange markets from $4.86 to $3.75.
American banks fail after Britain leaves gold whole source
In one month alone after the British departure from gold, 522 American banks went under—by the end of the year, a total of 2,294, one out of…
The Fed raises rates in a depression whole source
And so early that October, in the midst of the Depression, as bank runs raged across the Midwest, thousands of businesses closed down, and i…
Reconstruction Finance Corporation established whole source
The Reconstruction Finance Corporation (RFC) was established to channel public money—a total of $1.5 billion—into the banking system.
The Dow hits bottom whole source
On July 8, 1932, the Dow, which had stood at 381 on September, 3, 1929, and was trading around 150 before the European currency crisis, hit…
Roosevelt wins the presidency whole source
In November 1932, Roosevelt got 22.8 million votes against Hoover’s 15.7 million, the greatest electoral sweep since Lincoln beat McClellan…
State bank holidays cascade across America whole source
Governor after governor was forced to follow Michigan and declare a state bank holiday. Indiana closed its banks on the twenty-third of Febr…
Hoover and Roosevelt clash over the banks whole source
Roosevelt replied, “Like hell, I will! If you haven’t got the guts to do it yourself, I’ll wait until I am President to do it!”
New York and Illinois close their banks whole source
Finally at 2.30 a.m. Lehman relented and proclaimed a three-day bank holiday in New York. An hour later Governor Horner followed his lead.
The banking system grinds to a halt whole source
In three years, commercial bank credit had shrunk from $50 billion to $30 billion and a quarter of the country’s banks had collapsed.
Roosevelt declares a national bank holiday whole source
ONE DAY into office, the very first action that Roosevelt took was to close every bank in the country.
Emergency Banking Act submitted to Congress whole source
By Thursday, March 9, the Emergency Banking Act was ready to be submitted to Congress.
Roosevelt's first fireside chat whole source
At ten o’clock on the evening of Sunday, March 12, Roosevelt gave the first of his fireside chats over the radio.
Economy Act cuts federal spending whole source
On March 20, Congress passed the Economy Act, which cut the salaries of public employees by 15 percent, slashed department budgets by 25 per…
Glass-Steagall Act separates banking whole source
The Glass-Steagall Act, also passed in the middle of June, divorced commercial and investment banking and guaranteed bank deposits up to a m…
Roosevelt takes the dollar off gold whole source
With a chuckle, Roosevelt casually turned to his aides and said “Congratulate me. We are off the gold standard.”
Markets rally after dollar leaves gold whole source
But in the days after the Roosevelt decision, as the dollar fell against gold, the stock market soared by 15 percent.
Montagu Norman marries Priscilla Worsthorne whole source
The next day, to the great bemusement of all London, he was married at the age of sixty-one to the thirty-three-year old Priscilla Worsthorn…
London World Economic Conference opens whole source
The conference opened on June 12 in the Geological Museum in South Kensington.
Roosevelt torpedoes currency stabilization whole source
As he torpedoed this new agreement, he made sure on this occasion not to mince his words.
U.S. government begins buying gold whole source
Whereas the first fireside chat had brought clarity to a complex issue, this one was a masterpiece of obfuscation. The following day the gov…
Dollar stabilized at $35 an ounce whole source
By the end of the year, Roosevelt had begun to tire of the game; and in January 1934 he agreed to stabilize gold at $35 to the ounce. The do…
Banking Act of 1935 reforms the Fed whole source
In 1935, Congress passed a banking act designed to reform the Federal Reserve.
Harrison sends the Trinity test cable whole source
On July 16, after the successful detonation of the world’s first nuclear device in the New Mexico desert, it was Harrison who was the author…
Allies cancel German reparations whole source
The following month, France and Britain, finally recognizing that it was impossible to squeeze any money out of Germany in the current envir…
Hitler appointed chancellor of Germany whole source
Finally, in January 1933, the president bowed to necessity and appointed the “Bohemian corporal” as chancellor.
Schacht returns to the Reichsbank whole source
Two months later, on March 16, 1933, Schacht was back at the Reichsbank, after a three-year hiatus.
Schacht arrested after July 20 plot whole source
Following the failed July 20 plot to assassinate Hitler, Schacht was also arrested and imprisoned in Berlin—not because of any evidence of h…
Schacht acquitted at Nuremberg whole source
Schacht and Von Papen were acquitted, on the grounds that their involvement with the Nazi regime had ended before war broke out.
Montagu Norman retires and is made a peer whole source
He was elevated to the peerage that year as Lord Norman of St. Clere, the name of the village in Kent where his grandfather’s house was loca…
Keynes publishes The General Theory whole source
The book was not completed until late 1935, and was published, in February 1936, as The General Theory of Employment, Interest, and Money.
Harry Dexter White recruited as Soviet agent whole source
White also happened to be a Soviet agent, originally recruited in 1935 to the same spy ring that included Whittaker Chambers and Alger Hiss.
Bretton Woods conference opens whole source
The conference opened on June 30, 1944.
Bretton Woods conference closes whole source
On July 22, the conference came to its formal close with a great banquet.
Death of John Maynard Keynes whole source
Two years later, Keynes’s heart finally gave out and he died at the age of sixty-one.
Death of Harry Dexter White whole source
Three days after his testimony, on August 16, 1948, he, too, collapsed and died of a heart attack at the age of fifty-six.
Rubin rescues Mexico in the peso crisis whole source
The U.S. Treasury under Secretary Robert Rubin forestalled a default by providing Mexico an emergency credit of $50 billion with astonishing…
The Wall Street bubble bursts whole source
Eventually in the last week of October 1929, the bubble burst, plunging the United States into its own recession.
Irving Fisher's counterfactual on Strong whole source
In 1934, Yale economist Irving Fisher testified before a House committee that when Strong died, “his policies died with him.
Bank of England granted currency monopoly whole source
In Britain, while the Bank of England was granted a monopoly of currency in 1844, Scottish banks continued to issue currency and existing En…
Gold standard suspended at outbreak of war whole source
The gold standard was officially suspended in Germany and France in August 1914.
Pierre Laval executed for treason whole source
He was tried for treason after the war, and following a botched suicide attempt with cyanide, he was executed by firing squad, half consciou…
The Dawes Plan loans to Germany whole source
The BIS keeps operating under wartime pressure whole source